EXHIBIT 10.01
SECOND AMENDMENT TO
CREDIT AGREEMENT
Dated as of April 5, 1999
(amending the Credit Agreement,
dated as of
February 26, 1998)
among
ALADDIN GAMING, LLC,
as the Borrower,
VARIOUS FINANCIAL INSTITUTIONS,
as the Lenders,
THE BANK OF NOVA SCOTIA,
as the Administrative Agent for the Lenders,
MERRILL LYNCH CAPITAL CORPORATION,
as the Syndication Agent for the Lenders,
and
CIBC OPPENHEIMER CORP.,
as the Documentation Agent for the Lenders.
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "SECOND AMENDMENT TO CREDIT
AGREEMENT") dated as of April 5, 1999, effective as of March 10, 1999, by and
among ALADDIN GAMING, LLC, a Nevada limited-liability company (the "BORROWER"),
the various financial institutions as are or may become parties hereto
(collectively, the "LENDERS"), THE BANK OF NOVA SCOTIA, as administrative agent
(together with any successor thereto in such capacity, the "ADMINISTRATIVE
AGENT") for the Lenders, MERRILL LYNCH CAPITAL CORPORATION, as syndication agent
(together with any successor thereto in such capacity, the "SYNDICATION AGENT")
for the Lenders, and CIBC OPPENHEIMER CORP., as documentation agent (together
with any successor thereto in such capacity, the "DOCUMENTATION AGENT") for the
Lenders.
In consideration of the mutual agreements herein contained and other good
and valuable consideration, receipt of which is hereby acknowledged, the parties
hereto, intending to be legally bound, agree as follows:
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders, the Administrative Agent, the
Syndication Agent and the Documentation Agent have heretofore entered into (x)
that certain Credit Agreement (the "CA"), dated as of February 26, 1998 and (y)
that certain First Amendment to Credit Agreement (the "FIRST AMENDMENT TO CREDIT
AGREEMENT") dated as of January 29, 1999 (the CA, as amended by the First
Amendment to Credit Agreement, shall be referred to herein as the "CREDIT
AGREEMENT"); and
WHEREAS, the Borrower has requested the Lenders to acknowledge certain
waivers under the Credit Agreement and to enter into certain amendments of the
Credit Agreement; and
WHEREAS, each of the parties hereto is willing, on the terms and subject to
the conditions hereinafter set forth, to so amend the Credit Agreement and grant
the waivers, but only upon the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the agreements contained herein, the
parties hereto agree as follows:
ARTICLE I
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DEFINITIONS
SECTION 1.1. CERTAIN DEFINED TERMS. The following terms (whether or not
italicized) when used in this Second Amendment to Credit Agreement, including
its preamble and recitals, shall, except where the context otherwise requires,
have the following meanings:
"FIRST AMENDMENT TO COMPLETION GUARANTY" shall mean that certain First
Amendment to Completion Guaranty of even date between the Completion Guarantors
and the Administrative Agent for the benefit of the Lenders.
"FIRST AMENDMENT TO CREDIT AGREEMENT" is defined in the FIRST RECITAL.
"GECC FACILITIES AGREEMENT" shall mean that certain Facilities Agreement
between General Electric Capital Corporation ("GECC"), for itself and as agent
for certain participants, and the Borrower dated as of June 26, 1998, as amended
by that certain First Amendment to Facilities Agreement between GECC, for itself
and as agent for certain participants, and the Borrower dated as of September 2,
1998, as the same may from time to time be further amended, supplemented,
amended and restated or otherwise modified in accordance with the terms of the
Credit Agreement, as amended by the Second Amendment to Credit Agreement, and
the GECC Intercreditor Agreement.
"GECC INTERCREDITOR AGREEMENT" shall mean that certain Intercreditor
Agreement by and among the Administrative Agent, GECC and the Borrower dated as
of June 30, 1998 and as thereafter from time to time amended, supplemented,
amended and restated or otherwise modified in accordance with the terms thereof.
"SECOND AMENDMENT TO CREDIT AGREEMENT" is defined in the PREAMBLE.
SECTION 1.2. OTHER DEFINED TERMS; CONSTRUCTION. For purposes of this
Second Amendment to Credit Agreement, capitalized terms used but not defined
herein shall have the meanings assigned to them in the Credit Agreement, as
amended by this Second Amendment to Credit Agreement, and the rules of
construction set forth in ARTICLE I of the Credit Agreement shall apply to this
Second Amendment to Credit Agreement.
