EXHIBIT 4(32)
INTERCREDITOR AGREEMENT
This Intercreditor Agreement dated as of December 18, 1998, is
entered into between Bank of America National Trust and Savings Association, as
Agent under the Existing Credit Agreement referred to below, and the New Lenders
(as defined herein) under the Supplemental Bank Facility described below, with
reference to the following facts:
A. Pursuant to an Amended and Restated Credit Agreement dated as of
February 24, 1998 ("the "Existing Credit Agreement") entered into by
and among Rio Properties, Inc., a Nevada corporation ("Properties"),
Rio Leasing, Inc., a Nevada corporation ("Leasing" and collectively
with Properties, the "Borrowers"), the Banks named therein, and Bank
of America National Trust and Savings Association, as Agent, the
Banks have committed to extend credit facilities in an amount of
$275,000,000 to Borrowers.
B. The obligations of Borrowers under the Existing Credit Agreement
have been guaranteed by the Rio Hotel & Casino, Inc. ("Parent"),
HLG, Inc. and Cinderlane, Inc. (the "Guarantors") and are secured by
substantially all of the property of Borrowers, Parent and the other
Guarantors.
C. Borrowers propose to enter into a $125,000,000 credit facility (the
"Supplemental Bank Facility") with the lenders initially party to
this Agreement and described as such on the signature pages hereto
(with assignees thereof, the "New Lenders") pursuant to a Loan
Agreement of even date herewith among Borrowers, the New Lenders and
Bank of America National Trust and Savings Association, as Agent
(the "New Agent").
D. The obligations and indebtedness of Borrowers under the Supplemental
Bank Facility (i) are to be guaranteed by the Parent and the other
Guarantors, and (ii) shall be secured by the same property of
Borrowers, Parent and the other Guarantors which acts
as security for the Existing Credit Agreement and the related Loan
Documents referred to therein (subject, as to certain capital stock,
to Section 6 of this Agreement).
E. By and subject to the terms of this Agreement, the parties desire to
provide that the Agent's Liens and the New Lenders' Liens shall be
pari passu and of equal priority.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Definitions. As used herein, the following terms have the
meanings set forth after each:
"Agent's Liens" means each of the liens and security interests now
held or hereafter acquired by the Agent for the benefit of the Banks under
the Existing Credit Agreement in the property of Borrowers, the Parent and
the other Guarantors.
"Banks" means the Banks described in the Existing Credit Agreement,
including without limitation the Banks and the Agent.
"Existing Facility Obligations" means all obligations and
indebtedness of Borrowers, the Parent and the Guarantors under the
Existing Credit Agreement and the related Loan Documents described
therein.
"Creditor Group" means, (a) in respect of the Agent, the Banks, and
(b) in respect of the New Agent, the New Lenders.
"Supplemental Bank Facility" means the Supplemental Bank Facility
described in the recitals hereto, as it may from time to time be amended,
supplemented, modified, amended, restated or extended.
"Supplemental Bank Facility Obligations" means all obligations and
indebtedness of Borrowers, the Parent and the Guarantors under the
Supplemental Bank Facility, and the related Loan Documents described
therein.
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"Existing Credit Agreement" means the Amended and Restated Credit
Agreement described in the recitals hereto, as it may from time to time be
further amended, supplemented, modified, amended, restated or extended.
"Obligations" means, collectively, the Existing Facility Obligations
and the Supplemental Bank Facility Obligations.
"Qualified Obligations" means (a) in the case of the New Agent and
the New Lenders, all principal Supplemental Bank Facility Obligations
which are incurred prior to the delivery of notice by the Agent to the New
Agent of a Trigger Event, provided that the aggregate amount thereof shall
not exceed the principal amount of $125,000,000, together with interest,
fees, premiums, costs and expenses allocable to such principal, and (b) in
the case of the Banks, all principal Existing Facility Obligations which
are incurred prior to the delivery of notice by the New Agent to the Agent
of a Trigger Event (including, without limitation, the amount of any
letters of credit and related reimbursement obligations or other
contingent obligations issued by the Agent and the Banks and any currency
or interest rate hedging arrangements entered into with the Agent or any
Bank).
