FIVE YEAR 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
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Accounting Terms and Determinations . . . . . . . . . . . . . . . .20
1.03 Types of Borrowings . . . . . . . . . . . . . . . . . . . . . . . .21
ARTICLE II THE CREDITS. . . . . . . . . . . . . . . . . . . . . . . . . . . .22
2.01 Commitments to Lend . . . . . . . . . . . . . . . . . . . . . . . .22
2.02 Notice of Committed Borrowings. . . . . . . . . . . . . . . . . . .22
2.03 Money Market Borrowings . . . . . . . . . . . . . . . . . . . . . .23
2.04 Swing Line Loans. . . . . . . . . . . . . . . . . . . . . . . . . .28
2.05 Conversion and Continuation of Committed Loans. . . . . . . . . . .30
2.06 Notice to Lenders; Funding of Loans . . . . . . . . . . . . . . . .31
2.07 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
2.08 Interest Rates. . . . . . . . . . . . . . . . . . . . . . . . . . .33
2.09 Upfront Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . .34
2.10 Facility Fees . . . . . . . . . . . . . . . . . . . . . . . . . . .34
2.11 Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . . . .35
2.12 Optional Termination or Reduction of Commitments by Borrower. . . .35
2.13 Optional Termination of Commitments by the Lenders. . . . . . . . .35
2.14 Scheduled Termination of Commitments. . . . . . . . . . . . . . . .36
2.15 Extensions of the Termination Date. . . . . . . . . . . . . . . . .36
2.16 Optional Prepayments. . . . . . . . . . . . . . . . . . . . . . . .37
2.17 General Provisions as to Payments . . . . . . . . . . . . . . . . .37
2.18 Funding Losses. . . . . . . . . . . . . . . . . . . . . . . . . . .38
2.19 Computation of Interest and Fees. . . . . . . . . . . . . . . . . .39
2.20 Withholding Tax Exemption . . . . . . . . . . . . . . . . . . . . .39
2.21 Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . .39
2.22 Regulation D Compensation . . . . . . . . . . . . . . . . . . . . .43
ARTICLE III CONDITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . .45
3.01 Borrowings and Issuances of Letters of Credit . . . . . . . . . . .45
3.02 Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . .46
ARTICLE IV REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . .48
4.01 Corporate Existence and Power . . . . . . . . . . . . . . . . . . .48
4.02 Corporate and Governmental Authorization; Contravention . . . . . .48
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4.03 Binding Effect. . . . . . . . . . . . . . . . . . . . . . . . . . .48
4.04 Financial Information . . . . . . . . . . . . . . . . . . . . . . .48
4.05 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
4.06 Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . .49
4.07 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50
4.08 Significant Subsidiaries. . . . . . . . . . . . . . . . . . . . . .50
4.09 Not an Investment Company . . . . . . . . . . . . . . . . . . . . .50
4.10 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . .50
4.11 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . .50
ARTICLE V COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
5.01 Information . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
5.02 Maintenance of Property; Insurance. . . . . . . . . . . . . . . . .54
5.03 Conduct of Business and Maintenance of Existence. . . . . . . . . .55
5.04 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . .55
5.05 Inspection of Property, Books and Records . . . . . . . . . . . . .55
5.06 Negative Pledge . . . . . . . . . . . . . . . . . . . . . . . . . .56
5.07 Consolidations, Mergers and Sales of Assets . . . . . . . . . . . .57
5.08 Hostile Tender Offers . . . . . . . . . . . . . . . . . . . . . . .57
5.09 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . .57
5.10 Leverage Ratio. . . . . . . . . . . . . . . . . . . . . . . . . . .58
5.11 Interest Coverage Ratio . . . . . . . . . . . . . . . . . . . . . .58
ARTICLE VI DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59
6.01 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . .59
6.02 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . .61
6.03 Cash Cover. . . . . . . . . . . . . . . . . . . . . . . . . . . . .61
ARTICLE VII THE AGENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . .63
7.01 Appointment and Authorization . . . . . . . . . . . . . . . . . . .63
7.02 Agents and Affiliates . . . . . . . . . . . . . . . . . . . . . . .63
7.03 Action by Agents. . . . . . . . . . . . . . . . . . . . . . . . . .63
7.04 Consultation with Experts . . . . . . . . . . . . . . . . . . . . .63
7.05 Liability of Agent. . . . . . . . . . . . . . . . . . . . . . . . .63
7.06 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . .64
7.07 Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . .64
7.08 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . .64
7.09 Agents' Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . .65
ARTICLE VIII CHANGE IN CIRCUMSTANCES. . . . . . . . . . . . . . . . . . . . .66
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8.01 Basis for Determining Interest Rate Inadequate or Unfair. . . . . .66
8.02 Illegality. . . . . . . . . . . . . . . . . . . . . . . . . . . . .66
8.03 Increased Cost and Reduced Return . . . . . . . . . . . . . . . . .67
8.04 Base Rate Loans Substituted for Affected Fixed Rate Loans . . . . .69
ARTICLE IX MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . .70
9.01 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70
9.02 No Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . .70
9.03 Expenses; Documentary Taxes; Indemnification. . . . . . . . . . . .70
9.04 Amendments and Waivers. . . . . . . . . . . . . . . . . . . . . . .71
9.05 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . .72
9.06 Collateral. . . . . . . . . . . . . . . . . . . . . . . . . . . . .76
9.07 California Law; Submission to Jurisdiction. . . . . . . . . . . . .76
9.08 Counterparts; Integration . . . . . . . . . . . . . . . . . . . . .76
9.09 Several Obligations . . . . . . . . . . . . . . . . . . . . . . . .76
9.10 Sharing of Set-Offs . . . . . . . . . . . . . . . . . . . . . . . .77
9.11 WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . . . .78
SCHEDULES:
Schedule 1 - Lender Commitments
Schedule 2 - Pricing Schedule
EXHIBITS:
Exhibit A - Compliance Certificate
Exhibit B - Form of Note
Exhibit C - Pricing Certificate
Exhibit D - Form of Notice of Committed Borrowing
Exhibit E - Form of Money Market Quote Request
Exhibit F - Form of Invitation for Money Market Quotes
Exhibit G - Form of Money Market Quote
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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FIVE YEAR CREDIT AGREEMENT
FIVE YEAR 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 1.1 DEFINITIONS. The following terms, as used herein,
have the following meanings:
"Absolute Rate Auction" means a solicitation of Money Market Quotes setting
forth Money Market Absolute Rates pursuant to Section 2.03.