ARTICLE II
WAIVERS BY THE LENDERS
SECTION 2.1. INDEBTEDNESS OF ALADDIN MUSIC. Aladdin Music incurred the
Indebtedness listed on SCHEDULE 2.1 to the First Amendment to Credit Agreement
which, at the time of incurrence, was not permitted under SECTION 7.2.2 of the
Credit Agreement. The
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existence of such Indebtedness by Aladdin Music constituted an Event of
Default under the Credit Agreement. Pursuant to the First Amendment to
Credit Agreement, the Lenders agreed to forbear from exercising their rights,
remedies and options under the Credit Agreement based upon such Event of
Default from January 29, 1999 until March 10, 1999 during which time such
Indebtedness was to be discharged and/or subordinated to the obligations of
the Borrower under the Loan Documents as set forth in SECTION 2.1 of the
First Amendment to Credit Agreement. All of the Indebtedness listed on
SCHEDULE 2.1 to the First Amendment to Credit Agreement has been paid by or
on behalf of Aladdin Music and the Event of Default described in SECTION 2.1
of the First Amendment to Credit Agreement is hereby waived by the Lenders.
SECTION 2.2. BALANCING THE MAIN PROJECT BUDGET. The Borrower acknowledges
that as of the date of this Second Amendment to Credit Agreement, the amount
required in order for the Main Project Budget to be In Balance is $21,202,175
(collectively, the "IN BALANCE AMOUNT"). The Pepsi-Cola Company has entered
into that certain concession agreement with the Borrower dated November 17, 1998
pursuant to which the Pepsi-Cola Company has agreed to pay the Borrower
approximately $2,750,000 at the times and in the amounts set forth in such
concession agreement. The Lenders agree that the In Balance Amount shall be
reduced by $2,750,000 so long as the Pepsi-Cola Company remains obligated to
make such payments to the Borrower and is making such payments to the Borrower
in accordance with such concession agreement. Such concession agreement shall
not be amended, modified or terminated without the prior written consent of the
Administrative Agent.
SECTION 2.3. LETTERS OF CREDIT. On or about November 30, 1998, the
Completion Guarantors delivered letters of credit to the Administrative Agent in
the aggregate amount of $6,574,000 in order to bring the Main Project Budget In
Balance. The Completion Guarantors have directed the Administrative Agent to
draw such letters of credit and deposit the proceeds thereof into the Guaranty
Deposit Account for disbursement in accordance with the Disbursement Agreement.
SECTION 2.4. RESERVATION OF RIGHTS. The Borrower agrees that neither this
Second Amendment to Credit Agreement nor the making of any Advance by the
Disbursement Agent and the Administrative Agent's consent thereto shall
constitute (w) an approval of all or any portion of any Advance Request, (x) a
waiver or forbearance by the Disbursement Agent or the Administrative Agent
under any of the Loan Documents, except as expressly set forth herein, (y) the
acceptance by the Disbursement Agent or the Administrative Agent of any course
of conduct by the Borrower or the Completion Guarantors or (z) an agreement by
the Administrative Agent to amend any of the Loan Documents without the approval
from the Required Lenders and a corresponding amendment of the GECC Facilities
Agreement. The Borrower further agrees that the Administrative Agent and the
Disbursement Agent reserve all rights, remedies and options under the Loan
Documents to require the Borrower to satisfy in all respects the conditions
relating to each Advance and perform all of its obligations under the Loan
Documents which are then due and owing or are susceptible of performance, as the
case may be.
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ARTICLE III
AMENDMENTS
SECTION 3.1. AMENDMENTS. The parties hereto hereby agree as follows:
(a) Provided that the Borrower has delivered an opinion of counsel
(the "COUNSEL OPINION") which conforms to the requirements of CLAUSE (H) of
SECTION 4.1 which expressly provides, in relevant part, that no approval is
required under the GECC Facilities Agreement or the GECC Intercreditor Agreement
for the amendment set forth below, the definition of "AVAILABLE FUNDS" in
SECTION 1.1 of the Credit Agreement shall be amended in its entirety to read as
set forth below:
"AVAILABLE FUNDS" means, from time to time, the sum of (t) so long as
no default (beyond the expiration of applicable grace, notice and cure
periods) exists under an executed lease, occupancy, concession or license
agreement (but not including any letter of intent or other interim
agreement) covering a portion of the Main Project which has been approved
by the Administrative Agent in its sole discretion (which approval may be
conditioned upon the delivery of a subordination, non-disturbance and
attornment agreement or continuation agreement, as applicable, and estoppel
certificate, each in form and content satisfactory to the Administrative
Agent in its sole discretion), amounts payable thereunder prior to the
Conversion Date for Project Costs which amounts (1) would otherwise have
been paid by the Borrower if such lease, occupancy, concession or license
agreement had not been entered into and (2) are not otherwise payments or
prepayments of rent or other periodic payments to be made for the
