EXHIBIT 4.5
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FADAA LIMITED WAIVER
This FADAA LIMITED WAIVER (this "Limited Waiver") is dated as of November
12, 1999 and is entered into in relation to that certain Funding Agents'
Disbursement and Administration Agreement dated as of November 14, 1997 (as
amended from time to time, the "FADAA") by and among Las Vegas Sands, Inc.,
("LVSI"), Venetian Casino Resort, LLC ("VCR"), and Grand Canal Shops Mall
Construction, LLC ("GCCLLC" and collectively, the "Company"), Sheldon G.
Adelson, The Bank of Nova Scotia, as the Bank Agent (in such capacity, the "Bank
Agent"), First Trust National Association, as Mortgage Notes Indenture Trustee,
Salomon Brothers Realty Corp. ("SBRC"), successor-in-interest to GMAC Commercial
Mortgage Corporation ("GMACCM"), as the Interim Mall Lender, Atlantic-Pacific
Las Vegas, LLC, as the HVAC Provider, and the Bank of Nova Scotia, as
Disbursement Agent (in such capacity, the "Disbursement Agent"). All capitalized
terms not otherwise defined herein shall have the meaning ascribed thereto in
the FADAA. This agreement shall constitute a Limited Waiver, which shall be (i)
limited in all respects precisely as set forth below, (ii) shall be conditioned
upon satisfaction of each of the conditions set forth in Section 4 hereof and
(iii) shall constitute an agreement of the parties executing this document as to
the agreements set forth herein.
RECITALS
WHEREAS, Disbursement Agent and the Funding Agents believe that certain
Events of Default and Potential Events of Default, as set forth on Schedule 1
hereto, exist as of the date hereof;
WHEREAS, pursuant to Section 4.4 of the Intercreditor Agreement, the Bank
Agent and the Interim Mall Lender may waive defaults under the FADAA without the
consent of the other Credit Parties;
WHEREAS, pursuant to Section 1.1(e) of that certain Consent and Agreement
(HVAC Agreements) (the "HVAC Consent") dated November 14, 1997 by and between
the HVAC Provider and VCR, the Bank Agent and the Interim Mall Lender may waive
defaults under the FADAA without the consent of the other Credit Parties;
WHEREAS, the Company desires that Disbursement Agent, the Bank Agent and
SBRC, as Interim Mall Lender, waive those certain Events of Default and
Potential Events of Default set forth on Schedule 1 hereto (if and to the extent
such defaults exist on the date hereof) so that Mall Release and Completion may
occur on or before the Outside Completion Deadline and so that an Advance can be
made on the Mall Release Date and/or Completion Date; and
WHEREAS, the Disbursement Agent, the Bank Agent and SBRC, as the Interim
Mall Lender, agree to waive such Events of Default and Potential Events of
Default, all upon the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the promises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
Section 1. WAIVER
Subject to the terms and conditions and in reliance on the representations,
warranties and covenants of the Company set forth herein, Disbursement Agent,
Bank Agent and SBRC, as the Interim Mall Lender, pursuant to Section 4.4 of the
Intercreditor Agreement and Section 1.1(e) of the HVAC Consent, hereby (i) waive
each of the Events of Default and Potential Events of Default set forth on
Schedule 1 attached hereto (if and to the extent such defaults exist on the date
hereof) to the extent and for the period expressly set forth therein, (ii) waive
the requirement that the Company provide a Preliminary Funding Request and a
Preliminary Notice of Funding Request in connection with the Advance to be made
on the Mall Release Date and/or the Completion Date and (iii) waive the
requirement that the Company provide a Construction Manager's Certificate in
connection with the Advance to be made on the Completion Date and each
subsequent Advance made while the Construction Litigation (as hereinafter
defined) is ongoing.
