SHORT TERM CREDIT AGREEMENT
dated as of
December 31, 1998
among
PARK PLACE ENTERTAINMENT CORPORATION
The Lenders, Documentation Agents and Syndication Agent Referred to Herein
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
as Administrative Agent
______________________________________
NATIONSBANC MONTGOMERY SECURITIES LLC.
Lead Arranger
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Accounting Terms and Determinations . . . . . . . . . . . . . . . .17
1.03 Types of Borrowings . . . . . . . . . . . . . . . . . . . . . . . .18
ARTICLE II THE CREDITS. . . . . . . . . . . . . . . . . . . . . . . . . . . .19
2.01 Commitments to Lend . . . . . . . . . . . . . . . . . . . . . . . .19
2.02 Notice of Committed Borrowings. . . . . . . . . . . . . . . . . . .19
2.03 RESERVED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
2.04 RESERVED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
2.05 Conversion and Continuation of Committed Loans. . . . . . . . . . .20
2.06 Notice to Lenders; Funding of Loans . . . . . . . . . . . . . . . .20
2.07 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
2.08 Interest Rates. . . . . . . . . . . . . . . . . . . . . . . . . . .22
2.09 Upfront Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . .23
2.10 Facility Fees . . . . . . . . . . . . . . . . . . . . . . . . . . .23
2.11 RESERVED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
2.12 Optional Termination or Reduction of Commitments by Borrower. . . .24
2.13 Optional Termination of Commitments by the Lenders. . . . . . . . .24
2.14 Scheduled Termination of Commitments. . . . . . . . . . . . . . . .24
2.15 Extensions of the Termination Date. . . . . . . . . . . . . . . . .24
2.16 Optional Prepayments. . . . . . . . . . . . . . . . . . . . . . . .25
2.17 General Provisions as to Payments . . . . . . . . . . . . . . . . .26
2.18 Funding Losses. . . . . . . . . . . . . . . . . . . . . . . . . . .27
2.19 Computation of Interest and Fees. . . . . . . . . . . . . . . . . .27
2.20 Withholding Tax Exemption . . . . . . . . . . . . . . . . . . . . .27
2.21 RESERVED.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
2.22 Regulation D Compensation . . . . . . . . . . . . . . . . . . . . .28
2.23 Increased Commitments; Additional Lenders. . . . . . . . . . . . .28
ARTICLE III CONDITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . .30
3.01 Borrowings. . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
3.02 Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . .30
ARTICLE IV REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . .32
4.01 Corporate Existence and Power . . . . . . . . . . . . . . . . . . .32
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4.02 Corporate and Governmental Authorization; Contravention . . . . . .32
4.03 Binding Effect. . . . . . . . . . . . . . . . . . . . . . . . . . .32
4.04 Financial Information . . . . . . . . . . . . . . . . . . . . . . .32
4.05 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
4.06 Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . .33
4.07 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
4.08 Significant Subsidiaries. . . . . . . . . . . . . . . . . . . . . .34
4.09 Not an Investment Company . . . . . . . . . . . . . . . . . . . . .34
4.10 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . .34
4.11 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . .34
4.12 The Spin-Off Transaction. . . . . . . . . . . . . . . . . . . . . .35
4.13 Gaming Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
ARTICLE V COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
5.01 Information . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
5.02 Maintenance of Property; Insurance. . . . . . . . . . . . . . . . .38
5.03 Conduct of Business and Maintenance of Existence. . . . . . . . . .39
5.04 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . .39
5.05 Inspection of Property, Books and Records . . . . . . . . . . . . .39
5.06 Negative Pledge . . . . . . . . . . . . . . . . . . . . . . . . . .40
5.07 Consolidations, Mergers and Sales of Assets . . . . . . . . . . . .41
5.08 Hostile Tender Offers . . . . . . . . . . . . . . . . . . . . . . .41
5.09 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . .41
5.10 Leverage Ratio. . . . . . . . . . . . . . . . . . . . . . . . . . .42
5.11 Interest Coverage Ratio . . . . . . . . . . . . . . . . . . . . . .42
ARTICLE VI DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
6.01 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . .43
6.02 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . .45
6.03 RESERVED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
ARTICLE VII THE AGENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . .46
7.01 Appointment and Authorization . . . . . . . . . . . . . . . . . . .46
7.02 Agents and Affiliates . . . . . . . . . . . . . . . . . . . . . . .46
7.03 Action by Agents. . . . . . . . . . . . . . . . . . . . . . . . . .46
7.04 Consultation with Experts . . . . . . . . . . . . . . . . . . . . .46
7.05 Liability of Agent. . . . . . . . . . . . . . . . . . . . . . . . .46
7.06 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . .47
7.07 Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . .47
7.08 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . .47
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7.09 Agents' Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . .48
ARTICLE VIII CHANGE IN CIRCUMSTANCES. . . . . . . . . . . . . . . . . . . . .49
8.01 Basis for Determining Interest Rate Inadequate or Unfair. . . . . .49
8.02 Illegality. . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
8.03 Increased Cost and Reduced Return . . . . . . . . . . . . . . . . .50
8.04 Base Rate Loans Substituted for Affected Fixed Rate Loans . . . . .52
ARTICLE IX MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . .53
9.01 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53
9.02 No Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . .53
9.03 Expenses; Documentary Taxes; Indemnification. . . . . . . . . . . .53
9.04 Amendments and Waivers. . . . . . . . . . . . . . . . . . . . . . .54
9.05 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . .55
9.06 Collateral. . . . . . . . . . . . . . . . . . . . . . . . . . . . .59
9.07 California Law; Submission to Jurisdiction. . . . . . . . . . . . .59
9.08 Counterparts; Integration . . . . . . . . . . . . . . . . . . . . .59
9.09 Several Obligations . . . . . . . . . . . . . . . . . . . . . . . .59
9.10 Sharing of Set-Offs . . . . . . . . . . . . . . . . . . . . . . . .59
9.11 WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . . . .61
SCHEDULES:
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Schedule 1 - Lender Commitments
Schedule 2 - Pricing Schedule
EXHIBITS:
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Exhibit A - Compliance Certificate
Exhibit B - Form of Note
Exhibit C - Pricing Certificate
Exhibit D - Form of Notice of Committed Borrowing
Exhibit E - Reserved
Exhibit F - Reserved
Exhibit G - Reserved
Exhibit H - Extension Agreement
Exhibit I - Opinion of Gibson, Dunn & Crutcher LLP
Exhibit J - Opinion of Latham & Watkins, LLP
Exhibit K - Assignment and Assumption Agreement
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SHORT TERM CREDIT AGREEMENT
SHORT TERM CREDIT AGREEMENT dated as of December 31, 1998, among
PARK PLACE ENTERTAINMENT CORPORATION, the Lenders listed on the signature
pages hereto, THE BANK OF NEW YORK, as Syndication Agent, PNC BANK, NATIONAL
ASSOCIATION and SG, as Documentation Agents, and BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION, as Administrative Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 DEFINITIONS. The following terms, as used herein, have
the following meanings:
"Additional Lender" has the meaning set forth in Section 2.23.
"Administrative Agent" means Bank of America National Trust and Savings
Association in its capacity as administrative agent for the Lenders hereunder,
and its successors in such capacity.
"Administrative Questionnaire" means, with respect to each Lender, an
administrative questionnaire in the form prepared by the Administrative Agent
and submitted to the Administrative Agent (with a copy to the Borrower) duly
completed by such Lender.
"Affiliate" means, as to any Person, any other Person which directly or
indirectly controls, or is under common control with, or is controlled by,
such Person. As used in this definition, "control" (and the correlative
terms, "controlled by" and "under common control with") shall mean
possession, directly or indirectly, of power to direct or cause the direction
of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise); PROVIDED
that, in any event, any Person that owns, directly or indirectly, 5% or more
of the securities having ordinary voting power for the election of directors
or other governing body of a corporation that has more than 100 record
holders of such
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securities, or 5% or more of the partnership or other ownership interests of
any other Person that has more than 100 record holders of such interests,
will be deemed to control such corporation or other Person.
"Agents" mean, collectively, the Administrative Agent, the Syndication
Agent and the Documentation Agents, and "Agent" means any of them.
"Applicable Lending Office" means, with respect to any Lender, (i) in the
case of its Base Rate Loans, its Domestic Lending Office, and (ii) in the case
of its Euro-Dollar Loans, its Euro-Dollar Lending Office.
"Authorized Officer" means any of the controller, the treasurer or the
chief financial officer of the Borrower.
"Bank of America" means Bank of America National Trust and Savings
Association, its successors and assigns.
"Base Rate" means, as of any date of determination, the rate per annum
(rounded upwards, if necessary, to the next 1/100 of 1%) equal to the HIGHER OF
(a) the Reference Rate in effect on such date (calculated on the basis of a year
of 365 or 366 days and the actual number of days elapsed) and (b) the Federal
Funds Rate in effect on such date (calculated on the basis of a year of 360 days
and the actual number of days elapsed) PLUS 1/2 of 1% (50 basis points).
"Base Rate Loan" means a Committed Loan made or to be made by a Lender as a
Base Rate Loan in accordance with the applicable Notice of Committed Borrowing
or pursuant to Article VIII.
"Base Rate Margin" has the meaning set forth on Schedule 2.
"Benefit Arrangement" means at any time an employee benefit plan within the
meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan and
which is maintained or otherwise contributed to by any member of the ERISA
Group.
"Borrower" means Park Place Entertainment Corporation, a Delaware
corporation, and its successors.
"Borrowing" means the aggregation of Loans of one or more Lenders to be
made to the Borrower pursuant to Article II on a single date and, in the case of
Fixed Rate Borrowings, for a single Interest Period.
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"Change of Control" means the occurrence of a Rating Decline in connection
with any of the following events: (i) upon any merger or consolidation of the
Borrower with or into any person or any sale, transfer or other conveyance,
whether direct or indirect, of all or substantially all of the assets of the
Borrower, on a consolidated basis, in one transaction or a series of related
transactions, if, immediately after giving effect to such transaction, any
person or group of persons (within the meaning of Section 13 or 14 of the
Securities Exchange Act of 1934, as amended) is or becomes the beneficial owner
(within the meaning of Rule 13d-3 promulgated by the Securities and Exchange
Commission under said Act) of securities representing a majority of the total
voting power of the aggregate outstanding securities of the transferee or
surviving entity normally entitled to vote in the election of directors,
managers, or trustees, as applicable, of the transferee or surviving entity,
(ii) when any person or group of persons (within the meaning of Section 13 or 14
of the Securities Exchange Act of 1934, as amended) is or becomes the beneficial
owner (within the meaning of Rule 13d-3 promulgated by The Securities
and-Exchange Commission under said Act) of securities representing a majority of
total voting power of the aggregate outstanding securities of the Borrower
normally entitled to vote in the election of directors of the Borrower, (iii)
when, during any period of 12 consecutive calendar months, individuals who were
directors of the Borrower on the first day of such period (together with any new
directors whose election by the board of directors of the Borrower or whose
nomination for election by the stockholders of the Borrower was approved by a
vote of a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the board of directors of the Borrower, or (iv) the sale or
disposition, whether directly or indirectly, by the Borrower of all or
substantially all of its assets.
"Combined Pro Forma Financial Statements" means (a) from the Effective Date
until the Borrower delivers the combined pro forma financial statements
described in Section 5.01(a), the combined pro forma financial statements of the
Gaming Segment of Hilton and the Grand Assets for the twelve month period ended
September 30, 1998 heretofore delivered by Hilton and the Borrower to the
Administrative Agent and each Lender, and (b) thereafter, the combined pro forma
financial statements for the twelve month period ended December 31, 1998 so
delivered.
"Commitment" means, as to each Lender, the commitment of that Lender to
make Loans in each case as such amount may be reduced from time to time
pursuant to Section 2.12, 2.13 or 2.14, or increased pursuant to Section
2.23. The aggregate amount of the Commitments under this Agreement as of the
Effective Date is
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$650,000,000 and the respective Commitments of the Lenders as of the
Effective Date are set forth on Schedule 1.
"Committed Loan" means a loan made or to be made by a Lender pursuant to
Section 2.01.
"Compliance Certificate" means a certificate, substantially in the form of
Exhibit A, properly completed and signed by an Authorized Officer.
"Consolidated Debt" means at any date the Debt of the Borrower and its
Consolidated Subsidiaries, determined on a consolidated basis as of such date,
PROVIDED that Consolidated Debt shall exclude any Debt of the Borrower or a
Subsidiary as to which cash and cash equivalents sufficient to provide for
payment in full of such Debt at its scheduled maturity or at an earlier date at
which it shall have been or may be called for redemption shall have been
irrevocably deposited in trust for the benefit of the holders of such Debt or a
representative of such holders, which deposit shall have resulted in the legal
or in-substance defeasance thereof.
"Consolidated EBITDA" means, for any period, Consolidated Net Income for
such period before (i) income taxes, (ii) interest expense, (iii) depreciation
and amortization, (iv) minority interest, (v) extraordinary losses or gains,
(vi) Pre-Opening Expenses, (vii) transactional expenses associated with the
Spin-Off Transaction, and (viii) nonrecurring non-cash charges, PROVIDED that,
in calculating "Consolidated EBITDA":
(a) for all periods ending on or prior to December 31, 1998,
"Consolidated EBITDA" shall be computed on the basis of the operating
results of the Gaming Segment and the Grand Assets for such periods
reflected in the Combined Pro Forma Financial Statements.
(b) the operating results of each New Project which commences
operations and records not less than one full fiscal quarter's operations
during the relevant period shall be annualized; and
(c) Consolidated EBITDA shall be adjusted, on a pro forma basis, to
include the operating results of each resort or casino property acquired by
Borrower and its Consolidated Subsidiaries during the relevant period and
to exclude the operating results of each resort or casino property sold or
otherwise disposed of by Borrower and its Subsidiaries, or whose operations
are discontinued during the relevant period.
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"Consolidated Interest Expense" means, for any period, net interest expense
of Borrower and its Consolidated Subsidiaries for such period, determined in
accordance with generally accepted accounting principles, PROVIDED that for all
periods ending on or prior to December 31, 1998, "Consolidated Interest Expense"
shall be computed on the basis of the net interest expense allocated to Borrower
and its Consolidated Subsidiaries and shown on the Combined Pro Forma Financial
Statements.
"Consolidated Net Income" means, for any period, the consolidated net
income of the Borrower and its Consolidated Subsidiaries for such period,
provided that for all periods ending on or prior to December 31, 1998, such
consolidated net income shall be the consolidated net income of the Gaming
Segment and the Grand Assets for such periods reflected in the Combined Pro
Forma Financial Statements.
"Consolidated Net Tangible Assets" means the total amount of assets of
Borrower and its Consolidated Subsidiaries, after deducting therefrom (a) all
current liabilities of Borrower and its Consolidated Subsidiaries (excluding (i)
the current portion of long term indebtedness, (ii) inter-company liabilities,
and (iii) any liabilities which are by their terms renewable or extendable at
the option of the obligor thereon to a time more than twelve months from the
time as of which the amount thereof is being computed), and (b) all goodwill,
trade names, trademarks, patents, unamortized debt discount and expense and
other like intangibles, all as set forth on the latest consolidated balance
sheet of Borrower prepared in accordance with generally accepted accounting
principles.
"Consolidated Net Worth" means at any date the consolidated stockholders,
equity of the Borrower and its Consolidated Subsidiaries determined as of such
date.
