EXECUTION
MALL CONSTRUCTION SUBSIDIARY SECURITY AGREEMENT
This MALL CONSTRUCTION SUBSIDIARY SECURITY AGREEMENT (this "Agreement"),
dated as of November 14, 1997, is entered into by and between GRAND CANAL SHOPS
MALL CONSTRUCTION, LLC, a Delaware limited liability company ("Debtor") and THE
BANK OF NOVA SCOTIA, a Canadian chartered bank ("Scotiabank") in its capacity as
Intercreditor Agent under the terms of the Intercreditor Agreement (as defined
below) (in such capacity, "Intercreditor Agent") for and on behalf of (i) each
agent and each Bank Lender under the Bank Credit Agreement (as defined below)
and any Interest Rate Exchangers (as defined below) (individually, each a "Bank
Secured Party" and together, the "Bank Secured Parties"), (ii) GMAC Commercial
Mortgage Corporation, a California corporation ("GMAC"), (iii) First Trust
National Association, a national banking association as the trustee (the
"Mortgage Note Indenture Trustee") for and on behalf of the Mortgage Note
Holders (individually, each a "Mortgage Note Secured Party" and together, the
"Mortgage Note Secured Parties") under the Mortgage Notes Indenture (as defined
below) and (iv) Intercreditor Agent and Disbursement Agent.
RECITALS
A. The Project. LAS VEGAS SANDS, INC., a Nevada corporation ("LVSI"),
VENETIAN CASINO RESORT, LLC, a Nevada limited liability company ("VCR", and
together with LVSI, individually each a "Borrower" and together, as joint and
several obligors, the "Borrowers"), and Debtor propose to develop, construct and
operate the Venetian Casino Resort, a large scale Venetian-themed hotel, casino,
retail, convention, trade show, meeting and entertainment complex, with related
heating, ventilation and air conditioning and power station facilities, as part
of the redevelopment of the site of the former Las Vegas Sands Hotel and Casino.
B. Bank Credit Agreement. Concurrently herewith, the Borrowers have
entered into a Credit Agreement, dated the date hereof with the financial
institutions party thereto as lenders (the "Bank Lenders"), Scotiabank, as
administrative agent and Xxxxxxx Xxxxx Credit Partners L.P., as arranger and
syndication agent (such credit agreement as it may be modified, amended,
supplemented, extended, refinanced, refunded, renewed, replaced or substituted
from time to time, the "Bank Credit Agreement") pursuant to which the Bank
Lenders will extend certain credit to the Borrowers subject to the terms and
conditions set forth therein. Borrowers may from time to time enter into one or
more Interest Rate Agreements (collectively, the "Lender Interest Rate
Agreements") with one or more Bank Lenders (in such capacity, collectively,
"Interest Rate Exchangers") in accordance with the terms of the Bank Credit
Agreement, and it is desired that the obligations of Borrowers under the Lender
Interest Rate
Agreements, including the obligation of Borrowers to make payments thereunder in
the event of early termination thereof, be included in the Bank Secured
Obligations secured hereunder.
C. GMAC Credit Agreement. Concurrently herewith, the Borrowers and
Debtor have entered into a Credit Agreement, dated as of the date hereof, with
GMAC (such credit agreement as it may be modified, amended, supplemented,
extended, refinanced, refunded, renewed, replaced or substituted from time to
time, the "GMAC Credit Agreement") pursuant to which GMAC has agreed to extend
certain credit facilities to the Borrowers and Debtor subject to the terms and
conditions set forth therein.
D. Mortgage Notes Indenture. Concurrently herewith, the Borrowers,
certain guarantors named therein and the Mortgage Note Indenture Trustee have
entered into that certain Mortgage Notes Indenture, dated as of the date hereof
(such indenture as modified, amended or supplemented from time to time, the
"Mortgage Notes Indenture") pursuant to which the Borrowers will issue the
Mortgage Notes in a principal amount equal to $425,000,000 to finance certain
costs of constructing the Project, as more particularly described therein.
E. Disbursement Agreement. Concurrently herewith, the Borrowers,
Debtor, the Bank Agent, the Mortgage Notes Indenture Trustee, GMAC,
Atlantic-Pacific Las Vegas, LLC, and Scotiabank, as Disbursement Agent (the
"Disbursement Agent") have entered into the Funding Agents Disbursement and
Administration Agreement, dated as of the date hereof (such agreement as
modified, amended or supplemented from time to time, the "Disbursement
Agreement") setting forth conditions to and the sequencing of funding
construction costs for the Project and certain other matters.
F. Intercreditor Agreement. Concurrently herewith the Intercreditor
Agent, the Bank Agent, the Mortgage Note Indenture Trustee, GMAC and the trustee
for certain senior subordinated notes issued by the Borrowers, have entered into
an Intercreditor Agreement (Credit Parties), dated as of the date hereof (such
agreement as it may be modified, amended or supplemented from time to time, the
"Intercreditor Agreement") which sets forth certain agreements among such
lenders with respect to the priority of the liens created hereunder, the
enforcement of remedies and the allocation of the proceeds of any realization
upon the collateral. The Intercreditor Agent is entering into this Agreement and
shall perform its obligations as set forth and in the manner provided, pursuant
to the provisions of the Intercreditor Agreement and shall take directions from
time to time from one or more of the Credit Parties as defined and provided for
therein.
G. Condition Precedent. It is a condition precedent to entering into
the Mortgage Notes Indenture, the Bank Credit Agreement and the GMAC Credit
Agreement and consummating the transactions contemplated therein (including the
extension of credit thereunder) that Debtor enter into this Agreement.
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AGREEMENT
In consideration of the promises contained herein and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Debtor hereby agrees as follows:
1. Definitions.
1.1 "Bank Event of Default" shall mean any Event of Default under and as
defined in either the Disbursement Agreement or the Bank Credit Agreement.
1.2 "Event of Default" shall mean a Bank Event of Default, a GMAC Event
of Default or a Mortgage Note Event of Default.
1.3 "GECC Proceeds Account" means an account funded solely by proceeds
of loans made pursuant to a credit agreement by and between LVSI and/or VCR and
General Electric Capital Corporation and other lenders party thereto.
1.4 "GMAC Event of Default" shall mean any Event of Default under and as
defined in either the Disbursement Agreement or the GMAC Credit Agreement.
1.5 "Mortgage Note Event of Default" shall mean any Event of Default
under the Mortgage Notes Indenture.
1.6 "Obligations" shall mean collectively the Bank Secured Obligations,
the GMAC Secured Obligations and the Mortgage Notes Secured Obligations.
1.7 "Receivables" shall mean all of Debtor's accounts and accounts
receivable, including, without limitation, all rights to payment for goods sold
or leased or secured or for services rendered which are not evidenced by an
instrument or chattel paper, all other present or future rights for money due or
to become due, all of the accounts, chattel paper, instruments, promissory
notes, contract rights, documents, other obligations and general intangibles for
money due or to become due of any kind, in each case whether now existing or
hereafter arising and wherever arising and whether or not earned by performance.
1.8 "Secured Parties" shall mean individually and collectively,
Intercreditor Agent, Disbursement Agent, the Bank Secured Parties, GMAC and the
Mortgage Note Secured Parties.
1.9 "Specified FF&E" shall mean any furniture, fixtures, equipment and
other personal property which is acquired with proceeds of any Approved
Equipment Funding Commitments.
1.10 "UCC" shall mean the Uniform Commercial Code as the same may, from
time to time, be in effect in the State of New York; provided, however, in the
event that, by reason
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of mandatory provisions of law, any or all of the attachment, perfection or
priority of the security interest in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State of New York,
the term "UCC" shall mean the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such attachment,
perfection or priority and for purposes of definitions related to such
provisions.
1.11 Unless otherwise defined herein, all capitalized terms used herein
which are defined in the Disbursement Agreement shall have their respective
meanings as used in the Disbursement Agreement as in effect on the date hereof.
The rules of interpretation contained in Exhibit A to the Disbursement Agreement
as in effect on the date hereof shall apply to this Agreement.