Section 2. LIMITATION ON WAIVER
The waivers contained in this Limited Waiver shall be limited in all
respects precisely as set forth below and in Schedule 1 and nothing contained
herein shall be deemed to:
(a) constitute a waiver of (i) compliance by the Company with respect to
any term, provision or condition of the FADAA or any other instrument or
agreement referred to therein except as expressly set forth in Schedule 1
or (ii) any Event of Default or Potential Event of Default, except as
expressly set forth on Schedule 1;
(b) constitute a waiver of any of the Mall Release Conditions or any of the
conditions for Completion or extend the time for satisfaction of such
conditions;
(c) prejudice any right or remedy that Disbursement Agent, Bank Agent or
SBRC or any other Funding Agent or the Tranche A Take Out Lender may now or
in the future have (except to the extent such right or remedy was based
upon a default that will not exist after giving effect to this Limited
Waiver) under or in connection with the FADAA or any other instrument or
agreement referred to therein or delivered thereunder including, without
limitation, the Tranche A Take Out Loan Commitment Agreement as amended by
the Mall Agreement (as defined below) and the Tri-Party Agreement (as
defined in the Tranche A Take Out Loan Commitment Agreement, as each of the
same may have been amended by that certain Multi-Party Agreement Regarding
Grand Canal Shops Mall, Las Vegas, Nevada dated as of September 30, 1999
(the "Mall Agreement")); or
(d) constitute a waiver of any term, provision or condition of the Tranche
A Take Out Loan Commitment Agreement as amended by the Mall Agreement or
the Tri-Party Agreement, as amended by the Mall Agreement (including,
without limitation, the satisfaction of all Mall Release Conditions).
Except as expressly set forth herein, the terms, provisions and conditions
of the FADAA and the other Operative Documents shall remain in full force and
effect and in all other respects are hereby ratified and confirmed.
Section 3. REPRESENTATIONS AND WARRANTIES
(a) In order to induce Disbursement Agent, Bank Agent and SBRC to
enter into this Limited Waiver and provide the waivers and agreements
provided herein, each of VCR, LVSI and GCCLLC represents and warrants to
Disbursement Agent, GMACCM and each Funding Agent that the following
statements are true, correct and complete as of the date hereof and as of
the date the conditions set forth in Section 4 are satisfied:
(1) each of VCR, LVSI and GCCLLC has all requisite corporate or
limited liability company power and authority to enter into this
Limited Waiver and to carry out the transactions contemplated hereby,
and perform its obligations hereunder;
(2) the execution and delivery of this Limited Waiver by VCR,
LVSI and GCCLLC and the performance of their obligations hereunder
have been duly authorized by all necessary corporate action on the
part of VCR, LVSI and GCCLLC;
(3) the execution and delivery by VCR, LVSI and GCCLLC of this
Limited Waiver and the performance by VCR, LVSI and GCCLLC of this
Limited Waiver do not and will not (i) violate any provision of any
law or any governmental rule or regulation applicable to the Mall or
the Project or to VCR, LVSI, GCCLLC or any of their Affiliates, the
organizational documents of VCR, LVSI or GCCLLC or any of their
Affiliates or any order, judgment or decree of any court or other
agency of government binding on the Mall, the Project, VCR, LVSI or
GCCLLC or any of their Affiliates, (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 VCR, LVSI or GCCLLC or any
of their Affiliates or which binds the Mall or the Project, (iii)
result in or require the creation or imposition of any Lien upon any
of the properties or assets of VCR, LVSI or GCCLLC or any of their
Affiliates, or (iv) require any approval of stockholders or any
approval or consent of any Person under any contractual obligation of
VCR, LVSI or GCCLLC or any of their Affiliates;
(4) the execution and delivery by VCR, LVSI and GCCLLC of this Limited
Waiver and the performance by VCR, LVSI and GCCLLC of this Agreement 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;
(5) this Limited Waiver has been duly executed and delivered by VCR,
LVSI and GCCLLC and constitutes the legally valid and binding obligations
of VCR, LVSI and GCCLLC, enforceable against VCR, LVSI and GCCLLC 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;
(6) the representations and warranties contained in Article 4 of the
FADAA are and will be true, correct and complete in all material respects
on and as of the date hereof and on the date the conditions in Section 4
hereof are satisfied to the same extent as though made on and as of that
date, except (i) to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true,
correct and complete in all material respects on and as of such earlier
date, and (ii) with respect to the matters described on Schedule 1;
(7) the Remaining Costs are accurately reflected on that certain chart
previously delivered to the Disbursement Agent and attached hereto as
Exhibit A;
(8) the schedule to achieve Completion previously delivered to the
Disbursement Agent and attached hereto as Exhibit B is accurate and true;
(9) the litigation arising out of the lawsuit filed by the Company
against the Construction Manager in United States District Court for the
District of Nevada and the countersuit filed by the Construction Manager
against the Company and any other pending 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, and any judgment
or settlement amount owed by the Company to the Construction Manager or any
contractor or subcontractor or to the bonding company insuring over any
Lien as a result of the Construction Litigation (such amount, the
"Additional Contingent Claims") can not reasonably be expected to have,
when taken in the aggregate, a Material Adverse Effect;
(10) the status summary of the Construction Litigation attached hereto
as Exhibit C is true and correct in all material respects as of the date
hereof;
(11) the Company has 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;
(12) the Project is free of all Liens and encumbrances other than
Permitted Liens;
(13) no Events of Default or Potential Events of Default under the
FADAA exist or are continuing (other than those Events of Default and
Potential Events of Default set forth on Schedule 1);
(14) there are no defaults beyond any applicable grace or cure period
with respect to any financing secured by the Sands Expo and Convention
Center;
(15) The Master Leases referred to in Section 8 hereof to be entered
into between VCR and GCCLLC contain terms which are not less favorable to
VCR and its Subsidiaries than would be obtainable in an arm's length
transaction, including economic terms consistent with the current rental
market for comparable space in Las Vegas, Nevada;
(16) each of the Opening Conditions has been satisfied;
(17) GCCLLC and its successors and assigns have no obligation to
Frontier Insurance Company or any other person or entity under any
indemnification or reimbursement agreement, except as set forth in Section
6(i) hereof, with respect to any surety bond; and
(l8) The obligation for payment, indemnification or reimbursement
under each surety bond that the Company has acquired in respect of any Lien
is unsecured.
