CREDIT AGREEMENT
DATED AS OF NOVEMBER 14, 1997
AMONG
LAS VEGAS SANDS, INC.,
and
VENETIAN CASINO RESORT, LLC
as Borrowers,
THE LENDERS LISTED HEREIN,
as Lenders,
GOLDMAN SACHS CREDIT PARTNERS L.P.
as Arranger and Syndication Agent,
and
THE BANK OF NOVA SCOTIA
as Administrative Agent
LAS VEGAS SANDS, INC.
and
VENETIAN CASINO RESORT, LLC
CREDIT AGREEMENT
TABLE OF CONTENTS
Section 1. DEFINITIONS............................................................................................... 2
1.1 Certain Defined Terms..................................................................................... 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations
Under Agreement......................................................................................... 46
1.3 Other Definitional Provisions and Rules of Construction................................................... 47
Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS ............................................................... 47
2.1 Commitments; Making of Loans; the Register; Notes......................................................... 47
2.2 Interest on the Loans..................................................................................... 52
2.3 Fees...................................................................................................... 55
2.4 Repayments, Prepayments and Reductions in Commitments; General Provisions Regarding Payments.............. 56
2.5 Use of Proceeds........................................................................................... 64
2.6 Special Provisions Governing Eurodollar Rate Loans........................................................ 64
2.7 Increased Costs; Taxes; Capital Adequacy.................................................................. 66
2.8 Obligation of Lenders to Mitigate......................................................................... 70
2.9 Obligations Joint and Several............................................................................. 71
Section 3. LETTERS OF CREDIT......................................................................................... 72
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations Therein............................. 72
3.2 Letter of Credit Fees..................................................................................... 75
3.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit........................................ 76
3.4 Obligations Absolute...................................................................................... 78
3.5 Indemnification; Nature of Issuing Lenders' Duties........................................................ 79
3.6 Increased Costs and Taxes Relating to Letters of Credit................................................... 80
Section 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT................................................................. 81
4.1 Conditions to Term Loans and Initial Revolving Loans...................................................... 82
4.2 Conditions to All Term Loans.............................................................................. 85
4.3 Conditions to all Revolving Loans......................................................................... 85
4.4 Conditions to Letters of Credit........................................................................... 87
Section 5. BORROWERS' REPRESENTATIONS AND WARRANTIES................................................................. 88
5.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries............................. 88
(i)
Page
5.2 Authorization of Borrowing, etc........................................................................... 89
5.3 Financial Condition....................................................................................... 90
5.4 No Material Adverse Change; No Restricted Junior Payments................................................. 91
5.5 Title to Properties; Liens; Real Property................................................................. 91
5.6 Litigation; Adverse Facts................................................................................. 91
5.7 Payment of Taxes.......................................................................................... 92
5.8 Performance of Agreements; Materially Adverse Agreements; Material Contracts.............................. 92
5.9 Governmental Regulation................................................................................... 92
5.10 Securities Activities..................................................................................... 93
5.11 Employee Benefit Plans.................................................................................... 93
5.12 Certain Fees.............................................................................................. 94
5.13 Environmental Protection.................................................................................. 94
5.14 Employee Matters.......................................................................................... 95
5.15 Solvency.................................................................................................. 95
5.16 Matters Relating to Collateral............................................................................ 95
Section 6. BORROWERS' AFFIRMATIVE COVENANTS.......................................................................... 96
6.1 Financial Statements and Other Reports.................................................................... 96
6.2 Corporate Existence, etc..................................................................................103
6.3 Payment of Taxes and Claims; Tax Consolidation............................................................103
6.4 Maintenance of Properties; Insurance; Application of Net Loss Proceeds....................................104
6.5 Inspection; Lender Meeting................................................................................105
6.6 Compliance with Laws, etc.; Permits.......................................................................105
6.7 Environmental Review and Investigation, Disclosure, Etc.; Borrowers' Actions Regarding Hazardous
Materials Activities, Environmental Claims and Violations of Environmental Laws.........................105
6.8 Interest Rate Protection..................................................................................108
6.9 Compliance with Material Contracts........................................................................108
6.10 Separate Legal and Tax Parcel for Mall....................................................................108
6.11 Payment of Liens..........................................................................................108
6.12 Further Assurances........................................................................................109
6.13 Execution of Subsidiary Guaranty and Personal Property Collateral Documents by Certain Subsidiaries
and Future Subsidiaries.................................................................................111
Section 7. BORROWERS' NEGATIVE COVENANTS.............................................................................112
7.1 Indebtedness..............................................................................................112
7.2 Liens and Related Matters.................................................................................114
7.3 Investments; Joint Ventures; Formation of Subsidiaries....................................................116
7.4 Contingent Obligations....................................................................................118
7.5 Restricted Junior Payments................................................................................119
7.6 Financial Covenants.......................................................................................121
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions..........................................123
7.8 Sales and Lease-Backs.....................................................................................126
(ii)
Page
7.9 Sale or Discount of Receivables...........................................................................127
7.10 Transactions with Shareholders and Affiliates.............................................................127
7.11 Disposal of Subsidiary Stock..............................................................................129
7.12 Conduct of Business.......................................................................................129
7.13 Certain Restrictions on Changes to Operative Documents, Permits, Project Budget or Project Schedule.......130
7.14 Consolidated Capital Expenditures.........................................................................131
7.15 Fiscal Year...............................................................................................131
7.16 Zoning and Contract Changes and Compliance................................................................132
7.17 No Joint Assessment; Separate Lots........................................................................132
7.18 Certain Covenants Applicable to Mall Subsidiary...........................................................132
7.19 Limitation on Declaration of Restricted Subsidiaries......................................................134
7.20 Restrictions on Opening...................................................................................134
7.21 Limitation on Phase II Construction.......................................................................134
Section 8. EVENTS OF DEFAULT.........................................................................................134
8.1 Failure to Make Payments When Due.........................................................................134
8.2 Default under Other Indebtedness or Contingent Obligations................................................135
8.3 Breach of Certain Covenants...............................................................................135
8.4 Breach of Warranty........................................................................................135
8.5 Other Defaults Under Loan Documents.......................................................................135
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc......................................................136
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc........................................................136
8.8 Judgments and Attachments.................................................................................136
8.9 Dissolution...............................................................................................137
8.10 Employee Benefit Plans....................................................................................137
8.11 Change in Control.........................................................................................137
8.12 Failure of Guaranty; Repudiation of Obligations...........................................................137
8.13 Default Under or Termination of Operative Documents.......................................................138
8.14 Default Under or Termination of Permits...................................................................138
8.15 Default Under or Termination of Cooperation Agreement.....................................................138
8.16 Bankruptcy or Dissolution of Mall Subsidiary..............................................................139
8.17 Acceleration of Obligations of Mall Subsidiary............................................................139
8.18 Certain Investments in any Excluded Subsidiary............................................................139
Section 9. AGENTS....................................................................................................140
9.1 Appointment...............................................................................................140
9.2 Powers and Duties; General Immunity.......................................................................141
9.3 Representations and Warranties; No Responsibility For Appraisal of Credit Worthiness......................143
9.4 Right to Indemnity........................................................................................143
9.5 Successor Administrative Agent............................................................................144
9.6 Collateral Documents and Subsidiary Guaranties............................................................144
9.7 Disbursement Agreement and Intercreditor Agreement........................................................145
(iii)
Page
Section 10. MISCELLANEOUS.............................................................................................145
10.1 Assignments and Participations in Loans...................................................................145
10.2 Expenses..................................................................................................148
10.3 Indemnity.................................................................................................149
10.4 Set-Off; Security Interest in Deposit Accounts............................................................150
10.5 Ratable Sharing...........................................................................................150
10.6 Amendments and Waivers....................................................................................151
10.7 Certain Matters Affecting Lenders.........................................................................152
10.8 Independence of Covenants.................................................................................153
10.9 Notices...................................................................................................153
10.10 Survival of Representations, Warranties and Agreements....................................................153
10.11 Failure or Indulgence Not Waiver; Remedies Cumulative.....................................................153
10.12 Marshalling; Payments Set Aside...........................................................................154
10.13 Severability..............................................................................................154
10.14 Obligations Several; Independent Nature of Lenders' Rights................................................154
10.15 Headings..................................................................................................154
10.16 Applicable Law............................................................................................155
10.17 Successors and Assigns....................................................................................155
10.18 Consent to Jurisdiction and Service of Process............................................................155
10.19 Waiver of Jury Trial......................................................................................156
10.20 Confidentiality...........................................................................................156
10.21 Counterparts; Effectiveness...............................................................................157
10.22 Gaming Authorities........................................................................................157
Signature pages S-1
(iv)
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III-A FORM OF TERM NOTE
III-B FORM OF REVOLVING NOTE
IV FORM OF COMPLIANCE CERTIFICATE
V-A FORM OF OPINION OF PAUL, WEISS, RIFKIND, WHARTON & GARRISON
V-B FORM OF OPINION OF LIONEL SAWYER & COLLINS
VI FORM OF OPINION OF O'MELVENY & MYERS LLP
VII FORM OF ASSIGNMENT AGREEMENT
VIII FORM OF SUBSIDIARY SECURITY AGREEMENT
IX FORM OF CERTIFICATE RE NON-BANK STATUS
X FORM OF FINANCIAL CONDITION CERTIFICATE
XI FORM OF SUBSIDIARY GUARANTY
XII FORM OF COMPANY SECURITY AGREEMENT
XIII-A FORM OF DEED OF TRUST
XIII-B FORM OF LEASEHOLD DEED OF TRUST
XIII-C FORM OF MALL FEE DEED OF TRUST
XIV FORM OF INTERCREDITOR AGREEMENT (CREDIT PARTIES)
XV FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
XVI FORM OF INTERCREDITOR AGREEMENT (ADELSON)
XVII FORM OF DISBURSEMENT AGREEMENT
XVIII FORM OF SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
XIX FORM OF MALL CONSTRUCTION SUBSIDIARY SECURITY AGREEMENT
(v)
SCHEDULES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
5.1C OWNERSHIP OF BORROWERS
5.1D SUBSIDIARIES OF BORROWERS
5.1E OPTIONS
5.4 RESTRICTED JUNIOR PAYMENTS
5.5 REAL PROPERTY
5.6 LITIGATION
5.8 MATERIAL CONTRACTS
5.11 CERTAIN EMPLOYEE BENEFIT PLANS
5.12 CERTAIN FEES
5.13 ENVIRONMENTAL MATTERS
5.16 PERMITS
7.1 CERTAIN EXISTING INDEBTEDNESS
7.2 CERTAIN EXISTING LIENS
7.3 CERTAIN EXISTING INVESTMENTS
(vi)
LAS VEGAS SANDS, INC.
and
VENETIAN CASINO RESORT, LLC
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of November 14, 1997 and entered into
by and among LAS VEGAS SANDS, INC. ("LVSI"), a Nevada corporation, and VENETIAN
CASINO RESORT, LLC ("Venetian"), a Nevada limited liability company, as joint
and several obligors (each of LVSI and Venetian, a "Borrower" and, collectively,
the "Borrowers"), THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES
HEREOF (each individually referred to herein as a "Lender" and collectively as
"Lenders"), and GOLDMAN SACHS CREDIT PARTNERS L.P. ("GSCP"), as syndication
agent (in such capacity, "Syndication Agent") and arranger (in such capacity,
"Arranger") and THE BANK OF NOVA SCOTIA ("Scotiabank"), as administrative agent
for Lenders (in such capacity, "Administrative Agent").
R E C I T A L S
WHEREAS, Borrowers propose to develop and own the Project (such defined
term and other defined terms used in these Recitals shall have the meanings
given in subsection 1.1 of this Agreement);
WHEREAS, Borrowers desire to finance the development and construction
of the Project with (i) equity contributions to Borrowers from Adelson
consisting of the Real Estate Contribution (approximately 14 acres of which will
be released to the Phase II Subsidiary upon the completion of a subdivision of
such land) and cash in an aggregate amount of $320,000,000, (ii) proceeds of the
issuance of senior secured Mortgage Notes in an aggregate principal amount of
not less than $425,000,000, (iii) proceeds of the issuance of Subordinated Notes
of approximately $90,000,000 in cash, (iv) the proceeds of the Interim Mall
Facility in an aggregate principal amount of not less than $140,000,000, (v) the
proceeds of an equipment finance loan from the FF&E Lenders of not less than
approximately $98,000,000 to finance furniture, fixtures and equipment
(including, without limitation, gaming equipment and power station equipment) a
portion of which may be financed on an interim basis with proceeds of the
revolving loan portion of the senior secured credit facilities contemplated
hereby, (vi) the proceeds of a contribution from a joint venture between
Atlantic Thermal Systems, Inc., and Pacific Enterprises Energy Services, in an
amount up to approximately $70,000,000 as necessary to purchase, construct and
install (x) certain equipment that will be located at or used in connection with
the heating, ventilation and air conditioning facility for the Project and (y)
certain equipment that will be part of the Project's mechanical and/or
electrical systems, and (vii) the term loan portion of the senior secured credit
facilities contemplated hereby;
1
WHEREAS, Borrowers desire that Lenders extend the senior secured credit
facilities contemplated hereby to Borrowers to provide a portion of the
financings necessary to develop and construct the Project and, in the case of
the Revolving Loans, to provide working capital for the Project hotel and casino
following the Completion Date;
WHEREAS, subject to the terms and conditions hereof Lenders are willing
to extend such senior secured credit facilities to Borrowers, the proceeds of
which will be used, together with certain proceeds of the other financing
sources described above, to fund the development and construction of the
Project; and
WHEREAS, Borrowers desire to secure all of the Obligations hereunder
and under the other Loan Documents by granting to Administrative Agent, on
behalf of Lenders, a First Priority Lien on the First Priority Collateral and a
second priority lien on the Mall Collateral.
WHEREAS, each Subsidiary of Borrowers shall guaranty the Obligations
pursuant to the Subsidiary Guaranty and each such Subsidiary other than the
Intermediate Holding Companies shall secure all of the Obligations under the
Subsidiary Guaranty by granting to Administrative Agent, on behalf of Lenders, a
First Priority Lien on the First Priority Collateral and a second priority lien
on the Mall Collateral.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrowers, Lenders and Agents agree
as follows:
Section 1. DEFINITIONS
1.1 Certain Defined Terms.
The following terms used in this Agreement shall have the following
meanings:
"Adelson" means Sheldon G. Adelson, an individual.
"Adelson Completion Guaranty" means that certain Completion
Guaranty dated as of the date hereof executed by Adelson in favor of
the Administrative Agent, Interim Mall Lender and the Mortgage Notes
Indenture Trustee (acting on behalf of the Mortgage Note Holders).
"Adelson Contributions" means the Real Estate Contribution and
the Adelson Equity Contribution.
"Adelson Equity Contribution" means the cash equity
contributions received by Borrowers from Adelson or his Affiliates in
the aggregate amount of $95,000,000.
"Adelson Intercreditor Agreement" means the Intercreditor
Agreement (Adelson) dated as of November 14, 1997 among Adelson,
Venetian, Mall Construction
2
Subsidiary, Administrative Agent, Mortgage Note Indenture Trustee,
Interim Mall Lender and the Subordinated Notes Indenture Trustee in
substantially the form of Exhibit XVI hereto.
"Additional Billboard Space" has the meaning assigned to that
term in the Cooperation Agreement.
"Adjusted Eurodollar Rate" means, for any Interest Rate
Determination Date with respect to an Interest Period for a Eurodollar
Rate Loan, the rate per annum obtained by dividing (i) the arithmetic
average (rounded upward to the nearest 1/16 of one percent) of the
offered quotations, if any, to first class banks in the interbank
Eurodollar market Lenders for U.S. dollar deposits of amounts in same
day funds comparable to the respective principal amounts of the
Eurodollar Rate Loans of Scotiabank for which the Adjusted Eurodollar
Rate is then being determined with maturities comparable to such
Interest Period as of approximately 10:00 A.M. (New York time) on such
Interest Rate Determination Date by (ii) a percentage equal to 100%
minus the stated maximum rate of all reserve requirements (including
any marginal, emergency, supplemental, special or other reserves)
applicable on such Interest Rate Determination Date to any member bank
of the Federal Reserve System in respect of "Eurocurrency liabilities"
as defined in Regulation D (or any successor category of liabilities
under Regulation D).
"Administrative Agent" has the meaning assigned to that term
in the introduction to this Agreement and also means and includes any
successor Administrative Agent appointed pursuant to subsection 9.5.
"Advance Confirmation Notice" has the meaning assigned that
term in the Disbursement Agreement.
"Affected Lender" has the meaning assigned to that term in
subsection 2.6C.
"Affiliate", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under direct or
indirect common control with, that Person. For the purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlling", "controlled by" and "under common control with"), as
applied to any Person, means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting
securities or by contract or otherwise.
"Agent" means, individually, each of the Administrative Agent,
Arranger and Syndication Agent, and "Agents" means Administrative Agent,
Arranger and Syndication Agent, collectively.
"Agreement" means this Credit Agreement dated as of November
14, 1997.
3
"Amortization Commencement Date" means the earlier of (i) the
Opening Date and (ii) Outside Completion Deadline.
"Amortization Date" means (i) with respect to the first
Amortization Date, the first date occurring after the Amortization
Commencement Date which is the last day of a Fiscal Quarter and is 45
days or more after the earlier of the Opening Date and the Amortization
Commencement Date and (ii) with respect to each subsequent Amortization
Date, the end of the next succeeding Fiscal Quarter.
"Amortization Payment Date" means each Amortization Date
occurring on or after the earlier of (i) 120 days after the Opening
Date, (ii) the Completion Date and (iii) the Outside Completion
Deadline.
"Anticipated Future Work" has the meaning assigned to that
term in the Disbursement Agreement.
"Applicable Margin" means, (i) from the Closing Date until the
Substantial Completion Date, 2.00% per annum for Base Rate Loans and
3.00% per annum for Eurodollar Rate Loans, (ii) from the Substantial
Completion Date until the date on which a Compliance Certificate is
first delivered pursuant to subsection 6.1 with respect to the second
full Fiscal Quarter following the Substantial Completion Date, 1.50%
per annum for Base Rate Loans and 2.50% for Eurodollar Rate Loans, and
(iii) thereafter, a percentage per annum determined by reference to the
Leverage Ratio as set forth below:
=========================== ======================= ========================
Applicable Margin Applicable Margin
for Base for Eurodollar
Leverage Ratio Rate Loans Rate Loans
=========================== ======================= ========================
greater than 4.00 1.50% 2.50%
less than or equal to
4.00:1.00 but greater 1.25% 2.25%
than 3.50:1.00
less than or equal to
3.50:1.00 but greater 1.00% 2.00%
than 3.00:1.00
less than or equal to
3.00:1.00 but greater 0.50% 1.50%
than 2.50:1.00
less than or equal to 0.25% 1.25%
2.50:1.00
=========================== ======================= ========================
4
With respect to the period covered by clause (iii) above, the
Applicable Margin for each Base Rate Loan shall be determined by
reference to the Leverage Ratio in effect from time to time and the
Applicable Margin for each Eurodollar Rate Loan shall be determined by
reference to the Leverage Ratio in effect on the first day of the
Interest Period for such Loan; provided, however, that (x) no change in
the Applicable Margin shall be effective until three Business Days
after the date on which the Administrative Agent receives a Compliance
Certificate pursuant to subsection 6.1(iv) calculating the Leverage
Ratio, and (y) the Applicable Margin shall be 1.50% per annum, in the
case of Base Rate Loans, and 2.50% per annum, in the case of Eurodollar
Rate Loans, for so long as Borrowers have not submitted to the
Administrative Agent the information described in clause (x) of this
proviso as and when required under subsection 6.1(iv) prior to the
first day of the applicable Interest Period, with respect to Eurodollar
Rate Loans.
"Applicable Tax Percentage" means the highest aggregate
effective marginal rate of federal, state and local income tax or, when
applicable, alternative minimum tax, to which any direct or indirect
member or S corporation shareholder of the Borrowers subject to the
highest marginal rate of tax would be subject in the relevant year of
determination (as certified to the Administrative Agent by a nationally
recognized tax accounting firm), taking into account only that member's
or S corporation shareholder's share of income and deductions
attributable to its interest in the Borrowers.
"Approved Equipment Funding Commitment" has the meaning
assigned that term in the Disbursement Agreement.
"Arranger" has the meaning assigned to that term in the
introduction to this Agreement.
"Asset Sale" means the sale by a Borrower or any of its
Subsidiaries to any Person of (i) any of the stock of any of such
Person's Subsidiaries, (ii) substantially all of the assets of any
division or line of business of a Borrower or any of its Subsidiaries,
or (iii) any other assets (whether tangible or intangible) of a
Borrower or any of its Subsidiaries (other than (a) inventory or goods
(other than equipment) sold in the ordinary course of business, (b) any
other assets to the extent that the aggregate fair market value of such
assets sold during any Fiscal Year, is less than or equal to $1,000,000
or (c) any transfers or dispositions permitted by clauses (v) through
(xix), inclusive, and (xxi) of subsection 7.7).
"Assignment Agreement" means an Assignment Agreement in
substantially the form of Exhibit VII annexed hereto.
"Bankruptcy Code" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any
successor statute.
5
"Base Rate" means, at any time, the higher of (x) the Prime
Rate or (y) the rate which is 1/2 of 1% in excess of the Federal Funds
Effective Rate.
"Base Rate Loans" means Loans bearing interest at rates
determined by reference to the Base Rate as provided in subsection
2.2A.
"Billboard" means B.L. of Las Vegas, Inc., a Nevada
corporation.
"Billboard Master Lease" means that certain Lease Agreement
dated Novem ber 14, 1997 by and between Venetian and Mall Construction
Subsidiary pursuant to which the Mall Construction Subsidiary is
leasing from Venetian the Additional Billboard Space.
"Billboard Operating Lease" means that certain restaurant
lease dated June 26, 1997 by and between Venetian and Billboard
(together with all assignments, modifications, amendments, riders and
addendas thereto).
"Billboard Space" means the space covered by the Billboard
Operating Lease (including the Additional Billboard Space).
"Borrowers" has the meaning assigned to that term in the
introduction to this Agreement and shall mean, as the context requires,
any or all of the Borrowers.
"Business Day" means (i) for all purposes other than as
covered by clause (ii) below, any day excluding Saturday, Sunday and
any day which is a legal holiday under the laws of the State of New
York or Nevada or is a day on which banking institutions located in
either such state are authorized or required by law or other
governmental action to close, and (ii) with respect to all notices,
determinations, fundings and payments in connection with the Adjusted
Eurodollar Rate or any Eurodollar Rate Loans, any day that is a
Business Day described in clause (i) above and that is also a day for
trading by and between banks in Dollar deposits in the London interbank
market.
"Capital Lease", as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee
that, in conformity with GAAP, is accounted for as a capital lease on
the balance sheet of that Person.
"Cash" means (i) money, (ii) currency or (iii) a credit
balance in a Deposit Account.
"Cash Equivalents" means (a) [intentionally deleted] (b)(i)
direct obligations of the United States of America (including
obligations issued or held in book-entry form on the books of the
Department of the Treasury of the United States of America) or
obligations fully guaranteed by the United States of America, (ii)
obligations, debentures, notes or other evidence of indebtedness issued
or guaranteed by any other agency or instrumentality of the United
States, (iii) interest-bearing demand or time deposits (which
6
may be represented by certificates of deposit) issued by banks having
general obligations rated (on the date of acquisition thereof) at
least "A" or the equivalent by Standard & Poor's Corporation ("S&P")
or Moody's Investors Service, Inc. ("Moody's") (S&P and Moody's
together with any other nationally recognized credit rating agency if
neither of such corporations is then currently rating the pertinent
currently rating the pertinent obligations, a "Rating Agency") or, if
not so rated, secured at all times, in the manner and to the extent
provided by law, by collateral security in clause (i) or (ii) of this
definition, of a market value of no less than the amount of monies so
invested, (iv) commercial paper rated (on the date of acquisition
thereof) at least "A-1" or "P-1" or the equivalent by any Rating
Agency issued by any Person, (v) repurchase obligations for underlying
securities of the types described in clause (i) or (ii) above, entered
into with any commercial bank or any other financial institution
having long-term unsecured debt securities rated (on the date of
acquisition thereof) at least "A" or "A2" or the equivalent by any
Rating Agency in connection with which such underlying securities are
held in trust or by a third-party custodian, (vi) guaranteed
investment contracts of any financial institution which has a
long-term debt rated (on the date of acquisition thereof) at least "A"
or "A2" or the equivalent by any Rating Agency, (vii) obligations
(including both taxable and non-taxable municipal securities) issued
or guaranteed by, and any other obligations the interest on which is
excluded from income for Federal income tax purposes issued by, and
any state of the United States of America or District of Columbia or
the Commonwealth or Puerto Rico or any political subdivision, agency,
authority or instrumentality thereof, which issuer or guarantor has
(A) a short-term debt rated (on the date of acquisition thereof) at
least "A- 1" or "P-1" or the equivalent by any Rating Agency and (B) a
long-term debt rated (on the date of acquisition thereof) at least "A"
or "A2" or the equivalent by any Rating Agency, (viii) investment
contracts of any financial institution either (A) fully secured by (1)
direct obligations of the United States, (2) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality
of the United States or (3) securities or receipts evidencing
ownership interest in obligations or special portions thereof
described in clause (1) or (2), in each case guaranteed as full faith
and credit obligations of the United States of America, having a
market value at least equal to 102% of the amount deposited
thereunder, or (B) with long-term debt rated (on the date of
acquisition thereof) at least "A" or "A2" or the equivalent by any
Rating Agency and short-term debt rated (on the date of acquisition
thereof) at least "A-1" or "P-1" or the equivalent by any Rating
Agency, (ix) a contract or investment agreement with a provider or
guarantor (A) which provider or guarantor is rated (on the date of
acquisition thereof) at least "A" or "A2" or the equivalent by any
Rating Agency (provided that if a guarantor is a party to the rating,
the guaranty must be unconditional and must be confirmed in writing
prior to any assignment by the provider to any subsidiary of such
guarantor), (B) providing that monies invested shall be payable to the
Disbursement Agent while the Disbursement Agreement is in effect and
thereafter to Administrative Agent without condition (other than
notice) and without brokerage fee or other penalty, upon not more than
two Business Days' notice for application when and as required or
permitted under the Collateral Documents, and (C) stating that such
contract or agreement is unconditional, expressly disclaiming any
right of setoff and providing for immediate termination in the event
of
7
insolvency of the provider and termination upon demand of the
Disbursement Agent while the Disbursement Agreement is in effect and
thereafter to Administrative Agent (which demand shall only be made at
the direction of the Borrowers) after any payment or other covenant
default by the provider, or (x) any debt instruments of any Person
which instruments are rated (on the date of acquisition thereof) at
least "A," "A2", "A-1" or "P-1" or the equivalent by any Rating
Agency, provided that in each case of clauses (i) through (x), such
investments are denominated in Dollars and maturing not more than 13
months from the date of acquisition thereof; (c) investments in any
money market fund which is rated (on the date of acquisition thereof)
at least "A" or "A2" or the equivalent by any Rating Agency; (d)
investments in mutual funds sponsored by any securities broker-dealer
of recognized national standing having an investment policy that
requires substantially all the invested assets of such fund to be
invested in investments described in any one or more of the foregoing
clauses and having a rating of at least "A" or "A2" or the equivalent
by any Rating Agency; or (e) investments in both taxable and
nontaxable (i) periodic auction reset securities which have final
maturities between one and 30 years from the date of issuance and are
repriced through a dutch auction or other similar method every 35 days
or (ii) auction preferred shares which are senior securities of
leveraged closed end municipal bond funds and are repriced pursuant to
a variety of rate reset periods, in each case having a rating (on the
date of acquisition thereof) of at least "A" or "A2" or the equivalent
of any Rating Agency.
"Casino Lease" means that certain Casino Lease between
Venetian as lessor and LVSI as lessee dated effective as of the date
hereof with respect to the operation of the casino for the Project.
"Certificate re Non-Bank Status" means a certificate
substantially in the form of Exhibit IX annexed hereto delivered by a
Lender to Administrative Agent pursuant to subsection 2.7B(iii).
"Class" means, as applied to Lenders, each of the following
two classes of Lenders: (i) Lenders having Term Loan Exposure and (ii)
Lenders having Revolving Loan Exposure.
"Closing Date" means the date on or before November 14, 1997,
on which this Agreement and Disbursement Agreement are executed and
delivered.
"Code" means the Internal Revenue Code of 1986, as amended to
the date hereof and from time to time hereafter, and any successor
statute.
"Collateral" means, collectively, all of the real, personal
and mixed property (including capital stock) in which Liens are
purported to be granted pursuant to the Collateral Documents as
security for the Obligations.
"Collateral Account Agreements" has the meaning assigned to
that term in the Disbursement Agreement.
8
"Collateral Documents" means the Company Security Agreement,
the Deed of Trust, the Leasehold Deed of Trust, the Mall Fee Deed of
Trust, the Mall Construction Subsidiary Security Agreement, the
Collateral Account Agreements (other than the Mortgage Notes
Collateral Account Agreement), any Subsidiary Security Agreements and
all other instruments or documents delivered by a Loan Party pursuant
to this Agreement or any of the other Loan Documents in order to grant
to Intercreditor Agent, Disbursement Agent or Administrative Agent, on
behalf of Lenders, a Lien on any real, personal or mixed property of
that Loan Party as security for the Obligations.
"Collection Account" has the meaning assigned that term in the
Disbursement Agreement.
"Commercial Letter of Credit" means any letter of credit or
similar instrument issued for the purpose of providing the financing
payment mechanism in connection with the purchase of any materials,
goods or services by a Borrower in the ordinary course of business of
such Borrower.
"Commitment" means the commitment of a Lender to make Loans as
set forth in subsection 2.1A, and "Commitments" means such commitments
of all Lenders in the aggregate.
"Company Security Agreement" means the Company Security
Agreement executed and delivered by Borrowers and Mall Construction
Subsidiary on the Closing Date, substantially in the form of Exhibit
XII annexed hereto.
"Completion Date" has the meaning assigned that term in the
Disbursement Agreement.
"Completion Guaranty" means each of the Direct Construction
Guaranty, the Indirect Construction Guaranty and the Adelson Completion
Guaranty or any one of them and "Completion Guaranties" means the
Direct Construction Guaranty, the Indirect Construction Guaranty and
the Adelson Completion Guaranty collectively.
"Completion Guaranty Loan" means any amounts advanced by
Adelson under the Adelson Completion Guaranty, which is treated as a
loan to Venetian in an aggregate principal amount not to exceed
$25,000,000 at any time, plus accrued and unpaid interest thereon,
evidenced by a Completion Guaranty Note and subject to the terms of the
Adelson Intercreditor Agreement.
"Completion Guaranty Note" means a note in the form attached
to the Interim Mall Credit Agreement (as in effect on the Closing
Date).
"Compliance Certificate" means a certificate substantially in
the form of Exhibit IV annexed hereto delivered to Administrative Agent
and Lenders by Borrowers pursuant to subsection 6.1(iv).
9
"Consents" means consents to the collateral assignment by
Borrowers of Project Documents in substantially the form of Exhibit S
to the Disbursement Agreement.
"Consolidated Adjusted EBITDA" means, for any period, the sum
of the amounts (without duplication) for such period of (i)
Consolidated Net Income, (ii) Consolidated Interest Expense, (iii)
provision for taxes based on income to the extent deducted in
calculating Consolidated Net Income, (iv) total depreciation expense,
(v) total amortization expense, and (vi) other non-cash items reducing
Consolidated Net Income (including without limitation any reductions to
Consolidated Net Income as a result of minority or preferred interests
of Venetian) less other non-cash items increasing Consolidated Net
Income, all of the foregoing as determined on a consolidated basis for
Borrowers and their Subsidiaries in conformity with GAAP. Any cash
equity contributions made by Adelson or any of his Affiliates (other
than one of the Borrowers) to Borrowers during any quarter in an
aggregate amount not to exceed $15,000,000 per quarter may at the
written election of Borrowers be included in Consolidated Adjusted
EBITDA for such quarter for all purposes hereunder provided that
Borrowers may not include such cash equity contribu tions in
Consolidated Adjusted EBITDA for more than two consecutive quarters
unless, following any exercise of such election to include any such
cash equity contributions in Consolidated Adjusted EBITDA, Borrowers
have thereafter been in compliance with subsection 7.6 on a rolling
four quarter basis on any test date occurring after such election
(without giving affect to any previous cash contributions).
"Consolidated Capital Expenditures" means, for any period, the
sum of (i) the aggregate of all expenditures (whether paid in cash or
other consideration or accrued as a liability and including that
portion of Capital Leases which is capitalized on the consolidated
balance sheet of Borrowers) by Borrowers and their Subsidiaries during
that period that, in conformity with GAAP, are included in "additions
to property, plant or equipment" or comparable items reflected in the
consolidated statement of cash flows of Borrowers plus (ii) to the
extent not covered by clause (i) of this definition, any expenditures
by Borrowers (excluding any Excluded Subsidiaries) during that period
to acquire (by purchase or otherwise) the business, property or fixed
assets of any Person, or the stock or other evidence of beneficial
ownership of any Person that, as a result of such acquisition, becomes
a Subsidiary of the Borrowers or either of them.
"Consolidated Cash Interest Expense" means, for any period,
Consolidated Interest Expense for such period, excluding, however, any
interest expense not payable in Cash (including amortization of
discount and amortization of debt issuance costs).
"Consolidated Current Assets" means, as at any date of
determination, the total assets of Borrowers and their Subsidiaries on
a consolidated basis (excluding any Excluded Subsidiaries) which may
properly be classified as current assets in conformity with GAAP,
excluding Cash and cash equivalents.
10
"Consolidated Current Liabilities" means, as at any date of
determination, the total liabilities of Borrowers and their
Subsidiaries on a consolidated basis (excluding any Excluded
Subsidiaries) which may properly be classified as current liabilities
in conformity with GAAP, excluding the current portions of Funded Debt
and any liabilities otherwise classified as current liabilities in
conformity with GAAP to the extent incurred under the Operative
Documents with respect to construction of the Project.
"Consolidated Excess Cash Flow" means, for any period, an
amount (if positive) equal to (i) the sum, without duplication, of the
amounts for such period of (a) Consoli dated Adjusted EBITDA and (b)
the Consolidated Working Capital Adjustment minus (ii) the sum, without
duplication, of the amounts for such period of (a) voluntary and
scheduled repayments of Consolidated Total Debt to the extent actually
paid (excluding repayments of Revolving Loans except to the extent the
Commitments are permanently reduced in connection with such
repayments), (b) Consolidated Capital Expenditures (net of any proceeds
of any related financings with respect to such expenditures), (c)
Consolidated Cash Interest Expense other than any interest expense in
respect of Employee Repurchase Notes, (d) any amounts distributed by
Borrowers for tax payments in accordance with subsection 7.5 with
respect to such period and (without duplication) the provision for
current taxes based on income of Borrowers (excluding any Subsidiaries)
and payable by Borrowers to any Governmental Instrumentality in cash
with respect to such period, (e) any amounts distributed to Borrowers
or their Subsidiaries from Mall Subsidiary within 60 days of any debt
issuance by Mall Subsidiary up to the amount of the proceeds of such
debt or equity issuance to the extent included in Consolidated Adjusted
EBITDA and (f) any amounts distributed to Borrowers and their
Subsidiaries from Mall Subsidiary from proceeds of any equity issuance
of Mall Subsidiary up to the amount thereof but only to the extent
included in Consolidated Adjusted EBITDA.
"Consolidated Fixed Charges" means, for any period, the sum
(without duplication) of the amounts for such period of (i)
Consolidated Cash Interest Expense, (ii) scheduled repayments of
principal on Indebtedness (other than repayment of the Revolving Loan
on the Revolving Loan Commitment Termination Date), (iii) any amounts
distributed by Borrowers for tax payments in accordance with subsection
7.5 with respect to such period and (without duplication) provisions
for taxes based on income payable by Borrowers to any Governmental
Instrumentality, (iv) Consolidated Rental Payments, and (v)
Consolidated Capital Expenditures, all of the foregoing as determined
on a consolidated basis for Borrowers and their Subsidiaries in
conformity with GAAP.
"Consolidated Interest Expense" means, for any period, total
interest expense (including that portion attributable to Capital Leases
in accordance with GAAP and capitalized interest) of Borrowers and
their Subsidiaries on a consolidated basis with respect to all
outstanding Indebtedness of Borrowers, including all commissions,
discounts and other fees and charges owed with respect to letters of
credit and bankers' acceptance financing and net costs under Interest
Rate Agreements, but excluding,
11
however, any amounts referred to in subsection 2.3 payable to Agents
and Lenders on or before the Closing Date.
"Consolidated Net Income" means, for any period, the net
income (or loss) of Borrowers and their Subsidiaries on a consolidated
basis for such period taken as a single accounting period determined in
conformity with GAAP; provided that there shall be excluded (i) the
income (or loss) of any Person (other than a Subsidiary of a Borrower),
except to the extent of the amount of dividends or other distributions
actually paid to Borrowers or any of their Subsidiaries by such Person
during such period, (ii) the income (or loss) of any Person accrued
prior to the date it is merged into or consolidated with Borrowers or
that Person's assets are acquired by Borrowers, (iii) any after-tax
gains or losses attributable to Asset Sales or returned surplus assets
of any Pension Plan, (iv) dividends or distributions from any Excluded
Subsidiary to Borrowers or any Subsidiary which are used to fund
Permitted Quarterly Tax Distributions and (v) (to the extent not
included in clauses (i), (ii) and (iii) above) any net extraordinary
gains or net non-cash extraordinary losses.
"Consolidated Net Worth" means, as of any date of
determination, (i) the sum of the following items, as shown on the
consolidated balance sheet of LVSI and its Subsidiaries as of such date
(a) the common equity of LVSI and its Subsidiaries, (b)(1) the
aggregate liquidation preference of preferred stock or preferred
membership interests of LVSI and its Subsidiaries and (2) any increase
in depreciation and amortization resulting from any purchase accounting
treatment from an acquisition or related financing; (ii) less any
goodwill incurred subsequent to the Closing Date and (iii) less any
write up of assets (in excess of fair market value) after the Closing
Date, in each case on a consolidated basis for LVSI and its
Subsidiaries, determined in accordance with GAAP; provided, that in
calculating Consolidated Net Worth, any gain or loss from any Asset
Sale shall be excluded.
"Consolidated Rental Payments" means, for any period, the
aggregate amount of all rents paid or payable by Borrowers and their
Subsidiaries on a consolidated basis (excluding any Excluded
Subsidiaries) during that period under all Capital Leases to which
either Borrower or any of their respective Subsidiaries is a party as
lessee. Notwithstanding the foregoing, payments under the HVAC Services
Agreement shall in no event be included in Consolidated Rental
Payments.
"Consolidated Total Debt" means, as at any date of
determination, the aggregate stated balance sheet amount of all
Indebtedness of Borrowers and their Subsidiaries, determined on a
consolidated basis in accordance with GAAP, excluding, however, any
Employee Purchase Notes entered into in accordance with subsection 7.1
(xi).
"Consolidated Working Capital" means, as at any date of
determination, the excess (or deficit) of Consolidated Current Assets
over Consolidated Current Liabilities.
12
"Consolidated Working Capital Adjustment" means, for any
period on a consolidated basis, the amount (which may be a negative
number) by which Consolidated Working Capital as of the beginning of
such period exceeds (or is less than) Consolidated Working Capital as
of the end of such period.
"Construction Agency Agreement" means that certain
Construction Agency Agreement dated as of the date hereof by and
between HVAC Provider and Venetian.
"Construction Consultant" means Tishman Construction
Corporation of Nevada, or any other person designated from time to time
by the Administrative Agent, the Interim Mall Lender and the Mortgage
Notes Indenture Trustee, in their sole discretion, acting pursuant to
the Intercreditor Agreement, to serve as the Construction Consultant
under the Disbursement Agreement.
"Construction Consultant Engagement Agreement" means that
certain engagement letter dated November 14, 1997 by and among the
Construction Consultant, Borrowers, Administrative Agent, Interim Mall
Lender, the Mortgage Notes Indenture Trustee, Permanent Mall Lender and
Goldman Sachs & Co.
"Construction Management Agreement" means that certain
Construction Management Agreement dated as of February 15, 1997 between
Borrowers and Construction Manager for the construction of the Project
as amended and assigned to Venetian pursuant to a certain Assignment,
Assumption and Amendment of Construction Management Agreement dated as
of the date hereof.
"Construction Manager" means Lehrer McGovern Bovis Inc., a New
York corporation and its successors and assigns permitted under the
Construction Management Agreement.
"Contingent Obligation", as applied to any Person, means any
direct or indirect liability, contingent or otherwise, of that Person
(i) with respect to any Indebtedness, lease, dividend or other
obligation of another if the primary purpose or intent thereof by the
Person incurring the Contingent Obligation is to provide assurance to
the obligee of such obligation of another that such obligation of
another will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect
thereof, (ii) with respect to any letter of credit issued for the
account of that Person or as to which that Person is otherwise liable
for reimbursement of drawings, or (iii) under Interest Rate Agreements.
Contingent Obligations shall include (a) the direct or indirect
guaranty, endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or
sale with recourse by such Person of the obligation of another, (b) the
obligation to make take-or-pay or similar payments if required
regardless of non-performance by any other party or parties to an
agreement, and (c) any liability of such Person for the obligation of
another through any agreement (contingent or otherwise) (X) to
purchase, repurchase or otherwise acquire such
13
obligation or any security therefor, or to provide funds for the
payment or discharge of such obligation (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise) or (Y)
to maintain the solvency or any balance sheet item, level of income or
financial condition of another if, in the case of any agreement
described under subclauses (X) or (Y) of this sentence, the primary
purpose or intent thereof is as described in the preceding sentence.
The amount of any Contingent Obligation shall be equal to the amount
of the obligation so guaranteed or otherwise supported or, if less,
the amount to which such Contingent Obligation is specifically
limited.
"Contractors" means any architects, consultants, designers,
contractors, subcontractors, suppliers, laborers or any other Person
engaged by any Borrower(s) in connection with the design, engineering,
installation and construction of the Project (other than Construction
Manager).
"Contracts" means, collectively, the contracts entered into,
from time to time, between any Borrower(s) and any Contractor for
performance of services or sale of goods in connection with the design,
engineering, installation or construction of the Project.
"Contractual Obligation", as applied to any Person, means any
provision of any Security issued by that Person or of any material
indenture, mortgage, deed of trust, con tract, undertaking, agreement
or other instrument to which that Person is a party or by which it or
any of its properties is bound or to which it or any of its properties
is subject.
"Cooperation Agreement" means that certain Amended and
Restated Reciprocal Easement, Use and Operating Agreement dated on or
about the date hereof by and between LVSI, Venetian, Mall Construction
Subsidiary, and Interface.
"Deed of Trust" means that certain Deed of Trust, Assignment
of Rents and Leases and Security Agreement in the form of Exhibit
XIII-A annexed hereto, dated effective as of the Closing Date granted
by Borrowers to the Title Company, for the benefit of Administrative
Agent, as agent for the Lenders.
"Deposit Account" means a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union or
like organization, other than an account evidenced by a negotiable
certificate of deposit.
"Direct Construction Guarantor" means Bovis, Inc., a New York
corporation or any successor permitted under the Direct Construction
Guaranty.
"Direct Construction Guaranty" means that certain Guaranty of
Performance and Completion dated as of August 19, 1997 executed by the
Direct Construction Guarantor in favor of LVSI.
14
"Disbursement Agent" means Scotiabank, in its capacity as
Disbursement Agent under the Disbursement Agreement, and any successor
Disbursement Agent appointed pursuant to the terms of the Disbursement
Agreement.
"Disbursement Agreement" means that certain Funding Agents'
Disbursement and Administration Agreement in the form of Exhibit XVIII
annexed hereto and dated as of the date hereof among Borrowers, the
Mall Construction Subsidiary, the Administrative
Agent, the Mortgage Notes Indenture Trustee, the Interim Mall Lender,
the HVAC Provider and the Disbursement Agent.
"Disbursement Agreement Event of Default" means any Event of
Default under and as defined in the Disbursement Agreement.
"Dollars" and the sign "$" mean the lawful money of the United
States of America.
"Eighth Month Certificate" has the meaning set forth in the
Disbursement Agreement.
"Eligible Assignee" means (A) (i) a commercial bank organized
under the laws of the United States or any state thereof; (ii) a
savings and loan association or savings bank organized under the laws
of the United States or any state thereof; (iii) a commercial bank
organized under the laws of any other country or a political
subdivision thereof; provided that (x) such bank is acting through a
branch or agency located in the United States or (y) such bank is
organized under the laws of a country that is a member of the
Organization for Economic Cooperation and Development or a political
subdivision of such country; and (iv) any other entity which is an
"accredited investor" (as defined in Regulation D under the Securities
Act) which extends credit or buys loans as one of its businesses
including insurance companies, mutual funds and lease financing
companies; and (B) any Lender and any Affiliate of any Lender; provided
that no Affiliate of Borrowers shall be an Eligible Assignee; and
provided further that so long as no Event of Default shall have
occurred and be continuing, no (i) Person that owns or operates a
casino located in the State of Nevada or the State of New Jersey (or is
an Affiliate of such a Person) (provided that a passive investment
constituting less than 20% of the common stock of any such casino shall
not constitute ownership thereof for the purposes of this definition),
(ii) Person that owns or operates a convention, trade show or
exhibition facility in Las Vegas, Nevada or Clark County, Nevada (or an
Affiliate of such a Person) (provided that a passive investment
constituting less than 20% of the common stock of any such convention
or trade show facility shall not constitute ownership for the purpose
of this definition), or (iii) union pension fund (provided that any
intermingled fund or managed account which has as part of its assets
under management the assets of a union pension fund shall not be
disqualified from being an Eligible Assignee hereunder so long as the
manager of such fund is not controlled by a union), shall be an
Eligible Assignee, in each case which Person shall not have been
15
denied an approval or a license, or found unsuitable under the Nevada
Gaming Laws applicable to Lenders.
"Employee Benefit Plan" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is or was maintained or
contributed to by Borrowers, any of its Subsidiaries or any of their
respective ERISA Affiliates.
"Employee Repurchase Notes" has the meaning set forth in
subsection 7.1.
"Environmental Claim" means any investigation, notice, notice
of violation, claim, action, suit, proceeding, demand, abatement order
or other order or directive (conditional or otherwise), by any
governmental authority or any other Person, arising (i) pursuant to or
in connection with any actual or alleged violation of any Environmental
Law, (ii) in connection with any Hazardous Materials or any actual or
alleged Hazardous Materials Activity, or (iii) in connection with any
actual or alleged damage, injury, threat or harm to health, safety,
natural resources or the environment.
"Environmental Laws" means any and all current or future
statutes, ordinances, orders, rules, regulations, guidance documents,
judgments, Permits, or any other requirements of governmental
authorities relating to (i) environmental matters, including those
relating to any Hazardous Materials Activity, (ii) the generation, use,
storage, transportation or disposal of Hazardous Materials, or (iii)
occupational safety and health, industrial hygiene, land use or the
protection of human, plant or animal health or welfare, in any manner
applicable to Borrowers or any of its Subsidiaries or any Facility,
including the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. 9601 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. 1801 et seq.), the Resource Conservation
and Recovery Act (42 U.S.C. 6901 et seq.), the Federal Water Pollution
Control Act (33 U.S.C. 1251 et seq.), the Clean Air Act (42 U.S.C. 7401
et seq.), the Toxic Substances Control Act (15 U.S.C. 2601 et seq.),
the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. 136 et
seq.), the Occupational Safety and Health Act (29 U.S.C. 651 et seq.),
the Oil Pollution Act (33 U.S.C. 2701 et seq) and the Emergency
Planning and Community Right-to-Know Act (42 U.S.C. 11001 et seq.),
each as amended or supplemented, any analogous present or future state
or local statutes or laws, and any regulations promulgated pursuant to
any of the foregoing.
"Equipment Component" has the meaning assigned to that term in
the Disbursement Agreement.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor thereto.
"ERISA Affiliate" means, as applied to any Person, (i) any
corporation which is a member of a controlled group of corporations
within the meaning of Section 414(b) of the Code of which that Person
is a member; (ii) any trade or business (whether or not
16
incorporated) which is a member of a group of trades or businesses
under common control within the meaning of Section 414(c) of the Code
of which that Person is a member; and (iii) any member of an affiliated
service group within the meaning of Section 414(m) or (o) of the Code
of which that Person, any corporation described in clause (i) above or
any trade or business described in clause (ii) above is a member. Any
former ERISA Affiliate of Borrowers or any of their Subsidiaries shall
continue to be considered an ERISA Affiliate of Borrowers or such
Subsidiary within the meaning of this definition with respect to the
period such entity was an ERISA Affiliate of Borrowers or such
Subsidiary and with respect to liabilities arising after such period
for which Borrowers or such Subsidiary could be liable under the Code
or ERISA.
