EXHIBIT 10.3
FIRST AMENDMENT TO CREDIT AGREEMENT
-----------------------------------
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (the "First Amendment") is
entered into as of October 30, 1992 by and among MGM Grand Hotel Finance Corp.
("MGM Finance"), a Nevada corporation, MGM Grand Hotel, Inc. ("MGM Hotel"), a
Nevada corporation, Bank of Scotland ("Scotland") and United States National
Bank of Oregon ("USNBO") (collectively, the "New Banks"), and Bank of America
National Trust and Savings Association ("BofA"), as a Bank and as agent for the
Banks (the "Agent") and amends that certain Credit Agreement dated as of May 13,
1992 among MGM Finance, MGM Hotel and BofA in its capacity as both the Agent and
a Bank (the "Agreement").
RECITALS
--------
The parties desire to amend certain provisions of the Agreement to,
among other things, revise the definition of "Majority Banks" and to add two
additional Banks as parties to the Agreement.
MGM Finance has also requested the Banks (including the New Banks) and
the Agent to waive certain delivery requirements relating to an environmental
report required under the Agreement and to make certain other provisions with
respect to such environmental report.
The parties are willing to make such amendments on the terms and
conditions set forth herein.
The Banks (including the New Banks) and the Agent are willing to grant
such waiver and agree to certain provisions with respect to the aforementioned
environmental report on the terms and conditions set forth herein.
TERMS AND CONDITIONS
--------------------
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereby agree as follows:
1. Terms. All terms used herein shall have the same meanings as
-----
in the Agreement unless otherwise defined herein. All references to the
Agreement shall mean the Agreement as hereby amended.
2. Amendments. The parties hereto hereby agree to amend the
----------
Agreement as follows:
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2.1 The definition of "Majority Banks" in Section 1.01 of the
Agreement is hereby amended to read in its entirety as follows:
"'Majority Banks'" means: (a) at any time when there are two (2)
or fewer Banks party to this Agreement, Banks having at least 66-2/3%
of the Commitments, (b) at any time when there are three (3) or more
Banks party to this Agreement and one Bank has at least 66-2/3% of the
Commitments, Banks having at least 66-2/3% of the Commitments but in
no event less than two (2) Banks, and (c) at any other time, Banks
having at least 66-2/3% of the Commitments."
2.2 The Agreement is further amended to add each of the New
Banks as a Bank under the Agreement and the initial address for notice, the
initial Domestic Lending Office, the initial Eurodollar Lending Notice or the
initial Lending Office for each such Bank shall be as set forth on the signature
pages of this First Amendment. Each New Bank agrees that its Commitment and
Revolving Commitment is as set forth on Schedule 2.01 as amended by this First
Amendment. Each New Bank agrees to be bound by the Agreement, the Loan Documents
and the Intercreditor Agreement. Each New Bank hereby appoints and authorizes
the Agent to exercise such powers under the Agreement as are delegated to the
Agent by Article X of the Agreement and by the Loan Documents and the
Intercreditor Agreement.
2.3 Schedule 2.01 of the Agreement is hereby amended in its
entirety to read as set forth in Exhibit A to this First Amendment and the
Commitment and the Revolving Commitment of each of the New Banks and of BofA as
a Bank shall be as set forth in said amended Schedule 2.01.
3. Waiver and Other Provisions Regarding Environmental Report. Each
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of the Banks (including the New Banks) and the Agent waive compliance with the
provisions of Section 5.02(c) of the Agreement requiring delivery of the
environmental assessment described therein no later than July 31, 1992 on the
conditions that (a) the final environmental assessment report is substantially
unchanged from the preliminary environmental assessment dated August 12, 1992, a
copy of which has been received by each of the Banks, and (b) a copy of such
final report is delivered to the Agent for delivery to the Banks not later than
November 30, 1992 and (c) MGM Hotel performs all recommended monitoring and
takes such other action in compliance with the recommendations of such report
and such recommendations as may be made from time to time on the basis of the
results of such continued monitoring. Furthermore, subject to the foregoing
conditions, the Banks, including the New Banks, confirm that such environmental
assessment is satisfactory to the Banks for the
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purposes of determining compliance by MGM Finance and MGM Hotel with the
provisions of Section 5.02(c).
4. Representations and Warranties of MGM Finance and MGM Hotel. MGM
-----------------------------------------------------------
Finance and MGM Hotel, each on its own behalf, and only with respect to itself,
represents and warrants to the Agent and to each Bank:
4.1 Authorization. The execution, delivery and performance of
-------------
this First Amendment have been duly authorized by all necessary corporate action
and has been duly executed and delivered by it.
4.2 Binding Obligation. This First Amendment is the legally
------------------
valid and binding obligation of such party, enforceable in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors
rights generally or by equitable principals relating to enforceability.
4.3 No Legal Obstacle to Agreement. Neither the execution of
------------------------------
this First Amendment, the making of any Borrowings under the Agreement, nor the
performance of the Agreement has constituted or resulted in or will constitute
or result in a breach of the provisions of any contract to which such party is a
party, or the violation of any law, judgment, decree or governmental order, rule
or regulation applicable to such party, or result in the creation under any
agreement or instrument of any security interest, lien, charge, or encumbrance
upon any of the assets of such party. No approval or authorization of any
governmental authority is required to permit the execution, delivery or
performance of this First Amendment, the Agreement, or the transactions
contemplated hereby or thereby, or the making of any Borrowing under the
Agreement.
4.4 Incorporation of Certain Representations. The
----------------------------------------
representations and warranties set forth in Article VI of the Agreement are true
and correct in all respects on and as of the date hereof as though made on and
as of the date hereof.
4.5 Default. No Default or Event of Default under the Agreement
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has occurred and is continuing.
5. Representations and Warranties of BofA. BofA represents and
--------------------------------------
warrants to each of the New Banks as follows:
5.1 As of the date hereof, immediately prior to the
effectiveness of this First Amendment, BofA, in its capacity as a Bank, holds
100% of the Commitment under the Agreement free and clear of any adverse claim.
