LAS VEGAS SANDS, INC.
and
VENETIAN CASINO RESORT, LLC
AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT is dated as of
September 17, 2001 and entered into by and among LAS VEGAS SANDS, INC. ("LVSI"),
a Nevada corporation, and VENETIAN CASINO RESORT, LLC ("Venetian"), a Nevada
limited liability company, as joint and several obligors (each of LVSI and
Venetian, a "Borrower" and, collectively, the "Borrowers"), THE FINANCIAL
INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each individually referred to
herein as a "Lender" and collectively as "Lenders"), and THE BANK OF NOVA SCOTIA
("Scotiabank"), as Lead Arranger (in such capacity the "Arranger"), and
Scotiabank, as administrative agent for Lenders (in such capacity, the
"Administrative Agent") and solely for the purposes of subsection 10.22, ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇.
R E C I T A L S
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WHEREAS, pursuant to that certain Credit Agreement dated as of
November 14, 1997, as amended by the First Amendment thereto dated as of January
30, 1998, and further amended by the Limited Waiver and Second Amendment to
Credit Agreement dated as of November 12, 1999, by and among Borrowers, Lenders
and Administrative Agent (such Credit Agreement, as amended, the "Initial Credit
Agreement" ), lenders extended the senior secured credit facilities set forth in
the Initial Credit Agreement to Borrowers to provide a portion of the financings
necessary to develop and construct the Project (this and other capitalized terms
used herein shall have the meanings given in subsection 1.1 of this Agreement),
and in the case of the Revolving Loans, to provide working capital for the
Project hotel and casino following the Completion Date;
WHEREAS, Borrowers financed the development and construction of
the Project with (i) equity contributions to Borrowers from ▇▇▇▇▇▇▇ consisting
of the Real Estate Contribution (approximately 14 acres of which has been
released to the Phase II Subsidiary upon the completion of a subdivision of such
land) and cash in an aggregate amount of $320,000,000, (ii) proceeds of the
issuance of senior secured Mortgage Notes in an aggregate principal amount of
not less than $425,000,000, (iii) proceeds of the issuance of Subordinated Notes
of approximately $90,000,000 in cash, (iv) the proceeds of the Interim Mall
Facility (as defined in the Initial Credit Agreement) in an aggregate principal
amount of not less than $140,000,000, (v) the proceeds of an equipment finance
loan from the FF&E Lenders of not less than approximately $98,000,000 to finance
furniture, fixtures and equipment (including, without limitation, gaming
equipment and power station equipment) a portion of which may be financed on an
interim basis with proceeds of the revolving loan portion of the senior secured
credit facilities contemplated hereby, (vi) the proceeds of a contribution from
a joint venture between Atlantic Thermal Systems, Inc., and Pacific Enterprises
Energy Services, in an amount up to approximately $70,000,000 as necessary to
purchase, construct and install (x) certain equipment that is located at or used
in connection with the heating, ventilation and air conditioning facility for
the Project and (y) certain equipment that is part of the Project's mechanical
and/or electrical systems, and (vii) the term loan portion of the senior secured
credit facilities contemplated hereby;
WHEREAS, pursuant to that certain Amended and Restated Credit
Agreement dated as of June 14, 2000, as amended by the First Amendment thereto
dated as of March 15, 2001, and the Limited Waiver, Consent and Second Amendment
thereto dated as of June 29, 2001, each by and among Borrowers, Lenders and
Administrative Agent (such Credit Agreement, as amended, the "Existing Credit
Agreement"), Lenders amended and restated the terms of the Initial Credit
Agreement to (i) provide additional term loans in the aggregate principal amount
of $50,000,000, (ii) revise the financial covenants set forth in the Initial
Credit Agreement and (iii) make certain other amendments to the Initial Credit
Agreement;
WHEREAS, the parties to the Existing Credit Agreement desire to
amend and restate the Existing Credit Agreement in order to (i) revise the
amortization schedule for the existing Terms Loans (as defined in the Existing
Credit Agreement), the financial covenants set forth in the Existing Credit
Agreement and the mandatory prepayment provisions of the Existing Credit
Agreement, (ii) extend the Revolving Loan Commitment Termination Date, (iii)
combine the Tranche A Term Loan, Tranche B Term Loan and Tranche C Term Loan
into one tranche (to be referred to as the Term Loan) and (iv) make certain
other amendments to the Existing Credit Agreement; and
1
WHEREAS, it is the intention of Borrowers and Administrative
Agent and each of the Lenders that this amendment and restatement of the
Existing Credit Agreement shall not constitute a refinancing of the Loans
outstanding on the Closing Date and that all Obligations hereunder and under the
other Loan Documents, shall continue to be secured by the grant to
Administrative Agent, on behalf of Lenders, of a First Priority Lien on the
First Priority Collateral; that the Subsidiary Guaranty previously executed by
each Subsidiary of Borrowers shall continue in full force and effect and that
each Subsidiary other than the Intermediate Holding Companies shall continue to
secure all of the Obligations under the Subsidiary Guaranty by granting to
Administrative Agent, on behalf of Lenders, a First Priority Lien on the First
Priority Collateral.
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, Borrowers, Lenders and
the Agent agree as follows:
Section 1. DEFINITIONS
1.1 Certain Defined Terms.
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The following terms used in this Agreement shall have the
following meanings:
"▇▇▇▇▇▇▇" means ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, an individual.
"▇▇▇▇▇▇▇ Completion Guaranty" means that certain Completion
Guaranty dated as of the November 14, 1997 executed by ▇▇▇▇▇▇▇ in
favor of the Administrative Agent, Interim Mall Lender and the
Mortgage Notes Indenture Trustee (acting on behalf of the
Mortgage Note Holders).
"▇▇▇▇▇▇▇ Intercreditor Agreement" means the Intercreditor
Agreement (▇▇▇▇▇▇▇) dated as of November 14, 1997 among ▇▇▇▇▇▇▇,
Venetian, Mall Construction Subsidiary, Administrative Agent,
Mortgage Note Indenture Trustee, Interim Mall Lender and the
Subordinated Notes Indenture Trustee in substantially the form of
Exhibit XVI hereto.
"▇▇▇▇▇▇▇ Subordination Agreement" has the meaning assigned to
that term in subsection 5.19.
"Additional Contingent Claims" has the meaning assigned to that
term in subsection 5.17A.
"Additional Billboard Space" has the meaning assigned to that
term in the Cooperation Agreement.
"Additional Indebtedness" has the meaning assigned to that term
in subsection 7.1(xv).
"Adjusted Eurodollar Rate" means, for any Interest Rate
Determination Date with respect to an Interest Period for a
Eurodollar Rate Loan, the rate per annum obtained by dividing (i)
the arithmetic average (rounded upward to the nearest 1/16 of one
percent) of the offered quotations, if any, to first class banks
in the interbank Eurodollar market Lenders for U.S. dollar
deposits of amounts in same day funds comparable to the
respective principal amounts of the Eurodollar Rate Loans of
Scotiabank for which the Adjusted Eurodollar Rate is then being
determined with maturities comparable to such Interest Period as
of approximately 10:00 A.M. (New York time) on such Interest Rate
Determination Date by (ii) a percentage equal to 100% minus the
stated maximum rate of all reserve requirements (including any
marginal, emergency, supplemental, special or other reserves)
applicable on such Interest Rate Determination Date to any member
bank of the Federal Reserve System in respect of "Eurocurrency
liabilities" as defined in Regulation D (or any successor
category of liabilities under Regulation D).
"Administrative Agent" has the meaning assigned to that term in
the introduction to this Agreement and also means and includes
any successor Administrative Agent appointed pursuant to
subsection 9.5.
"Advance Confirmation Notice" has the meaning assigned that term
in the Disbursement Agreement.
"Affected Lender" has the meaning assigned to that term in
subsection 2.6C.
"Affected Loans" has the meaning assigned to that term in
subsection 2.6C.
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"Affiliate", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under
direct or indirect common control with, that Person. For the
purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by"
and "under common control with"), as applied to any Person, means
the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of that
Person, whether through the ownership of voting securities or by
contract or otherwise.
"Agent" means, individually, each of the Administrative Agent and
the Arranger, and "Agents" means Administrative Agent and the
Arranger, collectively.
"Aggregate Amounts Due" has the meaning assigned to that term in
subsection 10.5.
"Agreement" means this Amended and Restated Credit Agreement
dated as of September 17, 2001.
"Anticipated Future Work" has the meaning assigned to that term
in the Disbursement Agreement.
"Applicable Tax Percentage" means the highest aggregate effective
marginal rate of federal, state and local income tax or, when
applicable, alternative minimum tax, to which any direct or
indirect member or S corporation shareholder of the Borrowers
subject to the highest marginal rate of tax would be subject in
the relevant year of determination (as certified to the
Administrative Agent by a nationally recognized tax accounting
firm), taking into account only that member's or S corporation
shareholder's share of income and deductions attributable to its
interest in the Borrowers.
"Applied Amount" has the meaning assigned to that term in
subsection 2.4B(iv)(b).
"Approved Equipment Funding Commitment" has the meaning assigned
that term in the Disbursement Agreement.
"Arranger" has the meaning assigned to such term in the
introduction to this Agreement.
"Asset Sale" means the sale by a Borrower or any of its
Subsidiaries to any Person of (i) any of the stock of any of such
Person's Subsidiaries, (ii) substantially all of the assets of
any division or line of business of a Borrower or any of its
Subsidiaries, or (iii) any other assets (whether tangible or
intangible) of a Borrower or any of its Subsidiaries (other than
(a) inventory or goods (other than equipment) sold in the
ordinary course of business, (b) any other assets to the extent
that the aggregate fair market value of such assets sold during
any Fiscal Year, is less than or equal to $1,000,000 or (c) any
transfers or dispositions permitted by clauses (ii), (vii)
through (xix), inclusive, and (xxi) of subsection 7.7).
"Assignment Agreement" means an Assignment Agreement in
substantially the form of Exhibit VII annexed hereto.
"Bank Agent" has the meaning assigned to that term in the
Conforming ▇▇▇▇▇▇▇ L/C Drawing Agreement.
"Bankruptcy Code" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any
successor statute.
"Base Rate" means, at any time, the higher of (x) the Prime Rate
or (y) the rate which is 1/2 of 1% in excess of the Federal Funds
Effective Rate.
"Base Rate Loans" means Loans bearing interest at rates
determined by reference to the Base Rate as provided in
subsection 2.2A.
"Billboard" means H & H of Nevada, LLC.
"Billboard Master Lease" means that certain Lease Agreement dated
November 14, 1997 by and between Venetian and New Mall
Subsidiary, as successor to Mall Subsidiary (as successor to Mall
Construction Subsidiary) pursuant to which the New Mall
Subsidiary, as successor to Mall Subsidiary (as successor to Mall
Construction Subsidiary), is leasing from Venetian the Additional
Billboard Space.
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"Billboard Operating Lease" means that certain Amended and
Restated Restaurant Lease dated June 26, 1997 by and between New
Mall Subsidiary, as successor to Mall Subsidiary and Venetian and
Billboard, as successor to ▇.▇. International of Nevada, Inc.
(together with all assignments, modifications, amendments, riders
and addenda thereto).
"Borrowers" has the meaning assigned to that term in the
introduction to this Agreement and shall mean, as the context
requires, any or all of the Borrowers.
"Business Day" means (i) for all purposes other than as covered
by clause (ii) below, any day excluding Saturday, Sunday and any
day which is a legal holiday under the laws of the State of New
York or Nevada or is a day on which banking institutions located
in either such state are authorized or required by law or other
governmental action to close, and (ii) with respect to all
notices, determinations, fundings and payments in connection with
the Adjusted Eurodollar Rate or any Eurodollar Rate Loans, any
day that is a Business Day described in clause (i) above and that
is also a day for trading by and between banks in Dollar deposits
in the London interbank market.
"Capital Lease", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as
lessee that, in conformity with GAAP, is accounted for as a
capital lease on the balance sheet of that Person.
"Cash" means (i) money, (ii) currency or (iii) a credit balance
in a Deposit Account.
"Cash Equivalents" means (a) [intentionally deleted], (b)(i)
direct obligations of the United States of America (including
obligations issued or held in book-entry form on the books of the
Department of the Treasury of the United States of America) or
obligations fully guaranteed by the United States of America,
(ii) obligations, debentures, notes or other evidence of
indebtedness issued or guaranteed by any other agency or
instrumentality of the United States, (iii) interest-bearing
demand or time deposits (which may be represented by certificates
of deposit) issued by banks having general obligations rated (on
the date of acquisition thereof) at least "A" or the equivalent
by Standard & Poor's Ratings Group, a division of McGraw Hill,
Inc. (together with its successors, "S&P") or ▇▇▇▇▇'▇ Investors
Service, Inc. (together with its successors, "Moody's") (S&P and
Moody's together with any other nationally recognized credit
rating agency if neither of such corporations is then currently
rating the pertinent currently rating the pertinent obligations,
a "Rating Agency") or, if not so rated, secured at all times, in
the manner and to the extent provided by law, by collateral
security in clause (i) or (ii) of this definition, of a market
value of no less than the amount of monies so invested, (iv)
commercial paper rated (on the date of acquisition thereof) at
least "A-1" or "P-1" or the equivalent by any Rating Agency
issued by any Person, (v) repurchase obligations for underlying
securities of the types described in clause (i) or (ii) above,
entered into with any commercial bank or any other financial
institution having long-term unsecured debt securities rated (on
the date of acquisition thereof) at least "A" or "A2" or the
equivalent by any Rating Agency in connection with which such
underlying securities are held in trust or by a third-party
custodian, (vi) guaranteed investment contracts of any financial
institution which has a long-term debt rated (on the date of
acquisition thereof) at least "A" or "A2" or the equivalent by
any Rating Agency, (vii) obligations (including both taxable and
non-taxable municipal securities) issued or guaranteed by, and
any other obligations the interest on which is excluded from
income for Federal income tax purposes issued by, and any state
of the United States of America or District of Columbia or the
Commonwealth of Puerto Rico or any political subdivision, agency,
authority or instrumentality thereof, which issuer or guarantor
has (A) a short-term debt rated (on the date of acquisition
thereof) at least "A-1" or "P-1" or the equivalent by any Rating
Agency and (B) a long-term debt rated (on the date of acquisition
thereof) at least "A" or "A2" or the equivalent by any Rating
Agency, (viii) investment contracts of any financial institution
either (A) fully secured by (1) direct obligations of the United
States, (2) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States
or (3) securities or receipts evidencing ownership interest in
obligations or special portions thereof described in clause (1)
or (2), in each case guaranteed as full faith and credit
obligations of the United States of America, having a market
value at least equal to 102% of the amount deposited thereunder,
or (B) with long-term debt rated (on the date of acquisition
thereof) at least "A" or "A2" or the equivalent by any Rating
4
Agency and short-term debt rated (on the date of acquisition
thereof) at least "A-1" or "P-1" or the equivalent by any Rating
Agency, (ix) a contract or investment agreement with a provider
or guarantor (A) which provider or guarantor is rated (on the
date of acquisition thereof) at least "A" or "A2" or the
equivalent by any Rating Agency (provided that if a guarantor is
a party to the rating, the guaranty must be unconditional and
must be confirmed in writing prior to any assignment by the
provider to any subsidiary of such guarantor), (B) providing that
monies invested shall be payable to the Disbursement Agent while
the Disbursement Agreement is in effect and thereafter to
Administrative Agent without condition (other than notice) and
without brokerage fee or other penalty, upon not more than two
Business Days' notice for application when and as required or
permitted under the Collateral Documents, and (C) stating that
such contract or agreement is unconditional, expressly
disclaiming any right of setoff and providing for immediate
termination in the event of insolvency of the provider and
termination upon demand of the Disbursement Agent while the
Disbursement Agreement is in effect and thereafter to
Administrative Agent (which demand shall only be made at the
direction of the Borrowers) after any payment or other covenant
default by the provider, or (x) any debt instruments of any
Person which instruments are rated (on the date of acquisition
thereof) at least "▇," "▇▇", "▇-▇" or "P-1" or the equivalent by
any Rating Agency, provided that in each case of clauses (i)
through (x), such investments are denominated in Dollars and
maturing not more than 13 months from the date of acquisition
thereof; (c) investments in any money market fund which is rated
(on the date of acquisition thereof) at least "A" or "A2" or the
equivalent by any Rating Agency; (d) investments in mutual funds
sponsored by any securities broker-dealer of recognized national
standing having an investment policy that requires substantially
all the invested assets of such fund to be invested in
investments described in any one or more of the foregoing clauses
and having a rating of at least "A" or "A2" or the equivalent by
any Rating Agency; or (e) investments in both taxable and
nontaxable (i) periodic auction reset securities which have final
maturities between one and 30 years from the date of issuance and
are repriced through a dutch auction or other similar method
every 35 days or (ii) auction preferred shares which are senior
securities of leveraged closed end municipal bond funds and are
repriced pursuant to a variety of rate reset periods, in each
case having a rating (on the date of acquisition thereof) of at
least "A" or "A2" or the equivalent of any Rating Agency.
"Casino Lease" means that certain Casino Lease between Venetian
as lessor and LVSI as lessee dated effective as of November 14,
1997 with respect to the operation of the casino for the Project.
"Central Plant" means the "New HVAC Plant", as such term is
defined in the Cooperation Agreement.
"Certificate re Non-Bank Status" means a certificate
substantially in the form of Exhibit IX annexed hereto delivered
by a Lender to Administrative Agent pursuant to subsection
2.7B(iii).
"Class" means, as applied to Lenders, each of the following two
classes of Lenders: (i) Lenders having Term Loan Exposure and
(ii) Lenders having Revolving Loan Exposure.
"Closing Date" means the date, on or before September 21, 2001,
on which this Agreement is executed and delivered and all
conditions for the occurrence thereof set forth in subsection 4.1
shall have been satisfied or waived by Administrative Agent.
"Code" means the Internal Revenue Code of 1986, as amended to the
date hereof and from time to time hereafter, and any successor
statute.
"Collateral" means, collectively, all of the real, personal and
mixed property (including capital stock) in which Liens are
purported to be granted pursuant to the Collateral Documents as
security for the Obligations.
"Collateral Account Agreements" has the meaning assigned to that
term in the Disbursement Agreement.
5
"Collateral Documents" means the Company Security Agreement, the
Deed of Trust, the Mall Construction Subsidiary Security
Agreement, the Collateral Account Agreements (other than the
Mortgage Notes Collateral Account Agreement), any Subsidiary
Security Agreements and all other instruments or documents
delivered by a Loan Party pursuant to the Existing Credit
Agreement, this Agreement or any of the other Loan Documents in
order to grant to Intercreditor Agent, Disbursement Agent or
Administrative Agent, on behalf of Lenders, a Lien on any real,
personal or mixed property of that Loan Party as security for the
Obligations.
"Commercial Letter of Credit" means any letter of credit or
similar instrument issued for the purpose of providing the
financing payment mechanism in connection with the purchase of
any materials, goods or services by a Borrower in the ordinary
course of business of such Borrower.
"Commitment" means the commitment of a Lender to make Loans as
set forth in subsection 2.1A, and "Commitments" means such
commitments of all Lenders in the aggregate.
"Company Security Agreement" means the Company Security Agreement
executed and delivered by Borrowers and Mall Construction
Subsidiary on November 14, 1997, substantially in the form of
Exhibit XII annexed hereto.
"Completion Date" means November 12, 1999.
"Completion Guaranty" means each of the Direct Construction
Guaranty, the Indirect Construction Guaranty and the ▇▇▇▇▇▇▇
Completion Guaranty or any one of them and "Completion
Guaranties" means the Direct Construction Guaranty, the Indirect
Construction Guaranty and the ▇▇▇▇▇▇▇ Completion Guaranty
collectively.
"Completion Guaranty Loan" means any amounts advanced by ▇▇▇▇▇▇▇
under the ▇▇▇▇▇▇▇ Completion Guaranty, which is treated as a loan
to Venetian in an aggregate principal amount not to exceed
$25,000,000 at any time, plus accrued and unpaid interest
thereon, evidenced by a Completion Guaranty Note and subject to
the terms of the ▇▇▇▇▇▇▇ Intercreditor Agreement.
"Completion Guaranty Note" means a note in the form attached to
the Interim Mall Credit Agreement (as in effect on November 14,
1997).
"Compliance Certificate" means a certificate substantially in the
form of Exhibit IV annexed hereto delivered to Administrative
Agent and Lenders by Borrowers pursuant to subsection 6.1(iv).
"Conforming ▇▇▇▇▇▇▇ L/C" means an unconditional, direct pay
letter of credit which (a) is obtained by ▇▇▇▇▇▇▇ or one of his
Affiliates (but not Borrowers or any of their Subsidiaries), (b)
either (x) has an expiration date of not less than twenty-four
(24) months or (y) has an expiration date of not less than twelve
(12) months with an automatic extension of one twelve (12) month
period unless the issuer of such letter of credit gives Drawing
Agent not less than sixty (60) days prior written notice that it
will not renew the letter of credit for such successive term, (c)
either (x) is irrevocable or (y) provides that the issuer will
deliver not less than sixty (60) days prior written notice to
Drawing Agent of its intention to revoke such letter of credit,
(d) is issued by a financial institution acceptable to each of
the Agents in their reasonable judgment and (e) is otherwise in
form and substance acceptable to each of the Agents in their
reasonable judgment, provided that any such letter of credit
shall only qualify as a Conforming ▇▇▇▇▇▇▇ L/C if it states that
it may be drawn upon by the Conforming ▇▇▇▇▇▇▇ L/C Drawing Agent
and applied in accordance with the terms of this Agreement and
the Conforming ▇▇▇▇▇▇▇ L/C Drawing Agreement upon the occurrence
of any Conforming ▇▇▇▇▇▇▇ L/C Draw Event, and provided further
that neither Borrower nor any of their Subsidiaries shall have
any obligations (contingent or otherwise) in respect of any such
letter of credit.
6
"Conforming ▇▇▇▇▇▇▇ L/C Draw Event" shall mean, during the time
that the Conforming ▇▇▇▇▇▇▇ L/C remains in full force and effect,
the occurrence of any of the following (a) an Event of Default
(which is continuing and has not been waived) (i) set forth in
subsection 8.1 hereof (failure to make payments when due), (ii)
set forth in subsection 8.2 hereof (default under Other
Indebtedness or Contingent Obligations), (iii) set forth in
subsection 8.6 hereof (involuntary bankruptcy; appointment of
receiver, etc.) or subsection 8.7 hereof (voluntary bankruptcy,
appointment of receiver, etc.), (iv) set forth in subsection 8.13
(default under or termination of Operative Documents), and (v)
resulting from a breach of any of the covenants set forth in
subsection 7.6 hereof (financial covenants); (b) a draw on the
Conforming ▇▇▇▇▇▇▇ L/C by or on behalf of the agent under the
FF&E Facility; (c) if such Conforming ▇▇▇▇▇▇▇ L/C has a maturity
of less than twenty-four (24) months, either (x) Drawing Agent's
receipt of notice from the issuer of the Conforming ▇▇▇▇▇▇▇ L/C
that such issuer will not renew the Conforming ▇▇▇▇▇▇▇ L/C or (y)
the date that is five days prior to the expiration of the
Conforming ▇▇▇▇▇▇▇ L/C if the Administrative Agent has not
received evidence of the renewal thereof, provided that the
Administrative Agent may not draw down on the Conforming ▇▇▇▇▇▇▇
L/C under such circumstances if and only if (1) the failure to
obtain the renewal of such Conforming ▇▇▇▇▇▇▇ L/C was not caused
by ▇▇▇▇▇▇▇ or his Affiliates and ▇▇▇▇▇▇▇ and/or his Affiliates
have made reasonable efforts to obtain the renewal thereof and
(2) ▇▇▇▇▇▇▇ or his Affiliates substitute cash equity in Borrowers
in an amount equal to the face amount of the Conforming ▇▇▇▇▇▇▇
L/C in lieu of the Conforming ▇▇▇▇▇▇▇ L/C on or before the date
that is five (5) days prior to the expiration thereof (such
equity to be substituted for the withdrawn Conforming ▇▇▇▇▇▇▇ L/C
in the calculation of Consolidated Adjusted EBITDA); or (d)
Drawing Agent's receipt of notice from the issuer of the
Conforming ▇▇▇▇▇▇▇ L/C that such issuer intends to revoke,
terminate or cancel the Conforming ▇▇▇▇▇▇▇ L/C provided that the
Administrative Agent may not draw down on the ▇▇▇▇▇▇▇ Conforming
L/C under such circumstances if and only if ▇▇▇▇▇▇▇ or his
Affiliates substitute cash equity in Borrowers in an amount equal
to the face amount of the Conforming ▇▇▇▇▇▇▇ L/C in lieu of the
Conforming ▇▇▇▇▇▇▇ L/C on or before the date that is five (5)
days prior to the revocation, termination or cancellation thereof
(such equity to be substituted for the withdrawn Conforming
▇▇▇▇▇▇▇ L/C in the calculation of Consolidated Adjusted EBITDA).
"Conforming ▇▇▇▇▇▇▇ L/C Drawing Agent" means the "Drawing Agent"
as defined in the Conforming ▇▇▇▇▇▇▇ L/C Drawing Agreement.
"Conforming ▇▇▇▇▇▇▇ L/C Drawing Agreement" means the Conforming
▇▇▇▇▇▇▇ Drawing Agreement, dated as of June 14, 2000, among the
Conforming ▇▇▇▇▇▇▇ L/C Drawing Agent, the Administrative Agent
and General Electric Capital Corporation, as agent for the FF&E
Lenders under the FF&E Facility Agreement described in clause (i)
of the definition of "FF&E Facility Agreement" herein, pursuant
to which drawings, if any, on the Conforming ▇▇▇▇▇▇▇ L/Cs shall
be made and the proceeds thereof distributed ratably to the
Lenders and the FF&E Lenders, as such agreement may be amended,
restated or otherwise modified.
"Consolidated Adjusted EBITDA" means, for any period, the sum of
the amounts (without duplication) for such period of (i)
Consolidated Net Income, (ii) Consolidated Interest Expense,
(iii) provision for taxes based on income to the extent deducted
in calculating Consolidated Net Income, (iv) total depreciation
expense, (v) total amortization expense, and (vi) other non-cash
items reducing Consolidated Net Income (including without
limitation any reductions to Consolidated Net Income as a result
of minority or preferred interests of Venetian) less other
non-cash items increasing Consolidated Net Income, all of the
foregoing as determined on a consolidated basis for Borrowers and
their Subsidiaries in conformity with GAAP. Any cash equity
contributions made by ▇▇▇▇▇▇▇ or any of his Affiliates (other
than one of the Borrowers) to Borrowers and/or the face amount of
any Conforming ▇▇▇▇▇▇▇ L/C delivered to Drawing Agent for the
benefit of the Lenders and the FF&E Lenders during any quarter
and during a period of fifteen (15) days following such quarter,
in an aggregate amount for such cash equity contributions and
face amounts of Conforming ▇▇▇▇▇▇▇ L/Cs not to exceed $15,000,000
per quarter, may at the written election of Borrowers be included
in Consolidated Adjusted EBITDA for such quarter for all purposes
hereunder, provided that Borrowers may not include such cash
equity contributions or the face amount of the Conforming ▇▇▇▇▇▇▇
L/C, or any combination thereof, in Consolidated Adjusted EBITDA
(a) if any Conforming ▇▇▇▇▇▇▇ L/C Draw Event or any Event of
Default or Potential Event of Default has occurred and is
continuing at the time such cash contribution is made or such
Conforming ▇▇▇▇▇▇▇ L/C is provided to Drawing Agent or (b) in any
7
event, after two consecutive quarters unless, following any
exercise of such election to include any such cash equity
contributions and/or face amount of any Conforming ▇▇▇▇▇▇▇ L/C in
Consolidated Adjusted EBITDA, Borrowers have thereafter been in
compliance with subsection 7.6 on a rolling four quarter basis on
any test date occurring after such election (without giving
affect to any previous cash contributions or Conforming ▇▇▇▇▇▇▇
L/C).
"Consolidated Capital Expenditures" means, for any period, the
sum of (i) the aggregate of all expenditures (whether paid in
cash or other consideration or accrued as a liability and
including that portion of Capital Leases which is capitalized on
the consolidated balance sheet of Borrowers) by Borrowers and
their Subsidiaries during that period that, in conformity with
GAAP, are included in "additions to property, plant or equipment"
or comparable items reflected in the consolidated statement of
cash flows of Borrowers plus (ii) to the extent not covered by
clause (i) of this definition, any expenditures by Borrowers
(excluding any Excluded Subsidiaries) during that period to
acquire (by purchase or otherwise) the business, property or
fixed assets of any Person, or the stock or other evidence of
beneficial ownership of any Person that, as a result of such
acquisition, becomes a Subsidiary of the Borrowers or either of
them; provided, however, that any expenditures related to the
construction of the Phase I-A Project or the Guggenheim Projects
shall be excluded from such definition.
"Consolidated Cash Interest Expense" means, for any period,
Consolidated Interest Expense for such period, excluding,
however, any interest expense not payable in Cash (including
amortization of discount and amortization of debt issuance
costs).
"Consolidated Current Assets" means, as at any date of
determination, the total assets of Borrowers and their
Subsidiaries on a consolidated basis (excluding any Excluded
Subsidiaries) which may properly be classified as current assets
in conformity with GAAP, excluding Cash and cash equivalents.
"Consolidated Current Liabilities" means, as at any date of
determination, the total liabilities of Borrowers and their
Subsidiaries on a consolidated basis (excluding any Excluded
Subsidiaries) which may properly be classified as current
liabilities in conformity with GAAP, excluding the current
portions of Funded Debt and any liabilities otherwise classified
as current liabilities in conformity with GAAP to the extent
incurred under the Operative Documents with respect to
construction of the Project, the Phase I-A Tower and the
Guggenheim Projects.
"Consolidated Excess Cash Flow" means, for any period, an amount
(if positive) equal to (i) the sum, without duplication, of the
amounts for such period of (a) Consolidated Adjusted EBITDA and
(b) the Consolidated Working Capital Adjustment minus (ii) the
sum, without duplication, of the amounts for such period of (a)
voluntary and scheduled repayments of Consolidated Total Debt to
the extent actually paid (excluding repayments of Revolving Loans
except to the extent the Commitments are permanently reduced in
connection with such repayments), (b) Consolidated Capital
Expenditures (net of any proceeds of any related financings with
respect to such expenditures), (c) Consolidated Cash Interest
Expense other than any interest expense in respect of Employee
Repurchase Notes, (d) any amounts distributed by Borrowers for
tax payments in accordance with subsection 7.5 with respect to
such period and (without duplication) the provision for current
taxes based on income of Borrowers (excluding any Subsidiaries)
and payable by Borrowers to any Governmental Instrumentality in
cash with respect to such period, (e) any amounts distributed to
Borrowers or their Subsidiaries from New Mall Subsidiary, Mall
Subsidiary, Mall Direct Holdings, New Mall Manager or Mall
Manager following the sale or other disposition of all or any
portion of the Mall or any interest therein (including by sale or
other disposition of any equity interest in New Mall Subsidiary,
Mall Subsidiary, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇
Manager or New Mall Manager) or any issuance of debt or equity
securities of such entities to the extent included in
Consolidated Adjusted EBITDA up to the amount of the proceeds of
such sale, disposition or issuance (net of any distribution for
Permitted Quarterly Tax Distributions made in accordance with the
last sentence of subsection 2.4B(iii)(g)) and (f) the amount of
any Conforming ▇▇▇▇▇▇▇ L/C to the extent included in Consolidated
Adjusted EBITDA.
9
"Consolidated Fixed Charges" means, for any period, the sum
(without duplication) of the amounts for such period of (i)
Consolidated Cash Interest Expense, (ii) scheduled repayments of
principal on Indebtedness (other than repayment of the Revolving
Loan on the Revolving Loan Commitment Termination Date and
scheduled payments of the Term Loans on ▇▇▇▇▇ ▇▇, ▇▇▇▇), (▇▇▇)
any amounts distributed by Borrowers for tax payments in
accordance with subsection 7.5 with respect to such period and
(without duplication) provisions for taxes based on income
payable by Borrowers to any Governmental Instrumentality, (iv)
Consolidated Rental Payments, and (v) Consolidated Capital
Expenditures, all of the foregoing as determined on a
consolidated basis for Borrowers and their Subsidiaries in
conformity with GAAP.
"Consolidated Interest Expense" means, for any period, total
interest expense (including that portion attributable to Capital
Leases in accordance with GAAP and capitalized interest) of
Borrowers and their Subsidiaries on a consolidated basis with
respect to all outstanding Indebtedness of Borrowers, including
all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing
and net costs under Interest Rate Agreements, but excluding,
however, any amounts referred to in subsection 2.3 payable to
Agents and Lenders on or before November 14, 1997 and any fees
and expenses payable to Agents and Lenders in connection with
this Agreement and fees and expenses payable to the FF&E Lenders
and their agent in connection with the FF&E Facility Agreement in
each case, prior to the Closing Date and any fees and expenses
payable to the FF&E Lenders and their agent in connection with
the FF&E Facility Agreement (2001) prior to the closing date of
such facility.
"Consolidated Net Income" means, for any period, the net income
(or loss) of Borrowers and their Subsidiaries on a consolidated
basis for such period taken as a single accounting period
determined in conformity with GAAP; provided that there shall be
excluded (i) the income (or loss) of any Person (other than a
Subsidiary of a Borrower), except to the extent of the amount of
dividends or other distributions actually paid to Borrowers or
any of their Subsidiaries by such Person during such period, (ii)
the income (or loss) of any Person accrued prior to the date it
is merged into or consolidated with Borrowers or that Person's
assets are acquired by Borrowers, (iii) any after-tax gains or
losses attributable to Asset Sales or returned surplus assets of
any Pension Plan, (iv) dividends or distributions from any
Excluded Subsidiary to Borrowers or any Subsidiary which are used
to fund Permitted Quarterly Tax Distributions and (v) (to the
extent not included in clauses (i), (ii) and (iii) above) any net
extraordinary gains or net non-cash extraordinary losses,
including, without limitation, any refinancing costs or charges.
"Consolidated Net Worth" means, as of any date of determination,
(i) the sum of the following items, as shown on the consolidated
balance sheet of LVSI and its Subsidiaries as of such date (a)
the common equity of LVSI and its Subsidiaries, (b)(1) the
aggregate liquidation preference of preferred stock or preferred
membership interests of LVSI and its Subsidiaries and (2) any
increase in depreciation and amortization resulting from any
purchase accounting treatment from an acquisition or related
financing; (ii) less any goodwill incurred subsequent to November
14, 1997 and (iii) less any write up of assets (in excess of fair
market value) after November 14, 1997, in each case on a
consolidated basis for LVSI and its Subsidiaries, determined in
accordance with GAAP; provided, that in calculating Consolidated
Net Worth, any gain or loss from any Asset Sale shall be
excluded.
"Consolidated Rental Payments" means, for any period, the
aggregate amount of all rents paid or payable by Borrowers and
their Subsidiaries on a consolidated basis (excluding any
Excluded Subsidiaries) during that period under all Capital
Leases to which either Borrower or any of their respective
Subsidiaries is a party as lessee. Notwithstanding the foregoing,
payments under the HVAC Services Agreement and the Phase II Lease
shall in no event be included in Consolidated Rental Payments.
"Consolidated Total Debt" means, as at any date of determination,
the aggregate stated balance sheet amount of all Indebtedness of
Borrowers and their Subsidiaries, determined on a consolidated
basis in accordance with GAAP, excluding, however, any Employee
Purchase Notes entered into in accordance with subsection
7.1(xi).
10
"Consolidated Working Capital" means, as at any date of
determination, the excess (or deficit) of Consolidated Current
Assets over Consolidated Current Liabilities.
"Consolidated Working Capital Adjustment" means, for any period
on a consolidated basis, the amount (which may be a negative
number) by which Consolidated Working Capital as of the beginning
of such period exceeds (or is less than) Consolidated Working
Capital as of the end of such period.
"Construction Agency Agreement" means that certain Construction
Agency Agreement dated as of November 14, 1997 by and between
HVAC Provider and Venetian.
"Construction Consultant" means Tishman Construction Corporation
of Nevada, or any other person designated from time to time by
the Administrative Agent, the Interim Mall Lender and the
Mortgage Notes Indenture Trustee, in their sole discretion,
acting pursuant to the Intercreditor Agreement, to serve as the
Construction Consultant under the Disbursement Agreement.
"Construction Consultant Engagement Agreement" means that certain
engagement letter dated November 14, 1997 by and among the
Construction Consultant, Borrowers, Administrative Agent, Interim
Mall Lender, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company, the Mortgage Notes
Indenture Trustee and ▇▇▇▇▇▇▇ Sachs & Co.
"Construction Litigation" has the meaning assigned to that term
in subsection 5.17A.
"Construction Management Agreement" means that certain
Construction Management Agreement dated as of February 15, 1997
between Borrowers and Construction Manager for the construction
of the Project as amended and assigned to Venetian pursuant to a
certain Assignment, Assumption and Amendment of Construction
Management Agreement dated as of November 14, 1997.
"Construction Manager" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Bovis Inc., a New
York corporation and its successors and assigns permitted under
the Construction Management Agreement.
"Construction Related Obligations" means certain Legal
Requirements in connection with the development of the Project
including, without limitation, obligations under the ▇▇▇▇▇▇'▇
Shared Roadway Agreement and the obligations referred to in
clause (v) of the definition of "Standby Letter of Credit".
"Contingent Obligation", as applied to any Person, means any
direct or indirect liability, contingent or otherwise, of that
Person (i) with respect to any Indebtedness, lease, dividend or
other obligation of another if the primary purpose or intent
thereof by the Person incurring the Contingent Obligation is to
provide assurance to the obligee of such obligation of another
that such obligation of another will be paid or discharged, or
that any agreements relating thereto will be complied with, or
that the holders of such obligation will be protected (in whole
or in part) against loss in respect thereof, (ii) with respect to
any letter of credit issued for the account of that Person or as
to which that Person is otherwise liable for reimbursement of
drawings, or (iii) under Interest Rate Agreements. Contingent
Obligations shall include (a) the direct or indirect guaranty,
endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation
of another, (b) the obligation to make take-or-pay or similar
payments if required regardless of non-performance by any other
party or parties to an agreement, and (c) any liability of such
Person for the obligation of another through any agreement
(contingent or otherwise) (X) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital
contributions or otherwise) or (Y) to maintain the solvency or
any balance sheet item, level of income or financial condition of
another if, in the case of any agreement described under
subclauses (X) or (Y) of this sentence, the primary purpose or
intent thereof is as described in the preceding sentence. The
amount of any Contingent Obligation shall be equal to the amount
of the obligation so guaranteed or otherwise supported or, if
less, the amount to which such Contingent Obligation is
specifically limited.
12
"Contractors" means any architects, consultants, designers,
contractors, sub-contractors, suppliers, laborers or any other
Person engaged by any Borrower(s) in connection with the design,
engineering, installation and construction of the Project (other
than Construction Manager).
"Contracts" means, collectively, the contracts entered into, from
time to time, between any Borrower(s) and any Contractor for
performance of services or sale of goods in connection with the
design, engineering, installation or construction of the Project.
"Contractual Obligation", as applied to any Person, means any
provision of any Security issued by that Person or of any
material indenture, mortgage, deed of trust, contract,
undertaking, agreement or other instrument to which that Person
is a party or by which it or any of its properties is bound or to
which it or any of its properties is subject.
"Cooperation Agreement" means that certain Amended and Restated
Reciprocal Easement, Use and Operating Agreement dated as of
November 14, 1997 by and between LVSI, Venetian, Mall
Construction Subsidiary (replaced by New Mall Subsidiary pursuant
to an amendment dated December 20, 1999), Phase II Subsidiary and
Interface.
"Deed of Trust" means that certain Deed of Trust, Assignment of
Rents and Leases and Security Agreement in the form of Exhibit
XIII annexed hereto, dated effective as of November 14, 1997
granted by Borrowers to the Title Company, for the benefit of
Administrative Agent, as agent for the Lenders.
"Deposit Account" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union
or like organization, other than an account evidenced by a
negotiable certificate of deposit.
"Direct Construction Guarantor" means Bovis, Inc., a New York
corporation or any successor permitted under the Direct
Construction Guaranty.
"Direct Construction Guaranty" means that certain Guaranty of
Performance and Completion dated as of August 19, 1997 executed
by the Direct Construction Guarantor in favor of LVSI.
"Disbursement Agent" means Scotiabank, in its capacity as
Disbursement Agent under the Disbursement Agreement, and any
successor Disbursement Agent appointed pursuant to the terms of
the Disbursement Agreement.
"Disbursement Agreement" means that certain Funding Agents'
Disbursement and Administration Agreement dated as of November
14, 1997 among Borrowers, the Mall Construction Subsidiary, the
Administrative Agent, the Mortgage Notes Indenture Trustee, the
Interim Mall Lender, the HVAC Provider and the Disbursement
Agent.
"Disbursement Agreement Event of Default" means any Event of
Default under and as defined in the Disbursement Agreement.
"Dollars" and the sign "$" mean the lawful money of the United
States of America.
"Eighth Month Certificate" has the meaning set forth in the
Disbursement Agreement.
"Eligible Assignee" means (A) (i) a commercial bank organized
under the laws of the United States or any state thereof; (ii) a
savings and loan association or savings bank organized under the
laws of the United States or any state thereof; (iii) a
commercial bank organized under the laws of any other country or
a political subdivision thereof; provided that (x) such bank is
acting through a branch or agency located in the United States or
(y) such bank is organized under the laws of a country that is a
member of the Organization for Economic Cooperation and
Development or a political subdivision of such country; and (iv)
any other entity which is an "accredited investor" (as defined in
Regulation D under the Securities Act) which extends credit or
buys loans as one of its businesses including insurance
companies, mutual funds and lease financing companies; and (B)
any Lender and any Affiliate of any Lender; provided that no
Affiliate of Borrowers shall be an Eligible Assignee; provided
further that so long as no Event of Default shall have occurred
and be continuing, no (i) Person that owns or operates a casino
located in the State of Nevada or the State of New Jersey (or is
an Affiliate of such a Person) (provided that a passive
investment constituting less than 20% of the common stock of any
13
such casino shall not constitute ownership thereof for the
purposes of this definition), (ii) Person that owns or operates a
convention, trade show or exhibition facility in Las Vegas,
Nevada or ▇▇▇▇▇ County, Nevada (or an Affiliate of such a Person)
(provided that a passive investment constituting less than 20% of
the common stock of any such convention or trade show facility
shall not constitute ownership for the purpose of this
definition), or (iii) union pension fund (provided that any
intermingled fund or managed account which has as part of its
assets under management the assets of a union pension fund shall
not be disqualified from being an Eligible Assignee hereunder so
long as the manager of such fund is not controlled by a union),
shall be an Eligible Assignee, in each case which Person shall
not have been denied an approval or a license, or found
unsuitable under the Nevada Gaming Laws applicable to Lenders.
"Employee Benefit Plan" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is or was maintained or
contributed to by Borrowers, any of its Subsidiaries or any of
their respective ERISA Affiliates.
"Employee Repurchase Notes" has the meaning set forth in
subsection 7.1.
"Environmental Claim" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement
order or other order or directive (conditional or otherwise), by
any governmental authority or any other Person, arising (i)
pursuant to or in connection with any actual or alleged violation
of any Environmental Law, (ii) in connection with any Hazardous
Materials or any actual or alleged Hazardous Materials Activity,
or (iii) in connection with any actual or alleged damage, injury,
threat or harm to health, safety, natural resources or the
environment.
"Environmental Laws" means any and all current or future
statutes, ordinances, orders, rules, regulations, guidance
documents, judgments, Permits, or any other requirements of
governmental authorities relating to (i) environmental matters,
including those relating to any Hazardous Materials Activity,
(ii) the generation, use, storage, transportation or disposal of
Hazardous Materials, or (iii) occupational safety and health,
industrial hygiene, land use or the protection of human, plant or
animal health or welfare, in any manner applicable to Borrowers
or any of its Subsidiaries or any Facility, including the
Comprehensive Environmental Response, Compensation, and Liability
Act (42 ▇.▇.▇.▇▇. 9601 et seq.), the Hazardous Materials
Transportation Act (49 ▇.▇.▇.▇▇. 1801 et seq.), the Resource
Conservation and Recovery Act (42 ▇.▇.▇.▇▇. 6901 et seq.), the
Federal Water Pollution Control Act (33 ▇.▇.▇.▇▇. 1251 et seq.),
the Clean Air Act (42 ▇.▇.▇.▇▇. 7401 et seq.), the Toxic
Substances Control Act (15 ▇.▇.▇.▇▇. 2601 et seq.), the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C.ss.136 et
seq.), the Occupational Safety and Health Act (29 ▇.▇.▇.▇▇. 651
et seq.), the Oil Pollution Act (33 ▇.▇.▇.▇▇. 2701 et seq.) and
the Emergency Planning and Community Right-to-Know Act (42
▇.▇.▇.▇▇. 11001 et seq.), each as amended or supplemented, any
analogous present or future state or local statutes or laws, and
any regulations promulgated pursuant to any of the foregoing.
"Equipment Component" has the meaning assigned to that term in
the Disbursement Agreement.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor thereto.
"ERISA Affiliate" means, as applied to any Person, (i) any
corporation which is a member of a controlled group of
corporations within the meaning of Section 414(b) of the Code of
which that Person is a member; (ii) any trade or business
(whether or not incorporated) which is a member of a group of
trades or businesses under common control within the meaning of
Section 414(c) of the Code of which that Person is a member; and
(iii) any member of an affiliated service group within the
meaning of Section 414(m) or (o) of the Code of which that
Person, any corporation described in clause (i) above or any
trade or business described in clause (ii) above is a member. Any
former ERISA Affiliate of Borrowers or any of their Subsidiaries
shall continue to be considered an ERISA Affiliate of Borrowers
or such Subsidiary within the meaning of this definition with
respect to the period such entity was an ERISA Affiliate of
Borrowers or such Subsidiary and with respect to liabilities
arising after such period for which Borrowers or such Subsidiary
could be liable under the Code or ERISA.
14
"ERISA Event" means (i) a "reportable event" within the meaning
of Section 4043 of ERISA and the regulations issued thereunder
with respect to any Pension Plan (excluding those for which the
provision for 30-day notice to the PBGC has been waived by
regulation); (ii) the failure to meet the minimum funding
standard of Section 412 of the Code with respect to any Pension
Plan (whether or not waived in accordance with Section 412(d) of
the Code) or the failure to make by its due date a required
installment under Section 412(m) of the Code with respect to any
Pension Plan or the failure to make any required contribution to
a Multiemployer Plan; (iii) the provision by the administrator of
any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a
notice of intent to terminate such plan in a distress termination
described in Section 4041(c) of ERISA; (iv) the withdrawal by
Borrowers, any of its Subsidiaries or any of their respective
ERISA Affiliates from any Pension Plan with two or more
contributing sponsors or the termination of any such Pension Plan
resulting in liability pursuant to Section 4063 or 4064 of ERISA;
(v) the institution by the PBGC of proceedings to terminate any
Pension Plan, or the occurrence of any event or condition which
might constitute grounds under ERISA for the termination of, or
the appointment of a trustee to administer, any Pension Plan;
(vi) the imposition of liability on Borrowers, any of its
Subsidiaries or any of their respective ERISA Affiliates pursuant
to Section 4062(e) or 4069 of ERISA or by reason of the
application of Section 4212(c) of ERISA; (vii) the withdrawal of
Borrowers, any of its Subsidiaries or any of their respective
ERISA Affiliates in a complete or partial withdrawal (within the
meaning of Sections 4203 and 4205 of ERISA) from any
Multiemployer Plan if there is any potential liability therefor,
or the receipt by Borrowers, any of its Subsidiaries or any of
their respective ERISA Affiliates of notice from any
Multiemployer Plan that it is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA;
(viii) the occurrence of an act or omission which could give rise
to the imposition on Borrowers, any of its Subsidiaries or any of
their respective ERISA Affiliates of fines, penalties, taxes or
related charges under Chapter 43 of the Code or under Section
409, Section 502(c), (i) or (l), or Section 4071 of ERISA in
respect of any Employee Benefit Plan; (ix) the assertion of a
material claim (other than routine claims for benefits) against
any Employee Benefit Plan other than a Multiemployer Plan or the
assets thereof, or against Borrowers, any of its Subsidiaries or
any of their respective ERISA Affiliates in connection with any
Employee Benefit Plan; (x) receipt from the Service of notice of
the failure of any Pension Plan (or any other Employee Benefit
Plan intended to be qualified under Section 401(a) of the Code)
to qualify under Section 401(a) of the Code, or the failure of
any trust forming part of any Pension Plan to qualify for
exemption from taxation under Section 501(a) of the Code; or (xi)
the imposition of a Lien pursuant to Section 401(a)(29) or 412(n)
of the Code or pursuant to ERISA with respect to any Pension
Plan.
"Estimation Period" means the period for which a shareholder,
partner or member, who is an individual is required to estimate
for federal income tax purposes his allocation of taxable income
from a Subchapter S corporation or a partnership for federal
income tax purposes in connection with determining his estimated
federal income tax liability for such period.
"Eurodollar Rate Loans" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as
provided in subsection 2.2A.
"Event of Default" means each of the events set forth in Section
8.
"Event of Loss" means, with respect to any property or asset
(tangible or intangible, real or personal), any of the following:
(A) any loss, destruction or damage of such property or asset;
(B) any actual condemnation, seizure or taking by exercise of the
power of eminent domain or otherwise of such property or asset,
or confiscation of such property or asset or the requisition of
the use of such property or asset; or (C) any settlement in lieu
of clause (B) above.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"Excluded Subsidiary" means any Person excluded from the
definition of Subsidiary by virtue of the last sentence of such
definition set forth in this subsection 1.1 (including, without
limitation, New Mall Subsidiary, Mall Subsidiary, Phase II
15
Subsidiary, Mall Direct Holdings, Phase II Direct Holdings, Mall
Manager, New Mall Manager, Phase II Manager and any other Person
designated as an Excluded Subsidiary under Section 7.3(x)).
"Existing Credit Agreement" has the meaning set forth in the
third Recital.
"Facilities" means any and all real property (including all
buildings, fixtures or other improvements located thereon) now,
hereafter or heretofore owned, leased, operated or used by
Borrowers or any of their Subsidiaries or any of their respective
predecessors or Affiliates including, without limitation, the
Site.
"FDIC" means the Federal Deposit Insurance Corporation.
"Federal Funds Effective Rate" means, for any period, a
fluctuating interest rate equal for each day during such period
to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of
the quotations for such day on such transactions received by
Agent from three Federal funds brokers of recognized standing
selected by Administrative Agent.
"FF&E Facility" means the commitments, credit facilities,
equipment leases or similar agreements with the FF&E Lenders in
an aggregate principal amount of approximately $132,700,000 (plus
accrued and unpaid interest thereon) to finance the purchase and
installment of the Specified FF&E.
