EXHIBIT 10.1
EXHIBIT 10.1 to MGM GRAND, INC. 8-K
EXECUTION
LOAN AGREEMENT
Dated as of March 31, 1999
among
MGM GRAND DETROIT II, LLC,
as Borrower
The Lenders, Syndication Agent and Documentation Agent herein named
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
as Administrative Agent
NATIONSBANC XXXXXXXXXX SECURITIES, LLC,
Lead Arranger and Sole Book Manager
TABLE OF CONTENTS
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Page
Article 1 DEFINITIONS AND ACCOUNTING TERMS.............................. 1
1.1 Defined Terms................................................. 1
1.2 Use of Defined Terms.......................................... 29
1.3 Accounting Terms - Fiscal Periods............................. 29
1.4 Rounding...................................................... 30
1.5 Exhibits and Schedules........................................ 30
1.6 Miscellaneous Terms........................................... 30
Article 2 LOANS AND LETTERS OF CREDIT................................... 31
2.1 Loans-General................................................. 31
2.2 Base Rate Loans............................................... 32
2.3 Eurodollar Rate Loans......................................... 32
2.4 Letters of Credit............................................. 33
2.5 Voluntary Reduction of Commitment............................. 37
2.6 Scheduled Reductions of Commitment............................ 37
2.7 Optional Increases to the Commitment.......................... 37
2.8 Optional Termination of Commitment............................ 39
2.9 Administrative Agent's Right to Assume Funds Available for
Advances...................................................... 39
2.10 Collateral and Guaranty....................................... 40
Article 3 PAYMENTS AND FEES............................................. 41
3.1 Principal and Interest........................................ 41
3.2 Arranger's Fees............................................... 42
3.3 Upfront Fees.................................................. 42
3.4 Commitment Fees............................................... 42
3.5 Letter of Credit Fees......................................... 43
3.6 Agency Fees................................................... 43
3.7 Increased Commitment Costs.................................... 43
3.8 Eurodollar Costs and Related Matters.......................... 44
3.9 Late Payments................................................. 48
3.10 Computation of Interest and Fees.............................. 49
3.11 Non-Business Days............................................. 49
3.12 Manner and Treatment of Payments.............................. 49
3.13 Funding Sources............................................... 50
3.14 Failure to Charge Not Subsequent Waiver....................... 51
3.15 Administrative Agent's Right to Assume Payments Will be Made
by Borrower................................................... 51
3.16 Fee Determination Detail...................................... 51
3.17 Survivability................................................. 51
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Article 4 REPRESENTATIONS AND WARRANTIES................................ 52
4.1 Existence and Qualification; Power; Compliance With Laws...... 52
4.2 Authority; Compliance With Other Agreements and Instruments
and Government Regulations............................... 52
4.3 No Governmental Approvals Required............................ 53
4.4 Subsidiaries.................................................. 53
4.5 Company Financials; Borrower's Opening Balance Sheet.......... 53
4.6 No Other Liabilities.......................................... 53
4.7 Title to Property............................................. 53
4.8 Intangible Assets............................................. 54
4.9 Public Utility Holding Company Act............................ 54
4.10 Litigation.................................................... 54
4.11 Binding Obligations........................................... 54
4.12 No Default.................................................... 55
4.13 ERISA......................................................... 55
4.14 Regulations T, U and X; Investment Company Act................ 55
4.15 Disclosure.................................................... 55
4.16 Tax Liability................................................. 56
4.17 Projections................................................... 56
4.18 Hazardous Materials........................................... 56
4.19 Security Interests............................................ 56
4.20 Year 2000..................................................... 57
Article 5 AFFIRMATIVE COVENANTS (OTHER THAN INFORMATION AND
REPORTING REQUIREMENTS)............................................ 58
5.1 Payment of Taxes and Other Potential Liens.................... 58
5.2 Preservation of Existence..................................... 58
5.3 Maintenance of Properties..................................... 58
5.4 Maintenance of Insurance...................................... 59
5.5 Compliance With Laws.......................................... 59
5.6 Inspection Rights............................................. 59
5.7 Keeping of Records and Books of Account....................... 59
5.8 Compliance With Agreements.................................... 59
5.9 Use of Proceeds............................................... 59
5.10 Hazardous Materials Laws...................................... 60
5.11 Change of Name................................................ 60
5.12 Additional Collateral; the Temporary Project.................. 60
5.13 Completion Certificates....................................... 62
5.14 New Subsidiaries.............................................. 62
5.15 Year 2000..................................................... 62
Article 6 NEGATIVE COVENANTS............................................ 63