"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);
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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 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, (ii) in the case of
its Euro-Dollar Loans, its Euro-Dollar Lending Office and (iii) in the case of
its Money Market Loans, its Money Market 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.
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"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.
"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.
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"Commitment" means, as to each Lender, the commitment of that Lender to
make Loans and to participate in Letters of Credit and Swing Line 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
$1,500,000,000, 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
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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.
"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 $5,000,000.
"Debt" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by
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bonds, debentures, notes or other similar instruments, (iii) all obligations
of such Person to pay the deferred purchase price of property or services,
except trade accounts payable arising in the ordinary course of business,
(iv) all obligations of such Person as lessee which are capitalized in
accordance with generally accepted accounting principles, (v) all
indebtedness or other obligations secured by a contractual Lien on any asset
of such Person, whether or not such indebtedness or other obligations are
otherwise an obligation of such Person, and (vi) all Guarantees made by such
Person (including by way of provision of letters of credit or other
contingent obligations) with respect to indebtedness or other obligations of
any other Person which constitute "Debt" of a type or class described in
clauses (i) through (v) of this definition.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Documentation Agents" means PNC Bank, National Association and SG, in
each case in their capacity as documentation agent for the Lenders hereunder.
The capacity of the Documentation Agents is titular in nature, and the
Documentation Agents shall have no obligations or liabilities under the Loan
Documents by reason of acting in such capacity.
"Dollars" and the sign "$" 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 (and, in the
case of Swing Line Loans, Las Vegas, Nevada) 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
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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 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.
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"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.
"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 1%) 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 or Money Market Loans
(excluding Money Market Loans bearing interest at the Base Rate pursuant to
Section 8.01(a)) or any combination of the foregoing.
"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
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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.
"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.
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"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 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 principal 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.
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"Interest Period" means:
(a) 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:
(i) 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
another calendar month, in which case such Interest Period shall end on
the next preceding Euro-Dollar Business Day;
(ii) 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
(iii) 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.
(b) with respect to each Money Market LIBOR 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 accordance with Section 2.03;
provided that:
(i) 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
another calendar month, in which case such Interest Period shall end on
the next preceding Euro-Dollar Business Day;
(ii) any Interest Period which begins on the last Euro-Dollar Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
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Period) shall, subject to clause (b)(iii) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(iii) any Interest Period which would otherwise end after the Termination
Date shall end on the Termination Date.
(c) with respect to each Money Market Absolute Rate Borrowing, the period
commencing on the date of such Borrowing and ending not less than 5 days nor
more than the earlier to occur of 364 days or the Termination Date, as the
Borrower may elect in accordance with Section 2.03; provided that:
(i) 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; and
(ii) any Interest Period which would otherwise end after the Termination
Date shall end on the Termination Date.
"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.
"Issuing Lender" means Bank of America, in its capacity as issuer of a
Letter of Credit hereunder.
"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.
"LC Fee Rate" has the meaning set forth in Section 2.11.
"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
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and shall include, as the context may require, the Issuing Lender in its
capacity as Issuing Lender.
"Letter of Credit" means a letter of credit to be issued hereunder by the
Issuing Lender in accordance with Section 2.21.
"Letter of Credit Commitment" means the lesser of (x) $250,000,000 and (y)
the aggregate Commitments.
"Letter of Credit Liabilities" means, for any Lender and at any time, such
Lender's ratable participation in the sum of (x) the amounts then owing by the
Borrower in respect of amounts drawn under Letters of Credit and (y) the
aggregate amount then available for drawing under all Letters of Credit.
"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.
"LIBOR Auction" means a solicitation of Money Market Quotes setting forth
Money Market Margins based on the London Interbank Offered Rate pursuant to
Section 2.03.
"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, 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 or a Money Market Loan
and "Loans" means Base Rate Loans or Euro-Dollar Loans or Money Market Loans or
any combination of the foregoing.
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"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.
"Maximum Money Market Loan Amount" has the meaning set forth in Section
2.03(a).
"Money Market Absolute Rate" has the meaning set forth in Section 2.03(d).
"Money Market Absolute Rate Loan" means a loan to be made by a Lender
pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each Lender, its Domestic
Lending Office or such other office, branch or affiliate of such Lender as it
may hereafter designate as its Money Market Lending office by notice to the
Borrower and the Agent; provided that any Lender may from time to time by notice
to the Borrower and the Administrative Agent designate separate Money Market
Lending Offices for its Money Market LIBOR Loans, on the one hand, and its Money
Market Absolute Rate Loans, on the other hand, in which case all references
herein to the Money Market Lending Office of such Lender shall be deemed to
refer to either or both of such offices, as the context may require.
"Money Market LIBOR Loan" means a loan to be made by a Lender pursuant to a
LIBOR Auction (including such a loan bearing interest at the Base Rate pursuant
to Section 8.02).
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"Money Market Loan" means a Money Market LIBOR Loan or a Money Market
Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in Section 2.03(d).
"Money Market Quote" means an offer by a Lender to make a Money Market Loan
in accordance with Section 2.03.
"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.
"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) or a Notice of Money Market Borrowing (as defined in Section
2.03(f)).
"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.
"Notice of Issuance" has the meaning set forth in Section 2.21 (b) .
"Notice of Money Market Borrowing" has the meaning set forth in Section
2.03(f).
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"Other Commitments" means the lending commitments of the Lenders under the
Short Term 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
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.
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"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.
"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 and the aggregate amount of Letter of Credit Liabilities.
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"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 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
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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.
