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Exhibit 4.10
PARTNERSHIP FUNDS AGREEMENT
PARTNERSHIP FUNDS AGREEMENT (this "Agreement"), dated as of
December 30, 1997, among THE RESORT AT SUMMERLIN, LIMITED PARTNERSHIP (the
"Partnership"), THE RESORT AT SUMMERLIN, INC. ("Summerlin, Inc.", and together
with the Partnership, the "Assignors"), THE RESORT AT SUMMERLIN, INC., as
representative (in such capacity, the "Representative") for the existing and
future partners of the Partnership (the "Partners") and FIRST SECURITY TRUST
COMPANY OF NEVADA as Account Agent hereunder (in such capacity, the "Account
Agent"). Except as otherwise defined herein, terms used herein and defined in
the Credit Agreement referred to below (or in the Disbursement Agreement
referred to therein) shall be used herein as so defined.
W I T N E S S E T H :
WHEREAS, the Assignors, the lenders (the "Lenders") from time
to time party thereto, Gleacher Natwest, Inc., as Arranging Agent and the
Administrative Agent, have entered into a Credit Agreement, dated as of December
30, 1997 (as modified or restated and in effect from time to time, the "Credit
Agreement");
WHEREAS, the Partners are to deposit in the Partnership Funds
Account on the Closing Date $39,700,152 (the "Initial Deposit") and Additional
Amounts (as defined below) are required to be deposited in the Partnership Funds
Account from time to time;
WHEREAS, the amounts in the Partnership Funds Account may be
disbursed into the Disbursement Account, from time to time upon the satisfaction
of the applicable conditions set forth in the Disbursement Agreement;
NOW, THEREFORE, it is agreed:
SECTION 1. ESTABLISHMENT OF PARTNERSHIP FUNDS ACCOUNT; ETC.
1.01. Establishment. The Account Agent has established in its
own name and for the benefit of the Beneficiaries (as defined below) an account
(Account No. 702254C) (the "Partnership Funds Account") for purposes of this
Agreement, which Partnership Funds Account is maintained at the Account Agent's
office located at Las Vegas, Nevada (Wire transfers: First Security Bank of
Nevada -- ABA 1224 01668). Subject to the provisions of this Agreement, the
Partnership Funds Account shall be under the sole dominion and control of the
Account Agent and, except as set forth in Section 3.01 hereof, the Account Agent
shall have the sole right to make withdrawals from the Partnership Funds Account
and to exercise all rights with respect to the Collateral (as hereinafter
defined) from time to time therein. As used herein, "Beneficiaries" shall mean
and include the Partners, the holders of the Subordinated Notes (the "Holders")
and the Lenders as their interests may appear from time to time.
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1.02. Deposits to the Partnership Funds Account. On the
Closing Date, the Partners will transfer in immediately available funds the
Initial Deposit to the Account Agent for immediate deposit into the Partnership
Funds Account to be held therein until released pursuant to the provisions of
Section 3 below. On the Business Day following receipt by any Assignor prior to
the Commencement Date of any Additional Amounts, such Assignor shall transfer in
the funds received such Additional Amounts to the Account Agent for immediate
deposit into the Partnership Funds Account to be held therein until released
pursuant to Section 3 below. As used herein, "Additional Amounts" shall mean (x)
liquidated damages paid pursuant to Section ___ of the Construction Contract
and/or (y) any advance deposits and revenues from operations received by any
Assignor.
1.03. Investment of Funds. So long as any amounts remain in
the Partnership Funds Account, the Account Agent will from time to time, at the
request of the General Partner, invest funds on deposit in the Partnership Funds
Account in Cash Equivalents. All investments made pursuant to this Section 1.03
(and any instruments evidencing same), and all proceeds thereof, shall be held
in the Partnership Funds Account as part of the Collateral. All such investments
shall be made in the name of the Account Agent. All risk of loss in respect of
investments made pursuant to this Section 1.03 shall be on the Assignors.
SECTION 2. PLEDGE AND GRANT OF SECURITY INTEREST.