(b) In order to induce Disbursement Agent, Bank Agent and SBRC to enter
into this Limited Waiver and provide the waivers and agreements provided herein,
Adelson represents and warrants to Disbursement Agent, GMACCM and each Funding
Agent that the following statements are true, correct and complete as of the
date hereof and as of the date the conditions set forth in Section 4 are
satisfied:
(1) All governmental authorizations and actions necessary in
connection with the execution and delivery by Adelson of this Limited
Waiver and the performance of his obligations hereunder have been obtained
or performed and remain valid and in full force and effect;
(2) This Limited Waiver has been duly executed and delivered by
Adelson and constitutes the legal, valid and binding obligation of Adelson,
enforceable against Adelson (and Adelson's heirs, executors,
administrations, legal representatives, successors and assigns) in
accordance with the terms of this Limited Waiver, subject to applicable
bankruptcy, insolvency, moratorium and other similar laws affecting
creditors' rights generally and general principles of equity;
(3) The execution, delivery and performance of this Limited Waiver (i)
do not and will not contravene any law, rule, regulation, order, judgment
or decree applicable to or binding on the Mall or the Project or Adelson or
any of his assets or properties; (ii) do not and will not contravene, or
result in any breach of or constitute any default under, any agreement or
instrument to which Adelson is a party or by which Adelson or any of his
assets or properties may be bound or affected or which binds the Mall or
the Project; (iii) do not and will not require the consent of any Person
under existing law or agreement which has not already been obtained and
(iv) do not and will not result in or require the creation of any Lien upon
the Project or the Mall;
(4) There is no pending or, to the best of Adelson's knowledge,
threatened action or proceeding affecting Adelson, the Mall or the Project
before any court, governmental agency or arbitrator, which might reasonably
be expected to materially and adversely affect the financial condition,
results of operations, business or prospects of Adelson or the ability of
Adelson to perform his obligations under this Limited Waiver;
(5) Adelson possesses all franchises, certificates, licenses, permits
and other governmental authorizations and approvals necessary for him to
own his properties, conduct his businesses and perform his obligations
under this Limited Waiver; and
(6) Adelson has complied with the terms and conditions of that certain
Subordination and Intercreditor Agreement (Trade Claims) (the "Adelson
Subordination Agreement"), the form of which is attached hereto as Exhibit
E, with respect to Adelson Trade Claims (as defined in the Adelson
Subordination Agreement).