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5.2 As of the date hereof no Loans have been made under the
Agreement.
5.3 BofA has full power and authority, and has taken all action
necessary, to execute and deliver this First Amendment and to fulfill its
obligations under, and to consummate the transactions contemplated by, this
First Amendment, and no governmental authorizations or other authorizations are
required in connection therewith.
5.4 This First Amendment constitutes the legal, valid and
binding obligation of the BofA.
BofA makes no representation or warranty and assumes no responsibility with
respect to the financial condition of MGM Finance, MGM Hotel or any affiliate of
either of them or the performance by MGM Finance, MGM Hotel or any affiliate of
either of them of the Obligations, and assumes no responsibility with respect to
any statements, warranties or representations made under or in connection with
the Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Agreement or any other documents under the
Agreement, other than as expressly set forth above.
6. Representations and Warranties of the New Banks. Scotland and
-----------------------------------------------
USNBO, each on its own behalf, and only with respect to itself, hereby
represents and warrants to BofA in its capacity as the Agent and as a Bank and
to each other as follows:
6.1 It has full power and authority, and has taken all action
necessary, to execute and deliver this First Amendment and to become party to
the Agreement, and any and all other documents required or permitted to be
executed or delivered by it in connection with this Agreement and to fulfill its
obligations under, and to consummate the transactions contemplated by, this
First Amendment, the Agreement, and the other Loan Documents and no governmental
authorizations or other authorizations are required in connection therewith.
6.2 This First Amendment constitutes the legal, valid and
binding obligation of such New Bank.
6.3 Such New Bank has independently and without reliance upon
BofA and based on such information as it has deemed appropriate, made its own
credit analysis and decision to enter into this First Amendment and to be bound
by the Agreement and other Loan Documents. It will, independently and without
reliance upon the Agent or any Bank, and based upon such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Agreement and the Loan
Documents.
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6.4 If such New Bank is organized under the Laws of a
jurisdiction outside the United States of America, attached hereto are the forms
prescribed by Section 4.01(f) of the Agreement certifying its exemption from
United States withholding taxes with respect to all payments to be made to it
under the Agreement or any Loan Document.
7. Conditions, Effectiveness. The effectiveness of this First
-------------------------
Amendment shall be subject to the delivery of the following to the Agent in form
and substance satisfactory to the Agent:
7.1 Corporate Resolution. A copy of a resolution or resolutions
--------------------
passed by the Board of Directors of each of MGM Finance and MGM Hotel, certified
by the Secretary or an Assistant Secretary of such party as being in full force
and effect on the date of this First Amendment, authorizing the amendments to
the Agreement herein provided for and the execution, delivery and performance of
this First Amendment and any note or other instrument or agreement required
hereunder.
7.2 Authorized Signatories. A certificate, signed by the
----------------------
Secretary or an Assistant Secretary of each of MGM Finance and MGM Hotel and
dated the date of this First Amendment, as to the incumbency of the person or
persons authorized to execute and deliver this First Amendment and any
instrument or agreement required hereunder on behalf of such party.
7.3 Reaffirmations. Reaffirmations from each of the Guarantors
--------------
in a form acceptable to the Agent and the Banks.
7.4 Other Evidence. Such other evidence with respect to MGM
--------------
Finance or MGM Hotel or any other person as the Agent and each Bank may
reasonably request to establish the consummation of the transactions
contemplated hereby, the taking of all corporate action in connection with this
First Amendment and the Agreement and the compliance with the conditions set
forth herein.
8. Payments. On the date when all conditions set forth in Section 7
--------
hereof have been satisfied and each New Bank has delivered to the Agent duly
executed copies of this First Amendment, BofA shall pay to each New Bank, in
immediately available funds, the fees set forth in a letter agreement among
BofA, Scotland and USNBO dated of even date herewith.
9. Miscellaneous.
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9.1 Effectiveness of the Agreement. Except as hereby amended,
------------------------------
the Agreement shall remain in full force and effect.
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9.2 Waivers. This First Amendment is specific in time and in
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intent and, except as set forth in Section 3 of this First Amendment, does not
constitute, nor should it be construed as, a waiver of any other right, power or
privilege under the Agreement, or under any agreement, contract, indenture,
document or instrument mentioned in the Agreement; nor does it preclude any
exercise thereof or the exercise of any other right, power or privilege, nor
shall any future waiver of any right, power, privilege or default hereunder, or
under any agreement, contract, indenture, document or instrument mentioned in
the Agreement, constitute a waiver of any other default of the same or of any
other term or provision.
9.3 Counterparts. This First Amendment may be executed in any
------------
number of counterparts and all of such counterparts taken together shall be
deemed to constitute one and the same instrument. This First Amendment shall
become effective as of the date first above written when the conditions set
forth in Section 4 of this First Amendment have been satisfied and all the
parties hereto shall have signed a copy hereof, whether the same or counterparts
and shall have delivered same to the Agent.
9.4 Further Assurances. The parties hereto further agree to
------------------
execute and deliver such other instruments, and take such other action, as the
Agent may reasonably request in connection with the transactions contemplated by
this First Amendment.
9.5 Jurisdiction. This First Amendment, and any instrument or
------------
agreement required hereunder, shall be governed by and construed under the laws
of the State of Nevada.
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
be duly executed and delivered as of the date first written above.
MGM GRAND HOTEL FINANCE CORP.
By: /s/ J.T. Murphy
Title: Chief Financial Officer
-------------------------
MGM GRAND HOTEL, INC.