"Consolidated Subsidiary" means at any date any Subsidiary or other entity
the accounts of which would be consolidated with those of the Borrower in its
consolidated financial statements as of such date.
"Covered Subsidiary" means at any time any Subsidiary of the Borrower that
has consolidated assets in an amount greater than $5,000,000.
"Debt" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations of such Person as lessee which are capitalized in
accordance with generally accepted accounting principles, (v) all indebtedness
or other obligations secured by a contractual Lien on
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any asset of such Person, whether or not such indebtedness or other
obligations are otherwise an obligation of such Person, and (vi) all
Guarantees made by such Person (including by way of provision of letters of
credit or other contingent obligations) with respect to indebtedness or other
obligations of any other Person which constitute "Debt" of a type or class
described in clauses (i) through (v) of this definition.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Documentation Agents" means PNC Bank, National Association and SG, in each
case in their capacity as documentation agent for the Lenders hereunder. The
capacity of the Documentation Agents is titular in nature, and the Documentation
Agents shall have no obligations or liabilities under the Loan Documents by
reason of acting in such capacity.
"Dollars" and the sign "$" mean lawful money of the United States.
"Domestic Business Day" means any day except a Saturday, Sunday or other
day on which commercial banks in New York City or Los Angeles are authorized or
required by law to close.
"Domestic Lending Office" means, as to each Lender, its office located at
its address set forth in its Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Domestic Lending Office) or such other
office as such Lender may hereafter designate as its Domestic Lending Office by
notice to the Borrower and the Administrative Agent.
"Effective Date" means the date this Agreement becomes effective in
accordance with Section 3.02.
"Eligible Assignee" means (a) another Lender, (b) with respect to any
Lender, any Affiliate of that Lender, (c) any commercial bank having a combined
capital and surplus of $500,000,000 or more, (d) any (i) savings bank, savings
and loan association or similar financial institution or (ii) insurance company
engaged in the business of writing insurance which, in either case (A) has a net
worth of $500,000,000 or more, (B) is engaged in the business of lending money
and extending credit under credit facilities substantially similar to those
extended under this Agreement and (C) is operationally and procedurally able to
meet the obligations of a Lender hereunder to the same degree as a commercial
bank and (e) any other financial institution (INCLUDING
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a mutual fund or other fund) having total assets of $250,000,000 or more
which meets the requirements set forth in subclauses (B) and (C) of clause
(d) above; PROVIDED that each Eligible Assignee must either (a) be organized
under the Laws of the United States of America, any State thereof or the
District of Columbia or (b) be organized under the Laws of the Cayman Islands
or any country which is a member of the Organization for Economic Cooperation
and Development, or a political subdivision of such a country, and (i) act
hereunder through a branch, agency or funding office located in the United
States of America and (ii) is otherwise exempt from withholding of tax on
interest and delivers Form 1001 or Form 4224 pursuant to Section 2.20 at the
time of any assignment pursuant to Section 9.05.
"Environmental Laws" means any and all statutes, regulations, permits,
licenses or other governmental restrictions relating to the environment or to
releases of petroleum or petroleum products, chemicals or toxic or hazardous
substances or wastes into the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any
Subsidiary, are treated as a single employer under Section 414 of the Internal
Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
Dollar deposits) in London.
"Euro-Dollar Lending office" means, as to each Lender, its office, branch
or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of such
Lender as it may hereafter designate as its Euro-Dollar Lending Office by notice
to the Borrower and the Administrative Agent.
"Euro-Dollar Loan" means a Committed Loan made or to be made by a Lender as
a Euro-Dollar Loan in accordance with the applicable Notice of Committed
Borrowing.
"Euro-Dollar Margin" has the meaning set forth on Schedule 2.
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"Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System with deposits exceeding five billion Dollars in respect of
"eurocurrency liabilities" (or in respect of any other category of liabilities
which includes deposits by reference to which the interest rate on Euro-Dollar
Loans is determined or any category of extensions of credit or other assets
which includes loans by a non-United States office of any bank to United States
residents).
"Event of Default" has the meaning set forth in Section 6.01.
"Facility Fee Rate" has the meaning set forth in Section 2.10.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of l%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day, provided that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on the
next succeeding Domestic Business Day, and (ii) if no such rate is so published
on such next succeeding Domestic Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to The Bank of New York on such day on such
transactions as determined by the Administrative Agent.
"Fixed Rate Loans" means Euro-Dollar Loans.
"Gaming Board" means, collectively, (a) the Nevada Gaming Commission, (b)
the Nevada State Gaming Control Board, (c) the New Jersey Casino Control
Commission, (d) the New Jersey Division of Gaming Enforcement, (e) the
Mississippi Gaming Commission, and (f) any other Governmental Agency that holds
regulatory, licensing or permit authority over gambling, gaming or casino
activities conducted by Borrower or its Subsidiaries within its jurisdiction.
"Gaming Laws" means all laws pursuant to which any Gaming Board possesses
regulatory, licensing or permit authority over gambling, gaming or casino
activities conducted by Borrower or its Subsidiaries within its jurisdiction.
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"Gaming Segment" means the gaming segment (as "segment" is used in
Regulation S-K and Regulation S-X of the Securities and Exchange Commission) of
Hilton which, prior to the Effective Date, was comprised of assets and
operations owned and conducted by Borrower and its Subsidiaries following the
Effective Date.
"GCI Lakes, Inc." means GCI Lakes, Inc., a Minnesota corporation.
"Governmental Agency" means (a) any international, foreign, federal, state,
county or municipal government, or political subdivision thereof, (b) any
governmental or quasi-governmental agency, authority, board, bureau, commission,
department, instrumentality or public body (including any Gaming Board) or (c)
any court or administrative tribunal of competent jurisdiction.
"Grand" means Grand Casinos, Inc., a Minnesota corporation, and its
successors.
"Grand Agreement" means the Agreement and Plan of Merger dated as of June
30, 1998 among Hilton, Borrower (under its former name, Gaming Co., Inc.),
Gaming Acquisition Corporation, a Minnesota corporation, and GCI Lakes, Inc., a
Minnesota corporation and Grand, as amended as of the Effective Date.
"Grand Assets" means the assets of Grand and its Subsidiaries which are to
be retained by Grand following the Lakes Spin-off pursuant to the Grand
Distribution Agreement, including without limitation the assets described on
Schedule 1 to the Grand Distribution Agreement, and acquired by Borrower and its
Subsidiaries upon consummation of the merger between Borrower and Grand pursuant
to the Grand Agreement, including without limitation the resort casino
properties commonly known as (a) the Grand Casino Tunica, in Tunica,
Mississippi, (b) the Grand Casino Gulfport, in Gulfport, Mississippi, and (c)
the Grand Casino Biloxi, in Biloxi, Mississippi.
"Grand Distribution Agreement" means the Distribution Agreement dated as of
December 31, 1998 by and between Grand and GCI Lakes, Inc., together with the
agreements attached as Exhibits thereto.
"Grand Notes" means the 10 1/8% First Mortgage Notes of Grand due 2003
issued pursuant to the Indenture, dated as of November 30, 1995 executed by
Grand in favor of American National Bank, as Trustee.
"Granting Lender" has the meaning set forth in Section 9.05(f).
"Guarantee" by any Person means any obligation, contingent or otherwise,
of such Person directly or indirectly guaranteeing any Debt of any other
Person and, without
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limiting the generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of such Person (i) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Debt (whether arising by
virtue of partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for the
purpose of assuring in any other manner the holder of such Debt of the
payment thereof or to protect such holder against loss in respect thereof (in
whole or in part), including by way of provision of letters of credit or
other contingent obligations with respect thereto, provided that the term
Guarantee shall not include (x) endorsements for collection or deposit in the
ordinary course of business or (y) performance or completion guarantees. The
term "Guarantee" used as a verb has a corresponding meaning.
"Hilton" means Hilton Hotels Corporation, a Delaware corporation.
"Hilton Distribution Agreement" means the Distribution Agreement dated as
of December 31, 1998 by and between Hilton and Borrower, together with the
agreements attached as Exhibits thereto.
"Hilton Notes" means the 7.35% senior notes of Hilton due 2002 in the
aggregate principal amount of $300,000,000 and the 7.00% senior notes of Hilton
due 2004 in the aggregate amount of $325,000,000 issued pursuant to the
Indenture, dated as of April 15, 1997 executed by Hilton in favor of BNY Western
Trust Company, as Trustee.
"Increased Commitment" has the meaning set forth in Section 2.23.
"Indemnitee" has the meaning set forth in Section 9.03(b).
"Interest Coverage Ratio" means, as of each date of determination, the
ratio of (a) Consolidated EBITDA for the four fiscal quarters ending on that
date, to (b) Consolidated Interest Expense for the same period.
"Interest Period" means, with respect to each Euro-Dollar Borrowing, the
period commencing on the date of such Borrowing and ending one week or 1, 2, 3
or 6 months thereafter, as the Borrower may elect in the applicable Notice of
Committed Borrowing or Notice of Conversion/Continuation; provided that:
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in
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another calendar month, in which case such Interest Period shall end on the
next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar Business
Day in 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 (a)(iii) below, end on the last Euro-Dollar
Business Day in the calendar month which is the last calendar month which
commences in such Interest Period; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date, or, if such date is not
a Euro-Dollar Business Day, then on the next preceding Euro-Dollar Business
Day.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"Investment Grade" means (i) with respect to S&P, a rating of BBB- or
higher, and (ii) with respect to Moody's, a rating of Baa3 or higher.
"Lakes Spin-Off" means the contribution of all assets of Grand and its
Subsidiaries other than the Grand Assets to GCI Lakes, Inc. and the
corresponding distribution of the shares of GCI Lakes, Inc. to the shareholders
of Grand described in the Grand Agreement.
"Lead Arranger" means NationsBanc Montgomery Securities LLC. Following
the date of this Agreement, the Lead Arranger shall have no obligations or
liabilities under the Loan Documents.
"Lender" means each lender listed on the signature pages hereof and each
Lender which accepts an assignment pursuant to Section 9.05, and their
respective successors.
"Leverage Ratio" means, as of any date of determination, the ratio of (a)
Consolidated Debt on such date to (b) Consolidated EBITDA for the period of four
consecutive fiscal quarters ending on such date.
"License Revocation" means the revocation, failure to renew or
suspension of, or the appointment of a receiver, supervisor or similar
official with respect to, any casino,
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gambling or gaming license issued by any Gaming Board covering any casino or
gaming facility of Borrower and its Subsidiaries.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, the Borrower or any Subsidiary shall be
deemed to own subject to a Lien any asset which it has acquired or holds subject
to the interest of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement relating to such asset.
"Loan" means a Base Rate Loan or a Euro-Dollar Loan and "Loans" means Base
Rate Loans or Euro-Dollar Loans or any combination of the foregoing.
"Loan Documents" means this Agreement, the Notes and each other instrument,
document or agreement now or hereafter executed by the parties in furtherance of
this Agreement.
"London Interbank Offered Rate" means, as to the Interest Period applicable
to each Euro-Dollar Loan, means the average rounded upward, if necessary, to the
next higher 1/16 of 1%) of the respective rates per annum at which deposits in
Dollars are offered to the Administrative Agent in the London interbank market
at approximately 11:00 A.M. (London time) two Euro-Dollar Business Days before
the first day of such Interest Period in an amount approximately equal to the
principal amount of the Euro-Dollar Loan of the Administrative Agent to which
such Interest Period is to apply and for a period of time comparable to such
Interest Period.
"Margin Adjustment" has the meaning set forth in the Schedule 2.
"Material Plan" means at any time a Plan or Plans having aggregate Unfunded
Liabilities in excess of $25,000,000.
"Moody's" means Moody's Investors Service, Inc., and its successors.
"Multiemployer Plan" means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of the ERISA Group during such
five year period.
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"New Project" means each new hotel - casino, casino or resort project (as
opposed to any project which consists of an extension or redevelopment of an
operating hotel, casino or resort) having a development and construction budget
in excess of $25,000,000 which hereafter receives a certificate of completion or
occupancy and all relevant gaming and other licenses, and in fact commences
operations. Without limitation, the Paris Hotel & Casino located in Las Vegas,
Nevada, is a "New Project."
"Non-Recourse Debt" means Debt in respect of which the recourse of the
holder of such Debt is limited to the assets securing such Debt and such Debt
does not constitute the general obligation of the Borrower or any Subsidiary.
"Notes" means promissory notes of the Borrower, substantially in the form
of Exhibit B hereto, evidencing the obligation of the Borrower to repay the
Loans, and "Note" means any one of such promissory notes issued hereunder.
"Notice of Borrowing" means a Notice of Committed Borrowing (as defined in
Section 2.02).
"Notice of Committed Borrowing" has the meaning set forth in Section 2.02.
"Notice of Conversion\Continuation" has the meaning set forth in Section
2.05.
"Other Commitments" means the lending commitments of the Lenders under the
Five Year Credit Agreement of even date herewith among the Lenders party to this
Agreement on the Effective Date, the Bank of New York, as Syndication Agent, PNC
Bank, National Association and SG, as Documentation Agents, and Bank of America
National Trust and Savings Association, as Administrative Agent.
"Parent" means, with respect to any Lender, any Person controlling such
Lender.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a partnership, an association,
a trust or any other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
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either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.
"Pre-Opening Expenses" means, with respect to any fiscal period, the amount
of expenses (OTHER THAN Consolidated Interest Expense) incurred with respect to
capital projects which are classified as "pre-opening expenses" on the
applicable financial statements of Borrower and its Subsidiaries for such period
(or, with respect to periods prior to December 31, 1998, the Combined Pro Forma
Financial Statements), prepared in accordance with generally accepted accounting
principles.
"Pricing Certificate" means a Pricing Certificate substantially in the form
of Exhibit C hereto, properly completed and signed by an Authorized Officer of
Borrower.
"Pricing Period" means (a) the period beginning on the Effective Date and
ending on February 28, 1999, and (b) each period of three months beginning on
the first day of each March, June, September and December and ending on the last
day of the succeeding May, August, November and February.
"Proxy Statement" means the Joint Proxy Statement/Prospectus (S-4) filed
with the Securities and Exchange Commission on October 23, 1998, as it may be
amended or modified in any manner prior to the date hereof.
"Public Notice" means, without limitation, any filing or report made in
accordance with the requirements of the Securities and Exchange Commission (or
any successor), any press release or public announcement made by the Borrower or
any written notice the Borrower gives to the Administrative-Agent or the
Lenders.
"Rating Agencies" means S&P and Moody's.
"Rating Decline" means the occurrence on any date on or within 90 days
after the date of the first public notice of (i) the occurrence of an event
described in clauses (i)-(v) of the definition of "Change of Control" or (ii)
the intention by the Borrower to effect such an event (which 90-day period shall
be extended so long as the rating of the senior debt of the Borrower is under
publicly announced consideration for possible downgrade by any of the Rating
Agencies) of a decrease in the rating of the senior debt of the Borrower by any
of the Rating Agencies to below Investment Grade.
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"Reference Rate" means the rate of interest publicly announced from time to
time by Bank of America in San Francisco, California, as its "reference rate" or
the similar prime rate or reference rate announced by any successor
Administrative Agent. Bank of America's reference rate is a rate set by Bank of
America based upon various factors including Bank of America's costs and desired
return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate. Any change in the Reference Rate announced by Bank of
America or any successor Administrative Agent shall take effect at the opening
of business on the day specified in the public announcement of such change.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Required Lenders" means at any time Lenders having at least 51% of the
aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding at least 51% of the sum of the aggregate unpaid principal
amount of the Loans.