"Swing Line" means the revolving line of credit established by the Swing
Line Lender in favor of Borrower pursuant to Section 2.04.
"Swing Line Loans" means Loans made by the Swing Line Lender to Borrower
pursuant to Section 2.04.
"Swing Line Lender" means, when acting in such capacity, Bank of America
(through its Nevada Corporate Banking Division), its successors and assigns.
"Swing Line Documents" means the promissory note and any other documents
executed by Borrower in favor of the Swing Line Lender in connection with the
Swing Line.
"Swing Line Outstandings" means, as of any date of determination, the
aggregate principal Indebtedness of Borrower on all Swing Line Loans then
outstanding.
"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 31, 2003, 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, while a "Money Market Borrowing" is a
Borrowing under Section 2.03 in which the Lender participants are determined
in accordance therewith).
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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, Money Market Loans and Swing Line Loans plus the Letter of
Credit Liabilities 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 2.16,
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 (or, if
the Borrower shall have requested Money Market Quotes in an Absolute Rate
Auction to be submitted on such date but shall not have accepted such Money
Market Quotes in the full amount requested, then the Borrower may give a
Notice of Committed Borrowing not later than 10:00 A.M. (California local
time) on such date for the smallest amount permitted under Section 2.01 which
is sufficient to fund the shortfall), 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
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(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.
Section 2.03 MONEY MARKET BORROWINGS.
(a) THE MONEY MARKET OPTION. In addition to Committed Borrowings
pursuant to Section 2.01, the Borrower may, as set forth in this Section,
request the Lenders prior to the Termination Date to make offers to make
Money Market Loans to the Borrower in Dollars in a maximum aggregate
principal amount not to exceed $1,000,000,000 at any time outstanding (the
"Maximum Money Market Loan Amount"), provided that, giving effect to the
making of each Money Market Loan, the aggregate principal outstanding amount
of all Committed Loans, Money Market Loans and Swing Line Loans plus the
Letter of Credit Liabilities shall not exceed the aggregate Commitments. The
Lenders may, but shall have no obligation to, make such offers and the
Borrower may, but shall have no obligation to, accept any such offers in the
manner set forth in this Section.
(b) MONEY MARKET QUOTE REQUEST. When the Borrower wishes to request
offers to make Money Market Loans under this Section, it shall transmit to
the Administrative Agent by telex or facsimile transmission a Money Market
Quote Request substantially in the form of Exhibit E hereto so as to be
received no later than (x) 11:30 A.M. (California local time) on the fourth
Euro-Dollar Business Day prior to the date of Borrowing proposed therein, in
the case of a LIBOR Auction or (y) 10:30 A.M. (California local time) on the
Domestic Business Day prior to the date of Borrowing proposed therein, in the
case of an Absolute Rate Auction (or, in either case, such other time or date
as the Borrower and the Administrative Agent shall have mutually agreed and
shall have notified to the Lenders not later than the date of the Money
Market Quote Request for the first LIBOR Auction or Absolute Rate Auction for
which such change is to be effective) specifying:
(i) the proposed date of Borrowing, which shall be a Euro-Dollar
Business Day in the case of a LIBOR Auction or a Domestic Business Day
in the case of an Absolute Rate Auction,
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(ii) the aggregate amount of such Borrowing, which (A) when added
to the aggregate amount of all Money Market Loans then outstanding shall
not exceed the Maximum Money Market Loan Amount and (B) shall be $5,000,000
or a larger multiple of $1,000,000,
(iii) the duration of the Interest Period applicable thereto, subject
to the provisions of the definition of Interest Period, and
(iv) whether the Money Market Quotes requested are to set forth a
Money Market Margin or a Money Market Absolute Rate.
The Borrower may request offers to make Money Market Loans for no more than
three Interest Periods in a single Money Market Quote Request, and no more
than twelve Money Market Loans shall be outstanding at any time. No Money
Market Quote Request shall be given within five Euro-Dollar Business Days (or
such other number of days as the Borrower and the Administrative Agent may
agree) of any other Money Market Quote Request.
(c) INVITATION FOR MONEY MARKET QUOTES. Promptly upon receipt of a
Money Market Quote Request, the Administrative Agent shall send to the
Lenders by telex or facsimile transmission an Invitation for Money Market
Quotes substantially in the form of Exhibit F hereto, which shall constitute
an invitation by the Borrower to each Lender to submit Money Market Quotes
offering to make the Money Market Loans to which such Money Market Quote
Request relates in accordance with this Section.
(d) SUBMISSION AND CONTENTS OF MONEY MARKET QUOTES.
Each Lender may submit a Money Market Quote containing an offer or
offers to make Money Market Loans in response to any Invitation for Money
Market Quotes. Each Money Market Quote must comply with the requirements of
this subsection (d) and must be submitted to the Administrative Agent by
telex or facsimile transmission at its offices specified in or pursuant to
Section 9.01 not later than (x) 8:00 A.M. (California local time) on the
fourth Euro-Dollar Business Day prior to the proposed date of Borrowing, in
the case of a LIBOR Auction or (y) 8:00 A.M. (California local time) on the
Domestic Business Day immediately preceding the proposed date of Borrowing,
in the case of an Absolute Rate Auction (or, in either case, such other time
or date as the Borrower and the Administrative Agent shall have
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mutually agreed and shall have notified to the Lenders not later than the
date of the Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be effective); provided
that Money Market Quotes submitted by the Administrative Agent (or any
affiliate of the Administrative Agent) in the capacity of a Lender may be
submitted, and may only be submitted, if the Administrative Agent or such
affiliate notifies the Borrower of the terms of the offer or offers contained
therein not later than (x) one hour prior to the deadline for other Lenders,
in the case of a LIBOR Auction or (y) 15 minutes prior to the deadline for
other Lenders, in the case of an Absolute Rate Auction. Subject to Articles
III and VI, any Money Market Quote so made shall be irrevocable except with
the written consent of the Administrative Agent given on the instructions of
the Borrower.