"FF&E Facility Agreement" means (i) that certain credit agreement
dated December 22, 1997 among Borrowers, General Electric Capital
Corporation and the other FF&E Lenders party thereto as amended
by (x) a Limited Waiver and First Amendment to Term Loan and
Security Agreement dated as of November 12, 1999, (y) a Limited
Waiver and Second Amendment to Term Loan and Security Agreement
dated as of June 13, 2000 and (z) a Limited Waiver, Consent and
Third Amendment to Term Loan and Security Agreement dated as of
June 29, 2001 (as further amended, restated, supplemented or
modified from time to time), (ii) the FF&E Facility Agreement
(2001) and (iii) such other agreements among FF&E Lender(s) and
Borrowers providing for all or a portion of the FF&E Facility
(not covered under clause (i) or (ii)) on substantially the same
terms as the financing described in clause (i) or (ii) above, or
otherwise reasonably satisfactory to the Arranger and
Administrative Agent (as amended, restated, supplemented or
modified from time to time), provided in each case that the
applicable FF&E Lenders have entered into intercreditor
agreement(s) in form and substance satisfactory to the
Administrative Agent.
"FF&E Facility Agreement (2001)" means (i) the credit agreement
entered into or to be entered into among Venetian, LVSI and the
lenders party thereto, evidencing the debt facility on the terms
satisfactory to the Administrative Agent (the "FF&E Letter
Agreement"), (ii) such other agreements among certain lender(s),
Venetian and LVSI, providing for all or a portion of the FF&E
Facility (not covered under clause (i)) on substantially the same
terms as the financing described in clause (i) above, or
otherwise reasonably satisfactory to Scotiabank, as
Administrative Agent, provided in each case that the applicable
lenders have entered into intercreditor agreement(s) in form and
substance satisfactory to Scotiabank, as Administrative Agent.
"FF&E Intercreditor Agreement" means that certain Intercreditor
Agreement dated as of December 22, 1997 entered into among the
Administrative Agent, the Mortgage Notes Indenture Trustee, the
Interim Mall Lender and General Electric Capital Corporation as
agent for the FF&E Lenders and such other Persons as may be
necessary parties thereunder (as amended, restated, supplemented
or modified from time to time).
"FF&E Intercreditor Agreement (2001)" means the intercreditor
agreement(s) entered into or to be entered into among Scotiabank,
as Administrative Agent, Scotiabank, as administrative agent
under the Lido Facility Agreement, the lenders party to the FF&E
Facility Agreement (2001) and such other Persons as may be
necessary parties thereunder, in each case in form and substance
satisfactory to Scotiabank, as Administrative Agent.
16
"FF&E Lenders" means (i) General Electric Capital Corporation,
and the other lenders that are parties to the FF&E Facility
Agreements described in clauses (i) and (ii) of the definition of
such term and (ii) any other lenders under any other FF&E
Facility Agreement.
"FF&E Letter Agreement" has the meaning set forth in the
definition of "FF&E Facility Agreement (2001)".
"Final Completion" has the meaning set forth in the Disbursement
Agreement.
"Final Completion Date" has the meaning set forth in the
Disbursement Agreement.
"Financial Plan" has the meaning assigned to that term in
subsection 6.1(xiii).
"Financing Agreements" means, collectively, this Agreement, the
Disbursement Agreement, the Interim Mall Credit Agreement, the
Mortgage Notes Indenture, the Collateral Documents, the Other
Security Documents, the Mortgage Notes, any Approved Equipment
Funding Commitment, the FF&E Facility Agreements, any Completion
Guaranty Note, any Substitute Tranche B Note (as such term is
defined in the Initial Credit Agreement), and any other loan or
security agreements entered into by Borrowers or any of their
Subsidiaries on, prior to or after November 14, 1997 (excluding
the Permanent Mall Loan Agreement) to finance the Project in
accordance with subsection 7.13 and, while applicable, the
Disbursement Agreement.
"First Priority" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document,
that such Lien is the only Lien (other than Liens permitted
pursuant to subsection 7.2) to which such Collateral is subject.
"First Priority Collateral" means all assets, property, real,
personal and mixed of Borrowers and their Subsidiaries, other
than real or personal property or other assets acquired or leased
by Borrowers or their Subsidiaries pursuant to subsection
7.1(viii), and any proceeds of such property or other assets or
such indebtedness and any related collateral accounts in which
such proceeds are held, the Mortgage Notes Proceeds Account, the
GECC Proceeds Account, the Interim Mall Proceeds Account, the
HVAC Component, the stock or membership interests of Subsidiaries
and Excluded Subsidiaries, provided, that any assets expressly
excluded from the Lien in favor of Administrative Agent on behalf
of Lenders under the Collateral Documents shall not constitute
First Priority Collateral and provided further to the extent that
the Lien of Administrative Agent in favor of the Lenders in any
of the Specified FF&E shall be or has been released in accordance
with the terms of the Company Security Agreement, such Specified
FF&E shall thereafter be excluded from the First Priority
Collateral.
"Fiscal Quarter" means a fiscal quarter of any Fiscal Year.
"Fiscal Year" means the fiscal year of Borrowers ending on
December 31 of each calendar year.
"Former Lender" has the meaning assigned to that term in
subsection 10.7(a).
"Funded Debt", as applied to any Person, means all Indebtedness
of that Person (including any current portions thereof) which by
its terms or by the terms of any instrument or agreement relating
thereto matures more than one year from, or is directly renewable
or extendable at the option of that Person to a date more than
one year from (including an option of that Person under a
revolving credit or similar agreement obligating the lender or
lenders to extend credit over a period of one year or more from),
the date of the creation thereof.
"Funding and Payment Office" means (i) the office of
Administrative Agent located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ or (ii) such other office of
Administrative Agent as may from time to time hereafter be
designated as such in a written notice delivered by
Administrative Agent to Borrowers and each Lender.
"Funding Date" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, generally accepted
accounting principles set forth in opinions and pronouncements of
the Accounting Principles Board of the American Institute of
17
Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a
significant segment of the accounting profession, in each case as
the same are applicable to the circumstances as of the Closing
Date.
"Gaming License" means every license, franchise or other
authorization to own, lease, operate or otherwise conduct gaming
activities of the Borrowers or any of their Subsidiaries,
including without limitation, all such licenses granted under the
Nevada Gaming Control Act, and the regulations promulgated
pursuant thereto, and other applicable federal, state, foreign or
local laws.
"GECC Proceeds Account" means any account funded solely by
proceeds of loans made pursuant to any FF&E Facility Agreement.
"GMAC Guaranty" means the guaranty dated as of November 14, 1997
by ▇▇▇▇▇▇▇ in favor of Interim Mall Lender.
"Governmental Acts" has the meaning assigned to that term in
subsection 3.5A.
"Governmental Instrumentality" means any national, state or local
government (whether domestic or foreign), any political
subdivision thereof or any other governmental,
quasi-governmental, judicial, public or statutory
instrumentality, authority, body, agency, bureau or entity,
(including the Nevada Gaming Authorities, any zoning authority,
the FDIC, the Comptroller of the Currency or the Federal Reserve
Board, any central bank or any comparable authority) or any
arbitrator with authority to bind a party at law.
"Guggenheim Projects" means (a) the proposed Guggenheim Las Vegas
Exhibit Hall to be constructed adjacent to the Project and (b)
the proposed exhibition space to be constructed within the hotel
to display artwork from the Guggenheim Museum and the State
Hermitage Museum.
"▇▇▇▇▇▇'▇ Shared Roadway Agreement" has the meaning assigned that
term in the Disbursement Agreement.
"Hazardous Materials" means (i) any chemical, material or
substance at any time defined as or included in the definition of
"hazardous substances", "hazardous wastes", "hazardous
materials", "extremely hazardous waste", acutely hazardous
waste", "radioactive waste", "biohazardous waste", "pollutant",
"toxic pollutant", "contaminant", "restricted hazardous waste",
"infectious waste", "toxic substances", or any other term or
expression intended to define, list or classify substances by
reason of properties harmful to health, safety or the indoor or
outdoor environment (including harmful properties such as
ignitability, corrosivity, reactivity, carcinogenicity, toxicity,
reproductive toxicity, "TCLP toxicity" or "EP toxicity" or words
of similar import under any applicable Environmental Laws); (ii)
any oil, petroleum, petroleum fraction or petroleum derived
substance; (iii) any drilling fluids, produced waters and other
wastes associated with the exploration, development or production
of crude oil, natural gas or geothermal resources; (iv) any
flammable substances or explosives; (v) any radioactive
materials; (vi) any asbestos-containing materials; (vii) urea
formaldehyde foam insulation; (viii) electrical equipment which
contains any oil or dielectric fluid containing polychlorinated
biphenyls; (ix) pesticides; and (x) any other chemical, material
or substance, exposure to which is prohibited, limited or
regulated by any governmental authority or which may or could
pose a hazard to the health and safety of the owners, occupants
or any Persons in the vicinity of any Facility or to the indoor
or outdoor environment.
"Hazardous Materials Activity" means any past, current, proposed
or threatened activity, event or occurrence involving any
Hazardous Materials, including the use, manufacture, possession,
storage, holding, presence, existence, location, Release,
threatened Release, discharge, placement, generation,
transportation, processing, construction, treatment, abatement,
removal, remediation, disposal, disposition or handling of any
Hazardous Materials, and any corrective action or response action
with respect to any of the foregoing.
"HVAC Ground Lease" means that certain Ground Lease made
effective as of November 14, 1997 between Venetian and the HVAC
Provider.
18
"HVAC Component" means, collectively (i) the Central Plant and
(ii) the "Other Facilities", as defined in each HVAC Services
Agreement.
"HVAC Provider" means Sempra Energy Solutions, a California
corporation (successor to Atlantic-Pacific, Las Vegas LLC, a
Delaware limited liability company) or its permitted successors
under the HVAC Services Agreement.
"HVAC Services Agreements" means collectively (i) that certain
Energy Services Agreement dated as of November 14, 1997 between
Venetian and the HVAC Provider, (ii) the HVAC Ground Lease, (iii)
the Construction Agency Agreement (iv) that certain Energy
Services Agreement dated as of November 14, 1997 between Mall
Construction Subsidiary and the HVAC Provider and (v) all other
agreements between the HVAC Provider and the Borrowers or its
Subsidiaries (and any amendments of any agreements described in
clause (i), (ii), (iii) and (iv) above), as approved by
Scotiabank, as Administrative Agent, in its sole discretion.
"Improvements" means the buildings, fixtures and other
improvements to be situated on the Site.
"Included Taxes" has the meaning assigned to that term in
subsection 2.7B(i).
"Indebtedness", as applied to any Person, means (i) all
indebtedness for borrowed money, (ii) that portion of obligations
with respect to Capital Leases that is properly classified as a
liability on a balance sheet in conformity with GAAP, (iii) notes
payable and drafts accepted representing extensions of credit
whether or not representing obligations for borrowed money, (iv)
any obligation owed for all or any part of the deferred purchase
price of property or services (excluding any such obligations
incurred under ERISA and trade payables and accruals incurred in
the ordinary course of business), and (v) all indebtedness
secured by any Lien on any property or asset owned or held and
under Contracts by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that
Person or is nonrecourse to the credit of that Person.
Obligations under Interest Rate Agreements constitute Contingent
Obligations and not Indebtedness. All obligations under the
Financing Agreements shall constitute Indebtedness. Obligations
under the HVAC Services Agreement, the Phase I-A Lease and the
Phase II Lease shall be treated as service contracts or operating
leases and not Indebtedness.
"Indemnitee" has the meaning assigned to that term in subsection
10.3.
"Indentures" means the Mortgage Notes Indenture and the
Subordinated Notes Indenture or either one of them.
"Independent Consultants" means collectively the Construction
Consultant, the Insurance Advisor or in either case their
successors appointed pursuant to the Disbursement Agreement.
"Independent Financial Advisor" means an accounting, appraisal or
investment banking firm of nationally recognized standing that
is, in the judgment of LVSI's Board of Directors, (i) qualified
to perform the task for which it has been engaged and (ii)
disinterested and independent with respect to LVSI and its
Subsidiaries and each Affiliate of LVSI and ▇▇▇▇▇▇▇.
"Indirect Construction Guarantor" means The Peninsular and
Oriental Steam Navigation Company, a corporation organized under
the laws of England and Wales.
"Indirect Construction Guaranty" means that certain Guaranty
dated as of August 19, 1997 executed by Indirect Construction
Guarantor in favor of LVSI.
"Initial Credit Agreement" has the meaning set forth in the first
Recital.
"Insurance Advisor" means ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ of Tennessee, Inc., or
its successor, appointed pursuant to the Disbursement Agreement.
"Intellectual Property" means all patents, trademarks, trade
names, copyrights, technology, know-how and processes used in or
necessary for the conduct of the business of Borrowers as
proposed to be conducted pursuant to the Operative Documents that
are material to the condition (financial or otherwise), business
or operations of the Borrowers.
"Intercreditor Agent" means Scotiabank, in its capacity as
19
Intercreditor Agent under the Intercreditor Agreement, and any
successor Intercreditor Agent appointed pursuant to the terms of
the Intercreditor Agreement.
"Intercreditor Agreement" means that certain Intercreditor
Agreement dated as of November 14, 1997 among the Administrative
Agent, the Intercreditor Agent, the Mortgage Notes Indenture
Trustee, the Interim Mall Lender and the Subordinated Notes
Indenture Trustee, in substantially the form of Exhibit XIV
annexed hereto.
"Interest Payment Date" means (i) with respect to any Base Rate
Loan, each March 31, June 30, September 30 and December 31 of
each year, commencing on the first such date to occur after
November 14, 1997, and (ii) with respect to any Eurodollar Rate
Loan, the last day of each Interest Period applicable to such
Loan that in the case of each Interest Period of longer than
three months "Interest Payment Date" shall also include each date
that is three months, or an integral multiple thereof, after the
commencement of such Interest Period.
"Interest Period" has the meaning assigned to that term in
subsection 2.2B.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or
other similar agreement or arrangement.
"Interest Rate Determination Date" means, with respect to any
Interest Period, two Business Days prior to the first day of such
Interest Period.
"Interface" means Interface Group-Nevada, Inc., a Nevada
corporation.
"Interface Lease" means the lease agreement dated November 1,
1996 between Interface and LVSI.
"Interim Mall Credit Agreement" means that certain Credit
Agreement dated as of November 14, 1997 among Borrowers, Mall
Construction Subsidiary and Interim Mall Lender.
"Interim Mall Lender" means GMAC Commercial Mortgage Corporation
and its permitted successors and assigns.
"Interim Mall Proceeds Account" has the meaning assigned that
term in the Disbursement Agreement.
"Intermediate Holding Companies" means Mall Holdings and the
Phase II Holdings.
"Investment" means (i) any direct or indirect purchase or other
acquisition by Borrowers or any of their Subsidiaries of, or of a
beneficial interest in, any Securities of any other Person
(including any Subsidiary), (ii) any direct or indirect
redemption, retirement, purchase or other acquisition for value,
by Borrowers or any of their Subsidiaries from any Person, of any
equity Securities of any Subsidiary of Borrowers, or (iii) any
direct or indirect loan, advance (other than advances to
employees for moving, entertainment and travel expenses, drawing
accounts and similar expenditures in the ordinary course of
business) or capital contribution by Borrowers or any of their
Subsidiaries to any other Person, including all indebtedness and
accounts receivable from that other Person that are not current
assets or did not arise from sales to that other Person in the
ordinary course of business other than Interest Rate Agreements
required or permitted hereunder to hedge against fluctuations in
interest rates. The amount of any Investment shall be the
original cost of such Investment plus the cost of all additions
thereto, without any adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to
such Investment.
"Issuing Lender" means, with respect to any Letter of Credit, the
Lender which agrees or is otherwise obligated to issue such
Letter of Credit, determined as provided in subsection 3.1B(ii).
"Joint Venture" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership, limited
liability company or other legal form; provided that in no event
shall any corporate Subsidiary of any Person be considered to be
a Joint Venture to which such Person is a party.
"Legal Requirements" means all laws, statutes, orders, decrees,
injunctions, licenses, permits, approvals, agreements and
20
regulations of any Governmental Instrumentality having
jurisdiction over the matter in question.
"Lender" and "Lenders" means the persons identified as "Lenders"
and listed on the signature pages of this Agreement, whether or
not executed by such Lenders, together with their successors and
permitted assigns pursuant to subsection 10.1; provided that the
term "Lenders", when used in the context of a particular
Commitment, shall mean Lenders having that Commitment.
"Letter of Credit" or "Letters of Credit" means Commercial
Letters of Credit and Standby Letters of Credit issued or to be
issued by Issuing Lenders for the account of Borrowers pursuant
to subsection 3.1.
"Letter of Credit Usage" means, as at any date of determination,
the sum of (i) the maximum aggregate amount which is or at any
time thereafter may become available for drawing under all
Letters of Credit then outstanding plus (ii) the aggregate amount
of all drawings under Letters of Credit honored by Issuing
Lenders and not theretofore reimbursed by Borrowers (including
any such reimbursement out of the proceeds of Revolving Loans
pursuant to subsection 3.3B).
"Leverage Ratio" has the meaning assigned that term in subsection
7.6B.
"Lido Facility" means the credit facilities in an aggregate
principal amount of $80,000,000 to, among other things, (a)
finance construction of a conference center to be built on the
Phase II Land and (b) to fund the Phase I-A Subsidiary
Non-Recourse Loan, the proceeds of which will be used to prepay
rent owed to Venetian under the Phase I-A Lease, and thereafter
applied by Venetian to finance the construction of the Phase I-A
Tower.
"Lido Facility Agreement" means a credit agreement in the
aggregate principal amount of $80,000,000, between Phase II
Subsidiary, Scotiabank and the other lenders party thereto from
time to time, on the terms set forth in the commitment letter
dated July 16, 2001 with respect to the Lido Facility, and/or
such other terms as may be satisfactory to Administrative Agent.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in
respect of such asset, whether or not filed, recorded or
otherwise perfected under applicable law (including any
conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give
a security interest in and any filing of or agreement to give any
financing statement under the UCC).
"Liquidated Damages" means any proceeds or liquidated damages
paid pursuant to any obligation, default or breach under the
Contracts and Indirect Construction Guaranty and Direct
Construction Guaranty (net of actual and documented reasonable
costs incurred by Borrowers in connection with adjustment or
settlement thereof, including taxes and any reasonable provisions
made in respect of such costs and expenses (including any such
taxes paid or payable by an owner of either Borrower or any of
its Subsidiaries)). For purposes of this definition, so-called
"liquidated damages" insurance policies shall be deemed to be
Contracts.
"Loan" or "Loans" means one or more of the Term Loans or the
Revolving Loans or any combination thereof.
"Loan Documents" means this Agreement, the Notes, the Letters of
Credit (and any applications for, or reimbursement agreements or
other documents or certificates executed by Borrowers in favor of
an Issuing Lender relating to, the Letters of Credit) the
Subsidiary Guaranties, the Disbursement Agreement and the
Collateral Documents.
"Loan Exposure" means, with respect to any Lender as of any date
of determination, the sum of (i) such Lender's Term Loan Exposure
and (ii) such Lender's Revolving Loan Exposure.
"Loan Party" means each Borrower, Mall Construction Subsidiary,
each Intermediate Holding Company and each other Subsidiary of a
Borrower which may hereafter become a party to any Loan Document
and "Loan Parties" means all such Persons, collectively.
"Loss Proceeds" has the meaning assigned to that term in the
Disbursement Agreement.
21
"LVSI" means Las Vegas Sands, Inc., a Nevada corporation.
"Mall" means the retail mall component of the Project described
in more detail on Exhibit T-7 to the Disbursement Agreement.
"Mall Construction Subsidiary" means Grand Canal Shops Mall
Construction, LLC, a Delaware limited liability company and a
wholly-owned subsidiary of Venetian.
"Mall Construction Subsidiary Security Agreement" means the
Security Agreement executed and delivered by Mall Construction
Subsidiary on November 14, 1997, substantially in the form of
Exhibit XIX annexed hereto.
"Mall Direct Holdings" means Grand Canal Shops Mall Holding
Company, LLC, a Delaware limited liability company.
"Mall Escrow Agreement" has the meaning set forth in the
Disbursement Agreement.
"Mall Holdings" means Mall Intermediate Holding Company LLC, a
Delaware limited liability company and a wholly-owned Subsidiary
of Venetian.
"Mall Management Agreement" means that certain Management
Agreement between LVSI and Mall Operator pursuant to which Mall
Operator has agreed to perform certain management services
related to the Mall, as the same has been assigned to Mall
Subsidiary and subsequently to New Mall Subsidiary.
"Mall Manager" means Grand Canal Shops Mall MM, Inc., a Nevada
corporation and a wholly-owned subsidiary of LVSI.
"Mall Operator" means Forest City Commercial Management, Inc., an
Ohio corporation, and any replacement Mall Operator selected in
accordance with the terms hereof.
"Mall Parcel" means the mall space subdivided from the Site as
one or more legally separate parcel and recorded with the
applicable Governmental Authorities as described in more detail
in Exhibit T-7 to the Disbursement Agreement.
"Mall Parcel Creation Date" has the meaning assigned to that term
in the Disbursement Agreement.
"Mall Release Date" means November 12, 1999.
"Mall Retainage/Punchlist Account" has the meaning set forth in
the Disbursement Agreement.
"Mall Subsidiary" means Grand Canal Shops Mall LLC, a Delaware
limited liability company.
"Margin Stock" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve
System as in effect from time to time.
"Material Adverse Effect" means (i) a material adverse effect
upon the business, operations, properties, assets, condition
(financial or otherwise) or prospects of either (a) Borrowers and
any of their Subsidiaries, taken as a whole or (b) Borrowers and
any of their Subsidiaries and Excluded Subsidiaries, taken as a
whole or (ii) the material impairment of the ability of any Loan
Party to observe or perform, or of Administrative Agent or
Lenders to enforce, the Obligations.
"Material Contract" means any contract or other arrangement to
which any Borrower(s), or any of their Subsidiaries are a party
(other than the Loan Documents) for which breach, nonperformance,
cancellation or failure to renew could reasonably be expected to
have a Material Adverse Effect.
"Maximum Consolidated Capital Expenditures Amount" has the
meaning assigned to that term in subsection 7.14.
"Mortgage Notes" means the 12.25% Mortgage Notes due 2004 issued
by Borrowers pursuant to the Mortgage Notes Indenture.
"Mortgage Notes Collateral Account Agreement" has the meaning
assigned to that term in the Disbursement Agreement.
"Mortgage Note Holders" means the holders of the Mortgage Notes.
"Mortgage Notes Indenture" means that certain Indenture dated as
of November 14, 1997 between Borrowers, certain guarantors named
therein and the Mortgage Notes Indenture Trustee.
22
"Mortgage Notes Indenture Trustee" means US Bank Trust National
Association (formerly known as First Trust National Association)
in its capacity as the trustee under the Mortgage Notes Indenture
and its successors in such capacity.
"Mortgage Notes Proceeds" means the gross proceeds from the
issuance of the Mortgage Notes in the amount of at least
$425,000,000 (before deduction for underwriter's discounts, fees
and expenses).
"Mortgage Notes Proceeds Account" has the meaning set forth in
the Disbursement Agreement.
"Mortgage Policy" has the meaning assigned to that term in the
Existing Credit Agreement.
"Mortgaged Property" means the real property described in
Schedule 5.5.
"Multiemployer Plan" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"Net Asset Sale Proceeds" means the aggregate cash proceeds
received by any Borrower or any of its Subsidiaries in respect of
any Asset Sale, net of (i) the direct costs relating to such
Asset Sale (including, without limitation legal, accounting and
investment banking fees and expenses, employee severance and
termination costs, any trade payables or similar liabilities
related to the assets sold and required to be paid by the seller
as a result thereof and sales, finders' or broker's commission),
and any relocation expenses incurred as a result thereof and
taxes paid or payable as result thereof (including, without
limitation, any such taxes paid or payable by an owner of
Borrower or any of its Subsidiaries) (after taking into account
any available tax credits or deductions and any tax sharing
arrangements), (ii) amounts required to be applied to the
repayment of Indebtedness secured by a Lien (or amounts permitted
by the terms of such Indebtedness to be otherwise reinvested in
the Project to the extent so reinvested) which is prior to the
Lien under the Collateral Documents on the asset or assets that
are the subject of such Asset Sale, (iii) amounts required to be
applied to the repayment of the Phase I-A Subsidiary Non-Recourse
Loan or any FF&E Facility Agreement, (iv) all distributions and
other payments required to be made to minority interest holders
in a Subsidiary or joint venture as a result of the Asset Sale
and (v) any reserve for adjustment in respect of the sale price
of such asset or assets or any liabilities associated with the
asset disposed of in such Asset Sale.
"Net Loss Proceeds" means the aggregate cash proceeds received by
any Borrower or any of its Subsidiaries in respect of any Event
of Loss, including, without limitation, insurance proceeds,
condemnation awards or damages awarded by any judgment, net of
the direct costs in recovery of such Net Loss Proceeds
(including, without limitation, legal, accounting, appraisal and
insurance adjuster fees and expenses) and any taxes paid or
payable as a result thereof (including, without limitation, any
such taxes paid or payable by an owner of Borrower or any of its
Subsidiaries) (after taking into account any available tax
credits or deductions and any tax sharing arrangements) and
amounts required to be applied to the repayment of the Phase I-A
Subsidiary Non-Recourse Loan, any FF&E Facility Agreement or any
Indebtedness secured by a Lien (or amounts permitted by the terms
of such Indebtedness to be otherwise reinvested in the Project to
the extent so reinvested) which is prior to the Liens of Lenders
under the Collateral Documents on the asset or assets that are
the subject of the Event of Loss. Notwithstanding the foregoing,
all proceeds of so-called "liquidated damages" insurance policies
shall not be Net Loss Proceeds but shall be Liquidated Damages.
"Net Pension Proceeds" has the meaning assigned to that term in
subsection 2.4B(iii)(c).
"Net Proceeds" has the meaning assigned to that term in
subsection 2.4B(iii)(d).
"Nevada Gaming Authorities" shall mean, collectively, the Nevada
Gaming Commission, the Nevada State Gaming Control Board, and the
▇▇▇▇▇ County Liquor and Gaming Licensing Board.
"Nevada Gaming Laws" shall mean the Nevada Gaming Control Act, as
modified in Chapter 463 of the Nevada Revised Statutes, as
amended from time to time, and the regulations of the Nevada
Gaming Commission promulgated thereunder, as amended from time to
time.
▇▇
"▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇" means Grand Canal Shops Mall MM Subsidiary,
Inc., a Nevada corporation and a wholly-owned subsidiary of Mall
Manager.
"New Mall Subsidiary" means Grand Canal Shops Mall Subsidiary,
LLC, a Delaware limited liability company.
"Non-Recourse Financing" means Indebtedness incurred in
connection with the purchase or lease of personal or real
property useful in the business of Borrowers and their
Subsidiaries and (i) as to which the lender upon default may seek
recourse or payment as against a Borrower or any of its
Subsidiaries only through the return or sale of the property or
equipment so purchased or leased and (ii) may not otherwise
assert a valid claim for payment on such Indebtedness against a
Borrower or any of its Subsidiaries or any other property of a
Borrower or any of its Subsidiaries.
"Non-US Lender" has the meaning assigned to that term in
subsection 2.7B(iii)(a).
"Notes" means one or more of the Term Notes or Revolving Notes or
any combination thereof.
"Notice of Borrowing" means a notice substantially in the form of
Exhibit I-A annexed hereto delivered by Borrowers to
Administrative Agent pursuant to subsection 2.1B with respect to
a proposed borrowing.
"Notice of Conversion/Continuation" means a notice substantially
in the form of Exhibit II annexed hereto delivered to
Administrative Agent pursuant to subsection 2.2D with respect to
a proposed conversion or continuation of the applicable basis for
determining the interest rate with respect to the Loans specified
therein.
"Notice of Funding Request" has the meaning assigned that term in
the Disbursement Agreement.
"Notice of Issuance of Letter of Credit" means a notice
substantially in the form of Exhibit XV annexed hereto delivered
by Borrowers to Administrative Agent pursuant to subsection
3.1B(i) with respect to the proposed issuance of a Letter of
Credit.
"Obligations" means all obligations of every nature of each Loan
Party from time to time owed to Administrative Agent, Arranger,
Lenders or any of them under the Loan Documents, whether for
principal, interest, reimbursement of amounts drawn under Letters
of Credit, fees, expenses, indemnification or otherwise.
"Officers' Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its
chairman of the board (if an officer) or its president or one of
its vice presidents and by its chief financial officer or its
treasurer (in their capacity as such officer); provided that
every Officers' Certificate with respect to the compliance with a
condition precedent to the making of any Loans hereunder shall
include (i) a statement that the officer or officers making or
giving such Officers' Certificate have read such condition and
any definitions or other provisions contained in this Agreement
relating thereto, (ii) a statement that, in the opinion of the
signers, they have made or have caused to be made such
examination or investigation as is reasonably necessary to enable
them to express an informed opinion as to whether or not such
condition has been complied with, and (iii) a statement as to
whether, in the opinion of the signers, such condition has been
complied with in all material respects.
"Opening Conditions" has the meaning set forth in the
Disbursement Agreement.
"Opening Date" means the date on which the hotel, casino, or mall
portion of the Project opened for business.
"Operating Lease" means, as applied to any Person, any lease
(including leases that may be terminated by the lessee at any
time) of any property (whether real, personal or mixed) that is
not a Capital Lease other than any such lease under which that
Person is the lessor.
"Operative Documents" means the Financing Agreements and the
Project Documents.
"Organizational Documents" means (i) with respect to any
corporation, its certificate or articles of incorporation and its
24
bylaws, (ii) with respect to any limited partnership, its
certificate of limited partnership and its partnership agreement,
(iii) with respect to any general partnership, its partnership
agreement, (iv) with respect to any limited liability company,
its articles or certificate of organization and its operating
agreement and (v) with respect to any other entity, its
equivalent organizational, governing documents.
"Other Indebtedness" means (i) the Indebtedness of any Borrower
or any of its Subsidiaries evidenced by the Mortgage Notes, (ii)
the Indebtedness of any Borrower or any of its Subsidiaries
evidenced by the Subordinated Notes, (iii) [intentionally
omitted], (iv) the Indebtedness of any Borrower or any of its
Subsidiaries evidenced by the FF&E Facility Agreements, (v) any
Indebtedness of any Borrower or any of its Subsidiaries in
respect of any Completion Guaranty Loan and (vi) any Indebtedness
of any Borrower under an Employee Repurchase Note.
"Other Security Documents" means, the Security Documents as
defined in the Disbursement Agreement, other than the Collateral
Documents.
"Outside Completion Deadline" means April 21, 1999, as such date
was extended pursuant to Section 6.4 of the Disbursement
Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Code
or Section 302 of ERISA.
"Permanent Mall Lender" means any lender party from time to time
to the Permanent Mall Loan Agreement including, but not limited
to, ▇▇▇▇▇▇▇ Sachs Mortgage Company, Scotiabank and any permitted
successor or replacement thereto. "Permanent Mall Loan Agreement"
means that certain Loan Agreement dated as of December 20, 1999
by and among New Mall Subsidiary, as borrower, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Company, as Syndication Agent, Scotiabank, as Collateral
Agent and Administrative Agent, and the Permanent Mall Lenders
party thereto from time to time.
"Permits" means all authorizations, consents, decrees, permits,
waivers, privileges, approvals from and filings with all
Governmental Instrumentalities including, without limitation, the
Nevada Gaming Authorities necessary for the realization of the
Project in accordance with the Operative Documents.
"Permitted Employee Repurchase" has the meaning set forth in
subsection 7.1.
"Permitted Liens" means the following types of Liens (excluding
any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of
the Code or by ERISA, any such Lien relating to or imposed in
connection with any Environmental Claim, and any such Lien
expressly prohibited by any applicable terms of any of the
Collateral Documents provided in each case that such Liens do not
secure Indebtedness for borrowed money):
(i) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by
subsection 6.3;
(ii) statutory Liens of landlords, statutory Liens of banks
and rights of set-off, statutory Liens of carriers, warehousemen,
mechanics, repairmen, workmen and materialmen, and other Liens
imposed by law, in each case incurred in the ordinary course of
business (a) for amounts not yet overdue or (b) for amounts that
are overdue and that (in the case of any such amounts overdue for
a period in excess of 5 days) are being contested in good faith
by appropriate proceedings, so long as (1) such reserves or other
appropriate provisions, if any, as shall be required by GAAP
shall have been made for any such contested amounts, and (2) in
the case of a Lien with respect to any portion of the Collateral,
such contest proceedings conclusively operate to stay the sale of
any portion of the Collateral on account of such Lien;
(iii) Liens incurred or deposits made in the ordinary course
of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to
secure the performance of tenders, statutory obligations, surety
and appeal bonds, bids, leases, government contracts, trade
contracts, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment of
borrowed money), incurred in the ordinary course of business (a)
25
for amounts not yet overdue or (b) for amounts that are overdue
and that (in the case of any such amounts overdue for a period in
excess of 5 days) are being contested in good faith by
appropriate proceedings, so long as (1) such reserves or other
appropriate provisions, if any, as shall be required by GAAP
shall have been made for any such contested amounts and (2) in
the case of a Lien with respect to any portion of the Collateral,
such contest proceedings conclusively operate to stay the sale of
any portion of the Collateral on account of such Lien;
(iv) any attachment or judgment Lien not constituting an
Event of Default under subsection 8.8;
(v) leases or subleases granted to third parties in
accordance with any applicable terms of this Agreement and the
Collateral Documents and not interfering in any material respect
with the ordinary conduct of the business of a Borrower or any of
its Subsidiaries;
(vi) easements, rights-of-way, restrictions, encroachments,
and other minor defects or irregularities in title, in each case
which do not and will not interfere in any material respect with
the ordinary conduct of the business of a Borrower or any of its
Subsidiaries or result in a material diminution in the value of
any Collateral as security for the Obligations;
(vii) leases permitted under subsection 7.7 and any
leasehold mortgage in favor of any party financing the lessee
under any lease permitted under subsection 7.7 provided that (a)
none of the Borrowers nor any of their Subsidiaries is liable for
the payment of any principal of, or interest, premiums or fees
on, such financing and (b) the affected lease and leasehold
mortgage are expressly made subject and subordinate to the Lien
of the Deed of Trust;
(viii) Liens created or contemplated by the Cooperation
Agreement;
(ix) Liens on real property of Borrowers arising pursuant to
that certain ▇▇▇▇▇▇'▇ Shared Roadway Agreement (as in effect on
November 14, 1997);
(x) Liens incurred in connection with the construction of a
pedestrian bridge or a pedestrian tunnel under Las Vegas
Boulevard and Sands Avenue provided that such Liens will not (i)
materially interfere with, impair or detract from the operation
of the business of Borrowers and their Subsidiaries or the
construction or operation of the Project and (ii) cause a
material decrease in the value of the Collateral.
(xi) Liens arising from filing UCC financing statements
relating solely to leases permitted by this Agreement;
(xii) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in
connection with the importation of goods;
(xiii) any zoning or similar law or right reserved to or
vested in any governmental office or agency to control or
regulate the use of any real property;
(xiv) licenses of patents, trademarks and other intellectual
property rights granted by a Borrower or any of its Subsidiaries
in the ordinary course of business and not interfering in any
material respect with the ordinary conduct of the business of
such Borrower or such Subsidiary; and
(xv) Liens created under the HVAC Services Agreements;
(xvi) Liens created under the Predevelopment Agreement (as
in effect on November 14, 1997);
(xvii) easements, restrictions, rights of way, encroachments
and other minor defects or irregularities in title incurred in
connection with the traffic study relating to increased traffic
on Las Vegas Boulevard as a result of completion of the Project;
(xviii) Liens incurred in connection with Interest Rate
Agreements required or permitted to be maintained hereunder and
any Interest Rate Agreement intended to hedge interest rate risk
in respect of the FF&E Facility;
(xix) [Intentionally omitted.]
(xx) prior to the Final Completion Date any "Permitted
Liens" under the Disbursement Agreement; and
26
(xxi) Liens listed on Schedule 7.7.
"Permitted Quarterly Tax Distributions" means quarterly
distributions of Tax Amounts determined on the basis of the
estimated taxable income of LVSI or Venetian, as the case may be
(in each case including any such taxable income attributable to
such entity's ownership of interest in any other pass-through
entity for Federal income tax purposes except that if all or any
portion of the Completion Guaranty Loan is outstanding and held
by ▇▇▇▇▇▇▇ or a Related Party and is not paying current cash
interest, then such estimated taxable income shall be determined
without giving effect to any non-cash interest payments on such
loans held by ▇▇▇▇▇▇▇ or the Related Parties to the extent such
non-cash interest is deductible), for the related Estimation
Period, as in a statement filed with the Administrative Agent,
provided, however, that (A) prior to any distributions of Tax
Amounts the Borrowers shall deliver an officers' certificate with
a statement to the effect that in the case of distributions to be
made by Venetian, Venetian qualifies as a partnership or a
substantially similarly treated pass-through entity for federal
income tax purposes or that, in the case of distributions to be
made by LVSI, LVSI qualifies as a Subchapter S corporation under
the Code or a substantially similarly treated pass-through entity
for federal income tax purposes, as the case may be, and (B) at
the time of such distributions, the most recent audited financial
statements of LVSI reflect that LVSI was treated as a Subchapter
S corporation under the Code or a substantially similarly treated
pass-through entity for federal income tax purposes and Venetian
was treated as a partnership or substantially similarly treated
pass-through entity for Federal income tax purposes for the
period covered by such financial statements; provided, further,
that, for an Estimation Period that includes a True-up
Determination Date, (A) if the True-up Amount is due to the
members or shareholders, as the case may be, the Permitted
Quarterly Tax Distribution payable by LVSI or Venetian, as the
case may be, for the Estimation Period shall be increased by such
True-up Amount, and (B) if the True-up Amount is due to LVSI or
Venetian, the Permitted Quarterly Tax Distribution payable by
LVSI or Venetian as the case may be, for the Estimation Period
shall be reduced by such True-up Amount and the excess, if any,
of the True-up Amount over such Permitted Quarterly Tax
Distribution shall be applied to reduce the immediately following
Permitted Quarterly Tax Distribution(s) until such True-up Amount
is entirely offset. The amount of Permitted Quarterly Tax
Distribution relating to an Estimation Period including a True-up
Determination Date shall be determined by a Tax Amounts CPA, and
the amount of Permitted Quarterly Tax Distribution relating to
all other Estimation Periods shall be determined by LVSI or
Venetian, as the case may be.
"Person" means and includes natural persons, corporations,
limited partnerships, general partnerships, limited liability
companies, limited liability partnerships, joint stock companies,
Joint Ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations,
whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political
subdivisions thereof) and agencies or other administrative or
regulatory bodies thereof.
"Phase I-A Lease" means that certain Lease Agreement to be
entered between Venetian and the Phase I-A Subsidiary in form and
substance satisfactory to Scotiabank, as Administrative Agent, in
its sole discretion.
"Phase I-A Project" means the construction of the Phase I-A
Tower.
"Phase I-A Subsidiary" means Venetian Phase I-A Tower, LLC, a
limited liability company to be organized under the laws of
Nevada in form and substance satisfactory to Scotiabank, as
Administrative Agent.
"Phase I-A Subsidiary Non-Recourse Loan" means the non-recourse
loan to be made by Phase II Subsidiary, to the Phase I-A
Subsidiary with proceeds from the Lido Facility, in form and
substance satisfactory to Scotiabank, as Administrative Agent.
"Phase I-A Tower" means (i) an approximately 1,000 room hotel
expansion to be constructed by Venetian on the parking garage of
the Project together with (ii) an expansion of such parking
garage.
"Phase II" means a hotel, casino and mall complex proposed to be
developed on the Phase II Land.
27
"Phase II Casino Lease" means the gaming operations lease between
the Phase II Subsidiary and LVSI or Venetian pursuant to which
LVSI or Venetian will operate the gaming operations of the Phase
II, entered into in accordance with subsection 7.10.
"Phase II Direct Holdings" means Lido Casino Resort Holding
Company, LLC, a Delaware limited liability company.
"Phase II Holdings" means Lido Intermediate Holding Company, LLC,
a Delaware limited liability company, and a wholly-owned
Subsidiary of Venetian.
"Phase II Land" means the real property consisting of
approximately 14 acres of the Real Estate Contribution as
described in more detail in Exhibit T-5 of the Disbursement
Agreement together with all improvements thereon.
"Phase II Lease" has the meaning assigned to that term in
subsection 8.20.
"Phase II Manager" means Lido Casino Resort MM, Inc., a Nevada
corporation, and wholly-owned subsidiary of LVSI and the managing
member of Phase II Subsidiary.
"Phase II Release Conditions" has the meaning assigned to that
term in the Disbursement Agreement.
"Phase II Subsidiary" means Lido Casino Resort, LLC, a Nevada
limited liability company.
"Plans and Specifications" has the meaning assigned to that term
in the Disbursement Agreement.
"Potential Event of Default" means a condition or event that,
after notice or lapse of time or both, would constitute an Event
of Default.
"Predevelopment Agreement" means the Sands Resort Hotel Casino
Agreement dated February 18, 1997 by and between ▇▇▇▇▇ County and
LVSI.
"Prime Rate" means the rate that Scotiabank announces from its
New York office from time to time as its Dollar prime lending
rate, as in effect from time to time. The Prime Rate is a
reference rate and does not necessarily represent the lowest or
best rate actually charged to any customer. Scotiabank or any
other Lender may make commercial loans or other loans at rates of
interest at, above or below the Prime Rate.
"Proceedings" has the meaning assigned to that term in subsection
6.1(x).
"Pro Rata Share" means (i) with respect to all payments,
computations and other matters relating to the Term Loan
Commitment or the Term Loan of any Lender, the percentage
obtained by dividing (x) the Term Loan Exposure of that Lender by
(y) the aggregate Term Loan Exposure of all Lenders, (ii) with
respect to all payments, computations and other matters relating
to the Revolving Loan Commitment or the Revolving Loans of any
Lender or any Letters of Credit issued or participations therein
purchased by any Lender, the percentage obtained by dividing (x)
the Revolving Loan Exposure of that Lender by (y) the aggregate
Revolving Loan Exposure of all Lenders, and (iii) for all other
purposes with respect to each Lender, the percentage obtained by
dividing (x) the sum of the Term Loan Exposure of that Lender
plus the Revolving Loan Exposure of that Lender by (y) the sum of
the aggregate Term Loan Exposure of all Lenders plus the
aggregate Revolving Loan Exposure of all Lenders, in any such
case as the applicable percentage may be adjusted by assignments
permitted pursuant to subsection 10.1. The Pro Rata Share of each
Lender as of the Closing Date for purposes of each of clauses
(i), (ii) and (iii) of the preceding sentence is set forth
opposite the name of that Lender in Schedule 2.1 annexed hereto.
"Professional Services Agreement" means that certain Agreement
between Owner and Architect dated as of November 14, 1997,
between Borrowers and Project Architect.
"Project" means the Venetian-themed hotel, casino, retail,
meeting and entertainment complex, with related heating,
ventilation and air conditioning and power station facilities to
be developed at the Site, all as more particularly described in
Exhibit T-1 to the Disbursement Agreement (but not including the
Phase I-A Tower or the Guggenheim Projects).
28
"Project Architect" means collectively, TSA of Nevada, LLP, and
WAT&G, Inc. Nevada.
"Project Budget" has the meaning assigned that term in the
Disbursement Agreement.
"Project Costs" has the meaning assigned to that term in the
Disbursement Agreement.
"Project Documents" means the Construction Management Agreement,
the Completion Guaranties, the Contracts, the Cooperation
Agreement, the Professional Services Agreement, the HVAC Services
Agreements, the HVAC Ground Lease, the Mall Management Agreement,
the Predevelopment Agreement, the Billboard Master Lease, the
▇▇▇▇▇▇'▇ Shared Roadway Agreement, the Services Agreement, the
Sale and Contribution Agreement, the Casino Lease, the ▇▇▇▇▇▇▇▇
Agreement, the Work Continuation Agreement, the operating
agreements for each of Venetian and the Intermediate Holding
Companies and any other document or agreement entered into on,
prior to or after November 14, 1997, in accordance with Section
7.13 and, while applicable, the Disbursement Agreement relating
to the development, construction, maintenance or operation of the
Project provided, that following the Mall Release Date any
contracts and agreements relating to the Mall which are
transferred to Mall Subsidiary or New Mall Subsidiary shall no
longer constitute Project Documents.
"Project Schedule" has the meaning assigned that term in the
Disbursement Agreement.
"Quarterly Date" means the last day of each Fiscal Quarter.
"Quarterly Payment Period" means the period commencing on the
tenth day and ending and including the twentieth day of each
month in which federal estimated tax payments are due (provided
that payments in respect of estimated state income taxes due in
January may instead, at the option of Borrowers, be paid during
the last five days of the immediately preceding December).
"Real Estate Contribution" has the meaning assigned to that term
in the Initial Credit Agreement.
"Register" has the meaning assigned to that term in subsection
2.1D.
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"Reimbursement Date" has the meaning assigned to that term in
subsection 3.3B.
"Related Parties" means and shall include: (i) Family Members, as
hereafter defined; (ii) directors of LVSI or Venetian and
employees of LVSI or Venetian who are senior managers or officers
of LVSI, Venetian, Interface or any of their Affiliates; (iii)
any person who receives an interest in LVSI or Venetian from any
individual referenced in clauses (i)-(ii) in a gratuitous
transfer, whether by gift, bequest or otherwise, to the extent of
such interest; (iii) the estate of any individual referenced in
clauses (i)-(iii); (iv) a trust for the benefit of one or more of
the individuals referenced in clauses (i)-(iii); and/or (v) an
entity owned or controlled, directly or indirectly, by one or
more of the individuals, estates of trusts referenced in clauses
(i)-(iv). For the purpose of this paragraph, a "Family Member"
shall include: (i) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇; (ii) ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇;
(iii) any sibling of either of the foregoing; (iv) any issue of
any one or more of the individuals referenced in the preceding
clauses (i)-(iii); and (v) the spouse or issue of the spouse of
one or more of the individuals referenced in the preceding
clauses (i)-(iv).
"Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge,
dispersal, dumping, leaching or migration of Hazardous Materials
into the indoor or outdoor environment (including the abandonment
or disposal of any barrels, containers or other closed
receptacles containing any Hazardous Materials), including the
movement of any Hazardous Materials through the air, soil,
surface water or groundwater.
29
"Requisite Class Lenders" means, at any time of determination (i)
for the Class of Lenders having Term Loan Exposure, Lenders
having or holding more than 50% of the sum of the aggregate Term
Loan Exposure of all Lenders and (ii) for the Class of Lenders
having Revolving Loan Exposure, Lenders having or holding more
than 50% of the aggregate Revolving Loan Exposure of all Lenders.
"Requisite Lenders" means Lenders having or holding more than 50%
of the sum of the aggregate Loans and unused Commitment of all
Lenders.
"Restaurant Leases" means together (i) the lease between
Valentino Las Vegas, LLC, a Nevada limited liability company and
Venetian dated as of May 15, 1999, (ii) the lease between
Positano Las Vegas, LLC, a Nevada limited liability company and
New Mall Subsidiary, as successor-in-interest to Mall
Construction Subsidiary dated as of November 4, 1999 and (iii)
the lease between ▇▇▇▇▇▇▇▇▇ Coffee Bar, LLC, a Nevada limited
liability company and New Mall Subsidiary, dated as of April 26,
2000.
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any
class of stock of either Borrower now or hereafter outstanding,
except a dividend or distribution payable solely in shares of
that class of stock to the holders of that class (or the
accretion of such dividends or distribution), (ii) any
redemption, retirement, sinking fund or similar payment, purchase
or other acquisition for value, direct or indirect, of any shares
of any class of stock of either Borrower now or hereafter
outstanding, (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights
to acquire shares of any class of stock of either Borrower now or
hereafter outstanding, (iv) any payment or prepayment of
principal of, premium, if any, or interest on, or redemption,
purchase, retirement, defeasance (including in-substance or legal
defeasance), sinking fund or similar payment with respect to
Other Indebtedness and (v) any payment in respect of a repayment
or reimbursement of amounts advanced to Borrowers or any of their
Subsidiaries by ▇▇▇▇▇▇▇ or any Affiliate of ▇▇▇▇▇▇▇ under the
▇▇▇▇▇▇▇ Completion Guaranty.
"Revolving Loan Availability Date" means the date on which
Construction Consultant delivers the Six-Month Certificate to
Administrative Agent.
"Revolving Loan Commitment" means the commitment of a Lender to
make Revolving Loans to Borrowers pursuant to subsection
2.1A(ii), and "Revolving Loan Commitments" means such commitments
of all Lenders in the aggregate.
"Revolving Loan Commitment Termination Date" means June 30, 2003.
"Revolving Loan Exposure" means, with respect to any Lender as of
any date of determination (i) prior to the termination of the
Revolving Loan Commitments, that Lender's Revolving Loan
Commitment and (ii) after the termination of the Revolving Loan
Commitments, the sum of (a) the aggregate outstanding principal
amount of the Revolving Loans of that Lender plus (b) in the
event that Lender is an Issuing Lender, the aggregate Letter of
Credit Usage in respect of all Letters of Credit issued by that
Lender (in each case net of any participations purchased by other
Lenders in such Letters of Credit or any unreimbursed drawings
thereunder) plus (c) the aggregate amount of all participations
purchased by that Lender in any outstanding Letters of Credit or
any unreimbursed drawings under any Letters of Credit.
"Revolving Loans" means the Loans made by Lenders to Borrowers
pursuant to subsection 2.1A(ii).
"Revolving Notes" means (i) the promissory notes of Borrowers
issued pursuant to subsection 2.1E (ii) on the Closing Date and
(ii) any promissory notes issued by Borrowers pursuant to the
last sentence of subsection 10.1B(i) in connection with
assignments of the Revolving Loan Commitments and Revolving Loans
of any Lenders, in each case substantially in the form of Exhibit
III-B annexed hereto, as they may be amended, supplemented or
otherwise modified from time to time.
"Sale and Contribution Agreement" means that certain Sale and
Contribution Agreement dated as of November 14, 1997 among
Venetian, Mall Construction Subsidiary and Mall Subsidiary.
30
"Sands Expo and Convention Center" means the exposition and
meeting facilities commonly known as the Sands Expo and
Convention Center.
"Scotiabank" has the meaning assigned to that term in the
introduction to this Agreement.
"Securities" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or
participation in any profit-sharing agreement or arrangement,
options, warrants, bonds, debentures, notes, or other evidences
of indebtedness, secured or unsecured, convertible, subordinated
or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or
participations in temporary or interim certificates for the
purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"Services Agreement" means that amended and restated Services
Agreement dated as of November 14, 1997, by and among LVSI,
Interface, Interface Holding Company, Inc., and the parties
stated on the schedule thereto.
"Site" means the land on which the Project is to be constructed
as described in more detail in Exhibit T-4 to the Disbursement
Agreement.
"Six-Month Certificate" has the meaning set forth in the
Disbursement Agreement.