Section 4. CONDITIONS TO EFFECTIVENESS
Section 1 and Section 8 of this Limited Waiver shall become effective only
upon satisfaction of each of the following conditions precedent on or before the
Outside Completion Deadline:
(a) execution and delivery to Disbursement Agent of waivers of all
presently uncured defaults and events of default under each of (i) the Bank
Credit Agreement, (ii) the Interim Mall Credit Agreement and (iii) that
certain Term Loan and Security Agreement dated as of December 22, 1997 by
and among LVSI, VCR, the lenders named therein, BancBoston Leasing Inc. and
General Electric Capital Corporation (collectively, the "Facility
Waivers"), each substantially in the form of Exhibit D-1, D-2 or D-3 hereto
as applicable;
(b) the Company shall have caused the Project to become free of all
Liens and encumbrances other than Permitted Liens, and the Title Insurer
shall have issued endorsements insuring that the Project is free of all
Liens and encumbrances other than Permitted Liens to all parties entitled
to such endorsements under the FADAA;
(c) the Unallocated Contingency Balance shall equal or exceed the
Required Minimum Contingency and Available Funds shall equal or exceed
Remaining Costs after giving effect to the Additional Contingent Claims as
a Remaining Cost (it being understood that the Disbursement Agent may rely
on the certificates set forth in (d) and (e) below in making such
determination);
(d) Company shall have certified to the Disbursement Agent, GMACCM and
each Funding Agent, in form and substance acceptable to Disbursement Agent
and Construction Consultant, that (i) the schedule to achieve Completion
attached hereto as Exhibit B is accurate and complete and all conditions
for Completion will be satisfied by November 12, 1999 and (ii) the
Unallocated Contingency Balance equals or exceeds the Required Minimum
Contingency and Available Funds equal or exceed Remaining Costs after
giving effect to the Additional Contingent Claims as a Remaining Cost and
such certification shall set forth in detail the derivation of all such
figures and calculations (setting forth in detail the sources for payment
of all Remaining Costs and the sources of Available Funds);
(e) The Construction Consultant shall have certified to the
Disbursement Agent and each Funding Agent, in form and substance acceptable
to Disbursement Agent, that (i) the schedule to achieve Completion attached
hereto as Exhibit B is reasonable and all conditions for Completion may be
satisfied by November 12, 1999 and (ii) the Unallocated Contingency Balance
equals or exceeds the Required Minimum Contingency and Available Funds
equals or exceeds Remaining Costs after giving effect to the Additional
Contingent Claims as a Remaining Cost and such certification shall set
forth in detail the derivation of all such figures and calculations
(setting forth in detail the sources for payment of all Remaining Costs and
the sources of Available Funds);
(f) The Company shall have made the payment of principal and interest
in respect of the Mortgage Notes and the Subordinated Notes due on November
15, 1999 in full;
(g) Delivery to the Disbursement Agent of an estoppel certificate from
the HVAC Provider in form and substance satisfactory to the Disbursement
Agent, stating that, as of the date of such certificate, (i) there are no
uncured defaults, nor is the HVAC Provider aware of any condition or state
of events that with the passage of time may result in a default, by the
Company under the HVAC Services Agreement, the Construction Agency
Agreement or the HVAC Ground Lease and (ii) that such agreements remain in
full force and effect;
(h) Delivery to the Disbursement Agent of an opinion or opinions of
counsel to the Company in form and substance reasonably acceptable to the
Disbursement Agent;
(i) Delivery to the Disbursement Agent of a letter from the bonding
company, in the form agreed to by the parties to this Limited Waiver
confirming that bonds have been issued with respect to all mechanics liens
arising out of the Construction Litigation that have not been discharged of
record prior to the Completion Date, that such bonds are irrevocable and in
full force and effect and that all premiums required thereunder have been
paid by the Company;
(j) Each of the Mall-related accounts described in Section 6(h) hereto
have been established;
(k) The Company has delivered all certificates and documentation
required under the Mortgage Notes Indenture to the Mortgage Notes Indenture
Trustee and under Section 7.10 of the Bank Credit Agreement to the Bank
Agent so that VCR may enter into the Master Leases (as hereinafter defined)
and for the Mortgage Notes Indenture Trustee and Bank Agent to enter into
the non-disturbance agreements contemplated by Section 8 hereof;
(l) all Opening Conditions shall have been satisfied; and
(m) No Events of Default or Potential Events of Default (other than
those set forth on Schedule 1) shall exist or be continuing.
Notwithstanding the foregoing, if an Advance is made on or after the date
hereof, Section 1, Section 6, Section 7 and Section 8 shall become immediately
effective (provided that this Limited Waiver has been executed and delivered by
each of the parties hereto and the Bank Agent has received Requisite Lender
Consent), provided, however, that such effectiveness shall not be deemed a
waiver of the conditions set forth above for any other purpose or under any
other agreement.
Section 5. DEFAULT
The failure to comply with any covenant hereunder by Adelson or the Company
shall constitute an Event of Default under this Limited Waiver and an Event of
Default under the FADAA, subject to applicable cure, notice and grace periods.
Section 6. CERTAIN ADDITIONAL AGREEMENTS OF COMPANY AND ADELSON
(a) The Company agrees that it shall not directly or indirectly make
any payment to or for the benefit of Adelson 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 Adelson Subordination
Agreement (a complete list of which claims that have been purchased by
Adelson pursuant to the Adelson Subordination Agreement is attached hereto
as Schedule 2); (ii) payments made in respect of Adelson's 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 any Affiliate, provided that
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nothing contained herein shall be deemed to permit any such payment to
Adelson if such payment shall be otherwise prohibited or restricted
hereunder or under any other agreement or document.