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6.1 Payment of Subordinated Obligations.......................... 63
6.2 Disposition of Property...................................... 63
6.3 Mergers...................................................... 63
6.4 Hostile Acquisitions......................................... 63
6.5 Distributions................................................ 63
6.6 ERISA........................................................ 64
6.7 Change in Nature of Business................................. 64
6.8 Liens and Negative Pledges................................... 64
6.9 Indebtedness and Guaranty Obligations........................ 65
6.10 Transactions with Affiliates................................. 66
6.11 Fixed Charge Coverage Ratio.................................. 66
6.12 Capital Expenditures......................................... 66
6.13 Investments and Acquisitions................................. 67
6.14 Subsidiary Indebtedness and Guaranty Obligations............. 67
6.15 The Lease and Sublease....................................... 67
Article 7 INFORMATION AND REPORTING REQUIREMENTS........................ 68
7.1 Financial and Business Information........................... 68
7.2 Compliance Certificates...................................... 71
Article 8 CONDITIONS.................................................... 72
8.1 Initial Advances on the Closing Date......................... 72
8.2 Any Advance.................................................. 74
Article 9 EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT.......... 76
9.1 Events of Default............................................ 76
9.2 Remedies Upon Event of Default............................... 79
Article 10 THE ADMINISTRATIVE AGENT..................................... 83
10.1 Appointment and Authorization................................ 83
10.2 Administrative Agent and Affiliates.......................... 83
10.3 Proportionate Interest in any Collateral..................... 83
10.4 Lenders' Credit Decisions.................................... 84
10.5 Action by Administrative Agent............................... 84
10.6 Liability of Administrative Agent............................ 85
10.7 Indemnification.............................................. 86
10.8 Successor Administrative Agent............................... 87
10.9 Foreclosure on Collateral.................................... 87
10.10 Attornment Agreements........................................ 88
10.11 No Obligations of Borrower................................... 88
Article 11 MISCELLANEOUS................................................ 89
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11.1 Cumulative Remedies; No Waiver............................... 89
11.2 Amendments; Consents......................................... 89
11.3 Costs, Expenses and Taxes.................................... 90
11.4 Nature of Lenders' Obligations............................... 91
11.5 Survival of Representations and Warranties................... 92
11.6 Notices...................................................... 92
11.7 Execution of Loan Documents.................................. 92
11.8 Binding Effect; Assignment................................... 92
11.9 Right of Setoff.............................................. 96
11.10 Sharing of Setoffs........................................... 96
11.11 Indemnity by Borrower........................................ 97
11.12 Nonliability of the Lenders.................................. 98
11.13 No Third Parties Benefited................................... 99
11.14 Confidentiality.............................................. 99
11.15 Further Assurances........................................... 100
11.16 Integration.................................................. 100
11.17 Governing Law................................................ 100
11.18 Severability of Provisions................................... 100
11.19 Headings..................................................... 100
11.20 Time of the Essence.......................................... 101
11.21 Foreign Lenders and Participants............................. 101
11.22 Hazardous Material Indemnity................................. 101
11.23 Gaming Boards................................................ 102
11.24 Lien Releases................................................ 102
11.25 Termination; Release of Liens................................ 103
11.26 Removal of a Lender.......................................... 103
11.27 No Liability of Tracinda..................................... 104
11.28 WAIVER OF RIGHT TO TRIAL BY JURY............................. 104
11.29 PURPORTED ORAL AMENDMENTS.................................... 104
Exhibits
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A - Assignment Agreement
B - Compliance Certificate
C - Note
D - Pricing Certificate
E - Request for Letter of Credit
F - Request for Loan
G - Trademark Security Interest Assignment
H - Fee Property
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Schedules
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1.1 Lender Commitments
1.2 Permanent Casino Site
4.3 Governmental Approvals
4.7 Existing Liens, Negative Pledges and Rights of Others
4.8 Trademarks and Trade Names
4.10 Material Litigation
4.17 Projections
4.18 Environmental Matters
6.9 Existing Indebtedness and Guaranty Obligations
6.15 Existing Investments
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LOAN AGREEMENT
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Dated as of March 31, 1999
This Loan Agreement ("Agreement") is entered into by and among MGM
Grand Detroit II, LLC, a Delaware limited liability company ("Borrower"), each
Lender (as defined below), Comerica Bank, as Documentation Agent, The First
National Bank of Chicago, as Syndication Agent, and Bank of America National
Trust and Savings Association, as Administrative Agent.