"ERISA Event" means (i) a "reportable event" within the
meaning of Section 4043 of ERISA and the regulations issued thereunder
with respect to any Pension Plan (excluding those for which the
provision for 30-day notice to the PBGC has been waived by regulation);
(ii) the failure to meet the minimum funding standard of Section 412 of
the Code with respect to any Pension Plan (whether or not waived in
accordance with Section 412(d) of the Code) or the failure to make by
its due date a required installment under Section 412(m) of the Code
with respect to any Pension Plan or the failure to make any required
contribution to a Multiemployer Plan; (iii) the provision by the
administrator of any Pension Plan pursuant to Section 4041(a)(2) of
ERISA of a notice of intent to terminate such plan in a distress
termination described in Section 4041(c) of ERISA; (iv) the withdrawal
by Borrowers, any of its Subsidiaries or any of their respective ERISA
Affiliates from any Pension Plan with two or more contributing sponsors
or the termination of any such Pension Plan resulting in liability
pursuant to Section 4063 or 4064 of ERISA; (v) the institution by the
PBGC of proceedings to terminate any Pension Plan, or the occurrence of
any event or condition which might constitute grounds under ERISA for
the termination of, or the appointment of a trustee to administer, any
Pension Plan; (vi) the imposition of liability on Borrowers, any of its
Subsidiaries or any of their respective ERISA Affiliates pursuant to
Section 4062(e) or 4069 of ERISA or by reason of the application of
Section 4212(c) of ERISA; (vii) the withdrawal of Borrowers, any of its
Subsidiaries or any of their respective ERISA Affiliates in a complete
or partial withdrawal (within the meaning of Sections 4203 and 4205 of
ERISA) from any Multiemployer Plan if there is any potential liability
therefor, or the receipt by Borrowers, any of its Subsidiaries or any
of their respective ERISA Affiliates of notice from any Multiemployer
Plan that it is in reorganization or insolvency pursuant to Section
4241 or 4245 of ERISA, or that it intends to terminate or has
terminated under Section 4041A or 4042 of ERISA; (viii) the occurrence
of an act or omission which could give rise to the imposition on
Borrowers, any of its Subsidiaries or any of their respective ERISA
Affiliates of fines, penalties, taxes or related charges under Chapter
43 of the Code or under Section 409, Section 502(c), (i) or (l), or
Section 4071 of ERISA in respect of any Employee Benefit Plan; (ix) the
assertion of a material claim (other than routine claims for benefits)
against any Employee Benefit Plan other than a Multiemployer Plan or
the assets thereof, or against Borrowers, any of its Subsidiaries or
any of their respective ERISA Affiliates in connection with any
Employee Benefit Plan; (x) receipt from the Service of notice of the
failure of any Pension Plan (or any
17
other Employee Benefit Plan intended to be qualified under Section
401(a) of the Code) to qualify under Section 401(a) of the Code, or the
failure of any trust forming part of any Pension Plan to qualify for
exemption from taxation under Section 501(a) of the Code; or (xi) the
imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the
Code or pursuant to ERISA with respect to any Pension Plan.
"Estimation Period" means the period for which a shareholder,
partner or member, who is an individual is required to estimate for
federal income tax purposes his allocation of taxable income from a
Subchapter S corporation or a partnership for federal income tax
purposes in connection with determining his estimated federal income
tax liability for such period.
"Eurodollar Rate Loans" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
"Event of Default" means each of the events set forth in
Section 8.
"Event of Loss" means, with respect to any property or asset
(tangible or intangible, real or personal), any of the following: (A)
any loss, destruction or damage of such property or asset; (B) any
actual condemnation, seizure or taking by exercise of the power of
eminent domain or otherwise of such property or asset, or confiscation
of such property or asset or the requisition of the use of such
property or asset; or (C) any settlement in lieu of clause (B) above.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"Excluded Subsidiary" means any Person excluded from the
definition of Subsidiary by virtue of the last sentence of such
definition set forth in this Section 1.1 (including, without
limitation, Mall Subsidiary, Phase II Subsidiary, Mall Direct Holdings,
Phase II Direct Holdings, Mall Manager and Phase II Manager).
"Facilities" means any and all real property (including all
buildings, fixtures or other improvements located thereon) now,
hereafter or heretofore owned, leased, operated or used by Borrowers or
any of their Subsidiaries or any of their respective predecessors or
Affiliates including, without limitation, the Site.
"FDIC" means the Federal Deposit Insurance Corporation.
"Federal Funds Effective Rate" means, for any period, a
fluctuating interest rate equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is
a Business Day, the average of the
18
quotations for such day on such transactions received by Agent from
three Federal funds brokers of recognized standing selected by
Administrative Agent.
"FF&E Facility" means the credit facilities, equipment leases
or similar agreements with the FF&E Lenders in an aggregate principal
amount of approximately $97,700,000 (plus accrued and unpaid interest
thereon) to finance the purchase and installment of the Specified FF&E.
"FF&E Facility Agreement" means (i) the credit agreement among
Borrowers General Electric Capital Corporation and the other FF&E
Lenders party thereto evidencing the debt facility on the terms
described in the Approved Equipment Funding Commitment or otherwise on
terms reasonably acceptable to Arranger and Administrative Agent,
(ii) such other agreements among FF&E Lender(s) and Borrowers providing
for all or a portion of the FF&E Facility (not covered under clause
(i)) on substantially the same terms as described in the Approved
Equipment Funding Commitments or otherwise reasonably satisfactory to
the Arranger and Administrative Agent, provided in each case that the
applicable FF&E Lenders have entered into intercreditor agreement(s) in
form and substance satisfactory to the Administrative Agent.
"FF&E Intercreditor Agreement" means the Intercreditor
Agreement(s) entered into between the Administrative Agent, FF&E
Lenders and such other Persons as may be necessary parties thereunder
in each case in form and substance satisfactory to Administrative
Agent.
"FF&E Lenders" means (i) General Electric Capital Corporation,
and the other lenders that are parties to the FF&E Facility Agreement
described in clause (i) of the definition of such term and (ii) any
other lenders under any other FF&E Facility Agreement, provided that
each such other lender described in clause (ii) would be an Eligible
Assignee hereunder.
"Final Completion" has the meaning set forth in the
Disbursement Agreement.
"Final Completion Date" has the meaning set forth in the
Disbursement Agreement.
"Financial Plan" has the meaning assigned to that term in
subsection 6.1(xiii).
"Financing Agreements" means, collectively, this Agreement,
the Disbursement Agreement, the Interim Mall Credit Agreement, the
Mortgage Notes Indenture, the Collateral Documents, the Other Security
Documents, the Mortgage Notes, any Approved Equipment Funding
Commitment, the FF&E Facility Agreements, any Completion Guaranty Note,
any Substitute Tranche B Note, and any other loan or security
agreements entered into on, prior to or after the Closing Date to
finance the Project in accordance with subsection 7.13 and, while
applicable, the Disbursement Agreement.
19
"First Priority" means, with respect to any Lien purported to
be created in any Collateral pursuant to any Collateral Document, that
such Lien is the only Lien (other than Liens permitted pursuant to
subsection 7.2) to which such Collateral is subject.
"First Priority Collateral" means all assets, property, real,
personal and mixed of Borrowers and their Subsidiaries, other than the
Mall Collateral, the Mortgage Notes Proceeds Account, the GECC Proceeds
Account, the Interim Mall Proceeds Account, the HVAC Component, the
stock or membership interests of Subsidiaries and Excluded
Subsidiaries, provided, that any assets expressly excluded from the
Lien in favor of Administrative Agent on behalf of lender under the
Collateral Documents shall not constitute First Priority Collateral and
provided further to the extent that the Lien of Administrative Agent in
favor of the Lenders in any of the Specified FF&E shall be
released in accordance with the terms of the Company Security
Agreement, such Specified FF&E shall thereafter be excluded from the
First Priority Collateral.
"Fiscal Quarter" means a fiscal quarter of any Fiscal Year.
"Fiscal Year" means the fiscal year of Borrowers ending on
December 31 of each calendar year.
"Funded Debt", as applied to any Person, means all
Indebtedness of that Person (including any current portions thereof)
which by its terms or by the terms of any instrument or agreement
relating thereto matures more than one year from, or is directly
renewable or extendable at the option of that Person to a date more
than one year from (including an option of that Person under a
revolving credit or similar agreement obligating the lender or lenders
to extend credit over a period of one year or more from), the date of
the creation thereof.
"Funding and Payment Office" means (i) the office of
Administrative Agent located at 600 Peachtree Street NE, Suite 2700,
Atlanta, Georgia 30308 or (ii) such other office of Administrative
Agent as may from time to time hereafter be designated as such in a
written notice delivered by Administrative Agent to Borrowers and each
Lender.
"Funding Date" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, generally accepted accounting
principles set forth in opinions and pro nouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other
entity as may be approved by a significant segment of the accounting
profession, in each case as the same are applicable to the
circumstances as of the date of determination.
"Gaming License" means every license, franchise or other
authorization to own, lease, operate or otherwise conduct gaming
activities of the Borrowers or any of their
20
Subsidiaries, including without limitation, all such licenses granted
under the Nevada Gaming Control Act, and the regulations promulgated
pursuant thereto, and other applicable federal, state, foreign or local
laws.
"GECC Proceeds Account" means an account funded solely by
proceeds of loans made pursuant to a credit agreement made by and
between LVSI and/or VCR and General Electric Corporation and other
Lenders party thereto.
"Governmental Instrumentality" means any national, state or
local government (whether domestic or foreign), any political
subdivision thereof or any other governmental, quasi-governmental,
judicial, public or statutory instrumentality, authority, body, agency,
bureau or entity, (including the Nevada Gaming Authorities, any zoning
authority, the FDIC, the Comptroller of the Currency or the Federal
Reserve Board, any central bank or any comparable authority) or any
arbitrator with authority to bind a party at law.
"GMAC Guaranty" means the guaranty dated as of November 14,
1997 by Adelson in favor of Interim Mall Lender.
"Harrah's Shared Roadway Agreement" has the meaning assigned
that term in the Disbursement Agreement.
"Hazardous Materials" means (i) any chemical, material or
substance at any time defined as or included in the definition of
"hazardous substances", "hazardous wastes", "hazardous materials",
"extremely hazardous waste", acutely hazardous waste", "radioactive
waste", "biohazardous waste", "pollutant", "toxic pollutant",
"contaminant", "restricted hazardous waste", "infectious waste", "toxic
substances", or any other term or expression intended to define, list
or classify substances by reason of properties harmful to health,
safety or the indoor or outdoor environment (including harmful
properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, "TCLP toxicity" or
"EP toxicity" or words of similar import under any applicable
Environmental Laws); (ii) any oil, petroleum, petroleum fraction or
petroleum derived substance; (iii) any drilling fluids, produced waters
and other wastes associated with the exploration, development or
production of crude oil, natural gas or geothermal resources; (iv) any
flammable substances or explosives; (v) any radioactive materials; (vi)
any asbestos-containing materials; (vii) urea formaldehyde foam
insulation; (viii) electrical equipment which contains any oil or
dielectric fluid containing polychlorinated biphenyls; (ix) pesticides;
and (x) any other chemical, material or substance, exposure to which is
prohibited, limited or regulated by any governmental authority or which
may or could pose a hazard to the health and safety of the owners,
occupants or any Persons in the vicinity of any Facility or to the
indoor or outdoor environment.
"Hazardous Materials Activity" means any past, current,
proposed or threatened activity, event or occurrence involving any
Hazardous Materials, including the use,
21
manufacture, possession, storage, holding, presence, existence,
location, Release, threatened Release, discharge, placement,
generation, transportation, processing, construction, treatment,
abatement, removal, remediation, disposal, disposition or handling of
any Hazardous Materials, and any corrective action or response action
with respect to any of the foregoing.
"HC/Mall Component" has the meaning given that term in Exhibit
A to the Disbursement Agreement.
"HVAC Ground Lease" means that certain Ground Lease made
effective as of the date hereof between Venetian and the HVAC Provider.
"HVAC Component" has the meaning given that term in Exhibit A
to the Disbursement Agreement.
"HVAC Letters of Credit" has the meaning given to that term in
Section 2.4 of the Disbursement Agreement.
"HVAC Provider" means Atlantic-Pacific, Las Vegas LLC, a
Delaware limited liability company or its permitted successors under
the HVAC Services Agreement.
"HVAC Services Agreements" means collectively (i) that certain
Energy Services Agreement dated as of the date hereof between Venetian
and the HVAC Provider, (ii) the HVAC Ground Lease, (iii) the
Construction Agency Agreement and (iv) that certain Energy Services
Agreement dated as of the date hereof between Mall Construction
Subsidiary and the HVAC Provider.
"Improvements" means the buildings, fixtures and other
improvements to be situated on the Site.
"Increased Commitment" has the meaning assigned in subsection
2.1A(ii).
"Indebtedness", as applied to any Person, means (i) all
indebtedness for borrowed money, (ii) that portion of obligations with
respect to Capital Leases that is properly classified as a liability on
a balance sheet in conformity with GAAP, (iii) notes payable and drafts
accepted representing extensions of credit whether or not representing
obligations for borrowed money, (iv) any obligation owed for all or any
part of the deferred purchase price of property or services (excluding
any such obligations incurred under ERISA and trade payables and
accruals incurred in the ordinary course of business), and (v) all
indebtedness secured by any Lien on any property or asset owned or held
and under Contracts by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that Person or
is nonrecourse to the credit of that Person. Obligations under Interest
Rate Agreements constitute Contingent Obligations and not Indebtedness.
All obligations under the Financing Agreements shall
22
constitute Indebtedness. Obligations under the HVAC Services Agreement
(as in effect on the date hereof) shall be treated as a service
contract and not Indebtedness.
"Indemnitee" has the meaning assigned to that term in
subsection 10.3.
"Indentures" means the Mortgage Notes Indenture and the
Subordinated Notes Indenture or either one of them.
"Independent Consultants" means collectively the Construction
Consultant, the Insurance Advisor or in either case their successors
appointed pursuant to the Disbursement Agreement.
"Independent Financial Advisor" means an accounting, appraisal
or investment banking firm of nationally recognized standing that is,
in the judgment of LVSI's Board of Directors, (i) qualified to perform
the task for which it has been engaged and (ii) disinterested and
independent with respect to LVSI and its Subsidiaries and each
Affiliate of LVSI and Adelson.
"Indirect Construction Guarantor" means The Peninsular and
Oriental Steam Navigation Company, a corporation organized under the
laws of England and Wales.
"Indirect Construction Guaranty" means that certain Guaranty
dated as of August 19, 1997 executed by Indirect Construction Guarantor
in favor of LVSI.
"Insurance Advisor" means Sedgwick James of Tennessee, Inc.,
or its successor, appointed pursuant to the Disbursement Agreement.
"Intellectual Property" means all patents, trademarks,
tradenames, copyrights, technology, know-how and processes used in or
necessary for the conduct of the business of Borrowers as proposed to
be conducted pursuant to the Operative Documents that are material to
the condition (financial or otherwise), business or operations of the
Borrowers.
"Intercreditor Agent" means Scotiabank, in its capacity as
Intercreditor Agent under the Intercreditor Agreement, and any
successor Intercreditor Agent appointed pursuant to the terms of the
Intercreditor Agreement.
"Intercreditor Agreement" means that certain Intercreditor
Agreement dated as of the Closing Date among the Administrative Agent,
the Intercreditor Agent, the Mortgage Notes Indenture Trustee, the
Interim Mall Lender and the Subordinated Notes Indenture Trustee, in
substantially the form of Exhibit XIV annexed hereto.
"Interest Payment Date" means (i) with respect to any Base
Rate Loan, each March 31, June 30, September 30 and December 31 of each
year, commencing on the first such date to occur after the Closing
Date, and (ii) with respect to any Eurodollar
23
Rate Loan, the last day of each Interest Period applicable to such
Loan; provided that in the case of each Interest Period of longer than
three months "Interest Payment Date" shall also include each date that
is three months, or an integral multiple thereof, after the
commencement of such Interest Period.
"Interest Period" has the meaning assigned to that term in
subsection 2.2B.
"Interest Rate Agreement" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement
or other similar agreement or arrangement.
"Interest Rate Determination Date" means, with respect to any
Interest Period, two Business Days prior to the first day of such
Interest Period.
"Interface" means Interface Group-Nevada, Inc., a Nevada
corporation.
"Interface Lease" means the lease agreement dated November 1,
1996 between Interface and LVSI.
"Interim Construction Loan" means the loan from Goldman Sachs
Credit Partners L.P. to Borrowers in a maximum principal amount of
$45,000,000, to be repaid in full on the Closing Date.
"Interim Mall Credit Agreement" means that certain Credit
Agreement dated as of the date hereof among Borrowers, Mall
Construction Subsidiary and Interim Mall Lender.
"Interim Mall Facility" means the credit facility made
available to Borrowers and Mall Construction Subsidiary by Interim Mall
Lender pursuant to the Interim Mall Credit Agreement and any extension,
refinancing, renewal, replacement, substitution or refunding thereof
("Interim Mall Loan Refinancing"), provided that (a) the aggregate
principal amount outstanding under such Interim Mall Loan Refinancing
shall not exceed the aggregate principal amount of the Indebtedness so
extended, refinanced, renewed, replaced, substituted or refunded or
such lesser amount permitted under clause (e), (b) any such Interim
Mall Loan Refinancing shall be on substantially the same terms as the
credit agreement described above except that, subject to clause (e)
below, the Interim Mall Loan Refinancing may be made without the
support of the GMAC Guaranty, (c) each lender under such Interim Mall
Loan Refinancing would be an Eligible Assignee hereunder, (d) each
lender under such Interim Mall Loan Refinancing (or a duly authorized
agent acting on their behalf) shall have entered into the Intercreditor
Agreement and the Disbursement Agreement and assumed all obligations
and agreements of the original Interim Mall Lender thereunder and (e)
to the extent the Interim Mall Loan Refinancing is made without the
support of a guaranty substantially similar to the GMAC Guaranty, the
principal amount under the Interim Mall Loan Refinancing may not exceed
$105,000,000 in the aggregate and the balance (representing the Tranche
B portion) shall be funded as a Substitute Tranche B Loan with the
terms set forth in the
24
Substitute Tranche B Note and each lender thereunder shall have entered
into an intercreditor agreement in the form of the Adelson
Intercreditor Agreement and shall have entered into the Disbursement
Agreement and assumed the obligations and agreements of Interim Mall
Lender thereunder.
"Interim Mall Lender" means GMAC Commercial Mortgage
Corporation and its permitted successors and assigns.
"Interim Mall Proceeds Account" has the meaning assigned that
term in the Disbursement Agreement.
"Intermediate Holding Companies" means Mall Holdings and the
Phase II Holdings.
"Investment" means (i) any direct or indirect purchase or
other acquisition by Borrowers or any of their Subsidiaries of, or of a
beneficial interest in, any Securities of any other Person (including
any Subsidiary), (ii) any direct or indirect redemption, retirement,
purchase or other acquisition for value, by Borrowers or any of their
Subsidiaries from any Person, of any equity Securities of any
Subsidiary of Borrowers, or (iii) any direct or indirect loan, advance
(other than advances to employees for moving, entertainment and travel
expenses, drawing accounts and similar expenditures in the ordinary
course of business) or capital contribution by Borrowers or any of
their Subsidiaries to any other Person, including all indebtedness and
accounts receivable from that other Person that are not current assets
or did not arise from sales to that other Person in the ordinary course
of business other than Interest Rate Agreements required or permitted
hereunder to hedge against fluctuations in interest rates. The amount
of any Investment shall be the original cost of such Investment plus
the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or
write-offs with respect to such Investment.
"Issuing Lender" means, with respect to any Letter of Credit,
the Lender which agrees or is otherwise obligated to issue such Letter
of Credit, determined as provided in subsection 3.1B(ii).
"Joint Venture" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership, limited
liability company or other legal form; provided that in no event shall
any corporate Subsidiary of any Person be considered to be a Joint
Venture to which such Person is a party.
"Leasehold Deed of Trust" means that certain Leasehold Deed of
Trust, Assignment of Rents and Leases and Security Agreement in the
form of Exhibit XIII-B annexed hereto, dated as of Closing Date granted
by Mall Construction Subsidiary to Title Company, for the benefit of
Administrative Agent as agent for the Lenders which shall encumber Mall
Construction Subsidiary's interest in the Mall Collateral.
25
"Legal Requirements" means all laws, statutes, orders,
decrees, injunctions, licenses, permits, approvals, agreements and
regulations of any Governmental Instrumentality having jurisdiction
over the matter in question.
"Lender" and "Lenders" means the persons identified as
"Lenders" and listed on the signature pages of this Agreement, together
with their successors and permitted assigns pursuant to subsection
10.1; provided that the term "Lenders", when used in the context of a
particular Commitment, shall mean Lenders having that Commitment.
"Letter of Credit" or "Letters of Credit" means Commercial
Letters of Credit and Standby Letters of Credit issued or to be issued
by Issuing Lenders for the account of Borrowers pursuant to subsection
3.1.
"Letter of Credit Usage" means, as at any date of
determination, the sum of (i) the maximum aggregate amount which is or
at any time thereafter may become available for drawing under all
Letters of Credit then outstanding plus (ii) the aggregate amount of
all drawings under Letters of Credit honored by Issuing Lenders and not
theretofore reimbursed by Borrowers (including any such reimbursement
out of the proceeds of Revolving Loans pursuant to subsection 3.3B).
"Leverage Ratio" has the meaning assigned that term in
subsection 7.6B.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect
of such asset, whether or not filed, recorded or otherwise perfected
under applicable law (including any conditional sale or other title
retention agreement, any lease in the nature thereof, any option or
other agreement to sell or give a security interest in and any filing
of or agreement to give any financing statement under the UCC).
"Liquidated Damages" means any proceeds or liquidated damages
paid pursuant to any obligation, default or breach under the Contracts
and Indirect Construction Guaranty and Direct Construction Guaranty
(net of actual and documented reasonable costs incurred by Borrowers in
connection with adjustment or settlement thereof, including taxes and
any reasonable provisions made in respect of such costs and expenses
(including any such taxes paid or payable by an owner of either
Borrower or any of its Subsidiaries)). For purposes of this definition,
so-called "liquidated damages" insurance policies shall be deemed to be
Contracts.
"Loan" or "Loans" means one or more of the Term Loans or the
Revolving Loans or any combination thereof.
"Loan Documents" means this Agreement, the Notes, the Letters
of Credit (and any applications for, or reimbursement agreements or
other documents or certificates executed by Borrowers in favor of an
Issuing Lender relating to, the Letters of Credit) the Subsidiary
Guaranties, the Disbursement Agreement and the Collateral Documents.
26
"Loan Exposure" means, with respect to any Lender as of any
date of determination (i) prior to the termination of the Commitments,
that Lender's Commitment and (ii) after the termination of the
Commitments, the sum of (a) the aggregate outstanding principal amount
of the Loans of that Lender plus (b) in the event that Lender is an
Issuing Lender, the aggregate Letter of Credit Usage in respect of all
Letters of Credit issued by that Lender (in each case net of any
participations purchased by other Lenders in such Letters of Credit or
any unreimbursed drawings thereunder) plus (c) the aggregate amount of
all participations purchased by that Lender in any drawings under
Letters of Credit honored by Issuing Lenders and not theretofore
reimbursed by Borrowers.
"Loan Party" means each Borrower, Mall Construction
Subsidiary, each Intermediate Holding Company and each other Subsidiary
of a Borrower which may hereafter become a party to any Loan Document
and "Loan Parties" means all such Persons, collectively.
"Loss Proceeds" has the meaning assigned to that term in the
Disbursement Agreement.
"LVSI" means Las Vegas Sands, Inc., a Nevada corporation.
"Mall" means the retail mall component of the Project
described in more detail on Exhibit T-7 to the Disbursement Agreement.
"Mall Collateral" means all of the Borrowers' and their
Subsidiaries' right, title and interest in (i) prior to the Mall Parcel
Creation Date, the leasehold estate created by the Mall Lease and,
thereafter, the Mall Parcel; (ii) the leasehold estate created by the
Billboard Master Lease; (iii) all Improvements and equipment that are a
part of or attached or affixed to the Mall or located therein; (iv) any
reserves established by the Borrowers or any of their Subsidiaries
relating to the Mall; (v) all easements and other rights and interests
granted to the owner of the Mall in the Cooperation Agreement; (vi) all
warranties relating to the Mall and the above-described Improvements
and equipment that are given pursuant to or in connection with, the
Contracts; and (vii) all contracts (including space leases) entered
into by, or assigned to, Mall Construction Subsidiary, relating to the
foregoing Mall Collateral or any portion thereof, and all rights under
such contracts.
"Mall Construction Subsidiary" means Grand Canal Shops Mall
Construction, LLC, a Delaware limited liability company and a
wholly-owned subsidiary of Venetian.
"Mall Construction Subsidiary Security Agreement" means the
Security Agreement executed and delivered by Mall Construction
Subsidiary on the Closing Date, substantially in the form of Exhibit
XIX annexed hereto.
27
"Mall Direct Holdings" means Grand Canal Shops Mall Holding
Company, LLC, a Delaware limited liability company.
"Mall Escrow Agreement" has the meaning set forth in the
Disbursement Agreement.
"Mall Fee Deed of Trust" means a fee Deed of Trust, Assignment
of Leases and Rents and Security Agreement in the form of Exhibit
XIII-C annexed hereto, dated the Mall Parcel Creation Date granted by
Mall Construction Subsidiary for the benefit of Administrative Agent as
agent for the Lenders.
"Mall Holdings" means Mall Intermediate Holdings Company LLC,
a Delaware limited liability company and a wholly-owned Subsidiary of
Venetian.
"Mall Lease" means that certain Mall I Airspace/Groundlease
dated effective as of the date hereof by and between Venetian, as
lessor, and Mall Construction Subsidiary,as lessee, pursuant to which
Mall Construction Subsidiary will lease the Mall from Venetian.
"Mall Management Agreement" means that certain Management
Agreement between LVSI and Mall Operator pursuant to which Mall
Operator has agreed to perform certain management services related to
the Mall, as the same has been assigned to Mall Construction Subsidiary
pursuant to that certain assignment and assumption of contracts dated
as of November 14, 1997 between Venetian and Mall Construction
Subsidiary.
"Mall Manager" means Grand Canal Shops Mall MM, Inc., a Nevada
corporation and a wholly-owned subsidiary of LVSI.
"Mall Operator" means Forest City Commercial Management, Inc.,
an Ohio corporation, and any replacement Mall Operator selected in
accordance with the terms hereof.
"Mall Parcel" means the mall space subdivided from the Site as
one or more legally separate parcel and recorded with the applicable
Governmental Authorities as described in more detail in Exhibit T-7 to
the Disbursement Agreement.
"Mall Parcel Creation Date" has the meaning assigned to that
term in the Disbursement Agreement.
"Mall Release Date" has the meaning assigned that term in the
Disbursement Agreement.
"Mall Retainage/Punchlist Account" has the meaning set forth
in the Disbursement Agreement.
28
"Mall Subsidiary" means Grand Canal Shops Mall LLC, a Delaware
limited liability company.
"Margin Stock" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as
in effect from time to time.
"Material Adverse Effect" means (i) a material adverse effect
upon the business, operations, properties, assets, condition (financial
or otherwise) or prospects of either (a) Borrowers and any of their
Subsidiaries, taken as a whole or (b) Borrowers and any of their
Subsidiaries and Excluded Subsidiaries, taken as a whole or (ii) the
material impairment of the ability of any Loan Party to observe or
perform, or of Administrative Agent or Lenders to enforce, the
Obligations.
"Material Contract" means any contract or other arrangement to
which any Borrower(s), or any of their Subsidiaries are a party (other
than the Loan Documents) for which breach, nonperformance,
cancellation or failure to renew could reasonably be expected to have
a Material Adverse Effect.
"Mortgage Notes" means the 12.25% Mortgage Notes due 2004
issued by Borrowers pursuant to the Mortgage Notes Indenture.
"Mortgage Notes Collateral Account Agreement" has the meaning
assigned to that term in the Disbursement Agreement.
"Mortgage Note Holders" means the holders of the Mortgage
Notes.
"Mortgage Notes Indenture" means that certain Indenture dated
as of November 14, 1997 between Borrowers, certain guarantors named
therein and the Mortgage Notes Indenture Trustee.
"Mortgage Notes Indenture Trustee" means First Trust National
Association in its capacity as the trustee under the Mortgage Notes
Indenture and its successors in such capacity.
"Mortgage Notes Proceeds" means the gross proceeds from the
issuance of the Mortgage Notes in the amount of at least $425,000,000
(before deduction for underwriter's discounts, fees and expenses).
"Mortgage Notes Proceeds Account" has the meaning set forth in
the Disbursement Agreement.
"Mortgage Policy" has the meaning assigned that term in
subsection 4.1 of this Agreement.
"Mortgaged Property" means the real property described in
Schedule 5.5.
29
"Multiemployer Plan" means any Employee Benefit Plan which is
a "multi employer plan" as defined in Section 3(37) of ERISA.
"Net Asset Sale Proceeds" means the aggregate cash proceeds
received by any Borrower or any of its Subsidiaries in respect of any
Asset Sale, net of the direct costs relating to such Asset Sale
(including, without limitation legal, accounting and investment banking
fees and expenses, employee severance and termination costs, any trade
payables or similar liabilities related to the assets sold and required
to be paid by the seller as a result thereof and sales, finders' or
broker's commission), and any relocation expenses incurred as a result
thereof and taxes paid or payable as result thereof (including, without
limitation, any such taxes paid or payable by an owner of Borrower or
any of its Subsidiaries) (after taking into account any available tax
credits or deductions and any tax sharing arrangements), amounts
required to be applied to the repayment of Indebtedness secured by a
Lien (or amounts permitted by the terms of such Indebtedness to be
otherwise reinvested in the Project to the extent so reinvested) which
is prior to the Lien under the Collateral Documents on the asset or
assets that are the subject of such Asset Sale, all distributions and
other payments required to be made to minority interest holders in a
Subsidiary or joint venture as a result of the Asset Sale and any
reserve for adjustment in respect of the sale price of such asset or
assets or any liabilities associated with the asset disposed of in such
Asset Sale.
"Net Loss Proceeds" means the aggregate cash proceeds received
by any Borrower or any of its Subsidiaries in respect of any Event of
Loss, including, without limitation, insurance proceeds, condemnation
awards or damages awarded by any judgment, net of the direct costs in
recovery of such Net Loss Proceeds (including, without limitation,
legal, accounting, appraisal and insurance adjuster fees and expenses)
and any taxes paid or payable as a result thereof (including, without
limitation, any such taxes paid or payable by an owner of Borrower or
any of its Subsidiaries) (after taking into account any available tax
credits or deductions and any tax sharing arrangements) and amounts
required to be applied to the repayment of Indebtedness secured by a
Lien (or amounts permitted by the terms of such Indebtedness to be
otherwise reinvested in the Project to the extent so reinvested) which
is prior to the Liens of Lenders under the Collateral Documents on the
asset or assets that are the subject of the Event of Loss.
Notwithstanding the foregoing, all proceeds of so-called "liquidated
damages" insurance policies shall not be Net Loss Proceeds but shall be
Liquidated Damages.
"Nevada Gaming Authorities" shall mean, collectively, the
Nevada Gaming Commission, the Nevada State Gaming Control Board, and
the Clark County Liquor and Gaming Licensing Board.
"Nevada Gaming Laws" shall mean the Nevada Gaming Control Act,
as modified in Chapter 463 of the Nevada Revised Statutes, as amended
from time to time, and the regulations of the Nevada Gaming Commission
promulgated thereunder, as amended from time to time.
30
"Non-Recourse Financing" means Indebtedness incurred in
connection with the purchase or lease of personal or real property
useful in the business of Borrowers and their Subsidiaries and (i) as
to which the lender upon default may seek recourse or payment as
against a Borrower or any of its Subsidiaries only through the return
or sale of the property or equipment so purchased or leased and (ii)
may not otherwise assert a valid claim for payment on such Indebtedness
against a Borrower or any of its Subsidiaries or any other property of
a Borrower or any of its Subsidiaries.
"Notes" means one or more of the Term Notes or Revolving Notes
or any combination thereof.
"Notice of Borrowing" means a notice substantially in the form
of Exhibit I annexed hereto delivered by Borrowers to Administrative
Agent pursuant to subsection 2.1B with respect to a proposed borrowing.
"Notice of Conversion/Continuation" means a notice
substantially in the form of Exhibit II annexed hereto delivered to
Administrative Agent pursuant to subsection 2.2D with respect to a
proposed conversion or continuation of the applicable basis for
determining the interest rate with respect to the Loans specified
therein.
"Notice of Funding Request" has the meaning assigned that term
in the Disbursement Agreement.
"Notice of Issuance of Letter of Credit" means a notice
substantially in the form of Exhibit XV annexed hereto delivered by
Borrowers to Administrative Agent pursuant to subsection 3.1B(i) with
respect to the proposed issuance of a Letter of Credit.
"Obligations" means all obligations of every nature of each
Loan Party from time to time owed to Administrative Agent, Arranger,
Syndication Agent, Lenders or any of them under the Loan Documents,
whether for principal, interest, reimbursement of amounts drawn under
Letters of Credit, fees, expenses, indemnification or otherwise.
"Officers' Certificate" means, as applied to any corporation,
a certificate executed on behalf of such corporation by its chairman of
the board (if an officer) or its president or one of its vice
presidents and by its chief financial officer or its treasurer (in
their capacity as such officer); provided that every Officers'
Certificate with respect to the compliance with a condition precedent
to the making of any Loans hereunder shall include (i) a statement that
the officer or officers making or giving such Officers' Certificate
have read such condition and any definitions or other provisions
contained in this Agreement relating thereto, (ii) a statement that, in
the opinion of the signers, they have made or have caused to be made
such examination or investigation as is reasonably necessary to enable
them to express an informed opinion as to whether or not such condition
has been complied with, and (iii) a statement as to whether, in the
opinion of the signers, such condition has been complied with in all
material respects.
31
"Opening Conditions" has the meaning set forth in the
Disbursement Agreement.
"Opening Date" means the date on which the hotel, casino, or
mall portion of the Project is open for business.
"Operating Lease" means, as applied to any Person, any lease
(including leases that may be terminated by the lessee at any time) of
any property (whether real, personal or mixed) that is not a Capital
Lease other than any such lease under which that Person is the lessor.
"Operative Documents" means the Financing Agreements and the
Project Documents.
"Other Indebtedness" means (i) the Indebtedness of any
Borrower or any of its Subsidiaries evidenced by the Mortgage Notes,
(ii) the Indebtedness of any Borrower or any of its Subsidiaries
evidenced by the Subordinated Notes, (iii) the Indebtedness of any
Borrower or any of its Subsidiaries evidenced by the Interim Mall
Facility, (iv) the Indebtedness of any Borrower or any of its
Subsidiaries evidenced by the FF&E Facility Agreement, (v) any
Indebtedness of any Borrower or any of its Subsidiaries in respect of
the Substitute Tranche B Loan and/or any Completion Guaranty Loan and
(vi) any Indebtedness of any Borrower under an Employee Repurchase
Note.
"Other Security Documents" means, the Security Documents as
defined in the Disbursement Agreement, other than the Collateral
Documents.
"Outside Completion Deadline" means April 21, 1999, as such
date may be extended pursuant to Section 6.4 of the Disbursement
Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Code or
Section 302 of ERISA.
"Permanent Mall Lender" means Goldman Sachs Mortgage Company
and any successor or replacement thereto permitted under the Tri-Party
Agreement.
"Permits" means all authorizations, consents, decrees,
permits, waivers, privileges, approvals from and filings with all
Governmental Instrumentalities including, without limitation, the
Nevada Gaming Authorities necessary for the realization of the Project
in accordance with the Operative Documents.
"Permitted Employee Repurchase" has the meaning set forth in
subsection 7.1.
32
"Permitted Liens" means the following types of Liens
(excluding any such Lien imposed pursuant to Section 401(a)(29) or
412(n) of the Code or by ERISA, any such Lien relating to or imposed in
connection with any Environmental Claim, and any such Lien expressly
prohibited by any applicable terms of any of the Collateral Documents
provided in each case that such Liens do not secure Indebtedness for
borrowed money:
(i) Liens for taxes, assessments or governmental
charges or claims the payment of which is not, at the time,
required by subsection 6.3;
(ii) statutory Liens of landlords, statutory Liens of
banks and rights of set-off, statutory Liens of carriers,
warehousemen, mechanics, repairmen, workmen and materialmen,
and other Liens imposed by law, in each case incurred in the
ordinary course of business (a) for amounts not yet overdue or
(b) for amounts that are overdue and that (in the case of any
such amounts overdue for a period in excess of 5 days) are
being contested in good faith by appropriate proceedings, so
long as (1) such reserves or other appropriate provisions, if
any, as shall be required by GAAP shall have been made for any
such contested amounts, and (2) in the case of a Lien with
respect to any portion of the Collateral, such contest
proceedings conclusively operate to stay the sale of any
portion of the Collateral on account of such Lien;
(iii) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or
to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts,
trade contracts, performance and return-of-money bonds and
other similar obligations (exclusive of obligations for the
payment of borrowed money), incurred in the ordinary course of
business (a) for amounts not yet overdue or (b) for amounts
that are overdue and that (in the case of any such amounts
overdue for a period in excess of 5 days) are being contested
in good faith by appropriate proceedings, so long as (1) such
reserves or other appropriate provisions, if any, as shall be
required by GAAP shall have been made for any such contested
amounts and (2) in the case of a Lien with respect to any
portion of the Collateral, such contest proceedings
conclusively operate to stay the sale of any portion of the
Collateral on account of such Lien;
(iv) any attachment or judgment Lien not constituting
an Event of Default under subsection 8.8;
(v) leases or subleases granted to third parties in
accordance with any applicable terms of this Agreement and the
Collateral Documents and not interfering in any material
respect with the ordinary conduct of the business of a
Borrower or any of its Subsidiaries;
33
(vi) easements, rights-of-way, restrictions,
encroachments, and other minor defects or irregularities in
title, in each case which do not and will not interfere in any
material respect with the ordinary conduct of the business of
a Borrower or any of its Subsidiaries or result in a material
diminution in the value of any Collateral as security for the
Obligations;
(vii) leases permitted under subsection 7.7 and any
leasehold mortgage in favor of any party financing the lessee
under any lease permitted under subsection 7.7 provided that
(a) none of the Borrowers nor any of their Subsidiaries is
liable for the payment of any principal of, or interest,
premiums or fees on, such financing and (b) the affected lease
and leasehold mortgage are expressly made subject and
subordinate to the Lien of the Deed of Trust or the Leasehold
Deed of Trust, as applicable;
(viii) Liens created or contemplated by the
Cooperation Agreement (as in effect on the Closing Date);
(ix) Liens on real property of Borrowers arising
pursuant to that certain Harrah's Shared Roadway Agreement (as
in effect on the Closing Date);
(x) Liens incurred in connection with the
construction of a pedestrian bridge or a pedestrian tunnel
under Las Vegas Boulevard and Sands Avenue provided that such
Liens will not (i) materially interfere with, impair or
detract from the operation of the business of Borrowers and
their Subsidiaries or the construction or operation of the
Project and (ii) cause a material decrease in the value of the
Collateral.
(xi) Liens arising from filing UCC financing
statements relating solely to leases permitted by this
Agreement;
(xii) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of
customs duties in connection with the importation of goods;
(xiii) any zoning or similar law or right reserved to
or vested in any governmental office or agency to control or
regulate the use of any real property;
(xiv) licenses of patents, trademarks and other
intellectual property rights granted by a Borrower or any of
its Subsidiaries in the ordinary course of business and not
interfering in any material respect with the ordinary conduct
of the business of such Borrower or such Subsidiary; and
(xv) Liens created under the HVAC Services Agreements
(as in effect on the Closing Date);
34
(xvi) Liens created under the Predevelopment
Agreement (as in effect on the Closing Date);
(xvii) easements, restrictions, rights of way,
encroachments and other minor defects or irregularities in
title incurred in connection with the traffic study relating
to increased traffic on Las Vegas Boulevard as a result of
completion of the Project;
(xviii) Liens incurred in connection with Interest
Rate Agreements required or permitted to be maintained
hereunder provided that (a) to the extent such Interest Rate
Agreement is intended to hedge interest rate risk in respect
of the Interim Mall Loan such Liens attach only to the Mall
Collateral and (b) to the extent such Interest Rate Agreement
is intended to hedge interest rate risk in respect of the FF&E
Facility;
(xix) restrictions created under the Sale and
Contribution Agreement (as in effect on the Closing Date);
(xx) prior to the Final Completion Date any
"Permitted Liens" under the Disbursement Agreement; and
(xxi) Liens listed on Schedule 7.7.
"Permitted Quarterly Tax Distributions" means quarterly
distributions of Tax Amounts determined on the basis of the estimated
taxable income of LVSI or Venetian, as the case may be (in each case
including any such taxable income attributable to such entity's
ownership of interest in any other pass-through entity for Federal
income tax purposes except that if all or any portion of the Completion
Guaranty Loan or the Substitute Tranche B Loan is outstanding and held
by Adelson or a Related Party and is not paying current cash interest,
then such estimated taxable income shall be determined without giving
effect to any non-cash interest payments on such loans held by Adelson
or the Related Parties to the extent such non-cash interest is
deductible), for the related Estimation Period, as in a statement filed
with the Administrative Agent, provided, however, that (A) prior to any
distributions of Tax Amounts the Borrowers shall deliver an officers'
certificate with a statement to the effect that in the case of
distributions to be made by Venetian, Venetian qualifies as a
partnership or a substantially similarly treated pass-through entity
for federal income tax purposes or that, in the case of distributions
to be made by LVSI, LVSI qualifies as a Subchapter S corporation under
the Code or a substantially similarly treated pass-through entity for
federal income tax purposes, as the case may be, and (B) at the time of
such distributions, the most recent audited financial statements of
LVSI reflect that LVSI was treated as a Subchapter S corporation under
the Code or a substantially similarly treated pass-through entity for
federal income tax purposes and Venetian was treated as a partnership
or substantially similarly treated pass-through entity for Federal
income tax purposes for the period covered by such financial
statements; provided, further, that, for an Estimation Period
35
that includes a True-up Determination Date, (A) if the True-up Amount
is due to the members or shareholders, as the case may be, the
Permitted Quarterly Tax Distribution payable by LVSI or Venetian, as
the case may be, for the Estimation Period shall be increased by such
True-up Amount, and (B) if the True-up Amount is due to LVSI or
Venetian, the Permitted Quarterly Tax Distribution payable by LVSI or
Venetian as the case may be, for the Estimation Period shall be reduced
by such True-up Amount and the excess, if any, of the True-up Amount
over such Permitted Quarterly Tax Distribution shall be applied to
reduce the immediately following Permitted Quarterly Tax
Distribution(s) until such True-up Amount is entirely offset. The
amount of Permitted Quarterly Tax Distribution relating to an
Estimation Period including a True-up Determination Date shall be
determined by a Tax Amounts CPA, and the amount of Permitted Quarterly
Tax Distribution relating to all other Estimation Periods shall be
determined by LVSI or Venetian, as the case may be.
"Person" means and includes natural persons, corporations,
limited partnerships, general partnerships, limited liability
companies, limited liability partnerships, joint stock
companies, Joint Ventures, associations, companies, trusts, banks,
trust companies, land trusts, business trusts or other organizations,
whether or not legal entities, and governments (whether federal, state
or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative or regulatory bodies
thereof.
"Phase II" means a hotel, casino and mall complex proposed to
be developed on the Phase II Land.
"Phase II Casino Lease" means the gaming operations lease
between the Phase II Subsidiary and LVSI or Venetian pursuant to which
LVSI or Venetian will operate the gaming operations of the Phase II,
entered into in accordance with subsection 7.10.
"Phase II Direct Holdings" means Lido Casino Resort Holding
Company, LLC, a Delaware limited liability company.
"Phase II Holdings" means Lido Intermediate Holding Company,
LLC, a Delaware limited liability company, and a wholly-owned
Subsidiary of Venetian.
"Phase II Land" means the real property consisting of
approximately 14 acres of the Real Estate Contribution as described in
more detail in Exhibit T-5 of the Disbursement Agreement together with
all improvements thereon.
"Phase II Manager" means Lido Casino Resort MM, Inc., a Nevada
corporation, and wholly-owned subsidiary of LVSI and the managing
member of Phase II Subsidiary.
"Phase II Release Conditions" has the meaning assigned to that
term in the Disbursement Agreement.
36
"Phase II Subsidiary" means Lido Casino Resorts, LLC, a Nevada
limited liability company.
"Plans and Specifications" has the meaning assigned to that
term in the Disbursement Agreement.
"Potential Event of Default" means a condition or event that,
after notice or lapse of time or both, would constitute an Event of
Default.
"Pre-Completion Revenues Account" has the meaning assigned to
that term in the Disbursement Agreement.
"Predevelopment Agreement" means the Sands Resort Hotel Casino
Agreement dated February 18, 1997 by and between Clark County and LVSI.
"Prime Rate" means the rate that Scotiabank announces from its
New York office from time to time as its Dollar prime lending rate, as
in effect from time to time. The Prime Rate is a reference rate and
does not necessarily represent the lowest or best rate actually charged
to any customer. Scotiabank or any other Lender may make commercial
loans or other loans at rates of interest at, above or below the Prime
Rate.
"Pro Rata Share" means (i) with respect to all payments,
computations and other matters relating to the Term Loan Commitment or
the Term Loan of any Lender, the percentage obtained by dividing (x)
the Term Loan Exposure of that Lender by (y) the aggregate Term Loan
Exposure of all Lenders, (ii) with respect to all payments,
computations and other matters relating to the Revolving Loan
Commitment or the Revolving Loans of any Lender or any Letters of
Credit issued or participations therein purchased by any Lender, the
percentage obtained by dividing (x) the Revolving Loan Exposure of that
Lender by (y) the aggregate Revolving Loan Exposure of all Lenders, and
(iii) for all other purposes with respect to each Lender, the
percentage obtained by dividing (x) the sum of the Term Loan Exposure
of that Lender plus the Revolving Loan Exposure of that Lender by (y)
the sum of the aggregate Term Loan Exposure of all Lenders plus the
aggregate Revolving Loan Exposure of all Lenders, in any such case as
the applicable percentage may be adjusted by assignments permitted
pursuant to subsection 10.1. The initial Pro Rata Share of each Lender
for purposes of each of clauses (i), (ii) and (iii) of the preceding
sentence is set forth opposite the name of that Lender in Schedule 2.1
annexed hereto.
"Professional Services Agreement" means that certain Agreement
between Owner and Architect dated on or about the date hereof, between
Borrowers and Project Architect.
"Project" means the Venetian-themed hotel, casino, retail,
meeting and entertainment complex, with related heating, ventilation
and air conditioning and power
37
station facilities to be developed at the Site, all as more
particularly described in Exhibit T-1 to the Disbursement Agreement.
"Project Architect" means collectively, TSA of Nevada, LLP,
and WAT&G, Inc. Nevada.
"Project Budget" has the meaning assigned that term in the
Disbursement Agreement.
"Project Costs" has the meaning assigned to that term in the
Disbursement Agreement.
"Project Documents" means the Construction Management
Agreement, the Completion Guaranties, the Contracts, the Cooperation
Agreement, the Professional Services Agreement, the HVAC Services
Agreements, the HVAC Ground Lease, the Mall Management Agreement, the
Tri-Party Agreement, the Predevelopment Agreement, the Billboard Master
Lease, the Harrah's Roadway Agreement, the Services Agreement, the
Sale and Contribution Agreement, the Mall Lease, the Casino Lease, the
Treadway Agreement, the Work Continuation Agreement, the operating
agreements for each of Venetian and the Intermediate Holding Companies
and any other document or agreement entered into on, prior to or after
the Closing Date, in accordance with Section 7.13 and, while
applicable, the Disbursement Agreement relating to the development,
construction, maintenance or operation of the Project provided, that
following the Mall Release Date any contracts and agreements relating
to the Mall which are transferred to Mall Subsidiary shall no longer
constitute Project Documents.
"Project Schedule" has the meaning assigned that term in the
Disbursement Agr eement.