"Revolving Credit Period" means the period from and including the Effective
Date to but not including the Termination Date.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill,
Inc., and its successors.
"Significant Subsidiary" means each Subsidiary of the Borrower at any time
having (i) at least "10% of the total consolidated assets of the Borrower and
its Subsidiaries (determined as of the last day of the most recent fiscal
quarter of the Borrower) or (ii) at least 10% of the consolidated revenues of
the Borrower and its Subsidiaries for the fiscal year of the Borrower then most
recently ended.
"Solvent" as to any Person shall mean that (a) the sum of the assets of
such Person, both at a fair valuation and at present fair saleable value,
exceeds its liabilities, including its probable liability in respect of
contingent liabilities, (b) such Person will have sufficient capital with
which to conduct its business as presently conducted and as proposed to be
conducted and (c) such Person has not incurred debts, and does not intend to
incur debts, beyond its ability to pay such debts as they mature. For
purposes of this definition, "debt" means any liability on a claim, and
"claim" means (x) a right to payment, whether or not such right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured, or unsecured, or (y) a right
to an equitable remedy for breach of performance if such
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breach gives rise to a payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured,
disputed, undisputed, secured or unsecured. With respect to any such
contingent liabilities, such liabilities shall be computed at the amount
which, in light of all the facts and circumstances existing at the time,
represents the amount which can reasonably be expected to become an actual or
matured liability.
"SPC" has the meaning set forth in Section 9.05(f).
"Spin-Off Transaction" means (a) the contribution by Hilton of the assets
and operations of the Gaming Segment, including without limitation the assets
described on Schedule 1 to the Hilton Distribution Agreement, to Borrower and
its Subsidiaries pursuant to the Hilton Distribution Agreement and the
substantially concurrent distribution of shares in Borrower to the shareholders
in Hilton, (b) the execution of the First Supplemental Indenture to Borrower's
Indenture dated as of April 15, 1997, and the Debt Assumption Agreement between
the Borrower and Hilton, in each case substantially in the form previously
delivered to the Administrative Agent prior to the Effective Date, and (c) the
merger of Borrower with Grand (following the Lakes Spin-Off) pursuant to the
Grand Agreement.
"Subsidiary" means any corporation or other entity of which securities or
other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are at the
time directly or indirectly owned by the Borrower.
"Syndication Agent" means The Bank of New York in its capacity as
syndication agent for the Lenders hereunder. The capacity of the Syndication
Agent is titular in nature, and the Syndication Agent shall have no obligations
or liabilities under the Loan Documents by reason of acting in such capacity.
"Termination Date" means December 30, 1999 or such later date to which the
Revolving Credit Period shall have been extended pursuant to Section 2.15, or,
if such day is not a Euro-Dollar Business Day, the next preceding Euro-Dollar
Business Day.
"Unfunded Liabilities" means, with respect to any Plan at any time, the
amount (if any) by which (i) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed
by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair
market value of all Plan assets allocable to such liabilities under Title IV
of ERISA (excluding any accrued but unpaid contributions), all determined as
of the then most recent valuation date for such Plan,
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but only to the extent that such excess represents a potential liability of a
member of the ERISA Group to the PBGC or any other Person under Title IV of
ERISA.
"Wholly-Owned Consolidated Subsidiary" means any Consolidated Subsidiary
all of the shares of capital stock or other ownership interests of which (except
directors, qualifying shares) are at the time directly or indirectly owned by
the Borrower.
"Year 2000 Issue" means failure of computer software, hardware and firmware
systems, and equipment containing embedded computer chips, to properly receive,
transmit, process, manipulate, store, retrieve, re-transmit or in any other way
utilize data and information due to the occurrence of the year 2000 or the
inclusion of dates on or after January 1, 2000.
Section 1.02 ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial
statements required to be delivered hereunder shall be prepared, in
accordance with generally accepted accounting principles as in effect from
time to time, applied on a basis consistent (except for changes concurred in
by the Borrower's independent public accountants and disclosed in such
financial statements) with the most recent audited consolidated financial
statements of the Borrower and its Consolidated Subsidiaries delivered to the
Lenders; provided that, if the Borrower notifies the Administrative Agent
that the Borrower wishes to amend any covenant in Article V to eliminate the
effect of any change in generally accepted accounting principles on the
operation of such covenant (or if the Administrative Agent notifies the
Borrower that the Required Lenders wish to amend Article V for such purpose),
then the Borrower's compliance with such covenant shall be determined on the
basis of generally accepted accounting principles in effect immediately
before the relevant change in generally accepted accounting principles became
effective, until either such notice is withdrawn or such covenant is amended
in a manner satisfactory to the Borrower and the Required Lenders.
Section 1.03 TYPES OF BORROWINGS. Borrowings are classified for
purposes of this Agreement either by reference to the pricing of Loans
comprising such Borrowing (E.G., a "Euro-Dollar Borrowing" is a Borrowing
comprised of Euro-Dollar Loans) or by reference to the provisions of Article
II under which participation therein is determined (I.E., a "Committed
Borrowing" is a Borrowing under Section 2.01 in which all Lenders participate
in proportion to their commitments).
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ARTICLE II
THE CREDITS
Section 2.01 COMMITMENTS TO LEND. During the Revolving Credit
Period each Lender severally agrees, on the terms and conditions set forth in
this Agreement, to lend to the Borrower pursuant to this Section from time to
time amounts such that (a) the aggregate principal of Committed Loans by such
Lender at any one time outstanding shall not exceed the amount of its
Commitment, and (b) the aggregate principal outstanding amount of all
Committed Loans shall not exceed the aggregate Commitments. Each Borrowing
under this Section shall be in an aggregate principal amount of $10,000,000
or any larger multiple of $1,000,000; and each Committed Borrowing shall be
made from the several Lenders ratably in proportion to their respective
Commitments. Within the foregoing limits, the Borrower may borrow under this
Section, repay, or to the extent permitted by Section 2.17, prepay Loans and
reborrow at any time on or prior to the Termination Date under this Section.
The Committed Loans shall mature, and the principal amount thereof shall be
due and payable, on the Termination Date.
Section 2.02 NOTICE OF COMMITTED BORROWINGS. The Borrower shall
give the Administrative Agent notice (a "Notice of Committed Borrowing"),
substantially in the form of Exhibit D hereto, not later than 8:30 A.M.
(California local time) on (y) the date of each Base Rate Borrowing and (z)
the third Euro-Dollar Business Day before each Euro-Dollar Borrowing,
specifying:
(a) the date of such Borrowing, which shall be a Domestic Business
Day in the case of a Base Rate Borrowing or a Euro-Dollar Business Day in
the case of a Euro-Dollar Borrowing;
(b) the aggregate amount of such Borrowing;
(c) whether the Loans comprising such Borrowing are to be Base Rate
Loans or Euro-Dollar Loans; and
(d) in the case of a Euro-Dollar Borrowing, the duration of the
Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period.
Not more than twelve Committed Borrowings which are Euro-Dollar Borrowings
having different Interest Periods shall be outstanding at any time.
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Section 2.03 RESERVED.
Section 2.04 RESERVED.
Section 2.05 CONVERSION AND CONTINUATION OF COMMITTED LOANS.
Subject to the provisions of this Article II governing the making of
Euro-Dollar Loans, Borrower shall have the option at any time (i) to convert
all or any part of its outstanding Committed Loans equal to $10,000,000 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 Committed 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 Euro-Dollar
Loan, to continue all or any portion of such Loan equal to $1,000,000 and
integral multiples of $100,000 in excess of that amount as a Euro-Dollar
Loan; PROVIDED, HOWEVER, that a Euro-Dollar Loan may only be converted into a
Base Rate Loan on the expiration date of an Interest Period applicable
thereto.
Borrower shall deliver, to the Administrative Agent, notice of any such
conversion or continuation, substantially in the form of Exhibit D (each a
"Notice of Conversion/Continuation"), no later than 8:30 A.M. (California
local time) at least one Domestic Business Day in advance of the proposed
conversion date (in the case of a conversion to a Base Rate Loan) and at
least three Euro-Dollar Business Days in advance of the proposed
conversion/continuation date (in the case of a conversion to, or a
continuation of, a Euro-Dollar Loan). A Notice of Conversion/Continuation
shall specify (i) the proposed conversion/continuation date (which shall be a
Business Day in the case of Base Rate Loans and a Euro-Dollar Business Day,
in the case of conversion to or continuation of Euro-Dollar Loans), (ii) the
amount and type of the Loan to be converted/continued, (iii) the nature of
the proposed conversion/continuation, (iv) in the case of a conversion to, or
a continuation of, a Euro-Dollar Loan, the requested Interest Period, and (v)
in the case of a conversion to, or a continuation of, a Euro-Dollar Loan,
that no Default or Event of Default has occurred and is continuing.
Section 2.06 NOTICE TO LENDERS; FUNDING OF LOANS.
Upon receipt of a Notice of Borrowing, the Administrative Agent
shall promptly notify each Lender of the contents thereof and of such
Lender's share (if any) of such Borrowing and such Notice of Borrowing shall
not thereafter be revocable by the Borrower.
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Not later than 11:00 A.M. (California local time) on the date of
each Borrowing, if such Borrowing is to be made in Dollars, each Lender
participating therein shall (except as provided in subsection (c) of this
Section) make available its share of such Borrowing in Dollars, in federal or
other funds immediately available to the Administrative Agent at its address
referred to in Section 9.01. Unless the Administrative Agent determines that
any applicable condition specified in Article III has not been satisfied, the
Administrative Agent will make the funds so received from the Lenders
available to the Borrower at the Administrative Agent's aforesaid address or
place.
If any Lender makes a new Loan hereunder on a day on which the
Borrower is to repay all or any part of an outstanding Loan from such Lender,
such Lender shall apply the proceeds of its new Loan to make such repayment
and only an amount equal to the difference (if any) between the amount being
borrowed and the amount being repaid shall be made available by such Lender
to the Administrative Agent as provided in subsection (b), or remitted by the
Borrower to the Administrative Agent as provided in Section 2.17, as the case
may be.
Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's share of such Borrowing,
the Administrative Agent may assume that such Lender has made such share
available to the Administrative Agent on the date of such Borrowing in
accordance with subsections (b) and (c) of this Section 2.06 and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If and to the extent that
such Lender shall not have so made such share available to the Administrative
Agent, such Lender and the Borrower severally agree to repay to the
Administrative Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to the
Administrative Agent, at (i) in the case of the Borrower, a rate per annum
equal to the higher of the Federal Funds Rate and the interest rate
applicable thereto pursuant to Section 2.08 and (ii) in the case of such
Lender, the Federal Funds Rate. If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount so repaid shall
constitute such Lender's Loan included in such Borrowing for purposes of this
Agreement. If the Borrower pays interest under
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this subsection (d) at the Federal Funds Rate and the Federal Funds Rate is
higher than the interest rate applicable thereto pursuant to Section 2.08,
the applicable Lender shall pay the Borrower the difference between such
rates.
Section 2.07 NOTES.
The Committed Loans of each Lender shall be evidenced by a single
Note payable to the order of such Lender for the account of its Applicable
Lending Office in an amount equal to the aggregate unpaid principal amount of
such Lender's Commitment.
Upon receipt of each Lender's Note pursuant to Section 3.02(b), the
Administrative Agent shall forward such Note to such Lender. Each Lender
shall record the date, amount, type and maturity of each Loan made by it and
the date and amount of each payment of principal made by the Borrower with
respect thereto, and may, if such Lender so elects in connection with any
transfer or enforcement of its Note, endorse on the schedule forming a part
thereof appropriate notations to evidence the foregoing information with
respect to each such Loan then outstanding; provided that the failure of any
Lender to make any such recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Notes. Each Lender is
hereby irrevocably authorized by the Borrower so to endorse its Note and to
attach to and make a part of its Note a continuation of any such schedule as
and when required.
Section 2.08 INTEREST RATES. (a) Each Base Rate Loan shall bear
interest on the outstanding principal amount thereof, for each day from the
date such Loan is made until it becomes due, at a rate per annum equal to the
Base Rate for such day PLUS any applicable Base Rate Margin. Such interest
shall be payable on the last Domestic Business Day of each calendar quarter
in arrears and on the Termination Date. Any overdue principal of or interest
on any Base Rate Loan shall, at the option of the Required Lenders, bear
interest, payable on demand, for each day until paid at a rate per annum
equal to the sum of the Base Rate PLUS any applicable Base Rate Margin PLUS
2% per annum.
(b) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during the Interest Period applicable
thereto, at a rate per annum equal to the sum of (a) the Euro-Dollar Margin
for such day plus (b) the
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applicable London Interbank Offered Rate for such Interest Period. Such
interest shall be payable for each Interest Period on the last day thereof and,
if such Interest Period is longer than three months, at intervals of three
months after the first day thereof.
(c) Any overdue principal of or interest on any Euro-Dollar Loan shall, at
the option of the Required Lenders, bear interest, payable on demand, for each
day until paid at a rate per annum equal to the sum of 2% plus the Euro-Dollar
Margin for such day plus the quotient obtained (rounded upwards, if necessary,
to the next higher 1/100 of 1%) by dividing (i) the average (rounded upward, if
necessary, to the next higher 1/16 of 1%) of the respective rates per annum at
which one day (or, if such amount due remains unpaid more than three Euro-Dollar
Business Days, then for such period of time not longer than 6 months as the
Administrative Agent may elect) deposits in Dollars in an amount approximately
equal to such overdue payment due to the Administrative Agent are offered to the
Administrative Agent in the London interbank market for the applicable period
determined as provided above by (ii) 1.00 minus the Euro-Dollar Reserve
Percentage (or, if the circumstances described in clause (a) or (b) of Section
8.01 shall exist, at a rate per annum equal to the sum of 2% plus the rate
applicable to Base Rate Loans for such day).
(d) RESERVED.
(e) RESERVED.
(f) The Administrative Agent shall determine in accordance with the
provisions of this Agreement, each interest rate applicable to the Loans
hereunder. The Administrative Agent shall give prompt notice to the Borrower
and the participating Lenders of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.
Section 2.09 RESERVED.
Section 2.10 UPFRONT FEES. On the Effective Date, the Borrower
shall pay to the Administrative Agent for the account of each Lender
non-refundable upfront fees in the amounts set forth in letter agreements
between each Lender and the Lead Arranger and advised by the Lead Arranger to
Borrower.
Section 2.11 FACILITY FEES. The Borrower shall pay to the
Administrative Agent for the account of the Lenders ratably facility fees at
the Facility Fee Rate determined daily in accordance with the Schedule 2 (the
"Facility Fee Rate"). Such facility fee shall accrue from and including the
Effective Date to but excluding the Termination Date (or earlier date of
termination of the Commitments in their entirety), on the daily aggregate
amount of the Commitments (whether used or unused). Facility
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fees shall be payable quarterly in arrears on the first day of each March,
June, September and December and upon the date of termination of the
Commitments in their entirety, and are non-refundable.
Section 2.12 RESERVED.