"Solvent" means, with respect to any Person, that as of the date
of determination both (A) (i) the then fair saleable value of the
property of such Person is (y) greater than the total amount of
liabilities (including contingent liabilities) of such Person and
(z) not less than the amount that will be required to pay the
probable liabilities on such Person's then existing debts as they
become absolute and matured considering all financing
alternatives and potential asset sales reasonably available to
such Person; (ii) such Person's capital is not unreasonably small
in relation to its business or any contemplated or undertaken
transaction; and (iii) such Person does not intend to incur, or
believe (nor should it reasonably believe) that it will incur,
debts beyond its ability to pay such debts as they become due;
and (B) such Person is "solvent" within the meaning given that
term and similar terms under applicable laws relating to
fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time
shall be computed as the amount that, in light of all of the
facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or
matured liability.
"Specified FF&E" means any furniture, fixtures, equipment and
other personal property financed with the proceeds from the FF&E
Facility.
"Standby Letter of Credit" means any standby letter of credit or
similar instrument issued for the purpose of supporting (i)
Indebtedness of Borrowers in respect of industrial revenue or
development bonds or financings, (ii) workers' compensation
liabilities of Borrowers, (iii) the obligations of third party
insurers of Borrowers arising by virtue of the laws of any
jurisdiction requiring third party insurers, (iv) obligations
with respect to Capital Leases or Operating Leases of Borrowers
or with respect to the ▇▇▇▇▇▇'▇ Shared Roadway Agreement, (v)
performance, payment, deposit or surety obligations of Borrowers,
in any case if required by law or governmental rule or regulation
(including, without limitation, if required by any Governmental
Instrumentality or otherwise necessary in order to obtain any
Permit related to the Project) or in accordance with custom and
practice in the industry and (vi) Construction Related
Obligations; provided that Standby Letters of Credit may not be
issued for the purpose of supporting (a) trade payables or (b)
any Indebtedness constituting "antecedent debt" (as that term is
used in Section 547 of Bankruptcy Code).
"Stop Funding Notice" has the meaning set forth in the
Disbursement Agreement.
"Subordinated Indebtedness" means (i) any Indebtedness in respect
of the Subordinated Notes or the Completion Guaranty and (ii) any
Indebtedness in respect of Employee Repurchase Notes.
31
"Subordinated Notes" means the $97,500,000 in aggregate principal
amount of split coupon Senior Subordinated Notes due 2005 of
Borrowers issued pursuant to the Subordinated Notes Indenture.
"Subordinated Notes Indenture" means the Indenture dated as of
November 14, 1997 between Borrowers, certain guarantors named
therein and the Subordinated Notes Indenture Trustee.
"Subordinated Notes Indenture Trustee" means First Union National
Bank in its capacity as trustee under the Subordinated Notes
Indenture and its successors in such capacity.
"Subsidiary" means, with respect to any Person, (i) any
corporation, partnership, limited liability company, association,
joint venture or other business entity of which more than 50% of
the total voting power of shares of stock or other ownership
interests entitled (without regard to the occurrence of any
contingency) to vote in the election of the Person or Persons
(whether directors, managers, trustees or other Persons
performing similar functions) having the power to direct or cause
the direction of the management and policies thereof is at the
time owned or controlled, directly or indirectly, by that Person
or one or more of the other Subsidiaries of that Person or a
combination thereof and (ii) any partnership or limited liability
company of which more than 50% of such entities' capital
accounts, distribution rights, general or limited partnership
interests or membership interests are owned or controlled
directly or indirectly by such Person or one of more other
Subsidiaries of that Person or a combination thereof.
Notwithstanding the foregoing, any Subsidiary described in
subsection 7.3(x) that the Borrowers elect to designate as an
Excluded Subsidiary, New Mall Subsidiary, Mall Subsidiary, Phase
II Subsidiary, Phase II Manager, Phase II Direct Holdings, New
Mall Manager, Mall Manager and Mall Direct Holdings and their
respective Subsidiaries shall not constitute Subsidiaries under
this Agreement or any other Loan Document, except for purposes of
Article 5 (representations and warranties) (other than subsection
5.8) and subsection 6.1 (as specified therein) and for purposes
of any definitions as used in Article 5 or subsection 6.1.
"Subsidiary Guarantor" means each of the Intermediate Holding
Companies and any other Subsidiary of any of the Borrowers that
executes and delivers a counterpart of the Subsidiary Guaranty on
November 14, 1997 or from time to time thereafter pursuant to
subsection 6.13.
"Subsidiary Guaranty" means the Subsidiary Guaranty executed and
delivered by each of the Intermediate Holding Companies and
existing Subsidiaries of Borrowers on November 14, 1997 and to be
executed and delivered by additional Subsidiaries of Borrowers
from time to time thereafter in accordance with subsection 6.13,
substantially in the form of Exhibit XI annexed hereto, as such
Subsidiary Guaranty may hereafter be amended, supplemented or
otherwise modified from time to time.
"Subsidiary Security Agreement" means each Subsidiary Security
Agreement executed and delivered by any Subsidiary Guarantor
other than the Intermediate Holding Companies from time to time
thereafter in accordance with subsection 6.13, in each case
substantially in the form of Exhibit VIII and Exhibit VIII-A
(with respect to the Phase I-A Subsidiary) annexed hereto, as
such Subsidiary Security Agreement may be amended, supplemented
or otherwise modified from time to time, and "Subsidiary Security
Agreements" means all such Subsidiary Security Agreements,
collectively.
"Superior Facilities" has the meaning assigned to that term in
subsection 7.1(xv).
"Supplemental Agent" has the meaning assigned to that term in
subsection 9.1B.
"Supplier Joint Venture" means any Person that supplies or
provides materials or services to any Borrower, the Construction
Manager or any contractor in the Project and in which a Borrower
or one of its Subsidiaries have Investments.
"Substitute Lender" has the meaning assigned to that term in
subsection 10.7(a).
"Tax" or "Taxes" means any present or future tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature and
whatever called, by whomsoever, on whomsoever and wherever
imposed, levied, collected, withheld or assessed; provided that
"Tax on the overall net income" of a Person shall be construed as
a reference to a tax imposed by the jurisdiction in which that
32
Person is organized or in which that Person's principal office
(and/or, in the case of a Lender, its lending office) is located
or in which that Person (and/or, in the case of a Lender, its
lending office) is deemed to be doing business on all or part of
the net income, profits or gains (whether worldwide, or only
insofar as such income, profits or gains are considered to arise
in or to relate to a particular jurisdiction, or otherwise) of
that Person (and/or, in the case of a Lender, its lending
office).
"Tax Amount" means, with respect to a Estimation Period or a
taxable year, as the case may be an amount equal to (A) the
product of (x) the taxable income (including all separate items
of income) of LVSI or Venetian, as the case may be, for such
Estimation Period or taxable year, as the case may be, and (y)
the Applicable Tax Percentage reduced by (B) to the extent not
previously taken into account, any income tax benefit
attributable to LVSI or Venetian, as the case may be, which could
be utilized (without regard to the actual utilization) by its
members or shareholders, as the case may be, in the current or
prior taxable year, or portion thereof, commencing on or after
November 14, 1997 (including any tax losses or tax credits),
computed at the Applicable Tax Percentage of the year that such
benefit is taken into account for purposes of this computation;
provided, however, that, the computation of Tax Amount shall also
take into account (C) the deductibility of state and local taxes
for federal income tax purposes, and (D) any difference in the
Applicable Tax Percentage resulting from the nature of taxable
income (such as capital gain as opposed to ordinary income).
"Tax Amounts CPA" means a nationally recognized certified public
accounting firm.
"Title Company" means, Lawyers Title of Nevada, Inc. or an
Affiliate thereof and/or one or more other title insurance
companies reasonably satisfactory to Administrative Agent.
"Term Loan Commitment" means the commitment of a Lender to make a
Term Loan to Borrowers pursuant to subsection 2.1A(i) of this
Agreement, and "Term Loan Commitments" means such commitments of
all Lenders in the aggregate.
"Term Loan Exposure" means, with respect to any Lender as of any
date of determination, the outstanding principal amount of the
Term Loans made by that Lender.
"Term Loan" or "Term Loans" means one or more of the Loans made
by Lenders to Borrowers pursuant to subsection 2.1A(i) of this
Agreement.
"Term Notes" means (i) the promissory notes of Borrowers issued
pursuant to subsection 2.1E(i) of the Existing Credit Agreement
on June 14, 2000, (ii) promissory notes of Borrowers to be issued
on the Closing Date pursuant to subsection 2.1E(i) and (iii) any
promissory notes issued by Borrowers pursuant to the last
sentence of subsection 10.1B(i) hereof or, of the Existing Credit
Agreement if issued prior to the Closing Date, in connection with
assignments of the Term Loan Commitments or Term Loans of any
Lenders, in each case substantially in the form of Exhibit III-A
annexed hereto.
"Total Utilization of Revolving Loan Commitments" means, as at
any date of determination, the sum of (i) the aggregate principal
amount of all outstanding Revolving Loans (other than Revolving
Loans made for the purpose of reimbursing the applicable Issuing
Lender for any amount drawn under any Letter of Credit but not
yet so applied) plus (ii) the Letter of Credit Usage.
"Transaction Costs" means the fees, costs and expenses payable by
Borrowers on or before November 14, 1997 in connection with the
transactions contemplated by the Loan Documents and the Project
Documents.
"▇▇▇▇▇▇▇▇ Agreement" means that certain Time and Materials
Agreement dated February 10, 1997 by and between LVSI and
▇▇▇▇▇▇▇▇ Industries of Phoenix, Inc., an Arizona corporation.
"True-up Amount" means, in respect of a particular taxable year,
an amount determined by the Tax Amounts CPA equal to the
difference between (i) the aggregated Permitted Quarterly Tax
Distributions actually distributed in respect of such taxable
year, without taking into account any adjustments to such
Permitted Quarterly Tax Distributions made with respect to any
other taxable year (including any adjustment to take into account
a True-up Amount for the immediately preceding taxable year) and
(ii) the Tax Amount permitted to be distributed in respect of
33
such year as determined by reference to LVSI's Internal Revenue
Service Form 1120-S or Venetian's IRS Form 1065 filed for such
year; provided, however, that if there is an audit or other
adjustment with respect to a return filed by the LVSI or Venetian
(including a filing of an amended return), upon a final
determination or resolution of such audit or other adjustment,
the Tax Amounts CPA shall redetermine the True-up Amount for the
relevant taxable year. The amount equal to the excess, if any, of
the amount described in clause (i) above over the amount
described in clause (ii) above shall be referred to as the
"True-up Amount due to LVSI" or the "True-up Amount due to
Venetian", as the case may be and the excess, if any, of the
amount described in clause (ii) over the amount described in
clause (i) shall be referred to as the "True-up Amount due to the
shareholders or members."
"True-up Determination Date" means the date on which the Tax
Amounts CPA delivers a statement to the Administrative Agent
indicating the True-up Amount; provided, however, that the
True-up Determination Date shall not be later than 30 days after
the occurrence of an event requiring the determination of the
True-up Amount (including, the filing of the federal and state
tax returns or the final determination or resolution of an audit
or other adjustment, as the case may be).
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable
jurisdiction.
"Unadjusted Eurodollar Rate Component" has the meaning assigned
to that term in subsection 6.8.
"Venetian" means Venetian Casino Resort, LLC, a Nevada limited
liability company.
"Withdrawal Period" has the meaning assigned to that term in
subsection 10.7(b).
"Work Continuation Agreement" has the meaning set forth in the
Disbursement Agreement.
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations
--- ------------------------------------------------------------------
Under Agreement.
----------------
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Borrowers to Lenders pursuant to clauses (i), (ii),
(iii), (iv) and (xiii) of subsection 6.1 shall be prepared in accordance with
GAAP as in effect at the time of such preparation (and delivered together with
the reconciliation statements provided for in subsection 6.1(v)). Calculations
in connection with the definitions, covenants and other provisions of this
Agreement shall utilize accounting principles and policies in conformity with
those used to prepare the financial statements referred to in subsection 5.3.
1.3 Other Definitional Provisions and Rules of Construction.
--- --------------------------------------------------------
A. Any of the terms defined herein may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference.
B. References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Agreement unless otherwise
specifically provided.
C. The use in any of the Loan Documents of the word "include" or
"including", when following any general statement, term or matter, shall not be
construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.
D. Any reference to any agreement or instrument shall be deemed
to include a reference to such agreement or instrument as assigned, amended,
supplemented or otherwise modified from time to time in accordance with
subsection 7.13 and, while applicable, the Disbursement Agreement.
E. Any reference to a term defined in the Disbursement Agreement
shall have the meaning assigned to it in the Disbursement Agreement whether or
not such agreement remains in effect.
34
Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 Commitments; Making of Loans; the Register; Notes.
--- --------------------------------------------------
A. Commitments. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Borrowers
herein set forth and, while in effect, the representations and warranties set
forth in the Disbursement Agreement, each Lender hereby severally agrees to make
the Loans described in this subsection 2.1.A.
(i) Term Loans. Each Lender, which had a Term Loan Commitment
under the Existing Credit Agreement, has loaned to Borrowers an
aggregate amount not exceeding its Pro Rata Share of the
aggregate amount of the Term Loan Commitments under the Existing
Credit Agreement, which amount was used for the purposes
identified in subsection 2.5A. Each Lender having a Tranche B
Term Loan Commitment or Tranche C Term Loan Commitment (each as
defined in the Existing Credit Agreement) has loaned to Borrowers
an aggregate amount not exceeding its Pro Rata Share of the
Tranche B Term Loan Commitments or Tranche C Term Loan
Commitments, as applicable. Effective as of the Closing Date, the
aggregate outstanding amount of Tranche B Term Loans and Tranche
C Term Loans (each as defined in the Existing Credit Agreement)
shall be converted to Term Loans. The amount of each Lender's
outstanding Tranche A Term Loan; Tranche B Term Loan and Tranche
C Term Loan as of the opening of business on the Closing Date is
set forth opposite its name on Schedule 2.1 annexed hereto and
the aggregate amount of the Tranche A Term Loans, Tranche B Term
Loans and Tranche C Term Loans as of the opening of business on
the Closing Date is $152,750,000. Amounts borrowed under this
subsection 2.1A and subsequently repaid or prepaid may not be
reborrowed. For the avoidance of doubt, all Term Loans made under
the Existing Credit Agreement shall continue under this Agreement
and all Tranche B Term Loans and Tranche C Term Loans made under
the Existing Credit Agreement shall, from and after the Closing
Date, continue under this Agreement as Term Loans.
(ii) Revolving Loans. Each Lender severally agrees, subject to
the limitations set forth below with respect to the maximum
amount of Revolving Loans permitted to be outstanding from time
to time, to lend to Borrowers from time to time during the period
from November 14, 1997 to but excluding the Revolving Loan
Commitment Termination Date an aggregate amount not exceeding its
Pro Rata Share of the aggregate amount of the Revolving Loan
Commitments to be used for the purposes identified in subsection
2.5B. The amount of each Lender's Revolving Loan Commitment as of
the Closing Date is set forth opposite its name on Schedule 2.1
annexed hereto and the aggregate amount of the Revolving Loan
Commitments as of the Closing Date is $40,000,000; provided that
the Revolving Loan Commitments of Lenders shall be adjusted to
give effect to any assignments of the Revolving Loan Commitments
pursuant to subsection 10.1B; and provided, further that the
amount of the Revolving Loan Commitments shall be reduced from
time to time by the amount of any reductions thereto made
pursuant to subsections 2.4B(ii) and 2.4B(iii). Each Lender's
Revolving Loan Commitment shall expire on the Revolving Loan
Commitment Termination Date and all Revolving Loans and all other
amounts owed hereunder with respect to the Revolving Loans and
the Revolving Loan Commitments shall be paid in full no later
than that date. Amounts borrowed under this subsection 2.1A(ii)
may be repaid and reborrowed to but excluding the Revolving Loan
Commitment Termination Date. For the avoidance of doubt, all
Revolving Loans made and Letters of Credit issued under the
Existing Credit Agreement shall continue under this Agreement.
Anything contained in this Agreement to the contrary
notwithstanding, in no event shall the Total Utilization of
Revolving Loan Commitments at any time exceed the Revolving Loan
Commitments then in effect.
(iii) [Intentionally omitted].
B. Borrowing Mechanics. Term Loans or Revolving Loans made on any
Funding Date (other than Revolving Loans made pursuant to subsection 3.3B for
the purpose of reimbursing any Issuing Lender for the amount of a drawing under
a Letter of Credit issued by it), shall be in an aggregate minimum amount of (y)
$3,000,000 and integral multiples of $1,000,000 in excess of that amount in the
case of Term Loans and (z) $1,000,000 and integral multiples of $500,000 in the
case of Revolving Loans.
Whenever Borrowers desire that Lenders make Revolving Loans they
shall deliver to Administrative Agent a Notice of Borrowing no later than 10:00
A.M. (New York City time) at least three Business Days in advance of the
proposed Funding Date (in the case of a Eurodollar Rate Loan) or at least one
Business Day in advance of the proposed Funding Date (in the case of a Base Rate
35
Loan). The Notice of Borrowing shall specify (i) the proposed Funding Date
(which shall be a Business Day), (ii) the amount of Revolving Loans requested,
(iii) whether such Revolving Loans shall be Base Rate Loans or Eurodollar Rate
Loans, and (iv) in the case of any Loans requested to be made as Eurodollar Rate
Loans, the initial Interest Period requested therefor. Borrowers shall notify
Administrative Agent and Disbursement Agent prior to the funding of any
Revolving Loans in the event that any of the matters to which Borrowers are
required to certify in the applicable Notice of Borrowing is no longer true and
correct as of the applicable Funding Date, and the acceptance by Borrowers of
the proceeds of any Revolving Loans shall constitute a re-certification by
Borrowers, as of the applicable Funding Date, as to the matters to which
Borrowers are required to certify in the applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G,
a Notice of Borrowing for a Eurodollar Rate Loan shall be irrevocable on and
after the related Interest Rate Determination Date, and Borrowers shall be bound
to make a borrowing in accordance therewith.
C. Disbursement of Funds. All Loans under this Agreement shall be
made by Lenders simultaneously and proportionately to their respective Pro Rata
Shares, it being understood that no Lender shall be responsible for any default
by any other Lender in that other Lender's obligation to make a Loan requested
hereunder nor shall the Commitment of any Lender to make the particular type of
Loan requested be increased or decreased as a result of a default by any other
Lender in that other Lender's obligation to make a Loan requested hereunder.
Promptly after receipt by Administrative Agent of a Notice of Borrowing pursuant
to subsection 2.1B, Administrative Agent shall notify each Lender of the
proposed borrowing. Each Lender shall make the amount of its Loan available to
Administrative Agent not later than 12:00 Noon (New York City time) on the
applicable Funding Date, in same day funds in Dollars, at the Funding and
Payment Office. Except as provided in subsection 3.3B with respect to Revolving
Loans used to reimburse any Issuing Lender for the amount of a drawing under a
Letter of Credit issued by it, upon satisfaction or waiver of the conditions
precedent specified in subsection 4.2, Administrative Agent shall make the
aggregate amount of the Loans received by Administrative Agent from Lenders
available by crediting the account of Borrowers at the Funding and Payment
Office in the amount of such Loans.
Unless Administrative Agent shall have been notified by any
Lender prior to the Funding Date for any Loans that such Lender does not intend
to make available to Administrative Agent the amount of such Lender's Loan
requested on such Funding Date, Administrative Agent may assume that such Lender
has made such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Borrowers a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the customary rate set by Administrative Agent for the
correction of errors among banks for three Business Days and thereafter at the
Base Rate. If such Lender does not pay such corresponding amount forthwith upon
Administrative Agent's demand therefor, Administrative Agent shall promptly
notify Borrowers and Borrowers shall immediately pay such corresponding amount
to Administrative Agent together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Administrative Agent, at the
rate payable under this Agreement for Base Rate Loans. Nothing in this
subsection 2.1C shall be deemed to relieve any Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that Borrowers may
have against any Lender as a result of any default by such Lender hereunder.
D. The Register.
(i) Administrative Agent shall maintain, at its address referred
to in subsection 10.9, a register for the recordation of the
names and addresses of Lenders and the Commitments and Loans of
each Lender from time to time (the "Register"). The Register
shall be available for inspection by Borrowers or any Lender at
any reasonable time and from time to time upon reasonable prior
notice.
(ii) Administrative Agent shall record in the Register the
Commitment and the Loans from time to time of each Lender, and
each repayment or prepayment in respect of the principal amount
of the Loans of each Lender. Any such recordation shall be
conclusive and binding on Borrowers and each Lender, absent
manifest error; provided that failure to make any such
recordation, or any error in such recordation, shall not affect
any Lender's Commitments or Borrowers' Obligations in respect of
any applicable Loans.
36
(iii) Each Lender shall record on its internal records (including
the Notes held by such Lender) the amount of each Loan made by it
and each payment in respect thereof. Any such recordation shall
be conclusive and binding on Borrowers, absent manifest error;
provided that failure to make any such recordation, or any error
in such recordation, shall not affect any Lender's Commitments or
Obligations in respect of any applicable Loans; and provided,
further that in the event of any inconsistency between the
Register and any Lender's records, the recordations in the
Register shall govern.
(iv) Administrative Agent and Lenders shall deem and treat the
Persons listed as Lenders in the Register as the holders and
owners of the corresponding Commitments and Loans listed therein
for all purposes hereof, and no assignment or transfer of any
such Commitment or Loan shall be effective, in each case unless
and until an Assignment Agreement effecting the assignment or
transfer thereof shall have been accepted by Administrative Agent
and recorded in the Register as provided in subsection 10.1B(ii).
Prior to such recordation, all amounts owed with respect to the
applicable Commitment or Loan shall be owed to the Lender listed
in the Register as the owner thereof, and any request, authority
or consent of any Person who, at the time of making such request
or giving such authority or consent, is listed in the Register as
a Lender shall be conclusive and binding on any subsequent
holder, assignee or transferee of the corresponding Commitments
or Loans.
E. Notes.
(i) In exchange for the outstanding Tranche A Term Notes,
Borrower shall execute and deliver on the Closing Date (or
thereafter in the case of an assignment) to each Lender having a
Tranche A Term Loan Commitment (or to Administrative Agent for
that Lender) a Term Note, with a maturity of June 30, 2003,
substantially in the form of Exhibit III-A attached hereto to
replace that Lender's Tranche A Term Note, in the principal
amount of that Lender's Tranche A Term Loan Commitment and with
other appropriate insertions.
(ii) In exchange for the outstanding Tranche B Term Notes,
Borrowers shall execute and deliver on the Closing Date (or
thereafter in the case of an assignment) to each Lender having a
Tranche B Term Loan Commitment (or to Administrative Agent for
that Lender) a Term Note, with a maturity of June 30, 2003,
substantially in the form of Exhibit III-A annexed hereto to
replace that Lender's Tranche B Term Note, in the principal
amount of that Lender's Tranche B Term Loan Commitment and with
other appropriate insertions.
(iii) In exchange for the outstanding Tranche C Term Notes,
Borrowers shall execute and deliver on the Closing Date (or
thereafter in the case of an assignment) to each Lender having a
Tranche C Term Loan Commitment (or to Administrative Agent for
that Lender) a Term Note, with a maturity of June 30, 2003,
substantially in the form of Exhibit III-A annexed hereto to
replace that Lender's Tranche C Term Note, in the principal
amount of that Lender's Tranche C Term Loan Commitment and with
other appropriate insertions.
(iv) In exchange for the outstanding Revolving Notes, Borrowers
shall execute and deliver on the Closing Date (or thereafter in
the case of an assignment) to each Lender having a Revolving Loan
Commitment (or to Administrative Agent for that Lender) a
Revolving Note, with a maturity of June 30, 2003, substantially
in the form of Exhibit III-B annexed hereto to evidence that
Lender's Revolving Loans, in the principal amount of that
Lender's Revolving Loan Commitment, and with other appropriate
insertions.
(v) To the extent that a Lender fails to deliver an outstanding
Note under Clauses (i), (ii), (iii) or (iv) above, Borrowers
shall not be obligated to issue a new Note and such outstanding
Note shall be deemed amended as provided for in this Agreement.
Administrative Agent may deem and treat the payee of any Note as
the owner thereof for all purposes hereof unless and until an Assignment
Agreement effecting the assignment or transfer thereof shall have been accepted
by Administrative Agent as provided in subsection 10.1B(ii). Any request,
authority or consent of any person or entity who, at the time of making such
request or giving such authority or consent, is the holder of any Note shall be
conclusive and binding on any subsequent holder, assignee or transferee of that
Note or of any Note or Notes issued in exchange therefor.
37
2.2 Interest on the Loans.
--- ----------------------
A. Rate of Interest. Subject to the provisions of subsections 2.6
and 2.7, each Loan shall bear interest on the unpaid principal amount thereof
from the date made through maturity (whether by acceleration or otherwise) at a
rate determined by reference to the Base Rate or the Adjusted Eurodollar Rate.
The applicable basis for determining the rate of interest with respect to any
Loan shall be selected by Borrowers initially at the time a Notice of Borrowing
is given with respect to such Loan pursuant to subsection 2.1B, and the basis
for determining the interest rate with respect to any Loan may be changed from
time to time pursuant to subsection 2.2D. If on any day a Loan is outstanding
with respect to which notice has not been delivered to Administrative Agent in
accordance with the terms of this Agreement specifying the applicable basis for
determining the rate of interest, then for that day that Loan shall bear
interest determined by reference to the Base Rate.
(i) Revolving Loans. Subject to the provisions of subsections
2.2E and 2.7, the Revolving Loans shall bear interest through
maturity as follows:
(a) if a Base Rate Loan, then (x) from the date of funding
of such Loan until June 14, 2000, at the sum of the Base Rate
plus the Applicable Margin (as defined in the Initial Credit
Agreement), (y) from June 14, 2000 until the Closing Date, at the
sum of the Base Rate plus 2.00%, and (z) from and after the
Closing Date, at the sum of the Base Rate plus 2.50%; or
(b) if a Eurodollar Rate Loan, then (x) from the date of
funding of such Loan until June 14, 2000, at the sum of the
Adjusted Eurodollar Rate plus the Applicable Margin, (y) from
June 14, 2000 until the Closing Date, at the sum of the Adjusted
Eurodollar Rate plus 3.00%, and (z) from and after the Closing
Date, at the sum of the Adjusted Eurodollar Rate plus 3.50%.
(ii) Term Loans. Subject to the provisions of subsections 2.2E
and 2.7, the Term Loans shall bear interest through maturity as
follows:
(a) if a Base Rate Loan, then (x) from the date of funding
of such Loan until June 14, 2000, at the sum of the Base Rate
plus the Applicable Margin, (y) from June 14, 2000 until the
Closing Date, at the sum of the Base Rate plus 2.00%, and (z)
from and after the Closing Date, at the sum of the Base Rate plus
2.50%; or
(b) if a Eurodollar Rate Loan, then (x) from the date of
funding of such Loan until June 14, 2000, at the sum of the
Adjusted Eurodollar Rate plus the Applicable Margin, (y) from
June 14, 2000 until the Closing Date, at the sum of the Adjusted
Eurodollar Rate plus 3.00%, and (z) from and after the Closing
Date, at the sum of the Adjusted Eurodollar Rate plus 3.50%.
B. Interest Periods. In connection with each Eurodollar Rate
Loan, Borrowers may, pursuant to the applicable Notice of Funding Request,
Notice of Borrowing or Notice of Conversion/Continuation, as the case may be,
select an interest period (each an "Interest Period") to be applicable to such
Loan, which Interest Period shall be, at Borrowers' option, either a one, two,
three or six month period; provided that:
(i) the initial Interest Period for any Eurodollar Rate Loan
shall commence on the Funding Date in respect of such Loan, in
the case of a Loan initially made as a Eurodollar Rate Loan, or
on the date specified in the applicable Notice of
Conversion/Continuation, in the case of a Loan converted to a
Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate Loan continued as such pursuant
to a Notice of Conversion/Continuation, each successive Interest
Period shall commence on the day on which the next preceding
Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day that
is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided that, if any Interest
Period would otherwise expire on a day that is not a Business Day
but is a day of the month after which no further Business Day
occurs in such month, such Interest Period shall expire on the
next preceding Business Day;
38
(iv) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (v) of this subsection
2.2B, end on the last Business Day of a calendar month;
(v) no Interest Period with respect to any portion of the Loans
shall extend beyond June 30, 2003;
(vi) no Interest Period shall extend beyond a date on which
Borrowers are required to make a scheduled payment of principal
of the Loans or a permanent reduction of the Revolving Loan
Commitments is scheduled to occur unless the sum of (a) the
aggregate principal amount of Loans that are Base Rate Loans plus
(b) the aggregate principal amount of Loans that are Eurodollar
Rate Loans with Interest Periods expiring on or before such date
plus (c) the excess of the Commitments then in effect over the
aggregate principal amount of the Loans then outstanding equals
or exceeds the principal amount required to be paid on the Loans
or the permanent reduction of the Commitments that is scheduled
to occur, on such date;
(vii) there shall be no more than 8 Interest Periods outstanding
at any time; and
(viii) in the event Borrowers fail to specify an Interest Period
for any Eurodollar Rate Loan in the applicable Notice of Funding
Request, Notice of Borrowing or Notice of
Conversion/Continuation, Borrowers shall be deemed to have
selected an Interest Period of one month.
For the avoidance of doubt, any Loan made prior to the Closing
Date shall continue with the Interest Period it had under the Existing Credit
Agreement subject to the provisions of subsection 2.2D below.
C. Interest Payments. Subject to the provisions of subsection
2.2E, interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity).
D. Conversion or Continuation. Subject to the provisions of
subsection 2.6, Borrowers shall have the option (i) to convert at any time all
or any part of its outstanding Loans equal to $3,000,000 and integral multiples
of $1,000,000 in excess of that amount from Loans bearing interest at a rate
determined by reference to one basis to Loans bearing interest at a rate
determined by reference to an alternative basis or (ii) upon the expiration of
any Interest Period applicable to a Eurodollar Rate Loan, to continue all or any
portion of such Loan equal to $3,000,000 and integral multiples of $1,000,000 in
excess of that amount as a Eurodollar Rate Loan; provided, however, that a
Eurodollar Rate Loan may only be converted into a Base Rate Loan on the
expiration date of an Interest Period applicable thereto.
Borrowers shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 10:00 A.M. (New York City time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). A Notice of Conversion/Continuation
shall specify (i) the proposed conversion/continuation date (which shall be a
Business Day), (ii) the amount and type of the Loan to be converted/continued,
(iii) the nature of the proposed conversion/continuation, (iv) in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan, the requested
Interest Period, and (v) in the case of a conversion to, or a continuation of, a
Eurodollar Rate Loan, that no Potential Event of Default or Event of Default has
occurred and is continuing. In lieu of delivering the above-described Notice of
Conversion/Continuation, Borrowers may give Administrative Agent telephonic
notice by the required time of any proposed conversion/continuation under this
subsection 2.2D; provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Conversion/Continuation to Administrative
Agent on or before the proposed conversion/continuation date. Upon receipt of
written or telephonic notice of any proposed conversion/continuation under this
subsection 2.2D, Administrative Agent shall promptly transmit such notice by
telefacsimile or telephone to each Lender.
Neither Administrative Agent nor any Lender shall incur any
liability to Borrowers in acting upon any telephonic notice referred to above
that Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Borrowers or
for otherwise acting in good faith under this subsection 2.2D, and upon
conversion or continuation of the applicable basis for determining the interest
rate with respect to any Loans in accordance with this Agreement pursuant to any
such telephonic notice Borrowers shall have effected a conversion or
continuation, as the case may be, hereunder.
39
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G,
a Notice of Conversion/Continuation for conversion to, or continuation of, a
Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable
on and after the related Interest Rate Determination Date, and Borrowers shall
be bound to effect a conversion or continuation in accordance therewith.
E. Default Rate. Upon the occurrence and during the continuation
of any Event of Default, the outstanding principal amount of all Loans and, to
the extent permitted by applicable law, any interest payments thereon not paid
when due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable upon
demand at a rate that is 2% per annum in excess of the interest rate otherwise
payable under this Agreement with respect to the applicable Loans (or, in the
case of any such fees and other amounts, at a rate which is 2% per annum in
excess of the interest rate otherwise payable under this Agreement for Base Rate
Loans); provided that, in the case of Eurodollar Rate Loans, upon the expiration
of the Interest Period in effect at the time any such increase in the interest
rate is effective such Eurodollar Rate Loans shall thereupon become Base Rate
Loans and shall thereafter bear interest payable upon demand at a rate which is
2% per annum in excess of the interest rate otherwise payable under this
Agreement for Base Rate Loans. Payment or acceptance of the increased rates of
interest provided for in this subsection 2.2E is not a permitted alternative to
timely payment and shall not constitute a waiver of any Event of Default or
otherwise prejudice or limit any rights or remedies of Administrative Agent or
any Lender.
F. Computation of Interest. Interest on the Loans shall be
computed on the basis of (i) a 360-day year, in the case of Eurodollar Rate
Loans and (ii) a 365-day year, in respect of Base Rate Loans, in each case for
the actual number of days elapsed in the period during which it accrues. In
computing interest on any Loan, the date of the making of such Loan or the first
day of an Interest Period applicable to such Loan or, with respect to a Base
Rate Loan being converted from a Eurodollar Rate Loan, the date of conversion of
such Eurodollar Rate Loan to such Base Rate Loan, as the case may be, shall be
included, and the date of payment of such Loan or the expiration date of an
Interest Period applicable to such Loan or, with respect to a Base Rate Loan
being converted to a Eurodollar Rate Loan, the date of conversion of such Base
Rate Loan to such Eurodollar Rate Loan, as the case may be, shall be excluded;
provided that if a Loan is repaid on the same day on which it is made, one day's
interest shall be paid on that Loan.
2.3 Fees.
--- -----
A. Commitment Fees. Borrowers agree to pay to Administrative
Agent, for distribution to each Lender in proportion to that Lender's Pro Rata
Share, commitment fees for the period from and including the Closing Date to and
excluding the Revolving Loan Commitment Termination Date equal to the average of
the daily excess of the Revolving Loan Commitments over the sum of (i) the
aggregate principal amount of outstanding Revolving Loans but not the Letter of
Credit Usage plus (ii) the Letter of Credit Usage multiplied by half of 1% per
annum, such commitment fees to be calculated on the basis of a 360-day year and
the actual number of days elapsed and to be payable quarterly in arrears on
March 31, June 30, September 30 and December 31 of each year, commencing on the
first such date to occur after November 14, 1997, and on the Revolving Loan
Commitment Termination Date.
B. Annual Administrative Fee. Borrowers agree to pay to
Administrative Agent an annual administrative fee in the amount and at the times
separately agreed to by the Administrative Agent and the Borrower.
C. Other Fees. Borrowers agree to pay to the Arranger and
Administrative Agent such other fees in the amounts and at the times separately
agreed upon between Borrowers and the Arranger and Administrative Agent.
2.4 Repayments, Prepayments and Reductions in Commitments; General
--- --------------------------------------------------------------
Provisions Regarding Payments.
------------------------------
A. Scheduled Payments of Term Loans.
Term Loans.
Borrowers shall make principal payments on the Term Loans in
installments on each of the following dates in the aggregate amount
set forth opposite such date in the table set forth below:
40
Scheduled
Repayment
Date of Term Loans
------------------- -------------
September 30, 2001 $ 381,875
December 31, 2001 $ 381,875
March 31, 2002 $ 381,875
June 30, 2002 $ 381,875
September 30, 2002 $ 381,875
December 31, 2002 $ 381,875
March 31, 2003 $ 75,229,375
June 30, 2003 $ 75,229,375
------------
Total $152,750,000
============
; provided that the scheduled installments of principal of the Term
Loans set forth above shall be reduced in connection with any
voluntary or mandatory prepayments of the Term Loans in accordance
with subsection 2.4B(iv), and the final installment payable by
Borrowers in respect of the Term Loans on such date shall be in an
amount, if such amount is different from that specified above,
sufficient to repay all amounts owing by Borrowers under this
Agreement with respect to the Term Loans.
B. Prepayments and Unscheduled Reductions in Commitments.
(i) Voluntary Prepayments. Borrowers may, upon not less than one
Business Day's prior written or telephonic notice, in the case of
Base Rate Loans, and three Business Days' prior written or
telephonic notice, in the case of Eurodollar Rate Loans, in each
case given to Administrative Agent by 12:00 Noon (New York City
time) on the date required and, if given by telephone, promptly
confirmed in writing to Administrative Agent (which original
written or telephonic notice Administrative Agent will promptly
transmit by telefacsimile or telephone to each Lender), at any
time and from time to time prepay any Loans on any Business Day
in whole or in part in an aggregate minimum amount of $1,000,000
and integral multiples of $500,000 in excess of that amount;
provided, however, that with respect to any Eurodollar Rate Loan
not prepaid on the expiration of the Interest Period applicable
thereto Borrowers shall pay any amount payable pursuant to
subsection 2.6D. Notice of prepayment having been given as
aforesaid, the principal amount of the Loans specified in such
notice shall become due and payable on the prepayment date
specified therein. Any such voluntary prepayment shall be applied
as specified in subsection 2.4B(iv).
(ii) Voluntary Reductions of Commitments. Borrowers may, upon not
less than three Business Days' prior written or telephonic notice
confirmed in writing to Administrative Agent (which original
written or telephonic notice Administrative Agent will promptly
transmit by telefacsimile or telephone to each Lender), at any
time and from time to time terminate in whole or permanently
reduce in part, without premium or penalty, the Revolving Loan
Commitments in an amount up to the amount by which the Revolving
Loan Commitments exceed the Total Utilization of Revolving Loan
Commitments at the time of such proposed termination or
reduction; provided that any such partial reduction of the
Revolving Loan Commitments shall be in an aggregate minimum
amount of $1,000,000 and integral multiples of $500,000 in excess
of that amount. Borrowers' notice to Administrative Agent shall
designate the date (which shall be a Business Day) of such
termination or reduction and the amount of any partial reduction,
and such termination or reduction of the Revolving Loan
Commitments shall be effective on the date specified in
Borrowers' notice and shall reduce the Revolving Loan Commitment
of each Lender proportionately to its Pro Rata Share. Any such
voluntary reduction of the Revolving Loan Commitments shall be
applied as specified in subsection 2.4B(iv).
(iii) Mandatory Prepayments and Mandatory Reductions of
Commitments. The Loans shall be prepaid and/or the Commitments
shall be permanently reduced in the amounts and under the
circumstances set forth below, all such prepayments and/or
reductions to be applied as set forth below or as more
specifically provided in subsection 2.4B(iv):
41
(a) Prepayments and Reductions From Net Asset Sale Proceeds.
No later than the first Business Day following the date of
receipt by Borrowers or any of their Subsidiaries of any Net
Asset Sale Proceeds in respect of any Asset Sale (other than Net
Asset Sale Proceeds in respect of the sale of (i) any obsolete
worn out or surplus assets or assets no longer used or useful in
the business of the Project, (ii) construction equipment having a
fair market value not in excess of $4,000,000 prior to Completion
or during the first year following Completion, and (iii) any
heating, ventilation, air conditioning and similar property, with
a fair market value in the aggregate not exceeding $2,500,000
sold to the HVAC Provider pursuant to documents reasonably
satisfactory to Scotiabank, as Administrative Agent, but only in
each case to the extent reinvested in the business of Borrowers
or such Subsidiary within 180 days of receipt), Borrowers shall
prepay the Loans and/or the Commitments shall be permanently
reduced in an aggregate amount equal to such Net Asset Sale
Proceeds.
(b) Prepayments and Reductions from Net Loss Proceeds and
Liquidated Damages. No later than the second Business Day on
which Loss Proceeds or Liquidated Damages are required to be
applied to prepayment of Loans under subsection 5.20 of the
Disbursement Agreement (if applicable) or Article X, Sections 5,
12(d) and 13, Article XI, Section 1 or Article XII, sections 8-9
of the Cooperation Agreement (as applicable), Borrowers shall
prepay the Term Loans and/or the Commitments shall be permanently
reduced in an amount equal to the Loss Proceeds or Liquidated
Damages, as applicable, available for such application under
subsection 5.20 of the Disbursement Agreement, Article X,
Sections 5, 12(d) and 13, Article XI Section 1 and Article XII,
Sections 8-9 of the Cooperation Agreement (as applicable) but not
exceeding that portion thereof determined to be payable to
Lenders in accordance with Section 4.5 of the Intercreditor
Agreement.
(c) Prepayments and Reductions Due to Reversion of Surplus
Assets of Pension Plans. On the first Business Day following the
date of return to Borrowers or any of their Subsidiaries of any
surplus assets of any pension plan of Borrowers or any for their
Subsidiaries, Borrowers shall prepay the Loans and/or the
Commitments shall be permanently reduced in an aggregate amount
(such amount being the "Net Pension Proceeds") equal to 100% of
such returned surplus assets, net of transaction costs and
expenses incurred in obtaining such return, including incremental
taxes payable as a result thereof.
(d) Prepayments and Reductions Due to Issuance of Debt or
Equity. On the first Business Day following the date of receipt
by Borrowers or any of their Subsidiaries, of the proceeds
(including Cash, real property or other property) (any such
proceeds, net of underwriting discounts and commissions and other
reasonable costs and expenses associated therewith, including
reasonable legal fees and expenses, being "Net Proceeds") from
the issuance of any debt or equity of Borrowers or any of their
Subsidiaries (other than any debt expressly permitted under
subsection 7.1 and any equity issuances to employees of Borrowers
upon exercise of options issued pursuant to employment agreements
and option plans as in effect on November 14, 1997), Borrowers
shall prepay the Loans and/or the Commitments shall be
permanently reduced in an aggregate amount equal to (i) in the
case of any equity issuance which, individually or together with
all equity issuances on or after the Closing Date, results in the
receipt by Borrowers or any of their Subsidiaries of Net Proceeds
in excess of $200,000,000 (excluding any proceeds described in
clause (y) of the next sentence), 100% of such Net Proceeds in
excess of such $200,000,000 and (ii) in the case of any debt,
100% of such Net Proceeds. Notwithstanding the foregoing, (y)
Borrowers shall not be required to prepay the Loans and/or reduce
Commitments from any proceeds (including Cash, real property or
other property), of equity contributions from, or equity
issuances to, ▇▇▇▇▇▇▇ or any of his Affiliates (other than the
Subsidiaries) to LVSI or Venetian that are used for the expansion
or improvement of the Project, the Phase I-A Project or the
Guggenheim Projects or to pay operating costs with respect
thereto or to make contributions to Excluded Subsidiaries and (z)
any portion of the Net Proceeds of equity issuances not required
to be applied to prepay the Loans and/or to reduce the
Commitments shall, in any event, be used to make contributions to
Excluded Subsidiaries or used for the expansion or improvement of
the Project, the Phase I-A Project or the Guggenheim Projects or
to pay operating costs with respect thereto.
(e) [Intentionally omitted].
(f) [Intentionally omitted].
42
(g) Prepayments from Certain Distributions from Mall
Subsidiary. On the date of receipt by Borrowers or any of their
Subsidiaries of any dividends or distributions in Cash or Cash
Equivalents from New Mall Subsidiary, Mall Subsidiary, Mall
Direct Holdings, New Mall Manager or Mall Manager following the
sale or other disposition of all or any portion of the Mall or
any interest therein (including any equity interest in Mall
Direct Holdings, Mall Subsidiary, New Mall Subsidiary, Mall
Manager or New Mall Manager), Borrowers shall prepay the Loans
and/or the Commitments shall be permanently reduced in an amount
equal to 100% of such dividends or distributions. Notwithstanding
the foregoing, any dividends or distributions from New Mall
Subsidiary, Mall Subsidiary, Mall Direct Holdings, New Mall
Manager or Mall Manager which are applied by Borrowers within 15
days of receipt to fund Permitted Quarterly Tax Distributions
need not be applied to prepay the Loans or to reduce Commitments,
but such exclusion shall not reduce the amounts otherwise
required to be applied to prepay Loans and/or reduce Commitments
as provided above.
(h) Prepayments From Funds Returned to Administrative Agent.
To the extent no other provision of this subsection 2.4B(iii)
would otherwise apply, no later than the Business Day following
the date on which funds representing the proceeds of Loans are
returned or distributed to Administrative Agent on behalf of
Lenders under Section 2.11 or 2.12 of the Disbursement Agreement,
Administrative Agent shall apply such funds to prepay the Loans
and/or the Commitment shall be permanently reduced in an amount
equal to the amount of funds so returned or distributed.
(i) Other Prepayments. To the extent no other provision of
this subsection 2.4B(iii) would apply, if any funds would be
required to be used to redeem and/or prepay the Mortgage Notes
and/or the Subordinated Notes (other than funds from the Mortgage
Notes Proceeds Account) if not otherwise used to repay the Loans,
then no later than one Business Day prior to the date on which
Borrowers would otherwise be required to use such funds to effect
such prepayment or redemption of the Mortgage Notes and/or
Subordinated Notes, Borrowers shall prepay the Loans and/or the
Commitments shall be permanently reduced in an amount equal to
the amount of funds which would otherwise be used to redeem
and/or prepay Mortgage Notes and/or Subordinated Notes.
(j) Calculations of Net Proceeds Amounts; Additional
Prepayments and Reductions Based on Subsequent Calculations.
Concurrently with any prepayment of the Loans and/or if
applicable the reduction of Commitments pursuant to subsections
2.4B(iii)(a)-(i), Borrowers shall deliver to Administrative Agent
an Officers' Certificate demonstrating the calculation of the
amount (the "Net Proceeds Amount") of the applicable Net Asset
Sale Proceeds or Loss Proceeds or Liquidated Damages, the
applicable Net Pension Proceeds, Net Proceeds (as such terms are
defined in subsections 2.4B(iii)(c) and (d)), or the amount of
the subsidiary distribution or other amounts, as the case may be,
that gave rise to such prepayment and/or reduction. In the event
that Borrowers shall subsequently determine that the actual Net
Proceeds Amount was greater than the amount set forth in such
Officers' Certificate, Borrowers shall promptly make an
additional prepayment of the Term Loans (and/or, if applicable,
the Commitments shall be permanently reduced) in an amount equal
to the amount of such excess, and Borrowers shall concurrently
therewith deliver to Administrative Agent an Officers'
Certificate demonstrating the derivation of the additional Net
Proceeds Amount resulting in such excess.
(k) Prepayments Due to Reductions or Restrictions of
Revolving Loan Commitments. Borrowers shall from time to time
prepay the Revolving Loans to the extent necessary so that the
Total Utilization of Revolving Loan Commitments shall not at any
time exceed the Revolving Loan Commitments then in effect.
(l) [Intentionally omitted].
(m) [Intentionally omitted].
(n) Drawings on Conforming ▇▇▇▇▇▇▇ L/Cs. In the event that
any Conforming ▇▇▇▇▇▇▇ L/C Draw Event shall have occurred,
Administrative Agent may direct the Conforming ▇▇▇▇▇▇▇ L/C
Drawing Agent to draw down on each outstanding Conforming ▇▇▇▇▇▇▇
L/C in its entirety and shall apply the proceeds received from
the Conforming ▇▇▇▇▇▇▇ L/C Drawing Agent: first to prepay
outstanding amounts under (i) the Term Loans and (ii) Revolving
Loans, each on a pro rata basis to the full extent thereof and to
permanently reduce the Revolving Loan Commitments by the amount
of such prepayment of Revolving Loans and second to the extent of
any remaining amount of proceeds drawn by Drawing Agent, to
43
further permanently reduce the Revolving Loan Commitments. For
the avoidance of doubt, a Conforming ▇▇▇▇▇▇▇ L/C Draw Event shall
be in addition to an Event of Default described in Section 8
hereof and (i) the Administrative Agent shall not be required to
exercise any rights or remedy under Section 8 hereof in order to
draw on the Conforming ▇▇▇▇▇▇▇ L/Cs and (ii) any drawing on a
Conforming ▇▇▇▇▇▇▇ L/C shall not be deemed to be a waiver of any
Event of Default. Notwithstanding the foregoing, at the request
of Borrowers, the Administrative Agent shall instruct the
Conforming ▇▇▇▇▇▇▇ L/C Drawing Agent to release any Conforming
▇▇▇▇▇▇▇ L/C or a portion thereof in its possession to Borrowers,
provided that each of the following conditions shall have been
satisfied: (i) no Conforming ▇▇▇▇▇▇▇ L/C Draw Event shall have
occurred, (ii) Borrowers shall at such time be in compliance with
subsection 7.6 and shall have been in compliance therewith for
the preceding four consecutive quarters (without giving effect to
any such Conforming ▇▇▇▇▇▇▇ L/C or a portion thereof), (iii) no
Event of Default or Potential Event of Default shall have
occurred and (iv) since the last day of the preceding calendar
year, no event or change shall have occurred that caused, in any
case or in the aggregate, a Material Adverse Effect.
(iv) Application of Prepayments and Unscheduled Reductions of
Revolving Loan Commitments.
(a) Application of Voluntary Prepayments by Type of Loan and
Order of Maturity. Any voluntary prepayments pursuant to
subsection 2.4B(i) shall be applied as specified by Borrowers in
the applicable notice of prepayment; provided that in the event
Borrowers fail to specify the Loans to which any such prepayment
shall be applied, such prepayment shall be applied first to repay
outstanding Revolving Loans to the full extent thereof on a pro
rata basis, second to repay outstanding Term Loans on a pro rata
basis and third to permanently reduce the Revolving Loan
Commitments to the full extent thereof.
(b) Application of Mandatory Prepayments by Type of Loans.
Any amount (the "Applied Amount") required to be applied as a
mandatory prepayment of the Term Loans and/or a reduction of the
Revolving Loan Commitments pursuant to subsections
2.4B(iii)(a)-(j) shall be applied to first prepay the Term Loans
on a pro rata basis to the full extent thereof, second, to the
extent of any remaining portion of the Applied Amount, to prepay
the Revolving Loans to the full extent thereof and to further
permanently reduce the Revolving Loan Commitments by the amount
of such prepayment, and third, to the extent of any remaining
portion of the Applied Amount, to further permanently reduce the
Revolving Loan Commitments to the full extent thereof. Any amount
required to be applied as a mandatory prepayment pursuant to
subsection 2.4B(iii)(n) shall be applied in accordance with terms
of such subsection.
(c) Application of Mandatory Prepayments of Term Loans to
the Scheduled Installments of Principal Thereof. Any mandatory
prepayments of the Term Loans pursuant to subsection
2.4B(iii)(a)-(d), (f), (g), (h), (i) or (j) shall be applied to
reduce the scheduled installments of principal of the Term Loans
set forth in subsection 2.4A, on a pro rata basis, and any
mandatory prepayments of the Term Loans pursuant to subsection
2.4B(iii)(n) shall be applied to reduce the scheduled
installments of principal of the Term Loans set forth in
subsection 2.4A, in inverse order of maturity.
(d) Application of Prepayments to Base Rate Loans and
Eurodollar Rate Loans. Considering Loans being prepaid
separately, any prepayment thereof shall be applied first to Base
Rate Loans to the full extent thereof before application to
Eurodollar Rate Loans, in each case in a manner which minimizes
the amount of any payments required to be made by Borrowers
pursuant to subsection 2.6D.