(e) Each Money Market Quote shall be in substantially the form of
Exhibit G hereto and shall in any case specify:
(i) the proposed date of Borrowing,
(ii) the principal amount of the Money Market Loan for which each
such offer is being made, which principal amount (w) may be greater than
or less than the Commitment of the quoting Lender, (x) must be $5,000,000
or a larger multiple of $1,000,000, (y) may not exceed the principal
amount of Money Market Loans for which offers were requested and (z) may
be subject to an aggregate limitation as to the principal amount of Money
Market Loans for which offers being made by such quoting Lender may be
accepted,
(iii) in the case of a LIBOR Auction, the margin above or below the
applicable London Interbank Offered Rate (the "Money Market Margin")
offered for each such Money Market Loan, expressed as a percentage
(specified to the nearest 1/10,000th of 1%) to be added to or subtracted
from such base rate,
(iv) in the case of an Absolute Rate Auction, the rate of interest
per annum (specified to the nearest 1/10,000th of 1%)
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(the "Money Market Absolute Rate") offered for each such Money Market
Loan, and
(v) the identity of the quoting Lender.
A Money Market Quote may set forth up to five separate offers by the quoting
Lender with respect to each Interest Period specified in the related
Invitation for Money Market Quotes.
(f) Any Money Market Quote shall be disregarded if it:
(i) is not substantially in conformity with Exhibit G hereto or does
not specify all of the information required by subsection (d)(ii);
(ii) contains qualifying, conditional or similar language, except as
provided in subsection (d)(ii)(B)(z);
(iii) proposes terms other than or in addition to those set forth in
the applicable Invitation for Money Market Quotes, except as provided in
subsection (d)(ii)(B)(z); or
(iv) arrives after the time set forth in subsection (d)(i) .
(g) NOTICE TO BORROWER. The Administrative Agent shall promptly notify
the Borrower of the terms (i) of any Money Market Quote submitted by a Lender
that is in accordance with subsection (d) and (ii) of any Money Market Quote
that amends, modifies or is otherwise inconsistent with a previous Money
Market Quote submitted by such Lender with respect to the same Money Market
Quote Request. Any such subsequent Money Market Quote shall be disregarded
by the Administrative Agent unless such subsequent Money Market Quote is
submitted solely to correct a manifest error in such former Money Market
Quote. The Administrative Agent's notice to the Borrower shall specify (A)
the aggregate principal amount of Money Market Loans for which offers have
been received for each Interest Period specified in the related Money Market
Quote Request, (B) the respective principal amounts and Money Market Margins
or Money Market Absolute Rates, as the case may be, so offered and (C) if
applicable, limitations on the aggregate principal amount of Money
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Market Loans for which offers in any single Money Market Quote may be
accepted.
(h) ACCEPTANCE AND NOTICE BY BORROWER. Not later than (x) 8:30 A.M.
(California local time) on the third Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction or (y) 8:30 A.M.
(California local time) on the proposed date of Borrowing, in the case of an
Absolute Rate Auction (or, in either case, such other time or date as the
Borrower and the Administrative Agent shall have mutually agreed and shall
have notified to the Lenders not later than the date of the Money Market
Quote Request for the first LIBOR Auction or Absolute Rate Auction for which
such change is to be effective), the Borrower shall notify the Administrative
Agent of its acceptance or non-acceptance of the offers so notified to it
pursuant to subsection (e). In the case of acceptance, such notice (a
"Notice of Money Market Borrowing") shall specify the aggregate principal
amount of offers for each Interest Period that are accepted. The Borrower
may accept any Money Market Quote in whole or in part; PROVIDED that:
(i) the aggregate principal amount of each money Market Borrowing
may not exceed the applicable amount set forth in the related Money Market
Quote Request,
(ii) the principal amount of each Money Market Borrowing must be
$5,000,000 or a larger multiple of $1,000,000,
(iii) acceptance of offers may only be made on the basis of ascending
Money Market Margins or Money Market Absolute Rates, as the case may be,
and
(iv) the Borrower may not accept any offer that is described in
subsection (d)(iii) or that otherwise fails to comply with the requirements
of this Agreement.
(i) ALLOCATION BY ADMINISTRATIVE AGENT. If offers are made by two or
more Lenders with the same Money Market Margins or Money Market Absolute
Rates, as the case may be, for a greater aggregate principal amount than the
amount in respect of which such offers are permitted to be accepted for the
related Interest Period, the principal amount of Money Market Loans in
respect of which such offers are accepted shall be allocated by the
Administrative Agent among such Lenders as nearly as possible (in multiples
of
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$1,000,000, as the Administrative Agent may deem appropriate) in proportion
to the aggregate principal amounts of such offers. Determinations by the
Administrative Agent of the amounts of Money Market Loans shall be conclusive
in the absence of manifest error.
(j) EFFECT ON COMMITMENTS. Any Money Market Loans made by a Lender
pursuant to this Section shall not reduce such Lender's pro rata share of the
remaining undrawn Commitments.
(k) MATURITY OF MONEY MARKET LOANS. Each Money Market Loan shall
mature, and the principal amount thereof shall be due and payable, on the
last day of the Interest Period applicable to that Money Market Loan.
Section 2.04 SWING LINE LOANS.
The Swing Line Lender shall from time to time from the Effective Date
through the day prior to the Termination Date make Swing Line Loans in
Dollars to Borrower in such amounts as Borrower may request, PROVIDED that
(i) after giving effect to such Swing Line Loan, (A) the aggregate Swing Line
Outstandings shall not exceed $15,000,000 and (B) the aggregate principal
outstanding amount of all Committed Loans, Money Market Loans and Swing Line
Loans plus the Letter of Credit Liabilities shall not exceed the aggregate
Commitments, (ii) without the consent of all of the Lenders, no Swing Line
Loan may be made during the continuation of any Default or Event of Default
and (iii) the Swing Line Lender has not given at least twenty-four hours
prior notice to Borrower that availability under the Swing Line is suspended
or terminated. Borrower may borrow, repay and reborrow under this Section.