Section 2.13 OPTIONAL TERMINATION OR REDUCTION OF COMMITMENTS BY
BORROWER. During the Revolving Credit Period, the Borrower may, upon at least
five Domestic Business Days' notice to the Administrative Agent, (i)
terminate the Commitments at any time, if no Loans are outstanding at such
time or (ii) ratably and permanently reduce from time to time by an aggregate
amount of $25,000,000 or any larger amount in multiples of $1,000,000, the
aggregate amount of the Commitments in excess of the the aggregate
outstanding principal balance of the Loans.
Section 2.14 OPTIONAL TERMINATION OF COMMITMENTS BY THE LENDERS.
Following the occurrence of a Change of Control, the Required Lenders may in
their sole and absolute discretion elect, during the sixty day period
immediately subsequent to the LATER OF (a) such occurrence and (b) the
EARLIER of (i) receipt of Borrower's written notice to the Administrative
Agent of such occurrence and (ii) if no such notice has been received by the
Administrative Agent, the date upon which the Administrative Agent and the
Lenders have actual knowledge thereof, to terminate all of the Commitments.
In any such case the Commitments shall be terminated effective on the date
which is sixty days subsequent to the date of written notice from the
Administrative Agent to Borrower thereof, and, to the extent that there is
then any Debt evidenced by the Notes, the same shall be immediately due and
payable.
Section 2.15 SCHEDULED TERMINATION OF COMMITMENTS. The
Commitments shall terminate on the Termination Date and any Loans then
outstanding (together with accrued interest thereon) shall be due and payable
on such date.
Section 2.16 EXTENSIONS OF THE TERMINATION DATE. The Termination
Date may be extended, in the manner set forth in this Section, for a period
of 364 days after the date on which the Termination Date would otherwise have
occurred. If the Borrower wishes to extend the Termination Date, it shall
give written notice to that effect to the Administrative Agent not less than
90 days nor more than 150 days following the delivery to the Administrative
Agent of the audited annual financial statements of Borrower in accordance
with Section 5.01(b), whereupon the Administrative Agent shall notify each of
the Lenders of such notice. Each Lender will respond to such request,
whether affirmatively or negatively, within the period which ends upon the
later of (i) 30 days following Borrower's request, or (ii) 45 days prior to
the then
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effective Termination Date (the "Response Date"). If a Lender or Lenders
respond negatively or fail to timely respond to such request (each
non-responding Lender being conclusively deemed to refuse to consent to the
extension), but such non-extending Lender(s) have Commitment(s) aggregating
less than 33 1/3% of the aggregate amount of the Commitments, the Borrower
shall, for a period of 60 days following the Response Date, have the right,
with the assistance of the Administrative Agent, to seek a mutually
satisfactory substitute financial institution or financial institutions
(which may be one or more of the Lenders) to assume the Commitment(s) of such
non-extending Lender(s). Not later than the third Domestic Business Day
prior to the end of such 60-day period, the Borrower shall, by notice to the
Lenders through the Administrative Agent, either (i) terminate, effective on
the third Domestic Business Day after the giving of such notice, the
Commitment(s) of such non-extending Lender(s), whereupon the Lenders who have
consented to the extension shall continue with their commitments unaffected
to lend subject to the terms of this Agreement to the new Termination Date,
or (ii) designate one or more new financial institutions reasonably
acceptable to the Administrative Agent to assume the Commitments of such
non-extending Lenders, whereupon the aggregate amount of such Commitment(s)
shall be assumed by such substitute financial institution or financial
institutions within such 60-day period or (iii) withdraw its request for an
extension of the Termination Date, in which case the Commitments shall
continue unaffected. The failure of the Borrower to timely take the actions
contemplated by clause (i) or (ii) of the preceding sentence shall be deemed
a withdrawal of its request for an extension as contemplated by clause (iii)
whether or not notice to such effect is given, and in no event shall the
Termination Date be extended unless each Lender which has not consented to
the proposed extension has been either replaced or terminated as set forth
above. So long as Lenders having Commitment(s) totaling not less than
66 2/3% of the aggregate amount of the Commitment(s) shall have responded
affirmatively to such a request, and such request is not withdrawn in
accordance with the preceding sentence, then, subject to receipt by the
Administrative Agent of counterparts of an Extension Agreement in
substantially the form of Exhibit H duly completed and signed by the Borrower
and each of the affirmatively responding Lenders, the Termination Date shall
be extended, effective on such Extension Date, for a period of 364 days to
the date stated in such Extension Agreement.
Section 2.17 OPTIONAL PREPAYMENTS.
Subject in the case of any Euro-Dollar Borrowing to Section 2.18,
the Borrower may, upon at least one Domestic Business Day's notice to the
Administrative Agent, prepay any Base Rate Borrowing, or upon at least three
Euro-Dollar Business Days' notice to the Administrative Agent, with
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respect to any Euro-Dollar Borrowing, prepay any Euro-Dollar Borrowing, in
each case in whole at any time, or from time to time in part in amounts
aggregating $10,000,000 or any larger multiple of $1,000,000, by paying the
principal amount to be prepaid together with accrued interest thereon to the
date of prepayment. Each such optional prepayment shall be applied to prepay
ratably the Loans of the several Lenders included in such Borrowing.
Upon receipt of a notice of prepayment pursuant to this Section,
the Administrative Agent shall promptly notify each Lender of the contents
thereof and of such Lender's ratable share (if any) of such prepayment and
such notice shall not thereafter be revocable by the Borrower.
Section 2.18 RESERVED.
Section 2.19 GENERAL PROVISIONS AS TO PAYMENTS.
The Borrower shall make each payment of principal of, and interest
on, Loans and of fees hereunder, in Dollars not later than 11:00 A.M.
(California local time) on the date when due, in Federal or other immediately
available funds, to the Administrative Agent at its address referred to in
Section 9.01, without offset or counterclaim. The Administrative Agent will
promptly distribute to each Lender its ratable share of each such payment
received by the Administrative Agent for the account of the Lenders, in
Dollars and in the type of funds received by the Administrative Agent.
Whenever any payment of principal of, or interest on, the Base Rate Loans or
of fees shall be due on a day which is not a Domestic Business Day, the date
for payment thereof shall be extended to the next succeeding Domestic
Business Day. Whenever any payment of principal of, or interest on, the
Euro-Dollar Loans shall be due on a day which is not a Euro-Dollar Business
Day, the date for payment thereof shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in
another calendar month, in which case the date for payment thereof shall be
the next preceding Euro-Dollar Business Day. If the date for any payment of
principal is extended by operation of law or otherwise, interest thereon
shall be payable for such extended time.
Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Lenders
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in
full to the Administrative Agent on such date and the Administrative Agent
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may, in reliance upon such assumption, cause to be distributed to each Lender
on such due date an amount equal to the amount then due such Lender. If and
to the extent that the Borrower shall not have so made such payment, each
Lender shall repay to the Administrative Agent forthwith on demand such
amount distributed to such Lender together with interest thereon, for each
day from the date such amount is distributed to such Lender until the date
such Lender repays such amount to the Administrative Agent, at the Federal
Funds Rate.
Section 2.20 FUNDING LOSSES. If the Borrower makes any payment
of principal with respect to any Fixed Rate Loan (pursuant to Article VI or
VIII or otherwise) on any day other than the last day of the Interest Period
applicable thereto, or if the Borrower fails to borrow any Fixed Rate Loans
after notice has been given to any Lender in accordance with section 2.06(a),
the Borrower shall reimburse each Lender within 15 days after demand for any
resulting loss or expense incurred by it (or by an existing or prospective
participant in the related Loan), including (without limitation) any loss
incurred in obtaining, liquidating or employing deposits from third parties,
but excluding loss of margin for the period after any such payment or failure
to borrow, provided that such Lender shall have delivered to the Borrower a
certificate as to the amount of such loss or expense, which certificate shall
be conclusive in the absence of manifest error.
Section 2.21 COMPUTATION OF INTEREST AND FEES. Interest based
on the Reference Rate and all fees hereunder shall be computed on the basis
of a year of 365 days (or 366 days in a leap year) and paid for the actual
number of days elapsed (including the first day but excluding the last day).
All other interest shall be computed on the basis of a year of 360 days and
paid for the actual number of days elapsed (including the first day but
excluding the last day).
Section 2.22 WITHHOLDING TAX EXEMPTION. At least five Domestic
Business Days prior to the first date on which interest or fees are payable
hereunder for the account of any Lender, each Lender that is not incorporated
under the laws of the United States of America or a state thereof agrees that
it will deliver to each of the Borrower and the Administrative Agent two duly
completed copies of United States Internal Revenue Service Form 1001 or 4224,
certifying in either case that such Lender is entitled to receive payments
under this Agreement and the Notes without deduction or withholding of any
United States federal income taxes.
Each Lender which so delivers a Form 1001 or 4224 further undertakes to
deliver to each of the Borrower and the Administrative Agent two additional
copies of such
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form (or a successor form) on or before the date that such form expires or
becomes obsolete or after the occurrence of any event requiring a change in
the most recent form so delivered by it, and such amendments thereto or
extensions or renewals thereof as may be reasonably requested by the Borrower
or the Administrative Agent, in each case certifying that such Lender is
entitled to receive payments under this Agreement and the Notes without
deduction or withholding of any United States federal income taxes, unless an
event (including without limitation any change in treaty, law or regulation)
has occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent
such Lender from duly completing and delivering any such form with respect to
it and such Lender advises the Borrower and the Administrative Agent that it
is not capable of receiving payments without any deduction or withholding of
United States federal income tax.
Section 2.23 RESERVED.
Section 2.24 REGULATION D COMPENSATION. Each Lender may require
the Borrower to pay, contemporaneously with each payment of interest on the
Euro-Dollar Loans, additional interest on the related Euro-Dollar Loan of
such Lender at a rate per annum determined by such Lender up to but not
exceeding the excess of (i) (A) the applicable London Interbank Offered Rate
divided by (B) one minus the Euro-Dollar Reserve Percentage over (ii) the
applicable London Interbank Offered Rate. Any Lender wishing to require
payment of such additional interest (x) shall so notify the Borrower and the
Agent, in which case such additional interest on the Euro-Dollar Loans of
such Lender shall be payable to such Lender at the place indicated in such
notice with respect to each Interest Period commencing at least three
Euro-Dollar Business Days after the giving of such notice and (y) shall
notify the Borrower at least five Euro-Dollar Business Days prior to each
date on which interest is payable on the Euro-Dollar Loans of the amount then
due it under this Section.
Section 2.25 INCREASED COMMITMENTS; ADDITIONAL LENDERS.
(a) Subsequent to the Effective Date, the Borrower may, upon at least
30 days notice to the Administrative Agent (which shall promptly provide a
copy of such notice to the Lenders), propose to increase the aggregate amount
of the Commitments and the Other Commitments by an aggregate amount not to
exceed $625,000,000 (the amount of any such increase of the Commitments being
referred to as the "Increased Commitments"). Each Lender party to this
Agreement at such time shall have the right (but no obligation), for a period
of 15 days following receipt of such notice, to elect by notice to the
Borrower and the Administrative Agent to increase its Commitment by a
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principal amount which bears the same ratio to the Increased Commitments as
its then Commitment bears to the aggregate Commitments then existing. Each
Lender which fails to respond to any such request shall be conclusively
deemed to have refused to consent to an increase in its Commitment.
(b) If any Lender party to this Agreement shall not elect to increase
its Commitment pursuant to subsection (a) of this Section, the Borrower may
designate another Person which qualifies as an Eligible Assignee (which may
be, but need not be, one or more of the existing Lenders) which at the time
agrees to (i) in the case of any such Person that is an existing Lender,
increase its Commitment and (ii) in the case of any other such Person (an
"Additional Lender"), become a party to this Agreement. The sum of the
increases in the Commitments of the existing Lenders pursuant to this
subsection (b) plus the Commitments of the Additional Lenders shall not in
the aggregate exceed the unsubscribed amount of the Increased Commitments.
(c) An increase in the aggregate amount of the Commitments pursuant to
this Section 2.23 shall become effective upon the receipt by the
Administrative Agent of an agreement in form and substance satisfactory to
the Administrative Agent signed by the Borrower, by each Additional Lender
and by each other Lender whose Commitment is to be increased, setting forth
the new Commitments of such Lenders and setting forth the agreement of each
Additional Lender to become a party to this Agreement and to be bound by all
the terms and provisions hereof, together with such evidence of appropriate
corporate authorization on the part of the Borrower with respect to the
Increased Commitments and such opinions of counsel for the Borrower with
respect to the Increased Commitments as the Administrative Agent may
reasonably request.
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ARTICLE III
CONDITIONS
Section 3.01 BORROWINGS. The obligation of any Lender to make a
Loan on the occasion of any Borrowing is subject to the satisfaction of the
following conditions:
(a) receipt by the Administrative Agent of a Notice of Borrowing
as required by Section 2.02;
(b) immediately after such Borrowing, the sum of the aggregate
outstanding principal amount of the Loans will not exceed the aggregate
amount of the Commitments;
(c) immediately before and after such Borrowing, no Default or
Event of Default shall have occurred and be continuing; and
(d) the representations and warranties of the Borrower contained
in this Agreement (except the representations and warranties set forth
in Section 4.04(b) and Section 4.05, in each case as to any matter which
has theretofore been disclosed in writing by the Borrower to the
Lenders) shall be true on and as of the date of such Borrowing.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the facts specified in clauses
(b), (c) and (d) of this Section.
Section 3.02 EFFECTIVENESS. This agreement shall become
effective on the date that each of the following conditions shall have been
satisfied (or waived in accordance with Section 9.04):
(a) receipt by the Administrative Agent of counterparts hereof
signed by each of the parties hereto (or, in the case of any party as to
which an executed counterpart shall not have been received, receipt by
the Administrative Agent in form satisfactory to it of telegraphic,
telex or other written confirmation from such party of execution of a
counterpart hereof by such party);
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(b) receipt by the Administrative Agent for the account of each
Lender of a duly executed Note dated on or before the Effective Date
complying with the provisions of Section 2.05;
(c) receipt by the Administrative Agent of an opinion of Gibson,
Dunn & Crutcher LLP, substantially in the form of Exhibit I hereto and
an opinion of Latham & Watkins, LLP, substantially in the form of
Exhibit J hereto, in each case covering such additional matters relating
to the transactions contemplated hereby as the Required Lenders may
reasonably request;
(d) Borrower shall have executed the First Supplemental Indenture
described in the definition of "Spin-Off Transaction" and shall have
thereby assumed primary liability with respect to Hilton Notes in an
aggregate principal amount not to exceed $625,000,000;
(e) receipt by the Administrative Agent of evidence acceptable to
the Administrative Agent that the Spin-Off Transaction has been or shall
concurrently be consummated;
(f) arrangements satisfactory to the Administrative Agent for the
repayment of all loans (if any) outstanding under the Grand's senior
bank credit facility and the related liens and the termination of all
capital lease facilities for which Grand and its subsidiaries have any
liability (except as to customary surviving indemnities and other
contingent obligations) and the payment of all interest and fees accrued
thereunder shall have been made; and
(g) receipt by the Administrative Agent of all documents it may
reasonably request relating to the existence of the Borrower, the
corporate authority for and the validity of this Agreement and the
Notes, and any other matters relevant hereto, all in form and substance
satisfactory to the Administrative Agents;
The Administrative Agent shall promptly notify the Borrower, the Administrative
Agent and each Lender of the effectiveness of this Agreement, and such notice
shall be conclusive and binding on all parties hereto.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
Section 4.01 CORPORATE EXISTENCE AND POWER. The Borrower (a) is
a corporation duly incorporated, validly existing and in good standing under
the laws of Delaware, (b) has all corporate powers and authority and all
material governmental licenses (including, without limitation, any such
license issued by a Gaming Board), authorizations, consents and approvals
required to own its property and assets and carry on its business as now
conducted and (c) is duly qualified as a foreign corporation and in good
standing in each jurisdiction where the ownership, leasing and operation of
its property or the conduct of its business requires such qualification.