In consideration of the mutual covenants and agreements herein
contained, Borrower, the Administrative Agent, the Documentation Agent, the
Syndication Agent and the Lenders, covenant and agree as follows:
Article 1
DEFINITIONS AND ACCOUNTING TERMS
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1.1 Defined Terms. As used in this Agreement, the following terms
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shall have the meanings set forth below:
"Acquisition" means any transaction, or any series of related
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transactions, by which Borrower or its Subsidiaries directly or indirectly
(i) acquire any going business or all or substantially all of the assets of
any Person, or any division thereof, whether through purchase of assets,
merger or otherwise, or (ii) acquire (in one transaction or as the most
recent transaction in a series of transactions) control of at least a
majority in ordinary voting power of the securities of a corporation which
have ordinary voting power for the election of directors, or (iii) acquire
control of a 50% or more ownership interest in any partnership, joint
venture, limited liability company or any other Person; provided, however,
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that the transfer by the Licensee to Borrower of Property held by the
Licensee on the Closing Date and used or to be used in connection with the
Temporary Project shall not constitute an "Acquisition" as defined herein.
"Administrative Agent" means Bank of America, when acting in its
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capacity as the Administrative Agent under any of the Loan Documents, or
any successor Administrative Agent.
"Administrative Agent's Office" means the Administrative Agent's
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address as set forth on the signature pages of this Agreement, or such
other address as the Administrative Agent hereafter may designate by
written notice to Borrower and the Lenders.
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"Advance" means any advance made or to be made by any Lender to
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Borrower as provided in Article 2 as a ratable part of a Loan pursuant to
such Lender's Pro Rata Share of the Commitment, and includes each Base Rate
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Advance and Eurodollar Rate Advance.
"Affiliate" means, as to any Person, any other Person which directly
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or indirectly controls, or is under common control with, or is controlled
by, such Person. As used in this definition, "control" (and the correlative
terms, "controlled by" and "under common control with") shall mean
possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise); provided that, in any event, any Person that owns, directly or
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indirectly, 10% or more of the securities having ordinary voting power for
the election of directors or other governing body of a corporation that has
more than 100 record holders of such securities, or 10% or more of the
partnership or other ownership interests of any other Person that has more
than 100 record holders of such interests, will be presumed (subject to
rebuttal by a preponderance of the evidence) to control such corporation,
partnership or other Person.
"Aggregate Effective Amount" means, as of any date of determination
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and with respect to all Letters of Credit then outstanding, the sum of (a)
---
the aggregate effective face amounts of all such Letters of Credit not then
paid by the Issuing Lender plus (b) the aggregate amounts paid by the
----
Issuing Lender under such Letters of Credit not then reimbursed to the
Issuing Lender by Borrower pursuant to Section 2.4(d) and not the subject
of Advances made pursuant to Section 2.4(e).
"Arranger" means NationsBanc Xxxxxxxxxx Securities, LLC.
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"Assignment Agreement" means an Assignment Agreement substantially in
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the form of Exhibit A.
"Assignment and Assumption Agreement" means the Assignment and
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Assumption Agreement dated as of March 31, 1999 among Borrower, the
Licensee and the Landlord.
"Australia Companies" means, collectively, (a) MGM Grand Diamond,
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Inc., a Nevada corporation, (b) its wholly owned Subsidiary, MGM Grand
Australia Pty., Ltd., a corporation organized under the laws of the
Northern Territory of Australia, and (c) each Subsidiary of MGM Grand
Australia Pty., Ltd., their successors and permitted assigns which is not
incorporated under the Laws of the United States or its subdivisions and
which does not own material Property in the United States.
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"Bank of America" means Bank of America National Trust and Savings
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Association, its successors and assigns.
"Base Rate" means, as of any date of determination, the rate per annum
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(rounded upwards, if necessary, to the next 1/100 of 1%) equal to the
higher of (a) the Reference Rate in effect on such date and (b) the Federal
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Funds Rate in effect on such date plus 1/2 of 1% (50 basis points).
"Base Rate Advance" means an Advance made hereunder and specified to
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be a Base Rate Advance in accordance with Article 2.
"Base Rate Loan" means a Loan made hereunder and specified to be a
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Base Rate Loan in accordance with Article 2.
"Base Rate Margin" means, as of each date of determination, the
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applicable percentage set forth opposite the effective Company Rating in
the Pricing Matrix.
"Borrower" means MGM Grand Detroit II, LLC, a Delaware limited
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liability company, its successors and permitted assigns.
"Borrower EBITDAM" means, for any fiscal period, EBITDA of Borrower
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and its Subsidiaries plus Management Fee and Guarantee Fees paid during
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that period in each case as determined in accordance with Generally
Accepted Accounting Principles.
"Business Day" means any Monday, Tuesday, Wednesday, Thursday or
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Friday, other than a day on which banks are authorized or required to be
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closed in Michigan, California, Nevada or New York.
"Capital Expenditure" means any expenditure for or related to fixed
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assets or purchased intangibles that is treated as a capital expenditure
under Generally Accepted Accounting Principles, including any amount which
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is required to be treated as an asset subject to a Capital Lease
Obligation.