2. Assignment, Pledge and Grant of Security Interests.
2.1 Senior Grant to GMAC, the Disbursement Agent and the Intercreditor
Agent in Collateral. To secure the timely payment and performance of the GMAC
Secured Obligations (as defined in Section 3.1 hereof), subject to compliance
with applicable Nevada Gaming Laws, Debtor does hereby assign, grant and pledge
to, and subject to a security interest on a first priority basis in favor of,
the Intercreditor Agent, on behalf and for the benefit of GMAC, the
Intercreditor Agent and the Disbursement Agent, all the estate, right, title and
interest of Debtor, whether now owned or hereafter acquired or arising and
wheresoever located, whether or not of a type which may be subject to a security
interest under the UCC, in, to and under the following:
2.1.1 the following agreements and documents, as amended,
supplemented or otherwise modified from time to time (individually, an
"Assigned Agreement," and collectively, the "Assigned Agreements") and
all of such Debtor's rights thereunder:
(A) the Mall TESA;
(B) the Puck JV Letter of Intent ;
(C) the Billboard Master Lease (Debtor being in the
capacity
of the tenant thereunder), and the Billboard Operating Lease
(Debtor being in the capacity as landlord thereunder);
(D) the Mall Management Agreement;
(E) the Mall Leasing Agreement;
(F) The Mall Lease (Debtor being in the capacity of
the tenant thereunder);
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(G) the Tri-Party Agreement;
(H) the Sale and Contribution Agreement and any Mall
Retainage/ Punchlist Escrow Agreement entered pursuant
thereto;
(I) all rights of Debtor under that certain
Cross-License Agreement dated as of the date hereof among
LVSI, VCR and Debtor as it may be supplemented, amended or
otherwise modified;
(J) all amendments, supplements, substitutions and
renewals to any of the aforesaid agreements;
(K) all rights of Debtor to receive (i) monies due or
to become due under or pursuant to the aforesaid agreements
and (ii) proceeds of any insurance, indemnity, warranty or
guaranty with respect to the aforesaid agreements;
(L) all claims of Debtor for damages arising out of
breach or default under any of the aforesaid agreements;
(M) the rights of Debtor to terminate, amend,
supplement, or modify any of the aforesaid agreements, to
perform thereunder and to compel performance and otherwise
exercise all remedies thereunder; and
(N) all other documents and agreements entered into
on, prior to or after the Financing Date, pertaining to or
benefitting exclusively the Mall Assets as the same may be
amended from time to time in accordance with the terms and
conditions of the GMAC Credit Agreement and to the extent
assignable any other agreements to which Debtor is or becomes
a Party.
2.1.2 all Permits granted to or held by Debtor, including those
described on Annex 5 hereto, but excluding any of the Permits which by
their terms or by operation of law prohibit or do not allow assignment or
which would become void solely by virtue of a security interest being
granted therein;
2.1.3 all rents, profits, income, royalties, revenues, accounts,
contract rights, chattel paper, documents, instruments, general
intangibles and other rights of any kind and all rights in, to and under
all security agreements, leases and other contracts securing or otherwise
relating to any such rents, profits, income, royalties, revenues,
accounts, contract rights, chattel paper, instruments, documents, general
intangibles or other rights and claims to the payment or receipt of money
or other forms of consideration;
2.1.4 all equipment in all of its forms and all parts thereof and
accessions thereto, including, but not limited to, all plant, machinery,
tools, engines, and equipment of any type including, without limitation,
control equipment, gaming equipment and general equipment and devices, all
computer equipment, calculators, adding machines,
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slot gaming tables, video game and slot machines and any other electronic
equipment of every nature, appliances, mechanical and electrical systems,
elevators, lighting, alarm systems, fire control systems, furnishings,
furniture, service equipment, motor vehicles, building or maintenance
equipment, building or maintenance materials, pipes and pipelines, spare
parts, maps, plans, specifications, architectural, engineering,
construction or shop drawings, manuals or similar documents and any
replacements, renewals or substitutions for any of the foregoing;
2.1.5 all plant fixtures, business fixtures and other fixtures and
storage and office facilities and accessions thereto and replacements
thereof and products thereof;
2.1.6 all inventory in all of its forms, including, but not limited
to, (i) all goods held by Debtor for sale or lease or to be furnished
under contracts of service or so leased or furnished, (ii) all supplies,
raw materials, work in process, finished goods, and materials used or
consumed in Debtor's business, (iii) all goods covered by any warehouse
receipts, bills of lading or other such documents or in which Debtor has
an interest in mass or a joint or other interest or right of any kind and
(iv) all goods which are returned to or repossessed by Debtor and all
accessions thereto and products thereof;
2.1.7 all trademarks and service marks now held or hereafter
acquired by Debtor, which are registered in the United States Patent and
Trademark Office or in any similar office or agency of the United States
or any state thereof or any political subdivision thereof and any
application for such trademarks and service marks, as well as any
unregistered marks used by Debtor in the United States and trade dress
including logos, designs, trade names, business names, fictitious business
names and other business identifiers in connection with which any of these
registered or unregistered marks are used in the United States
(collectively, the "Marks") including, but not limited to, the Marks
listed on Annex 2, together with the registration and right to renewals
thereof, and the goodwill of the business of Debtor symbolized by the
Marks and all licenses associated therewith, it being understood that the
rights and interests included herein shall include, without limitation,
all rights and interests pursuant to licensing or other contracts in favor
of Debtor pertaining to the Marks presently or in the future owned or used
by third parties but, in the case of third parties which are not
Affiliates of Debtor, only to the extent permitted by such licensing or
other contracts and, if not so permitted, except with respect to the
rights of Debtor to receive payments thereunder, only with the consent of
such third parties;
2.1.8 all United States copyrights which Debtor now or hereafter
owns or has registered with the United States Copyright Office, as well as
any application for a United States copyright registration now or
hereafter made with the United States Copyright Office by Debtor
(collectively, the "Copyrights") including, but not limited to, the
Copyrights listed on Annex 3, and all United States patents to which
Debtor now or hereafter has title and any divisions or continuations
thereof, as well as any application for a United States patent now or
hereafter made by Debtor (collectively, the "Patents"), including, but not
limited to, all Patents listed on Annex 4, and all reissues,
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renewals or extensions of each of them, it being understood that the
rights and interests included herein shall include, without limitation,
all rights and interests pursuant to licensing or other contracts in favor
of Debtor pertaining to the Copyrights and Patents presently or in the
future owned or used by third parties but, in the case of third parties
which are not Affiliates of Debtor, except with respect to the rights of
Debtor to receive payments thereunder, only to the extent permitted by
such licensing or other contracts and, if not so permitted, only with the
consent of such third parties;
2.1.9 all computer programs and software of Debtor and all
intellectual property rights therein and all other proprietary information
of Debtor, including, but not limited to, trade secrets; it being
understood that the rights and interests included herein shall include,
without limitation, all rights and interests pursuant to licensing or
other contracts in favor of Debtor pertaining to the computer programs and
software presently or in the future owned or used by third parties but, in
the case of third parties which are not Affiliates of Debtor, except with
respect to the rights of Debtor to receive payments thereunder, only to
the extent permitted by such licensing or other contracts and, if not so
permitted, only with the consent of such third parties;
2.1.10 to the extent not covered by any other clause of this
subsection 2.1, but subject to the exclusions set out in the last sentence
of each of subsections 2.1.7 and 2.1.8, all other trademarks, tradenames,
tradesecrets, goodwill, business names, patents, patent applications,
licenses and copyrights, registrations, and franchise rights;
2.1.11 to the extent not covered by any other clause of this
subsection 2.1, all other general intangibles (including, but not limited
to, tax refunds, rights to payment or performance, chooses in action and
judgments taken on any rights or claims included in the Collateral);
2.1.12 the proceeds of all of the foregoing (all of the collateral
described in 2.1.1 through and including 2.1.11 being herein collectively
referred to as the "Collateral"), including without limitation, (a) all
rights of Debtor to receive proceeds, rents, profits and moneys due and to
become due under or pursuant to the Collateral; (b) all rights of Debtor
to receive the return of any premiums for, or proceeds of, any insurance,
indemnity, warranty or guaranty with respect to the Collateral or to
receive any condemnation proceeds; (c) all claims of Debtor for damages
arising out of, or for breach of or default under, any Collateral; and (d)
to the extent not included in the foregoing, all proceeds receivable or
received when any and all of the foregoing Collateral or proceeds thereof
is sold, collected, exchanged or otherwise disposed of, whether
voluntarily or involuntarily.
Notwithstanding anything to the contrary contained herein, the term "Collateral"
for the purposes of this Section 2.1 shall not include (i) any Accounts to the
extent included in the collateral under any of the Collateral Account
Agreements, (ii) any Specified FF&E, (iii) the HVAC Component, (iv) any common
stock, preferred stock or membership interest, whether represented by
certificates or otherwise, in Debtor or any of its Subsidiaries (including
Excluded
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Subsidiaries) (v) any gaming devices or other equipment which would require a
finding of suitability or other similar procedure by an applicable Gaming
Authority prior to being pledged, hypothecated, or given as collateral security
and (vi) the GECC Proceeds Account.