By: /s/ Larry Woolf
-------------------------
Title: PRESIDENT
-------------------------
(Signatures continue)
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BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By: /s/ David Price
-------------------------
Title: Vice President
-------------------------
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as a
Bank
By: /s/ Jon Varnell
-------------------------
Title: Vice President
-------------------------
BANK OF SCOTLAND
By: /s/ J. Craig Wilson
-------------------------
Title: Vice President
-------------------------
Domestic and Eurodollar Lending
Office
Bank of Scotland
Grand Cayman Branch
c/o 380 Madison Avenue
New York, New York 10017
Telephone: (212) 490-8030
Telecopy: (212) 557-9460
UNITED STATES NATIONAL
BANK OF OREGON
By: Scott J. Bell
-------------------------
Title: Assistant Vice President
-------------------------
Domestic and Eurodollar Lending
Office
United States National
Bank of Oregon
309 S.W. 6th Avenue, BB-10
Portland, Oregon 97204
Telephone: (503) 275-6738
Telecopy: (503) 275 5428
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SECOND AMENDMENT TO
CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Second Amendment") is
made and dated as of September 17, 1993 among MGM Grand Hotel Finance Corp.
("MGM Finance"), a Nevada corporation, MGM Grand Hotel, Inc. ("MGM Hotel"), a
Nevada corporation, the several financial institutions parties to this Agreement
(collectively, the "Banks"; individually, a "Bank"), and Bank of America
National Trust and Savings Association, as agent for the Banks (the "Agent") and
amends that certain Credit Agreement dated as of May 13, 1992 among the parties
hereto, as amended by a First Amendment to Credit Agreement dated as of October
30, 1992 (as amended, the "Agreement").
RECITAL
-------
MGM Hotel desires to enter into one or more lease transactions with
various Affiliates.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereby agree as follows:
1. Terms. All terms used herein shall have the same meanings as in
-----
the Agreement unless otherwise defined herein. All references to the Agreement
herein, in the Agreement and in the Notes shall mean the Agreement as hereby
amended.
2. Amendments to Agreement. MGM Finance, MGM Hotel, the Banks and
-----------------------
the Agent hereby agree to amend and restate Section 8.05 of the Agreement in its
entirety as follows:
"8.05 Lease Obligations. MGM Finance shall not create or suffer
-----------------
to exist any obligations for the payment by it of rent for any
property under lease or agreement to lease. MGM Hotel shall not, nor
shall it permit any Subsidiary to, create or suffer to exist any
obligations for the payment by it of rent for any property under lease
or agreement to lease, including Sale and Leaseback Transactions,
except that MGM Hotel may enter into:
(a) Operating leases involving personal property ordinarily
and customarily acquired through operating lease transactions;
- 1 -
(b) Operating leases entered into in the ordinary course of
its business in an arm's length transaction with a Person other than
an Affiliate;
(c) Capital Lease Obligations otherwise permitted under
this Agreement; and
(d) Lease transactions with an Affiliate if such
transaction complies with Section 8.08."
3. Representations and Warranties. MGM Finance and MGM Hotel
------------------------------
represent and warrant to the Banks and Agent:
3.1 Authorization. The execution, delivery and performance of this
-------------
Second Amendment have been duly authorized by all necessary corporate action by
each of them and has been duly executed and delivered by each of them.
3.2 Binding Obligation. This Second Amendment is the legally valid
------------------
and binding obligation of MGM Finance and MGM Hotel, enforceable in accordance
with its terms against each of them respectively.
3.3 No Legal Obstacle to Agreement. Neither the execution of this
------------------------------
Second Amendment, the making by MGM Finance of any Borrowing under the
Agreement, nor the performance of the Agreement has constituted or resulted in
or will constitute or result in a breach of the provisions of any Contractual
Obligation to which MGM Finance or MGM Hotel is a party, or the violation of any
Requirement of Law, or result in the creation under any agreement or instrument
of any security interest, lien, charge, or encumbrance upon any of the assets of
any of them. No approval or authorization of any governmental authority is
required to permit the execution, delivery or performance by MGM Finance or MGM
Hotel of this Second Amendment, the Agreement, or the transactions contemplated
hereby or thereby, or the making of any Borrowing under the Agreement.
3.4 Incorporation of Certain Representations. The representations
----------------------------------------
and warranties set forth in Article VI of the Agreement are true and correct in
all material respects on and as of the date hereof as though made on and as of
the date hereof.
3.5 Default. No Default or Event of Default under the Agreement has
-------
occurred and is continuing.
4. Conditions, Effectiveness. The effectiveness of this Second
-------------------------
Amendment shall be subject to the compliance by MGM Finance and MGM Hotel with
their respective agreements herein contained, and to the delivery of the
following to the Agent in
- 2 -
form and substance satisfactory to the Agent and the Majority Banks:
4.1 Corporate Resolutions. A copy of a resolution or resolutions
---------------------
passed by the Board of Directors of each of MGM Finance and MGM Hotel, certified
by the respective Secretary or an Assistant Secretary of such entity, as being
in full force and effect on the effective date of this Second Amendment,
authorizing the amendments to the Agreement herein provided for and the
execution, delivery and performance of this Second Amendment and any note or
other instrument or agreement required hereunder.
4.2 Authorized Signatories. A certificate, signed by the Secretary
----------------------
or an Assistant Secretary of each of MGM Finance and MGM Hotel dated the date of
this Second Amendment, as to the incumbency of the person or persons authorized
to execute and deliver this Second Amendment and any instrument or agreement
required hereunder on behalf of such entity.
4.3 Other Evidence. Such other evidence with respect to any MGM
--------------
Finance and MGM Hotel or any other person as the Agent or any Bank may
reasonably request to establish the consummation of the transactions
contemplated hereby, the taking of all corporate action in connection with this
Second Amendment and the Agreement and the compliance with the conditions set
forth herein.
5. Miscellaneous.
-------------
5.1 Effectiveness of the Agreement. Except as hereby expressly
------------------------------
amended, the Agreement shall remain in full force and effect, and are hereby
ratified and confirmed in all respects.