Unless notified to the contrary by the Swing Line Lender, borrowings under
the Swing Line may be made in amounts which are integral multiples of
$1,000,000 upon telephonic request by a Responsible Official of Borrower made
to the Administrative Agent not later than 1:00 P.M. (California local time),
on the Domestic Business Day of the requested Swing Line Loan (which
telephonic request shall be promptly confirmed in writing by telecopier).
Promptly after receipt of such a request for a Swing Line Loan, the
Administrative Agent shall provide telephonic verification to the Swing Line
Lender that the requested Swing Line Loan is in conformity with this Section.
Unless the Swing Line Lender otherwise agrees, each repayment of a Swing Line
Loan shall be in an amount which is an integral multiple of $1,000,000. If
Borrower instructs the Swing Line Lender to debit its demand deposit account
at the Swing Line Lender in the amount of any payment with respect to a Swing
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Line Loan, or the Swing Line Lender otherwise receives repayment, after 3:00
p.m. (California local time), on a Domestic Business Day, such payment shall
be deemed received on the next Domestic Business Day. The Swing Line Lender
shall promptly notify the Administrative Agent of the Swing Loan Outstandings
each time there is a change therein.
The Swing Line Lender shall be responsible for submitting invoices to
Borrower for such interest. The interest payable on Swing Line Loans shall
be solely for the account of the Swing Line Lender unless and until the Banks
fund their participations therein pursuant to clause (d) of this Section.
The Swing Line Loans shall be payable on demand made by the Swing Line
Lender and in any event on the Termination Date.
Upon the making of a Swing Line Loan, each Lender shall be deemed to
have purchased from the Swing Line Lender a participation therein in an
amount equal to that Lender's percentage of the aggregate Commitments TIMES
the amount of the Swing Line Loan. Upon demand made by the Swing Line
Lender, each Lender shall, according to such percentage, promptly provide to
the Swing Line Lender its purchase price therefor in an amount equal to its
participation therein. The obligation of each Lender to so provide its
purchase price to the Swing Line Lender shall be absolute and unconditional
and shall not be affected by the occurrence of a Default or Event of Default.
Each Lender that has provided to the Swing Line Lender the purchase price due
for its participation in Swing Line Loans shall thereupon acquire a pro rata
participation, to the extent of such payment, in the claim of the Swing Line
Lender against Borrower for principal and interest and shall share, in
accordance with that pro rata participation, in any principal payment made by
Borrower with respect to such claim and in any interest payment made by
Borrower (but only with respect to periods subsequent to the date such Lender
paid the Swing Line Lender its purchase price) with respect to such claim.
In the event that the Swing Line Outstandings are in excess of
$10,000,000 on three consecutive Domestic Business Days then, on the next
Domestic Business Day (unless Borrower has made other arrangements acceptable
to the Swing Line Lender to reduce the Swing Line Outstandings below
$10,000,000), Borrower shall request a Borrowing in an amount sufficient to
reduce the Swing Line Outstandings below $10,000,000. In addition, upon any
demand for payment of the Swing Line Outstandings by the Swing Line Lender
(unless Borrower has made other arrangements acceptable
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to the Swing Line Lender to reduce the Swing Line Outstandings to $0),
Borrower shall request a Borrowing in an amount sufficient to repay all Swing
Line Outstandings (and, for this purpose, the limitations as to the minimum
amounts of Base Rate Borrowings set forth in Section 2.01 shall not apply).
In each case, the Administrative Agent shall automatically provide the
responsive Loans made by each Lender to the Swing Line Lender (which the
Swing Line Lender shall then apply to the Swing Line Outstandings). In the
event that Borrower fails to request a Borrowing within the time specified by
Section 2.02 on any such date, the Administrative Agent may, but shall not be
required to, without notice to or the consent of Borrower, cause Loans to be
made by the Lenders under their Commitments in amounts which are sufficient
to reduce the Swing Line Outstandings as required above. The conditions
precedent set forth in Section 3.01 shall not apply to Loans to be made by
the Lenders pursuant to the three preceding sentences. The proceeds of such
Loans shall be paid directly to the Swing Line Lender for application to the
Swing Line Outstandings.
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
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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.
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
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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 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.
Each Lender may, by notice to the Borrower and the Administrative Agent,
request that its Money Market Loans be evidenced by a separate Note in an
amount equal to the aggregate unpaid principal amount of such Money Market
Loans. Each such Note shall be in substantially the form of Exhibit B hereto
with appropriate modifications to reflect the fact that it evidences solely
Money Market Loans. Each reference in this Agreement to the "Note" of such
Lender shall be deemed to refer to and include any or all of such Notes, as
the context may require.
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
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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 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) Subject to Section 8.01(a), each Money Market LIBOR Loan shall bear
interest on the outstanding principal amount thereof, for the Interest Period
applicable thereto, at a rate per annum equal to the sum of the London
Interbank Offered Rate for such Interest Period (determined as if the related
Money Market LIBOR Borrowing
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were a Euro-Dollar Borrowing) plus (or minus) the Money Market Margin quoted
by the Lender making such Loan in accordance with Section 2.03. Each Money
Market Absolute Rate Loan shall bear interest on the outstanding principal
amount thereof, for the Interest Period applicable thereto, at a rate per
annum equal to the Money Market Absolute Rate quoted by the Lender making
such Loan in accordance with Section 2.03. 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. Any overdue principal of or interest on any Money Market Loan shall
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 for such day.
(e) Swing Line Loans shall bear interest at a fluctuating rate per
annum equal to the Base Rate PLUS any applicable Base Rate Margin. Interest
on the Swing Line Loans shall be payable on such dates, not more frequent
than monthly, as may be specified by the Swing Line Lender and in any event
on the Termination Date. Any overdue principal of or interest on any Swing
Line Loan shall 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 for such day.
(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 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 2.10 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 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.