(b) For the benefit of the parties to the FADAA, Interim Mall Lender
and any successors thereto (prior to and after the Mall Release Date) and
Mall I LLC, or any other future owner of the Mall and such owner's secured
lenders, Tranche A Take Out Lender, its borrowers and any successors or
assigns thereof (and all such parties are third party beneficiaries
hereof), Borrowers and Adelson each agree that if (i) a court, arbitrator
or mediator shall finally determine (i.e., such determination shall not be
subject to appeal), or the Company shall agree with the Construction
Manager that, any work heretofore performed on the Project and/or the Mall
consists entirely or in part of Scope Changes, and (ii) the payment of the
Additional Contingent Claim arising out of such Scope Change will cause
Remaining Costs to exceed Available Funds or the Required Minimum
Contingency to exceed the Unallocated Contingency Balance or the amount of
funds on deposit in the Mall Retainage/Punchlist Account to be less than
125% of the Mall Punchlist Completion Amount (provided that when
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calculating the amount of funds that are required to be on deposit in the
Mall Retainage/Punchlist Account pursuant to Section 5.9.1(b) of the FADAA,
the Additional Mall Completion Amount (as defined below) shall be added to
the Mall Punchlist Completion Amount), then (x) the Company agrees to
comply with (1) the requirements of Section 5.9.2 of the FADAA and/or amend
the Project Budget in accordance with Section 6.4.1 of the FADAA so that,
after giving effect to the proposed Scope Change, the Available Funds will
equal or exceed Remaining Costs and the Unallocated Contingency Balance
shall equal or exceed the Required Minimum Contingency (provided, however,
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that any amounts on deposit in the Guaranty Deposit Account up to
$25,000,000 shall be disregarded for purposes of calculating Available
Funds and the Unallocated Contingency Balance) and (2) the requirements of
Section 5.9.1(b) of the FADAA, provided that when calculating the amount of
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Retainage/Punchlist Account pursuant to Section 5.9.1(b) of the FADAA,
there shall be added to the Mall Punchlist Completion Amount the amount of
the Additional Contingent Claim to the extent attributable to any such
Scope Change and allocable to the Mall and all costs related thereto (such
additional amount, the "Additional Mall Completion Amount"); and (y) if the
Company shall fail to comply with its obligations under clause (x) above
then Adelson will, (1) immediately deposit funds into the Mall
Retainage/Punchlist Account in the amount necessary for the Company to
satisfy its obligations under clause (x)(2) above and (2) pursuant to
Section 2(d) of the Adelson Completion Guaranty, promptly upon request
therefor from the Disbursement Agent, deposit into the Guaranty Deposit
Account sufficient funds such that immediately thereafter Available Funds
will equal or exceed the Remaining Costs and the Unallocated Contingency
Balance shall equal or exceed the Required Minimum Contingency (provided,
however, that any amounts on deposit in the Guaranty Deposit Account up to
$25,000,000 shall be disregarded for purposes of calculating Available
Funds and the Unallocated Contingency Balance, but amounts deposited in the
Mall Retainage/Punchlist Account pursuant to clause (x)(2) or (y)(1) above
may be so counted). Adelson and the Company hereby agree that if, pursuant
to a settlement of the Construction Litigation, the Company agrees to pay
for work previously performed in excess of the Guaranteed Maximum Price
under the Construction Management Agreement, such work shall constitute
Scope Changes for purposes of this Limited Waiver if and to the extent the
Construction Consultant shall determine that such work may properly be
classified as a Scope Change. The parties hereto agree that the
Construction Consultant shall, to the extent not already done so, be
engaged by such parties, at the Company's expense, to determine the fair
and just allocation between the Mall and the rest of the Project of the
amount of the Additional Contingent Claim to the extent attributable to any
such Scope Changes and the parties hereto and theirs successors and assigns
shall be bound by such allocation for the purposes of this Section 6(b).