"Puck JV Letter of Intent" means the letter of intent dated
May 16, 1997 between LVSI and Wolfgang Puck Food Company, L.P.
"Quarterly Date" means (i) with respect to the first Quarterly
Date, the first date occurring after the Completion Date which is the
last day of a Fiscal Quarter and is 45 days or more after the earlier
of the Opening Date and the Completion Date and (ii) with respect to
each subsequent Quarterly Date, the end of the next succeeding Fiscal
Quarter.
"Quarterly Payment Period" means the period commencing on the
tenth day and ending and including the twentieth day of each month in
which federal estimated tax payments are due (provided that payments in
respect of estimated state income taxes due in January may instead, at
the option of Borrowers, be paid during the last five days of the
immediately preceding December).
"Real Estate Contribution" has the meaning assigned to that
term in the introduction to this Agreement as described in more detail
in Schedule 4.5.
38
"Register" has the meaning assigned to that term in subsection
2.1D.
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"Reimbursement Date" has the meaning assigned to that term in
subsection 3.3B.
"Related Parties" means and shall include: (i) Family Members,
as hereafter defined; (ii) directors of LVSI or Venetian and employees
of LVSI or Venetian who are senior managers or officers of LVSI,
Venetian, Interface or any of their Affiliates; (iii) any person who
receives an interest in LVSI or Venetian from any individual referenced
in clauses (i)-(ii) in a gratuitous transfer, whether by gift, bequest
or otherwise, to the extent of such interest; (iii) the estate of any
individual referenced in clauses (i)-(iii); (iv) a trust for the
benefit of one or more of the individuals referenced in clauses
(i)-(iii); and/or (v) an entity owned or controlled, directly or
indirectly, by one or more of the individuals, estates of trusts
referenced in clauses (i)-(iv). For the purpose of this paragraph, a
`Family Member' shall include: (i) Sheldon G. Adelson; (ii) Dr. Miriam
Adelson; (iii) any sibling of either of the foregoing; (iv) any issue
of any one or more of the individuals referenced in the preceding
clauses (i)-(iii); and (v) the spouse or issue of the spouse of one or
more of the individuals referenced in the preceding clauses (i)-(iv).
"Release" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge,
dispersal, dumping, leaching or migration of Hazardous Materials into
the indoor or outdoor environment (including the abandonment or
disposal of any barrels, containers or other closed receptacles
containing any Hazardous Materials), including the movement of any
Hazardous Materials through the air, soil, surface water or
groundwater.
"Requisite Class Lenders" means, at any time of determination
(i) for the Class of Lenders having Term Loan Exposure, Lenders having
or holding more than 50% of the sum of the aggregate Term Loan Exposure
of all Lenders and (ii) for the Class of Lenders having Revolving Loan
Exposure, Lenders having or holding more than 50% of the aggregate
Revolving Loan Exposure of all Lenders.
"Requisite Lenders" means Lenders having or holding more than
50% of the sum of the aggregate Loans and unused Commitment of all
Lenders.
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class
of stock of either Borrower now or hereafter outstanding, except a
dividend or distribution payable solely in shares of that class of
stock to the holders of that class (or the accretion of such dividends
or distribution), (ii) any redemption, retirement, sinking fund or
similar payment, purchase or other acquisition for value, direct or
indirect, of any shares of any class of stock of either Borrower now or
hereafter outstanding, (iii) any payment made to retire, or to
39
obtain the surrender of, any outstanding warrants, options or other
rights to acquire shares of any class of stock of either Borrower now
or hereafter outstanding, (iv) any payment or prepayment of principal
of, premium, if any, or interest on, or redemption, purchase,
retirement, defeasance (including in-substance or legal defeasance),
sinking fund or similar payment with respect to Other Indebtedness and
(v) any payment in respect of a repayment or reimbursement of amounts
advanced to Borrowers or any of their Subsidiaries by Adelson or any
Affiliate of Adelson under the Adelson Completion Guaranty or the GMAC
Guaranty.
"Revolving Loan Availability Date" means the date on which
Construction Consultant delivers the Six-Month Certificate to
Administrative Agent.
"Revolving Loan Commitment" means the commitment of a Lender
to make Revolving Loans to Borrowers pursuant to subsection 2.1A(ii),
and "Revolving Loan Commitments" means such commitments of all Lenders
in the aggregate.
"Revolving Loan Commitment Termination Date" means the date
which is two years from the initial draw of Revolving Loans or issuance
of a Letter of Credit on or after the Revolving Loan Availability Date
but is not later than two years after the Term Loan Commitment
Termination Date.
"Revolving Loan Exposure" means, with respect to any Lender as
of any date of determination (i) prior to the termination of the
Revolving Loan Commitments, that Lender's Revolving Loan Commitment and
(ii) after the termination of the Revolving Loan Commitments, the sum
of (a) the aggregate outstanding principal amount of the Revolving
Loans of that Lender plus (b) in the event that Lender is an Issuing
Lender, the aggregate Letter of Credit Usage in respect of all Letters
of Credit issued by that Lender (in each case net of any participations
purchased by other Lenders in such Letters of Credit or any
unreimbursed drawings thereunder) plus (c) the aggregate amount of all
participations purchased by that Lender in any outstanding Letters of
Credit or any unreimbursed drawings under any Letters of Credit.
"Revolving Loans" means the Loans made by Lenders to Borrowers
pursuant to subsection 2.1A(ii).
"Revolving Notes" means (i) the promissory notes of Borrowers
issued pursuant to subsection 2.1E on the Closing Date and (ii) any
promissory notes issued by Borrowers pursuant to the last sentence of
subsection 10.1B(i) in connection with assignments of the Revolving
Loan Commitments and Revolving Loans of any Lenders, in each case
substantially in the form of Exhibit III-B annexed hereto, as they may
be amended, supplemented or otherwise modified from time to time.
"Sale and Contribution Agreement" means that certain Sale and
Contribution Agreement dated as of the date hereof among Venetian, Mall
Construction Subsidiary and Mall Subsidiary.
40
"Sands Expo and Convention Center" means the exposition and
meeting facilities commonly known as the Sands Expo and Convention
Center.
"Scotiabank" has the meaning assigned to that term in the
introduction to this Agreement.
"Securities" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in
any profit-sharing agreement or arrangement, options, warrants, bonds,
debentures, notes, or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim certificates
for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"Services Agreement" means that amended and restated Services
Agreement dated as of the date hereof, by and among LVSI, Interface,
Interface Holding Company, Inc., and the parties stated on the schedule
thereto.
"Site" means the land on which the Project is to be
constructed as described in more detail in Exhibit T-4 to the
Disbursement Agreement.
"Six-Month Certificate" has the meaning set forth in the
Disbursement Agreement.
"Solvent" means, with respect to any Person, that as of the
date of determination both (A) (i) the then fair saleable value of the
property of such Person is (y) greater than the total amount of
liabilities (including contingent liabilities) of such Person and (z)
not less than the amount that will be required to pay the probable
liabilities on such Person's then existing debts as they become
absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (ii) such
Person's capital is not unreasonably small in relation to its business
or any contemplated or undertaken transaction; and (iii) such Person
does not intend to incur, or believe (nor should it reasonably believe)
that it will incur, debts beyond its ability to pay such debts as they
become due; and (B) such Person is "solvent" within the meaning given
that term and similar terms under applicable laws relating to
fraudulent transfers and conveyances. For purposes of this definition,
the amount of any contingent liability at any time shall be computed as
the amount that, in light of all of the facts and circumstances
existing at such time, represents the amount that can reasonably be
expected to become an actual or matured liability.
"Specified FF&E" means any furniture, fixtures, equipment and
other personal property financed with the proceeds from the FF&E
Facility.
41
"Standby Letter of Credit" means any standby letter of credit
or similar instrument issued for the purpose of supporting (i)
Indebtedness of Borrowers in respect of industrial revenue or
development bonds or financings, (ii) workers' compensation liabilities
of Borrowers, (iii) the obligations of third party insurers of
Borrowers arising by virtue of the laws of any jurisdiction requiring
third party insurers, (iv) obligations with respect to Capital Leases
or Operating Leases of Borrowers, and (v) performance, payment, deposit
or surety obligations of Borrowers, in any case if required by law or
governmental rule or regulation or in accordance with custom and
practice in the industry; provided that Standby Letters of Credit may
not be issued for the purpose of supporting (a) trade payables or (b)
any Indebtedness constituting "antecedent debt" (as that term is used
in Section 547 of the Bankruptcy Code).
"Stop Funding Notice" has the meaning set forth in the
Disbursement Agreement.
"Subordinated Indebtedness" means (i) the Indebtedness in
respect of the Subordinated Notes, (ii) any Indebtedness in respect of
any Substitute Tranche B Loan or Completion Guaranty Loan and (iii) any
Indebtedness in respect of Employee Repurchase Notes.
"Subordinated Notes" means the $97,500,000 in aggregate
principal amount of split coupon Senior Subordinated Notes due 2005 of
Borrowers issued pursuant to the Subordinated Notes Indenture.
"Subordinated Notes Indenture" means the Indenture dated as of
November 14, 1997 between Borrowers, certain guarantors named therein
and the Subordinated Notes Indenture Trustee.
"Subordinated Notes Indenture Trustee" means First Union
National Bank in its capacity as trustee under the Subordinated Notes
Indenture and its successors in such capacity.
"Subsidiary" means, with respect to any Person, (i) any
corporation, partnership, limited liability company, association, joint
venture or other business entity of which more than 50% of the total
voting power of shares of stock or other ownership interests entitled
(without regard to the occurrence of any contingency) to vote in the
election of the Person or Persons (whether directors, managers,
trustees or other Persons performing similar functions) having the
power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by
that Person or one or more of the other Subsidiaries of that Person or
a combination thereof and (ii) any partnership or limited liability
company of which more than 50% of such entities' capital accounts,
distribution rights, general or limited partnership interests or
membership interests are owned or controlled directly or indirectly by
such Person or one of more other Subsidiaries of that Person or a
combination thereof. Notwithstanding the foregoing, Mall Subsidiary,
Phase II Subsidiary, Phase II Manager, Phase II Direct
42
Holdings, Mall Manager and Mall Direct Holdings and their respective
Subsidiaries shall not constitute Subsidiaries under this Agreement or
any other Loan Document, except for purposes of Article 5
(representations and warranties) (other than subsection 5.8) and
subsection 6.1 (as specified therein) and for purposes of any
definitions as used in Article 5 or subsection 6.1.
"Subsidiary Guarantor" means each of the Intermediate Holding
Companies and any other Subsidiary of any of the Borrowers that
executes and delivers a counterpart of the Subsidiary Guaranty on the
Closing Date or from time to time thereafter pursuant to subsection
6.13.
"Subsidiary Guaranty" means the Subsidiary Guaranty executed
and delivered by each of the Intermediate Holding Companies and
existing Subsidiaries of Borrowers on the Closing Date and to be
executed and delivered by additional Subsidiaries of Borrowers from
time to time thereafter in accordance with subsection 6.13,
substantially in the form of Exhibit XI annexed hereto, as such
Subsidiary Guaranty may hereafter be amended, supplemented or otherwise
modified from time to time.
"Subsidiary Security Agreement" means each Subsidiary Security
Agreement executed and delivered by any Subsidiary Guarantor other than
the Intermediate Holding Companies from time to time thereafter in
accordance with subsection 6.13, in each case substantially in the form
of Exhibit VIII annexed hereto, as such Subsidiary Security Agreement
may be amended, supplemented or otherwise modified from time to time,
and "Subsidiary Security Agreements" means all such Subsidiary Security
Agreements, collectively.
"Substantial Completion" means all conditions to Final
Completion have occurred other than completion of any Anticipated
Future Work, as certified by the Borrowers and the Construction
Consultant.
"Substantial Completion Date" means the date on which
Substantial Completion occurs.
"Substitute Tranche B Loan" means (i) any amount funded by
Adelson upon a draw under the GMAC Guaranty or the Tranche B Collateral
which Adelson elects to have treated as a subordinated loan to
Venetian, (ii) any amounts funded to refinance the Tranche B portion of
the Interim Mall Loan to the extent the Interim Mall Loan Refinancing
is not supported by a guaranty substantially similar to the GMAC
Guaranty, and (iii) any refinancing of the loans described under
clauses (i) or (ii) provided in the case of clauses (i), (ii) and (iii)
that such loans are in amounts not to exceed at any time an aggregate
principal amount of $35,000,000 (plus accrued and unpaid interest
thereon) are evidenced by Substitute Tranche B Notes and are subject to
the terms of the Adelson Intercreditor Agreement or a substantially
similar intercreditor agreement, and in the case of any such loan which
refinances the Tranche B portion of the Interim Mall Loan, the
43
lender shall have entered into the Disbursement Agreement and assumed
the obligations and agreements of Interim Mall Lender thereunder.
"Substitute Tranche B Note" means a note substantially in the
form attached to the Interim Mall Credit Agreement (as in effect on the
date hereof).
"Supplemental Agent" has the meaning assigned to that term in
subsection 9.1B.
"Supplier Joint Venture" means any Person that supplies or
provides materials or services to any Borrower, the Construction
Manager or any contractor in the Project and in which a Borrower or one
of its Subsidiaries have Investments.
"Syndication Agent" has the meaning assigned to that term in
the introduction to this Agreement.
"Tax" or "Taxes" means any present or future tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature and
whatever called, by whomsoever, on whomsoever and wherever imposed,
levied, collected, withheld or assessed; provided that "Tax on the
overall net income" of a Person shall be construed as a reference to a
tax imposed by the jurisdiction in which that Person is organized or in
which that Person's principal office (and/or, in the case of a Lender,
its lending office) is located or in which that Person (and/or, in the
case of a Lender, its lending office) is deemed to be doing business on
all or part of the net income, profits or gains (whether worldwide, or
only insofar as such income, profits or gains are considered to arise
in or to relate to a particular jurisdiction, or otherwise) of that
Person (and/or, in the case of a Lender, its lending office).
"Tax Amount" means, with respect to a Estimation Period or a
taxable year, as the case may be an amount equal to (A) the product of
(x) the taxable income (including all separate items of income) of LVSI
or Venetian, as the case may be, for such Estimation Period or taxable
year, as the case may be, and (y) the Applicable Tax Percentage reduced
by (B) to the extent not previously taken into account, any income tax
benefit attributable to LVSI or Venetian, as the case may be, which
could be utilized (without regard to the actual utilization) by its
members or shareholders, as the case may be, in the current or prior
taxable year, or portion thereof, commencing on or after the Closing
Date (including any tax losses or tax credits), computed at the
Applicable Tax Percentage of the year that such benefit is taken into
account for purposes of this computation; provided, however, that, the
computation of Tax Amount shall also take into account (C) the
deductibility of state and local taxes for federal income tax purposes,
and (D) any difference in the Applicable Tax Percentage resulting from
the nature of taxable income (such as capital gain as opposed to
ordinary income).
"Tax Amounts CPA" means a nationally recognized certified
public accounting firm.
44
"Term Loan Commitment" means the commitment of a Lender to
make a Term Loan to Borrowers pursuant to subsection 2.1A(i), and "Term
Loan Commitments" means such commitments of all Lenders in the
aggregate.
"Term Loan Commitment Termination Date" means the earlier of
(i) Completion and (ii) Outside Completion Deadline.
"Term Loan Exposure" means, with respect to any Lender as of
any date of determination (i) prior to the funding of the Term Loans,
that Lender's Term Loan Commitment and (ii) after the funding of the
Term Loans, the outstanding principal amount of the Term Loan of that
Lender.
"Term Loans" means the Loans made by Lenders to Borrowers
pursuant to subsection 2.1A(i).
"Term Notes" means (i) the promissory notes of Borrowers
issued pursuant to subsection 2.1E(i) on the Closing Date and (ii) any
promissory notes issued by Borrowers pursuant to the last sentence of
subsection 10.1B(i) in connection with assignments of the Term Loan
Commitments or Term Loans of any Lenders, in each case substantially in
the form of Exhibit III-A annexed hereto.
"Title Company" means, Lawyers Title of Nevada, Inc. or an
Affiliate thereof and/or one or more other title insurance companies
reasonably satisfactory to Administrative Agent.
"Total Utilization of Revolving Loan Commitments" means, as at
any date of determination, the sum of (i) the aggregate principal
amount of all outstanding Revolving Loans (other than Revolving Loans
made for the purpose of reimbursing the applicable Issuing Lender for
any amount drawn under any Letter of Credit but not yet so applied)
plus (ii) the Letter of Credit Usage.
"Tranche A Take Out Commitment" means the commitment of
Permanent Mall Lender dated as of the date hereof to make the loan to
Mall Subsidiary in the maximum amount of $105,000,000 to take out the
Tranche A portion of the Interim Mall Loan or any other commitment to
make such a loan that replaces the commitment described above in
accordance with the Tri-Party Agreement.
"Tranche B Collateral" means amounts or securities deposited
by Adelson in an account subject to the security interest of the
Interim Mall Lender pursuant to the terms of the Tranche B Collateral
Security Agreement.
"Tranche B Collateral Security Agreement" means that certain
Collateral Account Agreement dated as of November 14, 1997 between
Adelson and Interim Mall Lender.
45
"Tranche B Take-Out Loan" means the loan to Mall Subsidiary
which is funded pursuant to the Tranche B Take Out Commitment.
"Tranche B Take-Out Commitment" means the commitment of
Adelson contained in the Tri-Party Agreement to enter into and fund a
loan to Mall Subsidiary in a maximum amount of $35,000,000 to take out
the Tranche B portion of the Interim Mall Loan or any other commitment
to make such a loan that replaces the commitment of Adelson in
accordance with the Tri-Party Agreement.
"Transaction Costs" means the fees, costs and expenses payable
by Borrowers on or before the Closing Date in connection with the
transactions contemplated by the Loan Documents and the Project
Documents.
"Treadway Agreement" means that certain Time and Materials
Agreement dated February 10, 1997 by and between LVSI and Treadway
Industries of Phoenix, Inc., an Arizona corporation.
"Tri-Party Agreement" means the agreement between Venetian,
LVSI, Adelson, Mall Construction Subsidiary, the Mall Subsidiary,
Interim Mall Lender and Permanent Mall Lender.
"True-up Amount" means, in respect of a particular taxable
year, an amount determined by the Tax Amounts CPA equal to the
difference between (i) the aggregated Permitted Quarterly Tax
Distributions actually distributed in respect of such taxable year,
without taking into account any adjustments to such Permitted Quarterly
Tax Distributions made with respect to any other taxable year
(including any adjustment to take into account a True-up Amount for the
immediately preceding taxable year) and (ii) the Tax Amount permitted
to be distributed in respect of such year as determined by reference to
LVSI's Internal Revenue Service Form 1120-S or Venetian's IRS Form 1065
filed for such year; provided, however, that if there is an audit or
other adjustment with respect to a return filed by the LVSI or Venetian
(including a filing of an amended return), upon a final determination
or resolution of such audit or other adjustment, the Tax Amounts CPA
shall redetermine the True-up Amount for the relevant taxable year. The
amount equal to the excess, if any, of the amount described in clause
(i) above over the amount described in clause (ii) above shall be
referred to as the "True-up Amount due to LVSI" or the "True-up Amount
due to Venetian", as the case may be and the excess, if any, of the
amount described in clause (ii) over the amount described in clause (i)
shall be referred to as the "True-up Amount due to the shareholders or
members."
"True-up Determination Date" means the date on which the Tax
Amounts CPA delivers a statement to the Administrative Agent indicating
the True-up Amount; provided, however, that the True-up Determination
Date shall not be later than 30 days after the occurrence of an event
requiring the determination of the True-up Amount (including, the
filing of the federal and state tax returns or the final determination
or resolution of an audit or other adjustment, as the case may be).
46
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.
"Venetian" means Venetian Casino Resort, LLC, a Nevada limited
liability company.
"Work Continuation Agreement" has the meaning set forth in the
Disbursement Agreement.
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
Agreement.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Borrowers to Lenders pursuant to clauses (i), (ii),
(iii), (iv) and (xiii) of subsection 6.1 shall be prepared in accordance with
GAAP as in effect at the time of such preparation (and delivered together with
the reconciliation statements provided for in subsection 6.1(v)). Calculations
in connection with the definitions, covenants and other provisions of this
Agreement shall utilize accounting principles and policies in conformity with
those used to prepare the financial statements referred to in subsection 5.3.
1.3 Other Definitional Provisions and Rules of Construction.
A. Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
B. References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided.
C. The use in any of the Loan Documents of the word "include" or
"including", when following any general statement, term or matter, shall not be
construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.
D. Any reference to any agreement or instrument shall be deemed to
include a reference to such agreement or instrument as assigned, amended,
supplemented or otherwise modified from time to time in accordance with
subsection 6.13 and, while applicable, the Disbursement Agreement.
47
E. Any reference to a term defined in the Disbursement Agreement shall
have the meaning assigned to it in the Disbursement Agreement whether or not
such agreement remains in effect.
Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 Commitments; Making of Loans; the Register; Notes.
A. Commitments. Subject to the terms and conditions of this Agreement
and in reliance upon the representations and warranties of Borrowers herein set
forth and, while in effect, the representations and warranties set forth in the
Disbursement Agreement, each Lender hereby severally agrees to make the Loans
described in this subsection 2.1.A.
(i) Term Loans. Each Lender severally agrees to lend to the
Borrowers from time to time during the period from the Closing Date to
and including the Term Loan Commitment Termination Date an aggregate
amount not exceeding its Pro Rata Share of the aggregate amount of the
Commitments to be used for the purposes identified in subsec tion 2.5A.
The amount of each Lender's Commitment is set forth opposite its name
on Schedule 2.1 annexed hereto and the aggregate amount of the
Commitments is $150,000,000; provided that the Commitments of Lenders
shall be adjusted to give effect to any assignments of the Loan
Commitments pursuant to subsection 10.1B; and provided, further that
the amount of the Commitments shall be reduced from time to time by the
amount of any reductions thereto made pursuant to subsections 2.4B(ii)
and 2.4B(iii). Each Lender's Commitments shall expire immediately and
without further action on the Term Loan Commitment Termination Date and
no Term Loans shall be made after such date. Amounts borrowed under
this subsection 2.1A and subsequently repaid or prepaid may not be
reborrowed.
(ii) Revolving Loans. Each Lender severally agrees, subject to
the limitations set forth below with respect to the maximum amount of
Revolving Loans permitted to be outstanding from time to time, to lend
to Borrowers from time to time during the period from the Closing Date
to but excluding the Revolving Loan Commitment Termination Date an
aggregate amount not exceeding its Pro Rata Share of the aggregate
amount of the Revolving Loan Commitments to be used for the purposes
identified in subsection 2.5B. The original amount of each Lender's
Revolving Loan Commitment is set forth opposite its name on Schedule
2.1 annexed hereto and the aggregate original amount of the Revolv ing
Loan Commitments is $20,000,000; provided that the Revolving Loan
Commitments of Lenders shall be adjusted to give effect to any
assignments of the Revolving Loan Commitments pursuant to subsection
10.1B; and provided, further that the amount of the Revolving Loan
Commitments shall be reduced from time to time by the amount of any
reductions thereto made pursuant to subsections 2.4B(ii) and 2.4B(iii);
provided still further that, in the event Borrowers request that a
Lender or Lenders (or other Eligible Assignee reasonably acceptable to
Administrative Agent, who desires to become a Lender) increase their
Revolving Loan Commitments, such Lender or Lenders
48
may, in their sole and absolute discretion, increase the Revolving Loan
Commitments as requested by Borrowers (the "Increased Commitments") by
giving written notice to Borrowers and Administrative Agent, so long as
the aggregate amount of all such increases in the Revolving Loan
Commitments pursuant to this proviso does not exceed $20,000,000. Each
Lender's Revolving Loan Commitment shall expire on the Revolving Loan
Commitment Termination Date and all Revolving Loans and all other
amounts owed hereunder with respect to the Revolving Loans and the
Revolving Loan Commitments shall be paid in full no later than that
date. Amounts borrowed under this subsection 2.1A(ii) may be repaid and
reborrowed to but excluding the Revolving Loan Commitment Termination
Date.
Anything contained in this Agreement to the contrary
notwithstanding, the Revolving Loans and the Revolving Loan Commitments
shall be subject to the following limitations in the amounts and during
the periods indicated:
(a) in no event shall the Total Utilization of Revolving
Loan Commitments at any time exceed the Revolving Loan
Commitments then in effect; and
(b) in no event shall the Total Utilization of the
Revolving Loan Commitments exceed at any time prior to
the Revolving Loan Availability Date an amount equal to
$15,000,000 reduced by the amount of any Revolving
Loans repaid or Letters of Credit cancelled prior to
the Revolving Loan Availability Date.
B. Borrowing Mechanics. Term Loans or Revolving Loans made on any
Funding Date (other than Revolving Loans made pursuant to subsection 3.3B for
the purpose of reimbursing any Issuing Lender for the amount of a drawing under
a Letter of Credit issued by it), shall be in an aggregate minimum amount of (y)
$3,000,000 and integral multiples of $1,000,000 in excess of that amount in the
case of Term Loans and (z) $1,000,000 and integral multiples of $500,000 in the
case of Revolving Loans.
Whenever Borrowers desire that Lenders make Term Loans they shall
deliver, in accordance with and pursuant to the terms of subsection 2.5 of the
Disbursement Agreement such Advance Requests and Notices of Funding Requests in
the form, at the times and as required thereunder.
Whenever Borrowers desire that Lenders make Revolving Loans they shall
deliver to Administrative Agent a Notice of Borrowing no later than 10:00 A.M.
(New York City time) at least three Business Days in advance of the proposed
Funding Date (in the case of a Eurodollar Rate Loan) or at least one Business
Day in advance of the proposed Funding Date (in the case of a Base Rate Loan).
The Notice of Borrowing shall specify (i) the proposed Funding Date (which shall
be a Business Day), (ii) the amount of Revolving Loans requested, (iii) whether
such Revolving Loans shall be Base Rate Loan or Eurodollar Rate Loan, and (iv)
in the case of any Loans requested to be made as Eurodollar Rate Loans, the
initial Interest Period requested therefor. Borrowers shall notify
Administrative Agent and Disbursement Agent prior
49
to the funding of any Revolving Loans in the event that any of the matters to
which Borrowers are required to certify in the applicable Notice of Borrowing is
no longer true and correct as of the applicable Funding Date, and the acceptance
by Borrowers of the proceeds of any Revolving Loans shall constitute a
re-certification by Borrowers, as of the applicable Funding Date, as to the
matters to which Borrowers are required to certify in the applicable Notice of
Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Borrowing or Advance Request for a Eurodollar Rate Loan shall be
irrevocable on and after the related Interest Rate Determination Date, and
Borrowers shall be bound to make a borrowing in accordance therewith; provided
that, in the event a Stop Funding Notice ("Stop Funding Notice"), is delivered
with respect to any proposed Term Loans after delivery of a Notice of Funding
Request with respect thereto, Administrative Agent shall promptly notify Lenders
thereof and such Term Loans shall not be made, provided further that Borrower
shall be obligated to make any payments due pursuant to subsection 2.6D as a
result thereof.
C. Disbursement of Funds. All Loans under this Agreement shall be made
by Lenders simultaneously and proportionately to their respective Pro Rata
Shares, it being under stood that no Lender shall be responsible for any default
by any other Lender in that other Lender's obligation to make a Loan requested
hereunder nor shall the Commitment of any Lender to make the particular type of
Loan requested be increased or decreased as a result of a default by any other
Lender in that other Lender's obligation to make a Loan requested hereunder.
Promptly after receipt by Administrative Agent of (x) in the case of Term Loans,
an Advance Confirmation Notice from the Disbursement Agent in accordance with
the provisions of section 2.5 of the Disbursement Agreement, and (y) in the case
of Revolving Loans, a Notice of Borrowing pursuant to subsection 2.1B,
Administrative Agent shall notify each Lender of the proposed borrowing. Each
Lender shall make the amount of its Loan available to Administrative Agent not
later than 12:00 Noon (New York City time) on the applicable Funding Date, in
same day funds in Dollars, at the Funding and Payment Office. Except as provided
in subsection 3.3B with respect to Revolving Loans used to reimburse any Issuing
Lender for the amount of a drawing under a Letter of Credit issued by it, upon
satisfaction or waiver of the conditions precedent specified in subsections 4.1
(in the case of Loans made on the Closing Date) and 4.2 (in the case of all
Loans), Administrative Agent shall make the aggregate amount of the Loans
received by Administrative Agent from Lenders available (x) in the case of
Revolving Loans prior to the Revolving Loan Availability Date or Term Loans, to
the Disbursement Agent in the Collection Account no later than 3.00 p.m. (New
York City time) on the applicable Funding Date who shall then make the proceeds
of such Loans available to Borrowers in accordance with and upon fulfillment of
conditions set forth in the Disbursement Agreement and in so doing Loans in such
amounts shall be deemed made to Borrowers hereunder and (y) in the case of
Revolving Loans made on or after the Revolving Loan Availability Date by
crediting the account of Borrowers at the Funding and Payment Office in the
amount of such Loans.
In the event that the proceeds of any Term Loans are not disbursed by
the Disbursement Agent on the applicable Funding Date, the proceeds of such
Loans shall be held by the Disbursement Agent and/or returned to the
Administrative Agent in accordance with the provisions set forth in the
Disbursement Agreement; provided, however that the proceeds of such
50
Loans shall continue to bear interest and be repayable in accordance with the
provisions set forth in this Agreement. In the event that Administrative Agent
receives a Stop Funding Notice from the Disbursement Agent in accordance with
and pursuant to the terms of the Disbursement Agreement none of the
Administrative Agent and the Lenders shall have any obligation to advance the
Loans.
Unless Administrative Agent shall have been notified by any Lender
prior to the Funding Date for any Loans that such Lender does not intend to make
available to Administrative Agent the amount of such Lender's Loan requested on
such Funding Date, Administrative Agent may assume that such Lender has made
such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Borrowers a corresponding amount on such Funding Date. If such
corre sponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the customary rate set by Administrative Agent for the
correction of errors among banks for three Business Days and thereafter at the
Base Rate. If such Lender does not pay such corresponding amount forthwith upon
Administrative Agent's demand therefor, Administrative Agent shall promptly
notify Borrowers and Borrowers shall immediately pay such corresponding amount
to Administrative Agent together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Administrative Agent, at the
rate payable under this Agreement for Base Rate Loans. Nothing in this
subsection 2.1C shall be deemed to relieve any Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that Borrowers may
have against any Lender as a result of any default by such Lender hereunder.
D. The Register.
(i) Administrative Agent shall maintain, at its address
referred to in subsection 10.9, a register for the recordation of the
names and addresses of Lenders and the Commitments and Loans of each
Lender from time to time (the "Register"). The Register shall be
available for inspection by Borrowers or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(ii) Administrative Agent shall record in the Register the
Commitment and the Loans from time to time of each Lender, and each
repayment or prepayment in respect of the principal amount of the Loans
of each Lender. Any such recordation shall be conclusive and binding on
Borrowers and each Lender, absent manifest error; provided that failure
to make any such recordation, or any error in such recordation, shall
not affect any Lender's Commitments or Borrowers' Obligations in
respect of any applicable Loans.
(iii) Each Lender shall record on its internal records
(including the Notes held by such Lender) the amount of each Loan made
by it and each payment in respect thereof. Any such recordation shall
be conclusive and binding on Borrowers, absent
51
manifest error; provided that failure to make any such recordation, or
any error in such recordation, shall not affect any Lender's
Commitments or Obligations in respect of any applicable Loans; and
provided, further that in the event of any inconsistency between the
Register and any Lender's records, the recordations in the Register
shall govern.
(iv) Administrative Agent and Lenders shall deem and treat the
Persons listed as Lenders in the Register as the holders and owners of
the corresponding Commitments and Loans listed therein for all purposes
hereof, and no assignment or transfer of any such Commitment or Loan
shall be effective, in each case unless and until an Assignment
Agreement effecting the assignment or transfer thereof shall have been
accepted by Administrative Agent and recorded in the Register as
provided in subsection 10.1B(ii). Prior to such recordation, all
amounts owed with respect to the applicable Commitment or Loan shall be
owed to the Lender listed in the Register as the owner thereof, and any
request, authority or consent of any Person who, at the time of making
such request or giving such authority or consent, is listed in the
Register as a Lender shall be conclusive and binding on any subsequent
holder, assignee or transferee of the corresponding Commitments or
Loans.
E. Notes. Borrowers shall execute and deliver on the Closing Date to
each Lender (or to Administrative Agent for that Lender) (i) a Term Note
substantially in the form of Exhibit III-A annexed hereto to evidence that
Lender's Term Loans, in the principal amount of that Lender's Term Loan
Commitment and with other appropriate insertions and (ii) a Revolving Note
substantially in the form of Exhibit III-B annexed hereto to evidence that
Lender's Revolving Loans, in the principal amount of that Lender's Revolving
Loan Commitment and with other appropriate insertions.
Administrative Agent may deem and treat the payee of any Note as the
owner thereof for all purposes hereof unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been accepted by
Administrative Agent as provided in subsection 10.1B(ii). Any request, authority
or consent of any person or entity who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, assignee or transferee of that Note or of
any Note or Notes issued in exchange therefor.
2.2 Interest on the Loans.
A. Rate of Interest. Subject to the provisions of subsections 2.6 and
2.7, each Loan shall bear interest on the unpaid principal amount thereof from
the date made through maturity (whether by acceleration or otherwise) at a rate
determined by reference to the Base Rate or the Adjusted Eurodollar Rate. The
applicable basis for determining the rate of interest with respect to any Loan
shall be selected by Borrowers initially at the time a Notice of Borrowing or
Notice of Funding Request is given with respect to such Loan pursuant to
subsection 2.1B, and the basis for determining the interest rate with respect to
any Loan may be changed from time to time pursuant to subsection 2.2D. If on any
day a Loan is outstanding with respect to which notice has not been delivered to
Administrative Agent in accordance with the terms of this Agreement
52
specifying the applicable basis for determining the rate of interest, then for
that day that Loan shall bear interest determined by reference to the Base Rate.
Subject to the provisions of subsections 2.2E and 2.7, the
Loans shall bear interest through maturity as follows:
(a) if a Base Rate Loan, then at the sum of the Base
Rate plus the Applicable Margin; or
(b) if a Eurodollar Rate Loan, then at the sum of the
Adjusted Eurodollar Rate plus the Applicable Margin.
Notwithstanding anything set forth in the Agreement to the contrary,
Borrowers may not select that any Loans bear interest as Eurodollar Rate Loans
(or convert any Base Rate Loans to Eurodollar Rate Loans) until the earlier of
(i) 60 days after the Closing Date and (ii) notice in writing from
Administrative Agent that syndication has been successfully completed.
B. Interest Periods. In connection with each Eurodollar Rate Loan,
Borrowers may, pursuant to the applicable Notice of Funding Request, Notice of
Borrowing or Notice of Conversion/Continuation, as the case may be, select an
interest period (each an "Interest Period") to be applicable to such Loan, which
Interest Period shall be, at Borrowers' option, either a one, two, three or six
month period; provided that:
(i) the initial Interest Period for any Eurodollar Rate Loan
shall commence on the Funding Date in respect of such Loan, in the case
of a Loan initially made as a Eurodollar Rate Loan, or on the date
specified in the applicable Notice of Conversion/Continuation, in the
case of a Loan converted to a Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate Loan continued as such pursuant to a
Notice of Conversion/Continuation, each successive Interest Period
shall commence on the day on which the next preceding Interest Period
expires;
(iii) if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided that, if any Interest Period
would otherwise expire on a day that is not a Business Day but is a day
of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
(iv) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (v) of this subsection 2.2B, end on
the last Business Day of a calendar month;
53
(v) no Interest Period with respect to any portion of the
Loans shall extend beyond the sixth anniversary of the Closing Date;
(vi) no Interest Period shall extend beyond a date on which
Borrowers are required to make a scheduled payment of principal of the
Loans or a permanent reduction of the Revolving Loan Commitments is
scheduled to occur unless the sum of (a) the aggregate principal amount
of Loans that are Base Rate Loans plus (b) the aggregate principal
amount of Loans that are Eurodollar Rate Loans with Interest Periods
expiring on or before such date plus (c) the excess of the Commitments
then in effect over the aggregate principal amount of the Loans then
outstanding equals or exceeds the principal amount required to be paid
on the Loans or the permanent reduction of the Commitments that is
scheduled to occur, on such date;
(vii) there shall be no more than 8 Interest Periods
outstanding at any time; and
(viii) in the event Borrowers fail to specify an Interest
Period for any Eurodollar Rate Loan in the applicable Notice of Funding
Request, Notice of Borrowing or Notice of Conversion/Continuation,
Borrowers shall be deemed to have selected an Interest Period of one
month.
C. Interest Payments. Subject to the provisions of subsection 2.2E,
interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity).
D. Conversion or Continuation. Subject to the provisions of subsection
2.6, Borrowers shall have the option (i) to convert at any time all or any part
of its outstanding Loans equal to $3,000,000 and integral multiples of
$1,000,000 in excess of that amount from Loans bearing interest at a rate
determined by reference to one basis to Loans bearing interest at a rate
determined by reference to an alternative basis or (ii) upon the expiration of
any Interest Period applicable to a Eurodollar Rate Loan, to continue all or any
portion of such Loan equal to $3,000,000 and integral multiples of $1,000,000 in
excess of that amount as a Eurodollar Rate Loan; provided, however, that a
Eurodollar Rate Loan may only be converted into a Base Rate Loan on the
expiration date of an Interest Period applicable thereto.
Borrowers shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 10:00 A.M. (New York City time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). A Notice of Conversion/Continuation
shall specify (i) the proposed conversion/continuation date (which shall be a
Business Day), (ii) the amount and type of the Loan to be converted/continued,
(iii) the nature of the proposed conver sion/continuation, (iv) in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan, the requested
Interest Period, and (v) in the case of a conversion to, or a continuation of, a
Eurodollar Rate Loan, that no Potential Event of Default or Event of
54
Default has occurred and is continuing. In lieu of delivering the
above-described Notice of Conversion/Continuation, Borrowers may give
Administrative Agent telephonic notice by the required time of any proposed
conversion/continuation under this subsection 2.2D; provided that such notice
shall be promptly confirmed in writing by delivery of a Notice of
Conversion/Continuation to Administrative Agent on or before the proposed
conversion/continuation date. Upon receipt of written or telephonic notice of
any proposed conversion/continuation under this subsection 2.2D, Administrative
Agent shall promptly transmit such notice by telefacsimile or telephone to each
Lender.
Neither Administrative Agent nor any Lender shall incur any liability
to Borrowers in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Borrowers or
for otherwise acting in good faith under this subsection 2.2D, and upon
conversion or continuation of the applicable basis for determining the interest
rate with respect to any Loans in accordance with this Agreement pursuant to any
such telephonic notice Borrowers shall have effected a conversion or
continuation, as the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Conversion/Continuation for conversion to, or continuation of, a
Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable
on and after the related Interest Rate Determination Date, and Borrowers shall
be bound to effect a conversion or continuation in accordance there with.
E. Default Rate. Upon the occurrence and during the continuation of any
Event of Default, the outstanding principal amount of all Loans and, to the
extent permitted by applicable law, any interest payments thereon not paid when
due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable upon
demand at a rate that is 2% per annum in excess of the interest rate otherwise
payable under this Agreement with respect to the applicable Loans (or, in the
case of any such fees and other amounts, at a rate which is 2% per annum in
excess of the interest rate otherwise payable under this Agreement for Base Rate
Loans); provided that, in the case of Eurodollar Rate Loans, upon the expiration
of the Interest Period in effect at the time any such increase in interest rate
is effective such Eurodollar Rate Loans shall thereupon become Base Rate Loans
and shall thereafter bear interest payable upon demand at a rate which is 2% per
annum in excess of the interest rate otherwise payable under this Agreement for
Base Rate Loans. Payment or acceptance of the increased rates of interest
provided for in this subsection 2.2E is not a permitted alternative to timely
payment and shall not constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of Administrative Agent or any Lender.
F. Computation of Interest. Interest on the Loans shall be computed on
the basis of (i) a 360-day year, in the case of Eurodollar Rate Loans and (ii) a
365-day year, in respect of Base Rate Loans, in each case for the actual number
of days elapsed in the period during which it accrues. In computing interest on
any Loan, the date of the making of such Loan or the first day of an Interest
Period applicable to such Loan or, with respect to a Base Rate Loan
55
being converted from a Eurodollar Rate Loan, the date of conversion of such
Eurodollar Rate Loan to such Base Rate Loan, as the case may be, shall be
included, and the date of payment of such Loan or the expiration date of an
Interest Period applicable to such Loan or, with respect to a Base Rate Loan
being converted to a Eurodollar Rate Loan, the date of conversion of such Base
Rate Loan to such Eurodollar Rate Loan, as the case may be, shall be excluded;
provided that if a Loan is repaid on the same day on which it is made, one day's
interest shall be paid on that Loan.
2.3 Fees.
A. Commitment Fees. Borrowers agree to pay to Administrative Agent, for
distribution to each Lender in proportion to that Lender's Pro Rata Share,
commitment fees for the period from and including the Closing Date to and
excluding the Term Loan Commitment Termination Date equal to the average of the
daily excess of the Term Loan Commitments, as then in effect, over the sum of
the aggregate principal amount of Term Loans outstanding multiplied by half of
1% per annum, such commitment fees to be calculated on the basis of a 360-day
year and the actual number of days elapsed and to be payable quarterly in
arrears on March 31, June 30, September 30 and December 31 of each year,
commencing on the first such date to occur after the Closing Date, and ending on
the Term Loan Commitment Termination Date. In addition, Borrowers agree to pay
to Administrative Agent, for distribution to each Lender in proportion to that
Lender's Pro Rata Share, commitment fees for the period from and including the
Closing Date to and excluding the Revolving Loan Commitment Termination Date
equal to the average of the daily excess of the Revolving Loan Commitments over
the sum of (i) the aggregate principal amount of outstanding Revolving Loans but
not the Letter of Credit Usage plus (ii) the Letter of Credit Usage multiplied
by half of 1% per annum, such commitment fees to be calculated on the basis of a
360-day year and the actual number of days elapsed and to be payable quarterly
in arrears on March 31, June 30, September 30 and December 31 of each year,
commencing on the first such date to occur after the Closing Date, and on the
Revolving Loan Commitment Termination Date.
B. Annual Administrative Fee. Borrowers agree to pay to Administrative
Agent an annual administrative fee in the amount and at the times separately
agreed to by the Administrative Agent and the Borrower.
C. Other Fees. Borrowers agree to pay to Syndication Agent, Arranger
and Administrative Agent such other fees in the amounts and at the times
separately agreed upon between Borrowers and Syndication Agent, Arranger and
Administrative Agent.
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2.4 Repayments, Prepayments and Reductions in Commitments; General
Provisions Regarding Payments.
A. Scheduled Payments of Term Loans.
Borrowers shall make principal payments on the Term Loans on
Amortization Payment Dates in amounts equal to (i) in the case of the
first Amortization Payment Date, the sum of the percentages for all
Amortization Dates occurring on or prior to such Amortization Payment
Date (provided that if the first Amortization Date is less than 90 days
from the Amortization Commencement Date, the percentage included in
such sum in respect of the first Amortization Date shall be 3.75%
multiplied by a fraction the numerator of which is the number of days
elapsed since the Amortization Commencement Date and the denominator of
which is 90), multiplied by the principal amount of the Term Loans
outstanding on the Term Loan Commitment Termination Date and (ii) in
the case of each Amortization Payment Date thereafter, an amount equal
to the percentage of the principal amount of the Term Loans outstanding
on the Term Loan Commitment Termination Date multiplied by the
percentage applicable to the Amortization Date which occurs on such
Amortization Payment Date:
===================================================== =========================
Scheduled
Date Repayment
of Loans
===================================================== =========================
First Amortization Date 3.75%
Second Amortization Date 3.75%
Third Amortization Date 3.75%
Fourth Amortization Date 3.75%
Fifth Amortization Date 5.00%
Sixth Amortization Date 5.00%
Seventh Amortization Date 5.00%
Eighth Amortization Date 5.00%
Ninth Amortization Date 7.50%
Tenth Amortization Date 7.50%
Eleventh Amortization Date 7.50%
Twelfth Amortization Date 7.50%
Thirteenth Amortization Date 8.75%
Fourteenth Amortization Date 8.75%
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Fifteenth Amortization Date 8.75%
Sixteenth Amortization Date All remaining
outstanding
amounts
===================================================== =========================
; provided that the scheduled installments of principal of the Loans
set forth above shall be reduced in connection with any voluntary or
mandatory prepayments of the Loans in accordance with subsection
2.4B(iii); and provided, further that the Loans and all other amounts
owed hereunder with respect to the Loans shall be paid in full no later
than the sixth anniversary of the Closing Date, and the final
installment payable by Borrowers in respect of the Loans on such date
shall be in an amount, if such amount is different from that specified
above, sufficient to repay all amounts owing by Borrowers under this
Agreement with respect to the Loans. For the avoidance of doubt, it is
intended that should the Amortization Commencement Date be later than
90 days after the second anniversary of the Closing Date, the number of
Amortization Dates shall be reduced to the number occurring prior to
the sixth anniversary of the Closing Date and the final amortization
payment shall be increased so that all then outstanding principal on
the Term Loans is repaid on or before the sixth anniversary of the
Closing Date.
B. Prepayments and Unscheduled Reductions in Commitments.
(i) Voluntary Prepayments. Borrowers may, upon not less than
one Business Day's prior written or telephonic notice, in the case of
Base Rate Loans, and three Business Days' prior written or telephonic
notice, in the case of Eurodollar Rate Loans, in each case given to
Administrative Agent by 12:00 Noon (New York City time) on the date
required and, if given by telephone, promptly confirmed in writing to
Administrative Agent (which original written or telephonic notice
Administrative Agent will promptly transmit by telefacsimile or
telephone to each Lender), at any time and from time to time prepay any
Loans on any Business Day in whole or in part in an aggregate minimum
amount of $1,000,000 and integral multiples of $500,000 in excess of
that amount provided, however, that with respect to any Eurodollar Rate
Loan not prepaid on the expiration of the Interest Period applicable
thereto Borrowers shall pay any amount payable pursuant to subsection
2.6D. Notice of prepayment having been given as aforesaid, the
principal amount of the Loans specified in such notice shall become due
and payable on the prepayment date specified therein. Any such
voluntary prepayment shall be applied as specified in subsection
2.4B(iii).
(ii) Voluntary Reductions of Commitments. Borrowers may, upon
not less than three Business Days' prior written or telephonic notice
confirmed in writing to Administrative Agent (which original written or
telephonic notice Administrative Agent
58
will promptly transmit by telefacsimile or telephone to each Lender),
at any time and from time to time terminate in whole or permanently
reduce in part, without premium or penalty, the Revolving Loan
Commitments in an amount up to the amount by which the Revolving Loan
Commitments exceed the Total Utilization of Revolving Loan Commitments
at the time of such proposed termination or reduction; provided that
any such partial reduction of the Revolving Loan Commitments shall be
in an aggregate minimum amount of $1,000,000 and integral multiples of
$500,000 in excess of that amount. Borrowers' notice to Administrative
Agent shall designate the date (which shall be a Business Day) of such
termination or reduction and the amount of any partial reduction, and
such termination or reduction of the Revolving Loan Commitments shall
be effective on the date specified in Borrowers' notice and shall
reduce the Revolving Loan Commitment of each Lender proportionately to
its Pro Rata Share. Any such voluntary reduction of the Revolving Loan
Commitments shall be applied as specified in subsection 2.4B(iv).
(iii) Mandatory Prepayments and Mandatory Reductions of
Commitments. The Loans shall be prepaid and/or the Commitments shall be
permanently reduced in the amounts and under the circumstances set
forth below, all such prepayments and/or reductions to be applied as
set forth below or as more specifically provided in subsection
2.4B(iv):
(a) Prepayments and Reductions From Net Asset Sale
Proceeds. No later than the first Business Day following the
date of receipt by Borrowers or any of their Subsidiaries of
any Net Asset Sale Proceeds in respect of any Asset Sale
(other than Net Asset Sale Proceeds in respect of the sale of
any obsolete worn out or surplus assets or assets no longer
used or useful in the business of the Project or of
construction equipment having a fair market value not in
excess of $4,000,000 prior to Completion or during the first
year following Completion, but only in each case to the extent
reinvested in the business of Borrowers or such Subsidiary
within 180 days of receipt), Borrowers shall prepay the Loans
and/or the Commitments shall be permanently reduced in an
aggregate amount equal to such Net Asset Sale Proceeds.