occupancy, use or right to market products at the Main Project as
determined by the Administrative Agent in its sole discretion, PLUS (u) the
aggregate of the unutilized Commitments (EXCLUDING, HOWEVER, the
Commitments of all Defaulting Lenders) under the Bank Credit Facility, PLUS
(v) the aggregate of the amounts on deposit in the Borrower's Funds
Account, the Construction Note Disbursement Account and all Anticipated
Earnings thereon, PLUS (w) the aggregate of the amounts on deposit in the
Guaranty Deposit Account, the Cash Management Account, the Bank Proceeds
Account, the Loss Proceeds Account and the Interest Payment Account, PLUS
(x) so long as (1) no default under the Site Work Agreement and the Mall
Project Loan and no Default hereunder have occurred and are continuing at
the relevant time of computation, (2) advances of the Mall Project Loan
have commenced on or before June 30, 1999 and have continued in accordance
with the approved draw schedule for the Mall Project Loan, (3) advances of
the Mall Project Loan to reimburse the Borrower in accordance with the Site
Work Agreement are made within 45 days after the
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Construction Consultant and the Owner Representative have approved the
work to be completed by the Borrower pursuant to the Site Work
Agreement, the aggregate amounts payable to the Borrower by Aladdin
Bazaar pursuant to SECTION 4.5 of the Site Work Agreement, PLUS (y) the
lesser of (1) the aggregate of the amounts available to be drawn under
all Approved Equipment Funding Commitments and (2) the aggregate amount
of Remaining Costs on the date of calculation for the Equipment
Component (as in effect from time to time), PLUS (z) the aggregate
amount of Main Project Costs which the Design/Builder and/or Fluor have
agreed or confirmed in writing, to the reasonable satisfaction of the
Administrative Agent, that they are responsible for paying (on a timely
basis relative to the Main Project's cash needs) from their own funds
but which they have not yet paid."
(b) Provided that the Borrower has delivered the Counsel Opinion
which expressly provides that no approval is required under the GECC Facilities
Agreement or the GECC Intercreditor Agreement for the addition of the
definitions set forth below, the following definitions shall be added to SECTION
1.1 of the Credit Agreement:
"COMMON PARKING AREA" is defined in the Site Work Agreement.
"COMMON PARKING AREA BUDGET" is defined in SECTION 7.1.24.
"EXCESS CONTRIBUTION" is defined in SECTION 7.1.24.
"EXCESS CONTRIBUTION AGREEMENT" is defined in SECTION 7.1.24.
(c) Provided that the Borrower has delivered the Counsel Opinion
which expressly provides that no approval is required under the GECC Facilities
Agreement or the GECC Intercreditor Agreement for the addition of the
parenthetical clause set forth below, the following parenthetical clause shall
be added at the end of CLAUSE (D) of the definition of "INDEBTEDNESS" in SECTION
1.1 of the Credit Agreement:
"(other than (x) prior to the Conversion Date Indebtedness which is to be
funded from Available Funds and (y) after the Conversion Date accounts
payable by the Borrower arising in the ordinary course of business in
connection with the operation of the Main Project as a casino/hotel)"
(d) Provided that the Borrower has delivered the Counsel Opinion
which expressly provides that no approval is required under the GECC Facilities
Agreement or the GECC Intercreditor Agreement for the amendment set forth below,
the definition of "LOAN DOCUMENTS" in SECTION 1.1 of the Credit Agreement shall
be amended in its entirety to read as set forth below:
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"LOAN DOCUMENTS" means, collectively, this Agreement, the Notes, the
Letters of Credit, each Pledge Agreement, each Rate Protection Agreement,
each Borrowing Request, each Letter of Credit Issuance Request, the
Security Agreement, the Keep-Well Agreement, the Completion Guaranty, the
Excess Contribution Agreement, the GECC Intercreditor Agreement, the
Trademark Security Agreement, the Deed of Trust, the Disbursement
Agreement, the Mall Project Completion Assignment, the Fee Letters, the
Environmental Indemnity, the Assignment of Contracts, the Assignment of
Consulting Agreement, the Assignment of Design/Build Contract, the
Assignment of Salle Privee Agreement, the Assignment of Project Management
Agreement, the Borrower Collateral Account Agreement, the Holdings
Collateral Account Agreement, the Servicing and Collateral Account
Agreement, the Design/Builder Consent and Acknowledgment and any other
agreement, certificate, document or Instrument delivered in connection with
this Agreement and such other agreements, whether or not specifically
mentioned herein or therein."
(e) Provided that the Borrower has delivered the Counsel Opinion
which expressly provides that no approval is required under the GECC Facilities
Agreement or the GECC Intercreditor Agreement for the addition of the sentence
set forth below, the following sentence shall be added at the end of the
definition of "MAIN PROJECT BUDGET" in SECTION 1.1 of the Credit Agreement:
"The Main Project Budget shall include a Line Item and a Line Item Category
consistent with the Common Parking Area Budget."