2.2 Second Priority Grant in Favor of Bank Secured Parties, the
Disbursement Agent and the Intercreditor Agent. To secure the timely payment and
performance of the Bank Secured Obligations (as defined in Section 3.2 hereof),
subject to compliance with applicable Nevada Gaming Laws, Debtor does hereby
assign, grant and pledge to, and subject to a security interest on a second
priority basis in favor of, the Intercreditor Agent, on behalf and for the
benefit of the Bank Secured Parties, the Intercreditor Agent and the
Disbursement Agent all the estate, right, title and interest of Debtor, whether
now owned or hereafter acquired or arising and wheresoever located, whether or
not of a type which may be subject to a security interest under the UCC, in, to
and under the Collateral.
Notwithstanding anything to the contrary contained herein, the term "Collateral"
for the purposes of this Section 2.2 shall not include (i) any Accounts to the
extent included in the collateral under any of the Collateral Account
Agreements, (ii) any Specified FF&E (except to the extent that the Bank Secured
Parties finance Specified FF&E pursuant to an Approved Equipment Funding
Commitment), (iii) the HVAC Component, (iv) any common stock, preferred stock or
membership interest, whether represented by certificates or otherwise, in Debtor
or any of its Subsidiaries (including Excluded Subsidiaries) (v) any gaming
devices or other equipment which would require a finding of suitability or other
similar procedure by an applicable Gaming Authority prior to being pledged,
hypothecated, or given as collateral security and (vi) the GECC Proceeds
Account.
2.3 Third Priority Grant in Favor of Mortgage Note Secured Parties, the
Disbursement Agent and the Intercreditor Agent. To secure the timely payment and
performance of the Mortgage Note Secured Obligations (as defined in Section 3.3
hereof) subject to compliance with applicable Nevada Gaming Laws, Debtor does
hereby assign, grant and pledge to, and subject to a security interest on a
third priority basis, in favor of, the Intercreditor Agent, on behalf of and for
the benefit of the Mortgage Note Indenture Trustee, and the Disbursement Agent
and the Intercreditor Agent, all the estate, right, title and interest of
Debtor, whether now owned or hereafter acquired or arising and wheresoever
located, whether or not of a type which may be subject to a security interest
under the UCC, in, to and under the Collateral.
Notwithstanding anything to the contrary contained herein, the term "Collateral"
for the purposes of this Section 2.3 shall not include (i) any Accounts to the
extent included in the collateral under any of the Collateral Account
Agreements, (ii) any Specified FF&E, (iii) the HVAC Component, (iv) any common
stock, preferred stock or membership interest, whether represented by
certificates or otherwise, in Debtor or any of its Subsidiaries (including
Excluded Subsidiaries) (v) any gaming devices or other equipment which would
require a finding of suitability or other similar procedure by an applicable
Gaming Authority prior to being pledged, hypothecated, or given as collateral
security and (vi) the GECC Proceeds Account.
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2.4 Delivery of Assigned Agreements. Debtor has heretofore delivered, or
concurrently with the delivery hereof, is delivering to the Intercreditor Agent
an executed counterpart or certified copy of each of the Assigned Agreements.
Debtor will likewise deliver to the Intercreditor Agent an executed counterpart
of each future lease, construction agreement, operation agreement and other
agreement entered into by Debtor, any notices, reports or requests for
information related to any of the foregoing, and amendments and supplements to
the foregoing, as they are entered into by Debtor promptly upon the execution
thereof. Debtor will further: (1) xxxx conspicuously each item of chattel paper
and, at the reasonable request of the Intercreditor Agent, each of its records
pertaining to the Collateral, with a legend, in form and substance reasonably
satisfactory to the Intercreditor Agent, indicating that such Collateral is
subject to the security interest granted hereby, (ii) at the reasonable request
of the Intercreditor Agent, deliver and pledge to the Intercreditor Agent
hereunder all promissory notes and other instruments (including checks) and all
original counterparts of chattel paper constituting Collateral, duly endorsed
and accompanied by duly executed instruments of transfer or assignment, all in
form and substance satisfactory to the Intercreditor Agent.
2.5 Debtor to Remain Liable. Notwithstanding anything to the contrary
contained herein, Debtor shall remain liable under each of the Assigned
Agreements to perform all of the obligations undertaken by them thereunder, all
in accordance with and pursuant to the terms and provisions thereof and take
such action to such end as requested by the Intercreditor Agent, and the Secured
Parties shall have no obligation or liability under any of such Assigned
Agreements by reason of or arising out of this Agreement, nor shall the
Intercreditor Agent or any other Secured Party be required or obligated in any
manner to perform or fulfill any obligations of Debtor thereunder or to make any
payment or inquiry as to the nature or sufficiency of any payment received by
it, or present or file any claim or take any action to collect or enforce the
payment of any amounts which may have been assigned to Secured Parties or to
which such Secured Party may be entitled at any time.
2.6 Action by Intercreditor Agent and Secured Parties to Cure Certain
Defaults. If any default by Debtor under any of the Assigned Agreements shall
occur and be continuing that constitutes an Event of Default, then subject to
the terms of the Intercreditor Agreement any of the Intercreditor Agent and
Secured Parties shall be permitted (but shall not be obligated) to remedy any
such default by giving written notice of such intent to Debtor and to the
parties to the Assigned Agreement or Assigned Agreements for which such of the
Intercreditor Agent and Secured Parties intends to remedy the default. After
giving such notice of its intent to cure such default and upon the commencement
thereof, the Intercreditor Agent or Secured Parties, as applicable, will proceed
diligently to cure such default. Any cure by the Intercreditor Agent or any of
the Secured Parties of Debtor's default under any of the Assigned Agreements
shall not be construed as an assumption by the Intercreditor Agent or any of the
other Secured Parties of any obligations, covenants or agreements of Debtor
under such Assigned Agreement, and neither the Intercreditor Agent nor any of
the Secured Parties shall be liable to either Debtor or any other Person as a
result of any actions undertaken by the Intercreditor Agent or any of the
Secured Parties pursuant hereto or pursuant to any Consent or in curing or
attempting to cure any such default. This Agreement shall not be deemed to
release or to affect in any way the
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obligations of Debtor under the Assigned Agreements or the rights of
Intercreditor Agent hereunder with respect to the exercise of remedies.
2.7 Restrictions on Modification of Assigned Agreements. Debtor shall
not without the consent of the Intercreditor Agent:
2.7.1 cancel or terminate any of the Assigned Agreements or consent
to or accept any cancellation or termination thereof;
2.7.2 amend or otherwise modify the Assigned Agreements or give any
consent, waiver or approval thereunder;
2.7.3 waive any default under or breach of the Assigned Agreements;
2.7.4 consent to or permit or accept any prepayment of amounts to
become due under or in connection with the Assigned Agreements, except as
expressly provided therein; or,
2.7.5 take any other action in connection with the Assigned
Agreements that would impair the value of the interest or rights of Debtor
thereunder or that would impair the interest or rights of the Secured
Parties.
Notwithstanding the foregoing, Debtor may take any actions otherwise
prohibited under this Agreement to the extent permitted by the Disbursement
Agreement, the Mortgage Notes Indenture, the Bank Credit Agreement and the GMAC
Credit Agreement. Further, Debtor shall not sell, assign (by operation of law or
otherwise) or otherwise dispose of any of the Collateral except as permitted by
the Disbursement Agreement, the Bank Credit Agreement, the Mortgage Notes
Indenture or the GMAC Credit Agreement so long as any such agreement by its
terms restricts the sale, assignment or other disposition of Collateral.