(b) Prepayments and Reductions from Net Loss Proceeds
and Liquidated Damages. No later than the second Business Day
on which Loss Proceeds or Liquidated Damages are required to
be applied to prepayment of Loans under subsection 5.20 of the
Disbursement Agreement (if applicable) or Article X, Sections
5, 12(d) and 13, Article XI, Section 1 or Article XII,
sections 8-9 of the Cooperation Agreement (as applicable),
Borrowers shall prepay the Term Loans and/or the Commitments
shall be permanently reduced in an amount equal to the Loss
Proceeds or Liquidated Damages, as applicable, available for
such application under subsection 5.20 of the Disbursement
Agreement, Article X, Sections 5, 12(d) and 13, Article XI
Section 1 and Article XII, Sections 8-9 of the Cooperation
Agreement (as applicable) but not exceeding that
59
portion thereof determined to be payable to Lenders in
accordance with Section 4.5 of the Intercreditor Agreement.
(c) Prepayments and Reductions Due to Reversion of
Surplus Assets of Pension Plans. On the first Business Day
following the date of return to Borrowers or any of their
Subsidiaries of any surplus assets of any pension plan of
Borrowers or any for their Subsidiaries, Borrowers shall
prepay the Loans and/or the Commitments shall be permanently
reduced in an aggregate amount (such amount being the "Net
Pension Proceeds") equal to 100% of such returned surplus
assets, net of transaction costs and expenses incurred in
obtaining such return, including incremental taxes payable as
a result thereof.
(d) Prepayments and Reductions Due to Issuance of
Debt or Equity. On the first Business Day following the date
of receipt by Borrowers or any of their Subsidiaries, of the
proceeds (including Cash, real property or other property)
(any such proceeds, net of underwriting discounts and
commissions and other reasonable costs and expenses associated
therewith, including reasonable legal fees and expenses, being
"Net Proceeds") from the issuance of any debt or equity of
Borrowers or any of their Subsidiaries (other than any debt
expressly permitted under subsection 7.1 and any equity
issuances to employees of Borrowers upon exercise of options
issued pursuant to employment agreements and option plans as
in effect on the Closing Date), Borrowers shall prepay the
Loans and/or the Commitments shall be permanently reduced in
an aggregate amount equal to (i) in the case of any equity
issuance, 75% of such Net Proceeds and (ii) in the case of any
debt, 100% of such Net Proceeds. Notwithstanding the
foregoing, (y) Borrowers shall not be required to prepay the
Loans and/or reduce Commit ments from any proceeds (including
Cash, real property or other property), of equity
contributions from, or equity issuances to, Adelson or any of
his Affiliates (other than the Subsidiaries) to LVSI or
Venetian that are used for the expansion or improvement of the
Project or to pay operating costs with respect thereto and (z)
any portion of the Net Proceeds of equity issuances not
required to be applied to prepay the Loans and/or to reduce
the Commitments shall, in any event, be used to make
contributions to Excluded Subsidiaries or used for the
expansion or improvement of the Project or to pay operating
costs with respect thereto.
(e) Prepayments and Reductions from Consolidated
Excess Cash Flow. In the event that there shall be
Consolidated Excess Cash Flow for (y) the period from the
Opening Date through the end of the first Fiscal Year
occurring after the Completion Date or (z) any Fiscal Year
thereafter, Borrowers shall, no later than 90 days after the
end of such period or Fiscal Year, prepay the Term Loans
and/or the Commitments shall be permanently reduced in an
aggregate amount equal to (1) if the Leverage Ratio as at the
end of such period or Fiscal Year is greater than 2.5:1.00,
75% of such Consolidated Excess Cash Flow, and (2) if
60
the Leverage Ratio as at the end of such period or Fiscal Year
is less than or equal to 2.5:1.00, 50% of such Consolidated
Excess Cash Flow.
(f) Prepayments and Reductions from Mortgage Notes
Proceeds Account. No later than the first Business Day
following the date on which funds in the Mortgage Notes
Proceeds Account are to be transferred to Administrative Agent
or released to the Borrowers under Section 2.12 of the
Disbursement Agreement, Borrowers shall prepay the Term Loans
and/or the Commitments shall be permanently reduced in an
aggregate amount equal to the amount on deposit on such date
in the Mortgage Notes Proceeds Account in excess of
$50,000,000.
(g) Prepayments from Certain Distributions from Mall
Subsidiary. On the date of receipt by Borrowers or any of
their Subsidiaries of any dividends or distributions in Cash
or Cash Equivalents from Mall Subsidiary, Mall Direct Holdings
or Mall Manager following the issuance of any debt or equity
of Mall Subsidiary, Mall Direct Holdings or Mall Manager
(excluding any such proceeds to the extent used to repay the
Interim Mall Facility and excluding any dividends or
distributions representing the proceeds of any such debt
issuance to the extent made 60 days or more after such debt
issuance), Borrowers shall prepay the Loans and/or the
Commitments shall be permanently reduced in an amount equal to
100% of such dividends or distributions but not to exceed (1)
with respect to any debt issuance, 50% of the Net Proceeds of
such issuance (excluding any such proceeds to the extent used
to repay the Interim Mall Facility) and (2) with respect to
any equity issuance, 100% of the Net Proceeds of such issuance
(excluding any such proceeds to the extent used to repay the
Interim Mall Facility). Notwithstanding the foregoing, any
dividends or distributions from Mall Subsidiary, Mall Direct
Holdings or Mall Manager which are applied by Borrowers within
15 days of receipt to fund Permitted Quarterly Tax
Distributions need not be applied to prepay the Loans or to
reduce Commitments, but such exclusion shall not reduce the
amounts otherwise required to be applied to prepay Loans
and/or reduce Commitments as provided above.
(h) Prepayments From Funds Returned to Administrative
Agent. To the extent no other provision of this subsection
2.4B(iii) would otherwise apply, no later than the Business
Day following the date on which funds representing the
proceeds of Loans are returned or distributed to
Administrative Agent on behalf of Lenders under Section 2.11
or 2.12 of the Disbursement Agreement, Administra tive Agent
shall apply such funds to prepay the Loans and/or the
Commitment shall be permanently reduced in an amount equal to
the amount of funds so returned or distributed.
(i) Other Prepayments. To the extent no other
provision of this subsection 2.4B(iii) would apply, if any
funds would be required to be used to redeem and/or prepay the
Mortgage Notes and/or the Subordinated Notes (other
61
than funds from the Mortgage Notes Proceeds Account) if not
otherwise used to repay the Loans, then no later than one
Business Day prior to the date on which Borrowers would
otherwise be required to use such funds to effect such
prepayment or redemption of the Mortgage Notes and/or
Subordinated Notes, Borrowers shall prepay the Loans and/or
the Commitments shall be permanently reduced in an amount
equal to the amount of funds which would otherwise be used to
redeem and/or prepay Mortgage Notes and/or Subordinated Notes.
(j) Calculations of Net Proceeds Amounts; Additional
Prepayments and Reductions Based on Subsequent Calculations.
Concurrently with any prepayment of the Loans and/or if
applicable the reduction of Commitments pursuant to
subsections 2.4B(iii)(a)-(i), Borrowers shall deliver to
Administrative Agent an Officers' Certificate demonstrating
the calculation of the amount (the "Net Proceeds Amount") of
the applicable Net Asset Sale Proceeds or Loss Proceeds or
Liquidated Damages, the applicable Net Pension Proceeds, Net
Proceeds (as such terms are defined in subsections
2.4B(iii)(c) and (d)), the applicable Consolidated Excess Cash
Flow, or the amount of the subsidiary distribution or other
amounts, as the case may be, that gave rise to such prepayment
and/or reduction. In the event that Borrowers shall
subsequently determine that the actual Net Proceeds Amount was
greater than the amount set forth in such Officers'
Certificate, Borrowers shall promptly make an additional
prepayment of the Term Loans (and/or, if applicable, the
Commitments shall be permanently reduced) in an amount equal
to the amount of such excess, and Borrowers shall concurrently
therewith deliver to Administrative Agent an Officers'
Certificate demonstrating the derivation of the additional Net
Proceeds Amount resulting in such excess.
(k) Prepayments Due to Reductions or Restrictions of
Revolving Loan Commitments. Borrowers shall from time to time
prepay the Revolving Loans to the extent necessary so that (1)
the Total Utilization of Revolving Loan Commit ments shall not
at any time exceed the Revolving Loan Commitments then in
effect and (2) to give effect to the limitations set forth in
clause (b) of the second paragraph of subsection 2.1A(ii).
(l) Reduction of Term Loan Commitments from Revenues
Used in Construction. The Term Loan Commitments shall be
permanently reduced by an amount equal to 75% of the amounts
released to or on behalf of Borrowers at their election from
the Pre-Completion Revenues Account to fund Project Costs with
such reduction effective the date of such release.
(m) Reduction of Revolving Loans from FF&E Facility
Proceeds. Borrowers shall from time to time repay Revolving
Loans the proceeds of which were used to fund deposits for, or
to acquire, equipment to the extent required under subsection
6.14.
62
(iv) Application of Prepayments and Unscheduled Reductions of
Revolving Loan Commitments.
(a) Application of Voluntary Prepayments by Type of
Loan and Order of Maturity. Any voluntary prepayments pursuant
to subsection 2.4B(i) shall be applied as specified by
Borrowers in the applicable notice of prepayment, provided
that in the event Borrowers fail to specify the Loans to which
any such prepayment shall be applied, such prepayment shall be
applied first to repay outstanding Revolving Loans to the full
extent thereof on a pro rata basis, second to repay out
standing Term Loans on a pro rata basis and third to
permanently reduce the Revolving Loan Commitments to the full
extent thereof.
(b) Application of Mandatory Prepayments by Type of
Loans. Any amount (the "Applied Amount") required to be
applied as a mandatory prepayment of the Term Loans and/or a
reduction of the Revolving Loan Commitments pursuant to
subsections 2.4B(iii)(a)-(j) shall be applied to first prepay
the Term Loans to the full extent thereof, second, to the
extent of any remaining portion of the Applied Amount, to
prepay the Revolving Loans to the full extent thereof and to
further permanently reduce the Revolving Loan Commitments by
the amount of such prepayment, and third, to the extent of any
remaining portion of the Applied Amount, to further
permanently reduce the Revolving Loan Commitments to the full
extent thereof. Any amount required to be applied as a
mandatory repayment of Revolving Loans pursuant to subsection
2.4B(iii)(m) shall be applied to prepay Revolving Loans.
(c) Application of Mandatory Prepayments of Term
Loans to the Scheduled Installments of Principal Thereof. Any
mandatory prepayments of the Term Loans pursuant to subsection
2.4B(iii)(a)-(d), (f), (g), (h), (i) or (j) shall be applied
to reduce the scheduled installments of principal of the Term
Loans set forth in subsection 2.4A, on a pro rata basis, and
any mandatory prepayments of the Term Loans pursuant to
subsection 2.4B(iii)(e) shall be applied to reduce the
scheduled installments of principal of the Loans set forth in
subsection 2.4A, in inverse order of maturity.
(d) Application of Prepayments to Base Rate Loans and
Eurodollar Rate Loans. Considering Loans being prepaid
separately, any prepayment thereof shall be applied first to
Base Rate Loans to the full extent thereof before application
to Eurodollar Rate Loans, in each case in a manner which
minimizes the amount of any payments required to be made by
Borrowers pursuant to subsection 2.6D.
C. General Provisions Regarding Payments.
(i) Manner and Time of Payment. All payments by Borrowers of principal,
interest, fees and other Obligations hereunder and under the Notes shall be made
in
63
Dollars in same day funds, without defense, setoff or counterclaim, free of any
restriction or condition, and delivered to Administrative Agent not later than
12:00 Noon (New York City time) on the date due at the Funding and Payment
Office for the account of Lenders; funds received by Administrative Agent after
that time on such due date shall be deemed to have been paid by Borrowers on the
next succeeding Business Day. Borrowers hereby authorize Administrative Agent to
charge their accounts with Administrative Agent in order to cause timely payment
to be made to Administrative Agent of all principal, interest, fees and expenses
due hereunder (subject to sufficient funds being available in its accounts for
that purpose).
(ii) Application of Payments to Principal and Interest. All payments in
respect of the principal amount of any Loan shall include payment of accrued
interest on the principal amount being repaid or prepaid, and all such payments
shall be applied to the payment of interest before application to principal.
(iii) Apportionment of Payments. Aggregate principal and interest
payments in respect of Loans shall be apportioned among all outstanding Loans
proportionately to Lenders' respective Pro Rata Shares. Administrative Agent
shall promptly distribute to each Lender, at its primary address set forth below
its name on the appropriate signature page hereof or at such other address as
such Lender may request, its Pro Rata Share of all such payments received by
Administrative Agent and the commitment fees of such Lender when received by
Administrative Agent pursuant to subsection 2.3. Notwithstanding the foregoing
provisions of this subsection 2.4C(iii), if, pursuant to the provisions of
subsection 2.6C, any Notice of Conversion/Continuation is withdrawn as to any
Affected Lender or if any Affected Lender makes Base Rate Loans in lieu of its
Pro Rata Share of any Eurodollar Rate Loans, Administrative Agent shall give
effect thereto in apportioning payments received thereafter.
(iv) Payments on Business Days. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business Day, such
payment shall be made on the next succeeding Business Day and such extension of
time shall be included in the computation of the payment of interest hereunder
or of the commitment fees hereunder, as the case may be.
(v) Notation of Payment. Each Lender agrees that before disposing of
any Note held by it, or any part thereof (other than by granting participations
therein), that Lender will make a notation thereon of all Loans evidenced by
that Note and all principal payments previously made thereon and of the date to
which interest thereon has been paid; provided that the failure to make (or any
error in the making of) a notation of any Loan made under such Note shall not
limit or otherwise affect the obligations of Borrowers hereunder or under such
Note with respect to any Loan or any payments of principal or interest on such
Note.
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2.5 Use of Proceeds.
A. Term Loans. The proceeds of the Term Loans shall be applied by
Borrowers to pay Project Costs in accordance with the Disbursement Agreement
(including costs and expenses incurred by Borrowers in connection with the
transactions contemplated hereby), all in accordance with the Disbursement
Agreement.
B. Revolving Loans. The proceeds of the Revolving Loans shall be
applied by Borrowers for working capital and general corporate purposes
(including budgeted costs under the heading "Working Capital"), provided that
the proceeds of Revolving Loans may not be used for any purpose other than to
purchase Specified FF&E or to make deposits thereon prior to the Revolving Loan
Availability Date.
C. Margin Regulations. No portion of the proceeds of any borrowing
under this Agreement shall be used by Borrowers or any of their Subsidiaries in
any manner that might cause the borrowing or the application of such proceeds to
violate Regulation G, Regulation U, Regulation T or Regulation X of the Board of
Governors of the Federal Reserve System or any other regulation of such Board or
to violate the Exchange Act, in each case as in effect on the date or dates of
such borrowing and such use of proceeds.
2.6 Special Provisions Governing Eurodollar Rate Loans.
Notwithstanding any other provision of this Agreement to the contrary,
the following provisions shall govern with respect to Eurodollar Rate Loans as
to the matters covered:
A. Determination of Applicable Interest Rate. As soon as practicable
after 10:00 A.M. (New York City time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Eurodollar Rate Loans for which an interest rate is then
being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Borrowers
and each Lender.
B. Inability to Determine Applicable Interest Rate. In the event that
Administrative Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the interbank Eurodollar market adequate and fair means
do not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Adjusted Eurodollar Rate, Administrative
Agent shall on such date give notice (by telefacsimile or by telephone confirmed
in writing) to Borrowers and each Lender of such determination, whereupon (i) no
Loans may be made as, or converted to, Eurodollar Rate Loans until such time as
Administrative Agent notifies Borrowers and Lenders that the circum stances
giving rise to such notice no longer exist and (ii) any Notice of Borrowing or
Notice of Conversion/Continuation given by Borrowers with respect to the Loans
in respect
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of which such determination was made shall be deemed to be made with respect to
Base Rate Loans.
C. Illegality or Impracticability of Eurodollar Rate Loans. In the
event that on any date any Lender shall have determined (which determination
shall be final and conclusive and binding upon all parties hereto but shall be
made only after consultation with Borrowers and Administrative Agent) that the
making, maintaining or continuation of its Eurodollar Rate Loans (i) has become
unlawful as a result of compliance by such Lender in good faith with any law,
treaty, governmental rule, regulation, guideline or order not in effect on the
date such Person became a Lender (or would conflict with any such treaty,
governmental rule, regulation, guideline or order not having the force of law
even though the failure to comply therewith would not be unlawful), or (ii)
would cause such Lender material financial hardship as a result of contingencies
occurring after the date of this Agreement which materially and adversely affect
the interbank Eurodollar market or the position of such Lender in that market,
then, and in any such event, such Lender shall be an "Affected Lender" and it
shall on that day give notice (by telefacsimile or by telephone confirmed in
writing) to Borrowers and Administrative Agent of such determination (which
notice Administrative Agent shall promptly transmit to each other Lender).
Thereafter (a) the obligation of the Affected Lender to make Loans as, or to
convert Loans to, Eurodollar Rate Loans shall be suspended until such notice
shall be withdrawn by the Affected Lender (which such Affected Lender shall do
at the earliest practicable date), (b) to the extent such determination by the
Affected Lender relates to a Eurodollar Rate Loan then being requested by
Borrowers pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, the Affected Lender shall make such Loan as (or convert
such Loan to, as the case may be) a Base Rate Loan, (c) the Affected Lender's
obligation to maintain its outstanding Eurodollar Rate Loans (the "Affected
Loans") shall be terminated at the earlier to occur of the expiration of the
Interest Period then in effect with respect to the Affected Loans or when
required by law, and (d) the Affected Loans shall automatically convert into
Base Rate Loans on the date of such termination. Except as provided in the
immediately preceding sentence, nothing in this subsection 2.6C shall affect the
obligation of any Lender other than an Affected Lender to make or maintain Loans
as, or to convert Loans to, Eurodollar Rate Loans in accordance with the terms
of this Agreement.
D. Compensation For Breakage or Non-Commencement of Interest Periods.
Borrowers shall compensate each Lender, upon written request by that Lender
(which request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including any interest paid by that
Lender to lenders of funds borrowed by it to make or carry its Eurodollar Rate
Loans and any loss, expense or liability sustained by that Lender in connection
with the liquidation or re-employment of such funds) which that Lender may
sustain: (i) if for any reason (other than a default by that Lender) a borrowing
of any Eurodollar Rate Loan does not occur on a date specified therefor in an
Advance Confirmation Notice, Notice of Borrowing or a telephonic request for
borrowing, as applicable, or a conversion to or continuation of any Eurodollar
Rate Loan does not occur on a date specified therefor in a Notice of Conver
sion/Continuation or a telephonic request for conversion or continuation, (ii)
if any prepayment (including any prepayment pursuant to subsection 2.4B(i)) or
other principal payment or any conversion of any of its Eurodollar Rate Loans
occurs on a date prior to the last
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day of an Interest Period applicable to that Loan, (iii) if any prepayment of
any of its Eurodollar Rate Loans is not made on any date specified in a notice
of prepayment given by Borrowers, or (iv) as a consequence of any other default
by Borrowers in the repayment of its Eurodollar Rate Loans when required by the
terms of this Agreement.
E. Booking of Eurodollar Rate Loans. Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of that Lender.
F. Assumptions Concerning Funding of Eurodollar Rate Loans. Calculation
of all amounts payable to a Lender under this subsection 2.6 and under
subsection 2.7A shall be made as though that Lender had actually funded each of
its relevant Eurodollar Rate Loans through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to clause (i) of the definition
of Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity comparable to the relevant Interest Period and
through the transfer of such Eurodollar deposit from an offshore office of that
Lender to a domestic office of that Lender in the United States of America;
provided, however, that each Lender may fund each of its Eurodollar Rate Loans
in any manner it sees fit and the foregoing assumptions shall be utilized only
for the purposes of calculating amounts payable under this subsection 2.6 and
under subsection 2.7A.
G. Eurodollar Rate Loans After Default. After the occurrence of and
during the continuation of a Potential Event of Default or an Event of Default,
(i) Borrowers may not elect to have a Loan be made or maintained as, or
converted to, a Eurodollar Rate Loan after the expiration of any Interest Period
then in effect for that Loan and (ii) subject to the provisions of subsection
2.6D, any Advance Confirmation Notice, Notice of Borrowing or Notice of
Conversion/Continuation given by Borrowers with respect to a requested borrowing
or conversion/continuation that has not yet occurred shall be deemed made with
respect to Base Rate Loans.
2.7 Increased Costs; Taxes; Capital Adequacy.
A. Compensation for Increased Costs and Taxes. Subject to the
provisions of subsection 2.7B (which shall be controlling with respect to the
matters covered thereby), in the event that any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the date
hereof, or compliance by such Lender with any guideline, request or directive
issued or made after the date hereof by any central bank or other governmental
or quasi-governmental authority (whether or not having the force of law):
(i) subjects such Lender (or its applicable lending office) to
any additional Tax (other than any Tax on the overall net income of
such Lender) with respect to this
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Agreement or any of its obligations hereunder or any payments
to such Lender (or its applicable lending office) of principal,
interest, fees or any other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve
(including any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, FDIC insurance or similar
requirement against assets held by, or deposits or other liabilities in
or for the account of, or advances or loans by, or other credit
extended by, or any other acquisition of funds by, any office of such
Lender (other than any such reserve or other requirements with respect
to Eurodollar Rate Loans that are reflected in the definition of
Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with respect to
a Tax matter) on or affecting such Lender (or its applicable lending
office) or its obligations hereunder or the interbank Eurodollar
market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, Borrowers shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to Borrowers (with a copy to Administrative
Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Lender under this subsection
2.7A, which statement shall be conclusive and binding upon all parties hereto
absent manifest error.
B. Withholding of Taxes.
(i) Payments to Be Free and Clear. All sums payable by
Borrowers under this Agreement and the other Loan Documents shall
(except to the extent required by law) be paid free and clear of, and
without any deduction or withholding on account of, any Tax (other than
a Tax on the overall net income of any Lender) imposed, levied,
collected, withheld or assessed by or within the United States of
America or any political subdivision in or of the United States of
America or any other jurisdiction from or to which a payment is made by
or on behalf of Borrowers or by any federation or organization of which
the United States of America or any such jurisdiction is a member at
the time of payment, all such non-excluded Taxes being hereinafter
collectively referred to as "Included Taxes".
(ii) Grossing-up of Payments. If Borrowers or any other Person
is required by law to make any deduction or withholding on account of
any such Included Tax from any sum paid or payable by Borrowers to
Administrative Agent or any Lender under any of the Loan Documents:
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(a) Borrowers shall notify Administrative Agent of
any such require ment or any change in any such requirement as
soon as Borrowers become aware of it;
(b) Borrowers shall pay any such Included Tax before
the date on which penalties attach thereto, such payment to be
made (if the liability to pay is imposed on Borrowers) for its
own account or (if that liability is imposed on Administrative
Agent or such Lender, as the case may be) on behalf of and in
the name of Administrative Agent or such Lender;
(c) the sum payable by Borrowers in respect of which
the relevant deduction, withholding or payment is required
shall be increased to the extent necessary to ensure that,
after the making of that deduction, withholding or payment,
Administrative Agent or such Lender, as the case may be,
receives on the due date a net sum equal to what it would have
received had no such deduction, withholding or payment been
required or made; and
(d) within 30 days after paying any sum from which it
is required by law to make any deduction or withholding, and
within 30 days after the due date of payment of any Included
Tax which it is required by clause (b) above to pay, Borrowers
shall deliver to Administrative Agent evidence satisfactory to
the other affected parties of such deduction, withholding or
payment and of the remittance thereof to the relevant taxing
or other authority;
provided that no such additional amount shall be required to be paid to
any Lender under clause (c) above except to the extent that any change
after the date hereof (in the case of each Lender listed on the
signature pages hereof) or after the date of the Assignment Agreement
pursuant to which such Lender became a Lender (in the case of each
other Lender) in any such requirement for a deduction, withholding or
payment as is mentioned therein shall result in an increase in the rate
of such deduction, withholding or payment from that in effect at the
date of this Agreement or at the date of such Assignment Agreement, as
the case may be, in respect of payments to such Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is organized under the laws of
any jurisdiction other than the United States or any state or
other political subdivision thereof (for purposes of this
subsection 2.7B(iii), a "Non-US Lender") shall deliver to
Administrative Agent for transmission to Borrowers, on or
prior to the Closing Date (in the case of each Lender listed
on the signature pages hereof) or on or prior to the date of
the Assignment Agreement pursuant to which it becomes a Lender
(in the case of each other Lender), and at such other times as
may be necessary in the determination of Borrowers or
Administrative Agent (each in the reasonable exercise of its
discretion), (1) two original copies of Internal Revenue
Service Form 1001 or 4224 (or any successor forms), properly
completed and
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duly executed by such Lender, together with any other
certificate or statement of exemption required under the Code
or the regulations issued thereunder to establish that such
Lender is not subject to deduction or withholding of United
States federal income tax with respect to any payments to such
Lender of principal, interest, fees or other amounts payable
under any of the Loan Documents or (2) if such Lender is not a
"bank" or other Person described in Section 881(c)(3) of the
Code and cannot deliver either Internal Revenue Service Form
1001 or 4224 pursuant to clause (1) above, a Certificate re
Non-Bank Status together with two original copies of Internal
Revenue Service Form W-8 (or any successor form), properly
completed and duly executed by such Lender, together with any
other certificate or statement of exemption required under the
Code or the regulations issued thereunder to establish that
such Lender is not subject to deduction or withholding of
United States federal income tax with respect to any payments
to such Lender of interest payable under any of the Loan
Documents.
(b) Each Lender required to deliver any forms,
certificates or other evidence with respect to United States
federal income tax withholding matters pursuant to subsection
2.7B(iii)(a) hereby agrees, from time to time after the
initial delivery by such Lender of such forms, certificates or
other evidence, whenever a lapse in time or change in
circumstances renders such forms, certificates or other
evidence obsolete or inaccurate in any material respect, that
such Lender shall promptly (1) deliver to Administrative Agent
for transmission to Borrowers two new original copies of
Internal Revenue Service Form 1001 or 4224, or a Certificate
re Non-Bank Status and two original copies of Internal Revenue
Service Form W-8, as the case may be, properly completed and
duly executed by such Lender, together with any other
certificate or statement of exemption required in order to
confirm or establish that such Lender is not subject to
deduction or withholding of United States federal income tax
with respect to payments to such Lender under the Loan
Documents or (2) notify Administrative Agent and Borrowers of
its inability to deliver any such forms, certificates or other
evidence.
(c) Borrowers shall not be required to pay any
additional amount to any Non-US Lender under clause (c) of
subsection 2.7B(ii) if such Lender shall have failed to
satisfy the requirements of clause (a) or (b)(1) of this
subsection 2.7B(iii); provided that if such Lender shall have
satisfied the requirements of subsection 2.7B(iii)(a) on the
Closing Date (in the case of each Lender listed on the
signature pages hereof) or on the date of the Assignment
Agreement pursuant to which it became a Lender (in the case of
each other Lender), nothing in this subsection 2.7B(iii)(c)
shall relieve Borrowers of their obligation to pay any
additional amounts pursuant to clause (c) of subsection
2.7B(ii) in the event that, as a result of any change in any
applicable law, treaty or governmental rule, regulation or
order, or any change in the interpretation, administration or
application thereof, such Lender is no longer properly
entitled to deliver forms,
70
certificates or other evidence at a subsequent date
establishing the fact that such Lender is not subject to
withholding as described in subsection 2.7B(iii)(a).
C. Capital Adequacy Adjustment. If any Lender shall have determined
that the adoption, effectiveness, phase-in or applicability after the date
hereof of any law, rule or regulation (or any provision thereof) regarding
capital adequacy, or any change therein or in the interpretation or
administration thereof after the date hereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its applicable lending
office) with any guideline, request or directive regarding capital adequacy
(whether or not having the force of law) of any such governmental authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on the capital of such Lender or any corporation controlling such
Lender as a consequence of, or with reference to, such Lender's Loans or
Commitments or Letters of Credit or participations therein or other obligations
hereunder with respect to the Loans or the Letters of Credit to a level below
that which such Lender or such controlling corporation could have achieved but
for such adoption, effectiveness, phase-in, applicability, change or compliance
(taking into consideration the policies of such Lender or such controlling
corporation with regard to capital adequacy), then from time to time, within
five Business Days after receipt by Borrowers from such Lender of the statement
referred to in the next sentence, Borrowers shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such controlling
corporation on an after-tax basis for such reduction. Such Lender shall deliver
to Borrowers (with a copy to Administrative Agent) a written statement, setting
forth in reasonable detail the basis of the calculation of such additional
amounts, which statement shall be conclusive and binding upon all parties hereto
absent manifest error.
2.8 Obligation of Lenders to Mitigate.
Each Lender and Issuing Lender agrees that, as promptly as practicable
after the officer of such Lender or Issuing Lender responsible for administering
the Loans or Letters of Credit of such Lender or Issuing Lender, as the case may
be, becomes aware of the occurrence of an event or the existence of a condition
that would cause such Lender or Issuing Lender to become an Affected Lender or
that would entitle such Lender or Issuing Lender to receive payments under
subsection 2.7 or subsection 3.6 it will, to the extent not inconsistent with
the internal policies of such Lender or Issuing Lender and any applicable legal
or regulatory restrictions, use reasonable efforts (i) to make, issue, fund or
maintain the Commitments of such Lender or Issuing Lender or the affected Loans
or Letters of Credit of such Lender or Issuing Lender through another lending or
Letters of Credit office of such Lender or Issuing Lender or (ii) take such
other measures as such Lender or Issuing Lender may deem reasonable, if as a
result thereof the circumstances which would cause such Lender or Issuing Lender
to be an Affected Lender would cease to exist or the additional amounts which
would otherwise be required to be paid to such Lender or Issuing Lender pursuant
to subsection 2.7 would be materially reduced and if, as determined by such
Lender or Issuing Lender in its sole discretion, the making, issuing, funding or
maintaining of such Commitments or Loans or Letters
71
of Credit through such other lending or Letters of Credit office or in
accordance with such other measures, as the case may be, would not otherwise
materially adversely affect such Commitments or Loans or Letters of Credit or
the interests of such Lender or Issuing Lender; provided that such Lender or
Issuing Lender will not be obligated to utilize such other lending or lending or
Letters of Credit office pursuant to this subsection 2.8 if such Lender or
Issuing Lender would incur incremental expenses as a result of utilizing such
other lending office as described in clause (i) above. A certificate as to the
amount of any such expenses payable by Borrowers pursuant to this subsection 2.8
(setting forth in reasonable detail the basis for requesting such amount)
submitted by such Lender or Issuing Lender to Borrowers (with a copy to
Administrative Agent) shall be conclusive absent manifest error. Each Lender and
Issuing Lender agrees that it will not request compensation under subsection 2.7
unless such Lender or Issuing Lender requests compensation from borrowers under
other lending arrangements with such Lender or Issuing Lender who are similarly
situated.
2.9 Obligations Joint and Several.
Anything herein to the contrary notwithstanding, each Borrower hereby
agrees and acknowledges that the obligation of each Borrower for payment of the
Obligations shall be joint and several with the obligations of the other
Borrower hereunder regardless of which Borrower actually receives the proceeds
or benefits of any borrowing hereunder. Each Borrower hereby agrees and
acknowledges that it will receive substantial benefits from the Loans and credit
facilities made available under this Agreement.
Each Borrower agrees that its joint and several obligation to pay all
Obligations hereunder is irrevocable, absolute, independent and unconditional
and shall not be affected by any circumstance which constitutes a legal or
equitable discharge of a guarantor or surety other than the indefeasible payment
in full of the Obligations, and the liability of each Borrower with respect to
the Obligations shall not be affected, reduced or impaired by (i) consideration
of the amount of proceeds of the Loans received by any Borrower relative to the
aggregate amount of the Loans, (ii) the dissolution or termination of or any
increase, decrease or change in personnel of, Borrower, (iii) the insolvency or
business failure of, or any assignment for the benefit of creditors by, or the
commencement of any bankruptcy, reorganization, arrangement, moratorium or other
debtor relief proceedings by or against the other Borrower or (iv) the
appointment of a receiver for, or the attachment, restraint of or making or
levying of any order of court or legal process affecting, the property of the
other Borrower. Each Borrower agrees that a separate action or actions may be
brought and prosecuted against such Borrower whether or not action is brought
against the other Borrower and whether or not the other Borrower is joined in
any such action or actions. Either Borrower's payment of a portion, but not all,
of the Obligations shall in no way limit, affect, modify or abridge such
Borrower's liability for that portion of the Obligations which is not paid.
Each Borrower hereby waives any right to require the Administrative
Agent or any Lender, as a condition of payment or performance of the Obligations
by such Borrower, to proceed against the other Borrower or any other Person, to
exhaust any security held from any Borrower, or pursue any other remedy in the
power of the Administrative Agent or any Lender. Each Borrower hereby waives any
defense arising by reason of incapacity, lack of authority or any disability or
other defense that may be available to the other Borrower and any defenses or
72
benefits that may be derived or afforded by law which would limit the liability
of or exonerate any guarantor or surety with respect to the obligations, or
which may conflict with the terms and provisions of this Agreement, other than
the indefeasible payment in full of the Obligations.
Any indebtedness of a Borrower now or hereafter held by the other
Borrower is hereby subordinated in right of payment to the Obligations, and any
such indebtedness of a Borrower to the other Borrower collected or received by
such other Borrower after an Event of Default has occurred and is continuing
shall be held in trust for the Administrative Agent on behalf of the Lenders and
shall forthwith be paid over to the Administrative Agent for the benefit of the
Lenders to be credited and applied against the Obligations but without
affecting, impairing or limiting in any manner the liability of such other
Borrower under any other provision of this Agreement.
Section 3. LETTERS OF CREDIT
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations
Therein.
A. Letters of Credit. In addition to Borrowers requesting that Lenders
make Revolving Loans pursuant to subsection 2.1A(ii), Borrowers may request, in
accordance with the provisions of this subsection 3.1, from time to time during
the period from the Closing Date to but excluding the Revolving Loan Commitment
Termination Date, that one or more Lenders issue Letters of Credit for the
account of Borrowers for the purposes specified in the definitions of Commercial
Letters of Credit and Standby Letters of Credit; provided that prior to the
Revolving Loan Availability Date Borrowers may not request any Letters of Credit
for any purpose other than to support deposits for Specified FF&E. Subject to
the terms and conditions of this Agreement and in reliance upon the
representations and warranties of Borrowers herein set forth, any one or more
Lenders may, but (except as provided in subsection 3.1B(ii)) shall not be
obligated to, issue such Letters of Credit in accordance with the provisions of
this subsection 3.1; provided that Borrowers shall not request that any Lender
issue (and no Lender shall issue):
(i) any Letter of Credit if, after giving effect to such
issuance, the Total Utilization of Revolving Loan Commitments would
exceed the Revolving Loan Commitments then in effect or if after giving
affect to such issuance, Borrowers would not be in compliance with
clause (b) of the second paragraph of subsection 2.1A(ii);
(ii) any Letter of Credit if, after giving effect to such
issuance, the Letter of Credit Usage would exceed $15,000,000;
(iii) any Standby Letter of Credit having an expiration date
later than the earlier of (a) the Revolving Loan Commitment Termination
Date and (b) the date which is one year from the date of issuance of
such Standby Letter of Credit; provided that the immediately preceding
clause (b) shall not prevent any Issuing Lender from agreeing that a
Standby Letter of Credit will automatically be extended for one or more
successive
73
periods not to exceed one year each unless such Issuing Lender elects
not to extend for any such additional period; and provided, further
that such Issuing Lender shall elect not to extend such Standby Letter
of Credit if it has knowledge that an Event of Default has occurred and
is continuing (and has not been waived in accordance with subsection
10.6) at the time such Issuing Lender must elect whether or not to
allow such extension;
(iv) any Commercial Letter of Credit having an expiration date
(a) later than the earlier of (X) the date which is 30 days prior to
the Revolving Loan Commitment Termination Date and (Y) the date which
is 180 days from the date of issuance of such Commercial Letter of
Credit or (b) that is otherwise unacceptable to the applicable Issuing
Lender in its reasonable discretion; or
(v) any Letter of Credit denominated in a currency other than
Dollars.
B. Mechanics of Issuance.
(i) Notice of Issuance. Whenever Borrowers desire the issuance
of a Letter of Credit, they shall deliver to Administrative Agent a
Notice of Issuance of Letter of Credit substantially in the form of
Exhibit XV annexed hereto no later than 12:00 Noon (New York City time)
at least three Business Days (in the case of Standby Letters of Credit)
or five Business Days (in the case of Commercial Letters of Credit), or
in each case such shorter period as may be agreed to by the Issuing
Lender in any particular instance, in advance of the proposed date of
issuance. The Notice of Issuance of Letter of Credit shall specify (a)
the proposed date of issuance (which shall be a Business Day), (b)
whether the Letter of Credit is to be a Standby Letter of Credit or a
Commercial Letter of Credit, (c) the face amount of the Letter of
Credit, (d) the expiration date of the Letter of Credit, (e) the name
and address of the beneficiary, and (f) either the verbatim text of the
proposed Letter of Credit or the proposed terms and conditions thereof,
including a precise descrip tion of any documents to be presented by
the beneficiary which, if presented by the beneficiary prior to the
expiration date of the Letter of Credit, would require the Issuing
Lender to make payment under the Letter of Credit; provided that the
Issuing Lender, in its reasonable discretion, may require changes in
the text of the proposed Letter of Credit or any such documents; and
provided, further that no Letter of Credit shall require payment
against a conforming draft to be made thereunder on the same business
day (under the laws of the jurisdiction in which the office of the
Issuing Lender to which such draft is required to be presented is
located) that such draft is presented if such presentation is made
after 10:00 A.M. (in the time zone of such office of the Issuing
Lender) on such business day.
Borrowers shall notify the applicable Issuing Lender (and
Administrative Agent, if Administrative Agent is not such Issuing
Lender) prior to the issuance of any Letter of Credit in the event that
any of the matters to which Borrowers are required to certify in the
applicable Notice of Issuance of Letter of Credit is no longer true and
correct as of the proposed date of issuance of such Letter of Credit,
and upon the issuance of any Letter of Credit Borrowers shall be deemed
to have re-certified, as of the date of such
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issuance, as to the matters to which Borrowers are required to certify
in the applicable Notice of Issuance of Letter of Credit.
(ii) Determination of Issuing Lender. Upon receipt by
Administrative Agent of a Notice of Issuance of Letter of Credit
pursuant to subsection 3.1B(i) requesting the issuance of a Letter of
Credit, in the event Administrative Agent elects to issue such Letter
of Credit, Administrative Agent shall promptly so notify Borrowers, and
Administrative Agent shall be the Issuing Lender with respect thereto.
In the event that Administrative Agent, in its sole discretion, elects
not to issue such Letter of Credit, Administrative Agent shall promptly
so notify Borrowers, whereupon Borrowers may request any other Lender
to issue such Letter of Credit by delivering to such Lender a copy of
the applicable Notice of Issuance of Letter of Credit. Any Lender so
requested to issue such Letter of Credit shall promptly notify
Borrowers and Administrative Agent whether or not, in its sole
discretion, it has elected to issue such Letter of Credit, and any such
Lender which so elects to issue such Letter of Credit shall be the
Issuing Lender with respect thereto. In the event that all other
Lenders shall have declined to issue such Letter of Credit,
notwithstanding the prior election of Administrative Agent not to issue
such Letter of Credit, Administrative Agent shall be obligated to issue
such Letter of Credit and shall be the Issuing Lender with respect
thereto, notwithstanding the fact that the Letter of Credit Usage with
respect to such Letter of Credit and with respect to all other Letters
of Credit issued by Administrative Agent, when aggregated with
Administrative Agent's outstanding Revolving Loans, may exceed
Administrative Agent's Revolving Loan Commitment then in effect.
(iii) Issuance of Letter of Credit. Upon satisfaction or
waiver (in accordance with subsection 10.6) of the conditions set forth
in subsection 4.3, the Issuing Lender shall issue the requested Letter
of Credit in accordance with the Issuing Lender's standard operating
procedures.
(iv) Notification to Lenders. Upon the issuance of any Letter
of Credit the applicable Issuing Lender shall promptly notify
Administrative Agent and each other Lender of such issuance, which
notice shall be accompanied by a copy of such Letter of
Credit. Promptly after receipt of such notice (or, if Administrative
Agent is the Issuing Lender, together with such notice), Administrative
Agent shall notify each Lender of the amount of such Lender's
respective participation in such Letter of Credit, determined in
accordance with subsection 3.1C.
(v) Reports to Lenders. Within 15 days after the end of each
calendar quarter ending after the Closing Date, so long as any Letter
of Credit shall have been outstanding during such calendar quarter,
each Issuing Lender shall deliver to each other Lender a report setting
forth for such calendar quarter the daily aggregate amount available to
be drawn under the Letters of Credit issued by such Issuing Lender that
were outstanding during such calendar quarter.
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C. Lenders' Purchase of Participations in Letters of Credit.
Immediately upon the issuance of each Letter of Credit, each Lender shall be
deemed to, and hereby agrees to, have irrevocably purchased from the Issuing
Lender a participation in such Letter of Credit and any drawings honored
thereunder in an amount equal to such Lender's Pro Rata Share of the maximum
amount which is or at any time may become available to be drawn thereunder.
3.2 Letter of Credit Fees.
Borrowers agree to pay the following amounts with respect to Letters of
Credit issued hereunder:
(i) with respect to each Standby Letter of Credit, (a) a
fronting fee, payable directly to the applicable Issuing Lender for its
own account, equal to the greater of (X) $5,000 and (Y) 0.25% per annum
of the daily amount available to be drawn under such Standby Letter of
Credit and (b) a letter of credit fee, payable to Administrative Agent
for the account of Lenders, equal to the product of (y) a percentage
equal to the Applicable Margin with respect to Eurodollar Loans then in
effect and (z) the daily maximum amount available to be drawn under
such Standby Letter of Credit, each such fronting fee or letter of
credit fee to be payable in arrears on and to (but excluding) each
March 31, June 30, September 30 and December 31 of each year and
computed on the basis of a 360-day year for the actual number of days
elapsed;
(ii) with respect to each Commercial Letter of Credit, (a) a
fronting fee, payable directly to the applicable Issuing Lender for its
own account, equal to 0.25% per annum of the daily amount available to
be drawn under such Commercial Letter of Credit and (b) a letter of
credit fee, payable to Agent for the account of Lenders, equal to the
product of (y) a percentage equal to the Applicable Margin with respect
to Eurodollar Loans then in effect and (z) the daily maximum amount
available to be drawn under such Commercial Letter of Credit, each such
fronting fee or letter of credit fee to be payable in arrears on and to
(but excluding) each March 31, June 30, September 30 and December 31 of
each year and computed on the basis of a 360-day year for the actual
number of days elapsed; and
(iii) with respect to the issuance, amendment or transfer of
each Letter of Credit and each payment of a drawing made thereunder
(without duplication of the fees payable under clauses (i) and (ii)
above), documentary and processing charges payable directly to the
applicable Issuing Lender for its own account in accordance with such
Issuing Lender's standard schedule for such charges in effect at the
time of such issuance, amendment, transfer or payment, as the case may
be.
For purposes of calculating any fees payable under clauses (i) and (ii) of this
subsection 3.2, the daily amount available to be drawn under any Letter of
Credit shall be determined as of the close of business on any date of
determination. Promptly upon receipt by Administrative Agent of any amount
described in clause (i)(b) or (ii)(b) of this subsection 3.2, Administrative
Agent shall distribute to each Lender its Pro Rata Share of such amount.
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3.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit.
A. Responsibility of Issuing Lender With Respect to Drawings. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to examine the
documents delivered under such Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in accordance with the terms
and conditions of such Letter of Credit.
B. Reimbursement by Borrowers of Amounts Paid Under Letters of Credit.
In the event an Issuing Lender has determined to honor a drawing under a Letter
of Credit issued by it, such Issuing Lender shall immediately notify Borrowers
and Administrative Agent, and Borrowers shall reimburse such Issuing Lender on
or before the Business Day immediately following the date on which such drawing
is honored (the "Reimbursement Date") in an amount in Dollars and in same day
funds equal to the amount of such honored drawing; provided that, anything
contained in this Agreement to the contrary notwithstanding, (i) unless
Borrowers shall have notified Administrative Agent and such Issuing Lender prior
to 10:00 A.M. (New York City time) on the date such drawing is honored that
Borrowers intend to reimburse such Issuing Lender for the amount of such honored
drawing with funds other than the proceeds of Revolving Loans, Borrowers shall
be deemed to have given a timely Notice of Borrowing to Administrative Agent
requesting Lenders to make Revolving Loans that are Base Rate Loans on the
Reimbursement Date in an amount in Dollars equal to the amount of such honored
drawing and (ii) subject to satisfaction or waiver of the conditions specified
in subsection 4.2B, Lenders shall, on the Reimbursement Date, make Revolving
Loans that are Base Rate Loans in the amount of such honored drawing, the
proceeds of which shall be applied directly by Agent to reimburse such Issuing
Lender for the amount of such honored drawing; and provided, further that if for
any reason proceeds of Revolving Loans are not received by such Issuing Lender
on the Reimburse ment Date in an amount equal to the amount of such honored
drawing, Borrowers shall reimburse such Issuing Lender, on demand, in an amount
in same day funds equal to the excess of the amount of such honored drawing over
the aggregate amount of such Revolving Loans, if any, which are so received.
Nothing in this subsection 3.3B shall be deemed to relieve any Lender from its
obligation to make Revolving Loans on the terms and conditions set forth in this
Agreement, and Borrowers shall retain any and all rights it may have against any
Lender resulting from the failure of such Lender to make such Revolving Loans
under this subsection 3.3B.
C. Payment by Lenders of Unreimbursed Amounts Paid Under Letters of
Credit.
(i) Payment by Lenders. In the event that Borrowers shall fail
for any reason to reimburse any Issuing Lender as provided in
subsection 3.3B in an amount equal to the amount of any drawing honored
by such Issuing Lender under a Letter of Credit issued by it, such
Issuing Lender shall promptly notify each other Lender of the
unreimbursed amount of such honored drawing and of such other Lender's
respective participation therein based on such Lender's Pro Rata Share.
Each Lender shall make available to such Issuing Lender an amount equal
to its respective participation, in Dollars and in same day funds, at
the office of such Issuing Lender specified in such
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notice, not later than 12:00 Noon (New York City time) on the first
business day (under the laws of the jurisdiction in which such office
of such Issuing Lender is located) after the date notified by such
Issuing Lender. In the event that any Lender fails to make available to
such Issuing Lender on such business day the amount of such Lender's
participation in such Letter of Credit as provided in this subsection
3.3C, such Issuing Lender shall be entitled to recover such amount on
demand from such Lender together with interest thereon at the rate
customarily used by such Issuing Lender for the correction of errors
among banks for three Business Days and thereafter at the Base Rate.
Nothing in this subsection 3.3C shall be deemed to prejudice the right
of any Lender to recover from any Issuing Lender any amounts made
available by such Lender to such Issuing Lender pursuant to this
subsection 3.3C in the event that it is determined by the final
judgment of a court of competent jurisdiction that the payment with
respect to a Letter of Credit by such Issuing Lender in respect of
which payment was made by such Lender constituted gross negligence or
willful misconduct on the part of such Issuing Lender.
(ii) Distribution to Lenders of Reimbursements Received From
Borrowers. In the event any Issuing Lender shall have been reimbursed
by other Lenders pursuant to subsection 3.3C(i) for all or any portion
of any drawing honored by such Issuing Lender under a Letter of Credit
issued by it, such Issuing Lender shall distribute to each other Lender
which has paid all amounts payable by it under subsection 3.3C(i) with
respect to such honored drawing such other Lender's Pro Rata Share of
all payments subsequently received by such Issuing Lender from
Borrowers in reimbursement of such honored drawing when such payments
are received. Any such distribution shall be made to a Lender at its
primary address set forth below its name on the appropriate signature
page hereof or at such other address as such Lender may request.