C. General Provisions Regarding Payments.
(i) Manner and Time of Payment. All payments by Borrowers of
principal, interest, fees and other Obligations hereunder and
under the Notes shall be made in Dollars in same day funds,
without defense, setoff or counterclaim, free of any restriction
or condition, and delivered to Administrative Agent not later
than 12:00 Noon (New York City time) on the date due at the
Funding and Payment Office for the account of Lenders; funds
received by Administrative Agent after that time on such due date
shall be deemed to have been paid by Borrowers on the next
succeeding Business Day. Borrowers hereby authorize
Administrative Agent to charge their accounts with Administrative
Agent in order to cause timely payment to be made to
Administrative Agent of all principal, interest, fees and
44
expenses due hereunder (subject to sufficient funds being
available in its accounts for that purpose). (ii) Application of
Payments to Principal and Interest. All payments in respect of
the principal amount of any Loan shall include payment of accrued
interest on the principal amount being repaid or prepaid, and all
such payments shall be applied to the payment of interest before
application to principal.
(iii) Apportionment of Payments. Aggregate principal and interest
payments in respect of Loans shall be apportioned among all
outstanding Loans proportionately to Lenders' respective Pro Rata
Shares. Administrative Agent shall promptly distribute to each
Lender, at its primary address set forth below its name on the
appropriate signature page hereof or at such other address as
such Lender may request, its Pro Rata Share of all such payments
received by Administrative Agent and the commitment fees of such
Lender when received by Administrative Agent pursuant to
subsection 2.3. Notwithstanding the foregoing provisions of this
subsection 2.4C(iii), if, pursuant to the provisions of
subsection 2.6C, any Notice of Conversion/Continuation is
withdrawn as to any Affected Lender or if any Affected Lender
makes Base Rate Loans in lieu of its Pro Rata Share of any
Eurodollar Rate Loans, Administrative Agent shall give effect
thereto in apportioning payments received thereafter.
(iv) Payments on Business Days. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a
Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder or of the
commitment fees hereunder, as the case may be.
(v) Notation of Payment. Each Lender agrees that before disposing
of any Note held by it, or any part thereof (other than by
granting participations therein), that Lender will make a
notation thereon of all Loans evidenced by that Note and all
principal payments previously made thereon and of the date to
which interest thereon has been paid; provided that the failure
to make (or any error in the making of) a notation of any Loan
made under such Note shall not limit or otherwise affect the
obligations of Borrowers hereunder or under such Note with
respect to any Loan or any payments of principal or interest on
such Note.
2.5 Use of Proceeds.
--- ----------------
A. Term Loans. The proceeds of the Term Loans shall be applied by
Borrowers to pay Project Costs in accordance with the Disbursement Agreement
(including costs and expenses incurred by Borrowers in connection with the
transactions contemplated hereby), all in accordance with the Disbursement
Agreement or to pay indebtedness under this Agreement.
B. Revolving Loans. The proceeds of the Revolving Loans shall be
applied by Borrowers for working capital and general corporate purposes.
C. Margin Regulations. No portion of the proceeds of any
borrowing under this Agreement shall be used by Borrowers or any of their
Subsidiaries in any manner that might cause the borrowing or the application of
such proceeds to violate Regulation U, Regulation T or Regulation X of the Board
of Governors of the Federal Reserve System or any other regulation of such Board
or to violate the Exchange Act, in each case as in effect on the date or dates
of such borrowing and such use of proceeds.
2.6 Special Provisions Governing Eurodollar Rate Loans.
--- ---------------------------------------------------
Notwithstanding any other provision of this Agreement to the
contrary, the following provisions shall govern with respect to Eurodollar Rate
Loans as to the matters covered:
A. Determination of Applicable Interest Rate. As soon as
practicable after 10:00 A.M. (New York City time) on each Interest Rate
Determination Date, Administrative Agent shall determine (which determination
shall, absent manifest error, be final, conclusive and binding upon all parties)
the interest rate that shall apply to the Eurodollar Rate Loans for which an
interest rate is then being determined for the applicable Interest Period and
shall promptly give notice thereof (in writing or by telephone confirmed in
writing) to Borrowers and each Lender.
B. Inability to Determine Applicable Interest Rate. In the event
that Administrative Agent shall have determined (which determination shall be
final and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the interbank Eurodollar market adequate and fair means
do not exist for ascertaining the interest rate applicable to such Loans on the
45
basis provided for in the definition of Adjusted Eurodollar Rate, Administrative
Agent shall on such date give notice (by telefacsimile or by telephone confirmed
in writing) to Borrowers and each Lender of such determination, whereupon (i) no
Loans may be made as, or converted to, Eurodollar Rate Loans until such time as
Administrative Agent notifies Borrowers and Lenders that the circumstances
giving rise to such notice no longer exist and (ii) any Notice of Borrowing or
Notice of Conversion/Continuation given by Borrowers with respect to the Loans
in respect of which such determination was made shall be deemed to be made with
respect to Base Rate Loans.
C. Illegality or Impracticability of Eurodollar Rate Loans. In
the event that on any date any Lender shall have determined (which determination
shall be final and conclusive and binding upon all parties hereto but shall be
made only after consultation with Borrowers and Administrative Agent) that the
making, maintaining or continuation of its Eurodollar Rate Loans (i) has become
unlawful as a result of compliance by such Lender in good faith with any law,
treaty, governmental rule, regulation, guideline or order not in effect on the
date such Person became a Lender (or would conflict with any such treaty,
governmental rule, regulation, guideline or order not having the force of law
even though the failure to comply therewith would not be unlawful), or (ii)
would cause such Lender material financial hardship as a result of contingencies
occurring after the date of this Agreement which materially and adversely affect
the interbank Eurodollar market or the position of such Lender in that market,
then, and in any such event, such Lender shall be an "Affected Lender" and it
shall on that day give notice (by telefacsimile or by telephone confirmed in
writing) to Borrowers and Administrative Agent of such determination (which
notice Administrative Agent shall promptly transmit to each other Lender).
Thereafter (a) the obligation of the Affected Lender to make Loans as, or to
convert Loans to, Eurodollar Rate Loans shall be suspended until such notice
shall be withdrawn by the Affected Lender (which such Affected Lender shall do
at the earliest practicable date), (b) to the extent such determination by the
Affected Lender relates to a Eurodollar Rate Loan then being requested by
Borrowers pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, the Affected Lender shall make such Loan as (or convert
such Loan to, as the case may be) a Base Rate Loan, (c) the Affected Lender's
obligation to maintain its outstanding Eurodollar Rate Loans (the "Affected
Loans") shall be terminated at the earlier to occur of the expiration of the
Interest Period then in effect with respect to the Affected Loans or when
required by law, and (d) the Affected Loans shall automatically convert into
Base Rate Loans on the date of such termination. Except as provided in the
immediately preceding sentence, nothing in this subsection 2.6C shall affect the
obligation of any Lender other than an Affected Lender to make or maintain Loans
as, or to convert Loans to, Eurodollar Rate Loans in accordance with the terms
of this Agreement.
D. Compensation For Breakage or Non-Commencement of Interest
Periods. Borrowers shall compensate each Lender, upon written request by that
Lender (which request shall set forth the basis for requesting such amounts),
for all reasonable losses, expenses and liabilities (including any interest paid
by that Lender to lenders of funds borrowed by it to make or carry its
Eurodollar Rate Loans and any loss, expense or liability sustained by that
Lender in connection with the liquidation or re-employment of such funds) which
that Lender may sustain: (i) if for any reason (other than a default by that
Lender) a borrowing of any Eurodollar Rate Loan does not occur on a date
specified therefor in an Advance Confirmation Notice, Notice of Borrowing or a
telephonic request for borrowing, as applicable, or a conversion to or
continuation of any Eurodollar Rate Loan does not occur on a date specified
therefor in a Notice of Conversion/Continuation or a telephonic request for
conversion or continuation, (ii) if any prepayment (including any prepayment
pursuant to subsection 2.4B(i)) or other principal payment or any conversion of
any of its Eurodollar Rate Loans occurs on a date prior to the last day of an
Interest Period applicable to that Loan, (iii) if any prepayment of any of its
Eurodollar Rate Loans is not made on any date specified in a notice of
prepayment given by Borrowers, or (iv) as a consequence of any other default by
Borrowers in the repayment of its Eurodollar Rate Loans when required by the
terms of this Agreement.
E. Booking of Eurodollar Rate Loans. Any Lender may make, carry
or transfer Eurodollar Rate Loans at, to, or for the account of any of its
branch offices or the office of an Affiliate of that Lender.
F. Assumptions Concerning Funding of Eurodollar Rate Loans.
Calculation of all amounts payable to a Lender under this subsection 2.6 and
under subsection 2.7A shall be made as though that Lender had actually funded
each of its relevant Eurodollar Rate Loans through the purchase of a Eurodollar
deposit bearing interest at the rate obtained pursuant to clause (i) of the
definition of Adjusted Eurodollar Rate in an amount equal to the amount of such
Eurodollar Rate Loan and having a maturity comparable to the relevant Interest
Period and through the transfer of such Eurodollar deposit from an offshore
office of that Lender to a domestic office of that Lender in the United States
of America; provided, however, that each Lender may fund each of its Eurodollar
Rate Loans in any manner it sees fit and the foregoing assumptions shall be
utilized only for the purposes of calculating amounts payable under this
subsection 2.6 and under subsection 2.7A.
46
G. Eurodollar Rate Loans After Default. After the occurrence of
and during the continuation of a Potential Event of Default or an Event of
Default, (i) Borrowers may not elect to have a Loan be made or maintained as, or
converted to, a Eurodollar Rate Loan after the expiration of any Interest Period
then in effect for that Loan and (ii) subject to the provisions of subsection
2.6D, any Advance Confirmation Notice, Notice of Borrowing or Notice of
Conversion/Continuation given by Borrowers with respect to a requested borrowing
or conversion/continuation that has not yet occurred shall be deemed made with
respect to Base Rate Loans.
2.7 Increased Costs; Taxes; Capital Adequacy.
--- -----------------------------------------
A. Compensation for Increased Costs and Taxes. Subject to the
provisions of subsection 2.7B (which shall be controlling with respect to the
matters covered thereby), in the event that any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the date
hereof, or compliance by such Lender with any guideline, request or directive
issued or made after the date hereof by any central bank or other governmental
or quasi-governmental authority (whether or not having the force of law):
(i) subjects such Lender (or its applicable lending office) to
any additional Tax (other than any Tax on the overall net income
of such Lender) with respect to this Agreement or any of its
obligations hereunder or any payments to such Lender (or its
applicable lending office) of principal, interest, fees or any
other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve (including
any marginal, emergency, supplemental, special or other reserve),
special deposit, compulsory loan, FDIC insurance or similar
requirement against assets held by, or deposits or other
liabilities in or for the account of, or advances or loans by, or
other credit extended by, or any other acquisition of funds by,
any office of such Lender (other than any such reserve or other
requirements with respect to Eurodollar Rate Loans that are
reflected in the definition of Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with respect to a
Tax matter) on or affecting such Lender (or its applicable
lending office) or its obligations hereunder or the interbank
Eurodollar market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, Borrowers shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to Borrowers (with a copy to Administrative
Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Lender under this subsection
2.7A, which statement shall be conclusive and binding upon all parties hereto
absent manifest error.
B. Withholding of Taxes.
(i) Payments to Be Free and Clear. All sums payable by Borrowers
under this Agreement and the other Loan Documents shall (except
to the extent required by law) be paid free and clear of, and
without any deduction or withholding on account of, any Tax
(other than a Tax on the overall net income of any Lender)
imposed, levied, collected, withheld or assessed by or within the
United States of America or any political subdivision in or of
the United States of America or any other jurisdiction from or to
which a payment is made by or on behalf of Borrowers or by any
federation or organization of which the United States of America
or any such jurisdiction is a member at the time of payment, all
such non-excluded Taxes being hereinafter collectively referred
to as "Included Taxes".
(ii) Grossing-up of Payments. If Borrowers or any other Person is
required by law to make any deduction or withholding on account
of any such Included Tax from any sum paid or payable by
Borrowers to Administrative Agent or any Lender under any of the
Loan Documents:
47
(a) Borrowers shall notify Administrative Agent of any such
requirement or any change in any such requirement as soon as
Borrowers become aware of it;
(b) Borrowers shall pay any such Included Tax before the
date on which penalties attach thereto, such payment to be made
(if the liability to pay is imposed on Borrowers) for its own
account or (if that liability is imposed on Administrative Agent
or such Lender, as the case may be) on behalf of and in the name
of Administrative Agent or such Lender;
(c) the sum payable by Borrowers in respect of which the
relevant deduction, withholding or payment is required shall be
increased to the extent necessary to ensure that, after the
making of that deduction, withholding or payment, Administrative
Agent or such Lender, as the case may be, receives on the due
date a net sum equal to what it would have received had no such
deduction, withholding or payment been required or made; and
(d) within 30 days after paying any sum from which it is
required by law to make any deduction or withholding, and within
30 days after the due date of payment of any Included Tax which
it is required by clause (b) above to pay, Borrowers shall
deliver to Administrative Agent evidence satisfactory to the
other affected parties of such deduction, withholding or payment
and of the remittance thereof to the relevant taxing or other
authority;
provided that no such additional amount shall be required to be paid
to any Lender under clause (c) above except to the extent that any
change after the date hereof (in the case of each Lender listed on the
signature pages hereof) or after the date of the Assignment Agreement
pursuant to which such Lender became a Lender (in the case of each
other Lender) in any such requirement for a deduction, withholding or
payment as is mentioned therein shall result in an increase in the
rate of such deduction, withholding or payment from that in effect at
the date of this Agreement or at the date of such Assignment
Agreement, as the case may be, in respect of payments to such Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is organized under the laws of any
jurisdiction other than the United States or any state or other
political subdivision thereof (for purposes of this subsection
2.7B(iii), a "Non-US Lender") shall deliver to Administrative
Agent for transmission to Borrowers, on or prior to November 14,
1997 (in the case of each Lender listed on the signature pages
hereof) or on or prior to the date of the Assignment Agreement
pursuant to which it becomes a Lender (in the case of each other
Lender), and at such other times as may be necessary in the
determination of Borrowers or Administrative Agent (each in the
reasonable exercise of its discretion), (1) two original copies
of Internal Revenue Service Form W-8BEN or W-8ECI (or any
successor forms), properly completed and duly executed by such
Lender, together with any other certificate or statement of
exemption required under the Code or the regulations issued
thereunder to establish that such Lender is not subject to
deduction or withholding of United States federal income tax with
respect to any payments to such Lender of principal, interest,
fees or other amounts payable under any of the Loan Documents or
(2) if such Lender is not a "bank" or other Person described in
Section 881(c)(3) of the Code and cannot deliver either Internal
Revenue Service Form 1001 or 4224 pursuant to clause (1) above, a
Certificate re Non-Bank Status together with two original copies
of Internal Revenue Service Form W-8BEN or W-8ECI (or any
successor form), properly completed and duly executed by such
Lender, together with any other certificate or statement of
exemption required under the Code or the regulations issued
thereunder to establish that such Lender is not subject to
deduction or withholding of United States federal income tax with
respect to any payments to such Lender of interest payable under
any of the Loan Documents.
(b) Each Lender required to deliver any forms, certificates
or other evidence with respect to United States federal income
tax withholding matters pursuant to subsection 2.7B(iii)(a)
hereby agrees, from time to time after the initial delivery by
such Lender of such forms, certificates or other evidence,
whenever a lapse in time or change in circumstances renders such
forms, certificates or other evidence obsolete or inaccurate in
any material respect, that such Lender shall promptly (1) deliver
to Administrative Agent for transmission to Borrowers two new
original copies of Internal Revenue Service Form 1001 or 4224, or
a Certificate re Non-Bank Status and two original copies of
48
Internal Revenue Service Form W-8BEN or W-8ECI, as the case may
be, properly completed and duly executed by such Lender, together
with any other certificate or statement of exemption required in
order to confirm or establish that such Lender is not subject to
deduction or withholding of United States federal income tax with
respect to payments to such Lender under the Loan Documents or
(2) notify Administrative Agent and Borrowers of its inability to
deliver any such forms, certificates or other evidence.
(c) Borrowers shall not be required to pay any additional
amount to any Non-US Lender under clause (c) of subsection
2.7B(ii) if such Lender shall have failed to satisfy the
requirements of clause (a) or (b)(1) of this subsection
2.7B(iii); provided that if such Lender shall have satisfied the
requirements of subsection 2.7B(iii)(a) on November 14, 1997 (in
the case of each Lender listed on the signature pages hereof) or
on the date of the Assignment Agreement pursuant to which it
became a Lender (in the case of each other Lender), nothing in
this subsection 2.7B(iii)(c) shall relieve Borrowers of their
obligation to pay any additional amounts pursuant to clause (c)
of subsection 2.7B(ii) in the event that, as a result of any
change in any applicable law, treaty or governmental rule,
regulation or order, or any change in the interpretation,
administration or application thereof, such Lender is no longer
properly entitled to deliver forms, certificates or other
evidence at a subsequent date establishing the fact that such
Lender is not subject to withholding as described in subsection
2.7B(iii)(a).
C. Capital Adequacy Adjustment. If any Lender shall have
determined that the adoption, effectiveness, phase-in or applicability after the
date hereof of any law, rule or regulation (or any provision thereof) regarding
capital adequacy, or any change therein or in the interpretation or
administration thereof after the date hereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its applicable lending
office) with any guideline, request or directive regarding capital adequacy
(whether or not having the force of law) of any such governmental authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on the capital of such Lender or any corporation controlling such
Lender as a consequence of, or with reference to, such Lender's Loans or
Commitments or Letters of Credit or participations therein or other obligations
hereunder with respect to the Loans or the Letters of Credit to a level below
that which such Lender or such controlling corporation could have achieved but
for such adoption, effectiveness, phase-in, applicability, change or compliance
(taking into consideration the policies of such Lender or such controlling
corporation with regard to capital adequacy), then from time to time, within
five Business Days after receipt by Borrowers from such Lender of the statement
referred to in the next sentence, Borrowers shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such controlling
corporation on an after-tax basis for such reduction. Such Lender shall deliver
to Borrowers (with a copy to Administrative Agent) a written statement, setting
forth in reasonable detail the basis of the calculation of such additional
amounts, which statement shall be conclusive and binding upon all parties hereto
absent manifest error.
2.8 Obligation of Lenders to Mitigate.
--- ----------------------------------
Each Lender and Issuing Lender agrees that, as promptly as
practicable after the officer of such Lender or Issuing Lender responsible for
administering the Loans or Letters of Credit of such Lender or Issuing Lender,
as the case may be, becomes aware of the occurrence of an event or the existence
of a condition that would cause such Lender or Issuing Lender to become an
Affected Lender or that would entitle such Lender or Issuing Lender to receive
payments under subsection 2.7 or subsection 3.6 it will, to the extent not
inconsistent with the internal policies of such Lender or Issuing Lender and any
applicable legal or regulatory restrictions, use reasonable efforts (i) to make,
issue, fund or maintain the Commitments of such Lender or Issuing Lender or the
affected Loans or Letters of Credit of such Lender or Issuing Lender through
another lending or Letters of Credit office of such Lender or Issuing Lender or
(ii) take such other measures as such Lender or Issuing Lender may deem
reasonable, if as a result thereof the circumstances which would cause such
Lender or Issuing Lender to be an Affected Lender would cease to exist or the
additional amounts which would otherwise be required to be paid to such Lender
or Issuing Lender pursuant to subsection 2.7 would be materially reduced and if,
as determined by such Lender or Issuing Lender in its sole discretion, the
making, issuing, funding or maintaining of such Commitments or Loans or Letters
of Credit through such other lending or Letters of Credit office or in
accordance with such other measures, as the case may be, would not otherwise
materially adversely affect such Commitments or Loans or Letters of Credit or
the interests of such Lender or Issuing Lender; provided that such Lender or
Issuing Lender will not be obligated to utilize such other lending or Letters of
Credit office pursuant to this subsection 2.8 if such Lender or Issuing Lender
would incur incremental expenses as a result of utilizing such other lending
office as described in clause (i) above. A certificate as to the amount of any
49
such expenses payable by Borrowers pursuant to this subsection 2.8 (setting
forth in reasonable detail the basis for requesting such amount) submitted by
such Lender or Issuing Lender to Borrowers (with a copy to Administrative Agent)
shall be conclusive absent manifest error. Each Lender and Issuing Lender agrees
that it will not request compensation under subsection 2.7 unless such Lender or
Issuing Lender requests compensation from borrowers under other lending
arrangements with such Lender or Issuing Lender who are similarly situated.
2.9 Obligations Joint and Several.
--- ------------------------------
Anything herein to the contrary notwithstanding, each Borrower
hereby agrees and acknowledges that the obligation of each Borrower for payment
of the Obligations shall be joint and several with the obligations of the other
Borrower hereunder regardless of which Borrower actually receives the proceeds
or benefits of any borrowing hereunder. Each Borrower hereby agrees and
acknowledges that it will receive substantial benefits from the Loans and credit
facilities made available under this Agreement.
Each Borrower agrees that its joint and several obligation to pay
all Obligations hereunder is irrevocable, absolute, independent and
unconditional and shall not be affected by any circumstance which constitutes a
legal or equitable discharge of a guarantor or surety other than the
indefeasible payment in full of the Obligations, and the liability of each
Borrower with respect to the Obligations shall not be affected, reduced or
impaired by (i) consideration of the amount of proceeds of the Loans received by
any Borrower relative to the aggregate amount of the Loans, (ii) the dissolution
or termination of or any increase, decrease or change in personnel of, Borrower,
(iii) the insolvency or business failure of, or any assignment for the benefit
of creditors by, or the commencement of any bankruptcy, reorganization,
arrangement, moratorium or other debtor relief proceedings by or against the
other Borrower or (iv) the appointment of a receiver for, or the attachment,
restraint of or making or levying of any order of court or legal process
affecting, the property of the other Borrower. Each Borrower agrees that a
separate action or actions may be brought and prosecuted against such Borrower
whether or not action is brought against the other Borrower and whether or not
the other Borrower is joined in any such action or actions. Either Borrower's
payment of a portion, but not all, of the Obligations shall in no way limit,
affect, modify or abridge such Borrower's liability for that portion of the
Obligations which is not paid.
Each Borrower hereby waives any right to require the
Administrative Agent or any Lender, as a condition of payment or performance of
the Obligations by such Borrower, to proceed against the other Borrower or any
other Person, to exhaust any security held from any Borrower, or pursue any
other remedy in the power of the Administrative Agent or any Lender. Each
Borrower hereby waives any defense arising by reason of incapacity, lack of
authority or any disability or other defense that may be available to the other
Borrower and any defenses or benefits that may be derived or afforded by law
which would limit the liability of or exonerate any guarantor or surety with
respect to the obligations, or which may conflict with the terms and provisions
of this Agreement, other than the indefeasible payment in full of the
Obligations.
Any indebtedness of a Borrower now or hereafter held by the other
Borrower is hereby subordinated in right of payment to the Obligations, and any
such indebtedness of a Borrower to the other Borrower collected or received by
such other Borrower after an Event of Default has occurred and is continuing
shall be held in trust for the Administrative Agent on behalf of the Lenders and
shall forthwith be paid over to the Administrative Agent for the benefit of the
Lenders to be credited and applied against the Obligations but without
affecting, impairing or limiting in any manner the liability of such other
Borrower under any other provision of this Agreement.
Section 3. LETTERS OF CREDIT
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations
--- ---------------------------------------------------------------------
Therein.
--------
A. Letters of Credit. In addition to Borrowers requesting that
Lenders make Revolving Loans pursuant to subsection 2.1A(ii), Borrowers may
request, in accordance with the provisions of this subsection 3.1, from time to
time during the period from November 14, 1997 to but excluding the Revolving
Loan Commitment Termination Date, that one or more Lenders issue Letters of
Credit for the account of Borrowers for the purposes specified in the
definitions of Commercial Letters of Credit and Standby Letters of Credit.
Subject to the terms and conditions of this Agreement and in reliance upon the
representations and warranties of Borrowers herein set forth, any one or more
Lenders may, but (except as provided in subsection 3.1B(ii)) shall not be
obligated to, issue such Letters of Credit in accordance with the provisions of
this subsection 3.1; provided that Borrowers shall not request that any Lender
issue (and no Lender shall issue):
50
(i) any Letter of Credit if, after giving effect to such
issuance, the Total Utilization of Revolving Loan Commitments
would exceed the Revolving Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to such
issuance, the Letter of Credit Usage would exceed $15,000,000;
(iii) any Standby Letter of Credit having an expiration date
later than the earlier of (a) the Revolving Loan Commitment
Termination Date and (b) the date which is one year from the date
of issuance of such Standby Letter of Credit; provided that the
immediately preceding clause (b) shall not prevent any Issuing
Lender from agreeing that a Standby Letter of Credit will
automatically be extended for one or more successive periods not
to exceed one year each unless such Issuing Lender elects not to
extend for any such additional period; and provided, further that
such Issuing Lender shall elect not to extend such Standby Letter
of Credit if it has knowledge that an Event of Default has
occurred and is continuing (and has not been waived in accordance
with subsection 10.6) at the time such Issuing Lender must elect
whether or not to allow such extension;
(iv) any Commercial Letter of Credit having an expiration date
(a) later than the earlier of (X) the date which is 30 days prior
to the Revolving Loan Commitment Termination Date and (Y) the
date which is 180 days from the date of issuance of such
Commercial Letter of Credit or (b) that is otherwise unacceptable
to the applicable Issuing Lender in its reasonable discretion; or
(v) any Letter of Credit denominated in a currency other than
Dollars.
B. Mechanics of Issuance.
(i) Notice of Issuance. Whenever Borrowers desire the issuance of
a Letter of Credit, they shall deliver to Administrative Agent a
Notice of Issuance of Letter of Credit substantially in the form
of Exhibit XV annexed hereto no later than 12:00 Noon (New York
City time) at least three Business Days (in the case of Standby
Letters of Credit) or five Business Days (in the case of
Commercial Letters of Credit), or in each case such shorter
period as may be agreed to by the Issuing Lender in any
particular instance, in advance of the proposed date of issuance.
The Notice of Issuance of Letter of Credit shall specify (a) the
proposed date of issuance (which shall be a Business Day), (b)
whether the Letter of Credit is to be a Standby Letter of Credit
or a Commercial Letter of Credit, (c) the face amount of the
Letter of Credit, (d) the expiration date of the Letter of
Credit, (e) the name and address of the beneficiary, and (f)
either the verbatim text of the proposed Letter of Credit or the
proposed terms and conditions thereof, including a precise
description of any documents to be presented by the beneficiary
which, if presented by the beneficiary prior to the expiration
date of the Letter of Credit, would require the Issuing Lender to
make payment under the Letter of Credit; provided that the
Issuing Lender, in its reasonable discretion, may require changes
in the text of the proposed Letter of Credit or any such
documents; and provided, further that no Letter of Credit shall
require payment against a conforming draft to be made thereunder
on the same business day (under the laws of the jurisdiction in
which the office of the Issuing Lender to which such draft is
required to be presented is located) that such draft is presented
if such presentation is made after 10:00 A.M. (in the time zone
of such office of the Issuing Lender) on such business day.
Borrowers shall notify the applicable Issuing Lender (and
Administrative Agent, if Administrative Agent is not such Issuing
Lender) prior to the issuance of any Letter of Credit in the
event that any of the matters to which Borrowers are required to
certify in the applicable Notice of Issuance of Letter of Credit
is no longer true and correct as of the proposed date of issuance
of such Letter of Credit, and upon the issuance of any Letter of
Credit Borrowers shall be deemed to have re-certified, as of the
date of such issuance, as to the matters to which Borrowers are
required to certify in the applicable Notice of Issuance of
Letter of Credit.
(ii) Determination of Issuing Lender. Upon receipt by
Administrative Agent of a Notice of Issuance of Letter of Credit
pursuant to subsection 3.1B(i) requesting the issuance of a
Letter of Credit, in the event Administrative Agent elects to
issue such Letter of Credit, Administrative Agent shall promptly
so notify Borrowers, and Administrative Agent shall be the
Issuing Lender with respect thereto. In the event that
Administrative Agent, in its sole discretion, elects not to issue
such Letter of Credit, Administrative Agent shall promptly so
51
notify Borrowers, whereupon Borrowers may request any other
Lender to issue such Letter of Credit by delivering to such
Lender a copy of the applicable Notice of Issuance of Letter of
Credit. Any Lender so requested to issue such Letter of Credit
shall promptly notify Borrowers and Administrative Agent whether
or not, in its sole discretion, it has elected to issue such
Letter of Credit, and any such Lender which so elects to issue
such Letter of Credit shall be the Issuing Lender with respect
thereto. In the event that all other Lenders shall have declined
to issue such Letter of Credit, notwithstanding the prior
election of Administrative Agent not to issue such Letter of
Credit, Administrative Agent shall be obligated to issue such
Letter of Credit and shall be the Issuing Lender with respect
thereto, notwithstanding the fact that the Letter of Credit Usage
with respect to such Letter of Credit and with respect to all
other Letters of Credit issued by Administrative Agent, when
aggregated with Administrative Agent's outstanding Revolving
Loans, may exceed Administrative Agent's Revolving Loan
Commitment then in effect.
(iii) Issuance of Letter of Credit. Upon satisfaction or waiver
(in accordance with subsection 10.6) of the conditions set forth
in subsection 4.3, the Issuing Lender shall issue the requested
Letter of Credit in accordance with the Issuing Lender's standard
operating procedures.
(iv) Notification to Lenders. Upon the issuance of any Letter of
Credit the applicable Issuing Lender shall promptly notify
Administrative Agent and each other Lender of such issuance,
which notice shall be accompanied by a copy of such Letter of
Credit. Promptly after receipt of such notice (or, if
Administrative Agent is the Issuing Lender, together with such
notice), Administrative Agent shall notify each Lender of the
amount of such Lender's respective participation in such Letter
of Credit, determined in accordance with subsection 3.1C.
(v) Reports to Lenders. Within 15 days after the end of each
calendar quarter ending after November 14, 1997, so long as any
Letter of Credit shall have been outstanding during such calendar
quarter, each Issuing Lender shall deliver to each other Lender a
report setting forth for such calendar quarter the daily
aggregate amount available to be drawn under the Letters of
Credit issued by such Issuing Lender that were outstanding during
such calendar quarter.
C. Lenders' Purchase of Participations in Letters of Credit.
Immediately upon the issuance of each Letter of Credit, each Lender shall be
deemed to, and hereby agrees to, have irrevocably purchased from the Issuing
Lender a participation in such Letter of Credit and any drawings honored
thereunder in an amount equal to such Lender's Pro Rata Share of the maximum
amount which is or at any time may become available to be drawn thereunder.
3.2 Letter of Credit Fees.
--- ----------------------
Borrowers agree to pay the following amounts with respect to
Letters of Credit issued hereunder:
(i) with respect to each Standby Letter of Credit, (a) a fronting
fee, payable directly to the applicable Issuing Lender for its
own account, equal to the greater of (X) $5,000 and (Y) 0.25% per
annum of the daily amount available to be drawn under such
Standby Letter of Credit and (b) a letter of credit fee, payable
to Administrative Agent for the account of Lenders, equal to the
product of (y) (A) until June 14, 2000, a percentage equal to the
Applicable Margin (as defined in the Initial Credit Agreement)
for Eurodollar Rate Loans, (B) from June 14, 2000 until the
Closing Date, 3.00% times and (C) from and after the Closing
Date, 3.50% times, (z) the daily maximum amount available to be
drawn under such Standby Letter of Credit, each such fronting fee
or letter of credit fee to be payable in arrears on and to (but
excluding) each March 31, June 30, September 30 and December 31
of each year and computed on the basis of a 360-day year for the
actual number of days elapsed;
(ii) with respect to each Commercial Letter of Credit, (a) a
fronting fee, payable directly to the applicable Issuing Lender
for its own account, equal to 0.25% per annum of the daily amount
available to be drawn under such Commercial Letter of Credit and
(b) a letter of credit fee, payable to Administrative Agent for
the account of Lenders, equal to the product of (y) (A) until
June 14, 2000, a percentage equal to the Applicable Margin (as
defined in the Initial Credit Agreement) for Eurodollar Rate
Loans, (B) from June 14, 2000 until the Closing Date, 3.00% times
and (C) from and after the Closing Date, 3.50% times, (z) the
daily maximum amount available to be drawn under such Commercial
52
Letter of Credit, each such fronting fee or letter of credit fee
to be payable in arrears on and to (but excluding) each March 31,
June 30, September 30 and December 31 of each year and computed
on the basis of a 360-day year for the actual number of days
elapsed; and
(iii) with respect to the issuance, amendment or transfer of each
Letter of Credit and each payment of a drawing made thereunder
(without duplication of the fees payable under clauses (i) and
(ii) above), documentary and processing charges payable directly
to the applicable Issuing Lender for its own account in
accordance with such Issuing Lender's standard schedule for such
charges in effect at the time of such issuance, amendment,
transfer or payment, as the case may be.
For purposes of calculating any fees payable under clauses (i)
and (ii) of this subsection 3.2, the daily amount available to be drawn under
any Letter of Credit shall be determined as of the close of business on any date
of determination. Promptly upon receipt by Administrative Agent of any amount
described in clause (i)(b) or (ii)(b) of this subsection 3.2, Administrative
Agent shall distribute to each Lender its Pro Rata Share of such amount.
3.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit.
--- -------------------------------------------------------------------
A. Responsibility of Issuing Lender With Respect to Drawings. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to examine the
documents delivered under such Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in accordance with the terms
and conditions of such Letter of Credit.
B. Reimbursement by Borrowers of Amounts Paid Under Letters of
Credit. In the event an Issuing Lender has determined to honor a drawing under a
Letter of Credit issued by it, such Issuing Lender shall immediately notify
Borrowers and Administrative Agent, and Borrowers shall reimburse such Issuing
Lender on or before the Business Day immediately following the date on which
such drawing is honored (the "Reimbursement Date") in an amount in Dollars and
in same day funds equal to the amount of such honored drawing; provided that,
anything contained in this Agreement to the contrary notwithstanding, unless
Borrowers shall have notified Administrative Agent and such Issuing Lender prior
to 10:00 A.M. (New York City time) on the date such drawing is honored that
Borrowers intend to reimburse such Issuing Lender for the amount of such honored
drawing with funds other than the proceeds of Revolving Loans, Borrowers shall
be deemed to have given a timely Notice of Borrowing to Administrative Agent
requesting Lenders to make Revolving Loans that are Base Rate Loans on the
Reimbursement Date in an amount in Dollars equal to the amount of such honored
drawing and Lenders shall, on the Reimbursement Date, make Revolving Loans that
are Base Rate Loans in the amount of such honored drawing, the proceeds of which
shall be applied directly by Agent to reimburse such Issuing Lender for the
amount of such honored drawing; and provided, further that if for any reason
proceeds of Revolving Loans are not received by such Issuing Lender on the
Reimbursement Date in an amount equal to the amount of such honored drawing,
Borrowers shall reimburse such Issuing Lender, on demand, in an amount in same
day funds equal to the excess of the amount of such honored drawing over the
aggregate amount of such Revolving Loans, if any, which are so received. Nothing
in this subsection 3.3B shall be deemed to relieve any Lender from its
obligation to make Revolving Loans on the terms and conditions set forth in this
Agreement, and Borrowers shall retain any and all rights it may have against any
Lender resulting from the failure of such Lender to make such Revolving Loans
under this subsection 3.3B.
C. Payment by Lenders of Unreimbursed Amounts Paid Under Letters
of Credit.
(i) Payment by Lenders. In the event that Borrowers shall fail
for any reason to reimburse any Issuing Lender as provided in
subsection 3.3B in an amount equal to the amount of any drawing
honored by such Issuing Lender under a Letter of Credit issued by
it, such Issuing Lender shall promptly notify each other Lender
of the unreimbursed amount of such honored drawing and of such
other Lender's respective participation therein based on such
Lender's Pro Rata Share. Each Lender shall make available to such
Issuing Lender an amount equal to its respective participation,
in Dollars and in same day funds, at the office of such Issuing
Lender specified in such notice, not later than 12:00 Noon (New
York City time) on the first business day (under the laws of the
jurisdiction in which such office of such Issuing Lender is
located) after the date notified by such Issuing Lender. In the
event that any Lender fails to make available to such Issuing
Lender on such business day the amount of such Lender's
participation in such Letter of Credit as provided in this
subsection 3.3C, such Issuing Lender shall be entitled to recover
such amount on demand from such Lender together with interest
thereon at the rate customarily used by such Issuing Lender for
53
the correction of errors among banks for three Business Days and
thereafter at the Base Rate. Nothing in this subsection 3.3C
shall be deemed to prejudice the right of any Lender to recover
from any Issuing Lender any amounts made available by such Lender
to such Issuing Lender pursuant to this subsection 3.3C in the
event that it is determined by the final judgment of a court of
competent jurisdiction that the payment with respect to a Letter
of Credit by such Issuing Lender in respect of which payment was
made by such Lender constituted gross negligence or willful
misconduct on the part of such Issuing Lender.
(ii) Distribution to Lenders of Reimbursements Received From
Borrowers. In the event any Issuing Lender shall have been
reimbursed by other Lenders pursuant to subsection 3.3C(i) for
all or any portion of any drawing honored by such Issuing Lender
under a Letter of Credit issued by it, such Issuing Lender shall
distribute to each other Lender which has paid all amounts
payable by it under subsection 3.3C(i) with respect to such
honored drawing such other Lender's Pro Rata Share of all
payments subsequently received by such Issuing Lender from
Borrowers in reimbursement of such honored drawing when such
payments are received. Any such distribution shall be made to a
Lender at its primary address set forth below its name on the
appropriate signature page hereof or at such other address as
such Lender may request.
D. Interest on Amounts Paid Under Letters of Credit.
(i) Payment of Interest by Borrowers. Borrowers agree to pay to
each Issuing Lender, with respect to drawings honored under any
Letters of Credit issued by it, interest on the amount paid by
such Issuing Lender in respect of each such honored drawing from
the date such drawing is honored to but excluding the date such
amount is reimbursed by Borrowers (including any such
reimbursement out of the proceeds of Revolving Loans pursuant to
subsection 3.3B) at a rate equal to (a) for the period from the
date such drawing is honored to but excluding the Reimbursement
Date, the rate then in effect under this Agreement with respect
to Revolving Loans that are Base Rate Loans and (b) thereafter, a
rate which is 2% per annum in excess of the rate of interest
otherwise payable under this Agreement with respect to Revolving
Loans that are Base Rate Loans. Interest payable pursuant to this
subsection 3.3D(i) shall be computed on the basis of a 365-day
year for the actual number of days elapsed in the period during
which it accrues and shall be payable on demand or, if no demand
is made, on the date on which the related drawing under a Letter
of Credit is reimbursed in full.
(ii) Distribution of Interest Payments by Issuing Lender.
Promptly upon receipt by any Issuing Lender of any payment of
interest pursuant to subsection 3.3D(i) with respect to a drawing
honored under a Letter of Credit issued by it, (a) such Issuing
Lender shall distribute to each other Lender, out of the interest
received by such Issuing Lender in respect of the period from the
date such drawing is honored to but excluding the date on which
such Issuing Lender is reimbursed for the amount of such drawing
(including any such reimbursement out of the proceeds of
Revolving Loans pursuant to subsection 3.3B), the amount that
such other Lender would have been entitled to receive in respect
of the letter of credit fee that would have been payable in
respect of such Letter of Credit for such period pursuant to
subsection 3.2 if no drawing had been honored under such Letter
of Credit, and (b) in the event such Issuing Lender shall have
been reimbursed by other Lenders pursuant to subsection 3.3C(i)
for all or any portion of such honored drawing, such Issuing
Lender shall distribute to each other Lender which has paid all
amounts payable by it under subsection 3.3C(i) with respect to
such honored drawing such other Lender's Pro Rata Share of any
interest received by such Issuing Lender in respect of that
portion of such honored drawing so reimbursed by other Lenders
for the period from the date on which such Issuing Lender was so
reimbursed by other Lenders to but excluding the date on which
such portion of such honored drawing is reimbursed by Borrowers.
Any such distribution shall be made to a Lender at its primary
address set forth below its name on the appropriate signature
page hereof or at such other address as such Lender may request.
3.4 Obligations Absolute.
--- ---------------------
The obligation of Borrowers to reimburse each Issuing Lender for
drawings honored under the Letters of Credit issued by it and to repay any
Revolving Loans made by Lenders pursuant to subsection 3.3B and the obligations
of Lenders under subsection 3.3C(i) shall be unconditional and irrevocable and
54
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances including, without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit;
(ii) the existence of any claim, set-off, defense or other right
which Borrower or any Lender may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any
Persons for whom any such transferee may be acting), any Issuing
Lender or other Lender or any other Person or, in the case of a
Lender, against Borrowers, whether in connection with this
Agreement, the transactions contemplated herein or any unrelated
transaction (including any underlying transaction between
Borrowers or one of its Subsidiaries and the beneficiary for
which any Letter of Credit was procured);
(iii) any draft or other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) payment by the applicable Issuing Lender under any Letter of
Credit against presentation of a draft or other document which
does not substantially comply with the terms of such Letter of
Credit;
(v) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of
Borrowers;
(vi) any breach of this Agreement or any other Loan Document by
any party thereto;
(vii) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential Event of
Default shall have occurred and be continuing;
provided, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).
3.5 Indemnification; Nature of Issuing Lenders' Duties.
--- ---------------------------------------------------
A. Indemnification. In addition to amounts payable as provided in
subsection 3.6, Borrowers hereby agree to protect, indemnify, pay and save
harmless each Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which such Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by such Issuing
Lender, other than as a result of (a) the gross negligence or willful misconduct
of such Issuing Lender as determined by a final judgment of a court of competent
jurisdiction or (b) subject to the following clause (ii), the wrongful dishonor
by such Issuing Lender of a proper demand for payment made under any Letter of
Credit issued by it or (ii) the failure of such Issuing Lender to honor a
drawing under any such Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto
government or governmental authority (all such acts or omissions herein called
"Governmental Acts").
B. Nature of Issuing Lenders' Duties. As between Borrowers and
any Issuing Lender, Borrowers assume all risks of the acts and omissions of, or
misuse of the Letters of Credit issued by such Issuing Lender by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, such Issuing Lender shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) failure of the beneficiary of
any such Letter of Credit to comply fully with any conditions required in order
to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any such
Letter of Credit or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing under
55
such Letter of Credit; or (viii) any consequences arising from causes beyond the
control of such Issuing Lender, including without limitation any Governmental
Acts, and none of the above shall affect or impair, or prevent the vesting of,
any of such Issuing Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the
specific provisions set forth in the first paragraph of this subsection 3.5B,
any action taken or omitted by any Issuing Lender under or in connection with
the Letters of Credit issued by it or any documents and certificates delivered
thereunder, if taken or omitted in good faith, shall not put such Issuing Lender
under any resulting liability to Borrowers.
Notwithstanding anything to the contrary contained in this
subsection 3.5, Borrowers shall retain any and all rights it may have against
any Issuing Lender for any liability arising solely out of the gross negligence
or willful misconduct of such Issuing Lender, as determined by a final judgment
of a court of competent jurisdiction.
3.6 Increased Costs and Taxes Relating to Letters of Credit.
--- --------------------------------------------------------
Subject to the provisions of subsection 2.7B (which shall be
controlling with respect to the matters covered thereby), in the event that any
Issuing Lender or Lender shall determine (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto)
that any law, treaty or governmental rule, regulation or order, or any change
therein or in the interpretation, administration or application thereof
(including the introduction of any new law, treaty or governmental rule,
regulation or order), or any determination of a court or governmental authority,
in each case that becomes effective after the date hereof, or compliance by any
Issuing Lender or Lender with any guideline, request or directive issued or made
after the date hereof by any central bank or other governmental or
quasi-governmental authority (whether or not having the force of law):
(i) subjects such Issuing Lender or Lender (or its applicable
lending or letter of credit office) to any additional Tax (other
than any Tax on the overall net income of such Issuing Lender or
Lender) with respect to the issuing or maintaining of any Letters
of Credit or the purchasing or maintaining of any participations
therein or any other obligations under this Section 3, whether
directly or by such being imposed on or suffered by any
particular Issuing Lender;
(ii) imposes, modifies or holds applicable any reserve (including
without limitation any marginal, emergency, supplemental, special
or other reserve), special deposit, compulsory loan, FDIC
insurance or similar requirement in respect of any Letters of
Credit issued by any Issuing Lender or participations therein
purchased by any Lender; or
(iii) imposes any other condition (other than with respect to a
Tax matter) on or affecting such Issuing Lender or Lender (or its
applicable lending or letter of credit office) regarding this
Section 3 or any Letter of Credit or any participation therein;
and the result of any of the foregoing is to increase the cost to such Issuing
Lender or Lender of agreeing to issue, issuing or maintaining any Letter of
Credit or agreeing to purchase, purchasing or maintaining any participation
therein or to reduce any amount received or receivable by such Issuing Lender or
Lender (or its applicable lending or letter of credit office) with respect
thereto; then, in any case, Borrowers shall promptly pay to such Issuing Lender
or Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts as may be necessary to compensate such Issuing
Lender or Lender for any such increased cost or reduction in amounts received or
receivable hereunder. Such Issuing Lender or Lender shall deliver to Borrowers a
written statement, setting forth in reasonable detail the basis for calculating
the additional amounts owed to such Issuing Lender or Lender under this
subsection 3.6, which statement shall be conclusive and binding upon all parties
hereto absent manifest error.
Section 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans hereunder are subject to
the satisfaction of the following conditions. The conditions applicable to the
funding of Term Loans and any Revolving Loans made and the issuance of any
Letters of Credit issued, prior to the Closing Date are as set forth in the
Existing Credit Agreement or the Initial Credit Agreement and have been
satisfied or waived.
56
4.1 Conditions to the Occurrence of the Closing Date.
--- -------------------------------------------------
The conditions to the occurrence of the Closing Date are:
A. Borrowers' Documents. Borrowers shall have delivered to
Lenders (or to Administrative Agent for Lenders with sufficient originally
executed copies, where appropriate, for each Lender and its counsel) the
following with respect to Borrowers, each, unless otherwise noted, dated the
Closing Date:
(i) Copies of the Organizational Documents of such Person,
certified by the Secretary of State of its jurisdiction of
organization if such certification is generally available dated a
recent date prior to the Closing Date and in each other case, by
such Person's secretary or assistant secretary;
(ii) To the extent generally available, a good standing
certificate from the Secretary of State of its jurisdiction of
organization and a certificate or other evidence of good standing
as to payment of any applicable franchise or similar taxes from
the appropriate taxing authority of such jurisdiction, each dated
a recent date prior to the Closing Date;
(iii) Resolutions of the Board of Directors of such Person
approving and authorizing the execution, delivery and performance
of the Loan Documents being executed on the Closing Date to which
it is a party, certified as of the Closing Date by the corporate
secretary or an assistant secretary of such Person as being in
full force and effect without modification or amendment;
(iv) Signature and incumbency certificates of the officers of
such Person executing the Loan Documents being executed on the
Closing Date to which it is a party;
(v) Such other documents as Administrative Agent may reasonably
request.
B. Notes. Delivery to Administrative Agent of all promissory
notes or other instruments duly endorsed, where appropriate, in a manner
satisfactory to Administrative Agent evidencing Borrowers' obligation to repay
the Term Loans and Revolving Loans.
C. No Material Adverse Effect. Since December 31, 2000, no
Material Adverse Effect shall have occurred.
D. Sixth Amendment to Deed of Trust. Administrative Agent shall
have received from Borrowers (a) a fully executed and notarized sixth amendment
to the Deed of Trust, in form and substance reasonably satisfactory to
Administrative Agent, duly recorded in the appropriate filing or recording
office in the jurisdiction in which the Mortgaged Property is located, or
evidence that such sixth amendment to the Deed of Trust has been irrevocably
delivered to the Title Company for such recordation, and (b) such title
insurance endorsements to the Mortgage Policy (as such term is defined in the
Initial Credit Agreement) insuring the interest of the Lenders in the real
property securing the Facilities has been obtained, as of the Closing Date,
subject only to Permitted Liens, in form and substance satisfactory to the
Arrangers and the Administrative Agent.
E. Security Interests in Personal and Mixed Property.
Administrative Agent shall have received evidence reasonably satisfactory to it
that Borrowers shall have taken or caused to be taken all actions, executed and
delivered or caused to be executed and delivered all such agreements, documents
and instruments, and made or caused to be made all such filings and recordings
that may be necessary or in the reasonable opinion of Administrative Agent,
desirable in order to maintain in favor of Administrative Agent, for the benefit
of Lenders, a valid and perfected First Priority security interest in the First
Priority Collateral securing all of the Obligations (including, without
limitation, Obligations in respect of the Term Loans).
F. Opinions of Counsel to Borrowers. Lenders and their respective counsel shall
have received (i) originally executed copies of one or more favorable written
opinions of ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for Borrowers and
their Subsidiaries, and (ii) originally executed copies of one or more favorable
written opinions of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, Nevada counsel for Borrowers and
their Subsidiaries, each in form and substance reasonably satisfactory to
Administrative Agent and its counsel, dated as of the Closing Date and setting
forth substantially the matters in the opinions designated in Exhibits V-A and
V-B annexed hereto, respectively, and as to such other matters as Administrative
Agent acting on behalf of Lenders may reasonably request. Borrowers hereby
acknowledge and confirm that they have requested such counsel to deliver such
opinions to Lenders.
57
G. Fees. Borrowers shall have paid to Arranger and Administrative
Agent, for distribution (as appropriate) to Agents and Lenders, the fees payable
on the Closing Date referred to in subsection 2.3.
H. Completion of Proceedings. All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all documents incidental thereto not previously found reasonably acceptable by
Administrative Agent, acting on behalf of Lenders, and its counsel shall be
reasonably satisfactory in form and substance to Administrative Agent and such
counsel, and Administrative Agent and such counsel shall have received all such
counterpart originals or certified copies of such documents as Administrative
Agent may reasonably request.
I. No Event of Default Under Existing Credit Agreement. No Event
of Default or Potential Event of Default under (and as defined in) the Existing
Credit Agreement shall have occurred and be continuing or would result from the
effectiveness of this Amendment.
J. Approvals of Amendment. All Lenders shall have approved this
Amendment, such approval to be evidenced by execution of a counterpart of this
Agreement by each of the Lenders and receipt by Borrowers and Administrative
Agent of written or telephonic notification of such execution and authorization
of delivery thereof.
K. Certain Approvals and Agreements. The Borrowers and their
Subsidiaries shall have obtained all third party consents, waivers, amendments,
approvals and the like that may be necessary under the Borrowers' existing
contracts and agreements (including any other Indebtedness) in connection with
this Amendment and the amendment to the other Loan Documents, and the Borrowers
and their subsidiaries shall otherwise be in material compliance with such
agreements; except where the failure to have obtained any such consent, waiver,
amendment or approval or the failure to be in compliance herewith shall not,
individually or in the aggregate, have a Material Adverse Effect.