5.2 Waivers. This Second Amendment is specific in time and in intent
-------
and does not constitute, nor should it be construed as, a waiver of any other
right, power or privilege under the Agreement, or under any agreement, contract,
indenture, document or instrument mentioned in the Agreement; nor does it
preclude any exercise thereof or the exercise of any other right, power or
privilege, nor shall any future waiver of any right, power, privilege or default
hereunder, or under any agreement, contract, indenture, document or instrument
mentioned in the Agreement, constitute a waiver of any other default of the same
or of any other term or provision.
5.3 Counterparts. This Second Amendment may be executed in any
------------
number of counterparts and all of such counterparts taken together shall be
deemed to constitute one and the same instrument. This Second Amendment shall
not become effective until each MGM Finance, MGM Hotel, MGM Grand, the Banks
- 3 -
and the Agent shall have signed a copy hereof, whether the same or counterparts,
and the same shall have been delivered to the Agent.
5.4 Jurisdiction. This Second Amendment, and any instrument or
------------
agreement required hereunder, shall be governed by
- 4 -
and construed under the laws of the State of Nevada.
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be duly executed and delivered as of the date first written above.
MGM GRAND HOTEL FINANCE CORP.
By: /s/ J.T. Murphy
----------------------------
Title: Chief Financial Officer
-------------------------
MGM GRAND HOTEL, INC.
By: /s/ Larry Woolf
----------------------------
Title: CEO
-------------------------
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent
By: /s/ David M. Terrance
----------------------------
David M. Terrance
Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/ John Varnell
----------------------------
John Varnell
Vice President
BANK OF SCOTLAND
By: /s/ Catherine M. Oniffrey
----------------------------
Title: Vice President
-------------------------
UNITED STATES NATIONAL
BANK OF OREGON
By: /s/ Scott J. Bell
----------------------------
Title: Vice President
-------------------------
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CONSENT OF GUARANTOR
--------------------
The undersigned, as guarantor under that certain Continuing Guaranty dated as of
May 13, 1992, hereby consents to the foregoing Second Amendment to Credit
Agreement, dated as of the date hereof, and confirms that its Continuing
Guaranty remains in full force and effect.
MGM GRAND, INC.
By: /s/ K. Eugene Shutler
-----------------------------
Title: Executive Vice President
--------------------------
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THIRD AMENDMENT TO
CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this "Third Amendment") is made
and dated as of March 9, 1994 among MGM Grand Hotel Finance Corp. ("MGM
Finance"), a Nevada corporation, MGM Grand Hotel, Inc. ("MGM Hotel"), a Nevada
corporation, the several financial institutions parties to this Agreement
(collectively, the "Banks"; individually, a "Bank"), and Bank of America
National Trust and Savings Association, as agent for the Banks (the "Agent") and
amends that certain Credit Agreement dated as of May 13, 1992 among the parties
hereto, as amended by a First Amendment to Credit Agreement dated as of October
30, 1992 and a Second Amendment to Credit Agreement dated as of September 17,
1993 (as amended, the "Agreement").
RECITAL
-------
MGM Hotel desires to repurchase First Mortgage Notes from time to time, and
the Banks and Agent are willing to amend the Agreement on the terms and
conditions set forth herein to permit such repurchases.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereby agree as follows:
1. Terms. All terms used herein shall have the same meanings as in the
-----
Agreement unless otherwise defined herein. All references to the Agreement
herein, in the Agreement and in the Notes shall mean the Agreement as hereby
amended.
2. Amendments to Agreement. MGM Finance, MGM Hotel, the Banks and the
-----------------------
Agent hereby agree to amend the Agreement as follows:
2.1 The definition of "Permitted Investments" in Section 1.01 of the
Agreement is amended by deleting "or" before clause (f) and inserting the
following at the end of such definition before the period:
"or, (g) First Mortgage Notes provided that no Default or Event of Default
shall have occurred and be continuing or would occur as a consequence of an
Investment therein."
- 1 -
2.2 Section 8.14 of the Agreement is amended by deleting "and" at the end
of subsection (d), inserting "and" at the end of subsection (e) before the
period, and inserting a new subsection (f) as follows:
"(f) MGM Hotel may repurchase First Mortgage Notes provided that no
Default or Event of Default shall have occurred and be continuing or would
occur as a consequence of such repurchase."
3. Representations and Warranties. MGM Finance and MGM Hotel represent
------------------------------
and warrant to the Banks and Agent:
3.1 Authorization. The execution, delivery and performance of this Third
-------------
Amendment have been duly authorized by all necessary corporate action by each of
them and has been duly executed and delivered by each of them.
3.2 Binding Obligation. This Third Amendment is the legally valid and
------------------
binding obligation of MGM Finance and MGM Hotel, enforceable in accordance with
its terms against each of them respectively.
3.3 No Legal Obstacle to Agreement. Neither the execution of this Third
------------------------------
Amendment, the making by MGM Finance of any Borrowing under the Agreement, nor
the performance of the Agreement has constituted or resulted in or will
constitute or result in a breach of the provisions of any Contractual Obligation
to which MGM Finance or MGM Hotel is a party, or the violation of any
Requirement of Law, or result in the creation under any agreement or instrument
of any security interest, lien, charge, or encumbrance upon any of the assets of
any of them. No approval or authorization of any governmental authority is
required to permit the execution, delivery or performance by MGM Finance or MGM
Hotel of this Third Amendment, the Agreement, or the transactions contemplated
hereby or thereby, or the making of any Borrowing under the Agreement.
3.4 Incorporation of Certain Representations. The representations and
----------------------------------------
warranties set forth in Article VI of the Agreement are true and correct in all
material respects on and as of the date hereof as though made on and as of the
date hereof.
3.5 Default. No Default or Event of Default under the Agreement has
-------
occurred and is continuing.
4. Conditions, Effectiveness. The effectiveness of this Third Amendment
-------------------------
shall be subject to the compliance by MGM Finance and MGM Hotel with their
respective agreements herein contained, and to the delivery of the following to
the Agent in
- 2 -
form and substance satisfactory to the Agent and the Majority Banks:
4.1 Corporate Resolutions. A copy of a resolution or resolutions passed
---------------------
by the Board of Directors of each of MGM Finance and MGM Hotel, certified by the
respective Secretary or an Assistant Secretary of such entity as being in full
force and effect on the effective date of this Third Amendment, authorizing the
amendments to the Agreement herein provided for and the execution, delivery and
performance of this Third Amendment and any note or other instrument or
agreement required hereunder.