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Section 2.11 LETTER OF CREDIT FEES. The Borrower shall pay to the
Administrative Agent (i) for the account of the Lenders ratably a Letter of
Credit fee accruing daily on the aggregate amount then available for drawing
under all Letters of Credit at a rate per annum determined in accordance with
the Schedule 2 (the "LC Fee Rate") and (ii) for the account of the Issuing
Lender a Letter of Credit fronting fee accruing daily on the aggregate amount
then available for drawing under all Letters of Credit issued by the Issuing
Lender at a rate per annum set forth in a letter agreement between the
Borrower and the Issuing Lender. Letter of Credit fees shall 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 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 or Letter of Credit
Liabilities 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 sum of the aggregate outstanding principal balance of the Loans
and the aggregate amount of Letter of Credit Liabilities.
Section 2.13 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
Banks 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 (i) to the extent that there is
then any Debt evidenced by the Notes, the same shall be immediately due and
payable, and (ii) to the extent that any Letters of Credit are then
outstanding, Borrower shall provide cash collateral for the same.
Section 2.14 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.
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Section 2.15 EXTENSIONS OF THE TERMINATION DATE. The Termination Date
may be extended, in the manner set forth in this Section, for a period of one
year 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 30 days (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
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Lenders, the Termination Date shall be extended, effective on such Extension
Date, for a period of one year to the date stated in such Extension
Agreement.
Section 2.16 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 any Money Market
Borrowing bearing interest with reference to the Base Rate pursuant to
Section 8.01(a)) or upon at least three Euro-Dollar Business Days' notice to
the Administrative Agent, with 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.
Except as provided in Section 2.16(a), the Borrower may not prepay all
or any portion of the principal amount of any Money Market Loan prior to the
maturity thereof.
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 2.17 GENERAL PROVISIONS AS TO PAYMENTS.
The Borrower shall make each payment of principal of, and interest on,
Loans and Letters of Credit Liabilities 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 Letters of Credit Liabilities 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
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the next succeeding Domestic Business Day. Whenever any payment of principal
of, or interest on, the Euro-Dollar Loans or Money Market LIBOR 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. Whenever any payment of principal of, or interest
on, the Money Market Absolute Rate 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. 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
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 2.18 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 the last day of an applicable period fixed pursuant to
Section 2.08(d), 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.
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Section 2.19 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 2.20 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 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 2.21 LETTERS OF CREDIT.
(a) Subject to the terms and conditions hereof, the Issuing Lender
agrees to issue Letters of Credit hereunder from time to time before the
tenth day before the Termination Date upon the request of the Borrower;
PROVIDED that, immediately after each Letter of Credit is issued, (i)
the aggregate amount of the Letter of Credit Liabilities shall not
exceed the Letter of Credit Commitment and (ii) the aggregate amount of
the Letter of Credit Liabilities
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plus the aggregate outstanding amount of all Loans shall not exceed-the
aggregate amount of the Commitments. Upon the date of issuance of a
Letter of Credit, the Issuing Lender shall be deemed, without further
action by any party hereto, to have sold to each Lender, and each Lender
shall be deemed, without further action by any party hereto, to have
purchased from the Issuing Lender, a participation in such Letter of
Credit and the related Letter of Credit Liabilities in the proportion
their respective Commitments bear to the aggregate Commitments.
(b) The Borrower shall give the Issuing Lender notice at least
five days prior to the requested issuance of a Letter of Credit
specifying the date such Letter of Credit is to be issued, and
describing the terms of such Letter of Credit and the nature of the
transactions to be supported thereby (such notice, including any such
notice given in connection with the extension of a Letter of Credit, a
"Notice of Issuance") and shall concurrently submit to the Issuing Bank
a letter of credit application on the Issuing Bank's then standard form
for the issuance of letters of credit. Upon receipt of a Notice of
Issuance, the Issuing Lender shall promptly notify the Administrative
Agent, and the Administrative Agent shall promptly notify each Lender of
the contents thereof and of the amount of such Lender's participation in
such Letter of Credit. The issuance by the Issuing Lender of each
Letter of Credit shall, in addition to the conditions precedent set
forth in Article III, be subject to the conditions precedent that such
Letter of Credit shall be in such form and contain such terms as shall
be satisfactory to the Issuing Lender and that the Borrower shall have
executed and delivered such other instruments and agreements relating to
such Letter of Credit as the Issuing Lender shall have reasonably
requested. The Borrower shall also pay to the Issuing Lender for its
own account issuance, drawing, amendment and extension charges in the
amounts and at the times as agreed between the Borrower and the Issuing
Lender. The extension or renewal of any Letter of Credit shall be
deemed to be an issuance of such Letter of Credit, and if any Letter of
Credit contains a provision pursuant to which it is deemed to be
extended unless notice of termination is given by the Issuing Lender,
the Issuing Lender shall timely give such notice of termination unless
it has theretofore timely received a Notice of Issuance and the other
conditions to issuance of a Letter of Credit have also theretofore been
met with respect to such extension. NoLetter of Credit shall have a
term extending or be so extendible beyond the fifth Domestic Business
Day preceding the Termination Date.
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(c) Upon receipt from the beneficiary of any Letter of Credit of
any notice of a drawing under such Letter of Credit, the Issuing Lender
shall notify the Administrative Agent and the Administrative Agent shall
promptly notify the Borrower and each other Lender as to the amount to
be paid as a result of such demand or drawing and the payment date. The
Borrower shall be irrevocably and unconditionally obligated forthwith to
reimburse the Issuing Lender for any amounts paid by the Issuing Lender
upon any drawing under any Letter of Credit, without presentment,
demand, protest or other formalities of any kind. All such amounts paid
by the Issuing Lender and remaining unpaid by the Borrower shall bear
interest, payable on demand, for each day until paid at a rate per annum
equal to the sum of 2% plus the rate applicable to Base Rate Loans for
such day. In addition, each Lender will pay to the Administrative Agent,
for the account of the Issuing Lender, immediately upon the Issuing
Lender's demand at any time during the period commencing after such
drawing until reimbursement therefor in full by the Borrower, an amount
equal to such Lender's ratable share of such drawing (in proportion to
its participation therein), together with interest on such amount for
each day from the date of the Issuing Lender's demand for such payment
(or, if such demand is made after 9:00 A.M. (California local time) on
such date, from the next succeeding Domestic Business Day) to the date
of payment by such Lender of such amount at a rate of interest per annum
equal to the Federal Funds Rate. The Issuing Lender will promptly pay
to each Lender ratably all amounts received from the Borrower for
application in payment of its reimbursement obligations in respect of
any Letter of Credit, but only to the extent such Lender has made
payment to the Issuing Lender in respect of such Letter of Credit
pursuant hereto.