L. [Intentionally Deleted.]
M. FF&E Facility Agreements. Borrowers shall have received
written consent from the FF&E Lenders under the FF&E Facility Agreement
described in clause (i) of the definitions thereof to the execution, delivery
and performance of this Agreement in form and substance satisfactory to the
Administrative Agent.
N. Surety Bonds. Borrowers shall have obtained from American
International Group, Inc., an affiliate thereof or from a Person reasonably
acceptable to Administrative Agent in form and substance satisfactory to
Administrative Agent surety bonds covering any and all mechanics liens filed
against the Hotel/Casino (as defined in the Disbursement Agreement).
O. [Intentionally Deleted.]
P. Certificates of Occupancy. Administrative Agent shall have
received a copy of the final certificate of occupancy or other appropriate
permits for each of the Hotel/Casino, the Mall and the Central Plant (as such
terms are defined in the Disbursement Agreement).
Each Lender by execution and delivery of a signature page hereto
on the Closing Date confirms that it is satisfied that each of the conditions
set forth above in this subsection 4.1 has been satisfied provided that neither
such confirmation nor any extension of credit hereunder shall preclude any Agent
or Lender from later asserting that (and enforcing any rights or remedies it may
have if), any representation, warranty or certification made or deemed made by
Borrowers or any of their Affiliates in connection therewith was not true and
accurate when made.
4.2 Conditions to all Loans on or after the Closing Date.
--- -----------------------------------------------------
The obligations of Lenders to make Loans on or after the Closing
Date on any Funding Date are subject to the following further conditions
precedent:
A. Administrative Agent shall have received before that Funding
Date, in accordance with the provisions of subsection 2.1B, an originally
executed Notice of Borrowing, in each case signed by the chief executive
officer, the chief financial officer or the treasurer of each Borrower or of the
managing member of such Borrower or by any executive officer of such Borrower or
managing member designated by any of the above-described officers on behalf of
Borrowers in a writing delivered to Administrative Agent.
B. As of that Funding Date:
(i) [Intentionally omitted];
(ii) The representations and warranties contained herein and in
the other Loan Documents shall be true, correct and complete in
all material respects on and as of that Funding Date to the same
58
extent as though made on and as of that date, except to the
extent such representations and warranties specifically relate to
an earlier date, in which case such representations and
warranties shall have been true, correct and complete in all
material respects on and as of such earlier date;
(iii) No event shall have occurred and be continuing or would
result from the consummation of the borrowing contemplated by
such Notice of Borrowing that would constitute an Event of
Default or a Potential Event of Default (except as set forth in
Schedule 5.18 annexed hereto);
(iv) Each Loan Party shall have performed in all material
respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or
before that Funding Date;
(v) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any
Lender from making the Loans to be made by it on that Funding
Date;
(vi) The making of the Loans requested on such Funding Date shall
not violate any law including, Regulation T, Regulation U or
Regulation X of the Board of Governors of the Federal Reserve
System; and
(vii) There shall not be pending or, to the knowledge of
Borrowers, threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting Borrowers or
any of their Subsidiaries or any property of Borrowers or any of
their Subsidiaries that is required to be disclosed under, and
has not been disclosed by Borrowers in writing pursuant to,
subsection 5.6 or 6.1(x) prior to the making of the last
preceding Loans (or, in the case of the initial Revolving Loans,
prior to the execution of this Agreement), and there shall have
occurred no development not so disclosed in any such action,
suit, proceeding, governmental investigation or arbitration so
disclosed, that, in either event, in the reasonable opinion of
Administrative Agent or of Requisite Lenders, would have a
Material Adverse Effect.
4.3 Conditions to Letters of Credit.
--- --------------------------------
The issuance of any Letter of Credit hereunder (whether or not
the applicable Issuing Lender is obligated to issue such Letter of Credit) on or
after the Closing Date is subject to the following conditions precedent:
A. [Intentionally omitted].
B. On or before the date of issuance of such Letter of Credit,
Administrative Agent shall have received, in accordance with the provisions of
subsection 3.1B(i), an originally executed Notice of Issuance of Letter of
Credit, in each case signed by the chief executive officer, the chief financial
officer or the treasurer of each of the Borrowers or the managing member of such
Borrower or by any executive officer of each of the Borrowers or managing member
designated by any of the above-described officers on behalf of each of the
Borrowers in a writing delivered to Administrative Agent, together with all
other information specified in subsection 3.1B(i) and such other documents or
information as the applicable Issuing Lender may reasonably require in
connection with the issuance of such Letter of Credit.
C. On the date of issuance of such Letter of Credit, all
conditions precedent described in subsection 4.2B shall be satisfied to the same
extent as if the issuance of such Letter of Credit were the making of a Loan and
the date of issuance of such Letter of Credit were a Funding Date.
Section 5. BORROWERS' REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to
make or continue the Loans, as applicable, and to induce Issuing Lenders to
issue or continue Letters of Credit, as applicable, Borrowers represent and
warrant to each Lender that, on the Closing Date, on each Funding Date for
Revolving Loans on or after the Revolving Loan Availability Date and on the date
of issuance of each Letter of Credit on or after the Revolving Loan Availability
Date, the following statements are true, correct and complete
5.1 Organization, Powers, Qualification, Good Standing, Business and
--- ----------------------------------------------------------------
Subsidiaries.
-------------
A. Organization and Powers. Each Loan Party is a corporation or
limited liability company duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization as specified in Schedule 5.1A
annexed hereto. Each Loan Party has all requisite corporate or limited liability
59
company power and authority to own and operate its properties, to carry on its
business as now conducted and as proposed to be conducted, to enter into the
Loan Documents and Project Documents to which it is a party and to carry out the
transactions contemplated thereby.
B. Qualification and Good Standing. Each Loan Party is qualified
to do business and in good standing in every jurisdiction where its assets are
located and wherever necessary to carry out its business and operations, except
in jurisdictions where the failure to be so qualified or in good standing has
not had and will not have a Material Adverse Effect.
C. Ownership of Borrowers. The equity interests in each of the
Borrowers is duly authorized, validly issued and (if applicable) fully paid and
nonassessable and, as of November 14, 1997, none of such equity interests
constitute Margin Stock. Schedule 5.1C, as it may be supplemented from time to
time, correctly sets forth the ownership of each Borrower.
D. Subsidiaries. All of the Subsidiaries of Borrowers are
identified in Schedule 5.1D annexed hereto, as said Schedule 5.1D may be
supplemented from time to time pursuant to the provisions of subsection
6.1(xvi). The equity interests of each of the Subsidiaries of Borrowers
identified in Schedule 5.1D annexed hereto (as so supplemented) is duly
authorized, validly issued and (if applicable), fully paid and nonassessable and
none of such equity interests constitutes Margin Stock. Each of the Subsidiaries
of Borrowers identified in Schedule 5.1D annexed hereto (as so supplemented) is
a corporation or limited liability company duly organized, validly existing and
in good standing under the laws of its respective jurisdiction of organization
set forth therein, has all requisite corporate or limited liability company
power and authority to own and operate its properties and to carry on its
business as now conducted and as proposed to be conducted, and is qualified to
do business and in good standing in every jurisdiction where its assets are
located and wherever necessary to carry out its business and operations, in each
case except where failure to be so qualified or in good standing or a lack of
such corporate power and authority has not had and will not have a Material
Adverse Effect. Schedule 5.1D annexed hereto (as so supplemented) correctly sets
forth the ownership interest of Borrowers and each of its Subsidiaries in each
of the Subsidiaries of Borrowers identified therein.
E. Rights to Acquire Equity. There are no options, warrants,
convertible securities or other rights to acquire any equity interests in any
Borrower or any of their Subsidiaries (other than the New Mall Subsidiary and
Phase II Subsidiary) except as set forth as Schedule 5.1E.
F. Conduct of Business. Borrowers and their Subsidiaries (other
than the New Mall Subsidiary and the Phase II Subsidiary) are engaged only in
the businesses permitted to be engaged in pursuant to subsection 7.12.
5.2 Authorization of Borrowing, etc.
--- --------------------------------
A. Authorization of Borrowing. The execution, delivery and
performance of the Loan Documents and the Project Documents have been duly
authorized by all necessary corporate action on the part of each Loan Party that
is a party thereto.
B. No Conflict. The execution, delivery and performance by Loan
Parties of the Loan Documents and Project Documents to which they are parties
and the consummation of the transactions contemplated by the Loan Documents and
such Project Documents do not and will not (i) violate any provision of (a) any
law or any governmental rule or regulation applicable to Borrowers or any of
their Subsidiaries, (b) the Certificate or Articles of Incorporation, Bylaws or
operating agreements of Borrowers or any of their Subsidiaries or (c) any order,
judgment or decree of any court or other agency of government binding on
Borrowers or any of their Subsidiaries, (ii) conflict with, result in a breach
of or constitute (with due notice or lapse of time or both) a default under any
Contractual Obligation of Borrowers or any of their Subsidiaries, (iii) result
in or require the creation or imposition of any Lien upon any of the properties
or assets of Borrowers or any of their Subsidiaries (other than any Liens
created under any of the Loan Documents in favor of Administrative Agent on
behalf of Lenders), or (iv) require any approval of stockholders or any approval
or consent of any Person under any Contractual Obligation of Borrowers or any of
their Subsidiaries except for such approvals or consents which will be obtained
on or before the Closing Date and disclosed in writing to Lenders and except for
such violations, conflicts, approvals and consents the failure of which to
obtain could reasonably be expected to have a Material Adverse Effect.
C. Governmental Consents. The execution, delivery and performance
by Loan Parties of the Loan Documents to which they are parties and the
consummation of the transactions contemplated by the Loan Documents do not and
will not require any registration with, consent or approval of, or notice to, or
other action to, with or by, any federal, state or other governmental authority
or regulatory body.
60
D. Binding Obligation. Each of the Loan Documents and Project
Documents has been duly executed and delivered by Loan Parties that are parties
hereto or thereto, as applicable, and is the legally valid and binding
obligation of Loan Parties, enforceable against such Loan Party in accordance
with its respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally or by equitable principles relating to enforceability, whether
brought in a proceeding in equity or at law.
E. Valid Issuance of Mortgage Notes and Subordinated Notes.
Borrowers have the corporate or limited liability company power and authority to
issue the Mortgage Notes and the Subordinated Notes. The Mortgage Notes and the
Subordinated Notes are legally valid and binding obligations of Borrowers,
enforceable against Borrowers in accordance with their respective terms, except
as may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or limiting creditors' rights generally or by equitable
principles relating to enforceability. The issuance and sale of Mortgage Notes
and the Subordinated Notes, either (a) have been registered or qualified under
applicable federal and state securities laws or (b) are exempt therefrom. The
Loans and all other monetary Obligations hereunder are and will be within the
definition of "Senior Debt" and "Permitted Indebtedness" included in such
provisions.
5.3 Financial Condition.
--- --------------------
Borrowers have heretofore delivered to Lenders, at Lenders'
request, the following financial statements and information: (i) the audited
consolidated and consolidating balance sheets of LVSI and its Subsidiaries as at
December 31, 2000 and the related consolidated and consolidating statements of
income, stockholders' equity and cash flows of Borrowers and their Subsidiaries
for the Fiscal Year then ended and (ii) the unaudited consolidated and
consolidating balance sheets of LVSI and its Subsidiaries as at June 30, 2001
and the related unaudited consolidated and consolidating statements of income,
stockholders' equity and cash flows of LVSI and its Subsidiaries for the six
months then ended. All such statements were prepared in conformity with GAAP and
fairly present, in all material respects, the financial position (on a
consolidated and, where applicable, consolidating basis) of the entities
described in such financial statements as at the respective dates thereof and
the results of operations and cash flows (on a consolidated and, where
applicable, consolidating basis) of the entities described therein for each of
the periods then ended, subject, in the case of any such unaudited financial
statements, to changes resulting from audit and normal year-end adjustments.
Except for obligations under the Operative Documents, Borrowers do not (and will
not following the funding of the initial Loans) have any Contingent Obligation,
contingent liability or liability for taxes, long-term lease or forward or
long-term commitment that is not reflected in the foregoing financial statements
or the notes thereto and which in any such case is material in relation to the
business, operations, properties, assets, financial condition or prospects of
Borrowers and their Subsidiaries taken as a whole.
5.4 No Material Adverse Change; No Restricted Junior Payments.
--- ----------------------------------------------------------
Since December 31, 2000, no event or change has occurred that has
caused or evidences, either in any case or in the aggregate, a Material Adverse
Effect. Except as set forth on Schedule 5.4, neither of Borrowers nor any of
their Subsidiaries have directly or indirectly declared, ordered, paid or made,
or set apart any sum or property for, any Restricted Junior Payment or agreed to
do so except as permitted by subsection 7.5.
5.5 Title to Properties; Liens; Real Property.
--- ------------------------------------------
A. Title to Properties; Liens. Borrowers and their Subsidiaries
have (i) good marketable and insurable fee simple title to (in the case of fee
interests in real property), (ii) valid leasehold interests in (in the case of
leasehold interests in real or personal property), or (iii) good title to (in
the case of all other personal property), all of their respective material
properties and assets reflected in the financial statements referred to in
subsection 5.3 or in the most recent financial statements delivered pursuant to
subsection 6.1, in each case except for assets disposed of since the date of
such financial statements in the ordinary course of business or as otherwise
permitted under subsection 7.7. Except as permitted by this Agreement, all such
properties and assets are held free and clear of Liens.
B. Real Property. As of the Closing Date, Schedule 5.5 annexed
hereto contains a true, accurate and complete list of (i) all material
properties owned by Borrowers or any of their Subsidiaries and (ii) all material
leases, subleases or assignments of leases (together with all amendments,
modifications, supplements, renewals or extensions of any thereof) affecting
real estate of properties owned by Borrowers or any of their Subsidiaries
(exclusive of any retail and restaurant leases in the Mall) regardless of
whether a Borrower or such Subsidiary is the landlord or tenant (whether
directly or as an assignee or successor in interest) under such lease, sublease
or assignment. Except as specified in Schedule 5.5 annexed hereto, each
61
agreement listed in clause (ii) of the immediately preceding sentence is in full
force and effect and Borrowers do not have knowledge of any default that has
occurred and is continuing thereunder, and each such agreement constitutes the
legally valid and binding obligation of each applicable Borrower, enforceable
against such Borrower in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
except to the extent that the failure of such agreement to be in full force and
effect could not reasonably be expected to have a Material Adverse Effect.
5.6 Litigation; Adverse Facts.
--- --------------------------
Except as set forth in Schedule 5.6 and Schedule 5.17 annexed
hereto, there are no actions, suits, proceedings, arbitrations or governmental
investigations (whether or not purportedly on behalf of Borrowers or any of
their Subsidiaries) at law or in equity, or before or by any federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign (including any Environmental Claims) that
are pending or, to the knowledge of Borrowers, threatened against or affecting
Borrowers or any of their Subsidiaries or any property of Borrowers or any of
their Subsidiaries and that, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect. Neither Borrowers nor any of
their Subsidiaries (i) is in violation of any applicable laws (including
Environmental Laws) that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect, or (ii) is subject to or in
default with respect to any final judgments, writs, injunctions, decrees, rules
or regulations of any court or any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.
5.7 Payment of Taxes.
--- -----------------
Except to the extent permitted by subsection 6.3, all tax returns
and reports of Borrowers required to be filed by them have been timely filed,
and all taxes shown on such tax returns to be due and payable and all material
assessments, fees and other governmental charges upon Borrowers and upon their
respective properties, assets, income, businesses and franchises which are due
and payable have been paid when due and payable. Borrowers know of no proposed
tax assessment against Borrowers or any of their Subsidiaries which is not being
actively contested by Borrowers or such Subsidiary in good faith and by
appropriate proceedings; provided that such reserves or other appropriate
provisions, if any, as shall be required in conformity with GAAP shall have been
made or provided therefor.
5.8 Performance of Agreements; Materially Adverse Agreements; Material
--- ------------------------------------------------------------------
Contracts.
----------
A. Neither Borrowers nor any of their Subsidiaries is in default
in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any of its Contractual Obligations, and no
condition exists that, with the giving of notice or the lapse of time or both,
would constitute such a default, except where the consequences of such default
or defaults, if any, would not have a Material Adverse Effect.
B. Schedule 5.8 contains a true, correct and complete list of all
the Material Contracts in effect on the Closing Date. Except as described on
Schedule 5.8, all such Material Contracts are, to the knowledge of Borrowers, in
full force and effect and no material defaults currently exist thereunder.
5.9 Governmental Regulation.
--- ------------------------
Neither Borrowers nor any of their Subsidiaries is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, or the Interstate Commerce Act or registration under the Investment
Company Act of 1940 or under any other federal or state statute or regulation
which may limit its ability to incur Indebtedness other than the Nevada Gaming
Laws or which may otherwise render all or any portion of the Obligations
unenforceable. Incurrence of the Obligations under the Loan Documents complies
with all applicable provisions of the Nevada Gaming Laws.
5.10 Securities Activities.
---- ----------------------
A. Neither Borrowers nor any of their Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each Loan, not more
than 25% of the value of the assets (either of Borrowers only or of Borrowers
and their Subsidiaries on a consolidated basis) subject to the provisions of
subsection 7.2 or 7.7 or subject to any restriction contained in any agreement
62
or instrument, between Borrowers and any Lender or any Affiliate of any Lender,
relating to Indebtedness and within the scope of subsection 8.2, will be Margin
Stock.
5.11 Employee Benefit Plans.
---- -----------------------
A. Borrowers, each of their Subsidiaries and each of their
respective ERISA Affiliates are in material compliance with all applicable
provisions and requirements of ERISA and the regulations thereunder with respect
to each Employee Benefit Plan, and have performed all their obligations under
each Employee Benefit Plan. Each Employee Benefit Plan which is intended to
qualify under Section 401(a) of the Code is so qualified.
B. No ERISA Event has occurred or is reasonably expected to occur
which has resulted or would be reasonably likely to result in a liability in the
aggregate amount of $1,000,000 or more.
C. Except to the extent required under Section 4980B of the Code
or except as set forth in Schedule 5.11 annexed hereto, no Employee Benefit Plan
provides health or welfare benefits (through the purchase of insurance or
otherwise) for any retired or former employee of Borrowers, any of their
Subsidiaries or any of their respective ERISA Affiliates.
D. As of the most recent valuation date for any Pension Plan, the
amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of
ERISA), individually or in the aggregate for all Pension Plans (excluding for
purposes of such computation any Pension Plans with respect to which assets
exceed benefit liabilities), does not exceed $1,000,000.
E. As of the most recent valuation date for each Multiemployer
Plan for which the actuarial report is available, the potential liability of
Borrowers, their Subsidiaries and their respective ERISA Affiliates for a
complete withdrawal from such Multiemployer Plan (within the meaning of Section
4203 of ERISA), when aggregated with such potential liability for a complete
withdrawal from all Multiemployer Plans, based on information available pursuant
to Section 4221(e) of ERISA, does not exceed $1,000,000.
5.12 Certain Fees.
---- -------------
No broker's or finder's fee or commission will be payable with
respect to this Agreement or any of the transactions contemplated hereby except
as set forth on Schedule 5.12 (other than fees payable to Agents and Lenders
under subsection 2.3), and each Borrower hereby indemnifies Lenders against, and
agrees that it will hold Lenders harmless from, any claim, demand or liability
for any such broker's or finder's fees alleged to have been incurred in
connection herewith or therewith and any expenses (including reasonable fees,
expenses and disbursements of counsel) arising in connection with any such
claim, demand or liability.
5.13 Environmental Protection.
---- -------------------------
Except as set forth in Schedule 5.13 annexed hereto:
(i) neither Borrowers nor any of their Subsidiaries nor any of
their respective Facilities or operations relating to the Site,
the Project or the Phase I-A Project are subject to any
outstanding written order, consent decree or settlement agreement
with any Person relating to (a) any Environmental Law, (b) any
Environmental Claim, or (c) any Hazardous Materials Activity;
(ii) neither Borrowers nor any of their Subsidiaries has received
any letter or request for information under Section 104 of the
Comprehensive Environmental Response, Compensation, and Liability
Act (42 ▇.▇.▇.▇▇. 9604) or any comparable state law;
(iii) there are and, to Borrowers' knowledge, have been no
conditions, occurrences, or Hazardous Materials Activities on the
Site or any other Facility relating to the Project or the Phase
I-A Project which could reasonably be expected to form the basis
of an Environmental Claim against Borrowers or any of their
Subsidiaries;
(iv) neither Borrowers nor any of their Subsidiaries nor, to
Borrowers' knowledge, any predecessor of Borrowers or any of
their Subsidiaries has filed any notice under any Environmental
Law indicating past or present treatment of Hazardous Materials
at any Facility, and none of Borrowers' or any of their
Subsidiaries' operations involves the generation, transportation,
treatment, storage or disposal of hazardous waste, as defined
under 40 C.F.R. Parts 260-270 or any state equivalent;
63
(v) compliance with all current or reasonably foreseeable future
requirements pursuant to or under Environmental Laws will not,
individually or in the aggregate, have a reasonable possibility
of giving rise to a Material Adverse Effect.
Notwithstanding anything in this subsection 5.13 to the contrary,
no event or condition has occurred or is occurring with respect to Borrowers or
any of their Subsidiaries relating to any Environmental Law, any Release of
Hazardous Materials, or any Hazardous Materials Activity, including any matter
disclosed on Schedule 5.13 annexed hereto, which individually or in the
aggregate has had or could reasonably be expected to have a Material Adverse
Effect.
5.14 Employee Matters.
---- -----------------
There is no strike or work stoppage in existence or threatened
involving Borrowers that could reasonably be expected to have a Material Adverse
Effect.
5.15 Solvency.
---- ---------
Each Borrower is and, upon the incurrence of any Obligations by
such Borrower on any date on which this representation is made, will be,
Solvent.
5.16 Matters Relating to Collateral.
---- -------------------------------
A. Creation, Perfection and Priority of Liens. The execution and
delivery of the Collateral Documents by Borrowers and their Subsidiaries,
together with the actions taken on or prior to the Closing Date pursuant to
subsection 4.1 are effective to create in favor of Administrative Agent for the
benefit of Lenders, as security for the respective Secured Obligations (as
defined in the applicable Collateral Document in respect of any Collateral), a
valid and perfected First Priority Lien on all of the First Priority Collateral,
and all filings and other actions necessary to perfect and maintain the
perfection and priority status of such Liens have been duly made or taken and
remain in full force and effect, other than the filing of any UCC financing
statements delivered to Administrative Agent for filing (but not yet filed) and
the periodic filing of UCC continuation statements in respect of UCC financing
statements filed by or on behalf of Administrative Agent.
B. Permits. No authorization, approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for either (i) the pledge or grant by Borrowers and their Subsidiaries
of the Liens purported to be created in favor of Administrative Agent pursuant
to any of the Collateral Documents or (ii) the exercise by Administrative Agent
of any rights or remedies in respect of any Collateral (whether specifically
granted or created pursuant to any of the Collateral Documents or created or
provided for by applicable law), except for filings or recordings contemplated
by subsection 5.16A or as set forth in Schedule 5.16B.
C. Absence of Third-Party Filings. Except such as may have been
filed in favor of Administrative Agent as contemplated by subsection 5.16A or
filed to perfect a Lien permitted under subsection 7.2, no effective UCC
financing statement, fixture filing or other instrument similar in effect
covering all or any part of the Collateral is on file in any filing or recording
office.
D. Information Regarding Collateral. All information supplied to
Administrative Agent by or on behalf of Borrowers with respect to any of the
Collateral (in each case taken as a whole with respect to any particular
Collateral) is accurate and complete in all material respects.
5.17 Construction Litigation.
---- ------------------------
A. The litigation arising out of the lawsuit filed by Borrowers
against the Construction Manager in United States District Court for the
District of Nevada and the countersuit filed by the Construction Manager against
the Borrowers and any other outstanding lawsuit, action, claim or Lien arising
out of or relating to the construction of the Mall or the Project (the
"Construction Litigation"), including any claim made or Lien filed by
Construction Manager or any contractor or subcontractor or to the bonding
company insuring over any Lien relating to or binding upon the Mall, the Project
or to Venetian, LVSI, Mall Construction Subsidiary or any of their Affiliates in
connection therewith, and any judgment or settlement amount owed by the
Borrowers to the Construction Manager or any contractor or subcontractor or to
the bonding company insuring over any such Lien as a result of the Construction
Litigation (such amount, the "Additional Contingent Claims") cannot reasonably
be expected to have, when taken in the aggregate, a Material Adverse Effect;
64
B. The status summary of the Construction Litigation attached
hereto as Schedule 5.17 annexed hereto is true and correct in all material
respects as of the date hereof.
C. Borrowers have sufficient Available Funds such that Available
Funds will equal or exceed Remaining Costs after giving effect to the Additional
Contingent Claims as a Remaining Cost (as such capitalized terms are defined in
the Disbursement Agreement).
5.18 No Event of Default.
---- --------------------
No Event of Default or Potential Event of Default exists or is
continuing (other than those Events of Default and Potential Events of Default
set forth on Schedule 5.18 annexed hereto).
5.19 ▇▇▇▇▇▇▇ Subordination Agreement.
---- --------------------------------
▇▇▇▇▇▇▇ has complied with the terms and conditions of that
certain Subordination and Intercreditor Agreement (Trade Claims) dated as of
November 12, 1999 by and among Scotiabank, as bank agent, the Company and Mall
Construction Subsidiary and ▇▇▇▇▇▇▇ (the "▇▇▇▇▇▇▇ Subordination Agreement").
5.20 Status of Certain Agreements.
---- -----------------------------
A. Except as set forth on Schedule 5.20A, there have been no
Liens created or contemplated by the Cooperation Agreement other than those
created or contemplated by such agreement as in effect on November 14, 1997.
B. Except as set forth on Schedule 5.20B, there have been no
Liens created under the HVAC Services Agreement other than those created by such
agreement as in effect on November 14, 1997.
C. Except as set forth on Schedule 5.20C or as otherwise
reasonably approved by Scotiabank, as Administrative Agent, Borrowers are not
party to any agreement or plan pursuant to which Borrowers may repurchase or
redeem employee options or stock other than employment agreements and stock
option plans or agreements as in effect on November 14, 1997.
D. Except as set forth on Schedule 5.20D, there have been no
amendments, supplements or modifications to documents evidencing Other
Indebtedness as in effect on November 14, 1997.
Section 6. BORROWERS' AFFIRMATIVE COVENANTS
Borrowers covenant and agree that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations and the cancellation or expiration of all
Letters of Credit, unless the Requisite Lenders shall otherwise give prior
written consent, Borrowers shall perform, and shall cause each of their
Subsidiaries to perform, all covenants set forth in Article 5 of the
Disbursement Agreement (while in effect), and all covenants set forth in this
Section 6.
6.1 Financial Statements and Other Reports.
--- ---------------------------------------
Borrowers will maintain a system of accounting established and
administered in accordance with sound business practices to permit preparation
of financial statements in conformity with GAAP. Borrowers will deliver to
Administrative Agent and Lenders:
(i) Monthly Financials: as soon as available and in any event
within 30 days after the end of each month, the consolidated and
consolidating balance sheets of LVSI and its Subsidiaries as at
the end of such month and the related consolidated and
consolidating statements of income, stockholders' equity and cash
flows of LVSI and its Subsidiaries for such month and for the
period from the beginning of the then current Fiscal Year to the
end of such month, setting forth in each case in comparative form
the corresponding figures for the corresponding periods of the
previous Fiscal Year and the corresponding figures from the
Financial Plan for the current Fiscal Year, to the extent
prepared on a monthly basis, all in reasonable detail and
certified by the chief financial officer of LVSI, on behalf of
LVSI, that they fairly present, in all material respects, the
financial condition of LVSI and its Subsidiaries as at the dates
indicated and the results of their operations and their cash
flows for the periods indicated, subject to changes resulting
from audit and normal year-end adjustments;
(ii) Quarterly Financials: as soon as available and in any event
within 45 days after the end of each Fiscal Quarter,
65
(a) the consolidated and consolidating balance sheets of
LVSI and its subsidiaries (including the Excluded Subsidiaries)
as at the end of such Fiscal Quarter and the related consolidated
and consolidating statements of income, stockholders' equity and
cash flows of LVSI and its subsidiaries (including the Excluded
Subsidiaries) for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such
Fiscal Quarter), setting forth in each case in comparative form
the corresponding figures for the corresponding periods of the
previous Fiscal Year, all in reasonable detail and certified by
the chief financial officer of LVSI, on behalf of LVSI, that they
fairly present, in all material respects, the financial condition
of LVSI and its subsidiaries (including the Excluded
Subsidiaries) as at the dates indicated and the results of their
operations and their cash flows for the periods indicated,
subject to changes resulting from audit and normal year-end
adjustments;
(b) the consolidated balance sheets of LVSI and its
Subsidiaries as at the end of such Fiscal Quarter and the related
consolidated statements of income, stockholders' equity and cash
flows of LVSI and its Subsidiaries for such Fiscal Quarter and
for the period from the beginning of the then current Fiscal Year
to the end of such Fiscal Quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding
periods of the previous Fiscal Year and the corresponding figures
from the Financial Plan for the current Fiscal Year, all in
reasonable detail and certified by the chief financial officer of
LVSI, on behalf of LVSI, that they fairly present, in all
material respects, the financial condition of LVSI and its
Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated,
subject to changes resulting from audit and normal year-end
adjustments;
(c) the consolidated balance sheets of New Mall Subsidiary
and its subsidiaries as at the end of such Fiscal Quarter and the
related consolidated statements of income, stockholders' equity
and cash flows of New Mall Subsidiary and its subsidiaries for
such Fiscal Quarter and for the period from the beginning of the
then current Fiscal Year to the end of such Fiscal Quarter,
setting forth in each case in comparative form the corresponding
figures for the corresponding periods of the previous Fiscal
Year, all in reasonable detail and certified by the chief
financial officer of LVSI, on behalf of LVSI, that they fairly
present, in all material respects, the financial condition of New
Mall Subsidiary and its subsidiaries as at the dates indicated
and the results of their operations and their cash flows for the
periods indicated, subject to changes resulting from audit and
normal year-end adjustments; and
(d) a narrative report describing the operations of LVSI and
its subsidiaries (including the Excluded Subsidiaries) in the
form prepared for presentation to senior management for such
Fiscal Quarter and for the period from the beginning of the then
current Fiscal Year to the end of such Fiscal Quarter;
(iii) Year-End Financials: as soon as available and in any event
within 90 days after the end of each Fiscal Year,
(a) the consolidated and consolidating balance sheets of
LVSI and its subsidiaries (including the Excluded Subsidiaries)
as at the end of such Fiscal Year and the related consolidated
and consolidating statements of income, stockholders' equity and
cash flows of LVSI and its subsidiaries (including the Excluded
Subsidiaries) for such Fiscal Year, setting forth in each case in
comparative form the corresponding figures for the previous
Fiscal Year, all in reasonable detail and certified by the chief
financial officer of LVSI, on behalf of LVSI, that they fairly
present, in all material respects, the financial condition of
LVSI and its subsidiaries (including the Excluded Subsidiaries)
as at the dates indicated and the results of their operations and
their cash flows for the periods indicated;
(b) the consolidated balance sheets of LVSI and its
Subsidiaries as at the end of such Fiscal Year and the related
consolidated and consolidating statements of income,
stockholders' equity and cash flows of LVSI and its Subsidiaries
for such Fiscal Year, setting forth in each case in comparative
form the corresponding figures for the previous Fiscal Year and
the corresponding figures from the Financial Plan for the Fiscal
Year covered by such financial statements, all in reasonable
detail and certified by the chief financial officer of LVSI, on
behalf of LVSI, that they fairly present, in all material
respects, the financial condition of LVSI and its Subsidiaries as
66
at the dates indicated and the results of their operations and
their cash flows for the periods indicated;
(c) the consolidated balance sheets of New Mall Subsidiary
and its subsidiaries as at the end of such Fiscal Year and the
related consolidated statements of income, stockholders' equity
and cash flows of New Mall Subsidiary and its subsidiaries for
such Fiscal Year, setting forth in each case in comparative form
the corresponding figures for the previous Fiscal Year, all in
reasonable detail and certified by the chief financial officer of
LVSI, on behalf of LVSI, that they fairly present, in all
material respects, the financial condition of Mall Subsidiary and
its subsidiaries as at the dates indicated and the results of
their operations and their cash flows for the periods indicated;
(d) a narrative report describing the operations of LVSI and
its subsidiaries (including the Excluded Subsidiaries) in the
form prepared for presentation to senior management for such
Fiscal Year; and
(e) in the case of such consolidated financial statements
specified in subdivisions (a) to (c) above, a report thereon of
Price Waterhouse LLP or other independent certified public
accountants of recognized national standing selected by Borrowers
and reasonably satisfactory to Administrative Agent, which report
shall be unqualified as to scope of audit, shall express no
doubts about the ability of the Persons covered thereby to
continue as a going concern, and shall state that such
consolidated financial statements fairly present, in all material
respects, the consolidated financial position of LVSI and its
subsidiaries (including the Excluded Subsidiaries), LVSI and its
Subsidiaries and Mall Subsidiary and its subsidiaries,
respectively as at the dates indicated and the results of their
operations and their cash flows for the periods indicated in
conformity with GAAP applied on a basis consistent with prior
years (except as otherwise disclosed in such financial
statements) and that the examination by such accountants in
connection with such consolidated financial statements has been
made in accordance with generally accepted auditing standards;
(iv) Officers' and Compliance Certificates: together with each
delivery of financial statements of LVSI and its Subsidiaries
pursuant to subdivisions (ii) and (iii) above, (a) an Officers'
Certificate of LVSI stating that the signers, on behalf of LVSI,
have reviewed the terms of this Agreement and have made, or
caused to be made under their supervision, a review in reasonable
detail of the transactions and condition of LVSI and its
Subsidiaries (and, to the extent applicable, New Mall Subsidiary,
Mall Subsidiary, New Mall Manager, Mall Manager, Mall Direct
Holdings, Phase II Subsidiary, Phase II Manager, Phase II Direct
Holdings and their respective subsidiaries) during the accounting
period covered by such financial statements and that such review
has not disclosed the existence during or at the end of such
accounting period, and that the signers do not have knowledge of
the existence as at the date of such Officers' Certificate, of
any condition or event that constitutes an Event of Default or
Potential Event of Default, or, if any such condition or event
existed or exists, specifying the nature and period of existence
thereof and what action Borrowers have taken, is taking and
proposes to take with respect thereto; and (b) a Compliance
Certificate demonstrating in reasonable detail compliance during
and at the end of the applicable accounting periods with the
restrictions contained in Section 7;
(v) Reconciliation Statements: if, as a result of any change in
accounting principles and policies from those used in the
preparation of the audited financial statements referred to in
subsection 5.3, the consolidated financial statements of LVSI and
its subsidiaries delivered pursuant to subdivisions (i), (ii),
(iii) or (xiii) of this subsection 6.1 will differ in any
material respect from the consolidated financial statements that
would have been delivered pursuant to such subdivisions had no
such change in accounting principles and policies been made, then
(a) together with the first delivery of financial statements
pursuant to subdivision (i), (ii), (iii) or (xiii) of this
subsection 6.1 following such change, consolidated financial
statements of LVSI and its subsidiaries for (y) the current
Fiscal Year to the effective date of such change and (z) the two
full Fiscal Years immediately preceding the Fiscal Year in which
such change is made, in each case prepared on a pro forma basis
as if such change had been in effect during such periods, and (b)
together with each delivery of financial statements for LVSI and
its subsidiaries pursuant to subdivision (i), (ii), (iii) or
(xiii) of this subsection 6.1 following such change, a written
statement of the chief accounting officer or chief financial
officer of LVSI setting forth the differences (including any
67
differences that would affect any calculations relating to the
financial covenants set forth in subsection 7.6) which would have
resulted if such financial statements had been prepared without
giving effect to such change;
(vi) Accountants' Certification: together with each delivery of
consolidated financial statements pursuant to subdivision (iii)
above, a written statement by the independent certified public
accountants giving the report thereon (a) stating that their
audit examination has included a review of the terms of this
Agreement and the other Loan Documents as they relate to
accounting matters, (b) stating whether, in connection with their
audit examination, any condition or event that constitutes an
Event of Default or Potential Event of Default has come to their
attention and, if such a condition or event has come to their
attention, specifying the nature and period of existence thereof;
provided that such accountants shall not be liable by reason of
any failure to obtain knowledge of any such Event of Default or
Potential Event of Default that would not be disclosed in the
course of their audit examination, and (c) stating that based on
their audit examination nothing has come to their attention that
causes them to believe either or both that the information
contained in the certificates delivered therewith pursuant to
subdivision (iv) above is not correct or that the matters set
forth in the Compliance Certificates delivered therewith pursuant
to clause (b) of subdivision (iv) above for the applicable Fiscal
Year are not stated in accordance with the terms of this
Agreement;
(vii) Accountants' Reports: promptly upon receipt thereof (unless
restricted by applicable professional standards), copies of all
reports submitted to Borrowers by independent certified public
accountants in connection with each annual, interim or special
audit of the financial statements of LVSI and its subsidiaries
made by such accountants, including any comment letter submitted
by such accountants to management in connection with their annual
audit;
(viii) SEC Filings, Press Releases and Other Financial Reports:
promptly upon their becoming available, copies of (a) all
financial statements, reports, notices and proxy statements sent
or made available generally by Borrowers or any of their
subsidiaries to their security holders, (b) all regular and
periodic reports and all registration statements (other than on
Form S-8 or a similar form) and prospectuses, if any, filed by
Borrowers or any of their subsidiaries with any securities
exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority, (c) all press
releases and other statements made available generally by
Borrowers and any of their subsidiaries to the public concerning
material developments in the business of Borrowers and their
subsidiaries and (d) to the extent prepared, any financial
statements and reports concerning any subsidiaries of Borrowers
(including Excluded Subsidiaries not delivered pursuant to
clauses (i), (ii) or (iii) above);
(ix) Events of Default, etc.: promptly upon any officer of
Borrowers obtaining knowledge (a) of any condition or event that
constitutes an Event of Default or Potential Event of Default, or
becoming aware that any Lender has given any notice (other than
to Administrative Agent) or taken any other action with respect
to a claimed Event of Default or Potential Event of Default, (b)
that any Person has given any notice to Borrowers and their
Subsidiaries or taken any other action with respect to a claimed
default or event or condition of the type referred to in
subsection 8.2, (c) of any condition or event that would be
required to be disclosed in a current report filed by Borrowers
with the Securities and Exchange Commission on Form 8-K (Items 1,
2, 4, 5 and 6 of such Form as in effect on the Closing Date) if
Borrowers were required to file such reports under the Exchange
Act, or (d) of the occurrence of any event or change that has
caused or evidences, either in any case or in the aggregate, a
Material Adverse Effect, an Officers' Certificate specifying the
nature and period of existence of such condition, event or
change, or specifying the notice given or action taken by any
such Person and the nature of such claimed Event of Default,
Potential Event of Default, default, event or condition, and what
action Borrowers have taken, are taking and propose to take with
respect thereto;
(x) Litigation or Other Proceedings: (a) promptly upon any
officer of Borrowers obtaining knowledge of (X) the non-frivolous
institution of, or threat of, any action, suit, proceeding
(whether administrative, judicial or otherwise), governmental
investigation or arbitration against or affecting Borrowers and
their Subsidiaries, or any property of Borrowers and their
68
Subsidiaries (collectively, "Proceedings") not previously
disclosed in writing by Borrowers to Lenders or (Y) any material
development in any Proceeding that, in any case:
(1) if adversely determined, has a reasonable possibility of
giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the consummation
of, or to recover any damages or obtain relief as a result of,
the transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Borrowers to enable Lenders and their counsel
to evaluate such matters; and (b) within twenty days after the end of
each Fiscal Quarter, a schedule of all Proceedings involving an
alleged liability of, or claims against or affecting, Borrowers or any
of their Subsidiaries equal to or greater than $1,000,000, and
promptly after request by Administrative Agent such other information
as may be reasonably requested by Administrative Agent to enable
Administrative Agent and its counsel to evaluate any of such
Proceedings;
(xi) ERISA Events: promptly upon becoming aware of the occurrence
of or forthcoming occurrence of any ERISA Event, a written notice
specifying the nature thereof, what action Borrowers or any of
their respective ERISA Affiliates has taken, is taking or
proposes to take with respect thereto and, when known, any action
taken or threatened by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto;
(xii) ERISA Notices: with reasonable promptness, copies of (a)
each Schedule B (Actuarial Information) to the annual report
(Form 5500 Series) filed by Borrowers, any of their Subsidiaries
or any of their respective ERISA Affiliates with the Internal
Revenue Service with respect to each Pension Plan; (b) all
notices received by Borrowers or any of their respective ERISA
Affiliates from a Multiemployer Plan sponsor concerning an ERISA
Event; and (c) copies of such other documents or governmental
reports or filings relating to any Employee Benefit Plan as
Administrative Agent shall reasonably request;
(xiii) Financial Plans: as soon as practicable and in any event
no later than the Completion Date and 30 days prior to the
beginning of each Fiscal Year thereafter, a consolidated and
consolidating plan and financial forecast for such Fiscal Year
(or portion thereof from the Completion Date through the end of
such Fiscal Year) and each subsequent Fiscal Year through the
final maturity date of the Term Loans (the "Financial Plan" for
such Fiscal Years), including (a) forecasted consolidated and
consolidating balance sheets and forecasted consolidated and
consolidating statements of income and cash flows of LVSI and its
Subsidiaries for such Fiscal Years, together with a pro forma
Compliance Certificate for such Fiscal Years and an explanation
of the assumptions on which such forecasts are based, (b)
forecasted consolidated and consolidating statements of income
and cash flows of LVSI and its Subsidiaries for each month of
such Fiscal Years, together with an explanation of the
assumptions on which such forecasts are based, and (c) such other
information and projections for such Fiscal Years as any Lender
may reasonably request;
(xiv) Insurance: as soon as practicable and in any event by the
last day of each Fiscal Year, a report in form and substance
reasonably satisfactory to Administrative Agent outlining all
material insurance coverage maintained as of the date of such
report by Borrowers and their Subsidiaries and all material
insurance coverage planned to be maintained by Borrowers and
their Subsidiaries in the immediately succeeding Fiscal Year;
(xv) Board of Directors: with reasonable promptness, written
notice of any change in the members of the Board of Directors of
LVSI or any of its corporate Subsidiaries.
(xvi) New Subsidiaries: promptly upon any Person becoming a
Subsidiary of either of Borrowers, a written notice setting forth
with respect to such Person (a) the date on which such Person
became a Subsidiary of either of Borrowers and (b) all of the
data required to be set forth in Schedule 5.1 annexed hereto with
respect to all Subsidiaries of either of Borrowers (it being
understood that such written notice shall be deemed to supplement
Schedule 5.1 annexed hereto for all purposes of this Agreement);
(xvii) Material Contracts: promptly, and in any event within ten
Business Days after any Material Contract of Borrowers or any of
their Subsidiaries is terminated or amended in a manner that is
materially adverse to Borrowers or any of their Subsidiaries or
69
any new Material Contract is entered into, or upon becoming aware
of any material default by any Party under a Material Contract, a
written statement describing such event with copies of such
material amendments or new contracts, and an explanation of any
actions being taken with respect thereto;
(xviii) UCC Search Report: As promptly as practicable after the
date of delivery to Administrative Agent of any UCC financing
statement executed by any Loan Party pursuant to subsection 6.12,
copies of completed UCC searches evidencing the proper filing,
recording and indexing of all such UCC financing statement and
listing all other effective financing statements that name such
Loan Party as debtor, together with copies of all such other
financing statements not previously delivered to Administrative
Agent by or on behalf of such Loan Party;
(xix) Notices under Operative Documents: promptly upon receipt,
copies of all notices provided to the Borrowers or their
Affiliates pursuant to any Operative Documents relating to
material defaults or material delays and promptly upon execution
and delivery thereof, copies of all amendments to any of the
Operative Documents; and
(xx) Other Information: with reasonable promptness, such other
information and data with respect to Borrowers or any of their
Subsidiaries as from time to time may be reasonably requested by
any Lender.
6.2 Corporate Existence, etc.
--- -------------------------
Borrowers will, and will cause each of their Subsidiaries to, at
all times preserve and keep in full force and effect their corporate or limited
liability company existence and all rights and franchises material to its
business; provided, however that Borrowers and their Subsidiaries may merge or
consolidate as permitted pursuant to subsection 7.7 of this Agreement and
provided, further, that no Borrower nor any such Subsidiary shall be required to
preserve any such right or franchise if the Board of Directors of the applicable
Borrower or Subsidiary (or the managing member thereof, if applicable) shall
determine (and shall so notify the Administrative Agent), that the preservation
thereof is no longer desirable in the conduct of the business of such Borrower
or Subsidiary, as the case may be, and that the loss thereof is not
disadvantageous in any material respect to Borrowers and their Subsidiaries or
Lenders.
6.3 Payment of Taxes and Claims; Tax Consolidation.
--- -----------------------------------------------
A. Borrowers will, and will cause each of their Subsidiaries to,
pay all material taxes, assessments and other governmental charges imposed upon
it or any of its properties or assets or in respect of any of its income,
businesses or franchises before any penalty accrues thereon, and all material
claims (including claims for labor, services, materials and supplies) for sums
that have become due and payable and that by law have or may become a Lien upon
any of its properties or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; provided that no such charge or claim
need be paid if it is being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted, so long as (1) such reserve or
other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made therefor and (2) in the case of a charge or claim
which has or may become a Lien against any of the Collateral, such contest
proceedings conclusively operate to stay the sale of any portion of the
Collateral to satisfy such charge or claim.
B. Borrowers will not, nor will they permit any of their
Subsidiaries to, file or consent to the filing of any consolidated income tax
return with any Person (other than Borrowers or any of their Subsidiaries)
unless Borrower and its Subsidiaries shall have entered into, a tax sharing
agreement with such Person, in form and substance satisfactory to Administrative
Agent.
6.4 Maintenance of Properties; Insurance; Application of Net Loss Proceeds.
--- -----------------------------------------------------------------------
A. Maintenance of Properties. Borrowers will, and will cause each
of their Subsidiaries to, maintain or cause to be maintained in good repair,
working order and condition, ordinary wear and tear excepted, all material
properties used or useful in the business of Borrowers and their Subsidiaries
and from time to time will make or cause to be made all appropriate repairs,
renewals and replacements thereof except to the extent that the Borrowers
determine in good faith not to maintain, repair, renew or replace such property
if such property is no longer desirable in the conduct of their business and the
failure to do so is not disadvantageous in any material respect to the Borrowers
and their Subsidiaries or the Lenders.
70
B. Insurance. Borrowers will maintain or cause to be maintained,
with financially sound and reputable insurers, such public liability insurance,
third party property damage insurance, business interruption insurance and
casualty insurance with respect to liabilities, losses or damage in respect of
the assets, properties and businesses of Borrowers, and their Subsidiaries as
may customarily be carried or maintained under similar circumstances by
corporations of established reputation engaged in similar businesses, in each
case in such amounts (giving effect to self-insurance), with such deductibles,
covering such risks and otherwise on such terms and conditions as shall be
customary for corporations similarly situated in the industry. Without limiting
the generality of the foregoing, Borrowers will maintain or cause to be
maintained the insurance coverage required to be maintained under the
Disbursement Agreement, while applicable, and the Cooperation Agreement, such
insurance coverage to be provided by such insurance provider, in such amounts
with such deductibles and covering such risks as are at all times required under
the Disbursement Agreement, while applicable, and the Cooperation Agreement and
to include, if the Mortgaged Property is located in an area designated by the
Federal Emergency Management Agency as having special flood or mud slide
hazards, flood insurance in compliance with any applicable regulations of the
Board of Governors of the Federal Reserve System.
C. Application of Net Loss Proceeds. Borrowers shall (i) apply
Loss Proceeds and Liquidated Damages to restore, replace or rebuild the Project
in accordance with the Cooperation Agreement, (ii) apply Liquidated Damages, to
repay any Completion Guaranty Loan in accordance with subsection 7.5 hereof and
the ▇▇▇▇▇▇▇ Intercreditor Agreement, and (iii) apply any Loss Proceeds and
Liquidated Damages not applied as provided in clauses (i) and (ii) to prepay the
Loans in accordance with the Cooperation Agreement and subsection 2.4B(iii)(b)
hereof. Administrative Agent shall, and Borrowers hereby authorize
Administrative Agent to, apply such Loss Proceeds and Liquidated Damages to
prepay the Loans as provided in subsection 2.4B(iii)(b).
6.5 Inspection; Lender Meeting.
--- ---------------------------
A. Inspection Rights. Borrowers shall, and shall cause each of
their Subsidiaries to, permit any authorized representatives designated by any
Lender to visit and inspect any of the properties of Borrowers and their
Subsidiaries, to inspect, copy and take extracts from its and their financial
and accounting records, and to discuss its and their affairs, finances and
accounts with its and their officers and independent public accountants, if
requested by Administrative Agent (provided that any Borrower may, if it so
chooses, be present at or participate in any such discussion), all upon
reasonable notice and at such reasonable times during normal business hours and
as often as may reasonably be requested.
B. Lender Meeting. Borrowers will, upon the request of
Administrative Agent or Requisite Lenders, participate in a meeting of
Administrative Agent and Lenders once during each Fiscal Year to be held at
Borrowers' corporate offices (or at such other location as may be agreed to by
Borrowers and Administrative Agent) at such time as may be agreed to by
Borrowers and Administrative Agent.
6.6 Compliance with Laws, etc.; Permits.
--- ------------------------------------
A. Borrowers shall and shall cause each of their Subsidiaries and
all other Persons on or occupying any Facilities to, comply with the
requirements of all applicable laws, rules, regulations and orders of any
governmental authority (including all Environmental Laws), noncompliance with
which could reasonably be expected to cause, individually or in the aggregate, a
Material Adverse Effect.
B. Borrowers shall, and shall cause each of their Subsidiaries
to, from time to time obtain, maintain, retain, observe, keep in full force and
effect and comply in all material respects with the terms, conditions and
provisions of all Permits as shall now or hereafter be necessary under
applicable laws except any thereof the noncompliance with which could not
reasonably be expected to have a Material Adverse Effect.
6.7 Environmental Review and Investigation, Disclosure, Etc.; Borrowers'
--- --------------------------------------------------------------------
Actions Regarding Hazardous Materials Activities,Environmental Claims
---------------------------------------------------------------------
and Violations of Environmental Laws.