(f) Provided that the Borrower has delivered the Counsel Opinion
which expressly provides that no approval is required under the GECC Facilities
Agreement or the GECC Intercreditor Agreement for the amendment set forth below,
the definition of "MAIN PROJECT DOCUMENTS" in SECTION 1.1 of the Credit
Agreement shall be amended in its entirety to read as set forth below:
"MAIN PROJECT DOCUMENTS" means, collectively, the Design/Build
Contract, the Fluor Guaranty, the Contracts, the Energy Project Service
Agreement, the Energy Project Ground Lease, the Energy Project Development
Agreement, the Mall Project Ground Lease, the Music Project Ground Lease,
the Theater Lease (if entered into), the Reciprocal Easement Agreement, the
Common Parking Area Use Agreement, the Site Work Agreement, the Project
Management Agreement, the Development Agreement, the GECC Facilities
Agreement and any other document or agreement entered into on, prior to or
after the Effective Date, relating to the development, construction,
maintenance or operation of the Main Project (other than the Loan Documents
and the Discount Note Trust
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Indenture), as the same may be amended from time to time in accordance
with the terms and conditions hereof and thereof."
(g) Provided that the Borrower has delivered the Counsel Opinion
which expressly provides that no approval is required under the GECC Facilities
Agreement or the GECC Intercreditor Agreement for the amendment set forth below,
the definition of "MATERIAL MAIN PROJECT DOCUMENTS" in SECTION 1.1 of the Credit
Agreement shall be amended in its entirety to read as set forth below:
"MATERIAL MAIN PROJECT DOCUMENTS" means the Mall Project Ground Lease,
the Music Project Ground Lease, the Reciprocal Easement Agreement, the Site
Work Agreement, the Common Parking Area Use Agreement, the Energy Project
Service Agreement, the Energy Project Ground Lease, the Energy Project
Development Agreement, the GECC Facilities Agreement, the Theater Lease,
the Design/Build Contract, the Fluor Guaranty, the Project Management
Agreement, the Development Agreement and any other certificate, document or
Instrument delivered in connection with or by the Borrower and any other
Person pursuant to any Material Main Project Document, and such other
agreements, whether or not specifically mentioned herein or therein and,
without duplication, any Main Project Document with a total contract amount
in excess of $2,500,000.
(h) Provided that the Borrower has delivered the Counsel Opinion
which expressly provides that no approval is required under the GECC Facilities
Agreement or the GECC Intercreditor Agreement for the amendment set forth below,
the definition of "REALIZED SAVINGS" in SECTION 1.1 of the Credit Agreement
shall be amended in its entirety to read as set forth below:
"REALIZED SAVINGS" means:
(a) the portion of any decrease to the Guaranteed Maximum Price
retained or to be retained by the Borrower in accordance with the
provisions of Attachment H to the Design/Build Contract in the "COST OF THE
WORK" (as defined in Section 3 of Attachment G to the Design/Build
Contract) contemplated by a Line Item but only to the extent that the
Guaranteed Maximum Price has been reduced as a result of such decrease in
the anticipated "COST OF THE WORK" as approved in writing by the
Design/Builder and such reduction is confirmed by the Construction
Consultant;
(b) with respect to the Construction Period Interest Line Item, a
decrease in the anticipated cost of construction period interest resulting
from (x) a decrease in the interest rates payable by the Borrower prior to
the date which is six months after the Conversion Date as determined by the
Administrative Agent with the
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reasonable concurrence of the Borrower taking into account the current
and future anticipated interest rates and the anticipated times and
amounts of draws under the Bank Credit Facility for the payment of Main
Project Costs or (y) the anticipated Conversion Date being earlier than
the date set therefor in the Construction Benchmark Schedule as
determined by the Owner Representative with the reasonable concurrence
of the Construction Consultant; and
(c) with respect to any other Line Item, the amount by which the
total cost allocated to such Line Item exceeds the total cost incurred by
the Borrower to complete all aspects of the Work contemplated by such Line
Item which amount shall not be established until the Borrower has actually
completed 90% of all such Work or provided other evidence acceptable to the
Administrative Agent in its sole discretion (with the concurrence of the
Construction Consultant) that such amount is reasonably expected to be
realized as a permanent savings prior to completion of 90% of such Work;
in each case, which is documented by the Borrower in a Realized Savings
Certificate substantially in the form of EXHIBIT W hereto, duly executed
and completed with all exhibits and attachments thereto."
(i) Provided that the Borrower has delivered the Counsel Opinion
which expressly provides that no approval is required under the GECC
Facilities Agreement or the GECC Intercreditor Agreement for the addition
of the new Section set forth below, the following new Section shall be
added to the Credit Agreement as SECTION 7.1.24:
"Section 7.1.24 SITE WORK AGREEMENT; EXCESS CONTRIBUTION AGREEMENT.