(c) For the benefit of the parties to the FADAA, Interim Mall Lender
and any successors thereto (prior to and after the Mall Release Date) and
Mall I LLC, or any other future owner of the Mall and such owner's secured
lenders, Tranche A Take Out Lender, its borrowers and any successors or
assigns thereof (and all such parties are third party beneficiaries
hereof), Adelson hereby agrees that the Liability Cap set forth in the
Adelson Completion Guaranty shall not be applicable with respect to his
guaranty of the Company's obligations in respect of Scope Changes, as more
particularly set forth in the Adelson Completion Guaranty and in clause (b)
above;
(d) For the benefit of the parties to the FADAA, Interim Mall Lender
and any successors thereto (prior to and after the Mall Release Date) and
Mall I LLC, or any other future owner of the Mall and such owner's secured
lenders, Tranche A Take Out Lender, its borrowers and any successors or
assigns thereof (and all such parties are third party beneficiaries
hereof), Adelson hereby waives his right under the Adelson Completion
Guaranty to request the Disbursement Agent release funds on deposit in the
Guaranty Deposit Account to Adelson or as Adelson directs until the Final
Completion Date;
(e) For the benefit of the parties to the FADAA, Interim Mall Lender
and any successors thereto (prior to and after the Mall Release Date) and
Mall I LLC, or any other future owner of the Mall and such owner's secured
lenders, Tranche A Take Out Lender, its borrowers and any successors or
assigns thereof (and all such parties are third party beneficiaries
hereof), Adelson hereby confirms and ratifies the Adelson Completion
Guaranty and acknowledges that it shall remain in full force and effect
(except to the extent modified hereby) until the Final Completion Date;
(f) The Company and Adelson agree to comply with the terms and
conditions of the Adelson Subordination Agreement and of any other
agreement referred to in the FADAA, this Limited Waiver or the agreements
contemplated thereby to which they may be a party; and
(g) Adelson hereby ratifies and reaffirms his obligation under the
Tranche B Takeout Commitment and the Tranche B Guaranty and Security
Documents (as defined in the Interim Mall Credit Agreement) and all other
documents and agreements to which he is a party entered into in connection
with the Interim Mall Loan and agrees that nothing herein shall affect such
obligations.
(h) In connection with a delegation of duties to GMACCM by
Disbursement Agent pursuant to Section 9.3.5 of the FADAA as provided
below, on or before the Mall Release Date, for the benefit of the parties
to the FADAA, Interim Mall Lender and any successors thereto (prior to and
after Mall Release Date) and Tranche A Take Out Lender, Mall I LLC shall
establish with GMACCM, (i) the Mall Leasing Commissions Reserve Account and
the Mall Tenant Improvements Reserve Account and the Disbursement Agent
shall on the Mall Release Date transfer the respective amounts allocated in
the Project Budget to the "mall leasing commissions reserve" and "mall
tenants improvements reserve" line items into such accounts, respectively,
and Interim Mall Lender shall be entitled to a first priority lien on such
accounts; and (ii) the Mall Retainage/Punchlist Account and Disbursement
Agent shall deposit funds in such account as provided in Section 2.10(d) of
the FADAA and Interim Mall Lender shall be entitled to a first priority
lien on such account. GMACCM shall hold the funds in the Mall
Retainage/Punchlist Account in accordance with the Mall Escrow Agreement
which shall provide that (x) GMACCM shall be the escrowee thereunder; (y)
GMACCM shall disburse to Disbursement Agent funds in amounts requested by
Disbursement Agent to pay amounts payable from the Mall Retainage/Punchlist
Account solely for Mall Punchlist Items in accordance with the terms of the
FADAA (including Sections 2.10(e) and 2.12(b) thereof), provided that
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Disbursement Agent certifies in writing to GMACCM that the amount so
requested is the amount payable from the Mall Retainage/Punchlist Account
solely for Mall Punchlist Items in accordance with the terms of the FADAA
(it being understood that in making such certification the Disbursement
Agent may rely on all duly executed applicable certificates from the
Company and the Construction Consultant to the extent permitted under the
FADAA) and all conditions to disbursement set forth in the FADAA, including
without limitation, the conditions set forth in Section 3.2 and the
provision from the other funding sources contemplated therein of their
appropriate respective funding shares with respect to any such advance have
been satisfied, or will be satisfied, concurrently with disbursement; and
(z) at the time of the funding of the Tranche A Take Out Loan, GMACCM shall
transfer the amounts in all of the foregoing accounts and shall assign its
rights and obligations as escrowee under the Mall Escrow Agreement
thereafter arising to the Tranche A Take Out Lender who shall have a first
priority security interest on all such accounts. The establishment of the
accounts referenced in clauses (i) and (ii) above with GMACCM in lieu of
the Disbursement Agent is being done at the request of the Disbursement
Agent pursuant to Section 9.3.5 of the FADAA. The obligations of the
Disbursement Agent or the Company under the FADAA shall not be modified
except as specifically provided herein. Disbursement Agent acknowledges and
agrees that after transfer of the funds as provided in Section 2.10(d), it
shall have no rights or interest in or control over such accounts. The
parties understand and agree that the term "Mall I LLC" as used in Section
11.20 of the FADAA shall include the New Mall Subsidiary being formed as
set forth in the Mall Agreement.