-------------------------------------
A. Environmental Review and Investigation. Borrowers agree that
Administrative Agent may, from time to time and in its reasonable discretion,
(i) retain, at Borrowers' expense, an independent professional consultant to
review any environmental audits, investigations, analyses and reports relating
to Hazardous Materials in respect of the Site, the Project or the Phase I-A
Project prepared by or for Borrowers and (ii) conduct their own investigation of
any Facility; provided that, in the case of any Facility no longer owned,
leased, operated or used by Borrowers or any of their Subsidiaries, Borrowers
shall only be obligated to use their best efforts to obtain permission for
71
Administrative Agent's professional consultant to conduct an investigation of
such Facility. For purposes of conducting such a review and/or investigation,
Borrowers hereby grant to Administrative Agent and its agents, employees,
consultants and contractors the right to enter into or onto any Facilities
currently owned, leased, operated or used by Borrowers or any of their
Subsidiaries and to perform such tests on such property (including taking
samples of soil, groundwater and suspected asbestos-containing materials) as are
reasonably necessary in connection therewith. Any such investigation of any
Facility shall be conducted, unless otherwise agreed to by Borrowers and
Administrative Agent, during normal business hours and, to the extent reasonably
practicable, shall be conducted so as not to interfere with the ongoing
operations at such Facility or to cause any damage or loss to any property at
such Facility. Borrowers and Administrative Agent hereby acknowledge and agree
that any report of any investigation conducted at the request of Administrative
Agent pursuant to this subsection 6.7A will be obtained and shall be used by
Administrative Agent and Lenders for the purposes of Lenders' internal credit
decisions, to monitor and police the Loans and to protect Lenders' security
interests, if any, created by the Loan Documents. Administrative Agent agrees to
deliver a copy of any such report to Borrowers with the understanding that
Borrowers acknowledge and agree that (x) they will indemnify and hold harmless
Administrative Agent and each Lender from any costs, losses or liabilities
relating to Borrowers' use of or reliance on such report, (y) neither
Administrative Agent nor any Lender makes any representation or warranty with
respect to such report, and (z) by delivering such report to Borrowers, neither
Administrative Agent nor any Lender is requiring or recommending the
implementation of any suggestions or recommendations contained in such report.
B. Environmental Disclosure. Borrowers will deliver to
Administrative Agent and Lenders:
(i) Environmental Audits and Reports. As soon as practicable
following receipt thereof, copies of all environmental audits,
investigations, analyses and reports of any kind or character,
whether prepared by personnel of Borrowers or any of their
Subsidiaries or by independent consultants, governmental
authorities or any other Persons, with respect to significant
environmental matters at any Facility or with respect to any
Environmental Claims;
(ii) Notice of Certain Releases, Remedial Actions, Etc. Promptly
upon the occurrence thereof, written notice describing in
reasonable detail (a) any Release required to be reported to any
federal, state or local governmental or regulatory agency under
any applicable Environmental Laws, (b) any remedial action taken
by Borrowers or any other Person in response to (1) any Hazardous
Materials Activities the existence of which has a reasonable
possibility of resulting in one or more Environmental Claims
having, individually or in the aggregate, a Material Adverse
Effect, or (2) any Environmental Claims that, individually or in
the aggregate, have a reasonable possibility of resulting in a
Material Adverse Effect.
(iii) Written Communications Regarding Environmental Claims,
Releases, Etc. As soon as practicable following the sending or
receipt thereof by Borrowers or any of their Subsidiaries, a copy
of any and all written communications with respect to (a) any
Environmental Claims that, individually or in the aggregate, have
a reasonable possibility of giving rise to a Material Adverse
Effect, (b) any Release required to be reported to any federal,
state or local governmental or regulatory agency, and (c) any
request for information from any governmental agency that
suggests such agency is investigating whether Borrowers or any of
their Subsidiaries may be potentially responsible for any
Hazardous Materials Activity.
(iv) Notice of Certain Proposed Actions Having Environmental
Impact. Prompt written notice describing in reasonable detail (a)
any proposed acquisition of stock, assets, or property by
Borrowers or any of their Subsidiaries that could reasonably be
expected to (1) expose Borrowers or any of their Subsidiaries to,
or result in, Environmental Claims that could reasonably be
expected to have, individually or in the aggregate, a Material
Adverse Effect or (2) affect the ability of Borrowers or any of
their Subsidiaries to maintain in full force and effect all
material Permits required under any Environmental Laws for their
respective operations and (b) any proposed action to be taken by
Borrowers or any of their Subsidiaries to modify current
operations in a manner that could reasonably be expected to
subject Borrowers or any of their Subsidiaries to any material
additional obligations or requirements under any Environmental
Laws that could reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect.
72
(v) Other Information. With reasonable promptness, such other
documents and information as from time to time may be reasonably
requested by Administrative Agent in relation to any matters
disclosed pursuant to this subsection 6.7.
C. Borrowers' Actions Regarding Hazardous Materials Activities,
Environmental Claims and Violations of Environmental Laws.
(i) Remedial Actions Relating to Hazardous Materials Activities.
Borrowers shall promptly undertake, and shall cause each of their
Subsidiaries promptly to undertake, any and all investigations,
studies, sampling, testing, abatement, cleanup, removal,
remediation or other response actions necessary to remove,
remediate, clean up or ▇▇▇▇▇ any Hazardous Materials Activity on,
under or about any Facility that is in violation of any
Environmental Laws or that presents a material risk of giving
rise to an Environmental Claim. In the event Borrowers or any of
their Subsidiaries undertake any such action with respect to any
Hazardous Materials, Borrowers or such Subsidiary shall conduct
and complete such action in compliance with all applicable
Environmental Laws and in accordance with the policies, orders
and directives of all federal, state and local governmental
authorities except when, and only to the extent that, Borrowers'
or such Subsidiary's liability with respect to such Hazardous
Materials Activity is being contested in good faith by Borrowers
or such Subsidiary.
(ii) Actions with Respect to Environmental Claims and Violations
of Environmental Laws. Borrowers shall promptly take, and shall
cause each of their Subsidiaries promptly to take, any and all
actions necessary to (i) cure any material violation of
applicable Environmental Laws by Borrowers or their Subsidiaries
and (ii) make an appropriate response to any Environmental Claim
against Borrowers or any of their Subsidiaries and discharge any
obligations it may have to any Person thereunder.
6.8 Interest Rate Protection.
--- -------------------------
Borrowers, at all times, shall maintain in effect one or more
Interest Rate Agreements with respect to the Term Loans, each such Interest Rate
Agreement to be for a term and in form and substance reasonably satisfactory to
Administrative Agent, which Interest Rate Agreements shall effectively limit the
Unadjusted Eurodollar Rate Component (as hereinafter defined) of the interest
costs to Borrowers with respect to an aggregate notional principal amount of not
less than 50.0% of the aggregate principal amount of the Term Loans outstanding
from time to time (based on the assumption that such notional principal amount
was a Eurodollar Rate Loan with an Interest Period of three months) to a rate
equal to not more than 9.0% per annum. For purposes of this subsection 6.8, the
term "Unadjusted Eurodollar Rate Component" means that component of the interest
costs to Borrowers in respect of a Eurodollar Rate Loan that is based upon the
rate obtained pursuant to clause (i) of the definition of Adjusted Eurodollar
Rate.
6.9 Compliance with Material Contracts.
--- -----------------------------------
Borrowers shall, and shall cause each of their Subsidiaries to,
comply, duly and promptly, in all material respects with its respective
obligations and enforce all of its respective rights under all Material
Contracts, including all Operative Documents except where the failure to comply
could not reasonably be expected to have a Material Adverse Effect.
6.10 [Intentionally omitted].
---- ------------------------
6.11 Payment of Liens.
---- -----------------
A. Removal by Borrowers. In the event that, notwithstanding the
covenants contained in subsection 7.2, a Lien not otherwise permitted under
subsection 7.2 may encumber the Mortgaged Property or other item of Collateral
or any portion thereof, the Borrowers shall promptly discharge or cause to be
discharged by payment to the lienor or lien claimant or promptly secure removal
by bonding or deposit with the county clerk or otherwise or, at the
Administrative Agent's option, and if obtainable promptly obtain title insurance
against, any such Lien or mechanics' or materialmen's claims of lien filed or
otherwise asserted against the Mortgaged Property or any other item of
Collateral or any portion thereof within 60 days after the date of notice
thereof; provided that, compliance with the provisions of this subsection 6.11
shall not be deemed to constitute a waiver of the provisions of subsection 7.2.
The Borrowers shall exhibit to the Administrative Agent upon request all
receipts or other satisfactory evidence of payment, bonding, deposit of taxes,
assessments, Liens or any other item which may cause any such Lien to be filed
against the Mortgaged Property or other item of Collateral of any Borrower or
any of its Subsidiaries. Each Borrower and each of its Subsidiaries shall fully
preserve the Lien and the priority of each of the Deed of Trust and the other
73
Collateral Documents without cost or expense to the Administrative Agent or the
Lenders.
B. Removal by the Agent. If any Borrower or any of its
Subsidiaries fails to promptly discharge, remove or bond off any such Lien or
mechanics' or materialmen's claim of lien as described above, which is not being
contested by either Borrower or any of its Subsidiaries in good faith by
appropriate proceedings promptly instituted and diligently conducted, within 30
days after the receipt of notice thereof, then the Administrative Agent may, but
shall not be required to, procure the release and discharge of such Lien,
mechanics' or materialmen's claim of lien and any judgment or decree thereon,
and in furtherance thereof may, in its sole discretion, effect any settlement or
compromise with the lienor or lien claimant or post any bond or furnish any
security or indemnity as the Administrative Agent, in its sole discretion, may
elect. In settling, compromising or arranging for the discharge of any Liens
under this subsection, the Administrative Agent shall not be required to
establish or confirm the validity or amount of the Lien. The Borrowers agree
that all costs and expenses expended or otherwise incurred pursuant to this
subsection 6.11 (including reasonable attorneys' fees and disbursements) by the
Administrative Agent shall be paid by the Borrowers in accordance with the terms
hereof.
6.12 Further Assurances.
---- -------------------
A. Assurances. Without expense or cost to the Administrative
Agent or the Lenders, each Borrower shall, and shall cause each of its
Subsidiaries to, from time to time hereafter, execute, acknowledge, file,
record, do and deliver all and any further acts, deeds, conveyances, mortgages,
deeds of trust, deeds to secure debt, security agreements, hypothecations,
pledges, charges, assignments, financing statements and continuations thereof,
notices of assignment, transfers, certificates, assurances and other instruments
as the Administrative Agent may from time to time reasonably require in order to
carry out more effectively the purposes of this Agreement or the other Loan
Documents, including to subject any items of Collateral, intended to now or
hereafter be covered, to the Liens created by the Collateral Documents, to
perfect and maintain such Liens, and to assure, convey, assign, transfer and
confirm unto the Administrative Agent the property and rights hereby conveyed
and assigned or intended to now or hereafter be conveyed or assigned or which
any Borrower or any such Subsidiary may be or may hereafter become bound to
convey or to assign to the Administrative Agent or for carrying out the
intention of or facilitating the performance of the terms of this Agreement, or
any other Loan Documents or for filing, registering or recording this Agreement
or any other Loan Documents. Promptly upon a reasonable request each Borrower
shall, and shall cause each of its Subsidiaries to, execute and deliver, and
hereby authorizes the Agent to execute and file in the name of such Borrower or
Subsidiary, to the extent the Administrative Agent may lawfully do so, one or
more financing statements, chattel mortgages or comparable security instruments
to evidence more effectively the Liens of the Collateral Documents upon the
Collateral. Each Borrower hereby ratifies and confirms the grant of security
interests and Liens made by such Borrower in favor of the Administrative Agent
in and to the Collateral pursuant to the Collateral Documents as security for
the Obligations.
B. Filing and Recording Obligations. Borrowers shall pay or cause
to be paid all filing, registration and recording fees and all expenses incident
to the execution and acknowledgment of the Deed of Trust or any other Loan
Document, including any instrument of further assurance described in subsection
6.12A, and shall pay or cause to be paid all mortgage recording taxes, transfer
taxes, general intangibles taxes and governmental stamp and other taxes, duties,
imposts, assessments and charges arising out of or in connection with the
execution, delivery, filing, recording or registration of any Collateral
Document or any other Loan Document, the Casino Lease and the Billboard Master
Lease or memoranda thereof, including any instrument of further assurance
described in subsection 6.12A, or by reason of its interest in, or measured by
amounts payable under, the Notes, any Collateral Document or any other Loan
Document, including any instrument of further assurance described in subsection
6.12A, and shall pay all stamp taxes and other taxes required to be paid on the
Notes or any other Loan Document, but excluding in the case of each Lender and
the Administrative Agent, Taxes imposed on its income by a jurisdiction under
the laws of which it is organized or in which its principal executive office is
located or in which its applicable lender office for funding or booking its
Loans hereunder is located. If any Borrower fails to make or cause to be made
any of the payments described in the preceding sentence within 15 days after
notice thereof from the Administrative Agent (or such shorter period as is
necessary to protect the loss of or diminution in value of any Collateral by
reason of tax foreclosure or otherwise, as determined by the Administrative
Agent, in its sole discretion) accompanied by documentation verifying the nature
and amount of such payments, the Administrative Agent may (but shall not be
obligated to) pay the amount due and such Borrower shall reimburse all amounts
in accordance with the terms hereof.
C. Costs of Defending and Upholding the Lien. The Administrative
Agent may, upon at least five days' prior notice to the Borrower, (i) appear in
and defend any action or proceeding, in the name and on behalf of the
Administrative Agent or the Lenders in which the Administrative Agent or any
74
Lender is named or which the Administrative Agent in its sole discretion
determines is reasonably likely to materially adversely affect the Mortgaged
Property, any other Collateral, any Collateral Document, the Lien thereof or any
other Loan Document and (ii) institute any action or proceeding which the
Administrative Agent reasonably determines should be instituted to protect the
interest or rights of the Administrative Agent and the Lenders in the Mortgaged
Property or other Collateral or under this Agreement or any other Loan Document.
The Borrowers agree that all reasonable costs and expenses expended or otherwise
incurred pursuant to this subsection (including reasonable attorneys' fees and
disbursements) by the Administrative Agent shall be paid by the Borrowers or
reimbursed to the Administrative Agent, as the case may be, promptly after
demand.
D. Costs of Enforcement. The Borrowers agree to bear and shall
pay or reimburse the Administrative Agent and the Lenders in accordance with the
terms of subsection 10.2 for all reasonable sums, costs and expenses incurred by
the Administrative Agent and the Lenders (including reasonable attorneys' fees
and the expenses and fees of any receiver or similar official) of or incidental
to the collection of any of the Obligations, any foreclosure (or transfer in
lieu of foreclosure) of this Agreement, any Collateral Document or any other
Loan Document or any sale of all or any portion of the Mortgaged Property or all
or any portion of the other Collateral.
6.13 Execution of Subsidiary Guaranty and Personal Property Collateral
---- -----------------------------------------------------------------
Documents by Certain Subsidiaries and Future Subsidiaries.
----------------------------------------------------------
A. Execution of Subsidiary Guaranty and Personal Property
Collateral Documents. In the event that any Person becomes a Subsidiary on or
after November 14, 1997, Borrowers will promptly notify Administrative Agent of
that fact and, provided such Subsidiary is not an Excluded Subsidiary or is
excluded from the definition of Subsidiary Guarantor, cause such Subsidiary to
execute and deliver to Administrative Agent a counterpart of the Subsidiary
Guaranty and a Subsidiary Security Agreement and to take all such further
actions and execute all such further documents and instruments as may be
necessary or, in the reasonable opinion of Administrative Agent, desirable to
create in favor of Administrative Agent, for the benefit of Lenders, a valid and
perfected First Priority Lien on all of the personal and mixed property assets
of such Subsidiary which constitute First Priority Collateral. Notwithstanding
the foregoing (i) the Subsidiaries described in Section 7.3(x) shall not be
required to become Subsidiary Guarantors or enter into any Subsidiary Security
Agreement and (ii) the Phase I-A Subsidiary shall enter into a Subsidiary
Security Agreement in the form of Exhibit VIII-A.
B. Subsidiary Charter Documents, Legal Opinions, Etc. Borrowers
shall deliver to Administrative Agent, together with such Loan Documents, (i)
certified copies of such Subsidiary's Certificate or Articles of Incorporation
or equivalent limited liability company documents, together with a good standing
certificate from the Secretary of State of the jurisdiction of its incorporation
and each other state in which such Person is qualified as a foreign corporation
to do business and, to the extent generally available, a certificate or other
evidence of good standing as to payment of any applicable franchise or similar
taxes from the appropriate taxing authority of each of such jurisdictions, each
to be dated a recent date prior to their delivery to Administrative Agent, (ii)
a copy of such Subsidiary's Bylaws, certified by its corporate secretary or an
assistant secretary as of a recent date prior to their delivery to
Administrative Agent, (iii) a certificate executed by the secretary or an
assistant secretary of such Subsidiary as to (a) the fact that the attached
resolutions of the Board of Directors or managing member of such Subsidiary
approving and authorizing the execution, delivery and performance of such Loan
Documents are in full force and effect and have not been modified or amended and
(b) the incumbency and signatures of the officers of such Subsidiary executing
such Loan Documents, and (iv) a favorable opinion of counsel to such Subsidiary,
in form and substance reasonably satisfactory to Administrative Agent and its
counsel, as to (a) the due organization and good standing of such Subsidiary,
(b) the due authorization, execution and delivery by such Subsidiary of such
Loan Documents, (c) the enforceability of such Loan Documents against such
Subsidiary, (d) such other matters (including matters relating to the creation
and perfection of Liens in any Collateral pursuant to such Loan Documents) as
Administrative Agent may reasonably request, all of the foregoing to be
reasonably satisfactory in form and substance to Administrative Agent and its
counsel.
C. Real Estate Collateral Documents. Borrowers shall deliver to
Administrative Agent together with such Loan Documents all such further
documents and instruments and take such further action necessary to create in
favor of Administrative Agent, for the benefit of Lenders, a valid and perfected
first priority security interest on any real property assets of such Subsidiary,
as Administrative Agent may reasonably request from time to time.
Section 7. BORROWERS' NEGATIVE COVENANTS
Borrowers covenant and agree that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations and the cancellation or expiration of all
75
Letters of Credit, unless Requisite Lenders shall otherwise give prior written
consent, Borrowers shall perform, and shall cause each of their Subsidiaries to
perform, all of the covenants set forth in Article 6 of the Disbursement
Agreement (while in effect) and all of the covenants set forth in this Section
7.
7.1 Indebtedness.
--- -------------
Borrowers shall not, and shall not permit any of their
Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i) Borrowers and their Subsidiaries may become and remain liable
with respect to the Obligations;
(ii) Borrowers and their Subsidiaries may become and remain
liable with respect to Contingent Obligations permitted by
subsection 7.4 and (other than with respect to clauses (iv) and
(v) of subsection 7.4) upon any matured obligations actually
arising pursuant thereto, the Indebtedness corresponding to the
Contingent Obligations so extinguished;
(iii) Borrowers may become and remain liable for Indebtedness
represented by the Mortgage Notes in an aggregate principal
amount not to exceed at any time $425,000,000, reduced by any
principal payments required to be made thereon;
(iv) any Borrower may become and remain liable with respect to
Indebtedness to the other Borrower or any of its Subsidiaries,
and any Subsidiary of Borrowers may become and remain liable with
respect to Indebtedness to Borrowers or any other Subsidiary of
Borrowers; provided that (a) all such intercompany Indebtedness
shall be evidenced by promissory notes, (b) all such intercompany
Indebtedness owed by Borrowers to any of their Subsidiaries shall
be subordinated in right of payment to the payment in full of the
Obligations pursuant to the terms of the applicable promissory
notes or an intercompany subordination agreement, (c) any payment
by any Subsidiary of Borrowers under any guaranty of the
Obligations shall result in a pro tanto reduction of the amount
of any intercompany Indebtedness owed by such Subsidiary to
Borrowers or to any of their Subsidiaries for whose benefit such
payment is made, and (d) the aggregate principal amount of all
Indebtedness to any Subsidiaries described in subsection 7.3(x)
hereof shall not exceed $10,000,000 at any time outstanding;
(v) Borrowers may become and remain liable for Indebtedness
represented by the Subordinated Notes in an aggregate principal
amount not to exceed at any time $97,500,000 reduced by any
principal payments required to be made thereon;
(vi) Borrowers and their Subsidiaries may become and remain
liable for Indebtedness under the FF&E Facility Agreement in an
aggregate principal amount not to exceed at any time $132,700,000
(plus any accrued and unpaid interest thereon added to principal)
reduced by any principal payments required to be made thereon;
(vii) [Intentionally omitted];
(viii) Borrowers and their Subsidiaries may become and remain
liable for Non-Recourse Financing used to finance the purchase or
lease of personal or real property for use in the business of a
Borrower or one of its Subsidiaries provided that (x) such
Non-Recourse Financing represents at least 75% of the purchase
price of such personal or real property and (y) the Indebtedness
incurred pursuant to this clause (viii) shall not exceed
$50,000,000 at any time;
(ix) Borrowers may become and remain liable for Indebtedness in
respect of any Completion Guaranty Loan in an aggregate amount
not to exceed $25,000,000 (plus any accrued and unpaid interest
thereon added to principal);
(x) Borrowers and their Subsidiaries may become and remain liable
for additional Indebtedness to the extent permitted under and on
the terms described in the Intercreditor Agreement;
(xi) Borrowers may become and remain liable for Indebtedness to
employees of Borrowers ("Employee Repurchase Notes") incurred in
connection with any repurchase of employee options or stock upon
death, disability, termination or exercise of any redemption or
put of such option or stock of such employee in accordance with
employment agreements or option plans or agreements as in effect
on the Closing Date ("Permitted Employee Repurchases") provided
that such Indebtedness shall be unsecured and subordinated on
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terms not less favorable to Borrowers and the Lenders than the
terms of the Subordinated Notes and shall expressly provide that
payments thereon shall be required only to the extent not
restricted by any Financing Agreement;
(xii) Borrowers may become and remain liable for Indebtedness
incurred for the purpose of financing all or any part of the
purchase or lease of gaming equipment to be used in connection
with the casino located at the casino resort to be owned by Phase
II Subsidiary or any casino to be operated within Phase II in the
aggregate amount at any time outstanding not to exceed
$10,000,000; provided, that upon default under such Indebtedness,
the lender under such Indebtedness may seek recourse or payment
against the Borrowers and their Subsidiaries only through the
return or sale of the property or equipment so purchased or
leased and may not otherwise assert a valid claim for payment on
such Indebtedness against the Borrowers and their Subsidiaries or
any other property of the Borrowers and their Subsidiaries.
(xiii) Borrowers may become and remain liable with respect to
other Indebtedness in an aggregate principal amount not to exceed
$10,000,000 at any time outstanding;
(xiv) [Intentionally omitted]; and
(xv) Borrowers may incur Indebtedness in an aggregate principal
amount not to exceed $15,000,000 (plus any accrued and unpaid
interest thereon added to principal) at any time outstanding
("Additional Indebtedness"), provided that (a) such Additional
Indebtedness shall not be secured by, directly or indirectly, any
Liens on any property or assets owned directly or indirectly by
Venetian or LVSI or any Subsidiary of Venetian or LVSI or by any
stock, securities, membership interest, partnership interest or
other direct or indirect equity interests in Venetian or LVSI or
any Subsidiary of Venetian or LVSI; (b) such Additional
Indebtedness shall be subordinated to all Obligations under this
Agreement and all Indebtedness under the Mortgage Notes
Indenture, the Subordinated Notes Indenture and the FF&E Facility
(collectively, the "Superior Facilities") on terms reasonably
acceptable to the Administrative Agent and the Arranger and no
payments in respect thereof may be made or demanded prior to the
payment in full of all Obligations (and further the principal of
such Additional Indebtedness may not be paid back until all
Obligations and all Indebtedness with respect to the Superior
Facilities has been paid in full and this covenant of Borrowers
shall survive the earlier termination of this Credit Agreement),
other than payment of interest in kind provided that any
instruments or documents evidencing such payments contain the
same terms and conditions as the Additional Indebtedness
(provided that such subordination shall not prohibit the exchange
of any note evidencing any such Additional Indebtedness or of the
payment of any amounts under any such note in whole or in part
for securities of any Borrower) provided that no Restricted
Junior Payment may be made in respect of such securities; (c)
prior to incurring any Additional Indebtedness all documents and
instruments evidencing such Indebtedness shall be delivered to
Administrative Agent and the Arranger and such documents and
instruments shall (x) incorporate the terms set forth in the
other clauses of this proviso and otherwise be in form and
substance reasonably satisfactory to Administrative Agent and the
Arranger (y) provide that the Lenders shall be third party
beneficiaries of such documents and instruments and (z) contain
provisions prohibiting any amendment, modification or waiver
thereof binding on Borrowers or their Subsidiaries without the
prior written consent of Administrative Agent and the Arranger
(which consent shall not be unreasonably withheld); and (d) the
Additional Indebtedness shall be permitted under the other
Superior Facilities and all other agreements to which the
Borrowers are a party, and prior to the incurrence thereof
counsel to the Borrowers shall have delivered an opinion to the
Lenders to that effect (with respect to the Superior Facilities
only) in form and substance reasonably satisfactory (including
reasonably satisfactory assumptions) to the Administrative Agent
and the Arranger on behalf of the Lenders.
7.2 Liens and Related Matters.
--- --------------------------
A. Prohibition on Liens. Borrowers shall not, and shall not
permit any of their Subsidiaries to, directly or indirectly, create, incur,
assume or permit to exist any Lien on or with respect to any property or asset
of any kind (including any document or instrument in respect of goods or
accounts receivable) of such Borrower or Subsidiary, whether now owned or
77
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any State or under any similar
recording or notice statute, except:
(i) Permitted Liens;
(ii) Liens granted pursuant to the Collateral Documents;
(iii) Liens securing Indebtedness permitted under clause (iii) of
subsection 7.1, provided that such Liens are junior in priority
(other than in respect of the Mortgage Notes Proceeds Account) to
the Liens securing the Obligations; (iv) [Intentionally omitted];
(v) Liens securing Indebtedness permitted under clause (vi) of
subsection 7.1, provided that such Liens attach only to the
Specified FF&E and to any proceeds of such Specified FF&E or
Indebtedness and related collateral accounts in which such
proceeds are held;
(vi) Liens securing Indebtedness permitted under clause (viii) of
subsection 7.1, provided that such Liens extend only to the real
property or personal property purchased or leased with the
proceeds of such Non-Recourse Financing and to any proceeds of
such property or Indebtedness and related collateral accounts in
which such proceeds are held, and either (i), in the case of the
Phase I-A Non-Recourse Loan, the proceeds of such Non-Recourse
Financing shall be paid by the Phase I-A Subsidiary to Venetian
as rent pursuant to the Phase I-A Lease within 180 days of the
incurrence of such Indebtedness and (ii), in all other cases,
such property is leased or acquired within 180 days of the
incurrence of such Indebtedness;
(vii) Liens in favor of the Mortgage Note Holders or other
Persons securing Indebtedness advanced by any such Person and
permitted under (x) of subsection 7.1 to the extent that such
Liens are permitted under the Intercreditor Agreement, provided
that such Liens in favor of the Mortgage Note Holders or such
other Persons are junior (other than in respect of the Mortgage
Notes Proceeds Account) to the Liens securing the Obligations;
(viii) Liens securing Indebtedness permitted under clause (xii)
of subsection 7.1 provided that such Liens attach only to the
casino equipment purchased or leased with the proceeds of such
Indebtedness and such assets are acquired or leased within 180
days of the incurrence of such Indebtedness;
(ix) [Intentionally omitted];
(x) Liens described in Schedule 7.2 annexed hereto; and
(xi) Other Liens securing Indebtedness in an aggregate amount not
to exceed $5,000,000 at any time outstanding.
Notwithstanding the foregoing, the Borrowers shall not permit the
Intermediate Holding Companies to create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
of the Intermediate Holding Companies, Mall Direct Holdings and Mall
Subsidiary other than Permitted Liens which do not secure
Indebtedness.
B. Equitable Lien in Favor of Lenders. If Borrowers or any of
their Subsidiaries, shall create or assume any Lien upon any of its properties
or assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 7.2A, they shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; provided that, notwithstanding the foregoing,
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 7.2A.
C. No Further Negative Pledges. Except with respect to specific
property encumbered to secure payment of particular Indebtedness or leases or to
be sold pursuant to an executed agreement with respect to an Asset Sale, none of
the Borrowers nor any of their Subsidiaries, shall enter into any agreement
prohibiting the creation or assumption of any Lien upon any of its properties or
assets, whether now owned or hereafter acquired other than (w) as provided
herein or in the other Loan Documents, (x) as set forth in the documents
evidencing the Phase I-A Subsidiary Non-Recourse Loan, (y) as set forth in the
documents evidencing Other Indebtedness as in effect on the Closing Date
including any refinancing thereof permitted hereunder provided that the
provisions regarding the creation or assumption of Liens is not less favorable
to Borrowers, such Subsidiary or Lenders than those set forth in the documents
78
evidencing the Indebtedness being refinanced or (z) as required by applicable
law or any applicable rule or order of any Gaming Authority.
D. No Restrictions on Subsidiary Distributions to Borrowers or
Other Subsidiaries. Except as provided herein and as provided in the documents
evidencing the Phase I-A Subsidiary Non-Recourse Loan, Borrowers will not, and
will not permit any of their Subsidiaries to, create or otherwise cause or
suffer to exist or become effective any consensual encumbrance or restriction of
any kind on the ability of any of their Subsidiaries to (i) pay dividends or
make any other distributions on any of such Subsidiary's capital stock owned by
Borrowers or any other Subsidiary of Borrowers, (ii) repay or prepay any
Indebtedness owed by any such Subsidiaries to Borrowers, (iii) make loans or
advances to Borrowers, or (iv) transfer any of its property or assets to
Borrowers other than (x) as provided herein or in the other Loan Documents, (y)
as set forth in the documents evidencing Other Indebtedness as in effect on
November 14, 1997 including any refinancing thereof permitted hereunder provided
that the provisions regarding dividends, distributions, repayments of
Indebtedness, loans and advances and transfers of assets are not less favorable
to Borrowers, such Subsidiary or Lenders than those set forth in the documents
evidencing the Indebtedness being refinanced or (z) as required by applicable
law or any applicable rule or order of any Gaming Authority.
7.3 Investments; Joint Ventures; Formation of Subsidiaries.
--- -------------------------------------------------------
Borrowers shall not, and shall not permit any of their
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including any Joint Venture or otherwise form or create any Subsidiary,
except:
(i) Borrowers and their Subsidiaries may make and own Investments
in Cash Equivalents;
(ii) Borrowers may continue to own their existing Investments in
the Intermediate Holding Companies, the Excluded Subsidiaries and
Mall Construction Subsidiary described in Schedule 7.3 annexed
hereto, provided that Borrowers and their Subsidiaries may not
make any additional Investments in such Persons except as
permitted by clauses (iv) and (v) below;
(iii) Borrowers may (a) form the Phase I-A Subsidiary, (b) enter
into the Phase I-A Lease and (c) make Investments in the Phase
I-A Subsidiary to service the Phase I-A Subsidiary Non-Recourse
Loan and to make any lease payments or other payments that may be
required under the Phase I-A Lease, the Cooperation Agreement or
any other agreement entered into by the Phase I-A Subsidiary;
(iv) Borrowers may transfer a 1% managing membership interest in
each of Phase II Subsidiary and Phase II Direct Holdings to Phase
II Manager;
(v) Borrower and their Subsidiaries may invest in New Mall
Subsidiary or Phase II Subsidiary any cash or other property
contributed to Borrowers by ▇▇▇▇▇▇▇ or any of his Affiliates for
such purpose;
(vi) So long as no Event of Default or Potential Event of Default
shall have occurred and be continuing or would result therefrom,
Borrowers may form and make Investments in new Subsidiaries and
in Supplier Joint Ventures; provided that (a) the aggregate
amount of all such Investments shall not at any time exceed
$10,000,000, (b) no such Subsidiary or Supplier Joint Venture
shall own or operate or possess any material license, franchise
or right used in connection with the ownership or operation of
the Project or any material Project assets, (c) in the case of
any Investment in a Supplier Joint Venture, LVSI shall have
delivered an Officers' Certificate which certifies that in the
reasonable judgment of such officer the Investment in such
Supplier Joint Venture will result in an economic benefit to
Borrowers (taking into account such Investment) as a result of a
reduction in the cost of the goods or services being acquired
from the Supplier Joint Venture over the life of the Investment
and (d) none of the Borrowers, nor any other Subsidiary of the
Borrower shall incur any liabilities or contingent obligations in
respect of the obligations of such Subsidiary or Joint Venture;
(vii) Borrowers may make Consolidated Capital Expenditures
permitted by subsection 7.14;
(viii) Borrowers may make loans or advances to their employees
(a) to fund the exercise price of options granted under
Borrowers' stock option plans or agreements or employment
agreements as in effect on the Closing Date and (b) for other
purposes in an amount not to exceed $1,000,000 in the aggregate
outstanding at any time;
79
(ix) Borrowers and their Subsidiaries may hold investments
consisting of securities received in settlement of debt created
in the ordinary course of business and owing to the Borrowers or
any Subsidiary or in satisfaction of judgments;
(x) Borrowers may (x) create one or more Subsidiaries for the
purpose of establishing foreign or domestic offices for marketing
or to otherwise further the business of the Borrowers as
described in Section 7.12 hereof (at their election, Borrowers
may designate any such Subsidiary to be an Excluded Subsidiary)
and (y) make Investments in any or all of such Subsidiaries in an
aggregate amount not to exceed $10,000,000;
(xi) Borrowers may make and own other Investments in an aggregate
amount not to exceed at any time $5,000,000.
7.4 Contingent Obligations.
--- -----------------------
Borrowers shall not, and shall not permit any of their
Subsidiaries to, directly or indirectly, create or become or remain liable with
respect to any Contingent Obligation, except:
(i) Borrowers may become and remain liable with respect to
Contingent Obligations under Interest Rate Agreements which are
(a) required under subsection 6.8 or under the terms of any other
Financing Agreements or (b) entered into to hedge against
interest rate fluctuations in respect of up to 50% of the
principal amount of the Indebtedness outstanding under clause
(vi) of subsection 7.1 so long as such Interest Rate Agreements
are on substantially the same terms as those entered into to
satisfy subsection 6.8 hereof and all obligations thereunder are
secured solely by Liens included in Permitted Liens under clause
(xx) of the definition thereof;
(ii) Borrowers and their Subsidiaries may become and remain
liable with respect to Contingent Obligations under the Loan
Documents;
(iii) Borrowers and their Subsidiaries may become and remain
liable with respect to the Contingent Obligations for the
Indebtedness permitted under clauses (iii), (v), (viii), (x) and
(xiii) of subsection 7.1, provided that any such Contingent
Obligations of the Intermediate Holding Companies are subordinate
to the Obligations on terms at least as favorable to the Lender
as those relating to the subordination of the Intermediate
Holding Company guaranties set forth in Section 11.07 of the
Mortgage Notes Indenture (as in effect on November 14, 1997);
(iv) to the extent such incurrence does not result in the
incurrence by Borrowers or any of their Subsidiaries of any
obligation for the payment of borrowed money, Borrowers may
become and remain liable with respect to Contingent Obligations
incurred solely in respect of performance bonds, completion
guaranties and standby letters of credit or bankers' acceptances,
provided that such Contingent Obligations are incurred in the
ordinary course of business and do not at any time exceed
$10,000,000 in the aggregate;
(v) Borrowers and their Subsidiaries may become and remain liable
for customary indemnities under Project Documents as in effect on
November 14, 1997; and
(vi) Borrowers may become and remain liable with respect to other
Contingent Obligations, provided that the maximum aggregate
liability, contingent or otherwise, of Borrowers in respect of
all such Contingent Obligations shall at no time exceed
$5,000,000.
7.5 Restricted Junior Payments.
--- ---------------------------
Borrowers shall not, and shall not permit any of their
Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart
any sum for any Restricted Junior Payment, except:
(i) Borrowers may make regularly scheduled or required payments
of principal and interest in respect of any Other Indebtedness of
Borrowers in accordance with the terms of, and only to the extent
required by the agreement pursuant to which such Other
Indebtedness was issued provided that (a) any such payments shall
be subject to the terms of the Intercreditor Agreement, the
▇▇▇▇▇▇▇ Intercreditor Agreement, the ▇▇▇▇▇▇▇ Subordination
Agreement, the ▇▇▇▇▇▇▇ Completion Guaranty and any FF&E
Intercreditor Agreements, as applicable, (b) any such payments in
respect of any Completion Guaranty Note and any Employee
80
Repurchase Note may be made only to the extent no Event of
Default or Potential Event of Default shall then exist and be
continuing or would result therefrom and (c) any such payments in
respect of any Employee Repurchase Note may be made only to the
extent that the ratio of Consolidated Adjusted EBITDA without
giving effect to any Conforming ▇▇▇▇▇▇▇ L/C pursuant to the last
sentence of the definition of Consolidated Adjusted EBITDA to
Consolidated Fixed Charges for the four Fiscal Quarter period
ended on the most recent Quarterly Date preceding such payment or
such shorter period tested on such Quarterly Date under
subsection 7.6A (determined on a pro forma basis (as though such
payment on the Employee Repurchase Note had been made during the
period tested as of such Quarterly Date under subsection 7.6A)
would have been in compliance with the requirements of subsection
7.6A as certified to Administrative Agent by the chief financial
officer of Borrowers, on behalf of Borrowers, at the time of such
payment;
(ii) Borrowers may prepay any FF&E Facility from the portion of
any Loss Proceeds or net proceeds from Asset Sales of collateral
under such FF&E Facility (as permitted under subsection 7.7(iv))
required to be so applied in accordance with such FF&E Facility;
(iii) LVSI may make cash distributions in respect of its common
stock in an aggregate amount not to exceed $8,000,000 per year
to, or repurchase common stock from, senior managers or officers
of LVSI who may become holders of LVSI common stock as a result
of the exercise of stock options, provided that nothing in this
subsection 7.5(iii) shall be deemed to permit cash distributions
or payments to ▇▇▇▇▇▇▇ or any Family Member (as defined in the
definition of "Related Parties");
(iv) Borrowers may exchange up to $15,000,000 in shares of LVSI
common stock held by ▇▇▇▇▇▇▇ for up to $15,000,000 of preferred
membership interest in Venetian;
(v) [Intentionally omitted];
(vi) Borrowers and their Subsidiaries may redeem or purchase any
equity interests in Borrowers or their Subsidiaries or any
Indebtedness to the extent required by any Nevada Gaming
Authority in order to preserve a material Gaming License,
provided that so long as such efforts do not jeopardize any
material Gaming License, Borrowers shall have diligently tried to
find a third-party purchaser for such equity interests or
Indebtedness and no third-party purchasers acceptable to the
Nevada Gaming Authority is willing to purchase such equity
interests or Indebtedness within a time period acceptable to the
Nevada Gaming Authority;
(vii) for so long as LVSI is a corporation under Subchapter S of
the Code or a substantially similarly treated pass-through entity
or Venetian is a limited liability company that is treated as a
partnership or a substantially similarly treated pass-through
entity for Federal income tax purposes (as evidenced by an
opinion of counsel at least annually), Borrowers may each make
cash distributions to shareholders or members, during each
Quarterly Period, in an aggregate amount not to exceed the
Permitted Quarterly Tax Distribution in respect of the related
Estimation Period, and if any portion of the Permitted Quarterly
Tax Distribution is not distributed during such Quarterly Payment
Period, the Permitted Quarterly Tax Distribution payable during
the immediately following four quarter period shall be increased
by such undistributed portion; provided that Borrowers may not
make any such distribution to pay taxes attributable to income of
New Mall Subsidiary or Phase II Subsidiary or any of their
subsidiaries unless Borrowers have received from the applicable
holding companies of New Mall Subsidiary or Phase II Subsidiary,
as applicable, a cash distribution for such purpose in respect of
the applicable Estimation Period in an equal amount;
(viii) Borrowers and their wholly-owned Subsidiaries may make
intercompany payments between such entities and intercompany
payments from any Subsidiary of a Borrower to any wholly-owned
Subsidiary of Borrowers or any Borrower;
(ix) Borrowers may make Permitted Employee Repurchases so long as
(a) no Event of Default or Potential Event of Default shall exist
and be continuing or would result therefrom and (b) the ratio of
Consolidated Adjusted EBITDA without giving effect to any
Conforming ▇▇▇▇▇▇▇ L/C pursuant to the last sentence of the
definition of Consolidated Adjusted EBITDA to Consolidated Fixed
Changes for the four Fiscal Quarter period ended as of the most
recent Quarterly Date prior to such repurchase or such shorter
period tested on such immediately preceding Quarterly Date under
subsection 7.6A (determined on a pro forma basis as though such
81
Permitted Employee Repurchase had been made during the period
tested as of such Quarterly Date under subsection 7.6A) would
have been in compliance with the requirements of subsection 7.6A
as certified to Administrative Agent by the chief financial
officer of Borrowers, on behalf of Borrowers, at the time of such
payment;
(x) Borrowers may make repurchases of capital stock of LVSI
deemed to occur upon exercise of stock options to the extent such
capital stock represents a portion of the exercise price of such
options; and
(xi) Borrowers may make payments on any Completion Guaranty Loan
(a) prior to Final Completion, from amounts permitted to be
deposited in the Guaranty Deposit Account subject to the terms of
the ▇▇▇▇▇▇▇ Completion Guaranty and the Disbursement Agreement,
(b) on Final Completion Date from amounts which are advanced to
Borrowers pursuant to subsection 2.12 of the Disbursement
Agreement for the purpose of making such payments, (c) after
Final Completion Date from Liquidated Damages and (d) on Final
Completion Date, from amounts which are returned to Mall
Construction Subsidiary from funds in the Mall
Retainage/Punchlist Account in accordance with the Mall Escrow
Agreement, up to the aggregate amount previously deposited into
the Mall Retainage/Punchlist Account from the Guaranty Deposit
Account, provided in each case that such payments shall be
permitted only to the extent allowed under the ▇▇▇▇▇▇▇
Intercreditor Agreement and only so long as no Event of Default
or Potential Event of Default shall then exist and be continuing
or would result therefrom.
7.6 Financial Covenants.
--- --------------------
A. Minimum Fixed Charge Coverage Ratio. Borrowers shall not
permit the ratio of (i) Consolidated Adjusted EBITDA to (ii) Consolidated Fixed
Charges for any four-Fiscal Quarter period ending on any Quarterly Date set
forth below to be less than the correlative ratio indicated:
Minimum
Fixed Charge
Period Coverage Ratio
=========================================== ==============
Each of the Quarters ending on December 31, 1.05:1
1999, March 31, 2000, June 30, 2000 and
September 30, 2000
Each of the Quarters ending on December 31, 1.05:1
2000, March 31, 2001, June 30, 2001 and
September 30, 2001
Each of the Quarters ending on December 31, 1.10:1
2001 and the last day of each calendar
quarter thereafter
B. Maximum Leverage Ratio. Borrowers shall not permit the ratio
(the "Leverage Ratio") of (i) Consolidated Total Debt as of such Quarterly Date
to (ii) Consolidated Adjusted EBITDA for the four Fiscal Quarter period ending
on such Quarterly Date ending on any Quarterly Date set forth below to exceed
the correlative ratio indicated:
82
Maximum
Period Leverage Ratio
========================================== ==============
Each of the Quarters ending on December 4.75:1
31, 1999, March 31, 2000, June 30, 2000,
September 30, 2000, December 31, 2000 and
March 31, 2001
The Quarter ending on June 30, 2001 4.50:1
Each of the Quarters ending on September 6.00:1
30, 2001, December 31, 2001 and March 31,
2002
The Quarter ending on June 30, 2002 5.50:1
The Quarter ending on September 30, 2002 5.00:1
Each of the Quarters ending on December 4.90:1
31, 2002 and the last day of each
calendar quarter thereafter
C. Minimum Consolidated Adjusted EBITDA. Borrowers shall not
permit Consolidated Adjusted EBITDA for any four Fiscal Quarter period ending on
any Quarterly Date set forth below to be less than the correlative amount
indicated:
Minimum Consolidated
Period Adjusted EBITDA
========================================= =====================
The Quarter ending on December 31, 1999 $ 30,000,000
The Quarter ending on March 31, 2000 $ 75,000,000
The Quarter ending on June 30, 2000 $100,000,000
The Quarter ending on September 30, 2000 $150,000,000
The Quarter ending on December 31, 2000 $155,000,000
Each of the Quarters ending on March 31, $160,000,000
2001 and June 30, 2001
The Quarter ending on September 30, 2001 $145,000,000
The Quarter ending on December 31, 2001 $150,000,000
The Quarter ending on March 31, 2002 $155,000,000
The Quarter ending on June 30, 2002 $160,000,000
The Quarter ending on September 30, 2002 $165,000,000
The Quarter ending on December 31, 2002 $170,000,000
The Quarter ending on March 31, 2003, and $180,000,000
the last day of each calendar quarter
thereafter
D. Minimum Consolidated Net Worth. Borrowers shall not permit
Consolidated Net Worth at any Quarterly Date to be less than $120,000,000 plus
an amount equal to the sum of 85% of Consolidated Net Income for all periods
from November 14, 1997 through such Quarterly Date (net of all net losses for
Borrowers and their Subsidiaries on a consolidated basis for the same period).
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions.
--- -----------------------------------------------------------------
Borrowers shall not, and shall not permit any of their
Subsidiaries to, alter the corporate, capital or legal structure (except with
respect to changes in capital structure to the extent a Change of Control does
not occur as a result thereof) of any Borrower, or any of its Subsidiaries, or
enter into any transaction of merger or consolidation, or liquidate, wind-up or
dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease or sub-lease (as lessor or sublessor), transfer or otherwise dispose of,
in one transaction or a series of transactions, all or any part of its business,
property or assets, whether now owned or hereafter acquired, or acquire by
purchase or otherwise all or substantially all the business, property or fixed
assets of, or stock or other evidence of beneficial ownership of, any Person or
any division or line of business of any Person, except:
(i) Borrowers may make Consolidated Capital Expenditures
permitted under subsection 7.14;
83
(ii) Borrowers and their Subsidiaries may dispose of obsolete,
worn out or surplus assets or assets no longer used or useful in
the business of Borrowers and the Subsidiaries in each case to
the extent made in the ordinary course of business, provided that
either (i) such disposal does not materially adversely affect the
Mortgaged Property or (ii) prior to or promptly following such
disposal any such property shall be replaced with other property
of substantially equal utility and a value at least substantially
equal to that of the replaced property when first acquired and
free from any security of any other Person subject only to
Permitted Liens and by such removal and replacement Borrowers and
their Subsidiaries shall be deemed to have subjected such
replacement property to the lien of the Collateral Documents in
favor of Lenders, as applicable;
(iii) Borrowers and their Subsidiaries may sell or otherwise
dispose of assets in transactions that do not constitute Asset
Sales, provided that the consideration received for such assets
shall be in an amount at least equal to the fair market value
thereof except under subsections 7.7(v), (vii)-(ix) and (xi)
below;
(iv) subject to subsection 7.11, Borrowers and their Subsidiaries
may make Asset Sales of assets having a fair market value not in
excess of (x) $4,000,000 in respect of the sale or other
disposition of construction equipment prior to or during the
first year following the Completion Date and (y) $2,000,000 with
respect to any other Asset Sales; provided in each case that (1)
the consideration received for such assets shall be in an amount
at least equal to the fair market value thereof; (2) the sole
consideration received shall be cash; and (3) the proceeds of
such Asset Sales shall be applied as required by subsection
2.4B(iii)(a);
(v) Borrowers and their Subsidiaries may enter into the Phase I-A
Lease;
(vi) Borrowers and their Subsidiaries may enter into the Phase II
Lease;
(vii) Borrowers and their Subsidiaries may enter into any leases
with respect to any space on or within the Project;
(viii) Borrowers may enter into the HVAC Ground Lease.
(ix) LVSI may lease the casino from Venetian pursuant to the
Casino Lease;
(x) Borrower may enter into sale(s) transactions in accordance
with the terms set forth in Section 2.4B(iii)(a)(iii);
(xi) Either Borrower may be merged with the other Borrower;
(xii) Either Borrower may sell, lease or otherwise transfer
assets to another Borrower or to a wholly-owned Subsidiary of
such Borrower to the extent permitted by subsection 7.3 and any
wholly-owned Subsidiary of a Borrower may sell, lease or
otherwise transfer assets to any other wholly-owned Subsidiary of
such Borrower (other than the Intermediate Holding Companies) or
to the other Borrower;
(xiii) Mall Construction Subsidiary may be merged with or
liquidated into Venetian;
(xiv)Borrower may dedicate space for the purpose of constructing
(i) a mass transit system, (ii) a pedestrian bridge over or a
pedestrian tunnel under Las Vegas Boulevard and Sands Avenue or
similar structures to facilitate pedestrians or traffic and (iii)
a right turn lane or other roadway dedication at or near the
Project; provided in each case that such dedication does not
materially impair the use or operations of the Project;
(xv) Borrowers may license trademarks and trade names in the
ordinary course of business;
(xvi) Mall Construction Subsidiary may enter into or take by
assignment the Mall Management Agreement and assign its interest
therein to Mall Subsidiary and Mall Subsidiary may assign its
interest therein to New Mall Subsidiary;
(xvii) Borrowers may make the transfers permitted under
subsections 7.3(iii), (iv), (v) and (x).
(xviii) Venetian and Mall Construction Subsidiary (or Mall
Subsidiary or New Mall Subsidiary, as applicable) may enter into
the Billboard Master Lease and the other Master Leases (as
84
defined in that certain FADAA Limited Waiver dated as of November
12, 1999 among inter alia Borrowers, Mall Construction Subsidiary
and Scotiabank as bank agent);
(xix) Borrowers and their Subsidiaries may transfer any assets
leased or acquired with proceeds of a Non-Recourse Financing
permitted under subsection 7.1 or other financing permitted under
subsection 7.1(xii) to the lender providing such financing upon
default, expiration or termination of such Non-Recourse Financing
or other financing;
(xx) Borrowers may sell receivables for fair market value in the
ordinary course of business; and
(xxi) incurrence of Liens permitted under subsection 7.2,
provided that any leases, other than those described in clauses
(v) and (vi) above (whether or not constituting Permitted Liens),
shall be permitted only to the extent provided in clause (vii)
above and the last paragraph of this subsection 7.7.
Notwithstanding the foregoing provisions of this subsection 7.7,
clause (vii) shall be subject to the additional provisos that: (a) no Event of
Default or Potential Event of Default shall exist and be continuing at the time
of such transaction or lease or would occur after as a result of entering into
such transaction or lease (or immediately after any renewal or extension thereof
at the option of Borrowers or one of their Subsidiaries), (b) such transaction
or lease will not materially interfere with, impair or detract from the
operation of the business of Borrowers and their Subsidiaries, (c) such
transaction or lease is at a fair market rent or value (in light of other
similar or comparable prevailing commercial transactions) and contains such
other terms such that the lease, taken as a whole, is commercially reasonable
and fair to Borrowers and their Subsidiaries in light of prevailing or
comparable transactions in other casinos, hotels, hotel attractions or shopping
venues, (d) no gaming or casino operations (other than the operation of arcades
and games for children) may be conducted on any space that is subject to such
transaction or lease other than by Borrowers and (e) no lease may provide that
the Borrowers or any of their Subsidiaries may subordinate its fee, condominium
or leasehold interest to any lessee or any party financing any lessee; provided
that Administrative Agent on behalf of Lenders shall agree to provide the tenant
under any such lease with a Subordination, Non-Disturbance and Attornment
Agreement with the tenant under any such lease substantially in the form of
Exhibit VIII hereto with such changes as Administrative Agent may approve, which
approval shall not be unreasonably withheld or delayed. Administrative Agent on
behalf of Lenders shall also provide such agreement to the tenant under the
Phase I-A Lease and under the Guggenheim Projects.