Aladdin Bazaar has asked the Borrower and AHL to agree under the Site Work
Agreement that Aladdin Bazaar will pay up to $36,000,000 for amounts
attributable to the design and construction of the Common Parking Area and
that the Borrower and AHL will pay all amounts in excess of $36,000,000 for
such design and construction. The Borrower has delivered a budget (the
"COMMON PARKING AREA BUDGET") which is being reviewed by the Construction
Consultant. The Borrower agrees that if the Construction Consultant
reasonably determines that adjustments are required in order for the Common
Parking Area Budget to be accurate, the Borrower shall make such
adjustments as so determined. The Borrower shall pay all reasonable costs,
expenses and fees of the Administrative Agent and the Lenders with respect
to any reviews of the Common Parking Area Budget and the design and
construction of the Common Parking Area including, without limitation, the
costs and expenses of the Construction Consultant's reviews of the Common
Parking Area Budget from time to time and, if required, attorneys' fees and
costs and expenses. In addition, if the Common Parking Area Budget, as
approved by the Construction Consultant, shows a cost of completion
exceeding
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$36,000,000, the amount over $36,000,000 (but not to exceed the amount
permitted under the Discount Note Indenture) shall be funded by the
Borrower by delivery of a cash deposit in such amount upon the earlier
of (x) such time as the Borrower is otherwise required to bring the Loan
In Balance (without giving effect to such excess amount) in accordance
with this Credit Agreement and the other Loan Documents and (y) such
time as such amount is required in order to pay for such costs of
completion (each such amount being referred to as an "EXCESS
CONTRIBUTION"). In no event shall (x) any portion of any contingency,
reserve or Realized Savings be allocated to the Common Parking Area Line
Item Category in the Main Project Budget for amounts to be funded by the
Borrower pursuant to this section or (y) any contingency, reserve or
Realized Savings be used to fund any such amounts without the prior
written consent of the Administrative Agent in its sole discretion. Each
month the Construction Consultant shall verify the amounts required to
complete construction of the Common Parking Area as part of its review
of the Main Project Budget and In Balance requirements. If the
Construction Consultant determines in its sole discretion that there
should be an increase in the Excess Contributions, the Borrower shall,
in accordance with this SECTION 7.1.24, deposit cash into the Guaranty
Deposit Account in such increased amount. London Clubs and the Trust
shall enter into an agreement (the "EXCESS CONTRIBUTION AGREEMENT") for
the benefit of the Lenders and the Administrative Agent which shall
provide, in relevant part, that London Clubs and the Trust, jointly and
severally (x) shall make all Excess Contributions required from time to
time in accordance with this SECTION 7.1.24 (in addition to all other
payments under the Excess Contribution Agreement, the Completion
Guaranty, the Environmental Indemnity and the Keep-Well Agreement) and
(y) shall perform the obligation to keep the Line Item Category for all
such amounts in excess of $36,000,000 In Balance in accordance with the
Excess Contribution Agreement if the Borrower fails or refuses to do so.
The form and content of the Excess Contribution Agreement shall be
satisfactory to the Administrative Agent in its sole discretion."
(j) As of the Effective Date of this Second Amendment to Credit
Agreement, the following section shall be added to the Credit Agreement as
SECTION 7.2.23:
"Section 7.2.23. NET WORTH PRIOR TO THE CONVERSION DATE. From and
after April 1, 1999 until close of the Fiscal Quarter in which the
Conversion Date occurs, the Borrower will not permit Net Worth as of the
close of each calendar month during such period to be less than the sum of
$100,000,000 PLUS 85% of positive Net Income (after giving effect to the
amount of Restricted Payments made by the Borrower in cash in accordance
with CLAUSES (A) and (C) of SECTION 7.2.6, subject to the terms thereof for
the period, treated as one accounting period). The Borrower will furnish,
or will cause to be furnished, to the Administrative Agent (x) as soon as
available after the end of each
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calendar month during which time the Borrower is required to perform the
financial covenant set forth herein but in no event later than (i) 9
days immediately preceding the date on which an Advance is to be made by
the Lenders pursuant to the Loan Documents or, if applicable, by the
Disbursement Agent pursuant to the Disbursement Agreement, as the case
may be, or (ii) the tenth day of a calendar month if no Advance is being
made, as applicable, a Compliance Certificate, executed by the chief
financial or accounting Authorized Representative of the Borrower,
showing (in reasonable detail and with appropriate calculations and
computations in all respects reasonably satisfactory to the
Administrative Agent) compliance (currently and on a PRO FORMA basis
after giving effect to the payments to be made in respect of all
federal, state and local income taxes of the Borrower or, if the
Borrower is treated as a pass-through entity or is not treated as a
separate entity for United States federal income tax purposes, the
payments to be made pursuant to CLAUSE (C) OF SECTION 7.2.6) with the
financial covenants set forth in this SECTION 7.2.23 and (y) as soon as
available after the end of each calendar month during which time the
Borrower is required to perform the financial covenant set forth herein
but in no event later 30 days after each such month's end an agreed upon
procedures report (which shall be substantially in the form annexed to
the Second Amendment to Credit Agreement) from nationally recognized
independent public accountants acceptable to the Administrative Agent."