"Capital Lease Obligations" means all monetary obligations of a Person
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under any leasing or similar arrangement which, in accordance with
Generally Accepted Accounting Principles, is classified as a capital lease.
"Cash" means, when used in connection with any Person, all monetary
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and non-monetary items owned by that Person that are treated as cash in
accordance with Generally Accepted Accounting Principles, consistently
applied.
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"Cash Equivalents" means, when used in connection with any Person,
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that Person's Investments in:
(a) Government Securities due within one year after the date of
the making of the Investment;
(b) readily marketable direct obligations of any State of the
United States of America or any political subdivision of any such
State or any public agency or instrumentality thereof given on the
date of such Investment a credit rating of at least Aa by Moody's or
AA by S&P in each case due within one year from the making of the
Investment;
(c) certificates of deposit issued by, bank deposits in,
eurodollar deposits through, bankers' acceptances of, and repurchase
agreements covering Government Securities executed by any Lender or by
any bank incorporated under the Laws of the United States of America,
any State thereof or the District of Columbia and having on the date
of such Investment combined capital, surplus and undivided profits of
at least $250,000,000, or total assets of at least $5,000,000,000, in
each case due within one year after the date of the making of the
Investment;
(d) certificates of deposit issued by, bank deposits in,
eurodollar deposits through, bankers' acceptances of, and repurchase
agreements covering Government Securities executed by any branch or
office located in the United States of America of a bank incorporated
under the Laws of any jurisdiction outside the United States of
America having on the date of such Investment combined capital,
surplus and undivided profits of at least $500,000,000, or total
assets of at least $15,000,000,000, in each case due within one year
after the date of the making of the Investment;
(e) repurchase agreements covering Government Securities executed
by a broker or dealer registered under Section 15(b) of the Securities
Exchange Act of 1934, as amended, having on the date of the Investment
capital of at least $50,000,000, due within 90 days after the date of
the making of the Investment; provided that the maker of the
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Investment receives written confirmation of the transfer to it of
record ownership of the Government Securities on the books of a
"primary dealer" in such Government Securities or on the books of such
registered broker or dealer, as soon as practicable after the making
of the Investment;
(f) readily marketable commercial paper or other debt securities
issued by corporations doing business in and incorporated under the
Laws of
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the United States of America or any State thereof or of any
corporation that is the holding company for a bank described in clause
(c) or (d) above given on the date of such Investment a credit rating
of at least P-1 by Moody's or A-1 by S&P, in each case due within one
year after the date of the making of the Investment;
(g) "money market preferred stock" issued by a corporation
incorporated under the Laws of the United States of America or any
State thereof (i) given on the date of such Investment a credit rating
of at least Aa by Xxxxx'x Investors Service, Inc. and AA by S&P, in
each case having an investment period not exceeding 50 days or (ii) to
the extent that investors therein have the benefit of a standby letter
of credit issued by a Lender or a bank described in clauses (c) or (d)
above;
(h) a readily redeemable "money market mutual fund" sponsored by
a bank described in clause (c) or (d) hereof, or a registered broker
or dealer described in clause (e) hereof, that has and maintains an
investment policy limiting its investments primarily to instruments of
the types described in clauses (a) through (g) hereof and given on the
date of such Investment a cr edit rating of at least Aa by Moody's and
AA by S&P; and
(i) corporate notes or bonds having an original term to maturity
of not more than one year issued by a corporation incorporated under
the Laws of the United States of America or any State thereof, or a
participation interest therein; provided that any commercial paper
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issued by such corporation is given on the date of such Investment a
credit rating of at least Aa by Moody's and AA by S&P.
"Certificate of Responsible Official" means a certificate signed by a
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Responsible Official of the Person providing the certificate.
"Change in Control" means (a) any transaction or series of related
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transactions in which any Unrelated Person or two or more Unrelated Persons
acting in concert acquire beneficial ownership (within the meaning of Rule
13d-3(a)(1) under the Securities Exchange Act of 1934, as amended),
directly or indirectly, of 25% or more of the outstanding common stock of
the Company or (b) during any period of 24 consecutive months, individuals
who at the beginning of such period constituted the board of directors of
the Company (together with any new or replacement directors whose election
by the board of directors, or whose nomination for election, was approved
by a vote of at least a majority of
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the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for reelection was
previously so approved) cease for any reason to constitute a majority of
the directors then in office, or (c) the Company fails for any reason to
own, directly or indirectly, at least 75% of the outstanding voting power
of the Licensee, or (d) the Licensee fails for any reason to own, directly
or indirectly, 100% of the outstanding membership interests in Borrower,
provided, however, that no Change in Control shall exist under either
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subsection (a) or (b) of this definition for so long as Tracinda
Corporation, a Nevada corporation, and its Affiliates continue to be the
beneficial owner of 25% or more of the common stock of the Company and no
other Person is the owner of more of the common stock of the Company than
Tracinda Corporation and its Affiliates.