"Guarantors" means HLG, Inc., Cinderlane, Inc. and each other
guarantor of the obligations under the Existing Credit Agreement and the
Supplemental Bank Facility.
"Trigger Event" means any of the following:
(a) the occurrence of any Event of Default of the type described in
Section 9.1(k) of the Existing Credit Agreement with respect to Parent,
any Borrower or any Guarantor having assets in excess of $50,000,000; or
(b) the actual acceleration of any Obligations by the holder or
holders thereof or their representatives.
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"New Lenders' Liens" means each of the liens and security interests
now held or hereafter acquired by the New Agent for the benefit of the New
Lenders under the Supplemental Bank Facility in the property of Borrowers,
the Parents and the Guarantors.
2. Liens Pari Passu. Subject to Section 4 hereof, the parties hereto
hereby agree that, to the extent that the same are perfected and unavoidable
(whether by means of preference, fraudulent conveyance or transfer or
otherwise), and in each case to the extent that the same secure Qualified
Obligations, the Agent's Liens and the New Lenders' Liens shall be pari passu
and entitled to equal priority in distribution. The relative priority of such
liens and security interests described in this Agreement shall apply
irrespective of the time, order or manner of attachment or perfection of such
liens and security interests, and shall not be affected by any bankruptcy,
insolvency or similar event with respect to Borrowers, the Parent or any
Guarantors.
3. Sharing of Proceeds; Turnover. The Agent agrees on behalf of
itself and the Banks, and the New Lenders agree that:
(a) if, through the exercise of the Agent's Liens and the New
Lenders' Liens, either Creditor Group receives any amount which is in
excess of the amount to which that Creditor Group would otherwise be
entitled to pursuant to Section 2, then, subject to applicable laws, the
members of that Creditor Group shall purchase, and shall be deemed to have
simultaneously purchased, from the members of the other Creditor Group,
participations in the Obligations held by the other Creditor Group, and
shall pay a purchase price for such participations in the amount which is
necessary to ssure that the total amount received by the each Creditor
Group is in the amount contemplated by Section 2; and
(b) such other adjustments and purchases of participations shall be
made from time to time as shall be equitable to ensure that the Agent and
the Banks and the New Agent and the New Lenders share the proceeds of
their respective liens and security interests ratably in accordance with
Section 2;
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provided that, if all or any portion of a disproportionate payment obtained as a
result of the exercise of the Agent's Liens or the New Lenders' Liens is
thereafter recovered from the purchasing Creditor Group by Borrowers, the Parent
or any Guarantor or any other person claiming through or succeeding to the
rights of a Borrower, Parent, or a Guarantor the purchase of a participation
shall be rescinded and the purchase price thereof shall be restored to the
extent of the recovery, but without interest.
4. Limitation on Indebtedness Entitled to the Benefits Hereof. The
aggregate principal amount of Supplemental Bank Facility Obligations (whether
for loans or for any other credit accommodations) which are entitled to the
benefits of this Agreement shall be limited to indebtedness of Borrower to the
New Lenders in an aggregate amount not to exceed the principal amount of
$125,000,000, plus interest, fees, premiums, costs and expenses allocable to
such principal. No other obligations or indebtedness to the New Agent or the New
Lenders for the payment of principal under the Supplemental Bank Facility (nor
any interest, fees, premiums, cost, expenses or other amounts payable with
respect to any such excess principal) shall be entitled to the benefits of this
Agreement, but the priority of any liens or security interests therefor shall
instead be as determined by applicable law; provided that, (a) notwithstanding
the existence of any such excess principal amount, the benefits of this
Agreement shall continue to apply to the principal amount described in the first
sentence of this Section (plus any interest, fees, premiums, expenses or other
amounts payable with respect to any such principal), and (b) subject to the
limitation as to the amount of such Supplemental Bank Facility Obligations set
forth in (a), nothing contained herein shall limit the right of the New Agent
and the New Lenders to amend, modify or extend the Supplemental Bank Facility,
the Loan Documents described therein and the related notes as set forth in
Section 9(b) of this Agreement.