ARTICLE IV
CONDITIONS PRECEDENT AND COVENANT
SECTION 4.1. CONDITIONS TO EFFECTIVENESS. This Second Amendment to Credit
Agreement shall be and become effective as of March 10, 1999 (the "EFFECTIVE
DATE") on the date (the "SECOND AMENDMENT DATE") on which each of the following
conditions precedent shall have been satisfied.
(a) EXECUTION OF DOCUMENTS. The Administrative Agent shall have
received counterparts of (i) the First Amendment to Completion Guaranty
executed by Authorized Representatives of the parties thereto, (ii) the
"RATIFICATION OF LCI SUBSIDIARY GUARANTY" (as defined in the First
Amendment to Completion Guaranty) executed by Authorized Representatives of
London Clubs and its Subsidiaries which are parties thereto, (iii) this
Second Amendment to Credit Agreement executed by Authorized Representatives
of the Borrower, the Administrative Agent, the Syndication Agent, the
Documentation Agent and the Required Lenders, (iv) the Excess Contribution
Agreement executed by Authorized Representatives of London Clubs and the
Trust, (v) all documentation required by SECTION 2.1 of the First Amendment
to Credit Agreement and (vi) the concession agreement with the Pepsi-Cola
Company.
(b) INCUMBENCY, ETC. The Administrative Agent shall have received
(with
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copies for each Lender) a certificate, dated the Second Amendment Date,
of an Authorized Representative of the Borrower certifying
(i) as to the incumbency and signatures of the Person or Persons
authorized to execute and deliver this Second Amendment to Credit
Agreement and any instruments or agreements required hereunder,
(ii) as to an attached copy of one or more resolutions or other
authorizations of the manager of the Borrower certified by the
Authorized Representative of such manager as being in full force and
effect on the date hereof, authorizing the execution, delivery and
performance of this Second Amendment to Credit Agreement and any
instruments or agreements required hereunder, and
(iii) that the Organizational Documents of the Borrower have not
been modified since the date on which they were last delivered to the
Administrative Agent,
upon which certificate the Administrative Agent, the Syndication Agent, the
Documentation Agent and each Consenting Lender (collectively, the
"FINANCING PARTIES") may conclusively rely until it shall have received a
further certificate of an Authorized Representative of the Borrower
canceling or amending such prior certificate.
(c) FEES. All reasonable fees and costs and expenses of Mayer, Brown
& Platt and other professionals employed by the Administrative Agent and
all other reasonable expenses of the Administrative Agent in connection
with the negotiation, execution and delivery of this Second Amendment to
Credit Agreement and the transactions contemplated herein shall have been
paid in full.
(d) SATISFACTORY LEGAL FORM. Each Financing Party and its counsel
shall have received all information, approvals, opinions, documents or
instruments as each Financing Party or its counsel may have reasonably
requested, and all documents executed or submitted pursuant hereto by or on
behalf of the Borrower shall be satisfactory in form and substance to each
Financing Party and its counsel.
(e) DEFAULT. After giving effect to this Second Amendment to Credit
Agreement the following statements shall be true and correct: (i) to the
best knowledge of the Borrower, no act or condition exists which, with the
giving of notice or passage of time would constitute a "DEFAULT" or "EVENT
OF DEFAULT" (as defined in the Credit Agreement and the GECC Facilities
Agreement) has occurred and is continuing as of the date hereof (other than
a Default which may result from the delivery of financial statements
containing an Impermissible Qualification), and (ii) no material adverse
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change in (A) the financial condition, business, property, prospects or
ability of the Borrower to perform in all material respects its obligations
under any Operative Document or any of the documents evidencing and
securing the FF&E Financing to which it is a party or (B) the financial
condition, business, property, prospects and ability of any other Aladdin
Party or, to the best knowledge of the Borrower, LCNI, the Design/Builder
or Fluor to perform in all material respects its obligations under any
Operative Document to which it is a party has occurred since the Closing
Date.
(f) CONSENTS AND APPROVALS. All approvals and consents required to
be taken, given or obtained, as the case may be, by or from any
Governmental Instrumentality or another Person, or by or from any trustee
(including, without limitation, GECC and the Discount Note Indenture
Trustee) or holder of any indebtedness or obligation of the Borrower, that
are necessary or, in the reasonable opinion of the Administrative Agent,
advisable in connection with the execution, delivery and performance of
this Second Amendment to Credit Agreement by all parties hereto, shall have
been taken, given or obtained, as the case may be, shall be in full force
and effect and the time for appeal with respect to any thereof shall have
expired (or, if an appeal shall have been taken, the same shall have been
dismissed) and shall not be subject to any pending proceedings or appeals
(administrative, judicial or otherwise) and shall be in form and substance
satisfactory to the Administrative Agent.
(g) DELIVERY OF SECOND AMENDMENT TO CREDIT AGREEMENT. The Borrower
shall have delivered this Second Amendment to Credit Agreement to all
Persons entitled under the Operative Documents to receive delivery hereof.