Section 4.02 CORPORATE AND GOVERNMENTAL AUTHORIZATION;
CONTRAVENTION. The execution, delivery and performance by the Borrower of
this Agreement and the Notes are within the Borrower's corporate powers, have
been duly authorized by all necessary corporate action, require no action by
or in respect of, or filing with, any Governmental Agency and do not
contravene, or constitute a default under, any provision of applicable law or
regulation or of the certificate of incorporation or by-laws of the Borrower
or of any agreement, judgment, injunction, order, decree or other instrument
binding upon the Borrower or result in the creation or imposition of any Lien
on any asset of the Borrower or any of its Subsidiaries.
Section 4.03 BINDING EFFECT. This Agreement constitutes a valid
and binding agreement of the Borrower and the Notes, when executed and
delivered in accordance with this Agreement, will constitute valid and
binding obligations of the Borrower, in each case enforceable in accordance
with their respective terms.
Section 4.04 FINANCIAL INFORMATION.
The Combined Pro Forma Financial Statements (i) are derived from
(y) the audited financial statements of Hilton set forth in Hilton's 1997
Form 10-K, and the unaudited financial statements of Hilton set forth in
Hilton's Form 10-Q for the period ended September 30, 1998, and (z) the
audited financial statements of Grand set forth in Grand's 1997 Form 10-K and
the unaudited financial statements of Grand set forth in Grand's Form 10-Q
for the period ended September 30, 1998, (ii) represent allocation of the
assets, liabilities and results of operations of Grand and Hilton which
fairly present the
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pro forma combined financial position and results of operations of Borrower
and its Subsidiaries as of the dates and for the periods therein stated,
giving effect to the Spin-Off transaction and the Lakes Spin-Off, and (iii)
fairly present in all material respects, in conformity with generally
accepted accounting principles, the pro forma combined financial position of
the Gaming Segment and the divisions of Grand owning the Grand Assets as of
such date and their consolidated results of operations and cash flows for
such fiscal year
Since September 30, 1998, there has been no material adverse change
in the business, financial position, results of operations or prospects of
the Gaming Segment and the Grand Assets, or in the operations of the Persons
now comprising Borrower and its Consolidated Subsidiaries, considered as a
whole.
Section 4.05 LITIGATION. Except as disclosed in the form 10-Q
reports dated as of September 30, 1998 for Hilton and Grand, there is no
action, suit or proceeding pending against, or to the knowledge of the
Borrower threatened against or affecting, the Borrower or any of its
Subsidiaries before any court or arbitrator or any governmental body, agency
or official in which there is a reasonable possibility of an adverse decision
which could materially adversely affect the business, consolidated financial
position or consolidated results of operations of the Borrower and its
Consolidated Subsidiaries or which in any manner draws into question the
validity or enforceability of this Agreement or the Notes. Without limiting
the generality of the foregoing, with respect to those litigation matters
described above as reported in the 10-Q reports as of September 30, 1998, for
Hilton and Grand), (a) the disclosure contained therein was accurate as of
the date of thereof, and (b) since such date there has been no material
adverse development.
Section 4.06 COMPLIANCE WITH ERISA. Each member of the ERISA
Group has fulfilled its obligations under the minimum funding standards of
ERISA and the Internal Revenue Code with respect to each Plan and is in
compliance in all material respects with the presently applicable provisions
of ERISA and the Internal Revenue Code with respect to each Plan. No member
of the ERISA Group has (i) sought a waiver of the minimum funding standard
under Section 412 of the Internal Revenue Code in respect of any Plan, (ii)
failed to make any contribution or payment to any Plan or Multiemployer Plan
or in respect of any Benefit Arrangement, or made any amendment to any Plan
or Benefit Arrangement, which has resulted or could result in the imposition
of a Lien or the posting of a bond or other security under ERISA or the
Internal Revenue Code or (iii) incurred any liability under Title IV or ERISA
other than a liability to the PBGC for premiums under Section 4007 of ERISA.
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Section 4.07 TAXES. The United States Federal income tax returns
of Hilton and its Subsidiaries and of Grand and its Subsidiaries have been
examined and closed through the fiscal year ended December 31, 1997. The
Borrower and its Significant Subsidiaries have filed all United States
Federal income tax returns and all other material tax returns which are
required to be filed by them and have paid all taxes due pursuant to such
returns or pursuant to any assessment received by the Borrower or any
Subsidiary. The charges, accruals and reserves on the books of the Borrower
and its Significant Subsidiaries in respect of taxes or other governmental
charges are, in the opinion of the Borrower, adequate.
Section 4.08 SIGNIFICANT SUBSIDIARIES. Each of the Significant
Subsidiaries (a) is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation, (b) has
all corporate powers and authority and all material governmental licenses
(including, without limitation, any such license issued by a Gaming Board),
authorizations, consents and approvals required to own its property and
assets and carry on its business as now conducted and (c) is duly qualified
as a foreign corporation and in good standing in each jurisdiction where the
ownership, leasing and operation of its property or the conduct of its
business requires such qualification, and the failure to be so qualified
would have a material adverse effect on the Borrower and its Subsidiaries.
Section 4.09 NOT AN INVESTMENT COMPANY. The Borrower is not an
"investment company" within the meaning of the Investment Company Act of
1940, as amended.
Section 4.10 ENVIRONMENTAL MATTERS. The Borrower has reasonably
concluded that Environmental Laws are unlikely to have a material adverse
effect on the business, financial position, results of operations or
prospects of the Borrower and its Consolidated Subsidiaries, considered as a
whole.
Section 4.11 FULL DISCLOSURE. All information heretofore
furnished by Hilton, Grand and the Borrower to the Agents or to any Lender
for purposes of or in connection with this Agreement or any transaction
contemplated hereby is, and all such information hereafter furnished by the
Borrower to the Administrative Agent or any Lender will be, taken as a whole,
true and accurate in all material respects on the date as of which such
information is stated or certified. The Borrower has disclosed to the
Lenders in writing any and all facts which materially and adversely affect or
may affect (to the extent the Borrower can now reasonably foresee), the
business, operations or financial position of the Borrower and its
Consolidated Subsidiaries, taken as a whole, or the ability of the Borrower
to perform its obligations under this
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Agreement. With respect to any projections or forecasts provided, such
projections or forecasts represent, as of the date thereof, management's best
estimates based on reasonable assumptions and all available information, but
are subject to the uncertainty inherent in all projections and forecasts.
Section 4.12 THE SPIN-OFF TRANSACTION. As of the Effective Date,
the Spin-Off Transaction has been consummated in accordance with the Grand
Agreement and applicable laws. Giving effect to the Spin-Off Transaction, as
of the Effective Date, Borrower and its Significant Subsidiaries are, on a
consolidated basis, Solvent.
Section 4.13 GAMING LAWS. Borrower and its Subsidiaries are in
material compliance with all applicable Gaming Laws.
Section 4.14 YEAR 2000. Borrower and its Subsidiaries have
reviewed the effect of the Year 2000 Issue on the computer software, hardware
and firmware systems and equipment contained embedded microchips owned or
operated by or for Borrower and its Subsidiaries. The costs to Borrower and
its Subsidiaries of any reprogramming required as a result of the Year 2000
Issue to permit the proper functioning of such systems and equipment and the
proper processing of data, and the testing of such reprogramming, and of
required systems changes are not reasonably expected to result in a Default
or to have a material adverse effect on the business, financial position,
results of operations or prospects of Borrower and its Consolidated
Subsidiaries, considered as a whole.
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ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Lender has any Commitment
hereunder or any amount payable under any Note remains unpaid:
Section 5.01 INFORMATION. The Borrower will deliver to the
Administrative Agent:
(a) as soon as available and in any event no later than March 31,
1999, pro forma combined statement of income of the Gaming Segment and
the Grand Assets for the period commencing October 1, 1998 and ending on
December 31, 1998, and a combined pro forma balance sheet of the Gaming
Segment and the Grand Assets as at December 31, 1998, in each case,
prepared in a manner consistent the with Combined Pro Forma Financial
Statements delivered to the Administrative Agent and the Lenders prior
to the Effective Date;
(b) as soon as available and in any event within 90 days after the
end of each fiscal year of the Borrower, the consolidated balance sheet
of the Borrower and its Consolidated Subsidiaries as of the end of such
fiscal year and the related consolidated statements of income and cash
flows for such fiscal year, setting forth in each case in comparative
form the figures as of the end of and for the previous fiscal year, all
reported on in a manner acceptable to the Securities and Exchange
Commission by Arthur Andersen LLP or other independent public
accountants of nationally recognized standing;
(c) as soon as available and in any event within 60 days after the
end of each of the first three quarters of each fiscal year of the
Borrower, the consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such quarter and the related
consolidated statements of income and cash flows for such quarter and
for the portion of the Borrower's fiscal year ended at the end of such
quarter, setting forth in the case of such statements of income and cash
flows in comparative form the figures for the corresponding quarter and
the corresponding portion of the Borrower's previous fiscal year, all
certified (subject to normal year-end adjustments) as to fairness of
presentation, generally accepted accounting principles and consistency
by an Authorized Officer;
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(d) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a Compliance
Certificate (i) setting forth in reasonable detail the calculations
required to establish whether the Borrower was in compliance with the
requirements of Sections 5.06, 5.10 and 5.11 on the date of such
financial statements, and (ii) stating whether any Default exists on the
date of such Compliance Certificate and, if any Default then exists,
setting forth the details thereof and the action which the Borrower is
taking or proposes to take with respect thereto;
(e) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements (i)
whether anything has come to their attention to cause them to believe
that any Default existed on the date of such statements and (ii)
confirming the calculations set forth in the officer's certificate
delivered simultaneously therewith;
(f) as soon as available and in any event not later than the last
day of February of each year, a completed Pricing Certificate as of
December 31 of the prior year;
(g) within five Domestic Business Days of any officer of the
Borrower obtaining knowledge of any Default, if such Default is then
continuing, a certificate of an Authorized Officer setting forth the
details thereof and the action which the Borrower is taking or proposes
to take with respect thereto;
(h) promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and
proxy statements so mailed;
(i) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration
statements on Form S-8 or its equivalent) and reports on Forms 10-K,
10-Q and 8-K (or their equivalents) which the Borrower shall have filed
with the Securities and Exchange Commission;
(j) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as
defined in Section 4043 of ERISA) with respect to any Plan which might
constitute grounds for a termination of such Plan under Title IV of
ERISA, or knows that
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the plan administrator of any Plan has given or is required to give
notice of any such reportable event, a copy of the notice of such
reportable event given or required to be given to the PBGC; (ii)
receives notice of complete or partial withdrawal liability under Title
IV of ERISA or notice that any Multiemployer Plan is in reorganization,
is insolvent or has been terminated, a copy of such notice; (iii)
receives notice from the PBGC under Title IV of ERISA of an intent to
terminate, impose liability (other than for premiums under Section 4007
of ERISA) in respect of, or appoint a trustee to administer, any Plan, a
copy of such notice; (iv) applies for a waiver of the minimum funding
standard under Section 412 of the Internal Revenue Code, a copy of such
application; (v) gives notice of intent to terminate any Plan under
Section 4041(c) of ERISA, a copy of such notice and other information
filed with the PBGC; (vi) gives notice of withdrawal from any Plan
pursuant to Section 4063 of ERISA, a copy of such notice; or (vii) fails
to make any payment or contribution to any Plan or Multiemployer Plan or
in respect of any Benefit Arrangement or makes any amendment to any Plan
or Benefit Arrangement which has resulted or could result in the
imposition of a Lien or the posting of a bond or other security, a
certificate of the chief financial officer or the chief accounting
officer of the Borrower setting forth details as to such occurrence and
action, if any, which the Borrower or applicable member of the ERISA
Group is required or proposes to take;
(k) forthwith, notice of any change of which the Borrower becomes
aware in the rating by S&P or Moody's, of the Borrower's outstanding
senior unsecured long-term debt securities; and
(l) from time to time such additional information regarding the
financial position or business of the Borrower and its subsidiaries as
the Administrative Agent, at the request of any Lender, may reasonably
request.
Section 5.02 MAINTENANCE OF PROPERTY; INSURANCE.
The Borrower will keep, and will cause each Significant Subsidiary
to keep, all property useful and necessary in its business in good working
order and condition, ordinary wear and tear excepted, except where failure to
do so would not have a material adverse effect on the business, financial
position, results of operations or prospects of the Borrower and its
Consolidated Subsidiaries, considered as a whole.
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The Borrower will, and will cause each of its Significant
Subsidiaries to, maintain (either in the name of the Borrower or in such
Subsidiary's own name) with financially sound and responsible insurance
companies, insurance on all their respective properties in at least such
amounts and against at least such risks (and with such risk retention) as are
usually insured against in the same general area by companies of established
repute engaged in the same or a similar business and will furnish to the
Lenders, upon request from the Administrative Agent, information presented in
reasonable detail as to the insurance so carried. Notwithstanding the
foregoing, the Borrower may self-insure with respect to such risks with
respect to which companies of established repute engaged in the same or
similar business in the same general area usually self-insure.
Section 5.03 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE.
The Borrower will continue, and will cause each Significant Subsidiary to
continue, to engage in business of the same general type conducted by the
Borrower and its Significant Subsidiaries as of the Effective Date, and will
preserve, renew and keep in full force and effect, and will cause each
Subsidiary to preserve, renew and keep in full force and effect their
respective corporate existence and their respective rights, privileges and
franchises necessary or desirable in the normal conduct of business; provided
that nothing in this Section 5.03 shall prohibit (i) the merger of a
Subsidiary into the Borrower or the merger or the consolidation of a
Subsidiary with or into another Person if the corporation surviving such
consolidation or merger is a Subsidiary and if, in each case, after giving
effect thereto, no Default shall have occurred and be continuing or (ii) the
termination of the corporate existence of any Subsidiary if (A) the Borrower
in good faith determines that such termination is in the best interest of the
Borrower and (B) such termination is not materially disadvantageous to the
Lenders.
Section 5.04 COMPLIANCE WITH LAWS. The Borrower will comply, and
cause each Significant Subsidiary to comply, in all material respect with all
applicable laws, ordinances, rules, regulations, and requirements of any
Governmental Agency (including, without limitation, Environmental Laws,
Gaming Laws and ERISA and, in each case, the rules and regulations
thereunder) except where the necessity of compliance therewith is contested
in good faith by appropriate proceedings.
Section 5.05 INSPECTION OF PROPERTY, BOOKS AND RECORDS. The
Borrower will keep, and will cause each Significant Subsidiary to keep,
proper books of record and account in which full, true and correct entries
shall be made of all dealings and transactions in relation to its business
and activities; and will permit, and will cause
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each Significant Subsidiary to permit, representatives of any Lender at such
Lender's expense to visit and inspect any of their respective properties, to
examine and make abstracts from any of their respective books and records and
to discuss their respective affairs, finances and accounts with their
respective officers, employees and independent public accountants, all at
such reasonable times and as often as may reasonably be desired.