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5. Increase to Bank Facility. The New Agent and the New Lenders
agree that the Agent and the Banks may enter into any amendment, modification or
extension of the Existing Credit Agreement without affecting the relative
priority of the Agent's Liens contemplated herein, it being understood that
there is no limit to the amount of the indebtedness entitled to the benefits of
the Agent's Liens and that in the event that the credit commitments of the Banks
under the Existing Credit Agreement are hereafter increased, such increased
commitments shall be entitled to the equal, ratable and pari passu benefit of
the Agent's Liens.
6. Stock and Instruments Held By Agent. The Agent hereby agrees to
hold any capital stock and instruments delivered to it in pledge pursuant to the
terms of the Existing Credit Agreement and the other Loan Documents for the
mutual benefit of the Banks and the New Lenders in accordance with the terms of,
and subject to the limitations contained in, this Agreement, provided that the
Agent:
(a) shall not be deemed to hold the capital stock of Properties or
Leasing (or of any other subsidiary of Parent which is now or hereafter
becomes the holder of a gaming license under the law of the State of
Nevada or any other State) unless and until all required approvals of the
Nevada Gaming Commission and the Nevada State Gaming Control Board (or the
relevant gaming authorities of such other State) are obtained by the
beneficiaries of such pledge;
(b) may designate any bank, trust company or other financial
institution (which in the case of any person holding stock of a Nevada
Gaming Licensee shall be a person located in the State of Nevada
acceptable to the Nevada Gaming Commission) to hold any and all such
collateral in accordance with the terms of this Agreement in lieu of the
Agent (which designee shall be deemed the representative of both the New
Agent and the Agent) at the sole expense of Borrowers;
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(c) shall not be deemed to be in a relation of trust or confidence
with the New Agent or the New Lenders by reason of this Agreement, and
shall not owe any fiduciary, trust or other special duties to the New
Agent or the New Lenders by reason of this Agreement.
(d) shall be deemed to have exercised reasonable care in the custody
and preservation of such collateral if it is accorded treatment
substantially similar to that which the Agent accords its own property, it
being understood that the Agent shall not have any responsibility for
ascertaining or taking action with respect to maturities, calls,
conversions, exchanges, tenders or other matters relative to any such
collateral, whether or not the Agent has or is deemed to have knowledge of
such matters, or taking any necessary steps to preserve rights with
respect to any such collateral.
(e) shall not be under any duty or obligation to preserve, maintain
or protect any such collateral, exercise any voting rights with respect
thereto, or make or give any notices of default, presentments, demands for
performance, notices of nonperformance or dishonor, protests, notices of
protest or notice of any other nature whatsoever in connection therewith.
(f) in the event of any dispute regarding any such pledged
collateral may implead the same with a court of competent jurisdiction.
(g) shall not be liable to the New Agent or any New Lender for any
act or omission of the Agent, unless and to the extent that the same is
determined, by the final decision of a court of competent jurisdiction, to
arise solely from the gross negligence or willful misconduct of the Agent.
(h) shall not be deemed to have made any representation about the
existence, condition or sufficiency of any such collateral or its liens
therein.
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7. Title Insurance; Insurance, Casualty and Condemnation Proceeds.
(a) It is the intention of both the Agent and the New Agent that
they shall cooperatively arrange for an increase in the amount of the
lenders' policy of title insurance now held by the Agent with respect to
the Rio Hotel & Casino, in Las Vegas, Nevada, to an aggregate coverage of
$400,000,000.
(b) The proceeds of policy of title insurance referred to in (a),
and all other policies of insurance maintained by Borrower and its
Subsidiaries as to which each of the parties are loss payees or additional
insureds, or in which the parties hereto have any other interest, shall be
shared in the same manner as the proceeds of collateral described above.