7.8 Sales and Lease-Backs.
--- ----------------------
Borrowers shall not, and shall not permit any of their
Subsidiaries to, directly or indirectly, become or remain liable as lessee or as
a guarantor or other surety with respect to any lease, whether an Operating
Lease or a Capital Lease, of any property (whether real, personal or mixed),
whether now owned or hereafter acquired, (i) which Borrowers or any of their
Subsidiaries has sold or transferred or is to sell or transfer to any other
Person or (ii) which Borrowers or any of their Subsidiaries intends to use for
substantially the same purpose as any other property which has been or is to be
sold or transferred by Borrowers or any of their Subsidiaries to any Person in
connection with such lease, except that Borrowers and their Subsidiaries may
enter into sale-leaseback transactions in connection with any Non-Recourse
Financing permitted hereunder or such other financings permitted under clause
(xii) of subsection 7.1 to the extent that the assets subject to such
sale-leaseback are acquired contemporaneously with, or within 180 days prior to,
such Non-Recourse Financing or such other financings and with the proceeds
thereof and neither Borrower nor any of its Subsidiaries theretofore held any
interest in such assets and except that (a) Venetian may enter into the Phase II
Lease with Phase II Subsidiary and (b) Borrowers and their Subsidiaries may
enter into the Phase I-A Lease, provided that all other applicable terms and
conditions with respect to such leases set forth in this Agreement are
satisfied.
7.9 Sale or Discount of Receivables.
--- --------------------------------
Borrowers shall not, and shall not permit any of their
Subsidiaries to, directly or indirectly, sell with recourse, or discount or
otherwise sell for less than the face value thereof, any of its notes or
accounts receivable other than an assignment for purposes of collection in the
ordinary course of business.
7.10 Transactions with Shareholders and Affiliates.
---- ----------------------------------------------
Borrowers shall not, and shall not permit any of their
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction (including the purchase, sale, lease or exchange of any property or
85
the rendering of any service) with any holder of 5% or more of any class of
equity Securities of any Borrower or with any Affiliate of a Borrower or of any
such holder, except, that Borrowers may enter into and permit to exist:
(i) transactions that are on terms that are not less favorable to
that Borrower or Subsidiary, as the case may be, than those that
might be obtained at the time from Persons who are not such a
holder or Affiliate if (a) Borrowers have delivered to
Administrative Agent (1) with respect to any transaction
involving an amount in excess of $500,000, an Officers
Certificate certifying that such transaction complies with this
subsection 7.10, (2) with respect to any transaction involving an
amount in excess of $1,000,000, a resolution adopted by a
majority of the disinterested non-employee directors of the
applicable Borrower or Subsidiary approving such transaction and
an Officers Certificate certifying that such transaction complies
with this subsection 7.10, at the time such transaction is
entered into and (c) with respect to any such transaction that
involves aggregate payments in excess of $10,000,000 or that is a
loan transaction involving a principal amount in excess of
$10,000,000, an opinion as to the fairness to the applicable
Borrower or Subsidiary from a financial point of view issued by
an Independent Financial Advisor at the time such transaction is
entered into,
(ii) the Services Agreement;
(iii) purchases of materials or services from a Joint Venture
Supplier by the Borrowers or any of their Subsidiaries in the
ordinary course of business on arm's length terms;
(iv) any employment, indemnification, noncompetition or
confidentiality agreement entered into by Borrowers or any of
their Subsidiaries with their employees or directors in the
ordinary course of business;
(v) loans or advances to employees of Borrowers or their
Subsidiaries permitted under subsection 7.3(viii);
(vi) the payment of reasonable fees to directors of Borrowers and
their Subsidiaries who are not employees of Borrowers or their
Subsidiaries;
(vii) the grant of stock options or similar rights to employees
and directors of Borrowers pursuant to plans approved by the
Board of Directors of LVSI and any repurchases of stock or
options of Borrowers from such employees to the extent permitted
by subsection 7.5;
(viii) transactions between or among Borrowers and any of their
wholly-owned Subsidiaries;
(ix) the transactions contemplated by the ▇▇▇▇▇▇▇ Completion
Guaranty;
(x) the transactions contemplated by the Cooperation Agreement;
(xi) the transactions contemplated by the HVAC Services
Agreement;
(xii) the use of the Congress Center by the owner of the Sands
Expo and Convention Center; provided that Venetian receives fair
market value for the use of such property;
(xiii) the transactions contemplated by the Phase I-A Lease, the
Phase II Lease and any other agreements with respect to the Lido
Facility (including, without limitation, the agreements relating
to the Phase I-A Non-Recourse Loan);
(xiv) [Intentionally omitted];
(xv) [Intentionally omitted];
(xvi) Borrowers may enter into and perform their obligations
under a gaming operations lease agreement with Phase II
Subsidiary relating to the casino to be in the casino resort
owned by the Phase II Subsidiary on terms substantially similar
to those of the Casino Lease except that (a) the rent payable
under such lease shall be equal to all revenues derived from such
casino minus the sum of (1) the operating costs related to such
casino (including an allocated portion (based on gaming revenue)
of the Borrower's administrative costs related to its gaming
operations) and (2) the lesser of $250,000 or 1.0% of such
casino's operating income (or zero if there is an operating loss)
(determined in accordance with GAAP), (b) the Borrowers may agree
that they shall operate the casino in the casino resort owned by
86
the Phase II Subsidiary and the casino in the Project in
substantially similar manners and (c) the Borrowers may agree to
have common gaming and surveillance operations in such casinos
(based on equal allocations of revenues and operating costs).
(xvii) employees of Interface may participate in the Las Vegas
Sands Inc. 401(k) Retirement Plan if Interface reimburses the
Borrowers for a pro rata portion of the administrative expenses
of such plan based on the number of employees of each of
Interface and LVSI participating in such plan;
(xviii) transactions contemplated by the Interface Lease;
(xix) the Borrowers may reimburse Yona Aviation Services, Inc.,
or its successors for its operating and lease costs related to
the use of its aircraft by the Borrower's employees (based on the
actual allocated costs and time of usage);
(xx) transactions contemplated by the Restaurant Leases; and
(xxi) transactions contemplated by the Billboard Master Lease and
the other Master Leases.
7.11 Disposal of Subsidiary Stock.
---- -----------------------------
Borrowers shall not, and shall not permit any of their
Subsidiaries to, directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any shares of capital stock or other equity Securities of
Venetian or any of Borrowers' Subsidiaries (other than the sale of preferred
membership interests in Venetian to ▇▇▇▇▇▇▇ or an Affiliate of ▇▇▇▇▇▇▇), except
(i) to qualify directors if required by applicable law and (ii) to the extent
required by any Nevada Gaming Authority in order to preserve a material Gaming
License.
7.12 Conduct of Business.
---- --------------------
Borrowers shall not, and shall not permit any of their
Subsidiaries to, engage in any business other than (i) in the case of LVSI, the
casino gaming, hotel, retail and entertainment mall and resort business and any
activity or business incidental, directly related or similar thereto (including
operating the conference center and meeting facilities), or any business or
activity that is a reasonable extension, development or expansion thereof or
ancillary thereto, including any hotel, entertainment, recreation, convention,
trade show, meeting, retail sales or other activity or business designated to
promote, market, support, develop, construct or enhance the casino gaming,
hotel, retail and entertainment mall and resort business operated by Borrowers
and their Subsidiaries, including, without limitation, participating in the
Supplier Joint Ventures and ownership of Mall Manager, Phase II Manager and
Venetian, (ii) in the case of Venetian and its Subsidiaries (other than those
listed in clause (iii) below), (a) development, construction and the operation
of the Project, the Phase I-A Project and the Guggenheim Projects, (b) the
casino gaming, hotel, retail and entertainment mall and resort business
(including operating a conference center and meeting facilities) at the Project,
the Phase I-A Project and the Guggenheim Projects and any activity or business
incidental, directly related or similar thereto, or any business or activity
that is a reasonable extension, development or expansion thereof or ancillary
thereto, including any hotel, entertainment, recreation, convention, trade show,
meeting, retail sales, or other activity or business designated to promote,
market, support, develop, construct or enhance the casino gaming, hotel, retail
and entertainment mall and resort business operated at the Project by Borrowers
and their Subsidiaries, including, without limitation, the creation of the Phase
I-A Subsidiary and the Phase I-A Project and participating in the Supplier Joint
Venturers, and (c) ownership of equity interests in Subsidiaries, including the
Intermediate Holding Companies and (iii) in the case of Intermediate Holding
Companies, the ownership of equity interests in Mall Direct Holdings, Phase II
Direct Holdings and the delivery of guarantees in favor of the Lenders, the
Mortgage Noteholders and the holders of the Subordinated Notes. Borrower shall
not permit the Excluded Subsidiaries set forth below to engage in any business
other than (i) in the case of Mall Manager and Phase II Manager, ownership of 1%
managing membership interests in Mall Subsidiary and Mall Direct Holdings and
Phase II Direct Holdings and Phase II Subsidiary, respectively, (ii) in the case
of New Mall Subsidiary, ownership of the Mall and other matters reasonably
incidental thereto; (iii) in the case of Mall Direct Holdings and Phase II
Direct Holdings, ownership of equity interests in Mall Subsidiary and Phase II
Subsidiary, respectively; (iv) in the case of Mall Subsidiary, ownership of
equity interests in New Mall Subsidiary; (v) Mall Manager may hold the equity
interests in New Mall Manager and (vi) in the case of New Mall Manager,
ownership of a 1% managing membership interest in New Mall Subsidiary.
87
7.13 Certain Restrictions on Changes to Operative Documents, Permits,
---- ----------------------------------------------------------------
Project Budget or Project Schedule.
-----------------------------------
A. Modifications of Certain Operative Documents and Permits; New
Material Contracts or Permits. Borrowers shall not, and shall not permit any of
their Subsidiaries to, agree to any material amendment to, or waive any of its
material rights under, any Permit or Material Contract or enter into new
Material Contracts or Permits (it being understood that any Material Contracts
which are covered by clause B or C below shall also be subject to the
restrictions set forth therein) without in each case obtaining the prior written
consent of Requisite Lenders if in any such case, such amendment or waiver or
new Material Contract or Permit could reasonably be expected to have a Material
Adverse Effect or otherwise adversely affect Lenders in any material respect.
B. Amendments of Documents Relating to Other Indebtedness.
Borrowers shall not, and shall not permit any of their Subsidiaries to, amend or
otherwise change the terms of any Financing Agreements (other than the Loan
Documents) or permit the termination thereof (other than in accordance with the
terms thereof), or enter into any new Financing Agreements or make any payment
consistent with an amendment thereof or change thereto, if the effect of such
amendment or change is to increase the interest rate or fees on such Other
Indebtedness, change (to earlier dates) any dates upon which payments of
principal or interest are due thereon, change any event of default or condition
to an event of default with respect thereto (other than to eliminate any such
event of default or increase any grace period related thereto or otherwise
change such event of default in a manner more favorable to the Borrower or such
Subsidiary than the existing event of default), change the commitment
thereunder, change the redemption, prepayment or defeasance provisions thereof,
change the subordination provisions thereof (or of any guaranty thereof), or
change any collateral therefor (other than to release such collateral), or if
the effect of such amendment or change, together with all other amendments or
changes made, is to increase materially the obligations of the obligor
thereunder or to confer any additional rights on the holders of the Indebtedness
or obligations evidenced thereby (or a trustee or other representative on their
behalf) which would be materially adverse to Borrowers, such Subsidiary or
Lenders, provided, that (i) Borrowers may modify the terms of the Interim Mall
Credit Facility or any agreement relating thereto to the extent expressly
permitted by the Intercreditor Agreement, (ii) Borrowers may amend the terms of
any other Financing Agreement solely to increase the principal amount thereof to
the extent expressly permitted by the Intercreditor Agreement and (iii)
Borrowers may enter into an Approved Equipment Funding Commitment to the extent
permitted by the definition of such term and may amend, supplement or terminate
an existing Approved Equipment Funding Commitment for the purpose of replacing
all or a portion of it with such new Approved Equipment Funding Commitment.
C. Certain Other Restrictions on Amendments. Borrowers shall not,
and shall not permit any of their Subsidiaries to, agree to any material
amendment to, or waive any of its material rights under the Cooperation
Agreement which would require the consent of the Administrative Agent pursuant
to Article XIV, Section 26 thereof, including, but not limited to, any material
amendment to, or any waiver of material rights under Article III, Sections 1 and
3, Article IV, Section 1, Article IX(b)-(e), Articles X-XII and Article XIV,
Sections 1, 3, 4, 6, 7, 8, 14 and 26, without obtaining the prior written
consent of the Administrative Agent, which consent shall not be unreasonably
withheld or delayed.
D. Consent to Certain Agreements. Notwithstanding the foregoing
provisions of this subsection 7.13, on or after the Closing Date, Borrowers may
enter into (i) the HVAC Services Agreement (and any amendments thereto), (ii)
the FF&E Facility Agreement (2001) (and any amendments thereto) and (iii) the
Cooperation Agreement (and any amendments thereto), in each case, in form and
substance satisfactory to the Administrative Agent; and (iv) the Fourth
Amendment to Term Loan and Security Agreement to be entered into among the FF&E
Lenders, Venetian and LVSI, either on (x) the terms set forth in Exhibit XXI and
such other terms as are satisfactory in form and substance to the Administrative
Agent or (y) such terms as are satisfactory in form and substance to the
Administrative Agent. The Administrative Agent is hereby authorized by the
Lenders and the Arranger to execute, deliver and perform that certain amended
and restated Conforming ▇▇▇▇▇▇▇ L/C Drawing Agreement (the "Amended and Restated
Conforming ▇▇▇▇▇▇▇ L/C Drawing Agreement") in substantially the form of Exhibit
XX attached hereto and to request the release of the Conforming ▇▇▇▇▇▇▇ L/C held
on the date hereof by the Conforming ▇▇▇▇▇▇▇ L/C Drawing Agent in accordance
with the terms of the Amended and Restated Conforming ▇▇▇▇▇▇▇ L/C Drawing
Agreement.
7.14 Consolidated Capital Expenditures.
---- ----------------------------------
Borrowers shall not, and shall not permit their Subsidiaries to,
make or incur Consolidated Capital Expenditures, in any four Fiscal Quarter
period indicated below, in an aggregate amount in excess of the corresponding
amount (the "Maximum Consolidated Capital Expenditures Amount") set forth below
opposite such four Fiscal Quarter period; provided that the Maximum Consolidated
Capital Expenditures Amount for any four Fiscal Quarters shall be increased by
88
an amount equal to the excess, if any, of the Maximum Consolidated Capital
Expenditures Amount for the previous four Fiscal Quarter period over the actual
amount of Consolidated Capital Expenditures for such previous four Fiscal
Quarter period:
Maximum
Four Fiscal Consolidated Capital
Quarter Expenditures Amount
==================================== ====================
Fiscal Quarter ending December 31, $15,000,000
1999, Fiscal Quarter ending March
31, 2000, Fiscal Quarter ending June
30, 2000 and Fiscal Quarter ending
September 30, 2000
Fiscal Quarter ending December 31, $25,000,000
2000, Fiscal Quarter ending March
31, 2001 and Fiscal Quarter ending
June 30, 2001
Fiscal Quarter ending September 30, $33,000,000
2001, Fiscal Quarter ending December
31, 2001, Fiscal Quarter ending
March 31, 2002, Fiscal Quarter
ending June 30, 2002, Fiscal Quarter
ending September 30, 2002, Fiscal
Quarter ending December 31, 2002,
Fiscal Quarter ending March 31, 2003
and Fiscal Quarter ending June 30,
2003
;provided further (x) that the aggregate amount of construction costs expended
by Borrowers on the Guggenheim Project shall not exceed $38,000,000, and (y) the
aggregate amount of construction costs expended by Borrowers on the construction
of the Phase I-A Tower and expansion of the parking garage described under
clause (ii) of the definition of Phase I-A Tower (excluding any costs associated
with the construction of the HVAC Component incurred pursuant any HVAC Services
Agreements) shall not exceed $30,000,000; provided, however, that upon the
execution by all parties thereto of the Lido Facility Agreement, the HVAC
Services Agreement (as it relates to the Phase I-A Tower) and the Fourth
Amendment to Term Loan Agreement and Security Agreement and with the consent of
Lenders having or holding at least 66 2/3% of the sum of the aggregate Loans and
unused Commitment of all Lenders, such amount described in clause (y) shall be
increased to $250,000,000.
7.15 Fiscal Year.
---- ------------
Neither Borrower shall change its Fiscal Year-end from December
31.
7.16 Zoning and Contract Changes and Compliance.
---- -------------------------------------------
Without the prior written approval of the Administrative Agent,
the Borrowers shall not, and shall not permit any of their Subsidiaries to,
initiate or consent to any zoning downgrade of the Mortgaged Property or seek
any material variance under any existing zoning ordinance or use or permit the
use of the Mortgaged Property in any manner that could result in such use
becoming a non-conforming use (other than a non-conforming use permissible under
automatic grandfathering provisions) under any zoning ordinance or any other
applicable land use law, rule or regulation. The Borrowers shall not, and shall
not permit any of their Subsidiaries to, initiate or consent to any change in
any laws, requirements of Governmental Authorities or obligations created by
private contracts which now or hereafter could reasonably be likely to
materially and adversely affect the ownership, occupancy, use or operation of
the Mortgaged Property without the prior written consent of the Administrative
Agent.
7.17 No Joint Assessment; Separate Lots.
---- -----------------------------------
Without the prior written approval of the Administrative Agent,
which approval may be granted, withheld, conditioned or delayed in its sole
discretion, the Borrowers shall not suffer, permit or initiate, and shall not
permit any of their Subsidiaries to, suffer, permit or initiate, the joint
assessment of the Mortgaged Property (i) with any other real property
constituting a separate tax lot and (ii) with any portion of the Mortgaged
Property which may be deemed to constitute personal property, or any other
procedure whereby the lien of any Taxes which may be levied against any such
personal property shall be assessed or levied or charged to the Mortgaged
89
Property as a single lien. The Mortgaged Property is comprised of one or more
parcels, each of which, to the knowledge of the Borrowers, constitutes a
separate tax lot and none of which constitutes a portion of any other tax lot.
7.18 Certain Covenants Applicable to New Mall Subsidiary and Other Mall
---- ------------------------------------------------------------------
Related Companies.
------------------
A. Line of Business. Borrowers shall not permit New Mall
Subsidiary to engage in any business other than (i) acquiring, developing,
constructing, owning, holding, managing, marketing and operating of the Mall,
(ii) any activity and business incidental, directly related or similar thereto,
and (iii) engaging in any business or activity that is a reasonable extension,
development or expansion thereof or ancillary thereto including any retail,
restaurant, entertainment or other activity or business designed to promote,
market, support, develop, construct or enhance the retail, restaurant and
entertainment business of the Mall (including, owning and operating joint
ventures to supply materials or services for the construction or operation of
the Mall). Borrowers shall not permit Mall Direct Holdings, Mall Subsidiary or
Mall Manager to engage in any business or any transaction except (i) Mall Direct
Holdings may hold equity interests in Mall Subsidiary, (ii) Mall Subsidiary may
hold equity interests in New Mall Subsidiary, (iii) Mall Manager may hold a 1%
managing membership interest in Mall Direct Holdings and Mall Subsidiary and may
own the equity interests in New Mall Manager and (iv) New Mall Manager may hold
a 1% managing membership interest in New Mall Subsidiary.
B. Restrictions on Investment. Borrowers shall not permit New
Mall Subsidiary to purchase or acquire any Securities, loan, advance, capital
contribution or other investment of any kind except (i) advances to employees
for moving, entertainment and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business, (ii) any such investments in
Cash Equivalents and similar liquid Investments permitted under the Financing
Agreements to which it is a party; (iii) any investments in Joint Ventures with
third parties to develop and operate restaurants in the Mall in an aggregate
amount not to exceed $5,000,000 at any time; (iv) other such investments
reasonably necessary for the operation, maintenance and improvement of the Mall
in an aggregate amount not to exceed $2,500,000 at any time; (v) loans or
advances to employees made in the ordinary course of business of the New Mall
Subsidiary in an aggregate amount not to exceed $500,000 at any time; and (vi)
stock, obligations or securities received in settlement of debts created in the
ordinary course of business and owing to New Mall Subsidiary or in satisfaction
of judgments.
C. Affiliate Transactions. Borrowers shall not permit New Mall
Subsidiary to, directly or indirectly, enter into or permit to exist any
transaction (including the purchase, sale, lease or exchange of any property or
the rendering of any service), with any holder of 5% or more of any class of
equity Securities of any Borrower or New Mall Subsidiary or with any Affiliate
of a Borrower or New Mall Subsidiary or any such holder, provided that New Mall
Subsidiary may enter into or permit to exist (i) transactions that are not less
favorable to New Mall Subsidiary than those that might be obtained at the time
from Persons who are not such a holder or Affiliate if Borrowers have delivered
to Administrative Agent (a) with respect to any transaction involving an amount
in excess of $500,000, an Officers Certificate certifying that such transaction
complies with this clause (i), (b) with respect to any transaction involving an
amount in excess of $1,000,000, a resolution adopted by a majority of the
disinterested non-employee directors of the Borrowers approving such transaction
and an Officers Certificate certifying that such transaction complies with this
clause (i) and (c) with respect to any such transaction that involves aggregate
payments in excess of $10,000,000 or that is a loan transaction involving a
principal amount in excess of $10,000,000, an opinion as to the fairness to New
Mall Subsidiary from a financial point of view issued by an Independent
Financial Advisor at the time such transaction is entered into, (ii)
transactions contemplated or permitted by the Sale and Contribution Agreement,
the Second Sale and Contribution Agreement dated December 20, 1999 between Mall
Subsidiary and New Mall Subsidiary, the Permanent Mall Loan Agreement as in
effect on the date hereof, the HVAC Services Agreements, the Services Agreement,
the Restaurant Leases, the Billboard Master Lease and the other Master Leases
(as defined in that certain FADAA Limited Waiver dated as of November 12, 1999
among inter alia Borrowers, Mall Construction Subsidiary and Scotiabank as bank
agent) and the Cooperation Agreement, (v) any guarantees by ▇▇▇▇▇▇▇ of
Indebtedness of New Mall Subsidiary, (vi) purchases of materials or services
from a Joint Venture Supplier by the New Mall Subsidiary in the ordinary course
of business on arm's length terms; (vii) any employment, indemnification,
noncompetition or confidentiality agreement entered into by New Mall Subsidiary
with its employees or directors in the ordinary course of business, (viii) loans
or advances to employees of New Mall Subsidiary, but in any event not to exceed
$500,000 in the aggregate outstanding at any one time and (ix) the payment of
reasonable fees to directors of New Mall Subsidiary or its managing member who
are not employees of New Mall Subsidiary.
D. Restricted Junior Payments. Borrowers shall not permit New
Mall Subsidiary, Mall Subsidiary, Mall Direct Holdings, Mall Manager or New Mall
Manager (the "Excluded Mall Subsidiaries") to make any payments or distributions
which would constitute Restricted Junior Payments described in clauses (i)
90
through (iii) inclusive of the definition of Restricted Junior Payments if the
reference to Borrower in each such clause were a reference to the applicable
Excluded Mall Subsidiary unless such payments or distributions are made (i) to
the Borrowers or their Subsidiaries or another Excluded Mall Subsidiary (for
further distribution to Borrowers or their Subsidiaries) or (ii) pro rata on all
equity interests of the applicable Excluded Mall Subsidiary (so that Borrowers
receive a portion of such payment or distribution equal to the direct or
indirect ownership interest of Borrowers in such Excluded Mall Subsidiary).
7.19 Limitation on Declaration of Restricted Subsidiaries.
---- -----------------------------------------------------
Borrowers shall not declare or permit to be designated as a
"Restricted Subsidiary" under either of the Mortgage Note Indenture or
Subordinated Notes Indenture any Affiliate which is an Excluded Subsidiary.
7.20 Payments to ▇▇▇▇▇▇▇.
---- --------------------
Borrowers shall not directly or indirectly make any payment to or
for the benefit of ▇▇▇▇▇▇▇ until the Additional Contingent Claims shall be
finally determined and paid in full except for (i) payments made pursuant to and
as permitted by the ▇▇▇▇▇▇▇ Subordination Agreement, (ii) payments made in
respect of ▇▇▇▇▇▇▇'▇ taxes, salary and as reimbursement for reasonable expenses,
in each case, if and to the extent permitted under the Facility Agreements, and
(iii) payments made to Affiliates that are required under the Cooperation
Agreement or any other arm's-length agreement entered into with an Affiliate,
provided that nothing contained herein shall be deemed to permit any such
payment to or for the benefit of ▇▇▇▇▇▇▇ if such payment shall be otherwise
prohibited or restricted under any other provision of this Agreement (including,
without limitation, subsections 7.5 or 7.10) or any other agreement or document.
7.21 Interest Payments.
---- ------------------
On or prior to October 22, 2001, the Borrowers agree to provide a
$12.5 million letter of credit (which amount shall be reduced on a quarterly
basis to reflect interest payments made) to the Lenders to support interest
payments on the Loans through October 31, 2002 on terms satisfactory to the
Administrative Agent and issued by a financial institution acceptable to the
Administrative Agent; provided, however that such letter of credit shall be
released upon the earlier of (x) October 31, 2002 or (y) immediately following
the first Fiscal Quarter period ending after September 30, 2001 in which
Consolidated Adjusted EBITDA equals or exceeds $30 million for such Fiscal
Quarter period (without giving effect to cash equity contributions made by
▇▇▇▇▇▇▇ or any of his Affiliates to Borrowers or any Conforming ▇▇▇▇▇▇▇ L/C) so
long as no Event of Default or Default is existing and continuing on such date.
Section 8. EVENTS OF DEFAULT
If any of the following conditions or events set forth in
subsections 8.1 through 8.20 inclusive below shall occur or if prior to the
Final Completion Date any Disbursement Agreement Event of Default shall occur
(any such conditions or events collectively "Events of Default"):
8.1 Failure to Make Payments When Due.
--- ----------------------------------
Failure by Borrowers to pay any installment of principal on any
Loan when due, whether at stated maturity, by acceleration, by notice of
voluntary prepayment, by mandatory prepayment or otherwise; failure by Borrowers
to pay when due any amount payable to an Issuing Lender in reimbursement of any
drawings; or failure by Borrowers to pay any interest on any Loan or any fee or
any other amount due under this Agreement within five days after the date due;
or
8.2 Default under Other Indebtedness or Contingent Obligations.
--- -----------------------------------------------------------
(i) Failure of any Borrower or any of its Subsidiaries, to pay
when due any principal of or interest on or any other amount payable in respect
of one or more items of Indebtedness (other than Indebtedness referred to in
subsection 8.1) or Contingent Obligations in an individual principal amount of
$2,500,000 or more or with an aggregate principal amount of $5,000,000 or more,
in each case beyond the end of any grace period provided therefor; or (ii)
breach or default by any Borrower or any of its Subsidiaries with respect to any
other material term of (a) one or more items of Indebtedness or Contingent
Obligations in the individual or aggregate principal amounts referred to in
clause (i) above or (b) any loan agreement, mortgage, indenture or other
agreement relating to such item(s) of Indebtedness or Contingent Obligation(s),
if the effect of such breach or default is to cause, or to permit the holder or
holders of that Indebtedness or Contingent Obligation(s) (or a trustee on behalf
of such holder or holders) to cause, that Indebtedness or Contingent
Obligation(s) to become or be declared due and payable prior to its stated
maturity or the stated maturity of any underlying obligation, as the case may be
(upon the giving or receiving of notice, lapse of time, both, or otherwise); or
91
8.3 Breach of Certain Covenants.
--- ----------------------------
Failure of Loan Parties to perform or comply with any term or
condition contained in subsection 2.5 or 6.2 or Section 7 of this Agreement
provided that the failure to perform or comply with any such provision
incorporated by reference from the Disbursement Agreement shall constitute an
Event of Default hereunder only to the extent such failure to perform or comply
constitutes a Disbursement Agreement Event of Default; or
8.4 Breach of Warranty.
--- -------------------
Any representation, warranty, certification or other statement
made by Borrowers or any of their Subsidiaries in any Loan Document or in any
statement or certificate at any time given by Borrowers or any of their
Subsidiaries in writing pursuant hereto or thereto or in connection herewith or
therewith shall be false in any material respect on the date as of which made
provided that the failure to perform or comply with any such provision
incorporated by reference from the Disbursement Agreement shall constitute an
Event of Default hereunder only to the extent such failure to perform or to
comply constitutes a Disbursement Agreement Event of Default; or
8.5 Other Defaults Under Loan Documents.
--- ------------------------------------
Any Loan Party shall default in the performance of or compliance
with any term contained in this Agreement or any of the other Loan Documents,
other than any such term referred to in any other subsection of this Section 8,
and such default shall not have been remedied or waived within 30 days after the
earlier of (i) an officer of Borrowers or such Loan Party becoming aware of such
default or (ii) receipt by Borrowers and such Loan Party of notice from
Administrative Agent or any Lender of such default provided that the failure to
perform or comply with any such provision incorporated by reference from the
Disbursement Agreement shall constitute an Event of Default hereunder only to
the extent such failure to perform or comply constitutes a Disbursement
Agreement Event of Default; or
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.
--- -----------------------------------------------------
(i) A court having jurisdiction in the premises shall enter a
decree or order for relief in respect of a Borrower or any of its Subsidiaries
in an involuntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, which decree
or order is not stayed; or any other similar relief shall be granted under any
applicable federal or state law; or (ii) an involuntary case shall be commenced
against a Borrower or any of its Subsidiaries, under the Bankruptcy Code or
under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect; or a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over a Borrower or any of its
Subsidiaries, or over all or a substantial part of its property, shall have been
entered; or there shall have occurred the involuntary appointment of an interim
receiver, trustee or other custodian of a Borrower or any of its Subsidiaries,
for all or a substantial part of its property; or a warrant of attachment,
execution or similar process shall have been issued against any substantial part
of the property of a Borrower or any of its Subsidiaries, and any such event
described in this clause (ii) shall continue for 60 days unless dismissed,
bonded or discharged; or
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.
--- ---------------------------------------------------
(i) A Borrower or any of its Subsidiaries shall have an order for
relief entered with respect to it or commence a voluntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, or shall consent to the entry of an order for
relief in an involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such law, or shall consent to the appointment of or
taking possession by a receiver, trustee or other custodian for all or a
substantial part of its property; or a Borrower or any of its Subsidiaries shall
make any assignment for the benefit of creditors; or (ii) a Borrower or any of
its Subsidiaries shall be unable, or shall fail generally, or shall admit in
writing its inability, to pay its debts as such debts become due and in each
case a period of 30 days shall have elapsed; or the Board of Directors of a
Borrower or any of its Subsidiaries (or any committee thereof) or of its
managing member shall adopt any resolution or otherwise authorize any action to
approve any of the actions referred to in clause (i) above or this clause (ii);
or
8.8 Judgments and Attachments.
--- --------------------------
Any money judgment, writ or warrant of attachment or similar
process involving (i) in any individual case an amount in excess of $2,500,000
or (ii) in the aggregate at any time an amount in excess of $5,000,000 (in
92
either case not adequately covered by insurance as to which a solvent and
unaffiliated insurance company has acknowledged coverage) shall be entered or
filed against a Borrower or any of its Subsidiaries or any of their respective
assets and shall remain unpaid and undischarged, unvacated, unbonded or unstayed
for a period of 60 days (or in any event later than five days prior to the date
of any proposed sale thereunder); or
8.9 Dissolution.
--- ------------
Any order, judgment or decree shall be entered against a Borrower
or any of its Subsidiaries decreeing the dissolution or split up of such Person
and such order shall remain undischarged or unstayed for a period in excess of
30 days; or
8.10 Employee Benefit Plans.
---- -----------------------
There shall occur one or more ERISA Events which individually or
in the aggregate results in or might reasonably be expected to result in
liability of a Borrower, or any of its Subsidiaries or any of their respective
ERISA Affiliates in excess of $2,500,000 during the term of this Agreement; or
there shall exist an amount of unfunded benefit liabilities (as defined in
Section 4001(a)(18) of ERISA), individually or in the aggregate for all Pension
Plans (excluding for purposes of such computation any Pension Plans with respect
to which assets exceed benefit liabilities), which exceeds $5,000,000; or
8.11 Change in Control.
---- ------------------
As a result of any sale, pledge or other transfer, either (a)
▇▇▇▇▇▇▇ and the Related Parties shall cease to beneficially own and control
directly or indirectly at least 70% of the issued and outstanding shares of
capital stock of LVSI, entitled (without regard to the occurrence of any
contingency) to vote for the election of members of the Board of Directors of
LVSI; (b) ▇▇▇▇▇▇▇ or any Related Party (as applicable but excluding any of the
persons specified in clause (ii) of the definition of Related Parties) shall not
have invested the proceeds of any sale, or transfer of shares of LVSI by ▇▇▇▇▇▇▇
or any Related Party (as applicable) in the business of Borrowers (including any
Excluded Subsidiary) or (c) LVSI shall cease to own 100% of the equity
Securities of Venetian other than any preferred equity of Venetian owned by
Interface or another Affiliate of ▇▇▇▇▇▇▇ or (d) Borrowers shall cease to own
100% of the equity securities of each of their Subsidiaries, Mall Manager and
Phase II Manager, (e) Mall Manager and Mall Holdings together shall cease to own
100% of Mall Direct Holdings and Phase II Holdings and Phase II Manager together
shall cease to own 100% of Phase II Direct Holdings, (f) Mall Direct Holdings
shall cease to own not less than 99% of the equity securities in Mall Subsidiary
or (g) Mall Subsidiary shall cease to own not less than 80% of the equity
securities in New Mall Subsidiary or (h) Mall Manager shall cease to own not
less than 100% of the equity securities in New Mall Manager or (i) Phase II
Direct Holdings shall cease to own at least 51% of the equity securities in
Phase II Subsidiary or (j) the sole managing member of Mall Direct Holdings,
Phase II Direct Holdings, Intermediate Holding Companies, Mall Subsidiary and
Phase II Subsidiary shall cease to be LVSI, Venetian or (directly or indirectly)
a wholly-owned Subsidiary of LVSI or Venetian or (k) the sole managing member of
New Mall Subsidiary shall cease to be LVSI, Venetian, or (directly or
indirectly) a wholly-owned Subsidiary of LVSI or Venetian or (l) any "Change of
Control" (as defined in either of the Indentures) shall occur; or
8.12 Failure of Guaranty; Repudiation of Obligations.
---- ------------------------------------------------
At any time after the execution and delivery thereof, (i) the
Subsidiary Guaranty for any reason, other than the satisfaction in full of all
Obligations, shall cease to be in full force or effect (other than in accordance
with its terms), or shall be declared null and void by a Governmental
Instrumentality of competent jurisdiction, (ii) any Collateral Document shall
cease to be in full force and effect (other than by reason of a release of
Collateral thereunder in accordance with the terms hereof or thereof, the
satisfaction in full of the Obligations or any other termination of such
Collateral Document in accordance with the terms hereof or thereof) or shall be
declared null and void by a Governmental Instrumentality of competent
jurisdiction, or Administrative Agent shall not have or shall cease to have a
valid and perfected First Priority Lien in the First Priority Collateral for any
reason other than the failure of Administrative Agent or any Lender to take any
action within its control, or (iii) any Loan Party shall contest the validity or
enforceability of any Loan Document in writing or deny in writing that it has
any further liability prior to the indefeasible payment in full of all
Obligations, the cancellation of all outstanding Letters of Credit and the
termination of all Commitments, including with respect to future advances by
Lenders, under any Loan Document to which it is a party or (vi) the
subordination provisions in the Subordinated Notes, the Employee Repurchase
Notes, any Completion Guaranty Note or in any other instrument required under
any provision of this Agreement to be subordinated to the Obligations shall
cease to be enforceable against the holder thereof; or
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8.13 Default Under or Termination of Operative Documents.
---- ----------------------------------------------------
Any of the Operative Documents shall terminate or be terminated
or canceled, prior to its stated expiration date or either Borrower shall be in
default (after the giving of any applicable notice and the expiration of any
applicable grace period) or any Affiliate of the Borrowers shall be in default
(after the giving of any applicable notice and the expiration of any applicable
grace period) under any of the Operative Documents; provided that a default or
termination under any Project Document shall constitute an Event of Default
hereunder only if such default or termination may reasonably be expected to
cause a Material Adverse Effect; or
8.14 Default Under or Termination of Permits.
---- ----------------------------------------
A Borrower or any of its Subsidiaries shall fail to observe,
satisfy or perform, or there shall be a violation or breach of, any of the
material terms, provisions, agreements, covenants or conditions attaching to or
under the issuance to such Person of any material Permit, including the gaming
license held by LVSI or any such Permit or any material provision thereof shall
be terminated or fail to be in full force and effect or any Governmental
Instrumentality shall challenge or seek to revoke any such Permit if such
failure to perform, breach or termination could reasonably be expected to have a
Material Adverse Effect; or
8.15 Default Under or Termination of Cooperation Agreement.
---- ------------------------------------------------------
Any default by Interface shall occur under Article III, Section 3
of the Cooperation Agreement beyond any applicable notice or cure periods; or
8.16 Bankruptcy or Dissolution of New Mall Subsidiary.
---- -------------------------------------------------
Any event or circumstance described under subsections 8.6 or 8.7
hereof shall occur with respect to New Mall Subsidiary, Mall Subsidiary, New
Mall Manager, Mall Manager or Mall Direct Holdings which would constitute an
Event of Default if such Excluded Subsidiary were a Subsidiary of Borrowers for
purposes of those subsections; or
8.17 Acceleration of Obligations of New Mall Subsidiary.
---- ---------------------------------------------------
New Mall Subsidiary shall be in breach or default with respect to
any term of one or more items or Indebtedness or Contingent Obligation(s) in an
individual principal amount of $2,500,000 or more or an aggregate principal
amount of $5,000,000 or more, if as result thereof the holders of such
Indebtedness or Contingent Obligations) (or an agent or trustee acting on their
behalf) have caused that Indebtedness or Contingent Obligation(s) to become due
and payable prior to its stated maturity or the stated maturity of any
underlying obligation, as the case may be; or
8.18 Certain Investments in any Excluded Subsidiary.
---- -----------------------------------------------
▇▇▇▇▇▇▇ or any of his Affiliates (other than Borrowers and their
wholly-owned Subsidiaries) shall acquire or hold any Investment in any Excluded
Subsidiary or any Person which any Excluded Subsidiary controls or holds an
Investment other than (a) in the case of New Mall Subsidiary or Phase II
Subsidiary, through transactions expressly permitted under subsection 7.18 or
purchases of public debt securities in the secondary market and (b) in the case
of Phase II Subsidiary or any of its subsidiaries, investments arising through
loans, completion guaranties or other guaranties substantially similar to those
provided in connection with the development of the Project and permitted under
clause (a) of this subsection 8.18; or
8.19 Conforming ▇▇▇▇▇▇▇ L/C.
---- -----------------------
Except as released as permitted under subsections 2.4B(iii)(n)
and Section 7.13, any Conforming ▇▇▇▇▇▇▇ L/C shall cease to be in full force and
effect at any time prior to twenty-four (24) months from and after the date of
its delivery to Drawing Agent other than following a drawing in full by Drawing
Agent or, if permitted under the definition of Conforming ▇▇▇▇▇▇▇ L/C Draw
Event, the replacement of such Conforming ▇▇▇▇▇▇▇ L/C with a cash equity
contribution in Borrowers in the amount of the Conforming ▇▇▇▇▇▇▇ L/C; or
8.20 Default Under or Termination of the Phase II Lease.
---- ---------------------------------------------------
Any default occurring after the expiration of applicable grace
periods under the lease to be entered into by Phase II Subsidiary, as lessor,
and Venetian, as lessee, for the Phase II Land and the conference center to be
constructed thereon in form and substance satisfactory to Scotiabank, as
Administrative Agent, in its sole discretion ("Phase II Lease"), whereby such
94
lease shall terminate or be terminated or cancelled prior to the stated
expiration date therefor.
THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans, (b) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not any beneficiary
under any such Letter of Credit shall have presented, or shall be entitled at
such time to present, the drafts or other documents or certificates required to
draw under such Letter of Credit), and (c) all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by Borrowers, and the obligation of each Lender to make any Loan, the
obligation of Administrative Agent to issue any Letter of Credit and the right
of any Lender to issue any Letter of Credit hereunder shall thereupon terminate,
and (ii) upon the occurrence and during the continuation of any other Event of
Default, Administrative Agent shall, upon the written request or with the
written consent of Requisite Lenders, by written notice to Borrowers, declare
all or any portion of the amounts described in clauses (a) and (b) above to be,
and the same shall forthwith become, immediately due and payable, and the
obligation of each Lender to make any Loan, the obligation of Administrative
Agent to issue any Letter of Credit and the right of any Lender to issue any
Letter of Credit hereunder shall thereupon terminate; provided that the
foregoing shall not affect in any way the obligations of Lenders under
subsection 3.3C(i).
Any amounts described in clause (b) above, when received by
Administrative Agent, shall be held by Administrative Agent pursuant to a cash
collateral arrangement reasonably satisfactory to Administrative Agent.
Notwithstanding anything contained in the preceding paragraph, if at any time
within 60 days after an acceleration of the Loans pursuant to clause (ii) of
such paragraph Borrowers shall pay all arrears of interest and all payments on
account of principal which shall have become due otherwise than as a result of
such acceleration (with interest on principal and, to the extent permitted by
law, on overdue interest, at the rates specified in this Agreement) and all
Events of Default and Potential Events of Default (other than non-payment of the
principal of and accrued interest on the Loans, in each case which is due and
payable solely by virtue of acceleration) shall be remedied or waived pursuant
to subsection 10.6, then Requisite Lenders, by written notice to Borrowers, may
at their option rescind and annul such acceleration and its consequences; but
such action shall not affect any subsequent Event of Default or Potential Event
of Default or impair any right consequent thereon. The provisions of this
paragraph are intended merely to bind Lenders to a decision which may be made at
the election of Requisite Lenders and are not intended, directly or indirectly,
to benefit Borrowers, and such provisions shall not at any time be construed so
as to grant Borrowers the right to require Lenders to rescind or annul any
acceleration hereunder or to preclude Administrative Agent or Lenders from
exercising any of the rights or remedies available to them under any of the Loan
Documents, even if the conditions set forth in this paragraph are met.
Section 9. AGENTS
9.1 Appointment.
--- ------------
A. Appointment of Administrative Agent. Scotiabank is hereby
appointed Administrative Agent hereunder and under the other Loan Documents and
each Lender hereby authorizes Administrative Agent to act as its agent in
accordance with the terms of this Agreement and the other Loan Documents.
Scotiabank is hereby further appointed Arranger hereunder and under the other
Loan Documents and each Lender hereby authorizes Arranger to act as its agent in
accordance with the terms of this Agreement and the other Loan Documents. Each
Agent agrees to act upon the express conditions contained in this Agreement and
the other Loan Documents, as applicable. The provisions of this Section 9 are
solely for the benefit of each Agent and Lenders; Borrowers shall have no rights
as a third party beneficiary of any of the provisions thereof. In performing its
functions and duties under this Agreement, each Agent shall act solely as an
agent of Lenders and does not assume and shall not be deemed to have assumed any
obligation towards or relationship of agency or trust with or for Borrowers or
any of their Subsidiaries. Upon the Closing Date all obligations of Arranger
hereunder shall terminate.
B. Appointment of Supplemental Agents. It is the purpose of this
Agreement and the other Loan Documents that there shall be no violation of any
law of any jurisdiction denying or restricting the right of banking corporations
or associations to transact business as agent or trustee in such jurisdiction.
It is recognized that in case of litigation under this Agreement or any of the
other Loan Documents, and in particular in case of the enforcement of any of the
Loan Documents, or in case any Agent deems that by reason of any present or
future law of any jurisdiction it may not exercise any of the rights, powers or
remedies granted herein or in any of the other Loan Documents or take any other
action which may be desirable or necessary in connection therewith, it may be
necessary that such Agent appoint an additional individual or institution as a
95
separate trustee, co-trustee, collateral agent or collateral co-agent (any such
additional individual or institution being referred to herein individually as a
"Supplemental Agent" and collectively as "Supplemental Agents").
In the event that an Agent appoints a Supplemental Agent with
respect to any Collateral, (i) each and every right, power, privilege or duty
expressed or intended by this Agreement or any of the other Loan Documents to be
exercised by or vested in or conveyed to an Agent with respect to such
Collateral shall be exercisable by and vest in such Supplemental Agent to the
extent, and only to the extent, necessary to enable such Supplemental Agent to
exercise such rights, powers and privileges with respect to such Collateral and
to perform such duties with respect to such Collateral, and every covenant and
obligation contained in the Loan Documents and necessary to the exercise or
performance thereof by such Supplemental Agent shall run to and be enforceable
by either such Agent or such Supplemental Agent, and (ii) the provisions of this
Section 9 and of subsections 10.2 and 10.3 that refer to Agent shall inure to
the benefit of such Supplemental Agent and all references therein to Agent shall
be deemed to be references to Administrative Agent and/or such Supplemental
Agent, as the context may require.
Should any instrument in writing from Borrowers or any other Loan
Party be required by any Supplemental Agent so appointed for more fully and
certainly vesting in and confirming to him or it such rights, powers, privileges
and duties, Borrowers shall, or shall cause such Loan Party to, execute,
acknowledge and deliver any and all such instruments promptly upon request by
the appropriate Agent. In case any Supplemental Collateral Agent, or a successor
thereto, shall die, become incapable of acting, resign or be removed, all the
rights, powers, privileges and duties of such Supplemental Agent, to the extent
permitted by law, shall vest in and be exercised by Administrative Agent until
the appointment of a new Supplemental Agent.
9.2 Powers and Duties; General Immunity.
--- ------------------------------------
▇. ▇▇▇▇▇▇; Duties Specified. Each Lender irrevocably authorizes
Administrative Agent to take such action on such Lender's behalf and to exercise
such powers, rights and remedies hereunder and under the other Loan Documents as
are specifically delegated or granted to Administrative Agent by the terms
hereof and thereof, together with such powers, rights and remedies as are
reasonably incidental thereto. Administrative Agent shall have only those duties
and responsibilities that are expressly specified in this Agreement and the
other Loan Documents. Administrative Agent may exercise such powers, rights and
remedies and perform such duties by or through its agents or employees.
Administrative Agent shall not have, by reason of this Agreement or any of the
other Loan Documents, a fiduciary relationship in respect of any Lender; and
nothing in this Agreement or any of the other Loan Documents, expressed or
implied, is intended to or shall be so construed as to impose upon
Administrative Agent any obligations in respect of this Agreement or any of the
other Loan Documents except as expressly set forth herein or therein.
B. No Responsibility for Certain Matters. Administrative Agent
shall not be responsible to any Lender for the execution, effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency of this
Agreement or any other Loan Document or for any representations, warranties,
recitals or statements made herein or therein or made in any written or oral
statements or in any financial or other statements, instruments, reports or
certificates or any other documents furnished or made by Administrative Agent to
Lenders or by or on behalf of Borrowers to Administrative Agent or any Lender in
connection with the Loan Documents and the transactions contemplated thereby or
for the financial condition or business affairs of Borrowers or any other Person
liable for the payment of any Obligations, nor shall Administrative Agent be
required to ascertain or inquire as to the performance or observance of any of
the terms, conditions, provisions, covenants or agreements contained in any of
the Loan Documents or as to the use of the proceeds of the Loans or the use of
the Letters of Credit or as to the existence or possible existence of any Event
of Default or Potential Event of Default. Anything contained in this Agreement
to the contrary notwithstanding, Administrative Agent shall not have any
liability arising from confirmations of the amount of outstanding Loans or the
Letter of Credit Usage or the component amounts thereof.
C. Exculpatory Provisions. Neither Administrative Agent nor any
of its officers, directors, employees or agents shall be liable to Lenders for
any action taken or omitted by Administrative Agent under or in connection with
any of the Loan Documents except to the extent caused by Administrative Agent's
gross negligence or willful misconduct. Administrative Agent shall be entitled
to refrain from any act or the taking of any action (including the failure to
take an action) in connection with this Agreement or any of the other Loan
Documents or from the exercise of any power, discretion or authority vested in
it hereunder or thereunder unless and until Administrative Agent shall have
received instructions in respect thereof from Requisite Lenders (or such other
Lenders as may be required to give such instructions under subsection 10.6) and,
upon receipt of such instructions from Requisite Lenders (or such other Lenders,
as the case may be), Administrative Agent shall be entitled to act or (where so
instructed) refrain from acting, or to exercise such power, discretion or
authority, in accordance with such instructions. Without prejudice to the
generality of the foregoing, (i) Administrative Agent shall be entitled to rely,
96
and shall be fully protected in relying, upon any communication, instrument or
document believed by it to be genuine and correct and to have been signed or
sent by the proper person or persons, and shall be entitled to rely and shall be
protected in relying on opinions and judgments of attorneys (who may be
attorneys for Borrowers and their Subsidiaries), accountants, experts and other
professional advisors selected by it; and (ii) no Lender shall have any right of
action whatsoever against Administrative Agent as a result of Administrative
Agent acting or (where so instructed) refraining from acting under this
Agreement or any of the other Loan Documents in accordance with the instructions
of Requisite Lenders (or such other Lenders as may be required to give such
instructions under subsection 10.6).
D. Administrative Agent Entitled to Act as Lender. The agency
hereby created shall in no way impair or affect any of the rights and powers of,
or impose any duties or obligations upon, Administrative Agent in its individual
capacity as a Lender hereunder. With respect to its participation in the Loans
and the Letters of Credit, Administrative Agent shall have the same rights and
powers hereunder as any other Lender and may exercise the same as though it were
not performing the duties and functions delegated to it hereunder, and the term
"Lender" or "Lenders" or any similar term shall, unless the context clearly
otherwise indicates, include Administrative Agent in its individual capacity.
Administrative Agent and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of banking, trust, financial advisory or other
business with Borrowers or any of its Affiliates as if it were not performing
the duties specified herein, and may accept fees and other consideration from
Borrowers for services in connection with this Agreement and otherwise without
having to account for the same to Lenders.
E. Administrative Agent Determinations. To the extent the
Administrative Agent is entitled or required to make any determinations under
the Intercreditor Agreement, the ▇▇▇▇▇▇▇ Intercreditor Agreement, the ▇▇▇▇▇▇▇
Subordination Agreement or any FF&E Intercreditor Agreement, the Administrative
Agent shall make such determinations upon the advice of Requisite Lenders.
9.3 Representations and Warranties; No Responsibility For Appraisal of
Credit Worthiness.
------------------
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Borrowers
and their Subsidiaries in connection with the making of the Loans and the
issuance of the Letters of Credit hereunder and that it has made and shall
continue to make its own appraisal of the creditworthiness of Borrowers and
their Subsidiaries. Administrative Agent shall not have any duty or
responsibility, either initially or on a continuing basis, to make any such
investigation or any such appraisal on behalf of Lenders or to provide any
Lender with any credit or other information with respect thereto, whether coming
into its possession before the making of the Loans or at any time or times
thereafter, and Administrative Agent shall not have any responsibility with
respect to the accuracy of or the completeness of any information provided to
Lenders.