"Closing Date" means the time and Business Day on which the conditions
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set forth in Section 8.1 are satisfied or waived. The Administrative Agent
shall notify Borrower and the Lenders of the date that is the Closing Date.
"Code" means the Internal Revenue Code of 1986, as amended or replaced
----
and as in effect from time to time.
"Collateral" means all of the collateral covered by the Collateral
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Documents.
"Collateral Documents" means, collectively, the Security Agreement,
--------------------
the Mortgage and any other security agreement, pledge agreement, deed of
trust, mortgage or other collateral security agreement (including without
limitation any Trademark Security Interest Assignment) hereafter executed
and delivered by Borrower or any of its Subsidiaries to secure the
Obligations.
"Commercial Letter of Credit" means each Letter of Credit issued to
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support the purchase of goods by Borrower which is determined to be a
commercial letter of credit by the Issuing Lender.
"Commitment" means, subject to any increase or decrease in the amount
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thereof pursuant to Sections 2.5, 2.6, 2.7 and 2.8, $230,000,000. As of
the Closing Date, the respective Pro Rata Shares of the Lenders with
respect to the Commitment are set forth in Schedule 1.1.
"Commitment Fee Rate" means, as of each date of determination in any
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Pricing Period, the applicable percentage set forth opposite the effective
Company Rating in the Pricing Matrix.
"Company" means MGM Grand, Inc., a Delaware corporation, its
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successors and permitted assigns.
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"Company Annualized Cash Flow" means, as of the last day of any Fiscal
----------------------------
Quarter, and without duplication, (a) EBITDA of the Company and its
Restricted Subsidiaries for the four Fiscal Quarters ended on that date
(exclusive of the Unrestricted Subsidiaries), plus (b) Pre-Opening Expenses
----
for the same period, plus (c) EBITDA of the Australia Companies for the
----
same period (to the extent that the same are then directly or indirectly
owned by the Company), plus (d) New York Available EBITDA for the same
----
period (in each case, as defined in the Company Loan Agreement, or, if the
Company Loan Agreement is terminated, as in effect on the date of this
Agreement), in each case, determined in accordance with Generally Accepted
Accounting Principles.
"Company Average Quarterly Funded Debt" means, as of the last day of
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each Fiscal Quarter, the average of the principal amount of Company Funded
Debt outstanding on the last day of each of the three calendar months
comprising such Fiscal Quarter.
"Company Funded Debt" means, as of any date of determination, the sum
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(without duplication) of (a) all principal Indebtedness of the Company and
its Restricted Subsidiaries for borrowed money (including debt securities
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issued by the Company or any of its Subsidiaries) outstanding on that date
(other than any such Indebtedness to the extent it has been legally or
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contractually defeased or is the subject of a deposit in Cash or Cash
Equivalents for the purpose of defeasing the same in accordance with its
terms), plus (b) the aggregate amount of all Capital Lease Obligations of
----
the Company and its Restricted Subsidiaries on that date, plus (c)
----
obligations in respect of letters of credit or other similar instruments
which support Indebtedness of the type described in clause (a) and Capital
Lease Obligations, to the extent of the amount drawable under such letters
of credit or similar instruments (in each case excluding the Unrestricted
Subsidiaries), provided that no Guaranty Obligation by the Company or its
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Restricted Subsidiaries of the Indebtedness of another Person shall be
deemed to be Company Funded Debt except to the extent that Generally
Accepted Accounting Principles require that Guaranty Obligation to be set
forth on the Company's consolidated balance sheet (and not merely as a
footnote) as the exposure of the Company and its Subsidiaries with respect
thereto.
"Company Loan Agreement" means that certain Amended and Restated Loan
----------------------
Agreement dated as of July 17, 1997 among the Company, as borrower, MGM
Grand Atlantic City, Inc., a New Jersey corporation, as a Co-Borrower, MGM
Grand Detroit, LLC, a Delaware limited liability company, as a Co-Borrower,
the Banks, Managing Agents and Co-Agent named therein, and Bank of America,
as Administrative Agent, as amended and as the same may from time to time
be further supplemented, modified, amended, renewed, extended, supplanted
or replaced.
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"Company Leverage Ratio" means, as of the last day of each Fiscal
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Quarter, the ratio of (a) Company Total Debt as of that date to (b) Company
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Annualized Cash Flow as of that date.