(h) OPINIONS. The Administrative Agent shall have received such
opinions of counsel as it deems necessary, dated the Second Amendment Date
and addressed to the Administrative Agent, the Lenders and, if applicable,
the Disbursement Agent, which shall be in form and substance satisfactory
to the Administrative Agent.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
In order to induce each Financing Party to enter into this Second Amendment
to Credit Agreement, the Borrower hereby reaffirms, as of the Second Amendment
Date, its representations and warranties contained in Article VI of the Credit
Agreement and additionally represents and warrants unto each Financing Party as
set forth in this ARTICLE V.
SECTION 5.1. MATTERS PERTAINING TO THE GECC FACILITIES AGREEMENT.
(a) The Borrower has not directly or indirectly amended (by Change
Order or otherwise), modified (by Change Order or otherwise), allocated,
reallocated or
13
supplemented or permitted or consented to the amendment (by Change Order
or otherwise), modification (by Change Order or otherwise) allocation,
reallocation or supplementation of the Construction Benchmark Schedule
in any manner which would extend the Completion Date.
(b) The Borrower has performed all of its obligations under ITEM (1)
of CLAUSE (A) of SECTION 12 of the GECC Facilities Agreement.
(c) After giving effect to this Second Amendment and the performance
by the Borrower of its obligation to keep the Main Project Budget In
Balance, no "DEFAULT" or "EVENT OF DEFAULT" exists under the GECC
Facilities Agreement (without giving effect to the GECC Intercreditor
Agreement) other than a Default which may result from the delivery of
financial statements containing an Impermissible Qualification.
SECTION 5.2. DUE AUTHORIZATION, NON-CONTRAVENTION, ETC. The execution,
delivery and performance by the Borrower of this Second Amendment to Credit
Agreement and each other document executed or to be executed by it in connection
with this Second Amendment to Credit Agreement are within the Borrower's powers,
have been duly authorized by all necessary action, and do not
(a) contravene the Borrower's Organizational Documents;
(b) contravene any contractual restriction binding on or affecting the
Borrower;
(c) contravene any court decree or order or Legal Requirement binding
on or affecting the Borrower; or
(d) result in, or require the creation or imposition of, any Lien on
any of the Borrower's properties except as expressly contemplated by the
Operative Documents,
and the Financing Parties may conclusively rely on such representation and
warranty.
SECTION 5.3. GOVERNMENT APPROVAL, REGULATION, ETC. No authorization or
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or other Person is required for the due execution,
delivery or performance by the Borrower of this Second Amendment to Credit
Agreement or any other document to be executed by it in connection with this
Second Amendment to Credit Agreement.
SECTION 5.4. VALIDITY, ETC. This Second Amendment to Credit Agreement
constitutes, and each other document executed by the Borrower in connection with
this Second Amendment to Credit Agreement, on the due execution and delivery
thereof, will constitute, the legal, valid and binding obligations of the
Borrower enforceable in accordance with their respective terms,
14
except as such enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting the enforcement of creditors rights
generally and by general principles of equity.
SECTION 5.5. LIMITATION. Except as expressly provided hereby, all of the
representations, warranties, terms, covenants and conditions of the Credit
Agreement and each other Operative Document shall remain unamended and unwaived
and shall continue to be, and shall remain, in full force and effect in
accordance with their respective terms. The amendments, modifications and
consents set forth herein shall be limited precisely as provided for herein, and
shall not be deemed to be a waiver of, amendment of, consent to or modification
of any other term or provision of the Credit Agreement, the GECC Facilities
Agreement, any Operative Document, or other Instrument referred to therein or
herein, or of any transaction or further or future action on the part of the
Borrower or any other Person which would require the consent of the Agents, the
Lenders, GECC or the Discount Note Indenture Trustee.
SECTION 5.6. OFFSETS AND DEFENSES. The Borrower has no offsets or
defenses to its obligations under the Loan Documents or the documents evidencing
and securing the FF&E Financing and no claims or counterclaims against any of
the Agents, the Lenders or the Construction Consultant.
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 6.1. RATIFICATION OF AND REFERENCES TO THE CREDIT AGREEMENT. This
Second Amendment to Credit Agreement shall be deemed to be an amendment to the
Credit Agreement, and the Credit Agreement, as amended by this Second Amendment
to Credit Agreement, shall continue in full force and effect and is hereby
ratified, approved and confirmed in each and every respect. All references to
the Credit Agreement in any other document, instrument, agreement or writing
shall hereafter be deemed to refer to the Credit Agreement, as amended by this
Second Amendment to Credit Agreement.
SECTION 6.2. HEADINGS. The various headings of this Second Amendment to
Credit Agreement are inserted for convenience only and shall not affect the
meaning or interpretation of this Second Amendment to Credit Agreement or any
provisions hereof.