9.4 Right to Indemnity.
--- -------------------
Each Lender, in proportion to its Pro Rata Share, severally
agrees to indemnify Administrative Agent, to the extent that Administrative
Agent shall not have been reimbursed by Borrowers, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including counsel fees and disbursements) or disbursements of
any kind or nature whatsoever which may be imposed on, incurred by or asserted
against Administrative Agent in exercising its powers, rights and remedies or
performing its duties hereunder or under the other Loan Documents or otherwise
in its capacity as Administrative Agent in any way relating to or arising out of
this Agreement or the other Loan Documents; provided that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from Administrative Agent's gross negligence or willful misconduct. If any
indemnity furnished to Administrative Agent for any purpose shall, in the
opinion of Administrative Agent, be insufficient or become impaired,
Administrative Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished.
9.5 Successor Administrative Agent.
--- -------------------------------
Administrative Agent may resign at any time by giving 30 days'
prior written notice thereof to Lenders and Borrowers, and Administrative Agent
may be removed at any time with or without cause by an instrument or concurrent
instruments in writing delivered to Borrowers and Administrative Agent and
signed by Requisite Lenders. Upon any such notice of resignation or any such
removal, Requisite Lenders shall have the right, upon five Business Days' notice
to Borrowers, to appoint a successor Administrative Agent (provided that such
successor is or simultaneously therewith becomes a Lender). Upon the acceptance
of any appointment as Administrative Agent hereunder by a successor
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Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Administrative Agent and the retiring or removed
Administrative Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring or removed Administrative Agent's resignation
or removal hereunder as Administrative Agent, the provisions of this Section 9
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement.
9.6 Collateral Documents and Subsidiary Guaranties.
--- -----------------------------------------------
Each Lender hereby further authorizes Administrative Agent, on
behalf of and for the benefit of Lenders, to enter into each Collateral Document
and Subsidiary Guaranty as secured party or beneficiary (as applicable), and
each Lender agrees to be bound by the terms of each Collateral Document and
Subsidiary Guaranty; provided that Administrative Agent shall not (i) enter into
or consent to any material amendment, modification, termination or waiver of any
provision contained in any Collateral Document or Subsidiary Guaranty, or (ii)
release any Collateral (except as otherwise expressly permitted or required
pursuant to the terms of this Agreement or the applicable Collateral Document),
in each case without the prior consent of Requisite Lenders (or, if required
pursuant to subsection 10.6, all Lenders); provided further, however, that,
without further written consent or authorization from Lenders, Administrative
Agent may execute any documents or instruments necessary to (i) release any
Subsidiary from the Subsidiary Guaranty to the extent the stock of such
Subsidiary is sold in a transaction permitted under this Agreement or otherwise
consented to by Requisite Lenders in accordance with subsection 10.6, (ii)
release any Lien encumbering any item of Collateral that is the subject of a
sale or other disposition of assets permitted by this Agreement or to which
Requisite Lenders have otherwise consented in accordance with subsection 10.6
and (iii) release any Lien encumbering any item of Collateral acquired after the
Closing Date the purchase of which was financed with funds from the FF&E
Facility Agreement (2001) and the other Collateral permitted under Section
7.2(A)(vi). Anything contained in any of the Loan Documents to the contrary
notwithstanding, Borrowers, Administrative Agent and each Lender hereby agree
that (X) no Lender shall have any right individually to realize upon any of the
Collateral under any Collateral Document, it being understood and agreed that
all powers, rights and remedies under the Collateral Documents and each Guaranty
may be exercised solely by Administrative Agent for the benefit of Lenders in
accordance with the terms thereof, and (Y) in the event of a foreclosure by
Administrative Agent on any of the Collateral pursuant to a public or private
sale, Administrative Agent or any Lender may be the purchaser of any or all of
such Collateral at any such sale and Administrative Agent, as agent for and
representative of Lenders (but not any Lender or Lenders in its or their
respective individual capacities unless Requisite Lenders shall otherwise agree
in writing) shall be entitled, for the purpose of bidding and making settlement
or payment of the purchase price for all or any portion of the Collateral sold
at any such public sale, to use and apply any of the Obligations as a credit on
account of the purchase price for any collateral payable by Administrative Agent
at such sale.
9.7 Disbursement Agreement and Intercreditor Agreement.
--- ---------------------------------------------------
Each Lender hereby further authorizes Administrative Agent, on
behalf of and for the benefit of Lenders, to enter into the Disbursement
Agreement, the Intercreditor Agreement, the ▇▇▇▇▇▇▇ Intercreditor Agreement, the
▇▇▇▇▇▇▇ Subordination Agreement, the FF&E Intercreditor Agreement (2001) and any
FF&E Intercreditor Agreements and any other intercreditor agreements in the form
of the ▇▇▇▇▇▇▇ Intercreditor Agreement entered into by Administrative Agent with
any subsequent holders of a Completion Guaranty Note, and each Lender agrees to
be bound by the terms of the Disbursement Agreement, the Intercreditor Agreement
and each other such intercreditor agreement; provided that Administrative Agent
shall not enter into or consent to any amendment, modification, termination or
waiver of any provision contained in the Disbursement Agreement, the
Intercreditor Agreement or any other such intercreditor agreement without the
prior consent of Requisite Lenders (or, if such amendment, modification,
termination or waiver would result in a change that under subsection 10.6 would
require the consent of all Lenders, then the prior consent of all Lenders).
9.8 Appointment of Lead Arranger after November 14, 1997.
--- -----------------------------------------------------
Scotiabank is hereby appointed Lead Arranger hereunder and under
the other Loan Documents and each Lender hereby authorizes such Lead Arranger to
act as its agent in accordance with the terms of this Agreement and the other
Loan Documents. The Lead Arranger agrees to act upon the express conditions
contained in this Agreement and the other Loan Documents, as applicable. The
provisions of this Section 9 are solely for the benefit of each of the Lead
Arranger and Lenders; Borrowers shall have no rights as a third party
beneficiary of any of the provisions thereof. In performing its functions and
duties under this Agreement, the Lead Arranger shall act solely as an agent of
Lenders and does not assume and shall not be deemed to have assumed any
obligation towards or relationship of agency or trust with or for Borrowers or
98
any of their Subsidiaries. Upon the Closing Date all obligations of the Lead
Arranger hereunder shall terminate.
Section 10. MISCELLANEOUS
10.1 Assignments and Participations in Loans.
---- ----------------------------------------
A. General. Subject to subsection 10.1B, each Lender shall have
the right at any time to (i) sell, assign or transfer to any Eligible Assignee,
or (ii) sell participations to any Eligible Assignee or any other Person with
the approval of Borrowers in, all or any part of its Commitments or any Loan or
Loans made by it or its Letters of Credit or participations therein or any other
interest herein or in any other Obligations owed to it; provided that no such
sale, assignment, transfer or participation shall, without the consent of
Borrowers, require Borrowers to file a registration statement with the
Securities and Exchange Commission or apply to qualify such sale, assignment,
transfer or participation under the securities laws of any state; provided,
further that no such sale, assignment or transfer described in clause (i) above
shall be effective unless and until an Assignment Agreement effecting such sale,
assignment or transfer shall have been accepted by Administrative Agent and
recorded in the Register as provided in subsection 10.1B(ii) and provided,
further that no such sale, assignment, transfer or participation of any Letter
of Credit or any participation therein may be made separately from a sale,
assignment, transfer or participation of a corresponding interest in the
Commitment and the Loans of the Lender effecting such sale, assignment, transfer
or participation. Except as otherwise provided in this subsection 10.1, no
Lender shall, as between Borrowers and such Lender, be relieved of any of its
obligations hereunder as a result of any sale, assignment or transfer of, or any
granting of participations in, all or any part of its Commitments or the Loans,
the Letters of Credit or participations therein, or the other Obligations owed
to such Lender.
B. Assignments.
(i) Amounts and Terms of Assignments. Each Commitment, Loan,
Letter of Credit or participation therein, or other Obligation
may in whole or in part (a) be assigned, in any amount to another
Lender, or to an Affiliate of the assigning Lender or another
Lender, or may be pledged to an Eligible Assignee in support of
its obligations to such assignee (without releasing the pledging
Lender from any of its obligations hereunder), with the giving of
notice to Borrowers and Administrative Agent; provided that if
such assignment relates to Revolving Loans or Revolving Loan
Commitments, the assignee shall represent that it has the
financial resources to fulfill its commitments hereunder and such
assignment is consented to by Administrative Agent and Issuing
Lender (such consent not to be unreasonably withheld or delayed)
or (b) be assigned in an aggregate amount of not less than
$1,000,000 (or such lesser amount as shall constitute the
aggregate amount of the Commitments, Loans, Letters of Credit and
participations therein, and other Obligations of the assigning
Lender) to any other Eligible Assignee with the consent of
Borrowers and Administrative Agent (which consent shall not be
unreasonably withheld or delayed); provided that any such
assignment in accordance with either clause (a) or (b) above
shall effect a pro rata assignment (based on the respective
principal amounts thereof then outstanding or in effect) of both
the Term Loan Commitment and the Term Loans of the assigning
Lender, on the one hand, and the Revolving Loan Commitment and
the Revolving Loans of the assigning Lender, on the other hand,
except where such Lender does not hold both Revolving Loan
Commitments or Revolving Loans and Term Loan Commitments or Term
Loans. To the extent of any such assignment in accordance with
either clause (a) or (b) above, the assigning Lender shall be
relieved of its obligations with respect to its Commitments,
Loans, Letters of Credit or participations therein, or other
Obligations or the portion thereof so assigned. The assignor or
assignee to each such assignment shall execute and deliver to
Administrative Agent, for its acceptance and recording in the
Register, an Assignment Agreement, together with a processing and
recordation fee of $3,500 in respect of assignments, and such
forms, certificates or other evidence, if any, with respect to
United States federal income tax withholding matters as the
assignee under such Assignment Agreement may be required to
deliver to Administrative Agent pursuant to subsection
2.7B(iii)(a). Upon such execution, delivery, acceptance and
recordation, from and after the effective date specified in such
Assignment Agreement, (y) the assignee thereunder shall be a
party hereto and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment
Agreement, shall have the rights and obligations of a Lender
hereunder and (z) the assigning Lender thereunder shall, to the
extent that rights and obligations hereunder have been assigned
by it pursuant to such Assignment Agreement, relinquish its
rights (other than any rights which survive the termination of
99
this Agreement under subsection 10.9B) and be released from its
obligations under this Agreement (and, in the case of an
Assignment Agreement covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto; provided that,
anything contained in any of the Loan Documents to the contrary
notwithstanding, if such Lender is the Issuing Lender with
respect to any outstanding Letters of Credit such Lender shall
continue to have all rights and obligations of an Issuing Lender
with respect to such Letters of Credit until the cancellation or
expiration of such Letters of Credit and the reimbursement of any
amounts drawn thereunder). The Commitments hereunder shall be
modified to reflect the Commitment of such assignee and any
remaining Commitment of such assigning Lender and, if any such
assignment occurs after the issuance of Notes hereunder, the
assigning Lender shall, upon the effectiveness of such assignment
or as promptly thereafter as practicable, surrender its
applicable Notes to Administrative Agent for cancellation, and
thereupon new Notes shall be issued to the assignee and to the
assigning Lender, substantially in the form of Exhibits III-A and
III-B annexed hereto, as applicable, with appropriate insertions,
to reflect the new Commitments and/or outstanding Loans, as the
case may be, of the assignee and the assigning Lender.
(ii) Acceptance by Administrative Agent; Recordation in Register.
Upon its receipt of an Assignment Agreement executed by an
assigning Lender and an assignee representing that it is an
Eligible Assignee, together with the processing and recordation
fee referred to in subsection 10.1B(i) and any forms,
certificates or other evidence with respect to United States
federal income tax withholding matters that such assignee may be
required to deliver to Administrative Agent pursuant to
subsection 2.7B(iii)(a), Administrative Agent shall, if
Administrative Agent has consented to the assignment evidenced
thereby (to the extent such consent is required pursuant to
subsection 10.1B(i)), (a) accept such Assignment Agreement by
executing a counterpart thereof as provided therein (which
acceptance shall evidence any required consent of Administrative
Agent to such assignment), (b) record the information contained
therein in the Register, and (c) give prompt notice thereof to
Borrowers. Administrative Agent shall maintain a copy of each
Assignment Agreement delivered to and accepted by it as provided
in this subsection 10.1B(ii).
C. Participations. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the scheduled final maturity date of any
Loan allocated to such participation, (ii) a reduction of the principal amount
of or the rate of interest payable on any Loan allocated to such participation,
or (iii) releasing all or substantially all of the Collateral, and all amounts
payable by Borrowers hereunder (including amounts payable to such Lender
pursuant to subsections 2.6D and 2.7) shall be determined as if such Lender had
not sold such participation. Borrowers and each Lender hereby acknowledge and
agree that, solely for purposes of subsections 10.4 and 10.5, (a) any
participation will give rise to a direct obligation of Borrowers to the
participant and (b) the participant shall be considered to be a "Lender".
D. Assignments to Federal Reserve Banks. In addition to the
assignments and participations permitted under the foregoing provisions of this
subsection 10.1, any Lender may assign and pledge all or any portion of its
Loans, the other Obligations owed to such Lender, and its Notes to any Federal
Reserve Bank as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any operating circular issued by
such Federal Reserve Bank; provided that (i) no Lender shall, as between
Borrowers and such Lender, be relieved of any of its obligations hereunder as a
result of any such assignment and pledge and (ii) in no event shall such Federal
Reserve Bank be considered to be a "Lender" or be entitled to require the
assigning Lender to take or omit to take any action hereunder.
E. Information. Each Lender may furnish any information
concerning Borrowers and their Subsidiaries in the possession of that Lender
from time to time to assignees and participants (including prospective assignees
and participants), subject to subsection 10.20.
F. Representations of Lenders. Each Lender listed on the
signature pages hereof hereby represents and warrants (i) that it is an Eligible
Assignee described in clause (A) of the definition thereof; (ii) that it has
experience and expertise in the making of loans such as the Loans; and (iii)
that it will make its Loans for its own account in the ordinary course of its
business and without a view to distribution of such Loans within the meaning of
the Securities Act or the Exchange Act or other federal or state securities laws
(it being understood that, subject to the provisions of this subsection 10.1,
the disposition of such Loans or any interests therein shall at all times remain
within its exclusive control). Each Lender that becomes a party hereto pursuant
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to an Assignment Agreement shall be deemed to agree that the representations and
warranties of such Lender contained in Section 2(c) of such Assignment Agreement
are incorporated herein by this reference.
10.2 Expenses.
---- ---------
Whether or not the transactions contemplated hereby shall be
consummated, Borrowers agree to pay promptly (i) all the actual and reasonable
costs and expenses of preparation of the Loan Documents and any consents,
amendments, waivers or other modifications thereto; (ii) all the costs of
furnishing all opinions by counsel for Borrowers (including any opinions
requested by Lenders as to any legal matters arising hereunder) and of
Borrowers' performance of and compliance with all agreements and conditions on
its part to be performed or complied with under this Agreement and the other
Loan Documents including with respect to confirming compliance with
environmental, insurance and solvency requirements; (iii) the reasonable fees,
expenses and disbursements of counsel to Administrative Agent in connection with
the negotiation, preparation, execution and administration of the Loan Documents
and any consents, amendments, waivers or other modifications thereto and any
other documents or matters requested by Borrowers; provided that the fees and
costs of such counsel for the preparation and negotiation of the Loan Documents
may not exceed $350,000; (iv) all the actual costs and reasonable expenses of
creating and perfecting Liens in favor of Administrative Agent on behalf of
Lenders pursuant to any Collateral Document, including filing and recording
fees, expenses and taxes, stamp or documentary taxes, search fees, title
insurance premiums, and reasonable fees, expenses and disbursements of counsel
to Administrative Agent and of counsel providing any opinions that
Administrative Agent or Requisite Lenders may request in respect of the
Collateral Documents or the Liens created pursuant thereto; (v) all the actual
costs and reasonable expenses (including the reasonable fees, expenses and
disbursements of any auditors, accountants or appraisers and any environmental
or other consultants, advisors and agents employed or retained by Administrative
Agent or its counsel) of obtaining and reviewing any appraisals provided for
under any Loan Documents or the Disbursement Agreement, any environmental audits
or reports provided for under subsection 6.8B or under the Disbursement
Agreement; and (vi) the custody or preservation of any of the Collateral; (vii)
all other actual and reasonable costs and expenses incurred by Administrative
Agent in connection with the syndication of the Commitments and the negotiation,
preparation and execution of the Loan Documents and any consents, amendments,
waivers or other modifications thereto and the transactions contemplated
thereby; and (viii) after the occurrence of an Event of Default, all costs and
expenses, including reasonable attorneys' fees (including allocated costs of
internal counsel) and costs of settlement, incurred by Administrative Agent and
Lenders in enforcing any Obligations of or in collecting any payments due from
any Loan Party hereunder or under the other Loan Documents by reason of such
Event of Default (including in connection with the sale of, collection from, or
other realization upon any of the Collateral or the enforcement of any Guaranty)
or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a "work-out" or
pursuant to any insolvency or bankruptcy proceedings.
10.3 Indemnity.
---- ----------
In addition to the payment of expenses pursuant to subsection
10.2, whether or not the transactions contemplated hereby shall be consummated,
Borrowers agree to defend (subject to Borrowers' selection of counsel with the
consent of the Indemnitee, which shall not be unreasonably withheld), indemnify,
pay and hold harmless Administrative Agent, Arranger and Lenders, and the
officers, directors, employees, agents and affiliates of Administrative Agent,
Arranger and Lenders (collectively called the "Indemnitees"), from and against
any and all Indemnified Liabilities (as hereinafter defined); provided that
Borrowers shall not have any obligation to any Indemnitee hereunder with respect
to any Indemnified Liabilities to the extent such Indemnified Liabilities arise
solely from the gross negligence or willful misconduct of that Indemnitee as
determined by a final judgment of a court of competent jurisdiction.
As used herein, "Indemnified Liabilities" means, collectively,
any and all liabilities, obligations, losses, damages (including natural
resource damages), penalties, actions, judgments, suits, claims (including
Environmental Claims), costs (including the costs of any investigation, study,
sampling, testing, abatement, cleanup, removal, remediation or other response
action necessary to remove, remediate, clean up or ▇▇▇▇▇ any Hazardous Materials
Activity), expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and disbursements of counsel for Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto, and any fees or expenses
incurred by Indemnitees in enforcing this indemnity), whether direct, indirect
or consequential and whether based on any federal, state or foreign laws,
statutes, rules or regulations (including securities and commercial laws,
statutes, rules or regulations and Environmental Laws), on common law or
equitable cause or on contract or otherwise, that may be imposed on, incurred
by, or asserted against any such Indemnitee, in any manner relating to or
arising out of (i) this Agreement or the other Loan Documents or the Project
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Documents or the transactions contemplated hereby or thereby (including Lenders'
agreement to make the Loans hereunder or the use or intended use of the proceeds
thereof or the use or intended use of any thereof, or any enforcement of any of
the Loan Documents (including any sale of, collection from, or other realization
upon any of the Collateral or the enforcement of any Guaranty), (ii) the
statements contained in the commitment letter delivered by any Lender to
Borrowers with respect thereto, or (iii) any Environmental Claim or any
Hazardous Materials Activity relating to or arising from, directly or
indirectly, any past or present activity, operation, land ownership, or practice
of Borrowers or any of their Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and
hold harmless set forth in this subsection 10.3 may be unenforceable in whole or
in part because they are violative of any law or public policy, Borrowers shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
10.4 Set-Off; Security Interest in Deposit Accounts.
---- -----------------------------------------------
In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default each Lender is hereby authorized by Borrowers
at any time or from time to time, without notice to Borrowers or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, including
Indebtedness evidenced by certificates of deposit, whether matured or unmatured,
but not including trust accounts) and any other Indebtedness at any time held or
owing by that Lender to or for the credit or the account of Borrowers against
and on account of the obligations and liabilities of Borrowers to that Lender
under this Agreement, the Letters of Credit and participations therein and the
other Loan Documents, including all claims of any nature or description arising
out of or connected with this Agreement, the Letters of Credit and
participations therein or any other Loan Document, irrespective of whether or
not (i) that Lender shall have made any demand hereunder or (ii) the principal
of or the interest on the Loans or any amounts in respect of the Letters of
Credit or any other amounts due hereunder shall have become due and payable
pursuant to Section 9 and although said obligations and liabilities, or any of
them, may be contingent or unmatured. Borrowers hereby further grants to
Administrative Agent and each Lender a security interest in all deposits and
accounts maintained with Administrative Agent or such Lender as security for the
Obligations.
10.5 Ratable Sharing.
---- ----------------
Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the "Aggregate
Amounts Due" to such Lender) which is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due to such other Lender,
then the Lender receiving such proportionately greater payment shall (i) notify
Administrative Agent and each other Lender of the receipt of such payment and
(ii) apply a portion of such payment to purchase participations (which it shall
be deemed to have purchased from each seller of a participation simultaneously
upon the receipt by such seller of its portion of such payment) in the Aggregate
Amounts Due to the other Lenders so that all such recoveries of Aggregate
Amounts Due shall be shared by all Lenders in proportion to the Aggregate
Amounts Due to them; provided that if all or part of such proportionately
greater payment received by such purchasing Lender is thereafter recovered from
such Lender upon the bankruptcy or reorganization of Borrowers or otherwise,
those purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such purchasing Lender ratably to the extent
of such recovery, but without interest. Borrowers expressly consent to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by Borrowers to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.
10.6 Amendments and Waivers.
---- -----------------------
A. No amendment, modification, termination or waiver of any
provision of this Agreement or of the Notes, and no consent to any departure by
Borrowers therefrom, shall in any event be effective without the written
concurrence of Requisite Lenders; provided that no amendment, modification,
termination, waiver or consent shall, unless approved in writing and signed by
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Borrowers and all the Lenders, do any of the following: reduce the principal of,
or interest on, the Loans or any fees hereunder (other than any waiver of any
increase in the interest rate applicable to any of the Loans pursuant to
subsection 2.2E); change in any manner the definition of "Pro Rata Share" or the
definition of "Requisite Lenders" (it being understood that, with the consent of
Requisite Lenders, additional extensions of credit pursuant to this Agreement
may be included in "Pro Rata Share" and "Requisite Lenders" on substantially the
same terms as the Term Loan Commitments and the Term Loans and the Revolving
Loan Commitments and the Revolving Loans); change in any manner any provision of
this Agreement which, by its terms, expressly requires the approval or
concurrence of all Lenders; postpone any date fixed for the payment in respect
of principal of, or interest on, the Loans or any fees hereunder; release any
Lien granted in favor of Administrative Agent with respect to 25% or more in
aggregate fair market value of the Collateral; releases any Subsidiary Guarantor
from its obligations under its Guaranty, other than in accordance with the terms
of the Loan Documents; change in any manner the provisions contained in
subsections 7.21, 9.1 or this subsection 10.6; or waive any provision of
subsection 7.21; provided further that any such amendment, modification,
termination, waiver or consent which increases the amount of the Commitment for
any Lender shall be effective only if evidenced by a writing signed by or on
behalf of such Lender.
B. In addition, (i) any amendment, modification, termination or
waiver of any of the provisions contained in Section 4 shall be effective only
if evidenced by a writing signed by or on behalf of Administrative Agent and
Requisite Lenders, (ii) no amendment, modification, termination or waiver of any
provision of any Note shall be effective without the written concurrence of the
Lender which is the holder of that Note except that to the extent such
amendment, modification, termination or waiver would not otherwise require the
consent of all Lenders, only the holder of such Note or Notes up to the amount
constituting Requisite Lenders shall be required hereunder and (iii) no
amendment, modification, termination or waiver of any provision of Section 9 or
of any other provision of this Agreement which, by its terms, expressly requires
the approval or concurrence of Administrative Agent shall be effective without
the written concurrence of Administrative Agent.
C. Administrative Agent may, but shall have no obligation to,
with the concurrence of any Lender, execute amendments, modifications, waivers
or consents on behalf of that Lender. Any waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given. No notice to or demand on Borrowers in any case shall entitle Borrowers
to any other or further notice or demand in similar or other circumstances. Any
amendment, modification, termination, waiver or consent effected in accordance
with this subsection 10.6 shall be binding upon each Lender at the time
outstanding, each future Lender and, if signed by Borrowers, on Borrowers. To
the extent the Bank Agent is entitled or required to make any determinations
under the Intercreditor Agreement, the ▇▇▇▇▇▇▇ Intercreditor Agreement or any
FF&E Intercreditor Agreement, Bank Agent shall make such determinations upon the
advice of Requisite Lenders.
D. Notwithstanding the foregoing, if any Lender does not agree to
any amendment hereunder requiring the consent of all Lenders and consented to by
Lenders having or holding at least 66 2/3% of the sum of the aggregate Loans and
unused Commitment of all Lenders, then the Borrowers may, at their sole expense
and effort, upon notice to such Lender and Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with and subject
to the restrictions contained in subsection 10.1, including, without limitation,
as a condition precedent to such assignment, (i) Administrative Agent's consent
to the assignee unless not otherwise required by subsection 10.1 and (ii)
payment of the registration fee set forth in subsection 10.1B(i)), all its
interests, rights and obligations under this Agreement to an assignee that shall
assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) such Lender shall have received
irrevocable payment in full in cash of an amount equal to the outstanding
principal of its Loans, accrued interest thereon, and accrued fees and all other
Obligations and other amounts payable to it hereunder from the assignee or the
Borrowers and (ii) such assignment will result in such amendment being approved.
10.7 Certain Matters Affecting Lenders.
---- ----------------------------------
(a) If (i) the Nevada Gaming Commission shall determine that any
Lender does not meet suitability standards prescribed under the Nevada Gaming
Regulations or (ii) any other gaming authority with jurisdiction over the gaming
business of Borrowers shall determine that any Lender does not meet its
suitability standards (in any such case, a "Former Lender"), the Administrative
Agent or the Borrowers shall have the right (but not the duty) to designate
bank(s) or other financial institution(s) (in each case, a "Substitute Lender,"
which may be any Lender or Lenders that agree to become a Substitute Lender and
to assume the rights and obligations of the Former Lender, subject to receipt by
the Administrative Agent of evidence that such Substitute Lender is an Eligible
Assignee. The Substitute Lender shall assume the rights and obligations of the
Former Lender under this Agreement. Borrowers shall bear the costs and expenses
of any Lender required by the Nevada Gaming Commission, or any other gaming
authority with jurisdiction over the gaming business of Borrowers, to file an
application for a finding of suitability in connection with the investigation of
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an application by Borrowers for a license to operate a gaming establishment, in
connection with such application for a finding of suitability.
(b) Notwithstanding the provisions of subsection (a) of this
subsection 10.7, if any Lender becomes a Former Lender, and if the
Administrative Agent or the Borrowers fail to find a Substitute Lender pursuant
to subsection (a) of this subsection 10.7 within any time period specified by
the appropriate gaming authority for the withdrawal of a Former Lender (the
"Withdrawal Period"), the Borrowers shall immediately prepay in full the
outstanding principal amount of Loans made by such Former Lender, together with
accrued interest thereon to the earlier of (x) the date of payment or (y) the
last day of any Withdrawal Period.
10.8 Independence of Covenants.
---- --------------------------
All covenants hereunder shall be given independent effect so that
if a particular action or condition is not permitted by any of such covenants,
the fact that it would be permitted by an exception to, or would otherwise be
within the limitations of, another covenant shall not avoid the occurrence of an
Event of Default or Potential Event of Default if such action is taken or
condition exists.
10.9 Notices.
---- --------
Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be in writing
and may be personally served, telexed or sent by telefacsimile or United States
mail or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; provided that notices to Administrative Agent shall not
be effective until received. For the purposes hereof, the address of each party
hereto shall be as set forth under such party's name on the signature pages
hereof or (i) as to Borrowers and Administrative Agent, such other address as
shall be designated by such Person in a written notice delivered to the other
parties hereto and (ii) as to each other party, such other address as shall be
designated by such party in a written notice delivered to Administrative Agent.
10.10 Survival of Representations, Warranties and Agreements.
----- -------------------------------------------------------
A. All representations, warranties and agreements made herein
shall survive the execution and delivery of this Agreement and the making of the
Loans and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law
to the contrary, the agreements of Borrowers set forth in subsections 2.6D, 2.7,
10.2, 10.3 and 10.4 and the agreements of Lenders set forth in subsections 9.2C,
9.4, 10.5 and 10.20 shall survive the payment of the Loans and the reimbursement
of any amounts drawn thereunder, and the termination of this Agreement.
10.11 Failure or Indulgence Not Waiver; Remedies Cumulative.
----- ------------------------------------------------------
No failure or delay on the part of Administrative Agent or any
Lender in the exercise of any power, right or privilege hereunder or under any
other Loan Document shall impair such power, right or privilege or be construed
to be a waiver of any default or acquiescence therein, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
10.12 Marshalling; Payments Set Aside.
----- --------------------------------
Neither Administrative Agent nor any Lender shall be under any
obligation to marshal any assets in favor of Borrowers or any other party or
against or in payment of any or all of the Obligations. To the extent that
Borrowers make a payment or payments to Administrative Agent or Lenders (or to
Administrative Agent for the benefit of Lenders), or Administrative Agent or
Lenders enforce any security interests or exercise their rights of setoff, and
such payment or payments or the proceeds of such enforcement or setoff or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, any other state or federal law, common
law or any equitable cause, then, to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor or related thereto, shall be revived and continued in full
force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.
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10.13 Severability.
----- -------------
In case any provision in or obligation under this Agreement or
the Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
10.14 Obligations Several; Independent Nature of Lenders' Rights.
----- -----------------------------------------------------------
The obligations of Lenders hereunder are several and no Lender
shall be responsible for the obligations or Commitments of any other Lender
hereunder. Nothing contained herein or in any other Loan Document, and no action
taken by Lenders pursuant hereto or thereto, shall be deemed to constitute
Lenders as a partnership, an association, a joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Lender shall be a
separate and independent debt, and each Lender shall be entitled to protect and
enforce its rights arising out of this Agreement and it shall not be necessary
for any other Lender to be joined as an additional party in any proceeding for
such purpose.
10.15 Headings.
----- ---------
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
10.16 Applicable Law.
----- ---------------
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
10.17 Successors and Assigns.
----- -----------------------
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 10.1). Neither
Borrowers' rights or obligations hereunder nor any interest therein may be
assigned or delegated by Borrowers without the prior written consent of all
Lenders.
10.18 Consent to Jurisdiction and Service of Process.
----- -----------------------------------------------
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST BORROWERS ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING AND
DELIVERING THIS AGREEMENT, BORROWERS, FOR THEMSELVES AND IN CONNECTION WITH
THEIR PROPERTIES, IRREVOCABLY
(I) ACCEPT GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVE ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREE THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN
ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, TO BORROWERS AT THEIR ADDRESS PROVIDED
IN ACCORDANCE WITH SUBSECTION 10.9;
(IV) AGREE THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER BORROWERS IN ANY
SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT;
(V) AGREE THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST
BORROWERS IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREE THAT THE PROVISIONS OF THIS SUBSECTION 10.18 RELATING
TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE
FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW
SECTION 5-1402 OR OTHERWISE.
105
10.19 Waiver of Jury Trial.
----- ---------------------
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver
is intended to be all-encompassing of any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction, including
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each party hereto acknowledges that this waiver is a material
inducement to enter into a business relationship, that each has already relied
on this waiver in entering into this Agreement, and that each will continue to
rely on this waiver in their related future dealings. Each party hereto further
warrants and represents that it has reviewed this waiver with its legal counsel
and that it knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 10.19 AND EXECUTED BY EACH OF
THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
10.20 Confidentiality.
----- ----------------
Each Lender shall hold all non-public information obtained
pursuant to the requirements of this Agreement in accordance with such Lender's
customary procedures for handling confidential information of this nature and in
accordance with safe and sound banking or investment practices, it being
understood and agreed by Borrowers that in any event a Lender may make
disclosures to Affiliates of such Lender or disclosures reasonably required by
any bona fide assignee, transferee or participant in connection with the
contemplated assignment or transfer by such Lender of any Loans or any
participations therein (provided that such assignee, transferee or participant
agrees to also be bound by this subsection 10.20), or disclosures required or
requested by any governmental agency or representative thereof or pursuant to
legal process; provided that, unless specifically prohibited by applicable law
or court order, each Lender shall notify Borrowers of any request by any
governmental agency or representative thereof (other than any such request in
connection with any examination of the financial condition of such Lender by
such governmental agency) for disclosure of any such non-public information; and
provided, further that in no event shall any Lender be obligated or required to
return any materials furnished by Borrowers or any of their Subsidiaries.
10.21 Counterparts; Effectiveness.
----- ----------------------------
This Agreement and any amendments, waivers, consents or
supplements hereto or in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Agreement shall become effective as of the date hereof.
10.22 Restriction on ▇▇▇▇▇▇▇ Indebtedness.
----- ------------------------------------
Each of the Borrowers and ▇▇▇▇▇▇▇ agrees that the Borrowers and
their Subsidiaries shall not incur any Indebtedness owed to ▇▇▇▇▇▇▇ or any of
his Affiliates (other than with respect to the Affiliates of ▇▇▇▇▇▇▇, the
Borrowers and their Subsidiaries), except upon terms and conditions (including
subordination provisions) that are in form and substance satisfactory to the
Administrative Agent and ▇▇▇▇▇▇▇. The foregoing restriction shall not apply to
any Indebtedness of the Borrowers and their Subsidiaries (i) existing on the
Closing Date and held on the Closing Date by a Person or Persons unaffiliated
with ▇▇▇▇▇▇▇, (ii) incurred in connection with any FF&E Facility Agreement or
any financing of the HVAC Component or similar equipment or property, (iii)
incurred under the Phase I-A Subsidiary Non-Recourse Loan, (iv) incurred under
the Completion Guaranty Loan or (v) incurred under Employee Repurchase Notes.
▇▇▇▇▇▇▇ acknowledges that the execution, delivery and performance
of this Agreement shall not alter, modify or affect in any manner the
subordination provisions applicable to Indebtedness in respect of the Completion
Guaranty Loan.
Nothing in this Section 10.22 shall in any way modify the
provisions of Section 7.5.
106
10.23 Gaming Authorities.
----- -------------------
The Arranger, the Administrative Agent and each Lender agree to
cooperate with the Nevada Gaming Authorities in connection with the
administration of their regulatory jurisdiction over the Borrowers and their
Subsidiaries, including, without limitation, to the extent not inconsistent with
the internal policies of such Lender or Issuing Lender and any applicable legal
or regulatory restrictions the provision of such documents or other information
as may be requested by any such Nevada Gaming Authority relating to the
Arranger, the Administrative Agent or any of the Lenders, or Borrowers or any of
their Subsidiaries, or to the Loan Documents. Notwithstanding any other
provision of the Agreement, Borrowers expressly authorize each Agent and Lender
to cooperate with the Nevada Gaming Authorities as described above.
10.24 Automatic Amendment of this Agreement.
----- --------------------------------------
If the Borrowers shall not have entered into an amendment to the
FF&E Facility Agreement described in clause (i) of the definition thereof in
accordance with the terms of Section 7.13D on or before September 30, 2001, the
provisions of Sections 6 and 7 (and any definitions used in such sections) shall
be automatically amended so that such provisions are the same as those in the
Existing Credit Agreement immediately prior to the effectiveness of this
Agreement. Borrowers agree to execute any documents reasonably requested by the
Administrative Agent to confirm the foregoing.
[Remainder of page intentionally left blank]
107
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
BORROWERS:
LAS VEGAS SANDS, INC.
By: /s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Secretary
Notice Address:
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
VENETIAN CASINO RESORT, LLC
By: Las Vegas Sands, Inc. its managing
member
By: /s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Secretary
Notice Address:
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
S-1
For purpose of subsection
10.22 only:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
LENDERS:
THE BANK OF NOVA SCOTIA,
individually and as a Lender, Lead Arranger and
Administrative Agent
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
Notice Address:
The Bank of Nova Scotia
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
With copy to:
The Bank of Nova Scotia
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
S-2
FOOTHILL INCOME TRUST, L.P.
By: /s/R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Member
Notice Address:
Foothill Income Trust, L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telefax: ▇▇▇-▇▇▇-▇▇▇▇
FOOTHILL INCOME TRUST II, L.P.
By: /s/R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Member
Notice Address:
Foothill Income Trust, L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telefax: ▇▇▇-▇▇▇-▇▇▇▇
S-3
THE INTERNATIONAL COMMERCIAL
BANK OF CHINA, NEW YORK AGENCY
By: /s/Wen-▇▇▇ ▇▇▇▇
-------------------------------
Name: Wen-▇▇▇ ▇▇▇▇
Title: A.V.P. & Deputy General Manager
Notice Address:
International Commercial Bank of China
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇. ▇. ▇▇
Telefax: ▇▇▇-▇▇▇-▇▇▇▇
S-4
▇▇▇▇▇▇▇▇▇▇▇ SENIOR FLOATING
RATE FUND
By: /s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: A.V.P.
Notice Address:
▇▇▇▇▇▇▇▇▇▇▇ Senior Floating Rate Fund
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Fund Analyst III
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
S-5
CSAM FUNDING I
By: /s/▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Director
Notice Address:
CSAM Funding I
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
S-6
Acknowledgement and Consent
Each of the undersigned is a Loan Party to the Existing Credit
Agreement and is a party to certain Subsidiary Guaranties, Collateral Documents
and/or Loan Documents. Each of the undersigned confirms that it has reviewed the
terms and provisions of the foregoing Amended and Restated Credit Agreement (the
"Amended and Restated Credit Agreement"), including any documents referred to
therein, and confirms and agrees that, notwithstanding the effectiveness of the
Amended and Restated Credit Agreement, the obligations of the undersigned under
the Subsidiary Guaranties, the Collateral Documents and/or the Loan Documents to
which it is a party shall not be impaired or affected and each such Subsidiary
Guaranty, Loan Document and/or Collateral Document shall continue in full force
and effect and is hereby ratified and confirmed. Mall Construction Subsidiary
hereby ratifies and confirms the grant of security interests and Liens made by
such Mall Construction Subsidiary in favor of the Administrative Agent in and to
the Collateral pursuant to the Collateral Documents as security for the
Obligations.
Each of the undersigned acknowledges and agrees that (i)
notwithstanding the conditions to effectiveness set forth in the Amended and
Restated Credit Agreement, it is not required by the terms of the Existing
Credit Agreement, the Subsidiary Guaranties, the Collateral Documents or any
other Loan Document to which it is a party to consent to the amendment and
restatement of the Existing Credit Agreement effected pursuant to the Amended
and Restated Credit Agreement and (ii) nothing in the Existing Credit Agreement,
the Amended and Restated Credit Agreement, the Subsidiary Guaranties, the
Collateral Documents or any other Loan Document to which it is a party shall be
deemed to require the consent of the undersigned to any future amendments.
Capitalized terms used in the foregoing two paragraphs and not
otherwise defined therein, shall be used as defined in the Amended and Restated
Credit Agreement.
MALL INTERMEDIATE HOLDING COMPANY, LLC
By: VENETIAN CASINO RESORT, LLC, its sole member
By: LAS VEGAS SANDS, INC., its managing member
By: /s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Secretary
Notice Address:
Mall Intermediate Holding Company, LLC
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
S1-1
LIDO INTERMEDIATE HOLDING COMPANY, LLC
By: VENETIAN CASINO RESORT, LLC, its sole member
By: LAS VEGAS SANDS, INC., its managing member
By: /s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Secretary
Notice Address:
Lido Intermediate Holding, LLC
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
GRAND CANAL SHOPS MALL CONSTRUCTION, LLC
By: VENETIAN CASINO RESORT, LLC, its sole member
By: LAS VEGAS SANDS, INC., its managing member
By: /s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Secetary
Notice Address:
Grand Canal Shops Mall Construction, LLC
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
S1-2
AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF SEPTEMBER 17, 2001
AMONG
LAS VEGAS SANDS, INC.,
and
VENETIAN CASINO RESORT, LLC
as Borrowers,
THE LENDERS LISTED HEREIN,
as Lenders,
THE BANK OF NOVA SCOTIA
as Lead Arranger,
and
THE BANK OF NOVA SCOTIA
as Administrative Agent
TABLE OF CONTENTS
Page
----
Section 1. DEFINITIONS.................................................2
1.1 Certain Defined Terms.......................................2
1.2 Accounting Terms; Utilization of GAAP for Purposes
of Calculations Under Agreement ...........................34
1.3 Other Definitional Provisions and Rules of
Construction ..............................................34
Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS.................35
2.1 Commitments; Making of Loans; the Register; Notes..........35
2.2 Interest on the Loans......................................38
2.3 Fees.......................................................40
2.4 Repayments, Prepayments and Reductions in
Commitments; General Provisions Regarding Payments ........40
2.5 Use of Proceeds............................................45
2.6 Special Provisions Governing Eurodollar Rate Loans.........45
2.7 Increased Costs; Taxes; Capital Adequacy...................47
2.8 Obligation of Lenders to Mitigate..........................49
2.9 Obligations Joint and Several..............................50
Section 3. LETTERS OF CREDIT..........................................50
3.1 Issuance of Letters of Credit and Lenders'
Purchase of Participations Therein ........................50
3.2 Letter of Credit Fees......................................52
3.3 Drawings and Reimbursement of Amounts Paid Under
Letters of Credit .........................................53
3.4 Obligations Absolute.......................................54
3.5 Indemnification; Nature of Issuing Lenders' Duties.........55
3.6 Increased Costs and Taxes Relating to Letters of
Credit ....................................................56
Section 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT..................56
4.1 Conditions to the Occurrence of the Closing Date...........57
4.2 Conditions to all Loans on or after the Closing
Date ......................................................58
4.3 Conditions to Letters of Credit............................59
Section 5. BORROWERS' REPRESENTATIONS AND WARRANTIES..................59
5.1 Organization, Powers, Qualification, Good
Standing, Business and Subsidiaries .......................59
5.2 Authorization of Borrowing, etc............................60
5.3 Financial Condition........................................61
5.4 No Material Adverse Change; No Restricted Junior
Payments ..................................................61
5.5 Title to Properties; Liens; Real Property..................61
5.6 Litigation; Adverse Facts..................................62
5.7 Payment of Taxes...........................................62
5.8 Performance of Agreements; Materially Adverse
Agreements; Material Contracts ............................62
5.9 Governmental Regulation....................................62
1
5.10 Securities Activities......................................62
5.11 Employee Benefit Plans.....................................63
5.12 Certain Fees...............................................63
5.13 Environmental Protection...................................63
5.14 Employee Matters...........................................64
5.15 Solvency...................................................64
5.16 Matters Relating to Collateral.............................64
5.17 Construction Litigation....................................64
5.18 No Event of Default........................................65
5.19 ▇▇▇▇▇▇▇ Subordination Agreement............................65
5.20 Status of Certain Agreements...............................65
Section 6. BORROWERS' AFFIRMATIVE COVENANTS...........................65
6.1 Financial Statements and Other Reports.....................65
6.2 Corporate Existence, etc ..................................70
6.3 Payment of Taxes and Claims; Tax Consolidation ............70
6.4 Maintenance of Properties; Insurance; Application
of Net Loss Proceeds ......................................70
6.5 Inspection; Lender Meeting ................................71
6.6 Compliance with Laws, etc.; Permits .......................71
6.7 Environmental Review and Investigation,
Disclosure, Etc.; Borrowers' Actions Regarding
Hazardous Materials Activities, Environmental
Claims and Violations of Environmental Laws ...............71
6.8 Interest Rate Protection ..................................73
6.9 Compliance with Material Contracts ........................73
6.10 [Intentionally omitted] ...................................73
6.11 Payment of Liens ..........................................73
6.12 Further Assurances ........................................74
6.13 Execution of Subsidiary Guaranty and Personal Property
Collateral Documents by Certain Subsidiaries and Future
Subsidiaries ..............................................75
Section 7. BORROWERS' NEGATIVE COVENANTS .............................75
7.1 Indebtedness ..............................................76
7.2 Liens and Related Matters .................................77
7.3 Investments; Joint Ventures; Formation of Subsidiaries ....79
7.4 Contingent Obligations ....................................80
7.5 Restricted Junior Payments ................................80
7.6 Financial Covenants .......................................82
7.7 Restriction on Fundamental Changes; Asset Sales
and Acquisitions ..........................................83
7.8 Sales and Lease-Backs .....................................85
7.9 Sale or Discount of Receivables ...........................85
7.10 Transactions with Shareholders and Affiliates .............85
7.11 Disposal of Subsidiary Stock ..............................87
7.12 Conduct of Business .......................................87
2
7.13 Certain Restrictions on Changes to Operative
Documents, Permits, Project Budget or Project
Schedule ..................................................88
7.14 Consolidated Capital Expenditures .........................88
7.15 Fiscal Year ...............................................89
7.16 Zoning and Contract Changes and Compliance ................89
7.17 No Joint Assessment; Separate Lots ........................89
7.18 Certain Covenants Applicable to New Mall
Subsidiary and Other Mall Related Companies ...............90
7.19 Limitation on Declaration of Restricted
Subsidiaries ..............................................91
7.20 Payments to ▇▇▇▇▇▇▇ .......................................91
7.21 Interest Payments .........................................91
Section 8. EVENTS OF DEFAULT .........................................91
8.1 Failure to Make Payments When Due .........................91
8.2 Default under Other Indebtedness or Contingent
Obligations ...............................................91
8.3 Breach of Certain Covenants ...............................92
8.4 Breach of Warranty ........................................92
8.5 Other Defaults Under Loan Documents .......................92
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc ......92
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc ........92
8.8 Judgments and Attachments .................................92
8.9 Dissolution ...............................................93
8.10 Employee Benefit Plans ....................................93
8.11 Change in Control .........................................93
8.12 Failure of Guaranty; Repudiation of Obligations ...........93
8.13 Default Under or Termination of Operative
Documents .................................................94
8.14 Default Under or Termination of Permits ...................94
8.15 Default Under or Termination of Cooperation
Agreement .................................................94
8.16 Bankruptcy or Dissolution of New Mall Subsidiary ..........94
8.17 Acceleration of Obligations of New Mall Subsidiary ........94
8.18 Certain Investments in any Excluded Subsidiary ............94
8.19 Conforming ▇▇▇▇▇▇▇ L/C ....................................94
8.20 Default Under or Termination of the Phase II Lease ........94
Section 9. AGENTS ....................................................95
9.1 Appointment ...............................................95
9.2 Powers and Duties; General Immunity .......................96
9.3 Representations and Warranties; No Responsibility
For Appraisal of Credit Worthiness ........................97
9.4 Right to Indemnity ........................................97
9.5 Successor Administrative Agent ............................97
9.6 Collateral Documents and Subsidiary Guaranties ............98
9.7 Disbursement Agreement and Intercreditor Agreement ........98
3
9.8 Appointment of Lead Arranger after November 14, 1997 ......98
Section 10. MISCELLANEOUS .............................................99
10.1 Assignments and Participations in Loans ...................99
10.2 Expenses..................................................101
10.3 Indemnity.................................................101
10.4 Set-Off; Security Interest in Deposit Accounts............102
10.5 Ratable Sharing...........................................102
10.6 Amendments and Waivers....................................102
10.7 Certain Matters Affecting Lenders.........................103
10.8 Independence of Covenants.................................103
10.9 Notices...................................................104
10.10 Survival of Representations, Warranties and
Agreements ...............................................104
10.11 Failure or Indulgence Not Waiver; Remedies
Cumulative ...............................................104
10.12 Marshalling; Payments Set Aside...........................104
10.13 Severability..............................................105
10.14 Obligations Several; Independent Nature of
Lenders' Rights ..........................................105
10.15 Headings..................................................105
10.16 Applicable Law............................................105
10.17 Successors and Assigns....................................105
10.18 Consent to Jurisdiction and Service of Process............105
10.19 Waiver of Jury Trial......................................106
10.20 Confidentiality...........................................106
10.21 Counterparts; Effectiveness...............................106
10.22 Restriction on ▇▇▇▇▇▇▇ Indebtedness.......................106
10.23 Gaming Authorities........................................107
10.24 Automatic Amendment of this Agreement.....................107
Signature pages ............................................................S-1
Acknowledgement and Consent................................................S1-1
4
SCHEDULES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
5.1A JURISDICTION OF ORGANIZATIONS
5.1C OWNERSHIP OF BORROWERS
5.1D SUBSIDIARIES OF BORROWERS
5.1E OPTIONS
5.4 RESTRICTED JUNIOR PAYMENTS
5.5 REAL PROPERTY
5.6 LITIGATION
5.8 MATERIAL CONTRACTS
5.11 CERTAIN EMPLOYEE BENEFIT PLANS
5.12 CERTAIN FEES
5.13 ENVIRONMENTAL MATTERS
5.16 PERMITS
5.17 CONSTRUCTION LITIGATION
5.18 EVENTS OF DEFAULT AND POTENTIAL EVENTS OF DEFAULT
5.20A COOPERATION AGREEMENT LIENS
5.20B HVAC SERVICES AGREEMENT LIENS
5.20C ADDITIONAL EMPLOYMENT AGREEMENTS/OPTION PLANS OR AGREEMENTS
5.20D AMENDMENTS TO OTHER INDEBTEDNESS DOCUMENTS
7.2 CERTAIN EXISTING LIENS
7.3 CERTAIN EXISTING INVESTMENTS
5
EXHIBITS
I-A FORM OF NOTICE OF BORROWING FOR REVOLVING LOANS
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III-A FORM OF TERM NOTE
III-B FORM OF REVOLVING NOTE
IV FORM OF COMPLIANCE CERTIFICATE
V-A FORM OF OPINION OF ▇▇▇▇, WEISS, RIFKIND, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇-▇ FORM OF OPINION OF ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
VI [INTENTIONALLY OMITTED]
VII FORM OF ASSIGNMENT AGREEMENT
VIII FORM OF SUBSIDIARY SECURITY AGREEMENT
VIII-A FORM OF PHASE I-A SUBSIDIARY SECURITY AGREEMENT
IX FORM OF CERTIFICATE RE NON-BANK STATUS
X [INTENTIONALLY OMITTED]
XI FORM OF SUBSIDIARY GUARANTY
XII FORM OF COMPANY SECURITY AGREEMENT
XIII FORM OF DEED OF TRUST
XIV FORM OF INTERCREDITOR AGREEMENT (CREDIT PARTIES)
XV FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
XVI FORM OF INTERCREDITOR AGREEMENT (▇▇▇▇▇▇▇)
XVII FORM OF DISBURSEMENT AGREEMENT
XVIII FORM OF SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
XIX FORM OF MALL CONSTRUCTION SUBSIDIARY SECURITY AGREEMENT
XX FORM OF CONFORMING ▇▇▇▇▇▇▇ L/C DRAWING AGREEMENT
XXI FF&E LETTER AGREEMENT
6