"Company Rating" means, as of each date of determination, (i) the
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higher of the credit ratings assigned by Xxxxx'x or S&P to the credit
facilities provided under the Company Loan Agreement whether senior secured
or senior unsecured or (ii) in the event that the Company Loan Agreement
has been terminated, the higher of the credit ratings assigned by Xxxxx'x
or S&P to Company's senior unsecured debt, provided however in the case of
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both (i) and (ii) above, that (a) each change in either such credit rating
shall be deemed to be effective five days following the announcement by
Xxxxx'x or S&P of the change, and (b) in the event of a double split rating
(or more) the highest intermediate rating shall apply.
"Company Total Debt" means, as of each date of determination, the sum
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without duplication, as of such date, of (a) Company Average Quarterly
Funded Debt as of that date plus (b) Quantified New York Exposure as of
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that date.
"Compliance Certificate" means a certificate substantially in the form
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of Exhibit B, properly completed and signed by a Senior Officer of the
Licensee on behalf of Borrower.
"Contractual Obligation" means, as to any Person, any provision of any
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outstanding security issued by that Person or of any material agreement,
instrument or undertaking to which that Person is a party or by which it or
any of its Property is bound.
"Creditors" means, collectively, the Administrative Agent, the Issuing
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Lender, each Lender and, where the context requires, any one or more of
them.
"CSG" means a construction services consultant designated by the
---
Administrative Agent and reasonably acceptable to Borrower.
"Debtor Relief Laws" means the Bankruptcy Code of the United States of
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America, as amended from time to time, and all other applicable
liquidation, conservatorship, bankruptcy, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief Laws
from time to time in effect affecting the rights of creditors generally.
"Default" means any event that, with the giving of any applicable
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notice or passage of time specified in Section 9.1, or both, would be an
Event of Default.
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"Default Rate" means the interest rate prescribed in Section 3.9.
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"Deposit Account" means account no. 6856286361 ABA Number 000000000
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maintained by Borrower with Michigan National Bank at 000 Xxxxxx, Xxxxxxx
Xxxxxxxx 00000.
"Designated Eurodollar Market" means, with respect to any Eurodollar
----------------------------
Rate Loan, (a) the London Eurodollar Market, (b) if prime banks in the
London Eurodollar Market are at the relevant time not accepting deposits of
Dollars or if the Administrative Agent determines in good faith that the
London Eurodollar Market does not represent at the relevant time the
effective pricing to the Lenders for deposits of Dollars in the London
Eurodollar Market, the Cayman Islands Eurodollar Market or (c) if prime
banks in the Cayman Islands Eurodollar Market are at the relevant time not
accepting deposits of Dollars or if the Administrative Agent determines in
good faith that the Cayman Islands Eurodollar Market does not represent at
the relevant time the effective pricing to the Lenders for deposits of
Dollars in the Cayman Islands Eurodollar Market, such other Eurodollar
Market as may from time to time be selected by the Administrative Agent
with the approval of Borrower and the Requisite Lenders. The Administrative
Agent will endeavor to provide prompt notice to Borrower of any change in
the location of the Designated Eurodollar Market.
"Disposition" means the voluntary sale, transfer or other disposition
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of any asset of Borrower or any of its Subsidiaries other than the
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voluntary sale, transfer or other disposition of (a) Cash, Cash
Equivalents, Investments, inventory or other assets sold, leased or
otherwise disposed of in the ordinary course of business of Borrower or any
of its Subsidiaries, (b) equipment sold or otherwise disposed of where
substantially similar equipment in replacement thereof has theretofore been
acquired, or thereafter within 90 days is acquired, by Borrower or any of
its Subsidiaries, or where Borrower or the Subsidiary of Borrower
determines in good faith that the failure to replace such equipment will
not be detrimental in any material respect to the business of Borrower or
any of its Subsidiaries, or (c) Property to Borrower or any of its
Subsidiaries.
"Disqualification" means, with respect to any Lender or any holder of
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Subordinated Obligations:
(a) the failure of that Person timely to file pursuant to
applicable Gaming Laws (i) any application requested of that Person by
any Gaming Board in connection with any licensing required of that
Person as a lender to Borrower or (ii) any required application or
other papers in connection with determination of the suitability of
that Person as a lender to Borrower;
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(b) the withdrawal by that Person (except where requested or
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permitted by the Gaming Board) of any such application or other
required papers; or
(c) any final determination by a Gaming Board pursuant to
applicable Gaming Laws (i) that such Person is "unsuitable" as a
lender to Borrower, (ii) that such Person shall be "disqualified" as a
lender to Borrower or (iii) denying the issuance to that Person of any
license required under applicable Gaming Laws to be held by all
lenders to Borrower.