2.01. Pledge and Grant of Security Interest. As collateral
security to secure the full and prompt payment when due (whether at stated
maturity, by acceleration or otherwise) of the Obligations (and subject to
Section 3.02 below), each Assignor hereby pledges and assigns to the Account
Agent, for the benefit of the Lenders, a continuing possessory Lien and security
interest in all of the right, title and interest of such Assignor in and to the
Partnership Funds Account, in all funds deposited therein, in all investments
from time to time therein, and in all cash and non-cash proceeds of any of the
foregoing (collectively, the "Collateral"), from the date of the establishment
of the Partnership Funds Account until the termination thereof pursuant to the
terms hereof. As used herein, "Obligations" shall mean (i) the principal of,
interest on and premium on (x) the Loans made under the Credit Agreement and (y)
the Subordinated Notes, (ii) all other obligations and indebtedness of each
Assignor to the Lenders and Holders now existing or hereafter incurred under,
arising out of, or in connection with the Credit Agreement, the other Credit
Documents and the Subordinated Notes Documents and the due performance and
compliance by each Assignor with all of the terms, conditions and agreements
contained in the Credit Agreement, the other Credit Documents and the
Subordinated Notes Documents, (iii) any and all sums advanced by the Account
Agent in order to preserve the Collateral or to preserve its security interest
in the Collateral, (iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations or liabilities of any Assignor
referred to in clauses (i), (ii) or (iii) above, after an Event of Default shall
have occurred and be continuing, the reasonable expenses of retaking, holding,
preparing for sale or lease, selling or otherwise disposing of or realizing on
the Collateral, or of any exercise by the Account Agent of its rights hereunder,
together with reasonable attorneys' fees and court costs and (v) all amounts
paid by any Indemnitee (as hereinafter defined) as to which such Indemnitee has
the right to reimbursement under Section 9 hereof.
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SECTION 3. WITHDRAWALS, APPLICATIONS AND REMEDIES.
3.01. Withdrawals. (a) Upon receipt by the Account Agent of a
Transfer Notice from the Disbursement Agent, the Account Agent shall, on the
Transfer Date or other date specified in the Transfer Notice, withdraw from the
Partnership Funds Account and transfer to the Disbursement Account its Account
Agent's Portion for such date (i.e., the Requested Amount as stated in such
Transfer Notice.
(b) To the extent required to make any withdrawal pursuant to
the foregoing clause of this Section 3.01, the Account Agent shall, and is
hereby authorized to, liquidate Cash Equivalents then on deposit in the
Partnership Funds Accounts pursuant to its customary practices for liquidating
such securities.
(c) Collateral may only be withdrawn as provided in clause (a)
of this Section 3.01, Section 3.02 and/or Section 10 and shall remain in the
Partnership Funds Account until so withdrawn. Neither the Account Agent, the
Representative, the Trustee nor the Administrative Agent shall have any
liability whatsoever to any Lender, Holder or any Person as a result of any
release of Collateral by transfer to the Disbursement Account following receipt
by the Account Agent of a Transfer Notice regardless of any subsequent
determination that one or more of the conditions specified herein or in the
Disbursement Agreement to such withdrawal were not satisfied.
3.02. Remedies Upon a Noticed Event of Default; Application of
Proceeds. (a) If a Noticed Event of Default (as defined in the Disbursement
Agreement) shall occur and be continuing, if and to the extent directed to do so
by the Administrative Agent (acting at the direction of the Required Lenders),
the Account Agent shall, subject to any mandatory requirements of applicable law
(including the Gaming Laws), (i) exercise in respect of all of the Collateral in
addition to other rights and remedies provided for herein or otherwise available
to it under applicable law, all of the rights and remedies of a secured party on
default under the Uniform Commercial Code then in effect in the State of New
York, (ii) liquidate all Cash Equivalents in accordance with its customary
practices for liquidating such securities and/or (iii) withdraw the Collateral,
if any, from the Partnership Funds Account and pay the same to the
Administrative Agent for application to the Obligations in accordance with
Section 7.4 of the Security Agreement executed by the Partnership (which Section
provides that all amounts are to be first applied to the payment of all
Obligations as defined in such Security Agreement (which do not include any
amounts owing in respect of the Subordinated Notes) and the payment over to the
Trustee of any amounts remaining after such satisfaction of the Obligations,
with the Trustee to thereupon apply all amounts so paid to it pursuant to
Section 6.10 of the Indenture).
(b) Each Assignor shall remain jointly and severally liable to
the extent of any deficiency between the amount of the proceeds of the
Collateral applied as provided in preceding clause (a) and the aggregate amount
of the Obligations.
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SECTION 4. FURTHER ASSURANCES.
Each Assignor agrees that it will, at any time and from time
to time, at its expense, promptly execute and deliver all further agreements,
instruments and other documents and take all further action that may be
necessary or that the Account Agent or the Administrative Agent may reasonably
request in order to perfect and protect the security interest purported to be
created hereby or otherwise to enable the Account Agent to exercise and enforce
its rights and remedies hereunder.
SECTION 5. TRANSFERS AND OTHER LIENS.
Each Assignor agrees that it will not create or suffer to
exist any Lien upon or with respect to any Collateral except for the security
interest purported to be created hereby.
SECTION 6. ATTORNEY-IN-FACT.
Each Assignor hereby irrevocably appoints, which appointment
shall be coupled with an interest, the Account Agent its attorney-in-fact, with
full authority after the occurrence of and during the continuance of an Event of
Default, in the place and stead of such Assignor and in the name of such
Assignor or otherwise, from time to time in the Account Agent's discretion to
execute any instrument and to take any other action which the Account Agent may
deem necessary or advisable to accomplish the purposes of this Agreement or to
facilitate the assignment or other transfer by the Account Agent of any or all
of its rights hereunder.