(d) The obligations of the Borrower and each Lender under
subsection (c) above shall be absolute, unconditional and irrevocable,
and shall be performed strictly in accordance with the terms of this
Agreement, under all circumstances whatsoever, including without
limitation the following circumstances:
(i) any lack of validity or enforceability of this Agreement
or any Letter of Credit or any document related hereto or thereto;
(ii) any amendment, waiver of or any consent to departure from
all or any of the provisions of this Agreement, any Letter of Credit
or any document related hereto or thereto;
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(iii) the use which may be made of the Letter of Credit by, or
any acts or omission of, a beneficiary of a Letter of Credit (or any
Person for whom the beneficiary may be acting);
(iv) the existence of any claim, set-off, defense or other
rights that the Borrower may have at any time against a beneficiary
of a Letter of Credit (or any Person for whom the beneficiary may be
acting), the Lenders (including the Issuing Lender) or any other
Person, whether in connection with this Agreement or the Letter of
Credit or any document related hereto or thereto or any unrelated
transaction;
(v) any statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent or invalid in any
respect or any statement therein being untrue or inaccurate in any
respect whatsoever;
(vi) payment under a Letter of Credit to the beneficiary of
such Letter of Credit against presentation to the Issuing Lender of a
draft or certificate that does not comply with the terms of the
Letter of Credit; or
(vii) any other act or omission to act or delay of any kind by
any Lender (including the Issuing Lender), the Administrative Agent or
any other Person or any other event or circumstance whatsoever that
might, but for the provisions of this subsection (vii), constitute
a legal or equitable discharge of the Borrower's or the Lender's
obligations hereunder.
(e) The Borrower hereby indemnifies and holds harmless each Lender
(including the Issuing Lender) and the Administrative Agent from and
against any and all claims, damages, losses, liabilities, costs or
expenses which such Lender or the Administrative Agent may incur
(including, without limitation, any claims, damages, losses,
liabilities, costs or expenses which the Issuing Lender may incur by
reason of or in connection with the failure of any other Lender to
fulfill or comply with its obligations to the Issuing Lender hereunder
(but nothing herein contained shall affect any rights the Borrower may
have against such defaulting Lender)), and none of the Lenders
(including the Issuing Lender) nor the Administrative Agent nor any of
their officers or directors or employees or agents shall be liable or
responsible, by reason of or in connection with the execution and
delivery or transfer of or payment or
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failure to pay under any Letter of Credit, including without limitation any
of the circumstances enumerated in subsection (d) above, as well as (i)
any error, omission, interruption or delay in transmission or delivery
of any messages, by mail, cable, telegraph, telex or otherwise, (ii) any
error in interpretation of technical terms, (iii) any loss or delay in
the transmission of any document required in order to make a drawing
under a Letter of Credit, (iv) any consequences arising from causes
beyond the control of the Issuing Lender, including without limitation
any government acts, or any other circumstances whatsoever in making or
failing to make payment under such Letter of Credit; PROVIDED that the
Borrower shall not be required to indemnify the Issuing Lender for any
claims, damages, losses, liabilities, costs or expenses, and the
Borrower shall have a claim for direct (but not consequential) damage
suffered by it, to the extent found by a court of competent jurisdiction
to have been caused by (x) the willful misconduct or gross negligence of
the Issuing Lender in determining whether a request presented under any
Letter of Credit complied with the terms of such Letter of Credit or (y)
the Issuing Lender's failure to pay under any Letter of Credit after the
presentation to it of a request strictly complying with the terms and
conditions of the Letter of Credit. Nothing in this subsection (e) is
intended to limit the obligations of the Borrower under any other
provision of this Agreement. To the extent the Borrower does not
indemnify the Issuing Lender as required by this subsection, the Lenders
agree to do so ratably in accordance with their Commitments.
Section 2.22 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 2.23 INCREASED COMMITMENTS; ADDITIONAL LENDERS.
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(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 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 AND ISSUANCES OF LETTERS OF CREDIT. The
obligation of any Lender to make a Loan on the occasion of any Borrowing, the
obligation of the Issuing Lender to issue (or renew or extend the term of)
any Letter of Credit and the obligation of the Swing Line Lender to make any
Swing Line Loan are each 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 or 2.03, or receipt by the Issuing Lender of a
Notice of Issuance as required by Section 2.21(b), as the case may be;
(b) immediately after such Borrowing or issuance of a Letter of Credit,
the sum of the aggregate outstanding principal amount of the Loans and Swing
Line Loans and the aggregate amount of Letter of Credit Liabilities will not
exceed the aggregate amount of the Commitments;
(c) immediately before and after such Borrowing or issuance of a Letter
of Credit, no Default or Event of Default shall have occurred and be
continuing;
(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 or issuance of such Letter of Credit; and
(e) in the case of an issuance of a Letter of Credit, immediately after
such issuance of a Letter of Credit, the aggregate amount of the Letter of
Credit Liabilities shall not exceed the Letter of Credit Commitment.