D. Interest on Amounts Paid Under Letters of Credit.
(i) Payment of Interest by Borrowers. Borrowers agree to pay
to each Issuing Lender, with respect to drawings honored under any
Letters of Credit issued by it, interest on the amount paid by such
Issuing Lender in respect of each such honored drawing from the date
such drawing is honored to but excluding the date such amount is
reimbursed by Borrowers (including any such reimbursement out of the
proceeds of Revolving Loans pursuant to subsection 3.3B) at a rate
equal to (a) for the period from the date such drawing is honored to
but excluding the Reimbursement Date, the rate then in effect under
this Agreement with respect to Revolving Loans that are Base Rate Loans
and (b) thereafter, a rate which is 2% per annum in excess of the rate
of interest otherwise payable under this Agreement with respect to
Revolving Loans that are Base Rate Loans. Interest payable pursuant to
this subsection 3.3D(i) shall be computed on the basis of a 365-day
year for the actual number of days elapsed in the period during which
it accrues and shall be payable on demand or, if no demand is made, on
the date on which the related drawing under a Letter of Credit is
reimbursed in full.
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(ii) Distribution of Interest Payments by Issuing Lender.
Promptly upon receipt by any Issuing Lender of any payment of interest
pursuant to subsection 3.3D(i) with respect to a drawing honored under
a Letter of Credit issued by it, (a) such Issuing Lender shall
distribute to each other Lender, out of the interest received by such
Issuing Lender in respect of the period from the date such drawing is
honored to but excluding the date on which such Issuing Lender is
reimbursed for the amount of such drawing (including any such
reimbursement out of the proceeds of Revolving Loans pursuant to
subsection 3.3B), the amount that such other Lender would have been
entitled to receive in respect of the letter of credit fee that would
have been payable in respect of such Letter of Credit for such period
pursuant to subsection 3.2 if no drawing had been honored under such
Letter of Credit, and (b) in the event such Issuing Lender shall have
been reimbursed by other Lenders pursuant to subsection 3.3C(i) for all
or any portion of such honored drawing, such Issuing Lender shall
distribute to each other Lender which has paid all amounts payable by
it under subsection 3.3C(i) with respect to such honored drawing such
other Lender's Pro Rata Share of any interest received by such Issuing
Lender in respect of that portion of such honored drawing so reimbursed
by other Lenders for the period from the date on which such Issuing
Lender was so reimbursed by other Lenders to but excluding the date on
which such portion of such honored drawing is reimbursed by Borrowers.
Any such distribution shall be made to a Lender at its primary address
set forth below its name on the appropriate signature page hereof or at
such other address as such Lender may request.
3.4 Obligations Absolute.
The obligation of Borrowers to reimburse each Issuing Lender for
drawings honored under the Letters of Credit issued by it and to repay any
Revolving Loans made by Lenders pursuant to subsection 3.3B and the obligations
of Lenders under subsection 3.3C(i) shall be unconditional and irrevocable and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances including, without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit;
(ii) the existence of any claim, set-off, defense or other
right which Borrower or any Lender may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons
for whom any such transferee may be acting), any Issuing Lender or
other Lender or any other Person or, in the case of a Lender, against
Borrowers, whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including any
underlying transaction between Borrowers or one of its Subsidiaries and
the beneficiary for which any Letter of Credit was procured);
(iii) any draft or other document presented under any Letter
of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any
respect;
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(iv) payment by the applicable Issuing Lender under any Letter
of Credit against presentation of a draft or other document which does
not substantially comply with the terms of such Letter of Credit;
(v) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of
Borrowers;
(vi) any breach of this Agreement or any other Loan Document
by any party thereto;
(vii) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential Event
of Default shall have occurred and be continuing;
provided, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).
3.5 Indemnification; Nature of Issuing Lenders' Duties.
A. Indemnification. In addition to amounts payable as provided in
subsection 3.6, Borrowers hereby agree to protect, indemnify, pay and save
harmless each Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which such Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by such Issuing
Lender, other than as a result of (a) the gross negligence or willful misconduct
of such Issuing Lender as determined by a final judgment of a court of competent
jurisdiction or (b) subject to the following clause (ii), the wrongful dishonor
by such Issuing Lender of a proper demand for payment made under any Letter of
Credit issued by it or (ii) the failure of such Issuing Lender to honor a
drawing under any such Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto
government or governmental authority (all such acts or omissions herein called
"Governmental Acts").
B. Nature of Issuing Lenders' Duties. As between Borrowers and any
Issuing Lender, Borrowers assume all risks of the acts and omissions of, or
misuse of the Letters of Credit issued by such Issuing Lender by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, such Issuing Lender shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring
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or assigning or purporting to transfer or assign any such Letter of Credit or
the rights or benefits thereunder or proceeds thereof, in whole or in part,
which may prove to be invalid or ineffective for any reason; (iii) failure of
the beneficiary of any such Letter of Credit to comply fully with any conditions
required in order to draw upon such Letter of Credit; (iv) errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they be in cipher; (v)
errors in interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of such Issuing Lender, including without
limitation any Governmental Acts, and none of the above shall affect or impair,
or prevent the vesting of, any of such Issuing Lender's rights or powers
hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5B, any action
taken or omitted by any Issuing Lender under or in connection with the Letters
of Credit issued by it or any documents and certificates delivered thereunder,
if taken or omitted in good faith, shall not put such Issuing Lender under any
resulting liability to Borrowers.
Notwithstanding anything to the contrary contained in this subsection
3.5, Borrowers shall retain any and all rights it may have against any Issuing
Lender for any liability arising solely out of the gross negligence or willful
misconduct of such Issuing Lender, as determined by a final judgment of a court
of competent jurisdiction.
3.6 Increased Costs and Taxes Relating to Letters of Credit.
Subject to the provisions of subsection 2.7B (which shall be
controlling with respect to the matters covered thereby), in the event that any
Issuing Lender or Lender shall determine (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto)
that any law, treaty or governmental rule, regulation or order, or any change
therein or in the interpretation, administration or application thereof
(including the introduction of any new law, treaty or governmental rule,
regulation or order), or any determination of a court or governmental authority,
in each case that becomes effective after the date hereof, or compliance by any
Issuing Lender or Lender with any guideline, request or directive issued or made
after the date hereof by any central bank or other governmental or
quasi-governmental authority (whether or not having the force of law):
(i) subjects such Issuing Lender or Lender (or its applicable
lending or letter of credit office) to any additional Tax (other than
any Tax on the overall net income of such Issuing Lender or Lender)
with respect to the issuing or maintaining of any Letters of Credit or
the purchasing or maintaining of any participations therein or any
other obligations under this Section 3, whether directly or by such
being imposed on or suffered by any particular Issuing Lender;
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(ii) imposes, modifies or holds applicable any reserve
(including without limitation any marginal, emergency, supplemental,
special or other reserve), special deposit, compulsory loan, FDIC
insurance or similar requirement in respect of any Letters of Credit
issued by any Issuing Lender or participations therein purchased by any
Lender; or
(iii) imposes any other condition (other than with respect to
a Tax matter) on or affecting such Issuing Lender or Lender (or its
applicable lending or letter of credit office) regarding this Section 3
or any Letter of Credit or any participation therein;
and the result of any of the foregoing is to increase the cost to such Issuing
Lender or Lender of agreeing to issue, issuing or maintaining any Letter of
Credit or agreeing to purchase, purchasing or maintaining any participation
therein or to reduce any amount received or receivable by such Issuing Lender or
Lender (or its applicable lending or letter of credit office) with respect
thereto; then, in any case, Borrowers shall promptly pay to such Issuing Lender
or Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts as may be necessary to compensate such Issuing
Lender or Lender for any such increased cost or reduction in amounts received or
receivable hereunder. Such Issuing Lender or Lender shall deliver to Borrowers a
written statement, setting forth in reasonable detail the basis for calculating
the additional amounts owed to such Issuing Lender or Lender under this
subsection 3.6, which statement shall be conclusive and binding upon all parties
hereto absent manifest error.
Section 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans hereunder are subject to the
satisfaction of the following conditions.
4.1 Conditions to Term Loans and Initial Revolving Loans.
The obligations of Lenders to make the initial Loan, in addition to the
conditions precedent specified in subsection 4.2, 4.3 and 4.4, as applicable,
are subject to prior or concurrent satisfaction of the following conditions:
A. Deed of Trust; Mortgage Policy; Etc. Administrative Agent shall have
received from Borrowers:
(i) Mall Lease, and Billboard Master Lease. Evidence that the
Mall Lease and the Billboard Master Lease shall have been properly
executed and that the Mall Lease and the Billboard Master Lease or
memoranda thereof, have been duly recorded in the appropriate filing or
recording office in the jurisdiction in which the Mortgaged Property is
located or that the Mall Lease and the Billboard Master Lease or
memoranda thereof have been irrevocably delivered to Title Company for
such recordation.
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(ii) Deed of Trust. A fully executed and notarized Deed of
Trust and a fully executed and notarized Leasehold Deed of Trust, each
duly recorded in the appropriate filing or recording office in the
jurisdiction in which the Mortgaged Property is located or evidence
that such Deed of Trust and Leasehold Deed of Trust have been
irrevocably delivered to the Title Company for such recordation;
(iii) Title Insurance. (a) A 1970 (amended October 17, 1970)
ALTA mortgagee title insurance policy or policies or unconditional
commitment therefor (the "Mortgage Policy") issued by the Title Company
with respect to the Mortgaged Property in an amount not less than the
maximum aggregate amount of the Commitments, in each case, insuring for
the benefit of Administrative Agent on behalf of Agent and Lenders that
the Deed of Trust creates a valid and enforceable First Priority deed
of trust Lien on the Mortgaged Property, subject only to Permitted
Liens and that the Leasehold Deed of Trust creates a valid and
enforceable deed of trust Lien on or in the Mall Construction
Subsidiary's leasehold interest under the Mall Lease and the Billboard
Master Lease subject only to the Lien of the Interim Mall Lender
therein and other Permitted Liens, which Mortgage Policy (1) shall
include an endorsement for mechanics' liens, for future advances under
this Agreement and for any other matters reasonably requested by
Administrative Agent, (2) shall provide for affirmative insurance and
such reinsurance as Administrative Agent may reasonably request, all of
the foregoing in form and substance satisfactory to Administra tive
Agent and (3) shall not have a creditor's rights exception; and (b)
evidence reasonably satisfactory to Administrative Agent that Borrowers
have or have caused to be (i) delivered to the Title Company all
certificates and affidavits required by the Title Company in connection
with the issuance of the Mortgage Policy and (ii) paid to the Title
Company or to the appropriate governmental authorities all expenses and
premiums of the Title Company in connection with the issuance of the
Mortgage Policy and all recording and stamp taxes (including mortgage
recording and intangible taxes) payable in connection with recording
the Deed of Trust and the Leasehold Deed of Trust in the appropriate
real estate records;
(iv) Matters Relating to Flood Hazards. (a) Evidence, which
may be in the form of a letter from an insurance broker or a municipal
engineer, as to whether the Mortgaged Property is located in an area
designated by the Federal Emergency Management Agency as having special
flood or mud slide hazards and if so, whether the community in which
the Mortgaged Property is located participates in the National Flood
Insurance Program, (b) if the Mortgaged Property is located in an area
designated by the Federal Emergency Management Agency as having special
flood or mud slide hazards, written acknowledgement from Venetian and
Mall Construction Subsidiary of receipt of written notification from
Administrative Agent (1) that the Mortgaged Property is located in a
special flood hazard area and (2) as to whether the community in which
the Mortgaged Property is located is participating in the National
Flood Insurance Program, and (c) in the event the Mortgaged Property is
located in a community that participates in the National Flood
Insurance Program, evidence that Borrowers have obtained flood
insurance in respect of the Mortgaged Property to the extent required
under the applicable regulations of the Board of Governors of the
Federal Reserve System; and
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(v) Environmental Indemnity. If requested by Administrative
Agent, an environmental indemnity agreement, reasonably satisfactory in
form and substance to Administrative Agent and its counsel, with
respect to the indemnification of Administrative Agent and Lenders for
any liabilities that may be imposed on or incurred by any of them as a
result of any Hazardous Materials Activity.
B. Security Interests in Personal and Mixed Property. To the extent not
otherwise satisfied pursuant to subsection 4.1H, Administrative Agent shall have
received evidence reasonably satisfactory to it that Borrowers shall have taken
or caused to be taken all such actions, executed and delivered or caused to be
executed and delivered all such agreements, documents and instruments, and made
or caused to be made all such filings and recordings (other than the filing or
recording of items described in clauses (iii) and (iv) below) that may be
necessary or, in the reasonable opinion of Administrative Agent, desirable in
order to create in favor of Administrative Agent, for the benefit of Lenders, a
valid and (upon such filing and recording) perfected First Priority security
interest in the First Priority Collateral, and a second priority Lien in the
Mall Collateral. Such actions shall include the following:
(i) Schedules to Collateral Documents. Delivery to
Administrative Agent of accurate and complete schedules to all of the
applicable Collateral Documents.
(ii) Instruments. Delivery to Administrative Agent of all
promissory notes or other instruments (duly endorsed, where
appropriate, in a manner satisfactory to Administrative Agent)
evidencing any Collateral;
(iii) Lien Searches and UCC Termination Statements. Delivery
to Administra tive Agent of (a) the results of a recent search, by a
Person reasonably satisfactory to Administrative Agent, of all
effective UCC financing statements and fixture filings and all judgment
and tax lien filings which may have been made with respect to any
personal or mixed property of any Loan Party, together with copies of
all such filings disclosed by such search, and (b) UCC termination
statements duly executed by all applicable Persons for filing in all
applicable jurisdictions as may be necessary to terminate any effective
UCC financing statements or fixture filings disclosed in such search
(other than any such financing statements or fixture filings in respect
of Liens permitted to remain outstanding pursuant to the terms of this
Agreement);
(iv) UCC Financing Statements and Fixture Filings. Delivery to
Administrative Agent of UCC financing statements and, where
appropriate, fixture filings, duly executed by each applicable Loan
Party with respect to all personal and mixed property Collateral of
such Loan Party, for filing in all jurisdictions as may be necessary
or, in the reasonable opinion of Administrative Agent, desirable to
perfect the security interests created in such Collateral pursuant to
the Collateral Documents; and
C. Solvency Assurances. On the Closing Date, Arranger, Administrative
Agent and Lenders shall have received a Financial Condition Certificate from the
Borrowers dated the Closing Date, substantially in the form of Exhibit X annexed
hereto and with appropriate
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attachments, in each case demonstrating that, after giving effect to the
transactions contemplated by this Agreement, the other Loan Documents and the
other Operative Documents, Borrowers will be Solvent.
D. Opinions of Counsel to Borrowers. Lenders and their respective
counsel shall have received (i) originally executed copies of one or more
favorable written opinions of Paul, Weiss, Rifkind, Wharton & Garrison, counsel
for Borrowers and their Subsidiaries, and (ii) originally executed copies of one
or more favorable written opinions of Lionel Sawyer & Collins, Nevada counsel
for Borrowers and their Subsidiaries, each in form and substance reasonably
satisfactory to Administrative Agent and its counsel, dated as of the Closing
Date and setting forth substantially the matters in the opinions designated in
Exhibits V-A and V-B annexed hereto, respectively, and as to such other matters
as Administrative Agent acting on behalf of Lenders may reasonably request.
Borrowers hereby acknowledge and confirm that they have requested such counsel
to deliver such opinions to Lenders.
E. Opinions of Administrative Agent's Counsel. Lenders shall have
received originally executed copies of one or more favorable written opinions of
O'Melveny & Myers LLP, counsel to Administrative Agent, dated as of the Closing
Date, substantially in the form of Exhibit VI annexed hereto and as to such
other matters as Administrative Agent acting on behalf of Lenders may reasonably
request.
F. Fees. Borrowers shall have paid to Syndication Agent, Arranger and
Administra tive Agent, for distribution (as appropriate) to Agents and Lenders,
the fees payable on the Closing Date referred to in subsection 2.3.
G. Completion of Proceedings. All corporate and other proceedings taken
or to be taken in connection with the transactions contemplated hereby and all
documents incidental thereto not previously found reasonably acceptable by
Administrative Agent, acting on behalf of Lenders, and its counsel shall be
reasonably satisfactory in form and substance to Administrative Agent and such
counsel, and Administrative Agent and such counsel shall have received all such
counterpart originals or certified copies of such documents as Administrative
Agent may reasonably request.
H. Conditions to Initial Advances Under Disbursement Agreement. Each of
the conditions set forth in Article 3.1 of the Disbursement Agreement shall have
been satisfied in form and substance reasonably satisfactory to Administrative
Agent and Arranger.
Each Lender by execution and delivery of a signature page hereto on the
Closing Date confirms that it is satisfied that each of the conditions set forth
above in this Subsection 4.1 has been satisfied provided that neither such
confirmation nor any extension of credit hereunder shall preclude any Agent or
Lender from later asserting that (and enforcing any rights or remedies it may
have if), any representation, warranty or certification made or deemed made by
Borrowers or any of their Affiliates in connection therewith was not true and
accurate when made.
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4.2 Conditions to All Term Loans.
The obligations of Lenders to make Term Loans on each Funding Date are
subject to the following additional conditions precedent that Administrative
Agent shall have received before that Funding Date, in accordance with the
provisions of subsection 2.1B, an executed Advance Confirmation Notice in
accordance with and pursuant to the provisions of subsection 2.5 of the
Disbursement Agreement.
4.3 Conditions to all Revolving Loans.
The obligations of Lenders to make Revolving Loans on each Funding Date
are subject to the following further conditions precedent:
A. Administrative Agent shall have received before that
Funding Date, in accordance with the provisions of subsection 2.1B, an
originally executed Notice of Borrowing, in each case signed by the
chief executive officer, the chief financial officer or the treasurer
of each Borrower or of the managing member of such Borrower or by any
executive officer of such Borrower or managing member designated by any
of the above described officers on behalf of Borrowers in a writing
delivered to Administrative Agent.
B. As of that Funding Date:
(i) if the proceeds of the Revolving Loans are to be
used (or the Letter of Credit is being issued for), for any
purpose other than the purchase of Specified FF&E, the
Revolving Loan Availability Date shall have occurred;
(ii) (a) if such Funding Date is prior to the
Revolving Loan Availability Date, the representations and
warranties contained in Section 4 of the Disbursement
Agreement shall be true, correct and complete in all material
respects on and as of that Funding Date to the same extent as
though made on and as of that date, except to the extent such
representations and warranties specifically relate to an
earlier date, in which case such representations and
warranties shall have been true, correct and complete in all
material respects on and as of such earlier date and (b) if
such Funding Date is on or after the Revolving Loan
Availability Date, the representations and warranties
contained herein and in the other Loan Documents shall be
true, correct and complete in all material respects on and as
of that Funding Date to the same extent as though made on and
as of that date, except to the extent such representations and
warranties specifically relate to an earlier date, in which
case such representations and warranties shall have been true,
correct and complete in all material respects on and as of
such earlier date;
(iii) No event shall have occurred and be continuing
or would result from the consummation of the borrowing
contemplated by such Notice of
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Borrowing that would constitute an Event of Default or a
Potential Event of Default;
(iv) Each Loan Party shall have performed in all
material respects all agreements and satisfied all conditions
which this Agreement provides shall be performed or satisfied
by it on or before that Funding Date;
(v) No order, judgment or decree of any court,
arbitrator or govern mental authority shall purport to enjoin
or restrain any Lender from making the Revolving Loans to be
made by it on that Funding Date;
(vi) The making of the Revolving Loans requested on
such Funding Date shall not violate any law including
Regulation G, Regulation T, Regulation U or Regulation X of
the Board of Governors of the Federal Reserve System; and
(vii) There shall not be pending or, to the knowledge
of Borrowers, threatened, any action, suit, proceeding,
governmental investigation or arbitration against or affecting
Borrowers or any of their Subsidiaries or any property of
Borrowers or any of their Subsidiaries that is required to be
disclosed under, and has not been disclosed by Borrowers in
writing pursuant to, subsection 5.6 or 6.1(x) prior to the
making of the last preceding Revolving Loans (or, in the case
of the initial Revolving Loans, prior to the execution of this
Agreement), and there shall have occurred no development not
so disclosed in any such action, suit, proceeding,
governmental investigation or arbitration so disclosed, that,
in either event, in the reasonable opinion of Administrative
Agent or of Requisite Lenders, would have a Material Adverse
Effect;
(viii) If such Funding Date is prior to the Revolving
Loan Availability Date, such Funding Date shall also be a date
on which Term Loans are being funded and all conditions to the
funding of the Term Loans on such Funding Date shall be
satisfied; and
(ix) If such Funding Date is prior to the Revolving
Loan Availability Date, Borrowers shall have provided to
Administrative Agent a detailed list showing the Specified
FF&E to be funded with the proceeds of the Revolving Loans to
be made (or Letters of Credit to be issued) on such Funding
Date.
4.4 Conditions to Letters of Credit.
The issuance of any Letter of Credit hereunder (whether or not the
applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:
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A. On or before the date of issuance of the initial Letter of
Credit pursuant to this Agreement, the initial Loans shall have been
made.
B. On or before the date of issuance of such Letter of Credit,
Administrative Agent shall have received, in accordance with the
provisions of subsection 3.1B(i), an originally executed Notice of
Issuance of Letter of Credit, in each case signed by the chief
executive officer, the chief financial officer or the treasurer of each
of the Borrowers or the managing member of such Borrower or by any
executive officer of each of the Borrowers or managing member
designated by any of the above-described officers on behalf of each of
the Borrowers in a writing delivered to Administrative Agent, together
with all other information specified in subsection 3.1B(i) and such
other documents or information as the applicable Issuing Lender may
reasonably require in connection with the issuance of such Letter of
Credit.
C. On the date of issuance of such Letter of Credit, all
conditions precedent described in subsection 4.3B shall be satisfied to
the same extent as if the issuance of such Letter of Credit were the
making of a Loan and the date of issuance of such Letter of Credit were
a Funding Date.
Section 5. BORROWERS' REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make the
Loans and to induce Issuing Lenders to issue Letters of Credit, Borrowers
represent and warrant to each Lender that, on the Closing Date, on each Funding
Date for Revolving Loans on or after the Revolving Loan Availability Date and on
the date of issuance of each Letter of Credit on or after the Revolving Loan
Availability Date, the following statements are true, correct and complete it
being understood that such representations and warranties are being made solely
as of the Closing Date and as a condition to the making of Revolving Loans and
the issuance of Letters of Credit on or after the Revolving Loan Availability
Date and shall not be made or be a condition to the funding of any Term Loans or
the funding of any Revolving Loans or the issuance of any Letters of Credit
prior to the Revolving Loan Availability Date.
5.1 Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries.
A. Organization and Powers. Each Loan Party is a corporation or limited
liability company duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization as specified in Schedule 5.1A
annexed hereto. Each Loan Party has all requisite corporate or limited liability
company power and authority to own and operate its properties, to carry on its
business as now conducted and as proposed to be conducted, to enter into the
Loan Documents and Project Documents to which it is a party and to carry out the
transactions contemplated thereby.
B. Qualification and Good Standing. Each Loan Party is qualified to do
business and in good standing in every jurisdiction where its assets are located
and wherever necessary
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to carry out its business and operations, except in jurisdictions where the
failure to be so qualified or in good standing has not had and will not have a
Material Adverse Effect.
C. Ownership of Borrowers. The equity interests in each of the
Borrowers is duly authorized, validly issued and (if applicable) fully paid and
nonassessable and, as of the Closing Date, none of such equity interests
constitute Margin Stock. Schedule 5.1C, as it may be supplemented from time to
time, correctly sets forth the ownership of each Borrower.
D. Subsidiaries. All of the Subsidiaries of Borrowers are identified in
Schedule 5.1D annexed hereto, as said Schedule 5.1D may be supplemented from
time to time pursuant to the provisions of subsection 6.1(xvii). The equity
interests of each of the Subsidiaries of Borrowers identified in Schedule 5.1D
annexed hereto (as so supplemented) is duly authorized, validly issued and (if
applicable), fully paid and nonassessable and none of such equity interests
constitutes Margin Stock. Each of the Subsidiaries of Borrowers identified in
Schedule 5.1D annexed hereto (as so supplemented) is a corporation or limited
liability company duly organized, validly existing and in good standing under
the laws of its respective jurisdiction of organization set forth therein, has
all requisite corporate or limited liability company power and authority to own
and operate its properties and to carry on its business as now conducted and as
proposed to be conducted, and is qualified to do business and in good standing
in every jurisdiction where its assets are located and wherever necessary to
carry out its business and operations, in each case except where failure to be
so qualified or in good standing or a lack of such corporate power and authority
has not had and will not have a Material Adverse Effect. Schedule 5.1D annexed
hereto (as so supplemented) correctly sets forth the ownership interest of
Borrowers and each of its Subsidiaries in each of the Subsidiaries of Borrowers
identified therein.
E. Rights to Acquire Equity. There are no options, warrants,
convertible securities or other rights to acquire any equity interests in any
Borrower or any of their Subsidiaries (other than the Mall Subsidiary and Phase
II Subsidiary) except as set forth as Schedule 5.1E.
F. Conduct of Business. Borrowers and their Subsidiaries (other than
the Mall Subsidiary and the Phase II Subsidiary) are engaged only in the
businesses permitted to be engaged in pursuant to subsections 7.12.
5.2 Authorization of Borrowing, etc.
A. Authorization of Borrowing. The execution, delivery and performance
of the Loan Documents and the Project Documents have been duly authorized by all
necessary corporate action on the part of each Loan Party that is a party
thereto.
B. No Conflict. The execution, delivery and performance by Loan Parties
of the Loan Documents and the Project Documents to which they are parties and
the consummation of the transactions contemplated by the Loan Documents and such
Project Documents do not and will not (i) violate any provision of (a) any law
or any governmental rule or regulation applicable to any of their Subsidiaries,
Borrowers or any of their Subsidiaries, (b) the Certificate
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or Articles of Incorporation, Bylaws or operating agreements of Borrowers or any
of their Subsidiaries or (c) any order, judgment or decree of any court or other
agency of government binding on Borrowers or any of their Subsidiaries, (ii)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any Contractual Obligation of Borrowers or any of
their Subsidiaries, (iii) result in or require the creation or imposition of any
Lien upon any of the properties or assets of Borrowers or any of their
Subsidiaries (other than any Liens created under any of the Loan Documents in
favor of Administrative Agent on behalf of Lenders), or (iv) require any
approval of stockholders or any approval or consent of any Person under any
Contractual Obligation of Borrowers or any of their Subsidiaries except for such
approvals or consents which will be obtained on or before the Closing Date and
disclosed in writing to Lenders and except for such violations, conflicts,
approvals and consents the failure of which to obtain could reasonably be
expected to have a Material Adverse Effect.
C. Governmental Consents. The execution, delivery and performance by
Loan Parties of the Loan Documents to which they are parties and the
consummation of the transactions contemplated by the Loan Documents do not and
will not require any registration with, consent or approval of, or notice to, or
other action to, with or by, any federal, state or other govern mental authority
or regulatory body.
D. Binding Obligation. Each of the Loan Documents and Project Documents
has been duly executed and delivered by Loan Parties that are parties hereto or
thereto, as applicable, and is the legally valid and binding obligation of Loan
Parties, enforceable against such Loan Party in accordance with its respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability, whether brought in a
proceeding in equity or at law.
E. Valid Issuance of Mortgage Notes and Subordinated Notes. Borrowers
have the corporate or limited liability company power and authority to issue the
Mortgage Notes and the Subordinated Notes. The Mortgage Notes and the
Subordinated Notes, when issued and paid for, will be the legally valid and
binding obligations of Borrowers, enforceable against Borrowers in accordance
with their respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally or by equitable principles relating to enforceability. The
issuance and sale of Mortgage Notes and the Subordinated Notes, either (a) have
been registered or qualified under applicable federal and state securities laws
or (b) are exempt therefrom. The Loans and all other monetary Obligations
hereunder are and will be within the definition of "Senior Debt" included in
such provisions.
5.3 Financial Condition.
Borrowers have heretofore delivered to Lenders, at Lenders' request,
the following financial statements and information: (i) the audited consolidated
and consolidating balance sheets of LVSI and its Subsidiaries as at December 31,
1996 and the related consolidated and consolidating statements of income,
stockholders' equity and cash flows of Borrowers and their
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Subsidiaries for the Fiscal Year then ended and (ii) the unaudited consolidated
and consolidating balance sheets of LVSI and its Subsidiaries as at June 30,
1997 and the related unaudited consolidated and consolidating statements of
income, stockholders' equity and cash flows of LVSI and its Subsidiaries for the
six months then ended. All such statements were prepared in conformity with GAAP
and fairly present, in all material respects, the financial position (on a
consolidated and, where applicable, consolidating basis) of the entities
described in such financial statements as at the respective dates thereof and
the results of operations and cash flows (on a consolidated and, where
applicable, consolidating basis) of the entities described therein for each of
the periods then ended, subject, in the case of any such unaudited financial
statements, to changes resulting from audit and normal year-end adjustments.
Except for obligations under the Operative Documents, Borrowers do not (and will
not following the funding of the initial Loans) have any Contingent Obligation,
contingent liability or liability for taxes, long-term lease or forward or
long-term commitment that is not reflected in the foregoing financial statements
or the notes thereto and which in any such case is material in relation to the
business, operations, properties, assets, financial condition or prospects of
Borrowers and their Subsidiaries taken as a whole.
5.4 No Material Adverse Change; No Restricted Junior Payments.
Since June 30, 1997, no event or change has occurred that has caused or
evidences, either in any case or in the aggregate, a Material Adverse Effect.
Except as set forth on Schedule 5.4, neither of Borrowers nor any of their
Subsidiaries have directly or indirectly declared, ordered, paid or made, or set
apart any sum or property for, any Restricted Junior Payment or agreed to do so
except as permitted by subsection 7.5 and the repayment of the Interim
Construction Loan on the Closing Date.
5.5 Title to Properties; Liens; Real Property.
A. Title to Properties; Liens. Borrowers and their Subsidiaries have
(i) good marketable and insurable fee simple title to (in the case of fee
interests in real property), (ii) valid leasehold interests in (in the case of
leasehold interests in real or personal property), or (iii) good title to (in
the case of all other personal property), all of their respective material
properties and assets reflected in the financial statements referred to in
subsection 5.3 or in the most recent financial statements delivered pursuant to
subsection 6.1, in each case except for assets disposed of since the date of
such financial statements in the ordinary course of business or as otherwise
permitted under subsection 7.7. Except as permitted by this Agreement, all such
properties and assets are held free and clear of Liens.
B. Real Property. As of the Closing Date, Schedule 5.5 annexed hereto
contains a true, accurate and complete list of (i) all material properties owned
by Borrowers or any of their Subsidiaries and (ii) all material leases,
subleases or assignments of leases (together with all amendments, modifications,
supplements, renewals or extensions of any thereof) affecting real estate of
properties owned by Borrowers or any of their Subsidiaries regardless of whether
a Borrower or such Subsidiary is the landlord or tenant (whether directly or as
an assignee or successor in interest) under such lease, sublease or assignment.
Except as specified in
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Schedule 5.5 annexed hereto, each agreement listed in clause (ii) of the
immediately preceding sentence is in full force and effect and Borrowers do not
have knowledge of any default that has occurred and is continuing thereunder,
and each such agreement constitutes the legally valid and binding obligation of
each applicable Borrower, enforceable against such Borrower in accordance with
its terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally or by equitable principles except to the extent that the
failure of such agreement to be in full force and effect could not reasonably be
expected to have a Material Adverse Effect.
5.6 Litigation; Adverse Facts.
Except as set forth in Schedule 5.6 annexed hereto, there are no
actions, suits, proceedings, arbitrations or governmental investigations
(whether or not purportedly on behalf of Borrowers or any of their Subsidiaries)
at law or in equity, or before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign (including any Environmental Claims) that are pending or, to
the knowledge of Borrowers, threatened against or affecting Borrowers or any of
their Subsidiaries or any property of Borrowers or any of their Subsidiaries and
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect. Neither Borrowers nor any of their Subsidiaries
(i) is in violation of any applicable laws (including Environmental Laws) that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect, or (ii) is subject to or in default with respect to any
final judgments, writs, injunctions, decrees, rules or regulations of any court
or any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.
5.7 Payment of Taxes.
Except to the extent permitted by subsection 6.3, all tax returns and
reports of Borrowers required to be filed by them have been timely filed, and
all taxes shown on such tax returns to be due and payable and all material
assessments, fees and other governmental charges upon Borrowers and upon their
respective properties, assets, income, businesses and franchises which are due
and payable have been paid when due and payable. Borrowers know of no proposed
tax assessment against Borrowers or any of their Subsidiaries which is not being
actively contested by Borrowers or such Subsidiary in good faith and by
appropriate proceedings; provided that such reserves or other appropriate
provisions, if any, as shall be required in conformity with GAAP shall have been
made or provided therefor.
5.8 Performance of Agreements; Materially Adverse Agreements;
Material Contracts.
A. Neither Borrowers nor any of their Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse
92
of time or both, would constitute such a default, except where the consequences
of such default or defaults, if any, would not have a Material Adverse Effect.
B. Schedule 5.8 contains a true, correct and complete list of all the
Material Contracts in effect on the Closing Date. Except as described on
Schedule 5.8, all such Material Contracts are, to the knowledge of Borrowers, in
full force and effect and no material defaults currently exist thereunder.
5.9 Governmental Regulation.
Neither Borrowers nor any of their Subsidiaries is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, or the Interstate Commerce Act or registration under the Investment
Company Act of 1940 or under any other federal or state statute or regulation
which may limit its ability to incur Indebtedness other than the Nevada Gaming
Laws or which may otherwise render all or any portion of the Obligations
unenforceable. Incurrence of the Obligations under the Loan Documents complies
with all applicable provisions of the Nevada Gaming Laws.
5.10 Securities Activities.
A. Neither Borrowers nor any of their Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each Loan, not more than
25% of the value of the assets (either of Borrowers only or of Borrowers and
their Subsidiaries on a consolidated basis) subject to the provisions of
subsection 7.2 or 7.7 or subject to any restriction contained in any agreement
or instrument, between Borrowers and any Lender or any Affiliate of any Lender,
relating to Indebtedness and within the scope of subsection 8.2, will be Margin
Stock.
5.11 Employee Benefit Plans.
A. Borrowers, each of their Subsidiaries and each of their respective
ERISA Affiliates are in material compliance with all applicable provisions and
requirements of ERISA and the regulations thereunder with respect to each
Employee Benefit Plan, and have performed all their obligations under each
Employee Benefit Plan. Each Employee Benefit Plan which is intended to qualify
under Section 401(a) of the Code is so qualified.
B. No ERISA Event has occurred or is reasonably expected to occur which
has resulted or would be reasonably likely to result in a liability in the
aggregate amount of $1,000,000 or more.
C. Except to the extent required under Section 4980B of the Code or
except as set forth in Schedule 5.11 annexed hereto, no Employee Benefit Plan
provides health or welfare
93
benefits (through the purchase of insurance or otherwise) for any retired or
former employee of Borrowers, any of their Subsidiaries or any of their
respective ERISA Affiliates.
D. As of the most recent valuation date for any Pension Plan, the
amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of
ERISA), individually or in the aggregate for all Pension Plans (excluding for
purposes of such computation any Pension Plans with respect to which assets
exceed benefit liabilities), does not exceed $1,000,000.
E. As of the most recent valuation date for each Multiemployer Plan for
which the actuarial report is available, the potential liability of Borrowers,
their Subsidiaries and their respective ERISA Affiliates for a complete
withdrawal from such Multiemployer Plan (within the meaning of Section 4203 of
ERISA), when aggregated with such potential liability for a complete withdrawal
from all Multiemployer Plans, based on information available pursuant to Section
4221(e) of ERISA, does not exceed $1,000,000.
5.12 Certain Fees.
No broker's or finder's fee or commission will be payable with respect
to this Agreement or any of the transactions contemplated hereby except as set
forth on Schedule 5.12 (other than fees payable to Agents and Lenders under
subsection 2.3), and each Borrower hereby indemnifies Lenders against, and
agrees that it will hold Lenders harmless from, any claim, demand or liability
for any such broker's or finder's fees alleged to have been incurred in
connection herewith or therewith and any expenses (including reasonable fees,
expenses and disbursements of counsel) arising in connection with any such
claim, demand or liability.
5.13 Environmental Protection.
Except as set forth in Schedule 5.13 annexed hereto:
(i) neither Borrowers nor any of their Subsidiaries nor any of
their respective Facilities or operations relating to the Site or the
Project are subject to any outstanding written order, consent decree or
settlement agreement with any Person relating to (a) any Environmental
Law, (b) any Environmental Claim, or (c) any Hazardous Materials
Activity;
(ii) neither Borrowers nor any of their Subsidiaries has
received any letter or request for information under Section 104 of the
Comprehensive Environmental Response, Compensation, and Liability Act
(42 U.S.C. ss.9604) or any comparable state law;
(iii) there are and, to Borrowers' knowledge, have been no
conditions, occurrences, or Hazardous Materials Activities on the Site
or any other Facility relating to the Project which could reasonably be
expected to form the basis of an Environmental Claim against Borrowers
or any of their Subsidiaries;
94
(iv) neither Borrowers nor any of their Subsidiaries nor, to
Borrowers' knowledge, any predecessor of Borrowers or any of their
Subsidiaries has filed any notice under any Environmental Law
indicating past or present treatment of Hazardous Materials at any
Facility, and none of Borrowers' or any of their Subsidiaries'
operations involves the generation, transportation, treatment, storage
or disposal of hazardous waste, as defined under 40 C.F.R. Parts
260-270 or any state equivalent;
(v) compliance with all current or reasonably foreseeable
future requirements pursuant to or under Environmental Laws will not,
individually or in the aggregate, have a reasonable possibility of
giving rise to a Material Adverse Effect.
Notwithstanding anything in this subsection 5.13 to the contrary, no
event or condition has occurred or is occurring with respect to Borrowers or any
of their Subsidiaries relating to any Environmental Law, any Release of
Hazardous Materials, or any Hazardous Materials Activity, including any matter
disclosed on Schedule 5.13 annexed hereto, which individually or in the
aggregate has had or could reasonably be expected to have a Material Adverse
Effect.
5.14 Employee Matters.
There is no strike or work stoppage in existence or threatened
involving Borrowers that could reasonably be expected to have a Material Adverse
Effect.
5.15 Solvency.
Each Borrower is and, upon the incurrence of any Obligations by such
Borrower on any date on which this representation is made, will be, Solvent.
5.16 Matters Relating to Collateral.
A. Creation, Perfection and Priority of Liens. The execution and
delivery of the Collateral Documents by Borrowers and their Subsidiaries,
together with the actions taken on or prior to the date hereof pursuant to
subsections 4.1B and 4.1C are effective to create in favor of Administrative
Agent for the benefit of Lenders, as security for the respective Secured
Obligations (as defined in the applicable Collateral Document in respect of any
Collateral), a valid and perfected First Priority Lien on all of the First
Priority Collateral and a valid and perfected second priority lien on the Mall
Collateral, and all filings and other actions necessary to perfect and maintain
the perfection and priority status of such Liens have been duly made or taken
and remain in full force and effect, other than the filing of any UCC financing
statements delivered to Administrative Agent for filing (but not yet filed) and
the periodic filing of UCC continuation statements in respect of UCC financing
statements filed by or on behalf of Administrative Agent.
B. Permits. No authorization, approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for either (i) the pledge or grant by Borrowers and their Subsidiaries
of the Liens purported to be created in favor of
95
Administrative Agent pursuant to any of the Collateral Documents or (ii) the
exercise by Administrative Agent of any rights or remedies in respect of any
Collateral (whether specifically granted or created pursuant to any of the
Collateral Documents or created or provided for by applicable law), except for
filings or recordings contemplated by subsection 5.16A or as set forth in
Schedule 5.16B.
C. Absence of Third-Party Filings. Except such as may have been filed
in favor of Administrative Agent as contemplated by subsection 5.16A or filed to
perfect a Lien permitted under subsection 7.2, no effective UCC financing
statement, fixture filing or other instrument similar in effect covering all or
any part of the Collateral is on file in any filing or recording office.
D. Information Regarding Collateral. All information supplied to
Administrative Agent by or on behalf of Borrowers with respect to any of the
Collateral (in each case taken as a whole with respect to any particular
Collateral) is accurate and complete in all material respects.
Section 6. BORROWERS' AFFIRMATIVE COVENANTS
Borrowers covenant and agree that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless the Requisite Lenders shall otherwise give prior written consent,
Borrowers shall perform, and shall cause each of their Subsidiaries to perform,
(x) prior to the Final Completion Date, all covenants set forth in Article 5 of
the Disbursement Agreement and the covenants set forth in subsections 6.3, 6.5,
6.8 and 6.14 below and (y) on and after the Completion Date, all covenants set
forth in Article 5 of the Disbursement Agreement (while in effect), and all
covenants set forth in this Section 6.
6.1 Financial Statements and Other Reports.
Borrowers will maintain a system of accounting established and
administered in accordance with sound business practices to permit preparation
of financial statements in conformity with GAAP. Borrowers will deliver to
Administrative Agent and Lenders:
(i) Monthly Financials: as soon as available and in any event
within 30 days after the end of each month, the consolidated and
consolidating balance sheets of LVSI and its Subsidiaries as at the end
of such month and the related consolidated and consolidating statements
of income, stockholders' equity and cash flows of LVSI and its
Subsidiaries for such month and for the period from the beginning of
the then current Fiscal Year to the end of such month, setting forth in
each case in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year and the corresponding
figures from the Financial Plan for the current Fiscal Year, to the
extent prepared on a monthly basis, all in reasonable detail and
certified by the chief financial officer of LVSI, on behalf of LVSI,
that they fairly present, in all material respects, the
96
financial condition of LVSI and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for
the periods indicated, subject to changes resulting from audit and
normal year-end adjustments;
(ii) Quarterly Financials: as soon as available and in any
event within 45 days after the end of each Fiscal Quarter,
(a) the consolidated and consolidating balance sheets
of LVSI and its subsidiaries (including the Excluded
Subsidiaries) as at the end of such Fiscal Quarter and the
related consolidated and consolidating statements of income,
stock holders' equity and cash flows of LVSI and its
subsidiaries (including the Excluded Subsidiaries) for such
Fiscal Quarter and for the period from the beginning of the
then current Fiscal Year to the end of such Fiscal Quarter),
setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the
previous Fiscal Year, all in reasonable detail and certified
by the chief financial officer of LVSI, on behalf of LVSI,
that they fairly present, in all material respects, the
financial condition of LVSI and its subsidiaries (including
the Excluded Subsidiaries) as at the dates indicated and the
results of their operations and their cash flows for the
periods indicated, subject to changes resulting from audit and
normal year-end adjustments;
(b) the consolidated balance sheets of LVSI and its
Subsidiaries as at the end of such Fiscal Quarter and the
related consolidated statements of income, stockholders'
equity and cash flows of LVSI and its Subsidiaries for such
Fiscal Quarter and for the period from the beginning of the
then current Fiscal Year to the end of such Fiscal Quarter,
setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the
previous Fiscal Year and the corresponding figures from the
Financial Plan for the current Fiscal Year, all in reasonable
detail and certified by the chief financial officer of LVSI,
on behalf of LVSI, that they fairly present, in all material
respects, the financial condition of LVSI and its Subsidiaries
as at the dates indicated and the results of their operations
and their cash flows for the periods indicated, subject to
changes resulting from audit and normal year-end adjustments;
(c) the consolidated balance sheets of Mall
Subsidiary and its subsidiaries as at the end of such Fiscal
Quarter and the related consolidated statements of income,
stockholders' equity and cash flows of Mall Subsidiary and its
subsidiaries for such Fiscal Quarter and for the period from
the beginning of the then current Fiscal Year to the end of
such Fiscal Quarter, setting forth in each case in comparative
form the corresponding figures for the corresponding periods
of the previous Fiscal Year, all in reasonable detail and
certified by the chief financial officer of LVSI, on behalf of
LVSI, that they fairly present, in all material respects, the
financial condition of Mall Subsidiary and its subsidiaries as
at the dates indicated and the results of their operations and
their cash flows
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for the periods indicated, subject to changes resulting from
audit and normal year-end adjustments; and
(d) a narrative report describing the operations of
LVSI and its subsidiaries (including the Excluded
Subsidiaries) in the form prepared for presentation to senior
management for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such
Fiscal Quarter;
(iii) Year-End Financials: as soon as available and in any event within
90 days after the end of each Fiscal Year,
(a) the consolidated and consolidating balance sheets
of LVSI and its subsidiaries (including the Excluded
Subsidiaries) as at the end of such Fiscal Year and the
related consolidated and consolidating statements of income,
stockholders' equity and cash flows of LVSI and its
subsidiaries (including the Excluded Subsidiaries) for such
Fiscal Year, setting forth in each case in comparative form
the corresponding figures for the previous Fiscal Year, all in
reasonable detail and certified by the chief financial officer
of LVSI, on behalf of LVSI, that they fairly present, in all
material respects, the financial condition of LVSI and its
subsidiaries (including the Excluded Subsidiaries) as at the
dates indicated and the results of their operations and their
cash flows for the periods indicated;
(b) the consolidated balance sheets of LVSI and its
Subsidiaries as at the end of such Fiscal Year and the related
consolidated and consolidating statements of income,
stockholders' equity and cash flows of LVSI and its
Subsidiaries for such Fiscal Year, setting forth in each case
in comparative form the corresponding figures for the previous
Fiscal Year and the corresponding figures from the Financial
Plan for the Fiscal Year covered by such financial statements,
all in reasonable detail and certified by the chief financial
officer of LVSI, on behalf of LVSI, that they fairly present,
in all material respects, the financial condition of LVSI and
its Subsidiaries as at the dates indicated and the results of
their operations and their cash flows for the periods
indicated;
(c) the consolidated balance sheets of Mall
Subsidiary and its subsidiaries as at the end of such Fiscal
Year and the related consolidated statements of income,
stockholders' equity and cash flows of Mall Subsidiary and its
subsidiaries for such Fiscal Year, setting forth in each case
in comparative form the corresponding figures for the previous
Fiscal Year, all in reasonable detail and certified by the
chief financial officer of LVSI, on behalf of LVSI, that they
fairly present, in all material respects, the financial
condition of Mall Subsidiary and its subsidiaries as at the
dates indicated and the results of their operations and their
cash flows for the periods indicated;
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(d) a narrative report describing the operations of
LVSI and its subsidiaries (including the Excluded
Subsidiaries) in the form prepared for presentation to senior
management for such Fiscal Year; and
(e) in the case of such consolidated financial
statements specified in subdivisions (a) to (c) above, a
report thereon of Price Waterhouse LLP or other independent
certified public accountants of recognized national standing
selected by Borrowers and reasonably satisfactory to
Administrative Agent, which report shall be unqualified as to
scope of audit, shall express no doubts about the ability of
the Persons covered thereby to continue as a going concern,
and shall state that such consolidated financial statements
fairly present, in all material respects, the consolidated
financial position of LVSI and its subsidiaries (including the
Excluded Subsidiaries), LVSI and its Subsidiaries and Mall
Subsidiary and its subsidiaries, respectively as at the dates
indicated and the results of their operations and their cash
flows for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years (except as
otherwise disclosed in such financial statements) and that the
examination by such accountants in connection with such
consolidated financial statements has been made in accordance
with generally accepted auditing standards;
(iv) Officers' and Compliance Certificates: together with each
delivery of financial statements of LVSI and its Subsidiaries pursuant
to subdivisions (ii) and (iii) above, (a) an Officers' Certificate of
LVSI stating that the signers, on behalf of LVSI, have reviewed the
terms of this Agreement and have made, or caused to be made under their
supervision, a review in reasonable detail of the transactions and
condition of LVSI and its Subsidiaries (and, to the extent applicable,
Mall Subsidiary, Mall Manager, Mall Direct Holdings, Phase II
Subsidiary, Phase II Manager, Phase II Direct Holdings and their
respective subsidiaries) during the accounting period covered by such
financial statements and that such review has not disclosed the
existence during or at the end of such accounting period, and that the
signers do not have knowledge of the existence as at the date of such
Officers' Certificate, of any condition or event that constitutes an
Event of Default or Potential Event of Default, or, if any such
condition or event existed or exists, specifying the nature and period
of existence thereof and what action Borrowers have taken, is taking
and proposes to take with respect thereto; and (b) a Compliance
Certificate demonstrating in reasonable detail compliance during and at
the end of the applicable accounting periods with the restrictions
contained in Section 7;
(v) Reconciliation Statements: if, as a result of any change
in accounting principles and policies from those used in the
preparation of the audited financial statements referred to in
subsection 5.3, the consolidated financial statements of LVSI and its
subsidiaries delivered pursuant to subdivisions (i), (ii), (iii) or
(xiii) of this subsection 6.1 will differ in any material respect from
the consolidated financial statements that would have been delivered
pursuant to such subdivisions had no such change in accounting
principles and policies been made, then (a) together with the first
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delivery of financial statements pursuant to subdivision (i), (ii),
(iii) or (xiii) of this subsection 6.1 following such change,
consolidated financial statements of LVSI and its subsidiaries for (y)
the current Fiscal Year to the effective date of such change and (z)
the two full Fiscal Years immediately preceding the Fiscal Year in
which such change is made, in each case prepared on a pro forma basis
as if such change had been in effect during such periods, and (b)
together with each delivery of financial statements for LVSI and its
subsidiaries pursuant to subdivision (i), (ii), (iii) or (xiii) of this
subsection 6.1 following such change, a written statement of the chief
accounting officer or chief financial officer of LVSI setting forth the
differences (including any differences that would affect any
calculations relating to the financial covenants set forth in
subsection 7.6) which would have resulted if such financial statements
had been prepared without giving effect to such change;
(vi) Accountants' Certification: together with each delivery
of consolidated financial statements pursuant to subdivision (iii)
above, a written statement by the independent certified public
accountants giving the report thereon (a) stating that their audit
examination has included a review of the terms of this Agreement and
the other Loan Documents as they relate to accounting matters, (b)
stating whether, in connection with their audit examination, any
condition or event that constitutes an Event of Default or Potential
Event of Default has come to their attention and, if such a condition
or event has come to their attention, specifying the nature and period
of existence thereof; provided that such accountants shall not be
liable by reason of any failure to obtain knowledge of any such Event
of Default or Potential Event of Default that would not be disclosed in
the course of their audit examination, and (c) stating that based on
their audit examination nothing has come to their attention that causes
them to believe either or both that the information contained in the
certificates delivered therewith pursuant to subdivision (iv) above is
not correct or that the matters set forth in the Compliance
Certificates delivered therewith pursuant to clause (b) of subdivision
(iv) above for the applicable Fiscal Year are not stated in accordance
with the terms of this Agreement;
(vii) Accountants' Reports: promptly upon receipt thereof
(unless restricted by applicable professional standards), copies of all
reports submitted to Borrowers by inde pendent certified public
accountants in connection with each annual, interim or special audit of
the financial statements of LVSI and its subsidiaries made by such
accountants, including any comment letter submitted by such accountants
to management in connection with their annual audit;
(viii) SEC Filings, Press Releases and Other Financial
Reports: promptly upon their becoming available, copies of (a) all
financial statements, reports, notices and proxy statements sent or
made available generally by Borrowers or any of their subsidiaries to
their security holders, (b) all regular and periodic reports and all
registration statements (other than on Form S-8 or a similar form) and
prospectuses, if any, filed by Borrowers or any of their subsidiaries
with any securities exchange or with the Securities and Exchange
Commission or any governmental or private regulatory authority, (c) all
press releases and other statements made available generally by
Borrowers and any of their subsidiaries to the public concerning
material developments in the business of Borrowers and their
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subsidiaries and (d) to the extent prepared, any financial statements
and reports concerning any subsidiaries of Borrowers (including
Excluded Subsidiaries not delivered pursuant to clauses (i), (ii) or
(iii) above);
(ix) Events of Default, etc.: promptly upon any officer of
Borrowers obtaining knowledge (a) of any condition or event that
constitutes an Event of Default or Potential Event of Default, or
becoming aware that any Lender has given any notice (other than to
Administrative Agent) or taken any other action with respect to a
claimed Event of Default or Potential Event of Default, (b) that any
Person has given any notice to Borrowers and their Subsidiaries or
taken any other action with respect to a claimed default or event or
condition of the type referred to in subsection 8.2, (c) of any
condition or event that would be required to be disclosed in a current
report filed by Borrowers with the Securities and Exchange Commission
on Form 8-K (Items 1, 2, 4, 5 and 6 of such Form as in effect on the
date hereof) if Borrowers were required to file such reports under the
Exchange Act, or (d) of the occurrence of any event or change that has
caused or evidences, either in any case or in the aggregate, a Material
Adverse Effect, an Officers' Certificate specifying the nature and
period of existence of such condition, event or change, or specifying
the notice given or action taken by any such Person and the nature of
such claimed Event of Default, Potential Event of Default, default,
event or condition, and what action Borrowers have taken, are taking
and propose to take with respect thereto;
(x) Litigation or Other Proceedings: (a) promptly upon any
officer of Borrowers obtaining knowledge of (X) the non-frivolous
institution of, or threat of, any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration against or affecting Borrowers and their Subsidiaries, or
any property of Borrowers and their Subsidiaries (collectively,
"Proceedings") not previously disclosed in writing by Borrowers to
Lenders or (Y) any material development in any Proceeding that, in any
case:
(1) if adversely determined, has a reasonable
possibility of giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as
a result of, the transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Borrowers to enable Lenders and their counsel
to evaluate such matters; and (b) within twenty days after the end of
each Fiscal Quarter, a schedule of all Proceedings involving an alleged
liability of, or claims against or affecting, Borrowers or any of their
Subsidiaries equal to or greater than $1,000,000, and promptly after
request by Administrative Agent such other information as may be
reasonably requested by
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Administrative Agent to enable Administrative Agent and its counsel to
evaluate any of such Proceedings;
(xi) ERISA Events: promptly upon becoming aware of the
occurrence of or forthcoming occurrence of any ERISA Event, a written
notice specifying the nature thereof, what action Borrowers or any of
their respective ERISA Affiliates has taken, is taking or proposes to
take with respect thereto and, when known, any action taken or
threatened by the Internal Revenue Service, the Department of Labor or
the PBGC with respect thereto;
(xii) ERISA Notices: with reasonable promptness, copies of (a)
each Schedule B (Actuarial Information) to the annual report (Form 5500
Series) filed by Borrowers, any of their Subsidiaries or any of their
respective ERISA Affiliates with the Internal Revenue Service with
respect to each Pension Plan; (b) all notices received by Borrowers or
any of their respective ERISA Affiliates from a Multiemployer Plan
sponsor concerning an ERISA Event; and (c) copies of such other
documents or governmental reports or filings relating to any Employee
Benefit Plan as Administrative Agent shall reasonably request;
(xiii) Financial Plans: as soon as practicable and in any
event no later than the Completion Date and 30 days prior to the
beginning of each Fiscal Year thereafter, a consolidated and
consolidating plan and financial forecast for such Fiscal Year (or
portion thereof from the Completion Date through the end of such Fiscal
Year) and each subsequent Fiscal Year through the final maturity date
of the Term Loans (the "Financial Plan" for such Fiscal Years),
including (a) forecasted consolidated and consolidating balance sheets
and forecasted consolidated and consolidating statements of income and
cash flows of LVSI and its Subsidiaries for such Fiscal Years, together
with a pro forma Compliance Certificate for such Fiscal Years and an
explanation of the assumptions on which such forecasts are based, (b)
forecasted consolidated and consolidating statements of income and cash
flows of LVSI and its Subsidiaries for each month of such Fiscal Years,
together with an explanation of the assumptions on which such forecasts
are based, and (c) such other information and projections for such
Fiscal Years as any Lender may reasonably request;
(xiv) Insurance: as soon as practicable and in any event by
the last day of each Fiscal Year, a report in form and substance
reasonably satisfactory to Administrative Agent outlining all material
insurance coverage maintained as of the date of such report by
Borrowers and their Subsidiaries and all material insurance coverage
planned to be main tained by Borrowers and their Subsidiaries in the
immediately succeeding Fiscal Year;
(xv) Board of Directors: with reasonable promptness, written
notice of any change in the members of the Board of Directors of LVSI
or any of its corporate Subsidiaries.