4.2 Authorized Signatories. A certificate, signed by the Secretary or an
----------------------
Assistant Secretary of each of MGM Finance and MGM Hotel dated the date of this
Third Amendment, as to the incumbency of the person or persons authorized to
execute and deliver this Third Amendment and any instrument or agreement
required hereunder on behalf of such entity.
4.3 Other Evidence. Such other evidence with respect to any MGM Finance
--------------
and MGM Hotel or any other person as the Agent or any Bank may reasonably
request to establish the consummation of the transactions contemplated hereby,
the taking of all corporate action in connection with this Third Amendment and
the Agreement and the compliance with the conditions set forth herein.
5. Miscellaneous.
-------------
5.1 Effectiveness of the Agreement. Except as hereby expressly amended,
------------------------------
the Agreement shall remain in full force and effect, and are hereby ratified and
confirmed in all respects.
5.2 Waivers. This Third Amendment is specific in time and in intent and
-------
does not constitute, nor should it be construed as, a waiver of any other right,
power or privilege under the Agreement, or under any agreement, contract,
indenture, document or instrument mentioned in the Agreement; nor does it
preclude any exercise thereof or the exercise of any other right, power or
privilege, nor shall any future waiver of any right, power, privilege or default
hereunder, or under any agreement, contract, indenture, document or instrument
mentioned in the Agreement, constitute a waiver of any other default of the same
or of any other term or provision.
5.3 Counterparts. This Third Amendment may be executed in any number of
------------
counterparts and all of such counterparts taken together shall be deemed to
constitute one and the same instrument. This Third Amendment shall not become
effective until each MGM Finance, MGM Hotel, MGM Grand, the Banks and the Agent
shall have signed a copy hereof, whether the same
-3-
or counterparts, and the same shall have been delivered to the Agent.
5.4 Jurisdiction. This Third Amendment, and any instrument or agreement
------------
required hereunder, shall be governed by and construed under the laws of the
State of Nevada.
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to
be duly executed and delivered as of the date first written above.
MGM GRAND HOTEL FINANCE CORP.
By: /s/ J.T. Murphy
-----------------------------
Title: CEO
--------------------------
MGM GRAND HOTEL, INC.
By: /s/ J.T. Murphy
-----------------------------
Title: Secretary Treasurer
--------------------------
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent
By: /s/ Peggy Fujimoto
-----------------------------
Peggy Fujimoto
Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/ Jon Varnell
-----------------------------
Jon Varnell
Vice President
BANK OF SCOTLAND
By: /s/ Catherine M. Oniffrey
-----------------------------
Title:
--------------------------
(Signatures continue)
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UNITED STATES NATIONAL
BANK OF OREGON
By: /s/ Scott J. Bell
-----------------------------
Title: Vice President
--------------------------
FIRST SECURITY BANK OF UTAH, N.A.
By: /s/ David P. Williams
-----------------------------
Title: Vice President
--------------------------
BANK OF AMERICA NEVADA
By: /s/ Alan F. Gerder
-----------------------------
Title: Vice President
--------------------------
-5-
CONSENT OF GUARANTOR
--------------------
The undersigned, as guarantor under that certain Continuing Guaranty dated as of
May 13, 1992, hereby consents to the foregoing Third Amendment to Credit
Agreement, dated as of March 9, 1994, and confirms that its Continuing Guaranty
remains in full force and effect.
MGM GRAND, INC.
By: /s/ J.T. Murphy
-----------------------------
Title: VP
--------------------------
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FOURTH AMENDMENT TO
CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (this "Fourth Amendment") is made
and dated as of December 30, 1994 among MGM Grand Hotel Finance Corp. ("MGM
Finance"), a Nevada corporation, MGM Grand Hotel, Inc. ("MGM Hotel"), a Nevada
corporation, the several financial institutions parties to this Agreement
(collectively, the "Banks"; individually, a "Bank"), and Bank of America
National Trust and Savings Association, as agent for the Banks (the "Agent") and
amends that certain Credit Agreement dated as of May 13, 1992 among the parties
hereto, as amended by a First Amendment to Credit Agreement dated as of October
30, 1992, a Second Amendment to Credit Agreement dated as of September 17, 1993
and a Third Amendment to Credit Agreement dated as of March 9, 1994 (as so
amended, the "Agreement").
RECITAL
-------
MGM Hotel and MGM Finance have requested the Banks to make certain
amendments to the Agreement, and the Banks and Agent are willing to amend the
Agreement on the terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereby agree as follows:
1. Terms. All terms used herein shall have the same meanings as in the
-----
Agreement unless otherwise defined herein. All references to the Agreement
herein, in the Agreement and in the Notes shall mean the Agreement as hereby
amended.