"Distribution" means, with respect to any shares of capital stock or
------------
any warrant or option to purchase an equity security or other equity
security issued by a Person, (a) the retirement, redemption, purchase or
other acquisition for Cash or for Property (other than capital stock, or
any warrants or options to purchase an equity security or other security of
such Person) by such Person of any such security, (b) the declaration or
(without duplication) payment by such Person of any dividend in Cash or in
Prop erty (other than capital stock, or any warrants or options to
purchase an equity security or other security of such Person) on or with
respect to any such security, (c) any Investment by such Person in the
holder of 5% or more of any such security if a purpose of such Investment
is to avoid characterization of the transaction as a Distribution and (d)
any other payment in Cash or Property (other than capital stock, or any
warrants or options to purchase an equity security or other security of
such Person) by such Person constituting a distribution under applicable
Laws with respect to such security.
"Dollars" or "$" means United States dollars.
------- -
"EBITDA" means, with respect to any fiscal period and with respect to
------
any Person, the sum of (a) Net Income of such Person for that period, plus
--- -- ----
(b) any extraordinary loss reflected in such Net Income, minus (c) any
-----
extraordinary gain reflected in such Net Income, plus (d) Interest Charges
----
of such Person for that period, plus (e) the aggregate amount of federal,
----
state and local taxes on or measured by income of such Person for that
period (whether or not payable during that period) to the extent deducted
in arriving at that Person's Net Income, plus (f) depreciation,
----
amortization and all other non-cash expenses for that period, plus (g)
----
expenses classified as "pre-opening expenses" on the applicable financial
statements of that Person for that fiscal period, in each case as
determined in accordance with Generally Accepted Accounting Principles.
"Eligible Assignee" means (a) another Lender, (b) with respect to any
-----------------
Lender, any Affiliate of that Lender, (c) any commercial bank having a
combined capital and surplus of $100,000,000 or more (or, in the case of
any such institution headquartered within the State of Michigan,
$25,000,000), (d) any (i) savings bank, savings and loan
-10-
association or similar financial institution or (ii) insurance company
engaged in the business of writing insurance which, in either case (A) has
a net worth of $200,000,000 or more, (B) is engaged in the business of
lending money and extending credit under credit facilities substantially
similar to those extended under this Agreement and (C) is operationally and
procedurally able to meet the obligations of a Lender hereunder to the same
degree as a commercial bank and (e) any other financial institution
(including a mutual fund or other fund) having total assets of $250,000,000
---------
or more which meets the requirements set forth in subclauses (B) and (C) of
clause (d) above; provided that (I) each Eligible Assignee must either (a)
--------
be organized under the Laws of the United States of America, any State
thereof or the District of Columbia or (b) be organized under the Laws of
the Cayman Islands or any country which is a member of the Organization for
Economic Cooperation and Development, or a political subdivision of such a
country, and (i) act hereunder through a branch, agency or funding office
located in the United States of America and (ii) be exempt from withholding
of tax on interest and deliver the documents related thereto pursuant to
Section 11.21 and (II) to the extent required under applicable Gaming Laws,
each Eligible Assignee must not be the subject of a Disqualification.
"Enhanced Eurodollar Margin" means, for any period, the sum of (i) the
-------------------------- ---
Eurodollar Margin then in effect plus (ii) such interest rate margin as the
----
Requisite Lenders specify is necessary to adjust the Eurodollar Rate to a
rate which represents the effective pricing to such Lenders for deposits of
Dollars in the Designated Eurodollar Market in the relevant amount for the
applicable Eurodollar Period and which adequately and fairly reflects the
cost to such Lenders of making the applicable Eurodollar Rate Advances.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
-----
any regulations issued pursuant thereto, as amended or replaced and as in
effect from time to time.
"ERISA Affiliate" means, with respect to any Person, any other Person
---------------
(or any trade or business, whether or not incorporated) that is under
common control with that Person within the meaning of Section 414 of the
Code.
"Eurodollar Business Day" means any Business Day on which dealings in
-----------------------
Dollar deposits are conducted by and among banks in the Designated
Eurodollar Market.
"Eurodollar Lending Office" means, as to each Lender, its office or
-------------------------
branch so designated by written notice to Borrower and the Administrative
Agent as its Euro-
-11-
dollar Lending Office. If no Eurodollar Lending Office is designated by a
Lender, its Eurodollar Lending Office shall be its office at its address
for purposes of notices hereunder.
"Eurodollar Margin" means as of each date of determination, the
-----------------
applicable percentage set forth opposite the effective Company Rating in
the Pricing Matrix.
"Eurodollar Market" means a regular established market located outside
-----------------
the United States of America by and among banks for the solicitation, offer
and acceptance of Dollar deposits in such banks.