3. Obligations Secured.
3.1 GMAC Secured Obligations. This Agreement secures, and all of the
Collateral is collateral security for (i) the prompt payment and performance by
each of the Borrowers and Debtor when due whether at stated maturity, by
required prepayment, declaration, acceleration, demand or otherwise (including
the payment of amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
ss.362(a)), of all obligations and liabilities of every nature of each of the
Borrowers and Debtor now or hereafter existing under or arising out of or in
connection with the GMAC Credit Agreement and the other Loan Documents (as
defined in the GMAC Credit Agreement) and all extensions and renewals thereof,
whether for principal, interest (including without limitation, interest that,
but for the filing of a petition in bankruptcy with respect to any of such
Borrowers and Debtor, would accrue on such obligations at the contract rate
whether or not a claim for such interest is allowed in any such proceeding),
payments for early termination, fees, expenses,
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increased costs, indemnification, or otherwise, whether voluntary or
involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated and whether or not jointly owed with others, (ii) any and all sums
advanced by GMAC in order to preserve the Collateral or preserve GMAC's security
interest in the Collateral (or the priority thereof), (iii) the expenses of GMAC
of retaking, holding, preparing for sale or lease, selling or otherwise
disposing of or realizing on the Collateral, of any proceeding for the
collection or enforcement of any indebtedness, obligations or liabilities of
each of Borrowers and Debtor referred to above, or of any exercise by GMAC of
its rights hereunder, together with reasonable attorneys' fees and disbursements
and court costs, (iv) any and all obligations of Borrowers and Debtor to the
Disbursement Agent and Intercreditor Agent in respect of costs, fees,
indemnification or otherwise under this Agreement, the Disbursement Agreement,
the Collateral Account Agreements and/or any other Financing Agreement whether
voluntary or involuntary, direct or indirect, absolute or contingent, liquidated
or unliquidated and whether or not jointly owed with others and (v) any of the
foregoing obligations that are paid to the extent all or a portion of such
payment is avoided or recovered directly or indirectly from GMAC as a
preference, fraudulent transfer or otherwise (collectively, the "GMAC Secured
Obligations").
3.2 Bank Secured Obligations. This Agreement secures, and all of the
Collateral is collateral security for (i) the prompt payment and performance by
each Borrower and Debtor when due whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. ss.362(a)), of all
obligations and liabilities of every nature of Borrowers and Debtor now or
hereafter existing under or arising out of or in connection with the Bank Credit
Agreement and the other Loan Documents (as defined in the Bank Credit Agreement)
and the Lender Interest Rate Agreements and all extensions and renewals thereof,
whether for principal, interest (including without limitation, interest that,
but for the filing of a petition in bankruptcy with respect to such Borrowers or
Debtor, would accrue on such obligations at the contract rate whether or not a
claim for such interest is allowed in any such proceeding), reimbursement for
draws on letters of credit, payments for early termination, fees, expenses,
increased costs, indemnification, or otherwise, whether voluntary or
involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated and whether or not jointly owed with others, (ii) any and all sums
advanced by any of the Bank Secured Parties in order to preserve the Collateral
or preserve Bank Secured Parties' security interest in the Collateral (or the
priority thereof), (iii) the expenses of any Bank Secured Parties of retaking,
holding, preparing for sale or lease, selling or otherwise disposing of or
realizing on the Collateral, of any proceeding for the collection or enforcement
of any indebtedness, obligations or liabilities of Borrowers or Debtor referred
to above, or of any exercise by the Bank Secured Parties of its rights
hereunder, together with reasonable attorneys' fees and disbursements and court
costs, (iv) any and all obligations of Borrowers and Debtor to the Disbursement
Agent and Intercreditor Agent in respect of costs, fees, indemnification or
otherwise under this Agreement, the Disbursement Agreement, the Collateral
Account Agreements and/or any other Financing Agreement whether voluntary or
involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated and whether or not jointly owed with others and (v) any of the
foregoing obligations that are paid to the extent all or any portion of
11
such payment is avoided or recovered directly or indirectly from any Bank
Secured Party as a preference, fraudulent transfer or otherwise (collectively,
the "Bank Secured Obligations").
3.3 Mortgage Note Secured Obligations. This Agreement secures, and all
of the Collateral is collateral security for (i) the prompt payment and
performance by each Borrower and Debtor when due whether at stated maturity, by
required prepayment, declaration, acceleration, demand or otherwise (including
the payment of amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
ss.362(a)), of all obligations and liabilities of every nature of Borrowers and
Debtor now or hereafter existing under or arising out of or in connection with
the Mortgage Notes, the Mortgage Note Indenture, this Agreement, the
Disbursement Agreement, the Collateral Account Agreements and the Mortgage Notes
Indenture Security Documents and all extensions and renewals thereof, whether
for principal, interest (including without limitation, interest that, but for
the filing of a petition in bankruptcy with respect to such Borrower or Debtor,
would accrue on such obligations at the contract rate whether or not a claim for
such interest is allowed in any such proceeding), payments for early
termination, fees, expenses, increased costs, indemnification, or otherwise,
whether voluntary or involuntary, direct or indirect, absolute or contingent,
liquidated or unliquidated and whether or not jointly owed with others, (ii) any
and all sums advanced by any of any Mortgage Note Secured Party in order to
preserve the Collateral or preserve the Mortgage Note Secured Parties' security
interest in the Collateral (or the priority thereof), (iii) the expenses of the
Mortgage Note Indenture Trustee of retaking, holding, preparing for sale or
lease, selling or otherwise disposing of or realizing on the Collateral, of any
proceeding for the collection or enforcement of any indebtedness, obligations or
liabilities of Borrowers or Debtor referred to above, or of any exercise by the
Mortgage Note Indenture Trustee of its rights hereunder, together with
reasonable attorneys' fees and disbursements and court costs, (iv) any and all
obligations of Borrowers and Debtor to the Disbursement Agent and Intercreditor
Agent in respect of costs, fees, indemnification or otherwise under this
Agreement, the Disbursement Agreement, the Collateral Account Agreements and/or
any other Financing Agreement whether voluntary or involuntary, direct or
indirect, absolute or contingent, liquidated or unliquidated and whether or not
jointly owed with others and (v) any of the foregoing obligations that are paid,
to the extent all or a portion of such payment is avoided or recovered directly
or indirectly from any Mortgage Note Secured Party as a preference, fraudulent
transfer or otherwise (collectively, the "Mortgage Note Secured Obligations").
4. Representations and Warranties of Debtor.
Debtor represents and warrants as of the date hereof as follows:
4.1 Debtor has not assigned any of its rights under the Assigned
Agreements except as expressly permitted under the Disbursement Agreement and
each of the Bank Credit Agreement, the GMAC Credit Agreement and the Mortgage
Notes Indenture.
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4.2 Debtor has not executed and is not aware of any effective financing
statement, security agreement or other instrument similar in effect covering all
or any part of the Collateral, except such as may have been filed in accordance
with the terms of this Agreement and the other Financing Agreements in favor of
Secured Parties.
4.3 Except as otherwise permitted by the Disbursement Agreement, the
Bank Credit Agreement, the GMAC Credit Agreement and the Mortgage Notes
Indenture Debtor is lawfully possessed of ownership of the Collateral and has
full right, title and interest in and to all rights purported to be granted to
it under the Assigned Agreements, not subject to any Liens except Permitted
Liens. Debtor has full power and lawful authority to grant and assign the
Collateral hereunder and all consents of third parties required in connection
therewith have been obtained. All of the assets, equipment and personal property
of Debtor secured hereby is, as of the date hereof, located at the places
specified in Annex 1 attached hereto.
4.4 Debtor does not do business, and for the previous five years has not
done business, under any fictitious business names or trade names.
4.5 Debtor is the true, lawful and exclusive owner of the Marks listed
in Annex 2, except those listed as being held under a non-exclusive license, and
said listed Marks include all of Debtor's United States federal registrations or
applications registered in the United States Patent and Trademark office. Debtor
owns or is licensed to use all Marks that it uses that are material to its
business. Debtor is aware of no material third party claim that any aspect of
Debtor's present or contemplated business operations infringes or will infringe
on any such third party's rights to such Marks. Debtor is the owner of record of
all United States registrations and applications listed in Annex 2 hereto and
that said registrations are valid, subsisting, have not been cancelled and that
Debtor is not aware of any material third-party claim that any of said
registrations is invalid or unenforceable.
4.6 Debtor is the true, lawful and exclusive owner of all rights in the
Patents listed in Annex 3 hereto and in the Copyrights listed in Annex 4 hereto.
Said listed Patents include all the United States patents and applications for
United States patents that Debtor owns and said listed Copyrights constitute all
the United States copyrights registered in the United States Copyright Office
and applications for United States copyrights that it now uses or practices
under that are material to its business. Debtor is aware of no material third
party claim that any aspect of Debtor's present or contemplated business
operations infringes or will infringe on any such third party's rights to any
patent or any copyright.
4.7 All notes and other instruments (excluding checks) and all
certificated securities comprising any and all items of Collateral have been
delivered to the Intercreditor Agent duly endorsed and accompanied by duly
executed instruments of transfer or assignment in blank.
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5. Covenants of Debtor.