2. Amendments to Agreement. MGM Finance, MGM Hotel, the Banks and the
-----------------------
Agent hereby agree to amend the Agreement as follows:
2.1 The definition of "Applicable Margin" in Section 1.01 of the
Agreement is amended and restated in its entirety as follows:
"'Applicable Margin" means the following rates per annum:
-----------------
-1-
- --------------------------------------------------------------------------------------------------------------------------------
Level Consolidated Funded Commitment Eurodollar Alternate
Indebtedness to Fee Rate Loans Base Rate
EBITDA Ratio Loans
- --------------------------------------------------------------------------------------------------------------------------------
1 less than 1.00:1 0.3500% 0.875% 0.000%
- --------------------------------------------------------------------------------------------------------------------------------
2 greater than or equal to 1.00:1 but less than 1.50:1 0.3750% 1.125% 0.000%
- --------------------------------------------------------------------------------------------------------------------------------
3 greater than or equal to 1.50:1 but less than 2.00:1 0.3750% 1.250% 0.000%
- --------------------------------------------------------------------------------------------------------------------------------
4 greater than or equal to 2.00:1 but less than 2.50:1 0.3750% 1.375% 0.125%
- --------------------------------------------------------------------------------------------------------------------------------
5 greater than or equal to 2.50:1 but less than 3.00:1 0.4375% 1.750% 0.500%
- --------------------------------------------------------------------------------------------------------------------------------
6 greater than or equal to 3.00:1 but less than 3.50:1 0.5000% 2.125% 0.875%
- --------------------------------------------------------------------------------------------------------------------------------
7 greater than or equal to 3.50:1 0.5000% 2.500% 1.250%
- --------------------------------------------------------------------------------------------------------------------------------
"The Applicable Margin shall be based on the Consolidated Funded
Indebtedness to EBITDA Ratio as set forth in the most recent certificate
delivered pursuant to Section 7.02(b), and shall be effective from and
including the date the Agent receives such certificate to but excluding the
date on which Agent receives the next such certificate. Until the delivery
of the first certificate reflecting the Consolidated Funded Indebtedness to
EBITDA Ratio, the Applicable Margin shall be Level 4."
2.2 The definition of "EBITDA" in Section 1.01 of the Agreement is amended
and restated in its entirety as follows:
"'EBITDA' means, for any period, for any Person on a consolidated
------
basis, determined in accordance with GAAP, for the relevant
Determination Period, the sum of (a) the net income (or net loss) plus
----
(b) all amounts treated as expenses for depreciation and interest and
the amortization of intangibles of any kind to the extent included in
the determination of such net income (or loss), plus (c) all accrued
----
taxes on or measured by income to the extent included in the
determination of such net income (or loss); provided, however, that
-------- -------
net income (or loss) shall be computed for these purposes without
giving effect to extraordinary losses or extraordinary gains, plus,
----
the amount of management fees in respect of which a certificate has
been delivered pursuant to Section 7.02(b) that such amount of
management fees will be deferred to a date after the Termination Date.
For purposes of determining "Consolidated Funded Indebtedness to
EBITDA Ratio," management fees shall be added back to the extent
expensed in the determination of net income."
-2-
2.3 The definition of "Termination Date" in Section 1.01 of the Agreement
is amended and restated in its entirety as follows:
"'Termination Date' means the earliest to occur of
----------------
"(a) December 31, 1999; and
"(b) the date on which the Commitments shall terminate in
accordance with the provisions of this Agreement.
2.4 Section 1.01 of the Agreement is amended by deleting the definitions
of "Determination Period," "Determination Period 1," "Determination Period 2,"
"Determination Period 3," and "Determination Period 4," and inserting the
following new definition in lieu thereof:
"'Determination Period' means for any calculation made as of
--------------------
September 30, 1994, the relevant calculation for the period of the two
fiscal quarters ending on such date, multiplied by two; for any calculation
made as of December 31, 1994, the relevant calculation for the period of
three fiscal quarters ending on such date, multiplied by 4/3; and for any
calculation made as of any date thereafter, the relevant calculation for
the period of four fiscal quarters ending on such date."
2.5 Section 1.01 of the Agreement is amended by inserting the following
new definitions in proper alphabetical order;
"'Consolidated Funded Indebtedness' means, for any Person on a
--------------------------------
consolidated basis in accordance with GAAP, an amount equal to the sum of,
without duplication, (a) all Indebtedness of such Person for borrowed
money, including letters of credit, plus (b) the principal portion of all
----
Capital Lease Obligations of such Person."
"'Consolidated Funded Indebtedness to EBITDA Ratio" means, as of any
------------------------------------------------
date of determination, the ratio of (i) Consolidated Funded Indebtedness as
of such date to (ii) EBITDA for applicable Determination Period."
--
2.6 Section 3.01(b) of the Agreement is amended by deleting "one-half
percent (1/2%) per annum" in the second sentence thereof and inserting "the
Applicable Margin" in lieu thereof.
-3-
2.7 The last proviso to Section 8.02(c) of the Agreement is amended and
restated in its entirety as follows:
"provided that, the aggregate principal amount of such FF&E Financings
--------
shall not, when aggregated with the principal amount of Indebtedness incurred
under Section 8.02(f), exceed $30,000,000 in the aggregate at any time
outstanding;"
2.8 Section 8.02(f) of the Agreement is amended and restated in its
entirety as follows:
"(f) Provided no Event of Default shall have occurred and be
continuing at the time of incurrence, Indebtedness incurred for Capital
Expenditures in an amount not to exceed $30,000,000 in the aggregate
outstanding at any time; and"
2.9 Section 8.10 of the Agreement is amended and restated in its entirety
as follows:
"8.10 Restricted Payments. MGM Finance may not make any Restricted
-------------------
Payment. MGM Hotel may not make, and may not cause or permit any Subsidiary
to make (other than to MGM Hotel, any Subsidiary of MGM Hotel or to MGM
Finance) directly or indirectly, any Restricted Payment prior to the
Termination of Construction Period. Subsequent to the Termination of
Construction Period (the "Determining Date"), MGM Hotel may not make, and
may not cause or permit any Subsidiary or any Person directly or indirectly
controlled by MGM Hotel to make (other than the MGM Hotel, any Subsidiary
of MGM Hotel or to MGM Finance), directly or indirectly, any Restricted
Payment (including for purposes of this Section 8.10 repurchases of First
Mortgage Notes other than pursuant to Sections 8.14(a), (b) or (f)) unless,
after giving effect to such Restricted Payment:
"(a) no Default or Event of Default shall have occurred and be
continuing, or would occur as a consequence thereof;
"(b) the Consolidated Adjusted Net Worth of MGM Hotel is greater than
$415,000,000 as of the last day of the calendar month ending prior to the
date of such Restricted Payment, and after giving effect to such Restricted
Payment;
"(c) after giving effect to such Restricted Payment the aggregate
amount expended (determined as set forth below) for all such Restricted
Payments
-4-
subsequent to the Determining Date shall not exceed the sum of $25,000,000
plus the sum, if positive, of
"(i) 50% of the cumulative Consolidated Net Income of MGM Hotel
(or if such cumulative Consolidated Net Income shall be a loss, 100%
of such loss) accrued on a consolidated basis subsequent to the
Determining Date; plus
"(ii) the aggregate Net Proceeds in cash received by MGM Hotel
from the issue of sale (other than to a Subsidiary), subsequent to the
Determining Date, of Capital Stock of MGM Hotel (other than
Disqualified Capital Stock) other than in connection with the
conversion or exchange of any Indebtedness or Capital Stock; plus
"(iii) the aggregate Net Proceeds received by MGM Hotel
subsequent to the Determining Date, from the issue or sale (other than
to a Subsidiary) of any debt securities or Disqualified Capital Stock
of MGM Hotel that have subsequently been converted into or exchanged
for Capital Stock of MGM Hotel (other than Disqualified Capital
Stock); plus
"(iv) the aggregate amount of the Net Proceeds actually received
by MGM Hotel pursuant to the disposition of any Investment
constituting a Restricted Payment.