(i) If any Additional Contingent Claim shall be paid directly by the
Company to Construction Manager, any contractor, or any subcontractor,
including any payment to the bonding company or the Title Insurer that has
issued a surety bond or title insurance policy with respect to the Lien
relating thereto (each an "Additional Contingent Claimant") and
notwithstanding that GCCLLC, VCR and LVSI, may or may not be jointly and/or
severally liable to such Additional Contingent Claimant for reimbursement
of the Additional Contingent Claim, Construction Consultant shall allocate
in a fair and just manner the proportion of such Additional Contingent
Claim that shall be paid by VCR and LVSI, and their respective successors
and assigns on the one hand (the "Hotel Casino Party") and GCCLLC, and its
successors and assigns to ownership of the Mall, on the other hand (the
"Mall Party"). In the event that the Hotel/Casino Party or the Mall Party
objects to such allocations, the parties shall jointly select another
independent third party consultant reasonably acceptable to each of the
mortgage lenders for such parties to make such allocation. For the benefit
of the parties to the FADAA, Interim Mall Lender and any successors thereto
(prior to and after the Mall Release Date) and Mall I LLC, or any other
future owner of the Mall and such owner's secured lenders, Tranche A Take
Out Lender, its borrowers and any successors or assigns thereof (and all
such parties are third party beneficiaries hereof), each of VCR, LVSI and
GCCLLC and their respective successors and assigns agree that they shall be
bound by such allocations. Payments of such Additional Contingent Claims
shall be made by the Disbursement Agent from the then Available Funds in
accordance with the FADAA. To the extent such Available Funds are
insufficient to pay such Additional Contingent Claims, each party shall
promptly make payment of its allocated share of the balance due to the
Additional Contingent Claimant with respect to the Additional Contingent
Claim. If the Company does not make payment of any Additional Contingent
Claim directly to an Additional Contingent Claimant but instead the Company
or Sheldon Adelson deposits into one or more Accounts funds pursuant to
Section 6(b) hereof, the Disbursement Agent shall make such payment in
accordance with the terms of the FADAA and this Limited Waiver and Interim
Mall Lender and any successors thereto (prior to and after the Mall Release
Date), and Tranche A Take Out Loan Lender, its successors and assigns and
any other secured lender with respect to the Mall are third party
beneficiaries hereof.
(j) Nothing set forth in this Section 6 is intended to limit any
obligation of the Company or Adelson under any Operative Documents,
including, without limitation, its obligations under Article 5 and Article
6 of the of the FADAA.
Section 7. ACKNOWLEDGMENT REGARDING COSTS, FEES AND EXPENSES
Company hereby acknowledges that all reasonable costs, fees and expenses as
described in Section 11.15 of the FADAA incurred by Disbursement Agent, GMACCM,
each Funding Agent, the Construction Consultant and their counsel with respect
to this Limited Waiver and the documents and transactions contemplated hereby
shall be for the account of the Company, and the Company hereby agrees that all
such amounts, and any other amounts due and owing to such parties on the Mall
Release Date and/or the Completion Date, shall be paid out of the Advance made
in connection with the occurrence of the Mall Release Date and Completion.
Section 8. CONSENT AND AGREEMENT REGARDING CERTAIN LEASES
(a) GCCLLC has heretofore entered into a lease with CR Las Vegas, LLC
("Canyon Ranch Lease") and (together with VCR) a lease with Las Vegas Lutece
Corp., a Nevada corporation (the "Restaurant Lease")(collectively, the "Joint
Property Leases") each of which affects a portion of the Mall and a portion of
the Project outside of the Mall that is owned by VCR. Company and GCCLLC agree
that on or before the Mall Release Date, VCR will assign its interest in the
Restaurant Lease to GCCLLC, VCR and GCCLLC shall execute and/or deliver, as
appropriate, a master lease with respect to each Joint Property Lease
(collectively, the "Master Leases") from VCR demising to GCCLLC the portion of
the premises demised in each Joint Property Lease that is outside the Mall on
market terms, a memorandum of the Canyon Ranch Master Lease in recordable form
and a subordination of each Joint Property Lease to each Master Lease, all in
form and substance reasonably acceptable to the parties hereto and GMACCM. The
Company further agrees that it shall obtain on or before the Mall Release Date a
non-disturbance agreement from the holders of all fee deeds of trust affecting
the Project (other than the Mall), with respect to each Master Lease in each
case, as shall be in form and substance based upon the documents executed in
connection with the Billboard Lease and Billboard Master Lease conformed to the
terms of each Joint Property Lease and satisfactory to the parties hereto and
thereto, GMACCM, SBRC and the Tranche A Take Out Lender, all in their reasonable
discretion. The Company and GCLLC agree that, upon the occurrence of the Mall
Release Date, GCCLLC shall assign and transfer all of its right, title and
interest in each Master Lease to Mall I LLC and Mall I LLC shall assume such
interest from and after the Mall Release Date, in the same manner as applicable
to the Billboard Master Lease as provided in the Sale and Contribution
Agreement.