Debtor covenants as follows:
5.1 Any action or proceeding to enforce this Agreement after an Event of
Default has occurred and is continuing under any Assigned Agreement may be taken
by the Intercreditor Agent either in Debtor's name or in the Intercreditor
Agent's name, as the Intercreditor Agent may deem necessary.
5.2 Debtor will, so long as any Obligations shall be outstanding,
warrant and defend its title to the Collateral and the interests of the
Intercreditor Agent and the Secured Parties in the Collateral against any claim
or demand of any persons (other than Permitted Liens) which could reasonably be
expected to materially and adversely affect Debtor's title to, or the Secured
Parties right or interest in, such Collateral.
5.3 Debtor will at all times keep accurate and complete records of the
Collateral. Debtor shall, at its own expense, permit representatives of the
Intercreditor Agent, the Bank Agent, GMAC and the Mortgage Note Indenture
Trustee upon reasonable prior notice, and in accordance with Section 5.5 of the
Disbursement Agreement (while applicable), at any time during normal business
hours of Debtor to inspect and make abstracts from Debtor's books and records
pertaining to the Collateral subject to a confidentiality undertaking in form
and substance reasonably satisfactory to Debtor. Upon the occurrence and during
the continuation of any Event of Default, at the Intercreditor Agent's request,
Debtor shall promptly deliver copies of any and all such records to the
Intercreditor Agent.
5.4 Unless waived in writing by the Intercreditor Agent, Debtor shall
give the Intercreditor Agent at least forty-five (45) days' notice before it
changes its name, identity, corporate structure, location of its principal place
of business or location of its chief executive office and shall at the expense
of Debtor execute and deliver such instruments and documents as may reasonably
be required by the Intercreditor Agent to maintain a prior perfected security
interest in the Collateral.
5.5 Debtor will keep and maintain the Collateral in good condition,
working order and repair and from time to time will make or cause to be made all
repairs, replacements and other improvements in connection therewith that are
necessary or desirable toward such end. Debtor will not misuse the Collateral,
or allow it to deteriorate except for the ordinary wear and tear of its normal
and expected use in Debtor's business in accordance with Debtor's policies as
then in effect (provided that no changes are made to Debtor's policies as in
effect on the date hereof that would be materially adverse to the interests of
the Secured Parties), and will comply in all material respects with all laws,
statutes and regulations pertaining to the use or ownership of the Collateral.
Debtor will promptly notify the Intercreditor Agent, Bank Agent, GMAC and the
Mortgage Note Indenture Trustee regarding any material loss or damage to any
material Collateral or portion thereof; provided, however, that the foregoing
provisions exclude normal wear and tear to the Collateral, items that Debtor
reasonably believes are no longer necessary to the successful operation of its
business and the disposition of obsolete items. Debtor will not
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use or permit any Collateral to be used unlawfully or in violation of any
provision of this Agreement or any applicable statute, regulation or ordinance
or any policy of insurance covering the Collateral. Nothing contained in this
Section 5.5 shall prohibit Debtor from taking any action or refraining from
taking any action permitted by the Disbursement Agreement (while applicable),
the Bank Credit Agreement, the Mortgage Note Indenture or the GMAC Credit
Agreement.
5.6 Upon the reasonable request of the Intercreditor Agent, Bank Agent,
GMAC or the Mortgage Notes Indenture Trustee, Debtor will promptly deliver to
such Person records and sche dules that show the status, condition and location
of the Collateral, including accounts receivable aging reports and other reports
reasonably requested by such Person, all in reasonable detail; and will promptly
notify the Intercreditor Agent, Bank Agent, GMAC and the Mortgage Note Indenture
Trustee in writing of any event, or change of law, regulation, business
practice, or business condition that may materially adversely affect the value
of the Collateral. The Intercreditor Agent, Bank Agent, GMAC and the Mortgage
Note Indenture Trustee shall have the right to review and verify such records,
schedules, financial information and notices, and Debtor will reimburse each
such Person for all costs incurred thereby. Such review and verification shall
include the right of the Intercreditor Agent, Bank Agent, GMAC and the Mortgage
Note Indenture Trustee to contact account debtors to confirm balances owing on
and the terms of Receivables, provided that an Event of Default has occurred and
is continuing.
5.7 Except as otherwise provided in this Section 5.7, Debtor shall
continue to collect, at its own expense, all amounts due or to be become due
Debtor under the Receivables. In connection with such collections, Debtor may
take (and, at the Intercreditor Agent's reasonable direction, shall take) such
action as Debtor or the Intercreditor Agent after consultation with Debtor
reasonably deem necessary or advisable to enforce collection of the Receivables;
provided, however, that Debtor shall not adjust, settle or compromise the amount
or payment of any Receivable, or release wholly or partly any account debtor or
obligor thereof, or allow any credit or discount thereon, other than
adjustments, settlements, or discounts that are in accordance with Debtor's
policies as then in effect; provided that no changes are made to Debtor's
policies as in effect on the date hereof that would be materially adverse to the
interests of the Secured Parties. The Intercreditor Agent shall have the right
at any time after the occurrence and during the continuation of an Event of
Default to notify the account debtors or obligors under any of the Receivables
of the assignment of such Receivables to the Secured Parties and to direct such
account debtors or obligors to make payment of all amounts due or to become due
to Debtor thereunder directly to the Intercreditor Agent or to such Secured
Parties as Intercreditor Agent may direct in accordance with the Intercreditor
Agreement and, upon such notification and at the expense of Debtor, to enforce
collection of any such Receivables, and to adjust, settle or compromise the
amount or payment thereof, as the Intercreditor may deem appropriate in its sole
discretion. After the occurrence and during the continuation of an Event of
Default (i) all amounts and proceeds (including instruments) received by Debtor
in respect of the Receivables shall be received in trust for the benefit of the
Secured Parties hereunder and, upon notice from the Intercreditor Agent, shall
be segregated from other funds of Debtor and shall be forthwith paid over to the
Intercreditor Agent or to such Secured Parties as Intercreditor Agent may direct
in accordance with the Intercreditor Agreement in the same form as so
15
received (with all necessary or appropriate endorsements) to be held as cash
collateral and applied as provided by Section 8, and (ii) Debtor shall not
adjust, settle or compromise the amount or payment of any Receivable, or release
wholly or partly any account debtor or obligor thereof, or allow any credit or
discount thereon.
5.8 Debtor shall pay promptly when due all taxes, assessments and
governmental charges or levies imposed upon, and all claims against, the
Collateral, except to the extent the validity thereof is being contested in good
faith; provided that Debtor shall in any event pay such taxes, assessments,
charges, levies or claims not later than five (5) days prior to the date of any
proposed sale under any judgement, writ or warrant of attachment entered or
filed against Debtor or any of the Collateral as a result of the failure to make
such payment.
5.9 Marks.
(a) Debtor hereby agrees not to sell, assign (by operation of law
or otherwise) or otherwise dispose of any right under any material Xxxx
that Debtor is required to maintain under Section 5.9(b) hereof except as
permitted by the Disbursement Agreement (while applicable), the Bank
Credit Agreement, the GMAC Credit Agreement and the Mortgage Note
Indenture, absent prior written approval of the Intercreditor Agent. Each
Debtor agrees to use such Marks in interstate commerce in a manner that is
sufficient to preserve such Marks as trademarks or service marks
registered under the laws of the United States.
(b) Debtor shall, at its own expense, diligently prosecute all
applications for Marks listed in Annex 2 hereto and further, for all of
its material registered Marks, shall diligently process all documents
required by the Trademark Act of 1946, 15 U.S.C. xx.xx. 1051 et seq. to
maintain trademark registration, including but not limited to affidavits
of use and applications for renewals of registration in the United States
Patent and Trademark Office pursuant to 15 U.S.C. xx.xx. 1058(a), 1059 and
1065, and shall pay all fees and disbursements in connection therewith and
shall not abandon any such filing of affidavit of use or any such
application of renewal prior to the exhaustion of all administrative and
judicial remedies without the prior written consent of the Intercreditor
Agent; provided, that Debtor shall not be obligated to maintain any Xxxx
in the event that Debtor determines, in its reasonable business judgment,
that the maintenance of such Xxxx is no longer necessary or desirable in
the conduct of its business. Debtor agrees to notify the Intercreditor
Agent, the Bank Agent, GMAC and the Mortgage Note Indenture Trustee three
(3) months prior to the date on which the affidavits of use or the
applications for renewal registration are due with respect to any material
registered Xxxx.