Section 5.06 NEGATIVE PLEDGE. None of the Borrower, any Covered
Subsidiary or any Significant Subsidiary will create, assume or suffer to
exist any Lien on any asset now owned or hereafter acquired by it, except:
(a) Liens existing as of the Effective Date;
(b) any Lien existing on any asset of any corporation at the time
such corporation becomes a Subsidiary and not created in contemplation
of such event;
(c) any Lien on any asset securing Debt incurred or assumed for
the purpose of financing all or any part of the cost of acquiring or
constructing such asset (it being understood that, for this purpose, the
acquisition of a Person is also an acquisition of the assets of such
Person); provided that the Lien attaches to such asset concurrently with
or within 180 days after the acquisition thereof, or such longer period,
not to exceed 12 months, due to the Borrower's inability to retain the
requisite governmental approvals with respect to such acquisition;
provided further that, in the case of real estate, (i) the Lien attaches
within 12 months after the latest of the acquisition thereof, the
completion of construction thereon or the commencement of full operation
thereof and (ii) the Debt so secured does not exceed the sum of (x) the
purchase price of such real estate plus (y) the costs of such
construction;
(d) any Lien on any asset of any corporation existing at the time
such corporation is merged or consolidated with or into the Borrower or
a Subsidiary and not created in contemplation of such event;
(e) any Lien existing on any asset prior to the acquisition
thereof by the Borrower or a Subsidiary and not created in contemplation
of such acquisition;
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(f) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the
foregoing clauses of this Section, provided that such Debt is not
increased (other than to cover any transaction costs of such
refinancing, extension, renewal or refunding) and is not secured by any
additional assets;
(g) Liens securing Debt of a Subsidiary to the Borrower or another
Subsidiary; and
(h) Liens not otherwise permitted by the foregoing clauses of
this Section encumbering assets of the Borrower and its Consolidated
Subsidiaries having an aggregate fair market value which is not in
excess of 10% of Consolidated Net Tangible Assets (determined, in each
case, by reference to the Combined Pro Forma Financial Statements, or,
if then delivered, as of the most recent date for which Borrower has
delivered its financial statements under Section 5.01(b)).
Section 5.07 CONSOLIDATIONS, MERGERS AND SALES OF ASSETS. The
Borrower and its Subsidiaries will not (i) consolidate or merge with or into
any other Person or (ii) sell, lease or otherwise transfer all or any
substantial part of the assets of the Borrower and its Subsidiaries, taken as
a whole, to any other Person, or (iii) acquire all or substantially all of
the assets of, or more than 49% of the capital stock or other equity
securities of, any Person which is not engaged in the same general lines of
business as Borrower and its Subsidiaries, if, giving effect to such
consolidation, merger, sale or acquisition, Borrower is not in pro forma
compliance with the covenants set forth in Sections 5.10 and 5.11; PROVIDED
that, notwithstanding the foregoing, the Borrower may merge with another
Person only if (A) the Borrower is the corporation surviving such merger, and
(B) immediately after giving effect to such merger, no Default shall have
occurred and be continuing.
Section 5.08 HOSTILE TENDER OFFERS. The Borrower and its
Subsidiaries will not make any offer to purchase or acquire, or prosecute,
pursue or consummate a purchase or acquisition of, 5% or more of the capital
stock of any corporation or other business entity, if the board of directors
or other equivalent governing body of such corporation or business entity has
notified Borrower or its relevant Subsidiaries that it opposes such offer or
purchase and such notice has not been withdrawn or superseded.
Section 5.09 USE OF PROCEEDS. The proceeds of the Loans made
under this Agreement will be used by the Borrower for general corporate
purposes, including but not limited to (a) on the effective date, the
refinancing of obligations under the Hilton
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Credit Agreement and transactional and other expenses associated with the
Spin-Off Transaction, and (b), thereafter, for working capital, capital
expenditures, the back stop of commercial paper and the acquisition of
full-service hotel\casino, casino and casino\resort properties. None of such
proceeds will be used, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of buying or carrying any "margin stock"
within the meaning of Regulation U other than "margin stock" issued by the
Borrower which is retired upon purchase or for any purpose which violates
Section 5.08.
Section 5.10 LEVERAGE RATIO. The Leverage Ratio will not, as of
the last day of any fiscal quarter of Borrower described in the matrix below,
exceed the ratio set forth opposite that fiscal quarter:
FISCAL QUARTERS ENDING MAXIMUM RATIO
-------------------------------------------
Effective Date through
December 31, 2000 4.75:1.00
Later Fiscal Quarters 4.50:1.00.
Section 5.11 INTEREST COVERAGE RATIO. The Interest Coverage
Ratio shall not, as of the last day of any fiscal quarter of Borrower, be
less than 3.00:1.00.
Section 5.12 YEAR 2000. Borrower shall make, and shall cause
each of its Subsidiaries to make, all required systems changes by December
31, 1999, in computer software, hardware and firmware systems and equipment
containing embedded microchips owned or operated by or for Borrower and its
Subsidiaries required as a result of the Year 2000 Issue to permit the proper
functioning of such computer systems and other equipment, except to the
extent that the failure to take any such action could not reasonably be
expected to result in a Default or to have a material adverse effect on the
business, financial position, results of operations or prospects of Borrower
and its Consolidated Subsidiaries, considered as a whole. At the request of
any Lender, Borrower shall provide, and shall cause each of its Subsidiaries
to provide, to such Lender reasonable assurance of its compliance with the
preceding sentence.
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ARTICLE VI
DEFAULTS
Section 6.01 EVENTS OF DEFAULT. If one or more of the following
events ("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to (i) pay when due any principal of
any Loan under this Agreement, or (ii) pay within five days of the due
date thereof any interest, fees or other amount payable hereunder;
(b) the Borrower shall fail to observe or perform any covenant
contained in Sections 5.06 to 5.11, inclusive;
(c) the Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by
clause (a) or (b) above) for 7 days after written notice thereof has
been given to the Borrower by the Administrative Agent, which notice
shall be delivered to Borrower by the Administrative Agent at the
request of any Lender;
(d) any representation, warranty, certification or statement made
or deemed made by the Borrower in this Agreement or in any certificate,
financial statement or other document delivered pursuant to this
Agreement shall prove to have been incorrect in any material respect
when made (or deemed made);
(e) the Borrower or any Covered Subsidiary or any Significant
Subsidiary shall fail to make any payment in respect of any Debt (other
than the Notes and Non-Recourse Debt) when due or within any applicable
grace period and the aggregate principal amount of such Debt is in
excess of $100,000,000;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Debt (other than Non-Recourse Debt)
in excess of $100,000,000 of the Borrower or any Covered Subsidiary or
any Significant Subsidiary or enables or entitles the holder of such
Debt or any Person acting on such holder's behalf to accelerate the
maturity thereof;
(g) the Borrower or any Significant Subsidiary shall ommence a
voluntary case or other proceeding seeking liquidation,
-46-
reorganization or other relief with respect to itself or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, or
shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they become due, or
shall take any corporate action to authorize any of the foregoing;
(h) an involuntary case or other proceeding shall be commenced
against the Borrower or any Significant Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian
or other similar official of it or any substantial part of its property,
and such involuntary case or other proceeding shall remain undismissed
and unstayed for a period of 60 days; or an order for relief shall be
entered against the Borrower or any Significant Subsidiary under the
federal bankruptcy laws as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $5,000,000 which it shall
have become liable to pay under Title IV of ERISA; or notice of intent
to terminate a Material Plan shall be filed under Title IV of ERISA by
any member of the ERISA Group, any plan administrator or any combination
of the foregoing; or the PBGC shall institute proceedings under Title IV
of ERISA to terminate, to impose liability (other than for premiums
under Section 4007 of ERISA) in respect of, or to cause a trustee to be
appointed to administer, any Material Plan; or a condition shall exist
by reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated; or there shall
occur a complete or partial withdrawal from, or a default, within the
meaning of Section 4219(c)(5) of ERISA, with respect to, one or more
Multiemployer Plans which could cause one or more members of the ERISA
Group to incur a current payment obligation in excess of $25,000,000;
(j) a judgment or order for the payment of money in excess of
$25,000,000 shall be rendered against the Borrower or any Subsidiary
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and such judgment or order shall continue unsatisfied and unstayed for a
period of 30 days;
(k) the occurrence of a License Revocation with respect to a
license issued to Borrower or any of its Subsidiaries by any Gaming
Board of the States of Mississippi, New Jersey or Nevada with respect to
gaming operations at any gaming facility accounting for five percent
(5%) or more of the consolidated gross revenues of Borrower and its
Subsidiaries that continues for thirty calendar days;
(l) then, and in every such event, the Administrative Agent shall
(i) if requested by the Required Lenders, by notice to the Borrower
terminate the Commitments and they shall thereupon terminate, and (ii)
if requested by the Required Lenders, by notice to the Borrower declare
the Loans (together with accrued interest thereon) to be, and the Loans
(together with accrued interest thereon) shall thereupon become,
immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the
Borrower; PROVIDED that in the case of any of the Events of Default
specified in clause (g) or (h) above with respect to the Borrower,
without any notice to the Borrower or any other act by the
Administrative Agent or the Lenders, the Commitments shall thereupon
terminate and the Loans (together with accrued interest thereon) shall
become immediately due and payable without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the
Borrower.
Section 6.02 NOTICE OF DEFAULT. The Administrative Agent shall
give notice to the Borrower under Section 6.01(c) promptly upon being
requested to do so by any Lender and shall thereupon notify all the Lenders
thereof.
Section 6.03 RESERVED.
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ARTICLE VII
THE AGENTS
Section 7.01 APPOINTMENT AND AUTHORIZATION. Each Lender
irrevocably appoints and authorizes each Agent to take such action as agent
on its behalf and to exercise such powers under this Agreement and the Notes
as are delegated to such Agent by the terms hereof or thereof, together with
all such powers as are reasonably incidental thereto.
Section 7.02 AGENTS AND AFFILIATES. Bank of America and the
other Agents shall each have the same rights and powers under this Agreement
as any other Lender and each may exercise or refrain from exercising the same
as though it were not an Agent, and Bank of America and the other Agents and
their respective affiliates may accept deposits from, lend money to, and
generally engage in any kind of business with, the Borrower or any Subsidiary
or Affiliate of the Borrower as if they were not Agents hereunder.
Section 7.03 ACTION BY AGENTS. The obligations of the Agents
hereunder are only those expressly set forth herein. Without limiting the
generality of the foregoing, the Administrative Agent shall not be required
to take any action with respect to any Default, except as expressly provided
in Article VI.
Section 7.04 CONSULTATION WITH EXPERTS. Each Agent may consult
with legal counsel (who may be counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with
the advice of such counsel, accountants or experts.
Section 7.05 LIABILITY OF AGENT. Neither any Agent nor any of
their respective affiliates nor any of the respective directors, officers,
agents or employees of any of the foregoing shall be liable for any action
taken or not taken by it in connection herewith (i) with the consent or at
the request of the Required Lenders or (ii) in the absence of its own gross
negligence or willful misconduct. Neither any Agent nor any of their
respective affiliates nor any of the respective directors, officers, agents
or employees of any of the foregoing shall be responsible for or have any
duty to ascertain, inquire into or verify (i) any statement, warranty or
representation made in connection with this Agreement or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of the Borrower; (iii) the satisfaction of any condition specified
in Article III, except in the case of the Administrative Agent receipt of
items
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required to be delivered to it; or (iv) the validity, effectiveness or
genuineness of this Agreement, the Notes or any other instrument or writing
furnished in connection herewith. The Administrative Agent shall incur no
liability by acting in reliance upon any notice, consent, certificate,
statement, or other writing (which may be a bank wire, telex, facsimile
transmission or similar writing) believed by it to be genuine or to be signed
by the proper party or parties.
Section 7.06 INDEMNIFICATION. Each Lender shall, ratably in
accordance with its Commitment, indemnify the Administrative Agent, its
affiliates and its directors, officers, agents and employees (to the extent
not reimbursed by the Borrower) against any cost, expense (including counsel
fees and disbursements), claim, demand, action, loss or liability (except
such as result from such indemnitees' gross negligence or willful misconduct)
that such indemnitee may suffer or incur in connection with the
Administrative Agent's role under this Agreement or any related action taken
or omitted by such indemnitee hereunder.
Section 7.07 CREDIT DECISION. Each Lender acknowledges that it
has, independently and without reliance upon the Administrative Agent, the
Lead Arranger or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent, the
Lead Arranger or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking any action under this Agreement.
Section 7.08 SUCCESSOR AGENT. The Administrative Agent may
resign at any time subject to the appointment of a successor Agent by giving
notice to the Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right to appoint a successor Agent with the
consent of the Borrower, which consent shall not be unreasonably withheld or
delayed; provided that no such consent shall be required if the successor
Agent is a Lender. If no successor Agent shall have been so appointed, and
shall have accepted such appointment, within 30 days after the retiring
Agent's 'giving of notice of resignation, then the retiring Agent may, on
behalf of the Lenders, and without the Borrower's consent, appoint a
successor Agent, which shall be a commercial bank organized or licensed under
the laws of the United States of America or of any State thereof and having a
combined capital and surplus of at least $1,000,000,000. Upon the acceptance
of its appointment as Agent hereunder by a successor Agent, such successor
Agent shall thereupon succeed to and become vested with all the rights and
duties of the retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations hereunder. After any retiring Agent's
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resignation hereunder as Agent, the provisions of this Article shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent.
Section 7.09 AGENTS' FEES. The Borrower shall pay to each Agent
for its own account fees in the amounts and at the times previously agreed
upon between the Borrower and such Agent.
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ARTICLE VIII
CHANGE IN CIRCUMSTANCES
Section 8.01 BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR
UNFAIR. If on or prior to the first day of any Interest Period for any Fixed
Rate Borrowing:
(a) the Administrative Agent is advised by the Majority Lenders
that deposits in Dollars and in the required amounts are not being
offered to the Banks in the relevant market for such Interest Period, or
(b) in the case of a Committed Borrowing, Lenders having 50% or
more of the aggregate amount of the Commitments advise the
Administrative Agent that the London Interbank Offered Rate, as
determined by the Administrative Agent, will not adequately and fairly
reflect the cost to such Lenders of funding their Euro-Dollar Loans for
such Interest Period,
(c) the Administrative Agent shall forthwith give notice thereof
to the Borrower and the Lenders, whereupon until the Administrative
Agent notifies the Borrower that the circumstances giving rise to such
suspension no longer exist, the obligations of the Lenders to make
Euro-Dollar Loans shall be suspended. Unless the Borrower notifies the
Administrative Agent at least two Domestic Business Days before the date
of any Fixed Rate Borrowing for which a Notice of Borrowing has
previously been given that it elects not to borrow on such date, such
Fixed Rate Borrowing shall instead be made as a Base Rate Borrowing.
The Administrative Agent shall promptly notify the Lenders of any
election by the Borrower pursuant to the preceding sentence.