In the event that any insurance or condemnation proceeds are payable to
the Agent or the New Agent pursuant to the Loan Documents executed in
connection with the Existing Bank Facility or the Supplemental Bank
Facility, but are conditionally available to Borrower or any of its
Subsidiaries for the purpose of repair, reconstruction or replacement of
the related collateral, the Agent and the New Agent shall cooperate with
one another to establish an escrow for the retention of such proceeds
pending such repair, reconstruction or replacement (subject to the
application of such proceeds in the manner contemplated by such Loan
Documents), and shall be entitled to ratable and pari passu application,
in accordance with the terms hereof, of any funds not returned to Borrower
and the Guarantors.
8. Amendments; Marshaling of Assets; Election of Remedies.
(a) Each of the parties hereto waives any right it may now or
hereafter have to require the other party to marshal assets, to exercise
rights or remedies in a particular manner, or to forbear exercising such
rights and remedies in any particular manner or order.
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(b) Each of the parties hereto will be free to exercise in such
manner and order as it elects in its discretion, fail to exercise, waive,
suspend, terminate or suffer expiration of, any of its rights and remedies
with respect to the collateral for the Obligations to its Creditor Group.
Each of the parties hereto will have the unfettered right, at any time or
from time to time, to release, subordinate or otherwise diminish (whether
intentionally, negligently or otherwise) any lien or security interest on
any collateral not required to be released hereunder, without affecting
the liens and security interests of the other party in such collateral or
the rights of the releasing or subordinating party hereunder with respect
to other collateral.
9. Notice of Foreclosure; Sharing of Proceeds. Each of the parties
agrees to give notice to the other party of any action to foreclosure upon or
enforce a lien or security interest upon collateral securing both the Existing
Facility Obligations and the Supplemental Bank Facility Obligations promptly as
practicable and in any event no later than the time that any legally required
notices are given to Borrower or its affiliates. In the event of any realization
upon collateral securing both the Existing Facility Obligations and the
Supplemental Bank Facility Obligations, whether as a result of any action to
foreclose upon or enforce a lien or security interest against particular
property or otherwise, the proceeds of such realization of collateral (net of
expenses incurred in connection with such realization of collateral) shall be
shared so that the then outstanding amount of Existing Facility Obligations and
the then outstanding amount of Supplemental Bank Facility Obligations are repaid
on a pro rata basis (or in the event such realization of collateral does not
result in cash available for payment, such property shall be shared as
collateral on the basis set forth in this Agreement).
10. Further Assurances, etc. Each party hereto shall execute and
deliver such other documents and instruments, in form and substance reasonably
satisfactory to the other parties hereto, and shall take such other action, in
each case as any other party hereto may reasonably have requested (at the cost
and expense of Borrower) to effectuate and carry out the provisions of this
Agreement, including by recording or filing this Agreement or short form
memoranda hereof or such other
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documents or instruments in such places as the requesting party may reasonably
request. In the event that the Obligations under the Supplemental Bank Facility
or the Existing Credit Agreement are repaid in full, each party agrees that they
shall enter into a replacement intercreditor agreement on substantially
identical terms with this agreement with any institutional creditor holding
indebtedness designated by Borrower which (a) is permitted by the surviving
agreement, and (b) substantially refinances or replaces the Obligations so
repaid, provided that the Agent or the New Agent, as the case may be, shall be
provided at the expense of Borrower with any instruments, documents, opinions
and certificates as may reasonably be requested by such party or required by law
to confirm the authority and obligation of such party to enter into such an
agreement.
11. Attorneys Fees. In the event of any litigation between the
parties to this Agreement arising out of the subject matter hereof, the
prevailing party shall be entitled, in addition to any other relief awarded by
the court, arbitrator or other tribunal, to an award of its reasonable
attorneys' fees and expenses.
12. Notices. All notices, requests, demands, directions and other
communications provided for hereunder must be in writing and must be mailed (by
registered or certified mail), telecopied, dispatched by commercial courier or
delivered to the appropriate party at the address set forth in the records of
the Administrative Agent or to such other address as may be designated by a
party in a written notice sent to all other parties in accordance with this
Section.