(c) If any material Xxxx registration certificate is issued
hereafter to Debtor as a result of any application now or hereafter
pending before the United States Patent and Trademark Office, within
thirty (30) days of receipt of such certificate confirming such
registration Debtor shall deliver a copy of such certificate, and a grant
of security in such Xxxx on behalf of the Secured Parties, to the
Intercreditor Agent, the Bank Agent, GMAC and the Mortgage Note Indenture
Trustee, confirming the grant thereof
16
hereunder together with all cover sheets or other documents or instruments
required to be filed with the United States Patent and Trademark Office in
order to create or perfect a lien in respect of such Xxxx.
(d) Debtor agrees, promptly upon learning thereof, to notify the
Intercreditor Agent, the Bank Agent, GMAC and the Mortgage Note Indenture
Trustee in writing of the name and address of, and to furnish such
pertinent information that may be available with respect to, any party who
Debtor believes is infringing or otherwise violating any of Debtor's
rights to any material Xxxx, or with respect to any party claiming that
Debtor's use of any such Xxxx violates in any material respect any
property right of that party. Debtor further agrees, unless otherwise
agreed by the Intercreditor Agent, diligently to prosecute any Person
infringing any material Xxxx.
5.10 Patents and Copyrights.
(a) Debtor hereby agrees not to sell, assign (by operation of law
or otherwise), or otherwise dispose of any right under any material Patent
or Copyright except as permitted by the Disbursement Agreement (while
applicable), the Bank Credit Agreement, the GMAC Credit Agreement and the
Mortgage Note Indenture, absent prior written approval of the
Intercreditor Agent.
(b) Debtor shall, at its own expense, diligently prosecute all
applications for material Patents and material Copyrights listed in Annex
3 and Annex 4 hereto, respectively, and shall not abandon any such
application prior to exhaustion of all reasonable administrative and
judicial remedies, absent written consent of the Intercreditor Agent.
Debtor shall do all acts and things reasonably necessary to maintain the
Patents and Copyrights listed in Annex 3 and Annex 4, respectively, and
all Patents and Copyrights hereafter obtained or acquired by Debtor,
including, without limitation, making timely payment of all post-issuance
fees required pursuant to 35 U.S.C. ss. 41 to maintain in force rights
under each Patent.
(c) Within thirty (30) days of acquisition of a Patent or
Copyright, or of filing of an application for a Patent or Copyright by
Debtor, Debtor shall deliver to the Intercreditor Agent, the Bank Agent,
GMAC and the Mortgage Note Indenture Trustee a copy of said Patent or
Copyright or such application, as the case may be, with a grant of
security as to such Patent or Copyright, as the case may be, confirming
the grant thereof hereunder together with all cover sheets or other
documents or instruments required to be filed with the United States
Patent and Trademark Office in order to create or perfect a lien in
respect of such Patent or Copyright.
(d) Debtor agrees, promptly upon learning thereof, to notify the
Intercreditor Agent, the Bank Agent, GMAC and the Mortgage Note Indenture
Trustee in writing of the name and address of, and to furnish such
pertinent information available to Debtor with respect to any party who
Debtor believes is infringing or otherwise violating any of Debtor's
rights in any material Patent or material Copyright, or with respect to
any
17
party claiming that Debtor's practice of any Patent or use of any
Copyright violates any property right of that third party. Debtor further
agrees, unless otherwise agreed by the Intercreditor Agent, diligently to
prosecute any Person infringing any material Patent or material Copyright.
5.11 Accounts. Following termination of the Accounts, Debtor shall
establish a cash management system in form and substance reasonably acceptable
to Intercreditor Agent and shall only establish and maintain deposit accounts,
investment accounts or like accounts with financial institutions that have
entered into letter agreements with the Intercreditor Agent and the Debtor (or
its subsidiaries) in form and substance satisfactory to Intercreditor Agent
pursuant to which such financial institution confirms and acknowledges the
security interest of Secured Parties in such account, waives its right of
set-off with respect to amounts held therein and agrees that if Intercreditor
Agent notifies such institution that an Event of Default has occurred, then
until such notification is rescinded, such institution will act only on
instructions from Intercreditor Agent and will, if so instructed to, block
further withdrawals from such account. Debtor will take such further actions and
execute such further documents in connection therewith as Intercreditor Agent
may reasonably request in order to perfect, or maintain the perfection of the
security interest of Secured Parties in such accounts.
6. Remedies Upon Event of Default.
6.1 Subject to compliance with applicable Nevada Gaming Laws, if any
Event of Default shall have occurred and be continuing, the Intercreditor Agent
may exercise in respect of the Collateral, in addition to all other rights and
remedies provided for herein or otherwise available to it, all the rights and
remedies of a secured party on default under the UCC (whether or not the UCC
applies to the affected Collateral), and also may (a) require Debtor to, and
Debtor hereby agrees that it will at its expense and upon request of the
Intercreditor Agent forthwith, assemble all or part of the Collateral as
directed by the Intercreditor Agent and make it available to the Intercreditor
Agent at a place to be designated by the Intercreditor Agent that is reasonably
convenient to both parties, (b) enter onto the property where any Collateral is
located and take possession thereof with or without judicial process, (c) prior
to the disposition of the Collateral, store, process, repair or recondition the
Collateral or otherwise prepare the Collateral for disposition in any manner to
the extent the Intercreditor Agent deems appropriate, (d) take possession of
Debtor's premises or place custodians in exclusive control thereof, remain on
such premises and use the same and any of Debtor's equipment for the purpose of
completing any work in process, taking any actions described in the preceding
clause (c) and collecting any Obligation, and (e) without notice except as
specified below, sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any of the Intercreditor Agent's offices or
elsewhere, for cash, on credit or for future delivery, at such time or times and
at such price or prices and upon such other terms as the Intercreditor Agent may
deem commercially reasonable. The Intercreditor Agent or any of the Secured
Parties or Interest Rate Exchanger may be the purchaser of any or all of the
Collateral at any such sale and the Intercreditor Agent as agent for and
representative of the Secured Parties and Interest Rate Exchangers shall be
entitled, for the purpose of bidding and making settlement or payment of the
purchase price for
18
all or any portion of the Collateral sold at any such public sale, to use and
apply any of the Obligations as a credit on account of the purchase price for
any Collateral payable by the Intercreditor Agent at such sale. Each purchaser
at any such sale shall hold the property sold absolutely free from any claim or
right on the part of Debtor, and Debtor hereby waives (to the extent permitted
by applicable law) all rights of redemption, stay and/or appraisal which they
now have or may at any time in the future have under any rule of law or statute
now existing or hereafter enacted. Debtor agrees that, to the extent notice of
sale shall be required by law, at least ten days' notice to Debtor of the time
and place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Intercreditor Agent shall not
be obligated to make any sale of Collateral regardless of notice of sale having
been given. The Intercreditor Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned. Debtor hereby waives any claims against the Intercreditor Agent
arising by reason of the fact that the price at which any Collateral may have
been sold at such a private sale was less than the price which might have been
obtained at a public sale, even if the Intercreditor Agent accepts the first
offer received and does not offer such Collateral to more than one offeree. If
the proceeds of any sale or other disposition of the Collateral are insufficient
to pay all the Obligations, Debtor shall be liable for the deficiency and the
reasonable fees of any attorneys employed by the Intercreditor Agent to collect
such deficiency. Upon written demand from the Intercreditor Agent, Debtor shall
execute and deliver to the Intercreditor Agent an assignment or assignments of
the Patents, Copyrights, and Marks and such other documents as are necessary or
appropriate to carry out the intent and purposes of this Agreement. Debtor
agrees that such an assignment and/or recording shall be applied to reduce the
Obligations outstanding only to the extent that the Intercreditor Agent receives
cash proceeds in respect of the sale of, or other realization upon, the
Collateral.
7. Remedies Cumulative; Delay Not Waiver.
7.1 No right, power or remedy herein conferred upon or reserved to the
Intercreditor Agent is intended to be exclusive of any other right, power or
remedy and every such right, power and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right, power and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder or otherwise shall not
prevent the concurrent assertion or employment of any other appropriate right or
remedy. Resort to any or all security now or hereafter held by the Intercreditor
Agent may be taken concurrently or successively and in one or several
consolidated or independent judicial actions or lawfully taken nonjudicial
proceedings, or both.
7.2 No delay or omission of the Intercreditor Agent to exercise any
right or power accruing upon the occurrence and during the continuance of any
Event of Default as aforesaid shall impair any such right or power or shall be
construed to be a waiver of any such Event of Default or an acquiescence
therein; and every power and remedy given by this Agreement may
19
be exercised from time to time, and as often as shall be deemed expedient, by
the Intercreditor Agent.