"(d) For purposes of any calculation pursuant to subsection (c) above
which is required to be made within 60 days after the declaration of a
dividend by MGM Hotel or any Subsidiary, such dividend shall be deemed to
be paid at the date of declaration, and the subsequent payment of such
dividend during such 60-day period shall not be treated as an additional
Restricted Payment.
"(e) For purposes of determining the amount expended for Restricted
Payments or aggregate Net Proceeds received by MGM Hotel, cash distributed
shall be valued at the face amount thereof and property other than cash
shall be valued at its fair market value such fair market value shall be
determined in good faith by the Board of Directors as evidenced by a Board
Resolution delivered to the Agent; provided, however, that the fair market
-------- -------
value of all property distributed in any transaction or series of related
transactions shall not exceed $15,000,000 for the purposes of such
subsection (c) unless MGM Hotel has received an appraisal from an
Independent Financial Advisor
- 5 -
indicating that such property has a fair market value equal to or greater
than the fair market value determined by the Board of Directors.
"(f) Notwithstanding the foregoing, the provisions of this Section
8.10 will not prevent (i) the payment of any dividend within 60 days after
the date of declaration when the payment complied with the foregoing
provisions on the date of declaration, (ii) the retirement of any shares of
MGM Hotel's Capital stock by exchange for, or out of the proceeds of
the substantially concurrent sale (other than to a Subsidiary) of, other
shares of its Capital Stock (other than any Disqualified Capital Stock), or
(iii) any distribution or dividends that would otherwise be deemed a
Restricted Payment hereunder to the extent such payment is effected by the
distribution of an Investment which constituted a Restricted Payment.
Notwithstanding anything to the contrary in the foregoing, all of the
amounts referred to in clause (i) of this subsection (f) shall be included
as Restricted Payments in any computation made under this Section 8.10.
"(g) Prior to making any Restricted Payment, MGM Hotel will deliver to
the Agent a certificate signed by a Responsible Officer (dated the date of
such proposed payment) stating (i) that such proposed payment will be
in compliance with this Section 8.10 and (ii) no Default under this
Indenture has occurred or will occur as a result of such proposed payment."
2.10 Section 8.13 of the Agreement is amended and restated in its entirety
as follows:
"8.13 Capital Expenditures. MGM Finance shall not make any Capital
--------------------
Expenditures. Commencing with the Availability Date, MGM Hotel shall not
make or commit to make Capital Expenditures except:
"(a) Capital Expenditures and expenditures to purchase the common
stock with respect to Grand Laundry, Inc. not exceeding $10,000,000 in the
aggregate;
"(b) Capital Expenditures and commitments to make Capital
Expenditures with respect to EFXI and the theater not exceeding $44,000,000
in the aggregate;
"(c) Capital Expenditures and commitments to make Capital
Expenditures for the StarLane Mall not exceeding $12,000,000 in the
aggregate;
- 6 -
"(d) Capital Expenditures and commitments to make Capital
Expenditures with respect to the termination of Bank of America operating
leases not exceeding $43,000,000 in the aggregate; and
"(e) Capital Expenditures or commitments to make Capital
Expenditures in addition to those permitted above, not exceeding
$15,000,000 in the aggregate in any fiscal year plus an amount equal to the
----
amount of unused availability under this subsection (e) from the prior
fiscal year not exceeding an additional $5,000,000."
2.11 Section 8.16, 8.17 and 8.18 of the Agreement are amended and restated
in their entirety as follows:
"8.16 Leverage Ratio. MGM Hotel will not permit its Leverage Ratio as
--------------
determined as of the last day of each of each fiscal quarter to be greater
than the ratio set forth below for the applicable Determination Period:
"Date Ratio
---- -----
December 31, 1994 4.00 to 1
March 31, 1995 -
December 31, 1995 3.40 to 1
March 31, 1996 and
thereafter 3.00 to 1"
"8.17 Debt Service Coverage Ratio. MGM Hotel shall not permit its
---------------------------
ratio of (a) EBITDA to (b) Debt Service determined as of the last day of
each fiscal quarter to be less than the ratio set forth below for the
applicable Determination Period:
"Date Ratio
---- -----
December 31, 1994 2.00 to 1
March 31, 1995 and
thereafter 1.15 to 1"
"8.18 Interest Coverage Ratio. MGM Hotel shall not permit its ratio
-----------------------
of EBITDA to Consolidated Net Interest Expense determined as of the last
day of each fiscal quarter to be less than the ratio set forth below for
the applicable Determination Period:
"Date Ratio
---- -----
December 31, 1994 2.15 to 1
- 7 -
March 31, 1995 and
thereafter 2.30 to 1"
3. Representations and Warranties. MGM Finance and MGM Hotel
------------------------------
represent and warrant to the Banks and Agent.