Section 8.02 ILLEGALITY. If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Euro-Dollar
Lending Office) with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency shall
make it unlawful or impossible for any Lender (or its Euro-Dollar Lending
Office) to make, maintain or fund its Euro-Dollar Loans and such Lender shall
so notify the Administrative Agent, the Administrative Agent shall forthwith
give notice thereof to the other Lenders and the Borrower, whereupon until
such Lender notifies the Borrower and the Administrative Agent that the
circumstances giving rise to such suspension no longer exist, the obligation
of such Lender to make Euro-Dollar Loans
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shall be suspended. Before giving any notice to the Administrative Agent
pursuant to this Section, such Lender shall designate a different Euro-Dollar
Lending Office if such designation will avoid the need for giving such notice
and will not, in the sole judgment of such Lender, be otherwise
disadvantageous to such Lender. If such Lender shall determine that it may
not lawfully continue to maintain and fund any of its outstanding Euro-Dollar
Loans to maturity and shall so specify in such notice, the Borrower shall
immediately prepay in full the then outstanding principal amount of each such
Euro-Dollar Loan, together with accrued interest thereon. Concurrently with
prepaying each such Euro-Dollar Loan, the Borrower shall borrow a Base Rate
Loan in an equal principal amount from such Lender (on which interest and
principal shall be payable contemporaneously with the related Euro-Dollar
Loans of the other Lenders), and such Lender shall make such a Base Rate Loan.
Section 8.03 INCREASED COST AND REDUCED RETURN.
If on or after the date hereof, the adoption of any applicable
law, rule or regulation, or any change in any applicable law, rule or
regulation, or any change in the interpretation or administration thereof 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 request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency:
(a) shall subject any Lender (or its Applicable Lending Office) to
any tax, duty or other charge with respect to its Fixed Rate Loans, its
Note or its obligation to make Fixed Rate Loans, or shall change the
basis of taxation of payments to any Lender (or its Applicable Lending
Office) of the principal of or interest on its Fixed Rate Loans or any
other amounts due under this Agreement in respect of its Fixed Rate
Loans or its obligation to make Fixed Rate Loans (except for changes in
the rate of tax on the overall net income of such Lender or its
Applicable Lending Office imposed by the jurisdiction in which such
Lender's principal executive office or Applicable Lending Office is
located); or
(b) shall impose, modify or deem applicable any reserve
(including, without limitation, any such requirement imposed by the
Board of Governors of the Federal Reserve System, but excluding, with
respect to any Euro-Dollar Loan any such requirement included in an
applicable Euro-Dollar Reserve Percentage), special deposit, insurance
assessment or similar requirement against assets of, deposits
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with or for the account of, or credit extended by, any Lender (or its
Applicable Lending Office) or shall impose on any Lender (or its
Applicable Lending Office) or on the United States market for
certificates of deposit or the London interbank market any other
condition affecting its Fixed Rate Loans, its Note or its obligation to
make Fixed Rate Loans;
(c) and the result of any of the foregoing is to increase the cost
to such Lender (or its Applicable Lending Office) of making or
maintaining any Fixed Rate Loan, or to reduce the amount of any sum
received or receivable by such Lender (or its Applicable Lending Office)
under this Agreement or under its Note with respect thereto, by an
amount deemed by such Lender to be material, then, within 15 days after
demand by such Lender (with a copy to the Administrative Agent), the
Borrower shall pay to such Lender such additional amount or amounts as
will compensate such Lender for such increased cost or reduction.
(d) If, after the date hereof, any Lender shall have determined
that any applicable law, rule or regulation regarding capital adequacy
(irrespective of the actual timing of the adoption or implementation
thereof and including, without limitation, any law or regulation adopted
pursuant to the July 1988 report of the Basle Committee on Banking
Regulations and Supervisory Practices) or any change therein, or any
change in the interpretation or administration thereof 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 request or directive
regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, has or would have
the effect of reducing the rate of return on capital of such Lender (or
its Parent) as a consequence of such Lender's obligations hereunder to a
level below that which such Lender (or its Parent) could have achieved
but for such law, regulation, change or compliance (taking into
consideration its policies with respect to capital adequacy) by an
amount deemed by such Lender to be material, then from time to time,
within 15 days after demand by such Lender (with a copy to the
Administrative Agent), the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender (or its
Parent) for such reduction.
(e) Each Lender will promptly notify the Borrower and the
Administrative Agent of any event of which it has knowledge, occurring
after the date hereof, which will entitle such Lender to compensation
pursuant to this
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Section and will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the sole judgment of such Lender, be
otherwise disadvantageous to such Lender. A certificate of any Lender
claiming compensation under this Section and setting forth the additional
amount or amounts to be paid to it hereunder shall be conclusive in the
absence of manifest error. In determining such amount, such Lender may use
any reasonable averaging and attribution methods.
Section 8.04 BASE RATE LOANS SUBSTITUTED FOR AFFECTED FIXED RATE
LOANS. If (i) the obligation of any Lender to make Euro-Dollar Loans has
been suspended pursuant to Section 8.02 or (ii) any Lender has demanded
compensation under Section 8.03(a) and the Borrower shall, by at least five
Euro-Dollar Business Days, prior notice to such Lender through the
Administrative Agent, have elected that the provisions of this Section shall
apply to such Lender, then, unless and until such Lender notifies the
Borrower that the circumstances giving rise to such suspension or demand for
compensation no longer exist:
(a) all Loans which would otherwise be made by such Lender as
Euro-Dollar Loans shall be made instead as Base Rate Loans (on which
interest and principal shall be payable contemporaneously with the
related Fixed Rate Loans of the other Lenders), and
(b) after each of its Euro-Dollar Loans has been repaid, all
payments of principal which would otherwise be applied to repay such
Fixed Rate Loans shall be applied to repay its Base Rate Loans instead.
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ARTICLE IX
MISCELLANEOUS
Section 9.01 NOTICES. All notices, requests and other
communications to any party hereunder shall be in writing (including bank
wire, telex, telecopy or similar writing) and shall be given to such party:
(x) in the case of the Borrower or the Administrative Agent, at its address
or telex or telecopier number set forth on the signature pages hereof, (y) in
the case of any Lender, at its address or telex or telecopier number set
forth in its Administrative Questionnaire or (z) in the case of any party,
such other address or telex or telecopier number as such party may hereafter
specify for the purpose by notice to the Administrative Agent and the
Borrower. Each such notice, request or other communication shall be
effective (i) if given by telex, when such telex is transmitted to the telex
number specified in this Section and the appropriate answer back is received,
(ii) if given by mail, 72 hours after such communication is deposited in the
mails with first class postage prepaid, addressed as aforesaid or (iii) if
given by any other means, when delivered or received at the address specified
in this Section; provided that notices to the Administrative Agent under
Article II or Article VIII shall not be effective until received.
Section 9.02 NO WAIVERS. No failure or delay by the
Administrative Agent or any Lender in exercising any right, power or
privilege hereunder or under any Note shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided by law.
Section 9.03 EXPENSES; DOCUMENTARY TAXES; INDEMNIFICATION.
The Borrower shall pay (i) all reasonable out-of-pocket expenses of
the Administrative Agent and the Lead Arranger, including reasonable fees and
disbursements of counsel for the Administrative Agent (including the
allocated fees and expenses of any internal counsel), in connection with the
preparation of this Agreement and all related documents, the negotiation,
closing and syndication of this Agreement and the Loans, and in connection
with any waiver, amendment or consent hereunder or any amendment hereof or
any Default or alleged Default hereunder and (ii) if an Event of Default
occurs, all reasonable out-of-pocket expenses incurred by the Administrative
Agent or any Lender, including fees and disbursements of counsel (including
the allocated fees and expenses of any internal counsel), in
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connection with such Event of Default and collection, bankruptcy, insolvency
and other enforcement proceedings resulting therefrom. The Borrower shall
indemnify each Lender against any transfer taxes, documentary taxes, mortgage
recording taxes, assessments or charges made by any governmental authority by
reason of the execution and delivery or enforcement of this Agreement and the
Notes.
The Borrower agrees to indemnify each Agent, the Lead Arranger
and each Lender, their respective affiliates and the respective directors,
officers, agents and employees of the foregoing (each an "Indemnitee") and
hold each Indemnitee harmless from and against any and all liabilities,
losses, damages, costs and expenses of any kind, including, without
limitation, the reasonable fees and disbursements of counsel (including the
allocated fees and expenses of any internal counsel), which may be incurred
by such Indemnitee in connection with any investigative, administrative or
judicial proceeding (whether or not such Indemnitee shall be designated a
party thereto) brought or threatened relating to or arising out of this
Agreement or any actual or proposed use of proceeds of Loans hereunder;
provided that no Indemnitee shall have the right to be indemnified hereunder
for such Indemnitee's own gross negligence or willful misconduct as
determined by a court of competent jurisdiction.
Section 9.04 AMENDMENTS AND WAIVERS. No amendment or waiver of
the terms of this Agreement or the other Loan Documents shall be made or be
effective unless such amendment or waiver is in writing and is signed by the
Borrower and the Required Lenders (and, if the rights or duties of the
Administrative Agent are affected thereby, by the Administrative Agent);
provided that no such amendment or waiver shall, unless signed by all the
Lenders, (i) increase or decrease the amount of the Commitment of any Lender
without the consent of that Lender (except for a ratable decrease in the
Commitments of all Lenders) or subject any Lender to any additional
obligation, (ii) reduce the principal of or rate of interest on any Loan or
interest thereon or any fees hereunder, (iii) postpone the date fixed for any
payment of principal of or interest on any Loan or interest thereon or any
fees hereunder, or the Termination Date (except as contemplated by Section
2.15), (iv) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Notes, or the percentage of Lenders, which
shall be required for the Lenders or any of them to take any action under
this Section or any other provision of this Agreement or (v) render more
restrictive the ability of any Lender to assign or grant participations in
its Commitment under Section 9.05.
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Section 9.05 SUCCESSORS AND ASSIGNS.
This Agreement and the other Loan Documents to which
Borrower is a party will be binding upon and inure to the benefit of
Borrower, the Administrative Agent, each of the Lenders, and their
respective successors and assigns, EXCEPT that the Borrower may not assign
its rights hereunder or thereunder or any interest herein or therein
without the prior written consent of all the Lenders. Each Lender
represents that it is not acquiring its Note with a view to the
distribution thereof within the meaning of the Securities Act of 1933, as
amended (subject to any requirement that disposition of such Note must be
within the control of such Lender). Any Lender may at any time pledge its
Note or any other instrument evidencing its rights as a Lender under this
Agreement to a Federal Reserve Bank, but no such pledge shall release that
Lender from its obligations hereunder or grant to such Federal Reserve Bank
the rights of a Lender hereunder absent foreclosure of such pledge.
From time to time following the Effective Date, each
Lender may assign to one or more Eligible Assignees all or any portion of
its Commitment; PROVIDED that (i) such Eligible Assignee, if not then a
Lender or an Affiliate of the assigning Lender, shall be approved by each
of the Administrative Agent and (if no Event of Default then exists)
Borrower (neither of which approvals shall be unreasonably withheld or
delayed), (ii) such assignment shall be evidenced by an Assignment and
Assumption Agreement substantially in the form of Exhibit K, a copy of
which shall be furnished to the Administrative Agent as hereinbelow
provided, (iii) EXCEPT in the case of an assignment to an Affiliate of the
assigning Lender, to another Lender or of the entire remaining Commitment
of the assigning Lender, the assignment shall not assign a portion of the
Commitments that is equivalent to less than $5,000,000, and (iv) the
effective date of any such assignment shall be as specified in the
Assignment and Assumption Agreement, but not earlier than the date which is
five Banking Days after the date the Administrative Agent has received the
Assignment and Assumption Agreement. Upon the effective date of the
Assignment and Assumption Agreement, the Eligible Assignee named therein
shall be a Lender for all purposes of this Agreement, with the Commitment
therein set forth and, to the extent of such Commitment, the assigning
Lender shall be released from its further obligations under this Agreement.
Borrower agrees that they shall execute and deliver (against delivery by
the assigning Lender to Borrower of its Note) to such assignee Lender, a
Note evidencing that
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assignee Lender's Commitment, and to the assigning Lender, a Note evidencing
the remaining Commitment retained by the assigning Lender.
By executing and delivering an Assignment and Assumption Agreement,
the Eligible Assignee thereunder acknowledges and agrees that: (i) other than
the representation and warranty that it is the legal and beneficial owner of
the Commitment being assigned thereby free and clear of any adverse claim,
the assigning Lender has made no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or the execution, legality,
validity, enforceability, genuineness or sufficiency of this Agreement or any
other Loan Document; (ii) the assigning Lender has made no representation or
warranty and assumes no responsibility with respect to the financial
condition of Borrower or the performance by Borrower of its obligations under
this Agreement; (iii) it has received a copy of this Agreement, together with
copies of the most recent financial statements delivered pursuant to Section
5.01 and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such Assignment and
Assumption Agreement; (iv) it will, independently and without reliance upon
the Administrative Agent or any Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement; (v)
it appoints and authorizes the Administrative Agent to take such action and
to exercise such powers under this Agreement as are delegated to the
Administrative Agent by this Agreement; and (vi) it will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.
The Administrative Agent shall maintain a copy of each Assignment
and Assumption Agreement delivered to it and a register (the "Register") of
the names and address of each of the Lenders and the Commitment held by each
Lender, giving effect to each Assignment and Assumption Agreement. The
Register shall be available during normal business hours for inspection by
Borrower or any Lender upon reasonable prior notice to the Administrative
Agent. After receipt of a completed Assignment and Assumption Agreement
executed by any Lender and an Eligible Assignee, and receipt of an assignment
fee of $3,500 from such Lender or Eligible Assignee, the Administrative Agent
shall, promptly following the effective date thereof, provide to Borrower and
the Lenders a revised Schedule 1 giving effect thereto. Borrower, the
Administrative Agent and the Lenders shall deem and treat the
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Persons listed as Lenders in the Register as the holders and owners of the
Commitments listed therein for all purposes hereof, and no assignment or
transfer of any Commitment shall be effective, in each case unless and until
an Assignment and Assumption Agreement effecting the assignment or transfer
thereof shall have been accepted by the Administrative Agent and recorded in
the Register as provided above. Prior to such recordation, all amounts owed
with respect to the applicable Commitment 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 Commitment.
Each Lender may from time to time grant participations to one or
more Lenders or other financial institutions (INCLUDING another Lender) in
its Commitment; PROVIDED, HOWEVER, that (i) such Lender's obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) the participating Lenders or other financial institutions
shall not be a Lender hereunder for any purpose EXCEPT, if the participation
agreement so provides, for the purposes of Sections 2.22, 8.03 and 9.03 but
only to the extent that the cost of such benefits to Borrower does not exceed
the cost which Borrower would have incurred in respect of such Lender absent
the participation, (iv) Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement,
(v) the participation interest shall be expressed as a percentage of the
granting Lender's Commitment as it then exists and shall not restrict an
increase in the Commitments, or in the granting Lender's Commitment, so long
as the amount of the participation interest is not affected thereby and (vi)
the consent of the holder of such participation interest shall not be
required for amendments or waivers of provisions of the Loan Documents OTHER
THAN those which result in (A) a decrease in fees, interest rate spreads or
principal payable to the holder of such participation, (B) increase the
Commitment of the granting Lenders and thereby increase the funding
requirements of the holder of such a participation, or (C) extend the
Termination Date.