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(xvi) New Subsidiaries: promptly upon any Person becoming a
Subsidiary of either of Borrowers, a written notice setting forth with
respect to such Person (a) the date on which such Person became a
Subsidiary of either of Borrowers and (b) all of the data required to
be set forth in Schedule 5.1 annexed hereto with respect to all
Subsidiaries of either of Borrowers (it being understood that such
written notice shall be deemed to supplement Schedule 5.1 annexed
hereto for all purposes of this Agreement);
(xvii) Material Contracts: promptly, and in any event within
ten Business Days after any Material Contract of Borrowers or any of
their Subsidiaries is terminated or amended in a manner that is
materially adverse to Borrowers or any of their Subsidiaries or any new
Material Contract is entered into, or upon becoming aware of any
material default by any Party under a Material Contract, a written
statement describing such event with copies of such material amendments
or new contracts, and an explanation of any actions being taken with
respect thereto;
(xviii) UCC Search Report: As promptly as practicable after
the date of delivery to Administrative Agent of any UCC financing
statement executed by any Loan Party pursuant to subsection 6.12,
copies of completed UCC searches evidencing the proper filing,
recording and indexing of all such UCC financing statement and listing
all other effective financing statements that name such Loan Party as
debtor, together with copies of all such other financing statements not
previously delivered to Administrative Agent by or on behalf of such
Loan Party;
(xix) Notices under Operative Documents: promptly upon
receipt, copies of all notices provided to the Borrowers or their
Affiliates pursuant to any Operative Documents relating to material
defaults or material delays and promptly upon execution and delivery
thereof, copies of all amendments to any of the Operative Documents;
and
(xx) Other Information: with reasonable promptness, such other
information and data with respect to Borrowers or any of their
Subsidiaries as from time to time may be reasonably requested by any
Lender.
6.2 Corporate Existence, etc.
Borrowers will, and will cause each of their Subsidiaries to, at all
times preserve and keep in full force and effect their corporate or limited
liability company existence and all rights and franchises material to its
business; provided, however that Borrowers and their Subsidiaries may merge or
consolidate as permitted pursuant to subsection 7.7 of this Agreement and
provided, further, that no Borrower nor any such Subsidiary shall be required to
preserve any such right or franchise if the Board of Directors of the applicable
Borrower or Subsidiary (or the managing member thereof, if applicable) shall
determine (and shall so notify the Administrative Agent), that the preservation
thereof is no longer desirable in the conduct of the business of such Borrower
or Subsidiary, as the case may be, and that the loss thereof is not
disadvantageous in any material respect to Borrowers and their Subsidiaries or
Lenders.
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6.3 Payment of Taxes and Claims; Tax Consolidation.
A. Borrowers will, and will cause each of their Subsidiaries to, pay
all material taxes, assessments and other governmental charges imposed upon it
or any of its properties or assets or in respect of any of its income,
businesses or franchises before any penalty accrues thereon, and all material
claims (including claims for labor, services, materials and supplies) for sums
that have become due and payable and that by law have or may become a Lien upon
any of its properties or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; provided that no such charge or claim
need be paid if it is being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted, so long as (1) such reserve or
other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made therefor and (2) in the case of a charge or claim
which has or may become a Lien against any of the Collateral, such contest
proceedings conclusively operate to stay the sale of any portion of the
Collateral to satisfy such charge or claim.
B. Borrowers will not, nor will they permit any of their Subsidiaries
to, file or consent to the filing of any consolidated income tax return with any
Person (other than Borrowers or any of their Subsidiaries) unless Borrower and
its Subsidiaries shall have entered into, a tax sharing agreement with such
Person, in form and substance satisfactory to Administrative Agent.
6.4 Maintenance of Properties; Insurance; Application of Net Loss Proceeds.
A. Maintenance of Properties. Borrowers will, and will cause each of
their Subsidiaries to, maintain or cause to be maintained in good repair,
working order and condition, ordinary wear and tear excepted, all material
properties used or useful in the business of Borrowers and their Subsidiaries
and from time to time will make or cause to be made all appropriate repairs,
renewals and replacements thereof except to the extent that the Borrowers
determine in good faith not to maintain, repair, renew or replace such property
if such property is no longer desirable in the conduct of their business and the
failure to do so is not disadvanta geous in any material respect to the
Borrowers and their Subsidiaries or the Lenders.
B. Insurance. Borrowers will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Borrowers, and their Subsidiaries as may
customarily be carried or maintained under similar circumstances by corporations
of established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for
corporations similarly situated in the industry. Without limiting the generality
of the foregoing, Borrowers will maintain or cause to be maintained the
insurance coverage required to be maintained under the Disbursement Agreement,
while applicable, and the Cooperation
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Agreement, such insurance coverage to be provided by such insurance provider, in
such amounts with such deductibles and covering such risks as are at all times
required under the Disbursement Agreement, while applicable, and the Cooperation
Agreement and to include, if the Mortgaged Property is located in an area
designated by the Federal Emergency Management Agency as having special flood or
mud slide hazards, flood insurance in compliance with any applicable regulations
of the Board of Governors of the Federal Reserve System.
C. Application of Net Loss Proceeds. Borrowers shall (i) apply Loss
Proceeds and Liquidated Damages to restore, replace or rebuild the Project in
accordance with the Cooperation Agreement, (ii) apply Liquidated Damages, to
repay any Completion Guaranty Loan in accordance with Section 7.5 hereof and the
Adelson Intercreditor Agreement, and (iii) apply any Loss Proceeds and
Liquidated Damages not applied as provided in clauses (i) and (ii) to prepay the
Loans in accordance with the Cooperation Agreement and subsection 2.4B(iii)(b)
hereof. Administrative Agent shall, and Borrowers hereby authorize
Administrative Agent to, apply such Loss Proceeds and Liquidated Damages to
prepay the Loans as provided in subsection 2.4B(iii)(b).
6.5 Inspection; Lender Meeting.
A. Inspection Rights. Borrowers shall, and shall cause each of their
Subsidiaries to, permit any authorized representatives designated by any Lender
to visit and inspect any of the properties of Borrowers and their Subsidiaries,
to inspect, copy and take extracts from its and their financial and accounting
records, and to discuss its and their affairs, finances and accounts with its
and their officers and independent public accountants, if requested by
Administrative Agent (provided that any Borrower may, if it so chooses, be
present at or participate in any such discussion), all upon reasonable notice
and at such reasonable times during normal business hours and as often as may
reasonably be requested.
B. Lender Meeting. Borrowers will, upon the request of Administrative
Agent or Requisite Lenders, participate in a meeting of Administrative Agent and
Lenders once during each Fiscal Year to be held at Borrowers' corporate offices
(or at such other location as may be agreed to by Borrowers and Administrative
Agent) at such time as may be agreed to by Borrowers and Administrative Agent.
6.6 Compliance with Laws, etc.; Permits
A. Borrowers shall and shall cause each of their Subsidiaries and all
other Persons on or occupying any Facilities to, comply with the requirements of
all applicable laws, rules, regulations and orders of any governmental authority
(including all Environmental Laws), noncompliance with which could reasonably be
expected to cause, individually or in the aggregate, a Material Adverse Effect.
B. Borrowers shall, and shall cause each of their Subsidiaries to, from
time to time obtain, maintain, retain, observe, keep in full force and effect
and comply in all material respects with the terms, conditions and provisions of
all Permits as shall now or hereafter be necessary under applicable laws except
any thereof the noncompliance with which could not reasonably be expected to
have a Material Adverse Effect.
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6.7 Environmental Review and Investigation, Disclosure, Etc.; Borrowers'
Actions Regarding Hazardous Materials Activities, Environmental Claims
and Violations of Environmental Laws.
A. Environmental Review and Investigation. Borrowers agree that
Administrative Agent may, from time to time and in its reasonable discretion,
(i) retain, at Borrowers' expense, an independent professional consultant to
review any environmental audits, investigations, analyses and reports relating
to Hazardous Materials in respect of the Site or the Project prepared by or for
Borrowers and (ii) conduct their own investigation of any Facility; provided
that, in the case of any Facility no longer owned, leased, operated or used by
Borrowers or any of their Subsidiaries, Borrowers shall only be obligated to use
their best efforts to obtain permission for Administrative Agent's professional
consultant to conduct an investigation of such Facility. For purposes of
conducting such a review and/or investigation, Borrowers hereby grant to
Administrative Agent and its agents, employees, consultants and contractors the
right to enter into or onto any Facilities currently owned, leased, operated or
used by Borrowers or any of their Subsidiaries and to perform such tests on such
property (including taking samples of soil, groundwater and suspected
asbestos-containing materials) as are reasonably necessary in connection
therewith. Any such investigation of any Facility shall be conducted, unless
otherwise agreed to by Borrowers and Administrative Agent, during normal
business hours and, to the extent reasonably practicable, shall be conducted so
as not to interfere with the ongoing operations at such Facility or to cause any
damage or loss to any property at such Facility. Borrowers and Administrative
Agent hereby acknowledge and agree that any report of any investigation
conducted at the request of Administrative Agent pursuant to this subsection
6.7A will be obtained and shall be used by Administrative Agent and Lenders for
the purposes of Lenders' internal credit decisions, to monitor and police the
Loans and to protect Lenders' security interests, if any, created by the Loan
Documents. Administrative Agent agrees to deliver a copy of any such report to
Borrowers with the understanding that Borrowers acknowledge and agree that (x)
they will indemnify and hold harmless Administrative Agent and each Lender from
any costs, losses or liabilities relating to Borrowers' use of or reliance on
such report, (y) neither Administrative Agent nor any Lender makes any
representation or warranty with respect to such report, and (z) by delivering
such report to Borrowers, neither Administrative Agent nor any Lender is
requiring or recommending the implementation of any suggestions or
recommendations contained in such report.
B. Environmental Disclosure. Borrowers will deliver to Administrative
Agent and Lenders:
(i) Environmental Audits and Reports. As soon as practicable
following receipt thereof, copies of all environmental audits,
investigations, analyses and reports of any kind or character, whether
prepared by personnel of Borrowers or any of their Subsidiaries or by
independent consultants, governmental authorities or any other Persons,
with respect to significant environmental matters at any Facility or
with respect to any Environmental Claims;
106
(ii) Notice of Certain Releases, Remedial Actions, Etc.
Promptly upon the occurrence thereof, written notice describing in
reasonable detail (a) any Release required to be reported to any
federal, state or local governmental or regulatory agency under any
applicable Environmental Laws, (b) any remedial action taken by
Borrowers or any other Person in response to (1) any Hazardous
Materials Activities the existence of which has a reasonable
possibility of resulting in one or more Environmental Claims having,
individually or in the aggregate, a Material Adverse Effect, or (2) any
Environmental Claims that, individually or in the aggregate, have a
reasonable possibility of resulting in a Material Adverse Effect.
(iii) Written Communications Regarding Environmental Claims,
Releases, Etc. As soon as practicable following the sending or receipt
thereof by Borrowers or any of their Subsidiaries, a copy of any and
all written communications with respect to (a) any Environmental Claims
that, individually or in the aggregate, have a reasonable possibility
of giving rise to a Material Adverse Effect, (b) any Release required
to be reported to any federal, state or local governmental or
regulatory agency, and (c) any request for information from any
governmental agency that suggests such agency is investigating whether
Borrowers or any of their Subsidiaries may be potentially responsible
for any Hazardous Materials Activity.
(iv) Notice of Certain Proposed Actions Having Environmental
Impact. Prompt written notice describing in reasonable detail (a) any
proposed acquisition of stock, assets, or property by Borrowers or any
of their Subsidiaries that could reasonably be expected to (1) expose
Borrowers or any of their Subsidiaries to, or result in, Environmental
Claims that could reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect or (2) affect the ability of
Borrowers or any of their Subsidiaries to maintain in full force and
effect all material Permits required under any Environmental Laws for
their respective operations and (b) any proposed action to be taken by
Borrowers or any of their Subsidiaries to modify current operations in
a manner that could reasonably be expected to subject Borrowers or any
of their Subsidiaries to any material additional obligations or
requirements under any Environmental Laws that could reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect.
(v) Other Information. With reasonable promptness, such other
documents and information as from time to time may be reasonably
requested by Administrative Agent in relation to any matters disclosed
pursuant to this subsection 6.7.
C. Borrowers' Actions Regarding Hazardous Materials Activities,
Environmental Claims and Violations of Environmental Laws.
(i) Remedial Actions Relating to Hazardous Materials
Activities. Borrowers shall promptly undertake, and shall cause each of
their Subsidiaries promptly to undertake, any and all investigations,
studies, sampling, testing, abatement, cleanup, removal, remediation or
other response actions necessary to remove, remediate, clean
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up or abate any Hazardous Materials Activity on, under or about any
Facility that is in violation of any Environmental Laws or that
presents a material risk of giving rise to an Environmental Claim. In
the event Borrowers or any of their Subsidiaries undertake any such
action with respect to any Hazardous Materials, Borrowers or such
Subsidiary shall conduct and complete such action in compliance with
all applicable Environmental Laws and in accordance with the policies,
orders and directives of all federal, state and local governmental
authorities except when, and only to the extent that, Borrowers' or
such Subsidiary's liability with respect to such Hazardous Materials
Activity is being contested in good faith by Borrowers or such
Subsidiary.
(ii) Actions with Respect to Environmental Claims and
Violations of Environmental Laws. Borrowers shall promptly take, and
shall cause each of their Subsidiaries promptly to take, any and all
actions necessary to (i) cure any material violation of applicable
Environmental Laws by Borrowers or their Subsidiaries and (ii) make an
appropriate response to any Environmental Claim against Borrowers or
any of their Subsidiaries and discharge any obligations it may have to
any Person thereunder.
6.8 Interest Rate Protection.
At all times after the date which is 60 days after the Closing Date,
Borrowers shall maintain in effect one or more Interest Rate Agreements with
respect to the Term Loans, each such Interest Rate Agreement to be for a term
and in form and substance reasonably satisfactory to Administrative Agent, which
Interest Rate Agreements shall effectively limit the Unadjusted Eurodollar Rate
Component (as hereinafter defined) of the interest costs to Borrowers with
respect to an aggregate notional principal amount of not less than 50% of the
aggregate principal amount of the Term Loans outstanding from time to time
(based on the assumption that such notional principal amount was a Eurodollar
Rate Loan with an Interest Period of three months) to a rate equal to not more
than 9.0% per annum. For purposes of this subsection 6.8, the term "Unadjusted
Eurodollar Rate Component" means that component of the interest costs to
Borrowers in respect of a Eurodollar Rate Loan that is based upon the rate
obtained pursuant to clause (i) of the definition of Adjusted Eurodollar Rate.
6.9 Compliance with Material Contracts.
Borrowers shall, and shall cause each of their Subsidiaries to, comply,
duly and promptly, in all material respects with its respective obligations and
enforce all of its respective rights under all Material Contracts, including all
Operative Documents except where the failure to comply could not reasonably be
expected to have a Material Adverse Effect.
6.10 Separate Legal and Tax Parcel for Mall.
Borrowers shall use their reasonable best efforts to have the Mall
designated as one or more separate legal parcels and separate tax parcels by all
applicable Governmental Authorities as soon as practicable following the Closing
Date and to deliver to Administrative Agent written evidence thereof from the
appropriate Governmental Instrumentality.
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6.11 Payment of Liens.
A. Removal by Borrowers. In the event that, notwithstanding the
covenants contained in subsection 7.2, a Lien not otherwise permitted under
subsection 7.2 may encumber the Mortgaged Property or other item of Collateral
or any portion thereof, the Borrowers shall promptly discharge or cause to be
discharged by payment to the lienor or lien claimant or promptly secure removal
by bonding or deposit with the county clerk or otherwise or, at the
Administrative Agent's option, and if obtainable promptly obtain title insurance
against, any such Lien or mechanics' or materialmen's claims of lien filed or
otherwise asserted against the Mortgaged Property or any other item of
Collateral or any portion thereof within 60 days after the date of notice
thereof; provided that, compliance with the provisions of this subsection 6.11
shall not be deemed to constitute a waiver of the provisions of subsection 7.2.
The Borrowers shall exhibit to the Administrative Agent upon request all
receipts or other satisfactory evidence of payment, bonding, deposit of taxes,
assessments, Liens or any other item which may cause any such Lien to be filed
against the Mortgaged Property or other item of Collateral of any Borrower or
any of its Subsidiaries. Each Borrower and each of its Subsidiaries shall fully
preserve the Lienand the priority of each of the Deed of Trust and the other
Collateral Documents without cost or expense to the Administrative Agent or the
Lenders.
B. Removal by the Agent. If any Borrower or any of its Subsidiaries
fails to promptly discharge, remove or bond off any such Lien or mechanics' or
materialmen's claim of lien as described above, which is not being contested by
either Borrower or any of its Subsidiaries in good faith by appropriate
proceedings promptly instituted and diligently conducted, within 30 days after
the receipt of notice thereof, then the Administrative Agent may, but shall not
be required to, procure the release and discharge of such Lien, mechanics' or
materialmen's claim of lien and any judgment or decree thereon, and in
furtherance thereof may, in its sole discretion, effect any settlement or
compromise with the lienor or lien claimant or post any bond or furnish any
security or indemnity as the Administrative Agent, in its sole discretion, may
elect. In settling, compromising or arranging for the discharge of any Liens
under this subsection, the Administrative Agent shall not be required to
establish or confirm the validity or amount of the Lien. The Borrowers agree
that all costs and expenses expended or otherwise incurred pursuant to this
subsection 6.11 (including reasonable attorneys' fees and disbursements) by the
Administrative Agent shall be paid by the Borrowers in accordance with the
terms hereof.
6.12 Further Assurances.
A. Assurances. Without expense or cost to the Administrative Agent or
the Lenders, each Borrower shall, and shall cause each of its Subsidiaries to,
from time to time hereafter, execute, acknowledge, file, record, do and deliver
all and any further acts, deeds, conveyances, mortgages, deeds of trust, deeds
to secure debt, security agreements, hypothecations, pledges, charges,
assignments, financing statements and continuations thereof, notices of
assignment, transfers, certificates, assurances and other instruments as the
Administrative Agent may from time to time reasonably require in order to carry
out more effectively the purposes of this Agreement or the other Loan Documents,
including to subject any items of Collateral, intended
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to now or hereafter be covered, to the Liens created by the Collateral
Documents, to perfect and maintain such Liens, and to assure, convey, assign,
transfer and confirm unto the Administrative Agent the property and rights
hereby conveyed and assigned or intended to now or hereafter be conveyed or
assigned or which any Borrower or any such Subsidiary may be or may hereafter
become bound to convey or to assign to the Administrative Agent or for carrying
out the intention of or facilitating the performance of the terms of this
Agreement, or any other Loan Documents or for filing, registering or recording
this Agreement or any other Loan Documents. Promptly upon a reasonable request
each Borrower shall, and shall cause each of its Subsidiaries to, execute and
deliver, and hereby authorizes the Agent to execute and file in the name of such
Borrower or Subsidiary, to the extent the Administrative Agent may lawfully do
so, one or more financing statements, chattel mortgages or comparable security
instruments to evidence more effectively the Liens of the Collateral Documents
upon the Collateral.
B. Filing and Recording Obligations. Borrowers shall pay or cause to be
paid all filing, registration and recording fees and all expenses incident to
the execution and acknowledg ment of the Deed of Trust, the Leasehold Deed of
Trust or any other Loan Document, including any instrument of further assurance
described in subsection 6.12A, and shall pay or cause to be paid all mortgage
recording taxes, transfer taxes, general intangibles taxes and governmental
stamp and other taxes, duties, imposts, assessments and charges arising out of
or in connection with the execution, delivery, filing, recording or registration
of any Collateral Document or any other Loan Document or the Mall Lease, the
Casino Lease and the Billboard Master Lease or memoranda thereof, including any
instrument of further assurance described in subsection 6.12A, or by reason of
its interest in, or measured by amounts payable under, the Notes, any Collateral
Document or any other Loan Document, including any instrument of further
assurance described in subsection 6.12A, and shall pay all stamp taxes and other
taxes required to be paid on the Notes or any other Loan Document, but excluding
in the case of each Lender and the Administrative Agent, Taxes imposed on its
income by a jurisdiction under the laws of which it is organized or in which its
principal executive office is located or in which its applicable lender office
for funding or booking its Loans hereunder is located. If any Borrower fails to
make or cause to be made any of the payments described in the preceding sentence
within 15 days after notice thereof from the Administrative Agent (or such
shorter period as is necessary to protect the loss of or diminution in value of
any Collateral by reason of tax foreclosure or otherwise, as determined by the
Administrative Agent, in its sole discretion) accompanied by documentation
verifying the nature and amount of such payments, the Administrative Agent may
(but shall not be obligated to) pay the amount due and such Borrower shall
reimburse all amounts in accordance with the terms hereof.
C. Costs of Defending and Upholding the Lien. The Administrative Agent
may, upon at least five days' prior notice to the Borrower, (i) appear in and
defend any action or proceeding, in the name and on behalf of the Administrative
Agent or the Lenders in which the Administrative Agent or any Lender is named or
which the Administrative Agent in its sole discretion determines is reasonably
likely to materially adversely affect the Mortgaged Property, any other
Collateral, any Collateral Document, the Lien thereof or any other Loan Document
and (ii) institute any action or proceeding which the Administrative Agent
reasonably determines should be instituted to protect the interest or rights of
the Administrative Agent and the Lenders
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in the Mortgaged Property or other Collateral or under this Agreement or any
other Loan Document. The Borrowers agree that all reasonable costs and expenses
expended or otherwise incurred pursuant to this subsection (including reasonable
attorneys' fees and disbursements) by the Administrative Agent shall be paid by
the Borrowers or reimbursed to the Administrative Agent, as the case may be,
promptly after demand.
D. Costs of Enforcement. The Borrowers agree to bear and shall pay or
reimburse the Administrative Agent and the Lenders in accordance with the terms
of subsection 10.2 for all reasonable sums, costs and expenses incurred by the
Administrative Agent and the Lenders (including reasonable attorneys' fees and
the expenses and fees of any receiver or similar official) of or incidental to
the collection of any of the Obligations, any foreclosure (or transfer in lieu
of foreclosure) of this Agreement, any Collateral Document or any other Loan
Document or any sale of all or any portion of the Mortgaged Property or all or
any portion of the other Collateral.
6.13 Execution of Subsidiary Guaranty and Personal Property Collateral
Documents by Certain Subsidiaries and Future Subsidiaries.
A. Execution of Subsidiary Guaranty and Personal Property Collateral
Documents. In the event that any Person becomes a Subsidiary on or after the
date hereof, Borrowers will promptly notify Administrative Agent of that fact
and cause such Subsidiary to execute and deliver to Administrative Agent a
counterpart of the Subsidiary Guaranty and a Subsidiary Security Agreement and
to take all such further actions and execute all such further documents and
instruments (including actions, documents and instruments comparable to those
described in subsection 4.1C) as may be necessary or, in the reasonable opinion
of Administrative Agent, desirable to create in favor of Administrative Agent,
for the benefit of Lenders, a valid and perfected First Priority Lien on all of
the personal and mixed property assets of such Subsidiary which constitute First
Priority Collateral and a valid and perfected second priority lien on all of the
personal and mixed property assets of such Subsidiary which constitute Mall
Collateral.
B. Subsidiary Charter Documents, Legal Opinions, Etc. Borrowers shall
deliver to Administrative Agent, together with such Loan Documents, (i)
certified copies of such Subsidiary's Certificate or Articles of Incorporation
or equivalent limited liability company documents, together with a good standing
certificate from the Secretary of State of the jurisdiction of its incorporation
and each other state in which such Person is qualified as a foreign corporation
to do business and, to the extent generally available, a certificate or other
evidence of good standing as to payment of any applicable franchise or similar
taxes from the appropriate taxing authority of each of such jurisdictions, each
to be dated a recent date prior to their delivery to Administrative Agent, (ii)
a copy of such Subsidiary's Bylaws, certified by its corporate secretary or an
assistant secretary as of a recent date prior to their delivery to
Administrative Agent, (iii) a certificate executed by the secretary or an
assistant secretary of such Subsidiary as to (a) the fact that the attached
resolutions of the Board of Directors or managing member of such Subsidiary
approving and authorizing the execution, delivery and performance of such Loan
Documents are in full force and effect and have not been modified
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or amended and (b) the incumbency and signatures of the officers of such
Subsidiary executing such Loan Documents, and (iv) a favorable opinion of
counsel to such Subsidiary, in form and substance reasonably satisfactory to
Administrative Agent and its counsel, as to (a) the due organization and good
standing of such Subsidiary, (b) the due authorization, execution and delivery
by such Subsidiary of such Loan Documents, (c) the enforceability of such Loan
Documents against such Subsidiary, (d) such other matters (including matters
relating to the creation and perfection of Liens in any Collateral pursuant to
such Loan Documents) as Administrative Agent may reasonably request, all of the
foregoing to be reasonably satisfactory in form and substance to Administrative
Agent and its counsel.
C. Real Estate Collateral Documents. Borrowers shall deliver to
Administrative Agent together with such Loan Documents all such further
documents and instruments and take such further action necessary to create in
favor of Administrative Agent, for the benefit of Lenders, a valid and perfected
first priority security interest on any real property assets of such Subsidiary,
as Administrative Agent may reasonably request from time to time including
delivering documents and taking the other actions which would have been required
underSection 4.1A of this Agreement if such real property were part of the
Mortgaged Property on the Closing Date.
6.14 Contain Obligations in Connection with Specific FF&E.
Borrowers agree to make draws from time to time on the FF&E Facility as
soon as possible thereunder to purchase or finance any Specified FF&E where
proceeds of Revolving Loans have been used or Letters of Credit have been issued
to purchase or support deposit obligations incurred in connection with the
manufacture or acquisition of such Specified FF&E. Borrowers further agree that
in connection with any such draws they will repay the Revolving Loans or
terminate the Letters of Credit issued to purchase or provide deposits for the
Specified FF&E acquired or financed with the draw on the FF&E Facility.
Borrowers shall take all action within their control to maintain the eligibility
of any Specified FF&E financed by Lenders as collateral under the FF&E Facility.
Section 7. BORROWERS' NEGATIVE COVENANTS
Borrowers covenant and agree that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Borrowers shall perform, and shall cause each of their Subsidiaries to perform,
(x) prior to the Completion Date, all of the covenants set forth in Article 6 of
the Disbursement Agreement and the covenants set forth in subsections 7.1, 7.2,
7.3, 7.4, 7.5, 7.7, 7.8, 7.9. 7.10, 7.11, 7.12, 7.13B or C, 7.15, 7.18, 7.19,
7.20 and 7.21 below and (y) on and after the Completion Date, all of the
covenants set forth in Article 6 of the Disbursement Agreement (while in effect)
and all of the covenants set forth in this Section 7.
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7.1 Indebtedness.
Borrowers shall not, and shall not permit any of their Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:
(i) Borrowers and their Subsidiaries may become and remain
liable with respect to the Obligations;
(ii) Borrowers and their Subsidiaries may become and remain
liable with respect to Contingent Obligations permitted by subsection
7.4 and (other than with respect to clauses (iv) and (v) of subsection
7.4) upon any matured obligations actually arising pursuant thereto,
the Indebtedness corresponding to the Contingent Obligations so extin
guished;
(iii) Borrowers may become and remain liable for Indebtedness
represented by the Mortgage Notes in an aggregate principal amount not
to exceed at any time $425,000,000, reduced by any principal payments
required to be made thereon;
(iv) Borrowers may become and remain liable for Indebtedness
under the Interim Mall Credit Agreement representing the Interim Mall
Facility in an aggregate principal amount not to exceed at any time
$140,000,000 reduced by (x) any principal payments required to be made
thereon and (y) any amounts funded in respect of a Substitute Tranche B
Loan, provided that following the Mall Release Date or any transfer of
the Mall Assets to Mall Subsidiary, the Indebtedness under the Interim
Mall Facility shall not be Indebtedness permitted under this subsection
7.1;
(v) Borrowers may become and remain liable for Indebtedness
represented by the Subordinated Notes in an aggregate principal amount
not to exceed at any time $97,500,000 reduced by any principal payments
required to be made thereon;
(vi) Borrowers may become and remain liable for Indebtedness
under the FF&E Facility Agreement in an aggregate principal amount not
to exceed at any time $97,700,000 (plus any accrued and unpaid interest
thereon added to principal) reduced by any principal payments required
to be made thereon;
(vii) Borrowers and Mall Construction Subsidiary may become
and remain liable for Indebtedness in respect of any Substitute Tranche
B Loan in an aggregate principal amount not to exceed $35,000,000 at
any time (plus any accrued and unpaid interest thereon added to
principal), provided, that following the Mall Release Date or any
transfer of the Mall Assets to Mall Subsidiary, such Indebtedness shall
not constitute Indebtedness permitted under this subsection 7.1;
(viii) Borrowers may become and remain liable for Non-Recourse
Financing used to finance the purchase or lease of personal or real
property for use in the business
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of a Borrower or one of its Subsidiaries provided that (x) such
Non-Recourse Financing represents at least 75% of the purchase price of
such personal or real property (y) the Indebtedness incurred pursuant
to this clause (viii) shall not exceed $20,000,000 at any time; and (z)
no such Indebtedness may be incurred under this clause (viii) until the
Completion Date has occurred and Borrowers have generated Consolidated
EBITDA for one Fiscal Quarter of at least $25,000,000;
(ix) Borrowers may become and remain liable for Indebtedness
in respect of any Completion Guaranty Loan in an aggregate amount not
to exceed $25,000,000 (plus any accrued and unpaid interest thereon
added to principal);
(x) Borrowers and their Subsidiaries may become and remain
liable for additional Indebtedness to the extent permitted under and on
the terms described in the Intercreditor Agreement;
(xi) Borrowers may become and remain liable for Indebtedness
to employees of Borrowers ("Employee Repurchase Notes") incurred in
connection with any repurchase of employee options or stock upon death,
disability or termination of such employee in accordance with
employment agreements or option plans or agreements as in effect on the
Closing Date ("Permitted Employee Repurchases") provided that such
Indebtedness shall be unsecured and subordinated on terms not less
favorable to Borrowers and the Lenders than the terms of the
Subordinated Notes and shall expressly provide that payments thereon
shall be required only to the extent not restricted by any Financing
Agreement;
(xii) Borrowers may become and remain liable for Indebtedness
incurred for the purpose of financing all or any part of the purchase
or lease of gaming equipment to be used in connection with the casino
located at the casino resort to be owned by Phase II Subsidiary or any
casino to be operated within Phase II in the aggregate amount at any
time outstanding not to exceed $10,000,000; provided, that upon default
under such Indebtedness, the lender under such Indebtedness may seek
recourse or payment against the Borrowers and their Subsidiaries only
through the return or sale of the property or equipment so purchased or
leased and may not otherwise assert a valid claim for payment on such
Indebtedness against the Borrowers and their Subsidiaries or any other
property of the Borrowers and their Subsidiaries.
(xiii) Borrowers may become and remain liable with respect to
other Indebtedness in an aggregate principal amount not to exceed
$10,000,000 at any time outstanding; and
(xiv) Borrowers may become and remain liable for an aggregate
of $20,000,000 of additional Indebtedness under a working capital line
less the amount of Increased Commitments; provided that (x) no such
Indebtedness may be incurred until after the Completion Date and (y)
such Indebtedness shall be incurred either with Lenders or with other
Persons who are Eligible Assignees on substantially the same terms
(including
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security interests) as the Revolving Loans hereunder and otherwise on
terms (including voting and intercreditor arrangements) reasonably
satisfactory to Administrative Agent and Arranger;
7.2 Liens and Related Matters.
A. Prohibition on Liens. Borrowers shall not, and shall not permit any
of their Subsidiaries to, directly or indirectly, create, incur, assume or
permit to exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of such Borrower or Subsidiary, whether now owned or hereafter
acquired, or any income or profits therefrom, or file or permit the filing of,
or permit to remain in effect, any financing statement or other similar notice
of any Lien with respect to any such property, asset, income or profits under
the Uniform Commercial Code of any State or under any similar recording or
notice statute, except:
(i) Permitted Liens;
(ii) Liens granted pursuant to the Collateral Documents;
(iii) Liens securing Indebtedness permitted under clause (iii)
of subsection 7.1, provided that such Liens are junior in priority
(other than in respect of the Mortgage Notes Proceeds Account) to the
Liens securing the Obligations;
(iv) Liens securing Indebtedness permitted under clause (iv)
of subsection 7.1, provided that such Liens attach only to the Mall
Collateral;
(v) Liens securing Indebtedness permitted under clause (vi) of
subsection 7.1, provided that such Liens attach only to the Specified
FF&E and to any proceeds of such accounts or Indebtedness and related
collateral accounts in which such proceeds are held;
(vi) Liens securing Indebtedness permitted under clause (viii)
of subsection 7.1, provided that such Liens extend only to the real
property or personal property purchased or leased with the proceeds of
such Non-Recourse Financing and such assets are acquired or leased
within 180 days of the incurrence of such Indebtedness;
(vii) Liens in favor of the Mortgage Note Holders or the
Interim Mall Lender or other Persons securing Indebtedness advanced by
any such Person and permitted under (x) of subsection 7.1 to the extent
that such Liens are permitted under the Intercreditor Agreement,
provided that such Liens in favor of the Mortgage Note Holders or such
other Persons are junior (other than in respect of the Mortgage Notes
Proceeds Account) to the Liens securing the Obligations and such Liens
in favor of Interim Mall Lender attach only to the Mall Collateral;
(viii) Liens securing Indebtedness permitted under clause
(xii) of subsection 7.1 provided that such Liens attach only to the
casino equipment purchased or leased with
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the proceeds of such Indebtedness and such assets are acquired or
leased within 180 days of the incurrence of such Indebtedness;
(ix) Liens securing Indebtedness permitted under clause (xiv)
of subsection 7.1; provided that such Liens are pari passu with the
Liens securing the Obligations;
(x) Liens described in Schedule 7.2 annexed hereto; and
(xi) Other Liens securing Indebtedness in an aggregate amount
not to exceed $5,000,000 at any time outstanding.
Notwithstanding the foregoing, the Borrowers shall not permit the Intermediate
Holding Companies to create, incur, assume or permit to exist any Lien on or
with respect to any property or asset of any kind of the Intermediate Holding
Companies other than Permitted Liens which do not secure Indebtedness.
B. Equitable Lien in Favor of Lenders. If Borrowers or any of their
Subsidiaries, shall create or assume any Lien upon any of its properties or
assets, whether now owned or here after acquired, other than Liens excepted by
the provisions of subsection 7.2A, they shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; provided that, notwithstanding the foregoing,
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 7.2A.
C. No Further Negative Pledges. Except with respect to specific
property encumbered to secure payment of particular Indebtedness or leases or
to be sold pursuant to an executed agreement with respect to an Asset Sale, none
of the Borrowers nor any of their Subsidiaries, shall enter into any agreement
prohibiting the creation or assumption of any Lien upon any of its properties or
assets, whether now owned or hereafter acquired other than (x) as provided
herein or in the other Loan Documents, (y) as set forth in the documents
evidencing Other Indebtedness as in effect on the Closing Date including any
refinancing thereof permitted hereunder provided that the provisions regarding
the creation or assumption of Liens is not less favorable to Borrowers, such
Subsidiary or Lenders than those set forth in the documents evidencing the
Indebtedness being refinanced or (z) as required by applicable law or any
applicable rule or order of any Gaming Authority.
D. No Restrictions on Subsidiary Distributions to Borrowers or Other
Subsidiaries. Except as provided herein, Borrowers will not, and will not permit
any of their Subsidiaries to, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any of their Subsidiaries to (i) pay dividends or make any other
distributions on any of such Subsidiary's capital stock owned by Borrowers or
any other Subsidiary of Borrowers, (ii) repay or prepay any Indebtedness owed by
any such Subsidiaries to Borrowers, (iii) make loans or advances to Borrowers,
or (iv) transfer any of its property or assets to Borrowers other than (x) as
provided herein or in
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the other Loan Documents, (y) as set forth in the documents evidencing Other
Indebtedness as in effect on the Closing Date including any refinancing thereof
permitted hereunder provided that the provisions regarding dividends,
distributions, repayments of Indebtedness, loans and advances and transfers of
assets are not less favorable to Borrowers, such Subsidiary or Lenders than
those set forth in the documents evidencing the Indebtedness being refinanced or
(z) as required by applicable law or any applicable rule or order of any Gaming
Authority.
7.3 Investments; Joint Ventures; Formation of Subsidiaries.
Borrowers shall not, and shall not permit any of their Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, including any
Joint Venture or otherwise form or create any Subsidiary, except:
(i) Borrowers and their Subsidiaries may make and own
Investments in Cash Equivalents;
(ii) Borrowers may continue to own their existing Investments
in the Intermediate Holding Companies, the Excluded Subsidiaries and
Mall Construction Subsidiary described in Schedule 7.3 annexed hereto,
provided that Borrowers and their Subsidiaries may not make any
additional Investments in such Persons except as permitted by clauses
(iii), (iv), (v) and (x) below;
(iii) Borrowers may cause the transfer of the Mall Collateral
to Mall Subsidiary to the extent permitted by subsection 7.7(v) and
immediately thereafter transfer a 1% managing membership interest in
each of Mall Subsidiary and Mall Direct Holdings to Mall Manager;
(iv) Borrowers may transfer the Phase II Land to Phase II
Subsidiary to the extent permitted by subsection 7.7 (vi) and
immediately thereafter transfer a 1% managing membership interest in
each of Phase II Subsidiary and Phase II Direct Holdings to Phase II
Manager;
(v) Borrower and their Subsidiaries may invest in Mall
Subsidiary or Phase II Subsidiary any cash or other property
contributed to Borrowers by Adelson or any of his Affiliates for such
purpose;
(vi) So long as no Event of Default or Potential Event of
Default shall have occurred and be continuing or would result
therefrom, Borrowers may form and make Investments in new Subsidiaries
and in Supplier Joint Ventures; provided that (a) the aggregate amount
of all such Investments shall not at any time exceed $10,000,000, (b)
no such Subsidiary or Supplier Joint Venture shall own or operate or
possess any material license, franchise or right used in connection
with the ownership or operation of the Project or any material Project
assets, (c) in the case of any Investment in a Supplier Joint Venture,
LVSI shall have delivered an Officers' Certificate which certifies that
in the reasonable judgment of such officer the Investment in such
Supplier Joint Venture will result in an economic benefit to Borrowers
(taking into account such Investment) as a result of a reduction in the
cost of the goods or services being acquired from the Supplier Joint
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Venture over the life of the Investment and (d) none of the Borrowers,
nor any other Subsidiary of the Borrower shall incur any liabilities or
contingent obligations in respect of the obligations of such Subsidiary
or Joint Venture;
(vii) Borrowers may make Consolidated Capital Expenditures
permitted by subsection 7.14;
(viii) Borrowers may make loans or advances to their employees
(a) to fund the exercise price of options granted under Borrowers'
stock option plans or agreements or employment agreements as in effect
on the Closing Date and (b) for other purposes in an amount not to
exceed $1,000,000 in the aggregate outstanding at any time;
(ix) Borrowers and their Subsidiaries may hold investments
consisting of securities received in settlement of debt created in the
ordinary course of business and owing to the Borrowers or any
Subsidiary or in satisfaction of judgements;
(x) So long as no Event of Default or Potential Event of
Default shall have occurred and be continuing or would result
therefrom, Borrowers may make Cash contributions to Mall Subsidiary in
an aggregate amount not to exceed $5,000,000 to pay fees and expenses
in connection with the refinancing of the Interim Mall Facility; and
(xi) Borrowers may make and own other Investments in an
aggregate amount not to exceed at any time $5,000,000.
7.4 Contingent Obligations.
Borrowers shall not, and shall not permit any of their Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:
(i) Borrowers may become and remain liable with respect to
Contingent Obligations under Interest Rate Agreements which are (a)
required under subsection 6.8 or under the terms of any other Financing
Agreements or (b) entered into to hedge against interest rate
fluctuations in respect of up to 50% of the principal amount of the
Indebtedness outstanding under clauses (iv) and (vi) of subsection 7.1
so long as such Interest Rate Agreements are on substantially the same
terms as those entered into to satisfy subsection 6.8 hereof and all
obligations thereunder are secured solely by Liens included in
Permitted Liens under clause (xx) of the definition thereof;
(ii) Borrowers and their Subsidiaries may become and remain
liable with respect to Contingent Obligations under the Loan Documents;
(iii) Borrowers and their Subsidiaries may become and remain
liable with respect to the Contingent Obligations for the Indebtedness
permitted under clauses (iii),
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(iv), (v), (viii), (x), (xiii) and (xiv) of subsection 7.1, provided
that except with respect to the Indebtedness permitted under clauses
(iv) and (xiv) and Indebtedness to Interim Mall Lender permitted under
clause (x) any such Contingent Obligations of the Intermediate Holding
Companies are subordinate to the Obligations on terms at least as
favorable to the Lender as those relating to the subordination of the
Intermediate Holding Company guaranties set forth in Section 11.07 of
the Mortgage Notes Indenture (as in effect on the Closing Date);
(iv) to the extent such incurrence does not result in the
incurrence by Borrowers or any of their Subsidiaries of any obligation
for the payment of borrowed money, Borrowers may become and remain
liable with respect to Contingent Obligations incurred solely in
respect of performance bonds, completion guaranties and standby letters
of credit or bankers' acceptances, provided that such Contingent
Obligations are incurred in the ordinary course of business and do not
at any time exceed $10,000,000 in the aggregate;
(v) Borrowers and their Subsidiaries may become and remain
liable for customary indemnities under Project Documents as in effect
on the Closing Date; and
(vi) Borrowers may become and remain liable with respect to
other Contingent Obligations, provided that the maximum aggregate
liability, contingent or otherwise, of Borrowers in respect of all such
Contingent Obligations shall at no time exceed $5,000,000.