(b) The Disbursement Agent, the Bank Agent and the Interim Mall Lender
hereby consent to the consummation of the transactions described in this Section
8 in accordance with and subject to the terms and conditions described herein.
(c) The Company and Adelson shall cause the parties to the Cooperation
Agreement to enter into an amendment thereto on or before December 15, 1999
which shall provide for separation of the premises demised under the Canyon
Ranch Lease in a similar manner provided for the Additional Billboard Premises
and the Billboard Premises in Article XVI of the Cooperation Agreement, and such
amendment shall be acceptable to each of the Funding Agents, GMACCM and the
Tranche A Take Out Lender in their reasonable discretion. The Company and
Adelson shall use commercially reasonable efforts to cause the holder of any
deed of trust encumbering property subject to the Cooperation Agreement to
subordinate its lien to such amendment.
Section 9. GOVERNING LAW
THIS LIMITED WAIVER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES.
Section 10. COUNTERPARTS; EFFECTIVENESS
This Limited Waiver 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 so
executed and delivered 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 are physically attached to the
same document. This Limited Waiver (other than the provisions of Section 1)
shall become effective upon the execution of a counterpart hereof by each of the
parties hereto; provided that Bank Agent shall not be deemed to have executed
this Limited Waiver until it has received the written approval of Requisite
Lenders (as defined in the Bank Credit Agreement).
[The remainder of this page is intentionally left blank.]
THE BANK OF NOVA SCOTIA, as Bank Agent and Disbursement Agent
By:/s/ A. Pendergast
---------------------------------------
Name: A. Pendergast
Title: Managing Director
SALOMON BROTHERS REALTY CORP., as Interim Mall Lender
By: GMAC COMMERCIAL MORTGAGE CORPORATION, as its agent
By:/s/ Vacys Garbonkus
--------------------------------------
Name: Vacys Garbonkus
Title: Senior Vice President
VENETIAN CASINO RESORT, LLC, a Nevada
limited liability company
By: Las Vegas Sands, Inc., its managing member
By:/s/ David Friedman
-------------------------------------
Name: David Friedman
Title: Secretary
LAS VEGAS SANDS, INC., a Nevada corporation
By:/s/ David Friedman
------------------------------------
Name: David Friedman
Title: Secretary
GRAND CANAL SHOPS MALL CONSTRUCTION, LLC,
a Delaware limited liability company
By: Venetian Casino Resort, LLC, its member
By: Las Vegas Sands, Inc., its managing member
By:/s/ David Friedman
-----------------------------------
Name: David Friedman
Title: Secretary
SHELDON G. ADELSON
/s/Sheldon G. Adelson
-----------------------------------
SCHEDULE 1
EVENTS OF DEFAULT AND
POTENTIAL EVENTS OF DEFAULT
1. The Company's failure to satisfy each of the Opening Conditions on or
before May 24, 1999;
2. The occurrence of an "Event of Default" on or prior to the date hereof
under any of the other financial documents set forth in Section 7.1.1
of the FADAA, provided that such "Event of Default" has been cured or
waived pursuant to one of the Facility Waivers as of the date hereof;
3. The Company's failure to "demonstrate balancing" as required by
Section 7.1.2 of the FADAA at any time prior to the date hereof;
4. The Company's "inability to deliver certificates" pursuant to
Section 7.1.3 of the FADAA at any time prior to the date hereof;
5. Failure of the Company to have extended the Outside Completion Deadline
in a timely manner;
6. The failure to remove any Liens resulting from the Construction
Litigation that are not Permitted Liens in a timely manner, provided
that all Liens have been removed or bonded over as of the date hereof
and continue to be bonded over until removed of record (the waiver
shall be effective with respect to any Lien that has been and continues
to be bonded and insured over by the Title Insurer, notwithstanding the
Company's failure to complete the legal procedure for having such Lien
removed of record as of the Completion Date).