8. Application of Proceeds.
All proceeds received by the Intercreditor Agent in respect of any sale
of, collection from, or other realization upon all or any part of the Collateral
shall be applied to repay the Secured Obligations as provided in the
Intercreditor Agreement.
9. Attorney-In-Fact.
Subject to compliance with applicable Nevada Gaming Laws, Debtor hereby
irrevocably appoints the Intercreditor Agent as Debtor's attorney-in-fact, with
full authority in the place and stead of Debtor and in the name of Debtor, the
Intercreditor Agent or otherwise, from time to time upon and following the
occurrence and continuation of an Event of Default or Potential Event of Default
in the Intercreditor Agent's discretion to take any action and to execute any
instrument that the Intercreditor Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, including without limitation:
(a) to obtain and adjust insurance required to be maintained by
Debtor or paid to the Intercreditor Agent pursuant to this Agreement;
(b) to ask for, demand, collect, xxx for, recover, compound,
receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral;
(c) to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clauses (a)
and (b) above;
(d) to file any claims or take any action or institute any
proceedings that the Intercreditor Agent may deem necessary or desirable
for the collection of any of the Collateral or otherwise to enforce the
rights of the Intercreditor Agent with respect to any of the Collateral;
(e) to pay or discharge taxes or Liens (other than Permitted
Liens) levied or placed upon or threatened against the Collateral, the
legality or validity thereof and the amounts necessary to discharge the
same to be determined by the Intercreditor Agent in its sole discretion,
any such payments made by the Intercreditor Agent to become obligations of
Debtor to the Intercreditor Agent, due and payable immediately without
demand;
20
(f) to sign and endorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with accounts and
other documents relating to the Collateral; and
(g) upon the occurrence and during the continuation of an Event of
Default, generally to sell, transfer, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral as fully and
completely as though the Intercreditor Agent were the absolute owner
thereof for all purposes, and to do, at the Intercreditor Agent's option
and Debtor's expense, at any time or from time to time, all acts and
things that the Intercreditor Agent deems necessary to protect, preserve
or realize upon the Collateral and the Intercreditor Agent's security
interest therein in order to effect the intent of this Agreement, all as
fully and effectively as Debtor might do.
10. The Intercreditor Agent May Perform.
Upon the occurrence and during the continuance of an Event of Default, if
Debtor fails to perform any agreement contained herein, the Intercreditor Agent
may itself perform, or cause performance of, such agreement, and the reasonable
expenses of the Intercreditor Agent incurred in connection therewith shall be
part of the Obligations of the Relevant Secured Parties.
11. Perfection; Further Assurances.
11.1 Debtor agrees that from time to time, at the expense of Debtor,
Debtor shall promptly execute and deliver all further instruments and documents,
and take all further action, that may be reasonably necessary, or that the
Intercreditor Agent may reasonably request, in order to perfect and protect the
assignment and security interest granted, purported or intended to be granted
hereby in favor of the Secured Parties or to enable the Intercreditor Agent to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral. Without limiting the generality of the foregoing, Debtor shall (i)
if any Collateral shall be evidenced by a promissory note or other instrument in
excess of $5,000, deliver and pledge to the Intercreditor Agent for the benefit
of the Secured Parties granted a security interest in such Collateral such note
duly endorsed without recourse, and accompanied by duly executed instruments of
transfer or assignment, all in form and substance satisfactory to Intercreditor
Agent, (ii) execute and deliver to the Intercreditor Agent such financing or
continuation statements, or amendments thereto, and such other instruments,
endorsements or notices, as may be reasonably necessary or desirable or as such
Secured Parties may reasonably request, in order to perfect and preserve the
assignments and security interests granted, purported or intended to be granted
hereby in favor of the Relevant Secured Parties and (iii) at the Intercreditor
Agent's reasonable request, appear in and defend any action or proceeding that
may affect Debtor's title to or the Intercreditor Agent's or any of the Secured
Parties security interest in all or any part of the Collateral.
21
11.2 Debtor hereby authorizes the Bank Agent, GMAC, the Mortgage Note
Indenture Trustee and the Intercreditor Agent to file one or more financing or
continuation statements, and amendments thereto, relative to all or any part of
the Collateral in which such Secured Party has been granted a security interest
without the signature of Debtor where permitted by law.
11.3 Debtor shall pay all filing, registration and recording fees and all
refiling, re-registration and re-recording fees, and all reasonable expenses
incident to the execution and acknowledgment of this Agreement, any assurance,
and all federal, state, county and municipal stamp taxes and other taxes (other
than income taxes), duties, imports, assessments and charges arising out of or
in connection with the execution and delivery of this Agreement, any agreement
supplemental hereto, any financing statements, and any instruments of further
assurance.
11.4 Debtor shall, promptly upon request, provide to the Intercreditor
Agent, all information and evidence it may reasonably request concerning the
Collateral to enable the Intercreditor Agent to enforce the provisions of this
Agreement.
12. Place of Business; Location of Records.
Unless the Intercreditor Agent is otherwise notified under Section 5.4,
the place of business and chief executive office of Debtor is, and all records
of Debtor concerning the Collateral are and will be, located at the address of
Debtor set forth on the signature pages to this Agreement.
13. Continuing Assignment and Security Interest; Transfer of Debt.
This Agreement shall create a continuing assignment of, and security
interest in, the Collateral and shall (a) remain in full force and effect until
payment in full of all Obligations, (b) be binding upon Debtor, its successors
and assigns; provided, however, that the obligations of Debtor, its successors
and assigns hereunder may not be assigned without the prior written consent of
the Intercreditor Agent; and (c) inure, together with the rights and remedies of
the Intercreditor Agent hereunder, to the benefit of the Intercreditor Agent,
its successors, transferees and assigns (whether as a result of a refinancing or
otherwise), the other Secured Parties and their respective successors, transfers
and assigns (whether as a result of a refinancing or otherwise). Without
limiting the generality of the foregoing but subject to the terms of the
Financing Agreements evidencing the Obligations owed to particular Secured
Parties, such Secured Parties may assign or otherwise transfer all or any part
of or interest in such Financing Agreements or other evidence of indebtedness
held by them to any other Person to the extent permitted by such Financing
Agreements, and such other Person shall thereupon become vested with all or an
appropriate part of the benefits in respect thereof granted to the Secured
Parties herein or otherwise. The release of the security interest in any or all
of the Collateral, the taking or acceptance of additional security, or the
resort by any Secured Party or the Intercreditor Agent to any security it may
have in any order it may deem appropriate, shall not affect the liability of any
person on the Obligations secured hereby. If this Agreement shall be
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terminated or revoked by operation of law, Debtor will indemnify and save the
Secured Parties harmless from any loss which may be suffered or incurred by the
Secured Parties in acting hereunder prior to the receipt by the Intercreditor
Agent, its successors, transfers, or assigns of notice of such termination or
revocation. Debtor acknowledges and agrees that, pursuant to and in accordance
with the terms of the Intercreditor Agreement, one or more additional or
successor Intercreditor Agents, or other agents or representatives of the
Intercreditor Agent may be appointed, by written notice to Debtor, and such
person or persons shall be entitled to exercise or perform all or a portion of
the duties or obligations of the Intercreditor Agent hereunder in accordance
with the terms of such appointment.
14. Termination of Security Interest.
14.1 Upon the indefeasible payment in full of the GMAC Obligations or, if
earlier, the Mall Release Date, the security interest granted under Subsection
2.1 hereof in favor of GMAC shall terminate; provided that such termination
shall not affect the rights of the other Secured Parties hereunder. Upon any
such termination, the Intercreditor Agent will, at Debtor's expense, execute
and, deliver to Debtor such documents (including, without limitation, UCC-3
termination statements) as Debtor shall reasonably request to evidence such
termination. Following any such termination any references to GMAC and the GMAC
Credit Agreement shall be deemed to be deleted.
14.2 Upon the indefeasible payment in full of the Bank Secured
Obligations, the security interest granted under Subsection 2.2 hereof in favor
of the Intercreditor Agent on behalf of the Bank Secured Parties shall
terminate; provided that such termination shall not affect the rights of the
other Secured Parties hereunder. Upon any such termination, the Intercreditor
Agent will, at Debtor's expense, execute and deliver to Debtor such documents
(including, without limitation, UCC-3 termination statements) as Debtor shall
reasonably request to evidence such termination. Following any such termination
any references to the Bank Agent, the Bank Secured Parties and the Bank Credit
Agreement shall be deemed to be deleted.