13. Additional New Lenders. Each New Lender which hereafter becomes
a party to the Supplemental Facility shall be deemed to be a party hereto in
accordance with Section 10.08 of the Loan Agreement governing the Supplemental
Bank Facility, and shall be bound by and entitled to the benefits of this
Agreement.
14. Integration. This Agreement sets forth the entire understanding
of the Parties with respect to the within matters and may not be modified or
amended except upon a writing signed by all parties.
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15. Counterparts. This Agreement may be executed in one or more
counterparts, each one of which when so executed shall be deemed to be an
original, and all of which taken together shall constitute one and the same
agreement.
16. No Third Parties Benefitted. This Agreement is solely for the
benefit of the Agent and the Banks from time to time party to the Existing
Credit Agreement, the New Agent (in such capacity) and the New Lenders under the
Supplemental Bank Facility, and their respective successors and assigns, and
neither Parent, Borrowers, the Guarantors or their respective affiliates nor any
other persons or entities are intended to be third party beneficiaries hereunder
or to have any right, benefit, priority, or interest under, or because of the
existence of, or to have any right to enforce, this Agreement, provided that
Borrowers shall be entitled to rely upon the last sentence of Section 10 hereof.
17. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the internal laws of the State of
Nevada, without reference to the choice of law or conflicts of law provisions
thereof.
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IN WITNESS WHEREOF, the parties hereto have executed this
Intercreditor Agreement as of the date first written above by their duly
authorized representatives.
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Agent under the Existing Credit
Agreement and as New Agent under the
Supplemental Bank Facility
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice President
Address for Notices:
Bank of America National Trust and Savings
Association
Agency Management Services
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Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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▇▇▇▇▇ FARGO BANK, N.A.
By: /s/ ▇▇▇ ▇▇▇▇▇▇
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Title: Vice President
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Address for notices:
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MAC 4611-031
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Attn: ▇▇▇ ▇▇▇▇▇▇, Vice President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Domestic and Eurodollar
Lending Office:
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Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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Title: First Vice President
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Address for notices and Domestic and
Eurodollar Lending Office:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, CSA
The First National Bank of Chicago
1132/1-10
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▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
312/732-8543
312/732-4840 FAX
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SOCIETE GENERALE
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: Managing Director
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Address for notices and Domestic and
Eurodollar Lending Office:
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Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
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ABN AMRO BANK N.V.
By: /s/ ▇▇▇▇▇▇▇ ▇. French
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Title: Group Vice President
& Director
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By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Title: Vice President
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Address for notices:
ABN AMRO Bank N.V.
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Attn: ▇▇▇▇▇▇▇ ▇. French
Group Vice President & Director
415/▇▇▇-▇▇▇▇ telephone
415/362-3524 telecopier
Address for Domestic and Eurodollar
Lending Office:
ABN AMRO Bank N.V.
Loan Administration
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312/▇▇▇-▇▇▇▇ telephone
312/992-5158 telecopier
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▇.▇. ▇▇▇▇ ▇▇ ▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Title: Vice President
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Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Domestic and Eurodollar Lending Office:
U.S. Bank, N.A.
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▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇. ▇▇▇▇▇▇▇
Commercial Loan Servicing ▇▇▇▇ ▇▇-▇
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By: /s/ ▇▇▇▇▇ ▇▇▇▇ Tat
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Title: Senior Vice President
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Address for notices:
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇ Tat, Senior Vice President
Telephone: 212/▇▇▇-▇▇▇▇
Facsimile: 212/557-9460
and
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Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Regional Director
213/629-3057
213/489-3594 FAX
Address for Domestic and Eurodollar
Lending Office:
Bank of Scotland
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Attn: ▇▇▇▇▇ ▇▇▇▇ Tat, Senior Vice President
Telephone: 212/▇▇▇-▇▇▇▇
Facsimile: 212/557-9460
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