7.5 Restricted Junior Payments.
Borrowers shall not, and shall not permit any of their Subsidiaries to,
directly or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Junior Payment, except:
(i) Borrowers may make regularly scheduled or required
payments of principal and interest in respect of any Other Indebtedness
of Borrowers in accordance with the terms of, and only to the extent
required by the agreement pursuant to which such Other Indebtedness was
issued provided that (a) any such payments shall be subject to the
terms of the Intercreditor Agreement, the Adelson Intercreditor
Agreement, the Adelson Completion Guaranty and any FF&E Intercreditor
Agreements, as applicable, (b) any such payments in respect of any
Completion Guaranty Note and any Employee Repurchase Note may be made
only to the extent no Event of Default or Potential Event of Default
shall then exist and be continuing or would result therefrom and (c)
any such pay vments in respect of any Employee Repurchase Note may be
made only to the extent that the ratio of Consolidated Adjusted EBITDA
to Consolidated Fixed Charges for the four Fiscal Quarter period ended
on the most recent Quarterly Date preceding such payment or such
shorter period tested on such Quarterly Date under subsection 7.6A
(determined on a pro forma basis (as though such payment on the
Employee Repurchase Note had been made during the period tested as of
such Quarterly Date under subsection
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7.6A) would have been in compliance with the requirements of Section
7.6A as certified to Administrative Agent by the chief financial
officer of Borrowers, on behalf of Borrowers, at the time of such
payment;
(ii) Borrowers and Mall Construction Subsidiary may prepay the
Interim Mall Loan and the FF&E Facility from the portion of any Loss
Proceeds required to be so applied in accordance with the Interim Mall
Credit Agreement and the FF&E Facility respectively and each in
accordance with the Intercreditor Agreement;
(iii) Borrowers and Mall Construction Subsidiary may make
payments to Interim Mall Lender either funded from proceeds paid by
Mall Subsidiary to Venetian or Mall Construction Subsidiary under the
Sale and Contribution Agreement or which are deemed to occur solely as
a result of the assumption of the obligations under the Interim Mall
Credit Agreement by the Mall Subsidiary;
(iv) Borrowers and Mall Construction Subsidiary may make
payments in respect of the Substitute Tranche B Loan which are either
funded from proceeds paid by Mall Subsidiary to Venetian or Mall
Construction Subsidiary under the Sale and Contribution Agreement or
which are deemed to occur solely as a result of the assumption of
obligations under the Substitute Tranche B Loan by Mall Subsidiary,
provided that no cash payments on the Substitute Tranche B Loan may be
made from such proceeds unless the Interim Mall Loan has been repaid in
full;
(v) Borrowers and Mall Subsidiary may repay the Substitute
Tranche B Loan or the Interim Mall Facility from proceeds of a
refinancing thereof permitted under the definition thereof;
(vi) Borrowers and their Subsidiaries may redeem or purchase
any equity interests in Borrowers or their Subsidiaries or any
Indebtedness to the extent required by any Nevada Gaming Authority in
order to preserve a material Gaming License, provided that so long as
such efforts do not jeopardize any material Gaming License, Borrowers
shall have diligently tried to find a third-party purchaser for such
equity interests or Indebtedness and no third-party purchasers
acceptable to the Nevada Gaming Authority is willing to purchase such
equity interests or Indebtedness within a time period acceptable to the
Nevada Gaming Authority;
(vii) for so long as LVSI is a corporation under Subchapter S
of the Code or a substantially similarly treated pass-through entity or
Venetian is a limited liability company that is treated as a
partnership or a substantially similarly treated pass-through entity
for Federal income tax purposes (as evidenced by an opinion of counsel
at least annually), Borrowers may each make cash distributions to
shareholders or members, during each Quarterly Period, in an aggregate
amount not to exceed the Permitted Quarterly Tax Distribution in
respect of the related Estimation Period, and if any portion of the
Permitted Quarterly Tax Distribution is not distributed during such
Quarterly Payment Period, the Permitted Quarterly Tax Distribution
payable during the immediate-
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ly following four quarter period shall be increased by such
undistributed portion; provided that Borrowers may not make any such
distribution to pay taxes attributable to income of Mall Subsidiary or
Phase II Subsidiary or any of their subsidiaries unless Borrowers have
received a cash distribution from Mall Subsidiary or Phase II
Subsidiary, as applicable, for such purpose in respect of the
applicable Estimation Period in an equal amount;
(viii) Borrowers and their wholly-owned Subsidiaries may make
intercompany payments between such entities and intercompany payments
from any Subsidiary of a Borrower to any wholly-owned Subsidiary of
Borrowers or any Borrower;
(ix) Borrowers may make Permitted Employee Repurchases so long
as (a) no Event of Default or Potential Event of Default shall exist
and be continuing or would result therefrom and (b) the ratio of
Consolidated Adjusted EBITDA to Consolidated Fixed Changes for the four
Fiscal Quarter period ended as of the most recent Quarterly Date prior
to such repurchase or such shorter period tested on such immediately
preceding Quarterly Date under subsection 7.6A (determined on a pro
forma basis as though such Permitted Employee Repurchase had been made
during the period tested as of such Quarterly Date under subsection
7.6A) would have been in compliance with the requirements of subsection
7.6A as certified to Administrative Agent by the chief financial
officer of Borrowers, on behalf of Borrowers, at the time of such
payment;
(x) Borrowers may make repurchases of capital stock of LVSI
deemed to occur upon exercise of stock options to the extent such
capital stock represents a portion of the exercise price of such
options; and
(xi) Borrowers may make payments on any Completion Guaranty
Loan (a) prior to Final Completion, from amounts permitted to be
deposited in the Guaranty Deposit Account subject to the terms of the
Adelson Completion Guaranty and the Disbursement Agreement, (b) on
Final Completion Date from amounts which are advanced to Borrowers
pursuant to subsection 2.12 of the Disbursement Agreement for the
purpose of making such payments, (c) after Final Completion Date from
Liquidated Damages and (d) on Final Completion Date, from amounts which
are returned to Mall Construction Subsidiary from funds in the Mall
Retainage/Punchlist Account in accordance with the Mall Escrow
Agreement, up to the aggregate amount previously deposited into the
Mall Retainage/ Punchlist Account from the Guaranty Deposit Account,
provided in each case that such payments shall be permitted only to the
extent allowed under the Adelson Intercreditor Agreement and only so
long as no Event of Default or Potential Event of Default shall then
exist and be continuing or would result therefrom.
7.6 Financial Covenants.
A. Minimum Fixed Charge Coverage Ratio. Borrowers shall not permit the
ratio of (i) Consolidated Adjusted EBITDA to (ii) Consolidated Fixed Charges for
any four-Fiscal Quarter period (or such shorter period ending on such Quarterly
Date and beginning on the
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Opening Date, if the first Quarterly Date is the last day of the Fiscal Quarter
in which the Completion Date occurs, or, otherwise on the first day of the first
Fiscal Quarter which begins after the Completion Date) ending on any Quarterly
Date set forth below to be less than the correlative ratio indicated:
============================================ ==========================
Minimum
Period Fixed Charge
Coverage Ratio
============================================ ==========================
Each of the first, second, third 1.05:1
and fourth Quarterly Dates
Each of the fifth, sixth, seventh 1.05:1
and eighth Quarterly Dates
Each of the ninth, tenth, eleventh 1.05:1
and twelfth Quarterly Dates
Each of the thirteenth, four- 1.10:1
teenth, fifteenth and sixteenth
Quarterly Dates
Each of the seventeenth, eighteenth, 1.15:1
nineteenth and twentieth
Quarterly Dates
============================================ ==========================
B. Maximum Leverage Ratio. Borrowers shall not permit the ratio (the
"Leverage Ratio") of (i) Consolidated Total Debt as of such Quarterly Date to
(ii) Consolidated Adjusted EBITDA for the four Fiscal Quarter period ending on
such Quarterly Date (or such shorter period ending on any Quarterly Date set
forth below and beginning on the Opening Date, if the first Quarterly Date is
the last day of the Fiscal Quarter in which the Completion Date occurs, or,
otherwise, on the first day of the first Fiscal Quarter which begins after the
Completion Date) ending on any Quarterly Date set forth below to exceed the
correlative ratio indicated; provided that for purposes of calculating
Consolidated Adjusted EBITDA pursuant to this subsection 7.6B for any period
ending prior to the first anniversary of the Completion Date which is less than
four Fiscal Quarters, Consolidated Adjusted EBITDA shall be calculated on an
annualized basis:
========================================== =============================
Maximum
Period Leverage Ratio
========================================== =============================
Each of the first, second, third 4.75:1
and fourth Quarterly Dates
Each of each of the fifth, sixth, 3.75:1
seventh and eighth Quarterly Dates
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Each of the ninth, tenth, elev- 3.00:1
enth and twelfth Quarterly Dates
Each of the thirteenth, four- 2.75:1
teenth, fifteenth and sixteenth
Quarterly Dates
Each of the seventeenth, eigh- 2.50:1
teenth, nineteenth and twentieth
Quarterly Dates
========================================== =============================
C. Minimum Consolidated Adjusted EBITDA. Borrowers shall not permit Con-
solidated Adjusted EBITDA for any four Fiscal Quarter period (or such shorter
period ending on any Quarterly Date set forth below and beginning on the Opening
Date, if the first Quarterly Date is the last day of the Fiscal Quarter in which
the Completion Date occurs, or, otherwise, on the first day of the first Fiscal
Quarter which begins after the Completion Date) ending on any Quarterly Date set
forth below to be less than the correlative amount indicated, provided that for
purposes of Calculating Consolidated Adjusted EBITDA pursuant to this subsection
7.6C for the first, second, third and fourth Quarterly Dates, if the period
tested is less than one, two, three or four full Fiscal Quarters respectively,
Consolidated Adjusted EBITDA shall be multiplied by a fraction of the numerator
of which is 90, 182, 273 and 365, respectively and the denominator of which is
the number of days elapsed in the relevant test period:
========================================= ================================
Minimum Consolidated
Period Adjusted EBITDA
========================================= ================================
First Quarterly Date $30,000,000
Second Quarterly Date $75,000,000
Third Quarterly Date $100,000,000
Fourth Quarterly Date $150,000,000
Each of the fifth, sixth, seventh $175,000,000
and eighth Quarterly Dates
Each of the ninth, tenth, eleventh $190,000,000
and twelfth Quarterly Dates
Each of the thirteenth, fourteenth, $195,000,000
fifteenth and sixteenth
Quarterly Dates
Each of the seventeenth, $200,000,000
eighteenth, nineteenth and twentieth
Quarterly Dates
========================================= ================================
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D. Minimum Consolidated Net Worth. Borrowers shall not permit
Consolidated Net Worth at any Quarterly Date to be less than $120,000,000 plus
an amount equal to the sum of 85% of Consolidated Net Income for all periods
from the Closing Date through such Quarterly Date (net of all net losses for
Borrowers and their Subsidiaries on a consolidated basis for the same period).
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions.
Borrowers shall not, and shall not permit any of their Subsidiaries to,
alter the corporate, capital or legal structure (except with respect to changes
in capital structure to the extent a Change of Control does not occur as a
result thereof) of any Borrower, or any of its Subsidiaries, or enter into any
transaction of merger or consolidation, or liquidate, wind-up or dissolve itself
(or suffer any liquidation or dissolution), or convey, sell, lease or sub-lease
(as lessor or sublessor), transfer or otherwise dispose of, in one transaction
or a series of transactions, all or any part of its business, property or
assets, whether now owned or hereafter acquired, or acquire by purchase or
otherwise all or substantially all the business, property or fixed assets of, or
stock or other evidence of beneficial ownership of, any Person or any division
or line of business of any Person, except:
(i) Borrowers may make Consolidated Capital Expenditures
permitted under subsection 7.14;
(ii) Borrowers and their Subsidiaries may dispose of obsolete,
worn out or surplus assets or assets no longer used or useful in the
business of Borrowers and the Subsidiaries in each case to the extent
made in the ordinary course of business, provided that either (i) such
disposal does not materially adversely affect the Mortgaged Property or
(ii) prior to or promptly following such disposal any such property
shall be replaced with other property of substantially equal utility
and a value at least substantially equal to that of the replaced
property when first acquired and free from any security of any other
Person subject only to Permitted Liens and by such removal and
replacement Borrowers and their Subsidiaries shall be deemed to have
subjected such replacement property to the lien of the Collateral
Documents in favor of Lenders, as applicable;
(iii) Borrowers and their Subsidiaries may sell or otherwise
dispose of assets in transactions that do not constitute Asset Sales,
provided that the consideration received for such assets shall be in an
amount at least equal to the fair market value thereof except under
subsections 7.7(v)-(xi) below;
(iv) subject to subsection 7.11, Borrowers and their
Subsidiaries may make Asset Sales of assets having a fair market value
not in excess of (x) $4,000,000 in respect of the sale or other
disposition of construction equipment prior to or during the first year
following the Completion Date and (y) $2,000,000 with respect to any
other Asset Sales; provided in each case that (1) the consideration
received for such assets shall be in an amount at least equal to the
fair market value thereof; (2) the sole consideration
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received shall be cash; and (3) the proceeds of such Asset Sales shall
be applied as required by subsection 2.4B(iii)(a);
(v) Borrowers and Mall Construction Subsidiary may transfer
their respective interests in the Mall Collateral to the Mall
Subsidiary in accordance with Section 5.16(c) of the Disbursement
Agreement, provided that Borrowers and their Subsidiaries have complied
in all material respects with their obligations under Section 5.16(c)
of the Disbursement Agreement and all other conditions thereunder have
been satisfied in all material respects (whether or not such provision
is still in effect but substituting a reference to Administrative Agent
in lieu of Disbursement Agent if the Disbursement Agreement has been
terminated);
(vi) Borrowers may transfer the Phase II Land to the Phase II
Subsidiary, in accordance with Section 5.16(d) of the Disbursement
Agreement, provided that Borrowers and their Subsidiaries have complied
in all material respects with their obligations under Section 5.16(d)
of the Disbursement Agreement and all other conditions thereunder have
been satisfied in all material respects (whether or not such provision
is still in effect but substituting a reference to Administrative Agent
in lieu of Disbursement Agent if the Disbursement Agreement has been
terminated);
(vii) Borrowers and their Subsidiaries may enter into any
leases with respect to any space on or within the Project;
(viii) Borrowers may enter into the HVAC Ground Lease.
(ix) LVSI may lease the casino from Venetian pursuant to the
Casino Lease;
(x) Mall Construction Subsidiary (and, if applicable, Mall
Subsidiary) may lease the Mall from Venetian pursuant to the Mall Lease
and, further, upon the occurrence of the Mall Parcel Creation Date,
Venetian and Mall Construction Subsidiary (or, if applicable, Mall
Subsidiary) may terminate the Mall Lease, provided that Borrowers and
their Subsidiaries have complied in all material respects with their
obligations set forth in Section 5.16(b) of the Disbursement Agreement
and all other conditions thereunder have been satisfied in all material
respects (whether or not such provision shall be in effect but
substituting a reference to Administrative Agent in lieu of
Disbursement Agent if the Disbursement Agreement has been terminated);
(xi) Either Borrower may be merged with the other Borrower;
(xii) Either Borrower may sell, lease or otherwise transfer
assets to another Borrower or to a wholly-owned Subsidiary of such
Borrower to the extent permitted by subsection 7.3 and any wholly-owned
Subsidiary of a Borrower may sell, lease or otherwise transfer assets
to any other wholly-owned Subsidiary of such Borrower (other than the
Intermediate Holding Companies) or to the other Borrower;
125
(xiii) Mall Construction Subsidiary may be merged with or
liquidated into Venetian;
(xiv) Borrower may dedicate space for the purpose of
constructing (i) a mass transit system, (ii) a pedestrian bridge over
or a pedestrian tunnel under Las Vegas Boulevard and Sands Avenue or
similar structures to facilitate pedestrians or traffic and (iii) a
right turn lane or other roadway dedication at or near the Project;
provided in each case that such dedication does not materially impair
the use or operations of the Project;
(xv) Borrowers may license trademarks and tradenames in the
ordinary course of business;
(xvi) Mall Construction Subsidiary may enter into or take by
assignment the Mall Management Agreement;
(xvii) Borrowers may make the transfers permitted under
subsections 7.3(iii), (iv), (v) and (x).
(xviii) VCR and Mall Construction Subsidiary may enter into
the Billboard Master Lease;
(xix) Borrowers and their Subsidiaries may transfer any assets
leased or acquired with proceeds of a Non-Recourse Financing permitted
under Section 7.1 or other financing permitted under Section 7.1(xii)
to the lender providing such financing upon default, expiration or
termination of such Non-Recourse Financing or other financing;
(xx) Borrowers may sell receivables for fair market value in
the ordinary course of business; and
(xxi) incurrence of Liens permitted under Section 7.2,
provided that any leases (whether or not constituting Permitted Liens)
shall be permitted only to the extent provided in clause (vii) above
and the last paragraph of this Subsection 7.7.
Notwithstanding the foregoing provisions of this subsection 7.7, clause
(vii) shall be subject to the additional provisos that: (a) no Event of Default
or Potential Event of Default shall exist and be continuing at the time of such
transaction or lease or would occur after as a result of entering into such
transaction or lease (or immediately after any renewal or extension thereof at
the option of Borrowers or one of their Subsidiaries), (b) such transaction or
lease will not materially interfere with, impair or detract from the operation
of the business of Borrowers and their Subsidiaries, (c) such transaction or
lease is at a fair market rent or value (in light of other similar or comparable
prevailing commercial transactions) and contains such other terms such that the
lease, taken as a whole, is commercially reasonable and fair to Borrowers and
their Subsidiaries in light of prevailing or comparable transactions in other
casinos, hotels, hotel attractions or shopping venues, (d) no gaming or casino
operations (other than the operation of arcades and games for children) may be
conducted on any space that is subject to such
126
transaction or lease other than by Borrowers and (e) no lease may provide that
the Borrowers or any of their Subsidiaries may subordinate its fee, condominium
or leasehold interest to any lessee or any party financing any lessee, provided
that Administrative Agent on behalf of Lenders shall agree to provide the tenant
under any such lease with a Subordination, Non-Disturbance and Attornment
Agreement with the tenant under any such lease substantially in the form of
Exhibit VIII hereto with such changes as Administrative Agent may approve, which
approval shall not be unreasonably withheld or delayed.
7.8 Sales and Lease-Backs.
Borrowers shall not, and shall not permit any of their Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (i) which Borrowers or any of their Subsidiaries has sold or
transferred or is to sell or transfer to any other Person or (ii) which
Borrowers or any of their Subsidiaries intends to use for substantially the same
purpose as any other property which has been or is to be sold or transferred by
Borrowers or any of their Subsidiaries to any Person in connection with such
lease, except that Borrowers and their Subsidiaries may enter into
sale-leaseback transactions in connection with any Non-Recourse Financing
permitted hereunder or such other financings permitted under clause (xii) of
subsection 7.1 to the extent that the assets subject to such sale-leaseback are
acquired contemporaneously with, or within 180 days prior to, such Non-Recourse
Financing or such other financings and with the proceeds thereof and neither
Borrower nor any of its Subsidiaries theretofore held any interest in such
assets.
7.9 Sale or Discount of Receivables.
Borrowers shall not, and shall not permit any of their Subsidiaries to,
directly or indirectly, sell with recourse, or discount or otherwise sell for
less than the face value thereof, any of its notes or accounts receivable other
than an assignment for purposes of collection in the ordinary course of
business.
7.10 Transactions with Shareholders and Affiliates.
Borrowers shall not, and shall not permit any of their Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of equity Securities of any
Borrower or with any Affiliate of a Borrower or of any such holder, except, that
Borrowers may enter into and permit to exist:
(i) transactions that are on terms that are not less favorable
to that Borrower or Subsidiary, as the case may be, than those that
might be obtained at the time from Persons who are not such a holder or
Affiliate if (a) Borrowers have delivered to Administrative Agent (1)
with respect to any transaction involving an amount in excess of
$500,000, an Officers Certificate certifying that such transaction
complies with this
127
subsection 7.10, (2) with respect to any transaction involving an
amount in excess of $1,000,000, a resolution adopted by a majority of
the disinterested non-employee directors of the applicable Borrower or
Subsidiary approving such transaction and an Officers Certificate
certifying that such transaction complies with this subsection 7.10, at
the time such transaction is entered into and (c) with respect to any
such transaction that involves aggregate payments in excess of
$10,000,000 or that is a loan transaction involving a principal amount
in excess of $10,000,000, an opinion as to the fairness to the
applicable Borrower or Subsidiary from a financial point of view issued
by an Independent Financial Advisor at the time such transaction is
entered into,
(ii) the Services Agreement;
(iii) purchases of materials or services from a Joint Venture
Supplier by the Borrowers or any of their Subsidiaries in the ordinary
course of business on arm's length terms;
(iv) any employment, indemnification, noncompetition or
confidentiality agreement entered into by Borrowers or any of their
Subsidiaries with their employees or directors in the ordinary course
of business;
(v) loans or advances to employees of Borrowers or their
Subsidiaries permitted under subsection 7.3(viii);
(vi) the payment of reasonable fees to directors of Borrowers
and their Subsidiaries who are not employees of Borrowers or their
Subsidiaries;
(vii) the grant of stock options or similar rights to
employees and directors of Borrowers pursuant to plans approved by the
Board of Directors of LVSI and any repurchases of stock or options of
Borrowers from such employees to the extent permitted by subsection
7.5;
(viii) transactions between or among Borrowers and any of
their wholly-owned Subsidiaries;
(ix) the transactions contemplated by the Adelson Completion
Guaranty;
(x) the transactions contemplated by the Cooperation
Agreement;
(xi) the transactions contemplated by the HVAC Services
Agreement;
(xii) the use of the Congress Center by the owner of the Sands
Expo and Convention Center; provided that Venetian receives fair market
value for the use of such property;
128
(xiii) the transactions contemplated by the GMAC Guaranty,
including the Substitute Tranche B Loan;
(xiv) the transfer of the Phase II Land to the Phase II
Subsidiary, the transfer of the Mall Assets to Mall Subsidiary and
other asset transfers and investments permitted under subsections
7.3(iii), (iv), (v) and (xi);
(xv) any repayment or deemed repayment of the Interim Mall
Loan and the Substitute Tranche B Loan in connection with the transfer
of the Mall Assets to Mall Subsidiary; and
(xvi) Borrowers may enter into and perform their obligations
under a gaming operations lease agreement with Phase II Subsidiary
relating to the casino to be in the casino resort owned by the Phase II
Subsidiary on terms substantially similar to those of the Casino Lease
except that (a) the rent payable under such lease shall be equal to all
revenues derived from such casino minus the sum of (1) the operating
costs related to such casino (including an allocated portion (based on
gaming revenue) of the Borrower's administrative costs related to its
gaming operations) and (2) the lesser of $250,000 or 1.0% of such
casino's operating income (or zero if there is an operating loss)
(determined in accordance with GAAP), (b) the Borrowers may agree that
they shall operate the casino in the casino resort owned by the Phase
II Subsidiary and the casino in the Project in substantially similar
manners and (c) the Borrowers may agree to have common gaming and
surveillance operations in such casinos (based on equal allocations of
revenues and operating costs).
(xvii) employees of Interface may participate in the Las Vegas
Sands Inc. 401(k) Retirement Plan if Interface reimburses the Borrowers
for a pro rata portion of the administrative expenses of such plan
based on the number of employees of each of Interface and LVSI
participating in such plan;
(xviii) transactions contemplated by the Interface Lease;
(xix) the Borrowers may reimburse Yona Aviation Services,
Inc., or its successors for its operating and lease costs related to
the use of its aircraft by the Borrower's employees (based on the
actual allocated costs and time of usage);
(xx) transactions contemplated by the Puck JV Letter of
Intent; and
(xxi) transactions contemplated by the Billboard Master Lease.
7.11 Disposal of Subsidiary Stock.
Borrowers shall not, and shall not permit any of their Subsidiaries to,
directly or indirectly sell, assign, pledge or otherwise encumber or dispose of
any shares of capital stock or other equity Securities of Borrowers or any of
their Subsidiaries, except (i) to qualify
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directors if required by applicable law and (ii) to the extent required by any
Nevada Gaming Authority in order to preserve a material Gaming License.
7.12 Conduct of Business.
Borrowers shall not, and shall not permit any of their Subsidiaries to,
engage in any business other than (i) in the case of LVSI, the casino gaming,
hotel, retail and entertainment mall and resort business and any activity or
business incidental, directly related or similar thereto (including operating
the conference center and meeting facilities), or any business or activity that
is a reasonable extension, development or expansion thereof or ancillary
thereto, including any hotel, entertainment, recreation, convention, trade show,
meeting, retail sales or other activity or business designated to promote,
market, support, develop, construct or enhance the casino gaming, hotel, retail
and entertainment mall and resort business operated by Borrowers and their
Subsidiaries, including, without limitation, participating in the Supplier Joint
Ventures and ownership of Mall Manager, Phase II Manager and Venetian, (ii) in
the case of Venetian and its Subsidiaries (other than those listed in clause
(iii) below), (a) development, construction and the operation of the Project,
(b) the casino gaming, hotel, retail and entertainment mall and resort business
(including operating a conference center and meeting facilities) at the Project
and any activity or business incidental, directly related or similar thereto, or
any business or activity that is a reasonable extension, development or
expansion thereof or ancillary thereto, including any hotel, entertainment,
recreation, convention, trade show, meeting, retail sales, or other activity or
business designated to promote, market, support, develop, construct or enhance
the casino gaming, hotel, retail and entertainment mall and resort business
operated at the Project by Borrowers and their Subsidiaries, including, without
limitation, participating in the Supplier Joint Venturers, and (c) ownership of
equity interests in Subsidiaries, including the Intermediate Holding Companies,
(iii) in the case of Intermediate Holding Companies, the ownership of equity
interests in Mall Direct Holdings, Phase II Direct Holdings and the delivery of
guarantees in favor of the Lenders, the Mortgage Noteholders and the holders of
the Subordinated Notes, (iv) in the case of Mall Manager and Phase II Manager
ownership of 1% managing member interests in Mall Subsidiary and Mall Direct
Holdings and Phase II Direct Holdings and Phase II Subsidiary, respectively, (v)
in the case of Mall Construction Subsidiary, ownership of the Mall Collateral
and other matters reasonably incidental thereto; and (vi) in the case of Mall
Direct Holdings and Phase II Direct Holdings, ownership of equity interests in
Mall Subsidiary and Phase II Subsidiary, respectively.
7.13 Certain Restrictions on Changes to Operative Documents, Permits,
Project Budget or Project Schedule
A. Modifications of Certain Operative Documents and Permits; New
Material Contracts or Permits. Borrowers shall not, and shall not permit any of
their Subsidiaries to, agree to any material amendment to, or waive any of its
material rights under, any Permit or Material Contract or enter into new
Material Contract or Permits (it being understood that any Material Contracts
which are covered by clause B or C below shall also be subject to the
restrictions set forth therein) without in each case obtaining the prior written
consent of Requisite Lenders if in any such case, such amendment or waiver or
new Material Contract or Permit
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could reasonably be expected to have a Material Adverse Effect or otherwise
adversely affect Lenders in any material respect.
B. Amendments of Documents Relating to Other Indebtedness. Borrowers
shall not, and shall not permit any of their Subsidiaries to, amend or otherwise
change the terms of any Financing Agreements (other than the Loan Documents) or
permit the termination thereof (other than in accordance with the terms
thereof), or enter into any new Financing Agreements or make any payment
consistent with an amendment thereof or change thereto, if the effect of such
amendment or change is to increase the interest rate or fees on such Other
Indebtedness, change (to earlier dates) any dates upon which payments of
principal or interest are due thereon, change any event of default or condition
to an event of default with respect thereto (other than to eliminate any such
event of default or increase any grace period related thereto or otherwise
change such event of default in a manner more favorable to the Borrower or such
Subsidiary than the existing event of default), change the commitment
thereunder, change the redemption, prepayment or defeasance provisions thereof,
change the subordination provisions thereof (or of any guaranty thereof), or
change any collateral therefor (other than to release such collateral), or if
the effect of such amendment or change, together with all other amendments or
changes made, is to increase materially the obligations of the obligor
thereunder or to confer any additional rights on the holders of the Indebtedness
or obligations evidenced thereby (or a trustee or other representative on their
behalf) which would be materially adverse to Borrowers, such Subsidiary or
Lenders, provided, that (i) Borrowers may modify the terms of the Interim Mall
Credit Facility or any agreement relating thereto to the extent expressly
permitted by the Intercreditor Agreement, (ii) Borrowers may amend the terms of
any other Financing Agreement solely to increase the principal amount thereof to
the extent expressly permitted by the Intercreditor Agreement and (iii)
Borrowers may enter into an Approved Equipment Funding Commitment to the extent
permitted by the definition of such term and may amend, supplement or terminate
an existing Approved Equipment Funding Commitment for the purpose of replacing
all or a portion of it with such new Approved Equipment Funding Commitment.
C. Certain Other Restrictions on Amendments. Borrowers shall not, and
shall not permit any of their Subsidiaries to, agree to any material amendment
to, or waive any of its material rights under the Cooperation Agreement which
would require the consent of the Administrative Agent pursuant to Article XIV,
Section 26 thereof, including, but not limited to, any material amendment to, or
any waiver of material rights under Article III, Sections 1 and 3, Article IV,
Section 1, Article IX(b)-(e), Articles X-XII and Article XIV, Sections 1, 3, 4,
6, 7, 8, 14 and 26, without obtaining the prior written consent of the
Administrative Agent, which consent shall not be unreasonably withheld or
delayed.
7.14 Consolidated Capital Expenditures.
Borrowers shall not, and shall not permit their Subsidiaries to, make
or incur Consolidated Capital Expenditures, in any four Fiscal Quarter period
indicated below, in an aggregate amount in excess of the corresponding amount
(the "Maximum Consolidated Capital Expenditures Amount") set forth below
opposite such four Fiscal Quarter; provided that the Maximum Consolidated
Capital Expenditures Amount for any four Fiscal Quarters shall be
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increased by an amount equal to the excess, if any, of the Maximum Consolidated
Capital Expenditures Amount for the previous four Fiscal Quarter period over the
actual amount of Consolidated Capital Expenditures for such previous four Fiscal
Quarter period:
===================================== ==================================
Fiscal Maximum
Quarter Consolidated Capital
Expenditures Amount
===================================== ==================================
First, second, third and $15,000,000
fourth Fiscal Quarters after
the Completion Date
Fifth, sixth, seventh and $25,000,000
eighth Fiscal Quarters after
the Completion Date
Ninth, tenth, eleventh and $25,000,000
twelfth Fiscal Quarters
after the Completion Date
Thirteenth, fourteenth, $25,000,000
fifteenth and sixteenth Fiscal
Quarters after the
Completion Date
Seventeenth, eighteenth, $30,000,000
nineteenth and twentieth
Fiscal Quarters after the
Completion Date
===================================== ==================================
7.15 Fiscal Year.
Neither Borrower shall change its Fiscal Year-end from December 31.
7.16 Zoning and Contract Changes and Compliance.
Without the prior written approval of the Administrative Agent, the
Borrowers shall not, and shall not permit any of their Subsidiaries to, initiate
or consent to any zoning downgrade of the Mortgaged Property or seek any
material variance under any existing zoning ordinance or use or permit the use
of the Mortgaged Property in any manner that could result in such use becoming a
non-conforming use (other than a non-conforming use permissible under automatic
grandfathering provisions) under any zoning ordinance or any other applicable
land use law, rule or regulation. The Borrowers shall not, and shall not permit
any of their Subsidiaries to, initiate or consent to any change in any laws,
requirements of Governmental Authorities or obligations created by private
contracts which now or hereafter could reasonably be likely to materially and
adversely affect the ownership, occupancy, use or operation of the Mortgaged
Property without the prior written consent of the Administrative Agent.
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7.17 No Joint Assessment; Separate Lots.
Without the prior written approval of the Administrative Agent, which
approval may be granted, withheld, conditioned or delayed in its sole
discretion, the Borrowers shall not suffer, permit or initiate, and shall not
permit any of their Subsidiaries to, suffer, permit or initiate, the joint
assessment of the Mortgaged Property (i) with any other real property
constituting a separate tax lot and (ii) with any portion of the Mortgaged
Property which may be deemed to constitute personal property, or any other
procedure whereby the lien of any Taxes which may be levied against any such
personal property shall be assessed or levied or charged to the Mortgaged
Property as a single lien. The Mortgaged Property is comprised of one or more
parcels, each of which, to the knowledge of the Borrowers, constitutes a
separate tax lot and none of which constitutes a portion of any other tax lot.
7.18 Certain Covenants Applicable to Mall Subsidiary.
A. Line of Business. Borrowers shall not permit Mall Subsidiary to
engage in any business other than (i) acquiring, developing, constructing,
owning, holding, managing, marketing and operating of the Mall, (ii) any
activity and business incidental, directly related or similar thereto, and (iii)
engaging in any business or activity that is a reasonable extension, development
or expansion thereof or ancillary thereto including any retail, restaurant,
entertainment or other activity or business designed to promote, market,
support, develop, construct or enhance the retail, restaurant and entertainment
business of the Mall (including, owning and operating joint ventures to supply
materials or services for the construction or operation of the Mall).
B. Restrictions on Investment. Borrowers shall not permit Mall
Subsidiary to purchase or acquire any Securities, loan, advance, capital
contribution or other investment of any kind except (i) advances to employees
for moving, entertainment and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business, (ii) any such investments in
Cash Equivalents and similar liquid Investments permitted under the Financing
Agreements to which it is a party; (iii) any investments in Joint Ventures with
third parties to develop and operate restaurants in the Mall in an aggregate
amount not to exceed $5,000,000 at any time; (iv) other such investments
reasonably necessary for the operation, maintenance and improvement of the Mall
in an aggregate amount not to exceed $2,500,000 at any time; (v) loans or
advances to employees made in the ordinary course of business of the Mall
Subsidiary in an aggregate amount not to exceed $500,000 at any time; and (vi)
stock, obligations or securities received in settlement of debts created in the
ordinary course of business and owing to Mall Subsidiary or in satisfaction of
judgments.
C. Affiliate Transactions. Borrowers shall not permit Mall Subsidiary
to, directly or indirectly, enter into or permit to exist any transaction
(including the purchase, sale, lease or exchange of any property or the
rendering of any service), with any holder of 5% or more of any class of equity
Securities of any Borrower or Mall Subsidiary or with any Affiliate of a
Borrower or Mall Subsidiary or any such holder, provided that Mall Subsidiary
may enter into or permit to exist (i) transactions that are not less favorable
to Mall Subsidiary than those that
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might be obtained at the time from Persons who are not such a holder of
Affiliate if Borrowers have delivered to Administrative Agent (a) with respect
to any transaction involving an amount in excess of $500,000, an Officers
Certificate certifying that such transaction complies with this clause (i), (b)
with respect to any transaction involving an amount in excess of $1,000,000, a
resolution adopted by a majority of the disinterested non-employee directors of
the Borrowers approving such transaction and an Officers Certificate certifying
that such transaction complies with this clause (i) and (c) with respect to any
such transaction that involves aggregate payments in excess of $10,000,000 or
that is a loan transaction involving a principal amount in excess of
$10,000,000, an opinion as to the fairness to Mall Subsidiary from a financial
point of view issued by an Independent Financial Advisor at the time such
transaction is entered into, (ii) transactions contemplated by the Sale and
Contribution Agreement, the Mall Lease, the Tranche A Take Out Commitment, the
Tranche B Take Out Commitment, the Substitute Tranche B Loan, the HVAC Services
Agreements, the Services Agreement, the Puck JV Letter of Intent, the Billboard
Master Lease and the Cooperation Agreement, (v) any guarantees by Adelson of
Indebtedness of Mall Subsidiary, (vi) purchases of materials or services from a
Joint Venture Supplier by the Mall Subsidiary in the ordinary course of business
on arm's length terms; (vii) any employment, indemnification, noncompetition or
confidentiality agreement entered into by Mall Subsidiary with its employees or
directors in the ordinary course of business, (viii) loans or advances to
employees of Mall Subsidiary, but in any event not to exceed $500,000 in the
aggregate outstanding at any one time and (ix) the payment of reasonable fees to
directors of Mall Subsidiary or its managing member who are not employees of
Mall Subsidiary.
D. Restricted Junior Payments. Borrowers shall not permit Mall
Subsidiary to make any payments or distributions which would constitute
Restricted Junior Payments described in clauses (i) through (iii) inclusive of
the definition of Restricted Junior Payments if the reference to Borrower in
each such clause were a reference to Mall Subsidiary unless such payments or
distributions are made (i) to the Borrowers or their Subsidiaries or (ii) pro
rata on all equity interests of Mall Subsidiary (so that Borrowers receive a
portion of such payment or distribution equal to the direct or indirect
ownership interest of Borrowers in Mall Subsidiary).
7.19 Limitation on Declaration of Restricted Subsidiaries.
Borrowers shall not declare or permit to be designated as a "Restricted
Subsidiary" under either of the Mortgage Note Indenture or Subordinated Notes
Indenture any Affiliate which is an Excluded Subsidiary.
7.20 Restrictions on Opening.
Borrowers shall not, and shall not permit any of their subsidiaries or
Mall Subsidiary to, open any portion of the Project for business such that the
Opening Date would occur prior to the satisfaction of the Opening Conditions.
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7.21 Limitation on Phase II Construction.
Borrowers shall not, and shall not permit any of their Subsidiaries
(including any Excluded Subsidiary), at any time prior to receipt by Borrowers
or any such Subsidiary of a temporary certificate of occupancy from Clark
County, Nevada with respect to the Project in its entirety (a) to construct,
develop or improve the Phase II Land or any building on the Phase II Land
(including any excavation or site work and excluding the Phase II parking
garage), (b) enter into any contract or agreement for such construction,
development or improvement, or for any materials, supplies or labor necessary in
connection with such construction development or improvement (other than a
contract that is conditioned upon satisfaction of the above condition), or (c)
incur any Indebtedness the proceeds of which are expected to be used for the
construction, development or improvement of the Phase II Land or any building on
the Phase II Land, except (i) any construction, development or improvement on
the Phase II Land or any temporary building on the Phase II Land in connection
with the Project in accordance with the Plans and Specifications and included in
the Project Budget; and (ii) any design, architectural, engineering or
development work not involving actual construction on the Phase II Land.
Section 8. EVENTS OF DEFAULT
If any of the following conditions or events set forth in subsections
8.1, 8.2, 8.3, 8.4, 8.5, 8.6, 8.7, 8.8, 8.9, 8.11, 8.12, 8.15, 8.18 below or any
Disbursement Agreement Event of Default shall occur prior to the Final
Completion Date or if any of the conditions or events set forth in subsections
8.1 through 8.18 inclusive below shall occur on or after the Completion Date
(any such conditions or events, before or after the Completion Date,
collectively "Events of Default"):
8.1 Failure to Make Payments When Due.
Failure by Borrowers to pay any installment of principal on any Loan
when due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; failure by Borrowers to pay
when due any amount payable to an Issuing Lender in reimbursement of any
drawings; or failure by Borrowers to pay any interest on any Loan or any fee or
any other amount due under this Agreement within five days after the date due;
or
8.2 Default under Other Indebtedness or Contingent Obligations.
(i) Failure of any Borrower or any of its Subsidiaries, to pay when due
any principal of or interest on or any other amount payable in respect of one or
more items of Indebtedness (other than Indebtedness referred to in subsection
8.1) or Contingent Obligations in an individual principal amount of $2,500,000
or more or with an aggregate principal amount of $5,000,000 or more, in each
case beyond the end of any grace period provided therefor; or (ii) breach or
default by any Borrower or any of its Subsidiaries with respect to any other
material term of (a) one or more items of Indebtedness or Contingent Obligations
in the individual or aggregate
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principal amounts referred to in clause (i) above or (b) any loan agreement,
mortgage, indenture or other agreement relating to such item(s) of Indebtedness
or Contingent Obligation(s), if the effect of such breach or default is to
cause, or to permit the holder or holders of that Indebtedness or Contingent
Obligation(s) (or a trustee on behalf of such holder or holders) to cause, that
Indebtedness or Contingent Obligation(s) to become or be declared due and
payable prior to its stated maturity or the stated maturity of any underlying
obligation, as the case may be (upon the giving or receiving of notice, lapse of
time, both, or otherwise); or
8.3 Breach of Certain Covenants.
Failure of Loan Parties to perform or comply with any term or condition
contained in subsection 2.5 or 6.2 or Section 7 (to the extent applicable at
such time) of this Agreement provided that the failure to perform or comply with
any such provision incorporated by reference from the Disbursement Agreement
shall constitute an Event of Default hereunder only to the extent such failure
to perform or comply constitutes a Disbursement Agreement Event of Default; or
8.4 Breach of Warranty.
Any representation, warranty, certification or other statement made by
Borrowers or any of their Subsidiaries in any Loan Document or in any statement
or certificate at any time given by Borrowers or any of their Subsidiaries in
writing pursuant hereto or thereto or in connection herewith or therewith shall
be false in any material respect on the date as of which made provided that the
failure to perform or comply with any such provision incorporated by reference
from the Disbursement Agreement shall constitute an Event of Default hereunder
only to the extent such failure to perform or to comply constitutes a
Disbursement Agreement Event of Default; or
8.5 Other Defaults Under Loan Documents.
Any Loan Party shall default in the performance of or compliance with
any term contained in this Agreement or any of the other Loan Documents, other
than any such term referred to in any other subsection of this Section 8, and
such default shall not have been remedied or waived within 30 days after the
earlier of (i) an officer of Borrowers or such Loan Party becoming aware of such
default or (ii) receipt by Borrowers and such Loan Party of notice from
Administrative Agent or any Lender of such default provided that the failure to
perform or comply with any such provision incorporated by reference from the
Disbursement Agreement shall constitute an Event of Default hereunder only to
the extent such failure to perform or comply constitutes a Disbursement
Agreement Event of Default; or
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.
(i) A court having jurisdiction in the premises shall enter a decree or
order for relief in respect of a Borrower or any of its Subsidiaries in an
involuntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, which decree
or order is not stayed; or any other similar relief shall be granted under any
applica ble federal or state law; or (ii) an involuntary case shall be commenced
against a Borrower or any of its Subsidiaries, under the Bankruptcy Code or
under any other applicable bankruptcy, insolvency or similar law now or
hereafter in
136
effect; or a decree or order of a court having jurisdiction in the premises for
the appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over a Borrower or any of its Subsidiaries,
or over all or a substantial part of its property, shall have been entered; or
there shall have occurred the involuntary appointment of an interim receiver,
trustee or other custodian of a Borrower or any of its Subsidiaries, for all or
a substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of a Borrower or any of its Subsidiaries, and any such event described
in this clause (ii) shall continue for 60 days unless dismissed, bonded or
discharged; or
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.
(i) A Borrower or any of its Subsidiaries shall have an order for
relief entered with respect to it or commence a voluntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, or shall consent to the entry of an order for
relief in an involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such law, or shall consent to the appointment of or
taking possession by a receiver, trustee or other custodian for all or a
substantial part of its property; or a Borrower or any of its Subsidiaries shall
make any assignment for the benefit of creditors; or (ii) a Borrower or any of
its Subsidiaries shall be unable, or shall fail generally, or shall admit in
writing its inability, to pay its debts as such debts become due and in each
case a period of 30 days shall have elapsed; or the Board of Directors of a
Borrower or any of its Subsidiaries (or any committee thereof) or of its
managing member shall adopt any resolution or otherwise authorize any action to
approve any of the actions referred to in clause (i) above or this clause (ii);
or
8.8 Judgments and Attachments.
Any money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of $2,500,000 or (ii)
in the aggregate at any time an amount in excess of $5,000,000 (in either case
not adequately covered by insurance as to which a solvent and unaffiliated
insurance company has acknowledged coverage) shall be entered or filed against a
Borrower or any of its Subsidiaries or any of their respective assets and shall
remain unpaid and undischarged, unvacated, unbonded or unstayed for a period of
60 days (or in any event later than five days prior to the date of any proposed
sale thereunder); or
8.9 Dissolution.
Any order, judgment or decree shall be entered against a Borrower or
any of its Subsidiaries decreeing the dissolution or split up of such Person and
such order shall remain undischarged or unstayed for a period in excess of 30
days; or
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8.10 Employee Benefit Plans.
There shall occur one or more ERISA Events which individually or in the
aggregate results in or might reasonably be expected to result in liability of a
Borrower, or any of its Subsidiaries or any of their respective ERISA Affiliates
in excess of $2,500,000 during the term of this Agreement; or there shall exist
an amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of
ERISA), individually or in the aggregate for all Pension Plans (excluding for
purposes of such computation any Pension Plans with respect to which assets
exceed benefit liabilities), which exceeds $5,000,000; or
8.11 Change in Control.
As a result of any sale, pledge or other transfer, either (a) Adelson
and the Related Parties shall cease to beneficially own and control directly or
indirectly at least 70% of the issued and outstanding shares of capital stock of
LVSI, entitled (without regard to the occurrence of any contingency) to vote for
the election of members of the Board of Directors of LVSI; (b) Adelson or any
Related Party (as applicable but excluding any of the persons specified in
clause (ii) of the definition of Related Parties) shall not have invested the
proceeds of any sale, or transfer of shares of LVSI by Adelson or any Related
Party (as applicable) in the business of Borrowers (including any Excluded
Subsidiary) or (c) LVSI shall cease to own 100% of the equity Securities of
Venetian other than any preferred equity of Venetian owned by Interface or
another Affiliate of Adelson or (d) Borrowers shall cease to own 100% of the
equity securities of each of their Subsidiaries, Mall Manager and Phase II
Manager, (e) the Intermediate Holding Companies shall cease to own 100% of Mall
Direct Holdings and Phase II Direct Holdings, (f) Mall Direct Holdings shall
cease to own not less than 80% of the equity securities in Mall Subsidiary or
(g) Phase II Direct Holdings shall cease to own at least 51% of the equity
securities in Phase II Subsidiary or (h) the sole managing member of Mall Direct
Holdings, Phase II Direct Holdings, Intermediate Holding Companies, Mall
Subsidiary and Phase II Subsidiary shall cease to be LVSI, Venetian or a wholly
owned Subsidiary of LVSI or Venetian or (i) any "Change of Control" (as defined
in either of the Indentures) shall occur; or
8.12 Failure of Guaranty; Repudiation of Obligations.
At any time after the execution and delivery thereof, (i) the
Subsidiary Guaranty for any reason, other than the satisfaction in full of all
Obligations, shall cease to be in full force or effect (other than in accordance
with its terms), or shall be declared null and void by a Governmental
Instrumentality of competent jurisdiction, (ii) any Collateral Document shall
cease to be in full force and effect (other than by reason of a release of
Collateral thereunder in accordance with the terms hereof or thereof, the
satisfaction in full of the Obligations or any other termination of such
Collateral Document in accordance with the terms hereof or thereof) or shall be
declared null and void by a Governmental Instrumentality of competent
jurisdiction, or Administrative Agent shall not have or shall cease to have a
valid and perfected First Priority Lien in the First Priority Collateral, or a
valid and perfected second priority Lien on the Mall Collateral, in each case
for any reason other than the failure of Administrative Agent or any Lender to
take any action within its control, or (iii) any Loan Party shall contest the
validity or
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enforceability of any Loan Document in writing or deny in writing that it has
any further liability prior to the indefeasible payment in full of all
Obligations, the cancellation of all outstanding Letters of Credit and the
termination of all Commitments, including with respect to future advances by
Lenders, under any Loan Document to which it is a party or (vi) the
subordination provisions in the Subordinated Notes, the Employee Repurchase
Notes, any Completion Guaranty Note or any Substitute Tranche B Note or in any
other instrument required under any provision of this Agreement to be
subordinated to the Obligations shall cease to be enforceable against the holder
thereof; or
8.13 Default Under or Termination of Operative Documents.
Any of the Operative Documents shall terminate or be terminated or
canceled, prior to its stated expiration date or either Borrower shall be in
default (after the giving of any applicable notice and the expiration of any
applicable grace period) or any Affiliate of the Borrowers shall be in default
(after the giving of any applicable notice and the expiration of any applicable
grace period) under any of the Operative Documents; provided that a default or
termination under any Project Document shall constitute an Event of Default
hereunder only if such default or termination may reasonably be expected to
cause a Material Adverse Effect; or
8.14 Default Under or Termination of Permits.
A Borrower or any of its Subsidiaries shall fail to observe, satisfy or
perform, or there shall be a violation or breach of, any of the material terms,
provisions, agreements, covenants or conditions attaching to or under the
issuance to such Person of any material Permit, including the gaming license
held by LVSI or any such Permit or any material provision thereof shall be
terminated or fail to be in full force and effect or any Governmental
Instrumentality shall challenge or seek to revoke any such Permit if such
failure to perform, breach or termination could reasonably be expected to have a
Material Adverse Effect; or
8.15 Default Under or Termination of Cooperation Agreement
Any default by Interface shall occur under Article III, Section 3 of
the Cooperation Agreement beyond any applicable notice or cure periods; or
8.16 Bankruptcy or Dissolution of Mall Subsidiary.
Any event or circumstance described under subsections 8.6 or 8.7 hereof
shall occur with respect to Mall Subsidiary, Mall Manager or Mall Direct Holding
Company which would constitute an Event of Default if such Excluded Subsidiary
were a Subsidiary of Borrowers for purposes of those subsections; or
8.17 Acceleration of Obligations of Mall Subsidiary.
Mall Subsidiary shall be in breach or default with respect to any term
of one or more items or Indebtedness or Contingent Obligation(s) in an
individual principal amount of
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$2,500,000 or more or an aggregate principal amount of $5,000,000 or more, if
as result thereof the holders of such Indebtedness or Contingent Obligations)
(or an agent or trustee acting on their behalf) have caused that Indebtedness or
Contingent Obligation(s) to become due and payable prior to its stated maturity
or the stated maturity of any underlying obligation, as the case may be; or
8.18 Certain Investments in any Excluded Subsidiary.
Adelson or any of his Affiliates (other than Borrowers and their
wholly-owned Subsidiaries) shall acquire or hold any Investment in any Excluded
Subsidiary or any Person which any Excluded Subsidiary controls or holds an
Investment other than (a) in the case of Mall Subsidiary or Phase II Subsidiary,
through transactions expressly permitted under subsection 7.18 or purchases of
public debt securities in the secondary market and (b) in the case of Phase II
Subsidiary or any of its subsidiaries, investments arising through loans,
completion guaranties or other guaranties substantially similar to those
provided in connection with the development of the Project and permitted under
clause (a) of this subsection 8.18.
THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans, (b) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not any beneficiary
under any such Letter of Credit shall have presented, or shall be entitled at
such time to present, the drafts or other documents or certificates required to
draw under such Letter of Credit), and (c) all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by Borrowers, and the obligation of each Lender to make any Loan, the
obligation of Administrative Agent to issue any Letter of Credit and the right
of any Lender to issue any Letter of Credit hereunder shall thereupon terminate,
and (ii) upon the occurrence and during the continuation of any other Event of
Default, Administrative Agent shall, upon the written request or with the
written consent of Requisite Lenders, by written notice to Borrowers, declare
all or any portion of the amounts described in clauses (a) and (b) above to be,
and the same shall forthwith become, immediately due and payable, and the
obligation of each Lender to make any Loan, the obligation of Administrative
Agent to issue any Letter of Credit and the right of any Lender to issue any
Letter of Credit hereunder shall thereupon terminate; provided that the
foregoing shall not affect in any way the obligations of Lenders under
subsection 3.3C(i).
Any amounts described in clause (b) above, when received by
Administrative Agent, shall be held by Administrative Agent pursuant to a cash
collateral arrangement reasonably satisfactory to Administrative Agent.
Notwithstanding anything contained in the second preceding paragraph, if at any
time within 60 days after an acceleration of the Loans pursuant to clause (ii)
of such paragraph Borrowers shall pay all arrears of interest and all payments
on account of principal which shall have become due otherwise than as a result
of such acceleration (with interest on principal and, to the extent permitted by
law, on overdue interest, at the rates specified in this Agreement) and all
Events of Default and Potential Events of Default (other than non-payment of the
principal of and accrued interest on the Loans, in each case which is
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due and payable solely by virtue of acceleration) shall be remedied or waived
pursuant to subsection 10.6, then Requisite Lenders, by written notice to
Borrowers, may at their option rescind and annul such acceleration and its
consequences; but such action shall not affect any subsequent Event of Default
or Potential Event of Default or impair any right consequent thereon. The
provisions of this paragraph are intended merely to bind Lenders to a decision
which may be made at the election of Requisite Lenders and are not intended,
directly or indirectly, to benefit Borrowers, and such provisions shall not at
any time be construed so as to grant Borrowers the right to require Lenders to
rescind or annul any acceleration hereunder or to preclude Administrative Agent
or Lenders from exercising any of the rights or remedies available to them under
any of the Loan Documents, even if the conditions set forth in this paragraph
are met.
Section 9. AGENTS
9.1 Appointment.
A. Appointment of Administrative Agent. Scotiabank is hereby appointed
Administrative Agent hereunder and under the other Loan Documents and each
Lender hereby authorizes Administrative Agent to act as its agent in accordance
with the terms of this Agreement and the other Loan Documents. GSCP is hereby
appointed Arranger and Syndication Agent hereunder and under the other Loan
Documents and each Lender hereby authorizes Arranger and Syndication Agent to
act as its agent in accordance with the terms of this Agreement and the other
Loan Documents. Each Agent agrees to act upon the express conditions contained
in this Agreement and the other Loan Documents, as applicable. The provisions of
this Section 9 are solely for the benefit of each Agent and Lenders; Borrowers
shall have no rights as a third party beneficiary of any of the provisions
thereof. In performing its functions and duties under this Agreement, each Agent
shall act solely as an agent of Lenders and does not assume and shall not be
deemed to have assumed any obligation towards or relationship of agency or trust
with or for Borrowers or any of their Subsidiaries. Upon the Closing Date all
obligations of Arranger and the Syndication Agent hereunder shall terminate.
B. Appointment of Supplemental Agents. It is the purpose of this
Agreement and the other Loan Documents that there shall be no violation of any
law of any jurisdiction denying or restricting the right of banking corporations
or associations to transact business as agent or trustee in such jurisdiction.
It is recognized that in case of litigation under this Agreement or any of the
other Loan Documents, and in particular in case of the enforcement of any of the
Loan Documents, or in case any Agent deems that by reason of any present or
future law of any jurisdiction it may not exercise any of the rights, powers or
remedies granted herein or in any of the other Loan Documents or take any other
action which may be desirable or necessary in connection therewith, it may be
necessary that such Agent appoint an additional individual or institution as a
separate trustee, co-trustee, collateral agent or collateral co-agent (any such
additional individual or institution being referred to herein individually as a
"Supplemental Agent" and collectively as "Supplemental Agents").
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In the event that an Agent appoints a Supplemental Agent with respect
to any Collateral, (i) each and every right, power, privilege or duty expressed
or intended by this Agreement or any of the other Loan Documents to be exercised
by or vested in or conveyed to an Agent with respect to such Collateral shall be
exercisable by and vest in such Supplemental Agent to the extent, and only to
the extent, necessary to enable such Supplemental Agent to exercise such rights,
powers and privileges with respect to such Collateral and to perform such duties
with respect to such Collateral, and every covenant and obligation contained in
the Loan Documents and necessary to the exercise or performance thereof by such
Supplemental Agent shall run to and be enforceableby either such Agent or such
Supplemental Agent, and (ii) the provisions of this Section 9 and of subsections
10.2 and 10.3 that refer to Agent shall inure to the benefit of such
Supplemental Agent and all references therein to Agent shall be deemed to be
references to Administrative Agent and/or such Supplemental Agent, as the
context may require.
Should any instrument in writing from Borrowers or any other Loan Party
be required by any Supplemental Agent so appointed for more fully and certainly
vesting in and confirming to him or it such rights, powers, privileges and
duties, Borrowers shall, or shall cause such Loan Party to, execute, acknowledge
and deliver any and all such instruments promptly upon request by the
appropriate Agent. In case any Supplemental Collateral Agent, or a successor
thereto, shall die, become incapable of acting, resign or be removed, all the
rights, powers, privileges and duties of such Supplemental Agent, to the extent
permitted by law, shall vest in and be exercised by Administrative Agent until
the appointment of a new Supplemental Agent.
9.2 Powers and Duties; General Immunity.
A. Powers; Duties Specified. Each Lender irrevocably authorizes
Administrative Agent to take such action on such Lender's behalf and to exercise
such powers, rights and remedies hereunder and under the other Loan Documents as
are specifically delegated or granted to Administrative Agent by the terms
hereof and thereof, together with such powers, rights and remedies as are
reasonably incidental thereto. Administrative Agent shall have only those duties
and responsibilities that are expressly specified in this Agreement and the
other Loan Documents. Administrative Agent may exercise such powers, rights and
remedies and perform such duties by or through its agents or employees.
Administrative Agent shall not have, by reason of this Agreement or any of the
other Loan Documents, a fiduciary relationship in respect of any Lender; and
nothing in this Agreement or any of the other Loan Documents, expressed or
implied, is intended to or shall be so construed as to impose upon
Administrative Agent any obligations in respect of this Agreement or any of the
other Loan Documents except as expressly set forth herein or therein.
B. No Responsibility for Certain Matters. Administrative Agent shall
not be responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or any
other Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by Administrative Agent to Lenders or by
or on behalf of Borrowers to Administrative Agent or any Lender in connection
with the Loan Documents
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and the transactions contemplated thereby or for the financial condition or
business affairs of Borrowers or any other Person liable for the payment of any
Obligations, nor shall Administrative Agent be required to ascertain or inquire
as to the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained in any of the Loan Documents or as to the use
of the proceeds of the Loans or the use of the Letters of Credit or as to the
existence or possible existence of any Event of Default or Potential Event of
Default. Anything contained in this Agreement to the contrary notwithstanding,
Administrative Agent shall not have any liability arising from confirmations of
the amount of outstanding Loans or the Letter of Credit Usage or the component
amounts thereof.
C. Exculpatory Provisions. Neither Administrative Agent nor any of its
officers, directors, employees or agents shall be liable to Lenders for any
action taken or omitted by Administrative Agent under or in connection with any
of the Loan Documents except to the extent caused by Administrative Agent's
gross negligence or willful misconduct. Administrative Agent shall be entitled
to refrain from any act or the taking of any action (including the failure to
take an action) in connection with this Agreement or any of the other Loan
Documents or from the exercise of any power, discretion or authority vested in
it hereunder or thereunder unless and until Administrative Agent shall have
received instructions in respect thereof from Requisite Lenders (or such other
Lenders as may be required to give such instructions under subsection 10.6) and,
upon receipt of such instructions from Requisite Lenders (or such other Lenders,
as the case may be), Administrative Agent shall be entitled to act or (where so
instructed) refrain from acting, or to exercise such power, discretion or
authority, in accordance with such instructions. Without prejudice to the
generality of the foregoing, (i) Administrative Agent shall be entitled to rely,
and shall be fully protected in relying, upon any communication, instrument or
document believed by it to be genuine and correct and to have been signed or
sent by the proper person or persons, and shall be entitled to rely and shall be
protected in relying on opinions and judgments of attorneys (who may be
attorneys for Borrowers and their Subsidiaries), accountants, experts and other
professional advisors selected by it; and (ii) no Lender shall have any right of
action whatsoever against Administrative Agent as a result of Administrative
Agent acting or (where so instructed) refraining from acting under this
Agreement or any of the other Loan Documents in accordance with the instructions
of Requisite Lenders (or such other Lenders as may be required to give such
instructions under subsection 10.6).
D. Administrative Agent Entitled to Act as Lender. The agency hereby
created shall in no way impair or affect any of the rights and powers of, or
impose any duties or obligations upon, Administrative Agent in its individual
capacity as a Lender hereunder. With respect to its participation in the Loans
and the Letters of Credit, Administrative Agent shall have the same rights and
powers hereunder as any other Lender and may exercise the same as though it were
not performing the duties and functions delegated to it hereunder, and the term
"Lender" or "Lenders" or any similar term shall, unless the context clearly
otherwise indicates, include Administrative Agent in its individual capacity.
Administrative Agent and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of banking, trust, financial advisory or other
business with Borrowers or any of its Affiliates as if it were not performing
the duties specified herein, and may accept fees and other consideration from
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Borrowers for services in connection with this Agreement and otherwise without
having to account for the same to Lenders.
9.3 Representations and Warranties; No Responsibility For Appraisal of
Credit Worthi ness.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Borrowers
and their Subsidiaries in connection with the making of the Loans and the
issuance of the Letters of Credit hereunder and that it has made and shall
continue to make its own appraisal of the creditworthiness of Borrowers and
their Subsidiaries. Administrative Agent shall not have any duty or
responsibility, either initially or on a continuing basis, to make any such
investigation or any such appraisal on behalf of Lenders or to provide any
Lender with any credit or other information with respect thereto, whether coming
into its possession before the making of the Loans or at any time or times
thereafter, and Administrative Agent shall not have any responsibility with
respect to the accuracy of or the completeness of any information provided to
Lenders.
9.4 Right to Indemnity.
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify Administrative Agent, to the extent that Administrative Agent shall
not have been reimbursed by Borrowers, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including counsel fees and disbursements) or disbursements of any kind
or nature whatsoever which may be imposed on, incurred by or asserted against
Administrative Agent in exercising its powers, rights and remedies or performing
its duties hereunder or under the other Loan Documents or otherwise in its
capacity as Administrative Agent in any way relating to or arising out of this
Agreement or the other Loan Documents; provided that no Lender shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
Administra tive Agent's gross negligence or willful misconduct. If any indemnity
furnished to Administrative Agent for any purpose shall, in the opinion of
Administrative Agent, be insufficient or become impaired, Administrative Agent
may call for additional indemnity and cease, or not commence, to do the acts
indemnified against until such additional indemnity is furnished.
9.5 Successor Administrative Agent.
Administrative Agent may resign at any time by giving 30 days' prior
written notice thereof to Lenders and Borrowers, and Administrative Agent may be
removed at any time with or without cause by an instrument or concurrent
instruments in writing delivered to Borrowers and Administrative Agent and
signed by Requisite Lenders. Upon any such notice of resignation or any such
removal, Requisite Lenders shall have the right, upon five Business Days' notice
to Borrowers, to appoint a successor Administrative Agent (provided that such
successor is or simultaneously therewith becomes a Lender). Upon the acceptance
of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, that successor
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Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or removed Administrative
Agent and the retiring or removed Administrative Agent shall be discharged from
its duties and obligations under this Agreement. After any retiring or removed
Administrative Agent's resignation or removal hereunder as Administrative Agent,
the provisions of this Section 9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Agreement.
9.6 Collateral Documents and Subsidiary Guaranties.
Each Lender hereby further authorizes Administrative Agent, on behalf
of and for the benefit of Lenders, to enter into each Collateral Document and
Subsidiary Guaranty as secured party or beneficiary (as applicable), and each
Lender agrees to be bound by the terms of each Collateral Document and
Subsidiary Guaranty; provided that Administrative Agent shall not (i) enter into
or consent to any material amendment, modification, termination or waiver of any
provision contained in any Collateral Document or Subsidiary Guaranty, or (ii)
release any Collateral (except as otherwise expressly permitted or required
pursuant to the terms of this Agreement or the applicable Collateral Document),
in each case without the prior consent of Requisite Lenders (or, if required
pursuant to subsection 10.6, all Lenders); provided further, however, that,
without further written consent or authorization from Lenders, Administrative
Agent may execute any documents or instruments necessary to (i) release any
Subsidiary from the Subsidiary Guaranty to the extent the stock of such
Subsidiary is sold in a transaction permitted under this Agreement or otherwise
consented to by Requisite Lenders in accordance with subsection 10.6 and (ii)
release any Lien encumbering any item of Collateral that is the subject of a
sale or other disposition of assets permitted by this Agreement or to which
Requisite Lenders have otherwise consented in accordance with Subsection 10.6.
Anything contained in any of the Loan Documents to the contrary notwithstanding,
Borrowers, Administrative Agent and each Lender hereby agree that (X) no Lender
shall have any right individually to realize upon any of the Collateral under
any Collateral Document, it being understood and agreed that all powers, rights
and remedies under the Collateral Documents and each Guaranty may be exercised
solely by Administrative Agent for the benefit of Lenders in accordance with the
terms thereof, and (Y) in the event of a foreclosure by Administrative Agent on
any of the Collateral pursuant to a public or private sale, Administrative Agent
or any Lender may be the purchaser of any or all of such Collateral at any such
sale and Administrative Agent, as agent for and representative of Lenders (but
not any Lender or Lenders in its or their respective individual capacities
unless Requisite Lenders shall otherwise agree in writing) shall be entitled,
for the purpose of bidding and making settlement or payment of the purchase
price for all or any portion of the Collateral sold at any such public sale, to
use and apply any of the Obligations as a credit on account of the purchase
price for any collateral payable by Administrative Agent at such sale.
9.7 Disbursement Agreement and Intercreditor Agreement
Each Lender hereby further authorizes Administrative Agent, on behalf
of and for the benefit of Lenders, to enter into the Disbursement Agreement, the
Intercreditor Agreement, the Adelson Intercreditor Agreement and any FF&E
Intercreditor Agreements and any other
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intercreditor agreements in the form of the Adelson Intercreditor Agreement
entered into by Administrative Agent with any subsequent holders of a Substitute
Tranche B Note or a Completion Guaranty Note, and each Lender agrees to be bound
by the terms of the Disbursement Agreement, the Intercreditor Agreement and each
other such intercreditor agreement; provided that Administrative Agent shall not
enter into or consent to any amendment, modification, termination or waiver of
any provision contained in the Disbursement Agreement, the Intercreditor
Agreement or any other such intercreditor agreement without the prior consent of
Requisite Lenders (or, if such amendment, modification, termination or waiver
would result in a change that under Section 10.6 would require the consent of
all Lenders, then the prior consent of all Lenders).
Section 10. MISCELLANEOUS
10.1 Assignments and Participations in Loans.
A. General. Subject to subsection 10.1B, each Lender shall have the
right at any time to (i) sell, assign or transfer to any Eligible Assignee, or
(ii) sell participations to any Eligible Assignee or any other Person with the
approval of Borrowers in, all or any part of its Commitments or any Loan or
Loans made by it or its Letters of Credit or participations therein or any other
interest herein or in any other Obligations owed to it; provided that no such
sale, assignment, transfer or participation shall, without the consent of
Borrowers, require Borrowers to file a registration statement with the
Securities and Exchange Commission or apply to qualify such sale, assignment,
transfer or participation under the securities laws of any state; provided,
further that no such sale, assignment or transfer described in clause (i) above
shall be effective unless and until an Assignment Agreement effecting such sale,
assignment or transfer shall have been accepted by Administrative Agent and
recorded in the Register as provided in subsection 10.1B(ii) and provided,
further that no such sale, assignment, transfer or participation of any Letter
of Credit or any participation therein may be made separately from a sale,
assignment, transfer or participation of a corresponding interest in the
Commitment and the Loans of the Lender effecting such sale, assignment, transfer
or participation. Except as otherwise provided in this subsection 10.1, no
Lender shall, as between Borrowers and such Lender, be relieved of any of its
obligations hereunder as a result of any sale, assignment or transfer of, or any
granting of participations in, all or any part of its Commitments or the Loans,
the Letters of Credit or participations therein, or the other Obligations owed
to such Lender.
B. Assignments.
(i) Amounts and Terms of Assignments. Each Commitment, Loan,
Letter of Credit or participation therein, or other Obligation may (a)
be assigned in any amount to another Lender, or to an Affiliate of the
assigning Lender or another Lender, with the giving of notice to
Borrowers and Administrative Agent or (b) be assigned in an aggregate
amount of not less than $5,000,000 (or such lesser amount as shall
constitute the aggregate amount of the Commitments, Loans, Letters of
Credit and participations therein, and other Obligations of the
assigning Lender) to any other Eligible Assignee
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with the consent of Borrowers and Administrative Agent (which consent
shall not be unreasonably withheld or delayed); provided that any such
assignment in accordance with either clause (a) or (b) above shall
effect a pro rata assignment (based on the respective principal amounts
thereof then outstanding or in effect) of both the Term Loan Commitment
and the Term Loans of the assigning Lender, on the one hand, and the
Revolving Loan Commitment and the Revolving Loans of the assigning
Lender, on the other hand. To the extent of any such assignment in
accordance with either clause (a) or (b) above, the assigning Lender
shall be relieved of its obligations with respect to its Commitments,
Loans, Letters of Credit or participations therein, or other
Obligations or the portion thereof so assigned. The assignor or
assignee to each such assignment shall execute and deliver to
Administrative Agent, for its acceptance and recording in the Register,
an Assignment Agreement, together with a processing and recordation fee
of (a) $2,000 in respect of assignments made between parties which are
not Lenders as at the Closing Date and (b) $500 in respect of
assignments made between parties one of which is a Lender as at the
Closing Date, and such forms, certificates or other evidence, if any,
with respect to United States federal income tax withholding matters as
the assignee under such Assignment Agreement may be required to deliver
to Administrative Agent pursuant to subsection 2.7B(iii)(a). Upon such
execution, delivery, acceptance and recordation, from and after the
effective date specified in such Assignment Agreement, (y) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such
Assignment Agreement, shall have the rights and obligations of a Lender
hereunder and (z) the assigning Lender thereunder shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant
to such Assignment Agreement, relinquish its rights (other than any
rights which survive the termination of this Agreement under subsection
10.9B) and be released from its obligations under this Agreement (and,
in the case of an Assignment Agreement covering all or the remaining
portion of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto; provided that,
anything contained in any of the Loan Documents to the contrary
notwithstanding, if such Lender is the Issuing Lender with respect to
any outstanding Letters of Credit such Lender shall continue to have
all rights and obligations of an Issuing Lender with respect to such
Letters of Credit until the cancellation or expiration of such Letters
of Credit and the reimbursement of any amounts drawn thereunder). The
Commitments hereunder shall be modified to reflect the Commitment of
such assignee and any remaining Commitment of such assigning Lender
and, if any such assignment occurs after the issuance of Notes
hereunder, the assigning Lender shall, upon the effectiveness of such
assignment or as promptly thereafter as practicable, surrender its
applicable Notes to Administrative Agent for cancellation, and
thereupon new Notes shall be issued to the assignee and to the
assigning Lender, substantially in the form of Exhibit III-B annexed
hereto, with appropriate insertions, to reflect the new Commitments
and/or outstanding Loans, as the case may be, of the assignee and the
assigning Lender.
(ii) Acceptance by Administrative Agent; Recordation in
Register. Upon its receipt of an Assignment Agreement executed by an
assigning Lender and an assignee representing that it is an Eligible
Assignee, together with the processing and recordation
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fee referred to in subsection 10.1B(i) and any forms, certificates or
other evidence with respect to United States federal income tax
withholding matters that such assignee may be required to deliver to
Administrative Agent pursuant to subsection 2.7B(iii)(a),
Administrative Agent shall, if Administrative Agent has consented to
the assignment evidenced thereby (to the extent such consent is
required pursuant to subsection 10.1B(i)), (a) accept such Assignment
Agreement by executing a counterpart thereof as provided therein (which
acceptance shall evidence any required consent of Administrative Agent
to such assignment), (b) record the information contained therein in
the Register, and (c) give prompt notice thereof to Borrowers.
Administrative Agent shall maintain a copy of each Assignment Agreement
delivered to and accepted by it as provided in this subsection
10.1B(ii).
C. Participations. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the scheduled final maturity date of any
Loan allocated to such participation, (ii) a reduction of the principal amount
of or the rate of interest payable on any Loan allocated to such participation,
or (iii) releasing all or substantially all of the Collateral, and all amounts
payable by Borrowers hereunder (including amounts payable to such Lender
pursuant to subsections 2.6D and 2.7) shall be determined as if such Lender had
not sold such participation. Borrowers and each Lender hereby acknowledge and
agree that, solely for purposes of subsections 10.4 and 10.5, (a) any
participation will give rise to a direct obligation of Borrowers to the
participant and (b) the participant shall be considered to be a "Lender".
D. Assignments to Federal Reserve Banks. In addition to the assignments
and participations permitted under the foregoing provisions of this subsection
10.1, any Lender may assign and pledge all or any portion of its Loans, the
other Obligations owed to such Lender, and its Notes to any Federal Reserve Bank
as collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any operating circular issued by such Federal Reserve
Bank; provided that (i) no Lender shall, as between Borrowers and such Lender,
be relieved of any of its obligations hereunder as a result of any such
assignment and pledge and (ii) in no event shall such Federal Reserve Bank be
considered to be a "Lender" or be entitled to require the assigning Lender to
take or omit to take any action hereunder.
E. Information. Each Lender may furnish any information concerning
Borrowers and their Subsidiaries in the possession of that Lender from time to
time to assignees and participants (including prospective assignees and
participants), subject to subsection 10.20.
F. Representations of Lenders. Each Lender listed on the signature
pages hereof hereby represents and warrants (i) that it is an Eligible Assignee
described in clause (A) of the definition thereof; (ii) that it has experience
and expertise in the making of loans such as the Loans; and (iii) that it will
make its Loans for its own account in the ordinary course of its business and
without a view to distribution of such Loans within the meaning of the
Securities Act or the Exchange Act or other federal or state securities laws (it
being understood that, subject to the provisions of this subsection 10.1, the
disposition of such Loans or any interests
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therein shall at all times remain within its exclusive control). Each Lender
that becomes a party hereto pursuant to an Assignment Agreement shall be deemed
to agree that the representations and warranties of such Lender contained in
Section 2(c) of such Assignment Agreement are incorporated herein by this
reference.
10.2 Expenses.
Whether or not the transactions contemplated hereby shall be
consummated, Borrowers agree to pay promptly (i) all the actual and reasonable
costs and expenses of preparation of the Loan Documents and any consents,
amendments, waivers or other modifications thereto; (ii) all the costs of
furnishing all opinions by counsel for Borrowers (including any opinions
requested by Lenders as to any legal matters arising hereunder) and of
Borrowers' performance of and compliance with all agreements and conditions on
its part to be performed or complied with under this Agreement and the other
Loan Documents including with respect to confirming compliance with
environmental, insurance and solvency requirements; (iii) the reasonable fees,
expenses and disbursements of counsel to Administrative Agent in connection with
the negotiation, preparation, execution and administration of the Loan Documents
and any consents, amendments, waivers or other modifications thereto and any
other documents or matters requested by Borrowers; provided that the fees and
costs of such counsel for the preparation and negotiation of the Loan Documents
may not exceed $350,000; (iv) all the actual costs and reasonable expenses of
creating and perfecting Liens in favor of Administrative Agent on behalf of
Lenders pursuant to any Collateral Document, including filing and recording
fees, expenses and taxes, stamp or documentary taxes, search fees, title
insurance premiums, and reasonable fees, expenses and disbursements of counsel
to Administrative Agent and of counsel providing any opinions that
Administrative Agent or Requisite Lenders may request in respect of the
Collateral Documents or the Liens created pursuant thereto; (v) all the actual
costs and reasonable expenses (including the reasonable fees, expenses and
disbursements of any auditors, accountants or appraisers and any environmental
or other consultants, advisors and agents employed or retained by Administrative
Agent or its counsel) of obtaining and reviewing any appraisals provided for
under any Loan Documents or the Disbursement Agreement, any environmental audits
or reports provided for under subsection 6.8B or under the Disbursement
Agreement; and (vi) the custody or preservation of any of the Collateral; (vii)
all other actual and reasonable costs and expenses incurred by Administrative
Agent in connection with the syndication of the Commitments and the negotiation,
preparation and execution of the Loan Documents and any consents, amendments,
waivers or other modifications thereto and the transactions contemplated
thereby; and (viii) after the occurrence of an Event of Default, all costs and
expenses, including reasonable attorneys' fees (including allocated costs of
internal counsel) and costs of settlement, incurred by Administrative Agent and
Lenders in enforcing any Obligations of or in collecting any payments due from
any Loan Party hereunder or under the other Loan Documents by reason of such
Event of Default (including in connection with the sale of, collection from, or
other realization upon any of the Collateral or the enforcement of any Guaranty)
or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a "work-out" or
pursuant to any insolvency or bankruptcy proceedings.
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10.3 Indemnity.
In addition to the payment of expenses pursuant to subsection 10.2,
whether or not the transactions contemplated hereby shall be consummated,
Borrowers agree to defend (subject to Borrowers' selection of counsel with the
consent of the Indemnitee, which shall not be unreasonably withheld), indemnify,
pay and hold harmless Administrative Agent, Arranger and Lenders, and the
officers, directors, employees, agents and affiliates of Administrative Agent,
Arranger and Lenders (collectively called the "Indemnitees"), from and against
any and all Indemnified Liabilities (as hereinafter defined); provided that
Borrowers shall not have any obligation to any Indemnitee hereunder with respect
to any Indemnified Liabilities to the extentsuch Indemnified Liabilities arise
solely from the gross negligence or willful misconduct of that Indemnitee as
determined by a final judgment of a court of competent jurisdiction.
As used herein, "Indemnified Liabilities" means, collectively, any and
all liabilities, obligations, losses, damages (including natural resource
damages), penalties, actions, judgments, suits, claims (including Environmental
Claims), costs (including the costs of any investigation, study, sampling,
testing, abatement, cleanup, removal, remediation or other response action
necessary to remove, remediate, clean up or abate any Hazardous Materials
Activity), expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and disburse ments of counsel for Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto, and any fees or expenses
incurred by Indemnitees in enforcing this indemnity), whether direct, indirect
or consequential and whether based on any federal, state or foreign laws,
statutes, rules or regulations (including securities and commercial laws,
statutes, rules or regulations and Environmental Laws), on common law or
equitable cause or on contract or otherwise, that may be imposed on, incurred
by, or asserted against any such Indemnitee, in any manner relating to or
arising out of (i) this Agreement or the other Loan Documents or the Project
Documents or the transactions contemplated hereby or thereby (including Lenders'
agreement to make the Loans hereunder or the use or intended use of the proceeds
thereof or the use or intended use of any thereof, or any enforcement of any of
the Loan Documents (including any sale of, collection from, or other realization
upon any of the Collateral or the enforcement of any Guaranty), (ii) the
statements contained in the commitment letter delivered by any Lender to
Borrowers with respect thereto, or (iii) any Environmental Claim or any
Hazardous Materials Activity relating to or arising from, directly or
indirectly, any past or present activity, operation, land ownership, or practice
of Borrowers or any of their Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this subsection 10.3 may be unenforceable in whole or in
part because they are violative of any law or public policy, Borrowers shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
150
10.4 Set-Off; Security Interest in Deposit Accounts.
In addition to any rights now or hereafter granted under applicable law
and not by way of limitation of any such rights, upon the occurrence of any
Event of Default each Lender is hereby authorized by Borrowers at any time or
from time to time, without notice to Borrowers or to any other Person, any such
notice being hereby expressly waived, to set off and to appropriate and to apply
any and all deposits (general or special, including Indebtedness evidenced by
certificates of deposit, whether matured or unmatured, but not including trust
accounts) and any other Indebtedness at any time held or owing by that Lender to
or for the credit or the account of Borrowers against and on account of the
obligations and liabilities of Borrowers to that Lender under this Agreement,
the Letters of Credit and participations therein and the other Loan Documents,
including all claims of any nature or description arising out of or connected
with this Agreement, the Letters of Credit and participations therein or any
other Loan Document, irrespec tive of whether or not (i) that Lender shall have
made any demand hereunder or (ii) the principal of or the interest on the Loans
or any amounts in respect of the Letters of Credit or any other amounts due
hereunder shall have become due and payable pursuant to Section 9 and although
said obligations and liabilities, or any of them, may be contingent or
unmatured. Borrowers hereby further grants to Administrative Agent and each
Lender a security interest in all deposits and accounts maintained with
Administrative Agent or such Lender as security for the Obligations.
10.5 Ratable Sharing.
Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the "Aggregate
Amounts Due" to such Lender) which is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due to such other Lender,
then the Lender receiving such proportionately greater payment shall (i) notify
Administrative Agent and each other Lender of the receipt of such payment and
(ii) apply a portion of such payment to purchase participations (which it shall
be deemed to have purchased from each seller of a participation simultaneously
upon the receipt by such seller of its portion of such payment) in the Aggregate
Amounts Due to the other Lenders so that all such recoveries of Aggregate
Amounts Due shall be shared by all Lenders in proportion to the Aggregate
Amounts Due to them; provided that if all or part of such proportionately
greater payment received by such purchasing Lender is thereafter recovered from
such Lender upon the bankruptcy or reorganization of Borrowers or otherwise,
those purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such purchasing Lender ratably to the extent
of such recovery, but without interest. Borrowers expressly consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise
151
any and all rights of banker's lien, set-off or counterclaim with respect to any
and all monies owing by Borrowers to that holder with respect thereto as fully
as if that holder were owed the amount of the participation held by that holder.
10.6 Amendments and Waivers.
No amendment, modification, termination or waiver of any provision of
this Agreement or of the Notes, and no consent to any departure by Borrowers
therefrom, shall in any event be effective without the written concurrence of
Requisite Lenders; provided that any such amendment, modification, termination,
waiver or consent which: increases the amount of any of the Commitments or
reduces the principal amount of any of the Loans; changes in any manner the
definition of "Pro Rata Share" or the definition of "Requisite Lenders" (it
being understood that, with the consent of Requisite Lenders, additional
extensions of credit pursuant to this Agreement may be included in "Pro Rata
Share" and "Requisite Lenders" on substantially the same terms as the Term Loan
Commitments and the Term Loans and the Revolving Loan Commitments and the
Revolving Loans); changes in any manner any provision of this Agreement which,
by its terms, expressly requires the approval or concurrence of all Lenders;
postpones the scheduled final maturity date of any of the Loans; postpones the
date or reduces the amount of any scheduled payment (but not prepayment) of
principal of any of the Loans or any scheduled reduction in commitments;
postpones the date on which any interest or any fees or other amounts are
payable; decreases the interest rate borne by any of the Loans (other than any
waiver of any increase in the interest rate applicable to any of the Loans
pursuant to subsection 2.2E) or the amount of any fees or other amounts payable
hereunder; reduces the amount or postpones the due date of any amount payable in
respect of, or extends the required expiration date of, any Letter of Credit;
changes in any manner the obligations of Lenders relating to the purchase of
participations in Letters of Credit; increases the maximum duration of Interest
Periods permitted hereunder; releases any Lien granted in favor of
Administrative Agent with respect to 25% or more in aggregate fair market value
of the Collateral; releases any Subsidiary Guarantor from its obligations under
its Guaranty, other than in accordance with the terms of the Loan Documents; or
changes in any manner the provisions contained in subsection 9.1 or this
subsection 10.6 shall be effective only if evidenced by a writing signed by or
on behalf of all Lenders. In addition, (i) any amendment, modification,
termination or waiver of any of the provisions contained in Section 4 shall be
effective only if evidenced by a writing signed by or on behalf of
Administrative Agent and Requisite Lenders, (ii) no amendment, modification,
termination or waiver of any provision of any Note shall be effective without
the written concurrence of the Lender which is the holder of that Note, (iii) no
amendment, modification, termination or waiver of any provision of Section 9 or
of any other provision of this Agreement which, by its terms, expressly requires
the approval or concurrence of Administrative Agent shall be effective without
the written concurrence of Administrative Agent and (iv) no amendment,
modification, termination or waiver of any provision of subsection 2.4 which has
the effect of changing any interim scheduled payments, voluntary or mandatory
prepayments, or Commitment reductions applicable to either Class (the "Affected
Class") in a manner that disproportionately disadvantages such Class relative to
the other Class shall be effective without the written concurrence of Requisite
Class Lenders of the Affected Class (it being understood and agreed that any
amendment, modification, termination or waiver of any such provision
152
which only postpones or reduces any interim scheduled payment, voluntary or
mandatory prepayment, or Commitment reduction from those set forth in subsection
2.4 with respect to one Class but not the other Class shall be deemed to
disproportionately disadvantage such one Class but not to disproportionately
disadvantage such other Class for purposes of this clause (iv). Administrative
Agent may, but shall have no obligation to, with the concurrence of any Lender,
execute amendments, modifications, waivers or consents on behalf of that Lender.
Any waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given. No notice to or demand on Borrowers
in any case shall entitle Borrowers to any other or further notice or demand in
similar or other circumstances. Any amendment, modification, termination, waiver
or consent effected in accordance with this subsection 10.6 shall be binding
upon each Lender at the time outstanding, each future Lender and, if signed by
Borrowers, on Borrowers. To the extent the Bank Agent is entitled or required to
make any determinations under the Intercreditor Agreement, the Adelson
Intercreditor Agreement or any FF&E Intercreditor Agreement, Bank Agent shall
make such determinations upon the advice of Requisite Lenders.
10.7 Certain Matters Affecting Lenders.
(a) If (i) the Nevada Gaming Commission shall determine that any Lender
does not meet suitability standards prescribed under the Nevada Gaming
Regulations or (ii) any other gaming authority with jurisdiction over the gaming
business of Borrowers shall determine that any Lender does not meet its
suitability standards (in any such case, a "Former Lender"), the Administrative
Agent or the Borrowers shall have the right (but not the duty) to designate
bank(s) or other financial institution(s) (in each case, a "Substitute Lender,"
which may be any Lender or Lenders that agree to become a Substitute Lender and
to assume the rights and obligations of the Former Lender, subject to receipt by
the Administrative Agent of evidence that such Substitute Lender is an Eligible
Assignee. The Substitute Lender shall assume the rights and obligations of the
Former Lender under this Agreement. Borrowers shall bear the costs and expenses
of any Lender required by the Nevada Gaming Commission, or any other gaming
authority with jurisdiction over the gaming business of Borrowers, to file an
application for a finding of suitability in connection with the investigation of
an application by Borrowers for a license to operate a gaming establishment, in
connection with such application for a finding of suitability.
(b) Notwithstanding the provisions of subsection (a) of this subsection
9.7, if any Lender becomes a Former Lender, and if the Administrative Agent or
the Borrowers fail to find a Substitute Lender pursuant to subsection (a) of
this subsection 9.7 within any time period specified by the appropriate gaming
authority for the withdrawal of a Former Lender (the "Withdrawal Period"), the
Borrowers shall immediately prepay in full the outstanding principal amount of
Loans made by such Former Lender, together with accrued interest thereon to the
earlier of (x) the date of payment or (y) the last day of any Withdrawal Period.
153
10.8 Independence of Covenants.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
10.9 Notices.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; provided that notices to Administrative Agent shall not
be effective until received. For the purposes hereof, the address of each party
hereto shall be as set forth under such party's name on the signature pages
hereof or (i) as to Borrowers and Administrative Agent, such other address as
shall be designated by such Person in a written notice delivered to the other
parties hereto and (ii) as to each other party, such other address as shall be
designated by such party in a written notice delivered to Administrative Agent.
10.10 Survival of Representations, Warranties and Agreements.
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Borrowers set forth in subsections 2.6D, 2.7, 10.2,
10.3 and 10.4 and the agreements of Lenders set forth in subsections 9.2C, 9.4,
10.5 and 10.20 shall survive the payment of the Loans and the reimbursement of
any amounts drawn thereunder, and the termination of this Agreement.
10.11 Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Administrative Agent or any Lender
in the exercise of any power, right or privilege hereunder or under any other
Loan Document shall impair such power, right or privilege or be construed to be
a waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
154
10.12 Marshalling; Payments Set Aside.
Neither Administrative Agent nor any Lender shall be under any
obligation to marshal any assets in favor of Borrowers or any other party or
against or in payment of any or all of the Obligations. To the extent that
Borrowers make a payment or payments to Administrative Agent or Lenders (or to
Administrative Agent for the benefit of Lenders), or Administrative Agent or
Lenders enforce any security interests or exercise their rights of setoff, and
such payment or payments or the proceeds of such enforcement or setoff or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, any other state or federal law, common
law or any equitable cause, then, to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor or related thereto, shall be revived and continued in full
force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.
10.13 Severability.
In case any provision in or obligation under this Agreement or the
Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
10.14 Obligations Several; Independent Nature of Lenders' Rights.
The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for any other
Lender to be joined as an additional party in any proceeding for such purpose.
10.15 Headings.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
10.16 Applicable Law.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW
155
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
10.17 Successors and Assigns.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 10.1). Neither
Borrowers' rights or obligations hereunder nor any interest therein may be
assigned or delegated by Borrowers without the prior written consent of all
Lenders.
10.18 Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST BORROWERS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING AND
DELIVERING THIS AGREEMENT, BORROWERS, FOR THEMSELVES AND IN CONNECTION WITH
THEIR PROPER TIES, IRREVOCABLY
(I) ACCEPT GENERALLY AND UNCONDITIONALLY THE NONEX CLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVE ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREE THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING
IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO BORROWERS AT THEIR ADDRESS PROVIDED IN ACCORDANCE
WITH SUBSECTION 10.9;
(IV) AGREE THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER BORROWERS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT;
(V) AGREE THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST
BORROWERS IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREE THAT THE PROVISIONS OF THIS SUBSECTION 10.18
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO
THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW
SECTION 5-1402 OR OTHERWISE.
156
10.19 Waiver of Jury Trial.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE LEND
ER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver is
intended to be all-encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this transaction, including
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each party hereto acknowledges that this waiver is a material
inducement to enter into a business relationship, that each has already relied
on this waiver in entering into this Agreement, and that each will continue to
rely on this waiver in their related future dealings. Each party hereto further
warrants and represents that it has reviewed this waiver with its legal counsel
and that it knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 10.19 AND EXECUTED BY EACH OF
THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
10.20 Confidentiality.
Each Lender shall hold all non-public information obtained pursuant to
the requirements of this Agreement in accordance with such Lender's customary
procedures for handling confidential information of this nature and in
accordance with safe and sound banking or investment practices, it being
understood and agreed by Borrowers that in any event a Lender may make
disclosures to Affiliates of such Lender or disclosures reasonably required by
any bona fide assignee, transferee or participant in connection with the
contemplated assignment or transfer by such Lender of any Loans or any
participations therein (provided that such assignee, transferee or participant
agrees to also be bound by this subsection 10.20), or disclosures required or
requested by any governmental agency or representative thereof or pursuant to
legal process; provided that, unless specifically prohibited by applicable law
or court order, each Lender shall notify Borrowers of any request by any
governmental agency or representative thereof (other than any such request in
connection with any examination of the financial condition of such Lender by
such governmental agency) for disclosure of any such non-public information; and
provided, further that in no event shall any Lender be obligated or required to
return any materials furnished by Borrowers or any of their Subsidiaries.
157
10.21 Counterparts; Effectiveness.
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Borrowers and
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
10.22 Gaming Authorities.
The Arranger, the Administrative Agent and each Lender agree to
cooperate with the Nevada Gaming Authorities in connection with the
administration of their regulatory jurisdiction over the Borrowers and their
Subsidiaries, including, without limitation, to the extent not inconsistent with
the internal policies of such Lender or Issuing Lender and any applicable legal
or regulatory restrictions the provision of such documents or other information
as may be requested by any such Nevada Gaming Authority relating to the
Arranger, the Administrative Agent or any of the Lenders, or Borrowers or any of
their Subsidiaries, or to the Loan Documents. Notwithstanding any other
provision of the Agreement, Borrowers expressly authorize each Agent and Lender
to cooperate with the Nevada Gaming Authorities as described above.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
BORROWERS:
LAS VEGAS SANDS, INC.
By: /s/ William P. Weidner
----------------------
Name: William P. Weidner
Title: President
Notice Address:
3355 Las Vegas Boulevard South
Room 1A
Las Vegas, Nevada 89109
Attention: General Counsel
Telefax: (702) 733-5499
VENETIAN CASINO RESORT, LLC
By: Las Vegas Sands, Inc. its managing member
By: /s/ William P. Weidner
----------------------
Name: William P. Weidner
Title: President
Notice Address:
3355 Las Vegas Boulevard South
Room 1A
Las Vegas, Nevada 89109
Attention: General Counsel
Telefax: (702) 733-5499
S-1
LENDERS:
GOLDMAN SACHS CREDIT PARTNERS L.P.
individually and as Arranger and Syndication Agent
By: /s/ Gary Moross
-----------------------
Authorized signatory
Notice Address:
Goldman Sachs Credit Partners L.P.
85 Broad Street
New York, New York 10004
Attention: Lisa-Laura Mays
THE BANK OF NOVA SCOTIA,
individually and as Administrative Agent
By: /s/ Alan W. Pendergrast
-----------------------
Name:
Title:
Notice Address:
The Bank of Nova Scotia
580 California Street, Suite 2100
San Francisco, California 94104
Attention: Alan Pendergast
Telefax: (415) 397-0791
With copy to:
The Bank of Nova Scotia
600 Peachtree Street, N.E.
Atlanta, Georgia 30308
Attention: Marianne Velker
Telefax: (404) 888-8998
S-2
VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By: /s/ Jeffrey W. Maillet
----------------------
Name: Jeffrey W. Maillet
Title: Senior Vice President and Director
Notice Address:
Van Kampen American Capital
One Parkview Plaza - 5th Floor
Oakbrook Terrace, IL 60181
Attention: Mr. Brian Murphy
Telefax: (630) 684-6740
Telephone: (630) 684-4479
With a copy to:
State Street Bank and Trust
Corporate Trust Department
P.O. Box 778
Boston, MA 02102
Attention: Mr. Sean Emerson
Telefax: (617) 664-5366
Telephone: (617) 664-5481
S-3
THE INTERNATIONAL COMMERCIAL
BANK OF CHINA, NEW YORK AGENCY
By: /s/ Robin C.C. Lin
------------------
Name: Robin C.C. Lin
Title: Vice President and Deputy General Manager
Notice Address:
The International Commercial Bank of China
65 Liberty Street
New York, NY 10005
Attention: Mong-Shyr Wu
S-4
BDC FINANCE LLC
By: /s/ James J. Zenni, Jr.
-----------------------
Name: James J. Zenni, Jr.
Title: Director
Notice Address:
Black Diamond Capital Management LLC
One Conway Park, Suite 330
100 Field Drive
Lake Forest, IL 60045
Attention: James J. Zenni, Jr.
Telefax: (847) 615-9064
Telephone: (847) 615-9000
With a copy to:
Black Diamond Capital Management LLC
230 Park Avenue, Suite 610
New York, NY 10169
Attn: Stephen H. Deckoff
Telefax: (212) 953-6063
Telephone: (212) 687-1726
S-5
MERRILL LYNCH SENIOR FLOATING RATE FUND, INC.
By: /s/ Lynn Callicott Baranski
---------------------------
Name: Lynn Callicott Baranski
Title: Authorized Signatory
Notice Address:
Merrill Lynch Asset Management
800 Scudders Mill Road, Area 1B
Plainsboro, NJ 08536
Attention: Anne McCarthy
Telefax: (609) 282-2756
Telephone: (609) 282-2756
S-6
ARCHIMEDES FUNDING, L.L.C.
By: ING CAPITAL ADVISORS, INC., as Collateral Manager
By: /s/ Michael D. Hatley
---------------------
Name: Michael D. Hatley
Title: Vice President & Portfolio Manager
Notice Address:
Archimedes Funding, L.L.C.
c/o ING Capital Advisors, Inc.
333 S. Grand Avenue, Suite #4250
Los Angeles, CA 90071
Attention: Michael Hatley
Vice President & Portfolio Manager
Telefax: (213) 346-3995
Telephone: (213) 346-3972
S-7
TORONTO DOMINION (TEXAS), INC.
By: /s/ Neva Nesbitt
----------------
Name: Neva Nesbitt
Title: Vice President
Notice Address:
The Toronto-Dominion Bank
909 Fannin, Suite 1700
Houston, Texas 77010
Attention: David G. Parker
Manager-Credit Administration
Telefax: (713) 951-9921
S-9
TRANSAMERICA LIFE INSURANCE
AND ANNUITY COMPANY
By:/s/ John M. Casparian
-------------------------
Name: John M. Casparian
Title: Investment Officer
Notice Address:
Transamerica Investment Services, Inc.
1150 S. Olive Street, Suite 2700
Los Angeles, CA 90071
Attention: Mr. John M.Casparian
Investment Officer
Telefax: (213) 742-4150