14.3 Upon the indefeasible payment in full of the Mortgage Note Secured
Obligations, the security interest granted under Subsection 2.3 hereof in favor
of the Mortgage Note Indenture Trustee shall terminate; provided that such
termination shall not affect the rights of the other Secured Parties hereunder.
Upon any such termination, the Intercreditor Agent will, at Debtor's expense,
execute and deliver to Debtor such documents (including, without limitation,
UCC-3 termination statements) as Debtor shall reasonably request to evidence
such termination. Following any such termination any references to the Mortgage
Note Secured Parties, the Mortgage Note Indenture Trustee and the Mortgage Note
Indenture shall be deemed to be deleted.
14.4 Upon the termination of the security interests of GMAC and the Bank
Secured Parties in accordance with Sections 14.1 and 14.2 above, the appointment
of Intercreditor Agent shall terminate and all duties, rights and remedies
vested in Intercreditor Agent shall thereupon be vested in the Mortgage Notes
Indenture Trustee.
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15. Indemnity and Expenses.
To the extent not covered by the Bank Credit Agreement, the GMAC Credit
Agreement or the Mortgage Note Indenture, Debtor agrees to indemnify the
Intercreditor Agent and each other Secured Party from and against any and all
claims, losses and liabilities growing out of or resulting from this Agreement
(including, without limitation, enforcement of this Agreement), except claims,
losses or liabilities resulting from such Secured Party's gross negligence or
willful misconduct as finally determined by a court of competent jurisdiction.
16. Attorneys' Fees.
In the event any legal action or proceeding (including, without
limitation, any of the remedies provided for herein or at law) is commenced to
enforce or interpret this Agreement or any provision thereof, Debtor shall
indemnify each of the Secured Parties and the Intercreditor Agent for their
reasonable attorneys' fees and other costs and expenses incurred therein, and if
a judgment or award is entered in any such action or proceeding, such reasonable
attorneys' fees and other costs and expenses may be made a part of such judgment
or award.
17. Amendments; Waivers; Consents.
No amendment, modification, termination or waiver of any provision of this
Agreement, or consent to any departure by Debtor therefrom, shall in any event
be effective without the written concurrence of the Intercreditor Agent and
Debtor.
18. Notices.
All notices or other communications required or permitted to be given
hereunder shall be in writing and shall be considered as properly given (a) if
delivered in person, (b) if sent by reputable overnight delivery service, (c) in
the event overnight delivery services are not readily available, if mailed by
first class mail, postage prepaid, registered or certified with return receipt
requested or (d) if sent by prepaid telex, or by telecopy with correct answer
back received. Notice so given shall be effective upon receipt by the addressee,
except that communication or notice so transmitted by telecopy or other direct
written electronic means shall be deemed to have been validly and effectively
given on the day (if a Banking Day and, if not, on the next following Banking
Day) on which it is validly transmitted if transmitted before 4 p.m.,
recipient's time, and if transmitted after that time, on the next following
Banking Day; provided, however, that if any notice is tendered to an addressee
and the delivery thereof is refused by such addressee, such notice shall be
effective upon such tender. The addresses of the parties for purposes hereof
shall be as set forth on the signature pages hereof unless and until notice
changing such address is given in accordance with this Section 18. Any party
shall have the
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right to change its address for notice hereunder to any other location by giving
of no less than twenty (20) days' notice to the other parties in the manner set
forth hereinabove.
19. Governing Law.
Subject to the application of Nevada Gaming Laws, this Agreement,
including all matters of construction, validity, performance and the creation,
validity, enforcement or priority of the lien of, and security interests created
by, this Agreement in or upon the Collateral shall be governed by the laws of
the state of New York, without reference to conflicts of law (other than Section
5-1401 of the New York General Obligations Law), except as required by mandatory
provisions of law and except to the extent that the validity or perfection of
the lien and security interest hereunder, or remedies hereunder, in respect of
any particular Collateral are governed by the laws of a jurisdiction other than
the state of New York.
20. Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST DEBTOR ARISING OUT OF OR RELATING
TO THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN XXX XXXXX, XXXXXX XXX XXXX XX XXX
XXXX. BY EXECUTING AND DELIVERING THIS AGREEMENT, DEBTOR, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN
ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO DEBTOR AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION
18;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER DEBTOR IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT INTERCREDITOR AGENT AND ANY SECURED PARTY RETAINS
THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
BRING PROCEEDINGS AGAINST DEBTOR IN THE COURTS OF ANY OTHER JURISDICTION;
AND
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(VI) AGREES THAT THE PROVISIONS OF THIS SECTION 20 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST
EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402
OR OTHERWISE.
21. Reinstatement.
This Agreement shall continue to be effective or be reinstated, as the
case may be, if at any time any amount received by any Secured Party in respect
of the Obligations is rescinded or must otherwise be restored or returned by
such Secured Party upon the insolvency, bankruptcy, reorganization, liquidation
of Debtor or upon the dissolution of, or appointment of any intervenor or
conservator of, or trustee or similar official for, Debtor or any substantial
part of Debtor's assets, or otherwise, all as though such payments had not been
made.
22. Severability.
The provisions of this Agreement are severable, and if any clause or
provision shall be held invalid or unenforceable in whole or in part in any
jurisdiction, then such invalidity or unenforceability shall affect only such
clause or provision, or part thereof, in such jurisdiction and shall not in any
manner affect such clause or provision in any other jurisdiction, or any other
clause or provision of this Agreement in any jurisdiction.
23. Survival of Provisions.
All agreements, representations and warranties made herein shall survive
the execution and delivery of this Agreement and the other Financing Agreements
and extensions of credit thereunder. Notwithstanding anything in this Agreement
or implied by law to the contrary, the agreements, representations and
warranties of Debtor set forth herein shall terminate only upon full repayment
of the Obligations.
24. Headings Descriptive.
The headings in this Agreement are for convenience of reference only and
shall not constitute a part of this Agreement for any other purpose or be given
any substantive effect.
25. Entire Agreement.
This Agreement, together with any other agreement executed in connection
herewith, is intended by the parties as a final expression of their agreement
and is intended as a complete and exclusive statement of the terms and
conditions thereof.
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26. Time.
Time is of the essence of this Agreement.
27. Counterparts.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original but all of which shall together constitute one and
the same agreement.
28. Waiver of Jury Trial.
DEBTOR AND THE INTERCREDITOR AGENT HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO
A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS
AGREEMENT AND THE RELATIONSHIP AMONG THEM THAT IS BEING ESTABLISHED. DEBTOR AND
THE INTERCREDITOR AGENT ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO
ENTER INTO A BUSINESS RELATIONSHIP, THAT IT HAS ALREADY RELIED ON THE WAIVER IN
ENTERING INTO THIS AGREEMENT, AND THAT IT WILL CONTINUE TO RELY ON THE WAIVER IN
THEIR RELATED FUTURE DEALINGS. EACH SUCH PERSON FURTHER WARRANTS AND REPRE SENTS
THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT IT KNOWINGLY
AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL.
29. Responsibilities of the Intercreditor Agent.
The powers conferred on the Intercreditor Agent hereunder are solely to
protect its interest in the Collateral granted for the benefit of the Secured
Parties and shall not impose any duty upon it to exercise any such powers.
Except for the exercise of reasonable care in the custody of any Collateral in
its possession and the accounting for moneys actually received by it hereunder,
the Intercreditor Agent shall have no duty as to any Collateral, it being
understood that the Intercreditor Agent shall have no responsibility for (a)
taking any necessary steps (other than steps taken in accordance with the
standard of care set forth above to maintain possession of the Collateral) to
preserve rights against any parties with respect to any Collateral or (b) taking
any necessary steps to collect or realize upon the Obligations or any guarantee
therefor, or any part thereof, or any of the Collateral. The Intercreditor Agent
shall be deemed to have exercised reasonable care in the custody and
preservation of Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which such Person accords its own property
of like kind.
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IN WITNESS WHEREOF, each of the undersigned has caused this Mall
Construction Subsidiary Security Agreement to be duly executed and delivered as
of the day and year first above written.
DEBTOR:
GRAND CANAL SHOPS MALL
CONSTRUCTION, LLC,
a Delaware limited liability company
By: VENETIAN CASINO RESORT, LLC,
as sole member
By: LAS VEGAS SANDS, INC.,
as managing member
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
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INTERCREDITOR AGENT:
THE BANK OF NOVA SCOTIA,
a Canadian chartered bank,
as Intercreditor Agent
By: /s/ Xxxx X. Xxxxxxxxxx
----------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Relationship Manager
S-2