SECTION 7. PERFORMANCE BY THE ACCOUNT AGENT.
If any Assignor fails to perform any agreement or obligation
contained herein, the Account Agent itself may perform or cause performance of
such agreement or obligation, and the expenses of the Account Agent incurred in
connection therewith shall be payable to the Account Agent by the Assignors.
SECTION 8. RESPONSIBILITY OF THE ACCOUNT AGENT AND
ADMINISTRATIVE AGENT.
(a) Neither the Account Agent nor any of their respective
directors, officers, agents, employees, affiliates, representatives and agents
shall be liable for any failure to invest or reinvest any cash in the
Partnership Funds Account in accordance herewith or for any losses incurred by
reason of investments made by the Account Agent pursuant to Section 1.03 hereof.
The Account Agent shall act hereunder on the same terms and conditions as are
set forth in Section 10 of the Credit Agreement (which section is incorporated
herein by reference with each reference therein to "Agent" to include the
Account Agent hereunder and each reference therein to Lenders to include the
Lenders, the Holders and the Partners and by accepting the benefit hereof, the
Lenders, Holders and Partners being deemed to have agreed to such provisions as
so incorporated) and shall hold the Collateral in accordance with this Agreement
and with only such obligations in respect thereof as are expressly set forth in
this Agreement.
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(b) The Account Agent acknowledges and agrees that (i) all
disbursements and releases made pursuant to this Agreement shall be made by the
Account Agent irrespective of, and without deduction for, any counterclaim,
defense, recoupment or set-off and shall be final, (ii) all service charges and
fees with respect to this Agreement or the Partnership Funds Account shall be
paid by the Assignors, (iii) it irrevocably waives and renounces any pledge,
security interest (whether consensual, statutory or otherwise) or right of
offset or compensation that it has or may ever have for its own benefit with
respect to the Partnership Funds Account, (iv) it shall maintain appropriate
books and records with respect to the Partnership Funds Account in which shall
be recorded all transactions related thereto including, without limitation, all
disbursements hereunder and any investments made by the Account Agent and shall
permit the Administrative Agent and Trustee or any of their agents or
representatives to inspect and to make copies of such books and records, as is
reasonable, at the Assignors' sole cost and expense and (v) it shall exercise
its [customary]efforts and utilize prudence in performing its duties hereunder
in accordance with the terms of this Agreement.
SECTION 9. INDEMNITY.
9.1. Indemnity. (a) Each Assignor jointly and severally agrees
to indemnify, reimburse and hold the Account Agent and, to the extent acting
hereunder, the Administrative Agent and the Trustee and their respective
successors, assigns, employees, agents and servants (hereinafter in this Section
9.1 referred to individually as "Indemnitee," and collectively as "Indemnitees")
harmless from any and all liabilities, obligations, damages, injuries,
penalties, claims, demands, actions, suits, judgments and any and all costs,
expenses or disbursements (including reasonable attorneys' fees and expenses and
herein collectively called "expenses") of whatsoever kind and nature imposed on,
asserted against or incurred by any of the Indemnitees in any way relating to or
arising out of this Agreement or any other document executed in connection
herewith or in any other way connected with the administration of the
transactions contemplated hereby or the enforcement of any of the terms of, or
the preservation of any rights under any thereof, or in any way relating to or
arising out of the use of the Collateral; provided that no Indemnitee shall be
indemnified pursuant to this Section 9.1(a) for expenses to the extent caused by
the gross negligence or willful misconduct of such Indemnitee.
(b) Without limiting the application of Section 9.1(a) hereof,
each Assignor jointly and severally agrees to pay, or reimburse the Account
Agent, for any and all fees, costs and expenses of whatever kind or nature
incurred in connection with the creation, preservation or protection of the
Account Agent's Liens on, and security interest in, the Account, including,
without limitation, all fees and taxes in connection with the recording or
filing of instruments and documents in public offices, payment or discharge of
any taxes or Liens upon or in respect of the Collateral and all other fees,
costs and expenses in connection with protecting, maintaining or preserving the
Collateral and the Account Agent's interest therein, whether through judicial
proceedings or otherwise, or in defending or prosecuting any actions, suits or
proceedings arising out of or relating to the Collateral.
(c) Without limiting the application of Section 9.1(a) or (b)
hereof, each Assignor jointly and severally agrees to pay, indemnify and hold
each Indemnitee harmless from and against any loss, costs, damages and expenses
which such Indemnitee may suffer, expend or incur in
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consequence of or growing out of any misrepresentation by such
Assignor in this Agreement or in any writing contemplated by or made or
delivered pursuant to or in connection with this Agreement.