SECTION 6.3. APPLICABLE LAW. THIS SECOND AMENDMENT TO CREDIT AGREEMENT
AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS SECOND AMENDMENT TO
CREDIT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW, BUT EXCLUDING ALL OTHER CHOICE OF LAW AND
CONFLICTS OF LAW RULES OF SUCH STATE.
15
SECTION 6.4. CROSS-REFERENCES. References in this Second Amendment to
Credit Agreement to any Article or Section are, unless otherwise specified, to
such Article or Section of this Second Amendment to Credit Agreement.
SECTION 6.5. OPERATIVE DOCUMENT. This Second Amendment to Credit
Agreement is a Loan Document executed pursuant to the Credit Agreement and shall
(unless otherwise expressly indicated therein) be construed, administered and
applied in accordance with the terms and provisions of the Credit Agreement.
SECTION 6.6. SUCCESSORS AND ASSIGNS. This Second Amendment to Credit
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.
SECTION 6.7. COUNTERPARTS. This Second Amendment to Credit Agreement may
be executed by the parties hereto in any number of counterparts and on separate
counterparts, each of which shall be an original but all of which together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Second
Amendment to Credit Agreement as of the day and year first above written.
ALADDIN GAMING, LLC
By: /s/ RICHARD GOEGLEIN
---------------------------------
Name: Richard J. Goeglein
Title: President and Chief
Executive Officer
THE BANK OF NOVA SCOTIA, as the
Administrative Agent
By: /s/ ALAN PENDERGAST
---------------------------------
Name: Alan Pendergast
Title: Relationship Manager
MERRILL LYNCH CAPITAL CORPORATION,
as the Syndication Agent
By: /s/ HOWARD SPLEY
---------------------------------
Name: Howard Spley
Title: Vice President
17
By signing below, the Guarantors confirm their agreement to the terms of this
Second Amendment to Credit Agreement.
ALADDIN BAZAAR HOLDINGS, LLC
By: /s/ JACK SOMMER
- -------------------------------------
Name: Jack Sommer
Title: President
THE TRUST UNDER ARTICLE SIXTH
UNDER THE WILL OF SIGMUND SOMMER
By: /s/ VIOLA SOMMER
- -------------------------------------
Name: Viola Sommer
Title: Trustee
By: /s/ JACK SOMMER
- -------------------------------------
Name: Jack Sommer
Title: Trustee
LONDON CLUBS INTERNATIONAL PLC
By: /s/ G. BARRY HARDY
- -------------------------------------
Name: G. Barry Hardy
Title: Finance Director
18
ANNEX I
FORM OF AGREED UPON PROCEDURES REPORT
Independent Public Accountants' Report
We have performed the procedures enumerated below, which were agreed to by
Aladdin Gaming, LLC (the borrower), various financial institutions (the
"Lenders") The Bank Of Nova Scotia (the administrative agent for the Lenders),
Merrill Lynch Capital Corporation (the syndication agent for the Lenders) and
CIBC Oppenheimer Corp. (the documentation agent for the Lenders), solely to
assist the users in evaluating management's assertion about Aladdin Gaming,
LLC's compliance with Section 7.2.23, regarding maintenance of net worth, of its
credit agreement during the month ended [INSERT DATE], included in the
accompanying calculation of net worth schedule ("Net Worth Schedule"). This
agreed-upon procedures engagement was performed in accordance with standards
established by the American Institute of Certified Public Accountants. The
sufficiency of these procedures is solely the responsibility of the specified
users of the report. Consequently, we make no representation regarding the
sufficiency of the procedures described below either for the purpose for which
this report has been requested or for any other purpose. This report does not
constitute a legal determination as to Aladdin Gaming LLC's compliance with
specified requirements.
1. We tested management's Net Worth Schedule for clerical accuracy, noting
that the schedule was clerically accurate [OR NOTE EXCEPTIONS].
2. We obtained from management a schedule of costs incurred during the month
that had been capitalized. For all items in excess of $100,000, we vouched
the amount to a relevant invoice and reviewed the invoice to determine
whether the cost was appropriately classified as a capitalizable item.
No exceptions were noted. [OR LIST EXCEPTIONS].
3. We obtained from management a schedule of costs incurred during the month
that had been expensed. For all items in excess of $100,000, we vouched
that amount to a relevant invoice and reviewed the invoice to determine
whether the cost was appropriately classified as an expense.
No exceptions were noted. [OR LIST EXCEPTIONS].
We were not engaged to perform an examination, the objective of which would be
the expression of an opinion on management's assertion. Accordingly, we do not
express such an opinion. Had we been engaged to perform additional procedures,
other matters might have come to our attention that would have been reported to
you.
This report is intended solely for the use of management and the parties listed
in the first paragraph, and should not be used by those who have not agreed to
the procedures and taken responsibility for the sufficiency of those procedures
for their purposes.