Notwithstanding anything to the contrary contained herein, any Lender (a
"Granting Lender") may grant to a special purpose funding vehicle (an "SPC")
of such Granting Lender, identified as such in writing from time to time by
the Granting
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Lender to the Administrative Agent and the Borrower the option to provide all
or any part of any Committed Loan that such Granting Lender would otherwise
be obligated to make pursuant to this Agreement, provided that (i) nothing
herein shall constitute a commitment to make any Loan by any SPC, (ii) if an
SPC elects not to exercise such option or otherwise fails to provide all or
any part of such Loan, the Granting Lender shall be obligated to make such
Loan pursuant to the terms hereof, and (iii) except as expressly set forth
herein, the rights of any such SPC shall be derivative of the rights of the
Granting Lender, and each SPC shall be subject to all of the restrictions
upon the Granting Lender herein contained. Each SPC shall be conclusively
presumed to have made arrangements with its Granting Lender for the exercise
of voting and other rights hereunder in a manner which is acceptable to the
SPC, and the Administrative Agent, the Lenders and Borrower and each other
party shall be entitled to rely upon and deal solely with the Granting Lender
with respect to Loans made by or through its SPC. The making of a Loan by an
SPC hereunder shall utilize the Commitment of the Granting Lender to the same
extent, and as if, such Loan were made by the Granting Lender. Each party
hereto hereby agrees that no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement (all liability for which shall remain
with the related Granting Lender). In furtherance of the foregoing, each
party hereto hereby agrees (which agreement shall survive the termination of
this Agreement) that, prior to the date that is one year and one day after
the payment in full of all outstanding senior indebtedness of any SPC, it
will not institute against, or join any other person in insituting against,
such SPC any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or similar proceedings under the laws of the United
States or any State thereof. In addition, notwithstanding anything to the
contrary contained in this Section 9.05, each SPC may, at any time, without
regard to the period required by Section 9.05(b)(iv), (i) with notice to, but
without the prior written consent of, the Borrower, the Borrower or the
Administrative Agent, and without paying any processing fee therefor, assign
all or a portion of its interests in any Loans to its Granting Lender or to
any financial institutions providing liquidity and/or credit facilities to or
for the account of such SPC to fund the Loans made by such SPC or to support
the securities (if any) issued by such SPC to fund such Loans (but nothing
contained herein shall be construed in derogation of the obligation of the
Granting Lender to make Loans hereunder), and (ii) disclose on a confidential
basis any non-public information relating to its Loans to any rating agency,
commercial paper dealer or provider of a surety, guarantee or credit or
liquidity enhancement to such SPC. This Section 9.05(f) may not be amended
without the consent of all SPC's then designated to the Administrative Agent
in accordance with the foregoing provisions of this Section.
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Section 9.06 COLLATERAL. Each of the Lenders represents to each
Agent and each of the other Lenders that it in good faith is not relying upon
any "margin stock" (as defined in Regulation U) as collateral in the
extension or maintenance of the credit provided for in this Agreement.
Section 9.07 CALIFORNIA LAW; SUBMISSION TO JURISDICTION. This
Agreement and each Note shall be construed in accordance with and governed by
the laws of the State of California. The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Central
District of California and of any California State court sitting in Los
Angeles, California for purposes of all legal proceedings arising out of or
relating to this Agreement or the transactions contemplated hereby. The
Borrower irrevocably, waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of
any such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient forum.
Section 9.08 COUNTERPARTS; INTEGRATION. This Agreement may be
signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the
same instrument. This Agreement constitutes the entire agreement and
understanding among the parties hereto and supersedes any and all prior
agreements and understandings, oral or written, relating to the subject
matter hereof.
Section 9.09 SEVERAL OBLIGATIONS. The obligations of the Lenders
hereunder are several. Neither the failure of any Lender to carry out its
obligations hereunder nor the failure of this Agreement to be duly
authorized, executed and delivered by any Lender shall relieve any other
Lender of its obligations hereunder (or affect the rights hereunder of such
other Lender). No Lender shall be responsible for the obligations of, or any
action taken or omitted by, any other Lender hereunder.
Section 9.10 SHARING OF SET-OFFS. Each Lender agrees that if it
shall, by exercising any right of set-off or counterclaim or otherwise,
receive payment of a proportion of the aggregate amount of principal and
interest due with respect to any Note held by it which is greater than the
proportion received by any other Lender in respect of the aggregate amount of
principal and interest due with respect to any Note held by such other
Lender, the Lender receiving such proportionately greater payment shall
purchase such participations in the Notes held by the other Lenders, and such
other adjustments shall be made, as may be required so that all such payments
of principal and interest with respect to the Notes held by the Lenders shall
be shared by the Lenders pro rata; PROVIDED that nothing in this Section
shall impair the right of any
62
Lender to exercise any right of set-off or counterclaim it may have and to
apply the amount subject to such exercise to the payment of indebtedness of
the Borrower other than its indebtedness under the Notes. The Borrower
agrees, to the fullest extent it may effectively do so under applicable law,
that any holder of a participation in a Note, whether or not acquired
pursuant to the foregoing arrangements, may exercise rights of set-off or
counterclaim and other rights with respect to such participation as fully as
if such holder of a participation were a direct creditor of the Borrower in
the amount of such participation.
63
Section 9.11 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
AGENTS AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
PARK PLACE ENTERTAINMENT CORPORATION
By: Scott LaPorta
---------------------------
Scott LaPorta, Executive Vice President and
Chief Financial Officer
Address for Notices:
Telecopier number:
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Administrative Agent
By: Janice Hammond
---------------------------
Janice Hammond, Vice President
Bank of America National Trust and Savings
Association
555 South Flower Street
11th Floor
Los Angeles, California 90071
Attn: Janice Hammond
Telecopier: (213) 228-2299
Telephone: (213) 228-9861
64
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION
By: Scott L. Faber
----------------------------
Scott L. Faber, Vice President
THE BANK OF NEW YORK
By: Lisa Y. Brown
----------------------------
Lisa Y. Brown, Vice President
SOCIETE GENERALE
By: Donald Schubert
----------------------------
Donald Schubert, Managing Director
PNC BANK, NATIONAL ASSOCIATION
By: Gary Wessels
----------------------------
Gary Wessels, Vice President
CREDIT SUISSE FIRST BOSTON
By: Chris T. Horgan
----------------------------
Chris T. Horgan, Vice President
By: Kristin Lepri
----------------------------
Title: Associate
-------------------------
65
THE FIRST NATIONAL BANK OF CHICAGO
By: Mark A. Isley
----------------------------
Mark A. Isley, First Vice President
FIRST UNION NATIONAL BANK
By: John Reid
----------------------------
John Reid
Title: Vice President
-------------------------
WACHOVIA BANK
By: Charles S. Zimmerman
----------------------------
Charles S. Zimmerman
Title: Vice President
-------------------------
WELLS FARGO BANK, N.A.
By: Kathleen S. Stone
----------------------------
Kathleen S. Stone, Vice President
BANKBOSTON, N.A.
By: Daniel P. Gilbert
----------------------------
Daniel P. Gilbert, Vice President
66
CREDIT LYONNAIS LOS ANGELES BRANCH
By: Dianne M. Scott
----------------------------
Dianne M. Scott, First Vice President
and Manager
FLEET BANK N.A.
By: John Harrison
----------------------------
John Harrison, Senior Vice President
FIRST SECURITY BANK, N.A.
By: David P. Williams
----------------------------
David P. Williams, Vice President
ABN-AMRO BANK N.V.
By: Michael M. Tolentino
----------------------------
Title: Vice President
-------------------------
By: Jeffrey A. French
----------------------------
Title: Group Vice President & Director
-------------------------
BANK OF HAWAII
By: Robert M. Wheeler, III
----------------------------
Robert M. Wheeler, III, Vice President
67
COMMERZBANK AG, LOS ANGELES BRANCH
By: Christian Jagenberg
-------------------------------------
Christian Jagenberg, SVP and Manager
By: Karla Wirth
-----------------------------
Karla Wirth, Assistant Treasurer
HIBERNIA NATIONAL BANK
By: Ross W. Wales
-------------------------------
Ross S. Wales, Vice President
MERRILL LYNCH CAPITAL CORPORATION
By: David Dysenchuk
----------------------------
David Dysenchuk
Title: Managing Director
---------------------------
THE NORTHERN TRUST COMPANY
By: John E. Burda
------------------------------
Title: Second Vice President
-----------------------------
By: James F.T. Monhart
--------------------------------
Title: Senior Vice President
-------------------------------
U.S. BANK NATIONAL ASSOCIATION
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By: Dale Parshall
--------------------------
Dale Parshall, Vice President
WHITNEY NATIONAL BANK
By: John Zollinger
---------------------------
John Zollinger, Vice President
COMERICA WEST INCORPORATED
By: Eoin P. Collins
----------------------------
Eoin P. Collins, Account Officer
FIRST AMERICAN NATIONAL BANK, operating as
DEPOSIT GUARANTY NATIONAL BANK
By: Larry C. Ratzlaff
------------------------------
Larry C. Ratzlaff, Senior Vice President
FIRST TENNESSEE BANK NATIONAL ASSOCATION
By: Jim Moore
----------------------
Jim Moore
Title: Vice President
------------------------
HANCOCK BANK
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By: John S. Hall
-------------------------
John S. Hall, Senior Vice President
TRUSTMARK NATIONAL BANK
By: Barney Daly FVP
----------------------------
Barney Daly, First Vice President
THE PEOPLES BANK, BILOXI, MISSISSIPPI
By: Robert M. Tucei - Sr.V.P.
--------------------------------------
Robert M. Tucei, Senior Vice President
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Schedule 1 -
Lender Commitments
-71-
Schedule 2 - Pricing Schedule - 364 Day Facility
This Schedule 2 is attached to and made a part of the Short Term Credit
Agreement dated as of December 31, 1998 among Park Place Entertainment
Corporation, a Delaware corporation, the Lenders, Syndication Agent and
Documentation Agent referred to therein, Bank of America National Trust and
Savings Association, as Administrative Agent, and NationsBanc Montgomery
Securities, LLC as Lead Arranger (the "Credit Agreement"). Capitalized terms
used in this Schedule 2 are used with the meanings set forth for those terms
in the Credit Agreement.
The "Euro-Dollar Margin," "Base Rate Margin," and "Facility Fee Rate"
referred to in the Credit Agreement shall be determined for any day on the
basis of the Status (as defined below) of the Borrower as of that date,
provided, that in the event that Borrower fails to deliver any Compliance
Certificate or Pricing Certificate on the date when required by Section 5.01,
and it is ultimately determined that the Status of Borrower would have been
changed on the basis of such delivery, then (a) the rate at which interest,
facility fees, and letter of credit fees accrue under the Credit Agreement
shall be increased in accordance with this Schedule, with retroactive effect
to the first day of the Pricing Period to which such Compliance Certificate
relates, and (b) Borrower shall, within 10 Business Days of a request by the
Administrative Agent, make such additional payments to the Lenders through
the Administrative Agent as are required to give effect to such increased
interest rates, facility fees and letter of credit fees in respect of any
payments previously made by Borrower. As of each date of determination, the
Euro-Dollar Margin and Facility Fee Rates shall equal the percentages set
forth below under the column corresponding to the Status that exists on such
day, PROVIDED that the Euro- Dollar Margin shall be increased or decreased by
the "Margin Adjustment" described below:
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Status Level Level Level Level Level Level
I II III IV V VI
Facility Fee Rate 0.080% 0.100% 0.125% 0.150% 0.200% 0.250%
Euro-Dollar Margin 0.520% 0.650% 0.875% 0.975% 1.175% 1.500%
The "Base Rate Margin" shall, as of each date of determination, be the
percentage, not less than 0.000% per annum, which is equal to the then
prevailing Euro-Dollar Margin (after adjustment upwards or downwards by the
Margin Adjustment), MINUS 1.250%
As of each date of determination, the Status of the Borrower shall be
determined on the basis of:
(a) the Borrower's Debt Rating as of that date; or
(b) from and after March 1, 2000 the Leverage Ratio as of the last day of
the fiscal quarter of Borrower ending immediately prior to the first day of
the Pricing Period in which such date of determination occurs (the
"Applicable Leverage Ratio");
whichever such criteria yields the more favorable pricing to the Borrower
according to the following standards:
"Level I Status" exists at any date if, at such date, either (x) the
Debt Rating assigned by S&P is A- or the Debt Rating assigned by Moody's is
A3 or higher, or (y) the Applicable Leverage Ratio is less than 1.50:1.
"Level II Status" exists at any date if, at such date, (i) either (x)
the Debt Rating assigned by S&P is BBB+ or higher or the Debt Rating
assigned by Moody's is Baa1 or higher, or (y) the Applicable Leverage Ratio
is less than 2.25:1 and (ii) Level I Status does not exist.
"Level III Status" exists at any date, if, at such date, (i) either
(x) the Debt Rating assigned by S&P is BBB or higher or the Debt Rating
assigned by Moody's is Baa2 or higher, or (y) the Applicable Leverage Ratio
is less than 3.00:1 and (ii) neither Level I Status nor Level II Status
exists.
"Level IV Status" exists at any date, if, at such date, (i) either (x)
the Debt Rating assigned by S&P is BBB- or higher or the Debt Rating
Assigned by Moody's is Baa3 or higher, or (y) the Applicable Leverage Ratio
is less than 3.75 and (ii) none of Level I Status, Level II Status or Level
III Status exists.
"Level V Status" exists at any date, if, at such date, (i) either (x)
the Debt Rating assigned by S&P is BB+ or higher or the Debt Rating
assigned by Moody's is Ba1 or higher or (y) the Applicable Leverage Ratio
is less than 4.25:1 and (ii) none of Level I Status, Level II Status, Level
III Status or Level IV Status exists.
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"Level VI Status" exists at any date if, at such date, no such other
Status exists.
For purposes of this Schedule, the following terms have the following
meanings, subject to the final two paragraphs of this Schedule:
"Margin Adjustment" means, (a) as of any date of determination when the
Applicable Leverage Ratio is in excess of 3.50:1 but equal to or less than
4.00:1, an incremental interest margin of 0.075% per annum to be added to the
Euro-Dollar Margin in determining the rate applicable to Euro-Dollar Loans,
(b) as of any date of determination when the Applicable Leverage Ratio is in
excess of 4.00:1, an incremental interest margin of 0.150% per annum to be
added to the Euro-Dollar Margin in determining the rate applicable to
Euro-Dollar Loans, and (c) as of any date of determination when the
Applicable Leverage Ratio is less than 2.00:1, a deduction of 0.075% per
annum to be subtracted from the Euro-Dollar Margin in determining the rate
applicable to Euro-Dollar Loans.
"Debt Rating" means, as of any date of determination, the rating
assigned by the Rating Agencies to the senior unsecured long-term debt
securities of the Borrower without third-party credit enhancement (and any
rating assigned to any other debt security of the Borrower shall be
disregarded) as of the close of business on such date, provided that (a)
during the period between the Effective Date and March 31, 2000, to the
extent that no such credit rating has been assigned, a credit rating of BBB-
shall be assumed, (b) if such securities receive a split-rating and the
rating differential is one level, the higher of the two ratings will apply
(e.g. A-/Baa1 results in Level I Status and A-/Baa2 results in Level II
Status), and (c) if the Borrower is split-rated and the ratings differential
is more than one level, the average of the two ratings (or the higher of any
two intermediate ratings) shall be used (e.g.. A-/Baa2 results in Level II
Status, as does A-/Baa3).
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