Each Borrowing and issuance of a Letter of Credit hereunder shall be deemed
to be a representation and warranty by the Borrower on the date of such
Borrowing or issuance 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):
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(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);
(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 2.07 and of the Swing Line Documents;
(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;
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(h) 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 Agreement. With respect to any
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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 or any Letter of Credit Liability
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 each Significant Subsidiary to permit,
representatives of any Lender at such Lender's expense to visit
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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;
(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
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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 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
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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) reimburse any drawing under any
Letter of Credit when required hereunder or (ii) pay when due any principal
of any Loan or Swing Line Loan under this Agreement, or (iii) pay when due
any interest on any Money Market Loan or (iv) pay within five days of the due
date thereof any other 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;
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(g) the Borrower or any Significant Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, 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 and such
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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;
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 and the Letter
of Credit Liabilities (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 and the Letter of Credit Liabilities
(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 CASH COVER. The Borrower agrees, in addition to
the provisions of Section 6.01 hereof, that upon the occurrence and during
the continuance of any Event of Default, it shall, if requested by the
Administrative Agent upon the instruction of the Required Lenders, pay to the
Administrative Agent an amount in immediately available funds (which funds
shall be held as collateral pursuant to arrangements satisfactory to the
Administrative Agent) equal to the aggregate amount available for drawing
under all Letters of Credit then outstanding at such time, provided that,
upon the occurrence of any Event of Default specified in Section 6.01(g) or
6.01(h) with respect to the Borrower or any of its Significant Subsidiaries,
the Borrower shall pay such amount forthwith without any notice or demand or
any other act by the Administrative Agent or the Lenders.
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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, the
Issuing Lender, their affiliates and their respective 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 indemnitees may suffer or incur
in connection with the Administrative Agent's and Issuing Lender's roles
under this Agreement or any related action taken or omitted by such
indemnitees 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
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discharged from its duties and obligations hereunder. After any retiring
Agent's 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, (i) if such Fixed Rate Borrowing is a Committed
Borrowing, such Borrowing shall instead be made as a Base Rate Borrowing and
(ii) if such Fixed Rate Borrowing is a Money Market LIBOR Borrowing, the
Money Market LIBOR Loans comprising such Borrowing shall bear interest for
each day from and including the first day to but excluding the last day of
the Interest Period applicable thereto at the rate applicable to Base Rate
Loans for such day. 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,
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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 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
(x) the date hereof, in the case of any Committed Loan or Letter of Credit or
any obligation to make Committed Loans or issue or participate in any Letter
of Credit or (y) the date of the related Money Market Quote, in the case of
any Money Market Loan, 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 its obligations hereunder in
respect of Letters of Credit, 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
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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 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 or its obligations hereunder in respect to Letters of Credit;
(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 of issuing or participating in any Letter of Credit, 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.
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,
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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.
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 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 8.03 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 answerback 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 or the
Issuing Lender 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, the Issuing Lender, the Swing Line Lender or any Lender, including
fees and disbursements of counsel (including the allocated
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fees and expenses of any internal counsel), in connection with such Event of
Default and collection, bankruptcy, insolvency and other enforcement
proceedings resulting therefrom. The Borrower shall indemnify each Lender
and the Swing Line 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, the Notes and the Swing Line Documents.
The Borrower agrees to indemnify each Agent, the Lead Arranger,
the Issuing Lender, the Swing Line Lender 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, the Swing Line Lender or the Issuing Lender are
affected thereby, by the Administrative Agent, the Swing Line Lender or the
Issuing Lender, as relevant); 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 the amount to be reimbursed in respect of any Letter
of Credit or interest thereon or any fees hereunder, (iii) postpone the date
fixed for any payment of principal of or interest on any Loan or the amount
to be reimbursed in respect of any Letter of Credit 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 and Letter of Credit
Liabilities, or the percentage of Lenders, which shall be required for the
Lenders
73
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.
Section 9.05 SUCCESSORS AND ASSIGNS.
(a) 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.
(b) 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
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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 assignee Lender's Commitment, and to the assigning Lender, a Note
evidencing the remaining Commitment retained by the assigning Lender.
(c) 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.
(d) 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,
75
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 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.
(e) 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.
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(f) 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 Lender to the Administrative Agent and the Borrower the option
to provide all or any part of any Committed Loan or Money Market 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 (and, if such Loan is a Money Market Loan,
shall be deemed to utilize the Commitments of all the Lenders) 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 pament in full of all outstanding senior indebtedness of any SPC, it will
not institute against, or join any other person in instituting 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
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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.
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
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and any Letter of Credit Liabilities 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 and any Letter of Credit
Liabilities held by such other Lender, the Lender receiving such
proportionately greater payment shall purchase such participations in the
Notes and Letter of Credit Liabilities 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 and Letter of Credit
Liabilities held by the Lenders shall be shared by the Lenders pro rata;
PROVIDED that nothing in this Section shall impair the right of any 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 or Letter of Credit Liability, 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.
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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
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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
-----------------
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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
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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
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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
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Larry C. Ratzlaff, Senior Vice President
FIRST TENNESSEE BANK NATIONAL ASSOCATION
By: Jim Moore
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Jim Moore
Title: Vice President
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HANCOCK BANK
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By: John S. Hall
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John S. Hall, Senior Vice President
TRUSTMARK NATIONAL BANK
By: Barney Daly FVP
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Barney Daly, First Vice President
THE PEOPLES BANK, BILOXI, MISSISSIPPI
By: Robert M. Tucei - Sr.V.P.
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Robert M. Tucei, Senior Vice President
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Schedule 1 - Lender Commitments
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Schedule 2 - Pricing Schedule - Five Year Facility
This Schedule 2 is attached to and made a part of the Five Year Credit
Agreement dated 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,""Facility Fee Rate" and "LC
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 or Pricing 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, Facility
Fee Rates and LC 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:
Status Level Level Level Level Level Level
I II III IV V VI
- - ------------------------------------------------------------------------
Facility Fee Rate 0.100% 0.125% 0.150% 0.200% 0.250% 0.300%
- - ------------------------------------------------------------------------
Euro-Dollar Margin 0.500% 0.625% 0.850% 0.925% 1.125% 1.450%
- - ------------------------------------------------------------------------
LC Fee Rate 0.600% 0.750% 1.000% 1.125% 1.375% 1.750%
- - ------------------------------------------------------------------------
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
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(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.
"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
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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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