3.1 Authorization. The execution, delivery and performance of this
-------------
Fourth Amendment have been duly authorized by all necessary corporate action
by each of them and has been duly executed and delivered by each of them.
3.2 Binding Obligation. This Fourth Amendment is the legally valid
------------------
and binding obligation of MGM Finance and MGM Hotel, enforceable in accordance
with its terms against each of them respectively.
3.3 No Legal Obstacle to Agreement. Neither the execution of this
------------------------------
Fourth Amendment, the making by MGM Finance of any Borrowing under the
Agreement, nor the performance of the Agreement has constituted or resulted in
or will constitute or result in a breach of the provisions of any Contractual
Obligation to which MGM Finance or MGM Hotel is a party, or the violation of any
Requirement of Law, or result in the creation under any agreement or instrument
of any security interest, lien, charge, or encumbrance upon any of the assets of
any of them. No approval or authorization of any governmental authority is
required to permit the execution, delivery or performance by MGM Finance or MGM
Hotel of this Fourth Amendment, the Agreement, or the transactions contemplated
hereby or thereby, or the making of any Borrowing under the Agreement.
3.4 Incorporation of Certain Representations. The representations and
----------------------------------------
warranties set forth in Article VI of the Agreement are true and correct in all
material respects on and as of the date hereof as though make on and as of the
date hereof.
3.5 Default. No Default or Event of Default under the Agreement has
-------
occurred and is continuing.
4. Conditions, Effectiveness. The effectiveness of this Fourth
-------------------------
Amendment shall be subject to the compliance by MGM Finance and MGM Hotel with
their respective agreements herein contained, and to the delivery of the
following to the Agent in form and substance satisfactory to the Agent and the
Majority Banks:
4.1 Corporate Resolutions. A copy of a resolution or resolutions
---------------------
passed by the Board of Directors of each of MGM Finance and MGM Hotel, certified
by the respective Secretary or an Assistant Secretary of such entity as being in
full force and effect on the effective date of this Fourth Amendment.
- 8 -
authorizing the amendments to the Agreement herein provided for and the
execution, delivery and performance of this Fourth Amendment and any note or
other instrument or agreement required hereunder.
4.2 Authorized Signatories. A certificate, signed by a Responsible
----------------------
Officer of each of MGM Finance and MGM Hotel dated the date of this Fourth
Amendment, as to the incumbency of the person or persons authorized to execute
and deliver this Fourth Amendment and any instrument or agreement required
hereunder on behalf of such entity.
4.3 Title Insurance Endorsement. A title insurance company
---------------------------
acceptable to the Collateral Agent and the Banks shall have issued or committed
to issue endorsements to the ALTA Lender's coverage policy of title insurance
issued in connection with the Deed of Trust as requested by the Agent to reflect
this Fourth Amendment.
4.4 Amendment Fee. An amendment fee equal to 0.50% of the Aggregate
-------------
Revolving Commitments for the ratable benefit of the Banks.
4.5 Other Evidence. Such other evidence with respect to any MGM
--------------
Finance and MGM Hotel or any other person as the Agent or any Bank may
reasonably request to establish the consummation of the transactions
contemplated hereby, the taking of all corporate action in connection with this
Fourth Amendment and the Agreement and the compliance with the conditions set
forth herein.
5. Miscellaneous.
-------------
5.1 Effectiveness of the Agreement. Except as hereby expressly
------------------------------
amended, the Agreement shall remain in full force and effect, and are hereby
ratified and confirmed in all respects.
5.2 Waivers. This Fourth Amendment is specific in time and in intent
--------
and does not constitute, nor should it be construed as, a waiver of any other
right, power or privilege under the Agreement, or under any agreement, contract,
indenture, document or instrument mentioned in the Agreement; nor does it
preclude any exercise thereof or the exercise of any other right, power or
privilege, nor shall any future waiver of any right, power, privilege or default
hereunder, or under any agreement, contract, indenture, document or instrument
mentioned in the Agreement, constitute a waiver of any other default of the same
or of any other term or provision.
5.3 Counterparts. This Fourth Amendment may be executed in any number
------------
of counterparts and all of such counterparts taken together shall be deemed to
constitute one and
- 9 -
the same instrument. This Fourth Amendment shall not become effective until each
MGM Finance, MGM Hotel, MGM Grand, the Banks and the Agent shall have signed a
copy hereof, whether the same or counterparts, and the same shall have been
delivered to the Agent.
5.4 Jurisdiction. This Fourth Amendment, and any instrument or
------------
agreement required hereunder, shall be governed by and construed under the laws
of the state of Nevada.
IN WITNESS WHEREOF, the parties hereto have caused this Fourth
Amendment to be duly executed and delivered as of the date first written above.
MGM GRAND HOTEL FINANCE CORP.
By: /s/ J.T. Murphy
---------------------------
Title: CFO
------------------------
MGM GRAND HOTEL, INC.
By: /s/ J.T. Murphy
---------------------------
Title: Sr. VP
------------------------
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent
By:
--------------------------
Peggy Fujimoto
Vice President
(Signatures continue)
- 10 -
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By:
-------------------------
Jon Varnell
Vice President
BANK OF SCOTLAND
By:
-------------------------
Title:
----------------------
UNITED STATES NATIONAL
BANK OF OREGON
By:
-------------------------
Title:
----------------------
FIRST SECURITY BANK OF UTAH, N.A.
By:
-------------------------
Title:
----------------------
BANK OF AMERICA NEVADA
By:
-------------------------
Title:
----------------------
- 11 -
CONSENT OF GUARANTOR
--------------------
The undersigned, as guarantor under that certain Continuing Guaranty dated as of
May 13, 1992, hereby consents to the foregoing Fourth Amendment to Credit
Agreement, dated as of December 30, 1994, and confirms that its Continuing
Guaranty remains in full force and effect.
MGM GRAND, INC.
By: /s/ Alejandro Yemenidjian
--------------------------
Title: CFO
----------------------
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