(d) If and to the extent that the obligations of any Assignor
under this Section 9.1 are unenforceable for any reason, such Assignor hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
9.2. Indemnity Obligations Secured by Collateral; Survival.
Any amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of each Assignor contained in this Section 9 shall
continue in full force and effect notwithstanding the full payment of all
Obligations.
SECTION 10. TERMINATION; RELEASE.
(a) Upon the Termination Date (as defined below) this
Agreement shall terminate, and the Account Agent will duly assign, transfer and
deliver to the Assignors (without recourse and without any representation or
warranty) the Collateral, if any, that remains in the possession of the Account
Agent and has not theretofore been sold or otherwise applied or released
pursuant to this Agreement together with any monies at the time held by the
Collateral Agent hereunder. As used in this Agreement, "Termination Date" shall
mean the earlier of (x) that date upon which all Commitments under the Credit
Agreement have terminated and all Obligations have been repaid in full and (y)
that date, occurring after the Commencement Date, which is one Business Day
after the date upon which all of the amounts on deposit under the Mortgage Notes
Proceeds Agreement have been applied as required by Section 3.01(b) of such
agreement.
(b) At any time that the Assignors desire that Collateral be
released as provided in the foregoing Section 10(a), the Assignors shall deliver
to the Account Agent and the Administrative Agent a certificate signed by an
Authorized Officer of the General Partner, stating that the release of the
respective Collateral is permitted pursuant to said Section 10(a). Neither the
Account Agent nor the Administrative Agent shall have any liability whatsoever
to any Lender as a result of any release of Collateral by it as permitted by
this Section 10.
SECTION 11. NOTICES, ETC.
Except as otherwise specified herein, all notices, requests,
demands or other communications to or upon the respective parties hereto shall
be deemed to have been duly given or made when delivered as follows:
(a) if to any Assignor, at:
1160 Town Center Drive
Suite 200
Las Vegas, Nevada
Attention: John Tipton
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(b) if to the Account Agent:
First Security Bank
Trust Dept.
530 Las Vegas Blvd. South
Las Vegas, Nevada 89101
(c) if to the Administrative Agent:
175 Water Street
New York, NY 10038
Attention: Robert Karlovitz
(d) if to the Trustee:
114 West 47th St.
New York, NY 10036
Attention: James D. Nesci
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
SECTION 12. MISCELLANEOUS.
This Agreement and the rights and obligations of the parties
hereunder shall be construed in accordance with and be governed by the law of
the State of New York. This Agreement shall be binding upon each Assignor and
its successors and assigns and shall inure to the benefit of and be enforceable
by the Account Agent, the Administrative Agent and the Trustee and their
successors and assigns. The headings in this Agreement are for purposes of
reference only and shall not limit or define the meaning hereof. This Agreement
may be executed in any number of counterparts, each of which shall be an
original, but all of which shall constitute one instrument. Delivery of an
executed counterpart of the signature pages to this Agreement by telecopier
shall be effective as delivery of a manually executed counterpart of this
Agreement. This Agreement shall become effective on the date on which each of
the parties shall have executed and delivered a copy hereof. In the event that
any provision of this Agreement shall prove to be invalid or unenforceable, such
provision shall be deemed to be severable from the other provisions of this
Agreement, which shall remain binding on all parties hereto.
SECTION 13. WAIVER; AMENDMENT.
None of the terms and conditions of this Agreement may be
changed, waived, modified or varied in any manner whatsoever, except pursuant to
a writing signed by all the parties hereto, with the Administrative Agent to act
only at the direction of the Required Lenders or all Lenders, as provided in
Section 11.12 of the Credit Agreement. The Account Agent will be
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replaced hereunder by a new Account Agent at such time as such new Account Agent
replaces the Disbursement Agent under and in accordance with Section 13 of the
Disbursement Agreement. Upon the effectiveness of such replacement, the original
Account Agent will transfer to the new Partnership Funds Account established by
the new Account Agent all amounts on deposit in the original Partnership Funds
Account.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by their duly authorized representatives,
as of the date first above written.
THE RESORT AT SUMMERLIN, LIMITED
PARTNERSHIP, as an Assignor
By ____________________________________,
its General Partner
By ____________________________________
Title:
THE RESORT AT SUMMERLIN, INC.,
as an Assignor
By:____________________________________
Title:
THE RESORT AT SUMMERLIN, INC.,
as Representative
By:____________________________________
Title:
FIRST SECURITY TRUST COMPANY OF NEVADA
as Account Agent
By:____________________________________
Title:
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Agreed
NATIONAL WESTMINSTER BANK PLC,
as Administrative Agent
By:_______________________________
Title:
UNITED STATES TRUST COMPANY
OF NEW YORK as Trustee
By:_______________________________
Title:
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