"Eurodollar Obligations" means eurocurrency liabilities, as defined in
----------------------
Regulation D or any comparable regulation of any Governmental Agency having
jurisdiction over any Lender.
"Eurodollar Period" means, as to each Eurodollar Rate Loan, the period
-----------------
commencing on the date specified by Borrower pursuant to Section 2.1(b) and
ending 1, 2, 3 or 6 months (or, with the written consent of all of the
Lenders, any other period) thereafter, as specified by Borrower in the
applicable Request for Loan; provided that:
--------
(a) The first day of any Eurodollar Period shall be a Eurodollar
Business Day;
(b) Any Eurodollar Period that would otherwise end on a day that
is not a Eurodollar Business Day shall be extended to the next
succeeding Eurodollar Business Day unless such Eurodollar Business Day
falls in another calendar month, in which case such Eurodollar Period
shall end on the next preceding Eurodollar Business Day;
(c) Borrower may not specify a Eurodollar Period that extends
beyond any Reduction Date unless the sum of (i) the aggregate
---
principal amount of the Eurodollar Loans having a Eurodollar Period
ending after such Reduction Date plus (ii) the aggregate maximum
----
amount available for drawing under Letters of Credit for which the
expiry date is after such Reduction Date, does not exceed the
Commitment (after giving effect to any reduction thereto scheduled to
be made on such Reduction Date pursuant to Section 2.6); and
(d) No Eurodollar Period shall extend beyond the Maturity Date.
"Eurodollar Rate" means, with respect to any Eurodollar Rate Loan, the
---------------
interest rate per annum (rounded upward, if necessary, to the next 1/100 of
1%) at which deposits in Dollars are offered by Bank of America to prime
banks in the
-12-
Designated Eurodollar Market at or about 11:00 a.m. local time in the
Designated Eurodollar Market, two (2) Eurodollar Business Days before the
first day of the applicable Eurodollar Period in an aggregate amount
approximately equal to the amount of the Advance made by Bank of America
with respect to such Eurodollar Rate Loan and for a period of time
comparable to the number of days in the applicable Eurodollar Period.
"Eurodollar Rate Advance" means an Advance made hereunder and
-----------------------
specified to be a Eurodollar Rate Advance in accordance with Article 2.
"Eurodollar Rate Loan" means a Loan made hereunder and specified to be
--------------------
a Eurodollar Rate Loan in accordance with Article 2.
"Event of Default" shall have the meaning provided in Section 9.1.
----------------
"Federal Funds Rate" means, as of any date of determination, the rate
------------------
set forth in the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Board (including
any such successor, "H.15(519)") for such date opposite the caption
"Federal Funds (Effective)". If for any relevant date such rate is not yet
published in H.15(519), the rate for such date will be the rate set forth
in the daily statistical release designated as the Composite 3:30 p.m.
Quotations for U.S. Government Securities, or any successor publication,
published by the Federal Reserve Bank of New York (including any such
successor, the "Composite 3:30 p.m. Quotation") for such date under the
caption "Federal Funds Effective Rate". If on any relevant date the
appropriate rate for such date is not yet published in either H.15(519) or
the Composite 3:30 p.m. Quotations, the rate for such date will be the
arithmetic mean of the rates for the last transaction in overnight Federal
funds arranged prior to 9:00 a.m. (New York City time) on that date by each
of three leading brokers of Federal funds transactions in New York City
selected by the Administrative Agent. For purposes of this Agreement, any
change in the Base Rate due to a change in the Federal Funds Rate shall be
effective as of the opening of business on the effective date of such
change.
"Fee Property" means the real property described as Parcel 2 on
------------
Exhibit G attached hereto.
"Fiscal Quarter" means the fiscal quarter of Borrower consisting,
--------------
subject to Section 1.3, of the three calendar month periods ending on each
March 31, June 30, September 30 and December 31.
"Fiscal Year" means the fiscal year of Borrower consisting, subject to
-----------
Section 1.3, of the twelve month period ending on each December 31.
-13-
"Fixed Charge Coverage Ratio" means, as of the last day of each Fiscal
---------------------------
Quarter, the ratio of (a) Borrower EBITDAM for the four Fiscal Quarter
period ending on such date to (b) Fixed Charges for the same period.
"Fixed Charges" means, for any fiscal period, the sum of (a) all
------------- ------
Interest Charges of Borrower and its Subsidiaries during that fiscal
period, plus (b) all required payments of principal paid or payable
----
(without duplication) for that fiscal period by Borrower and its
Subsidiaries to lenders in connection with borrowed money, plus (c) all
----
Maintenance Capital Expenditures incurred by Borrower and its Subsidiaries
during that fiscal period with respect to the Temporary Project, plus (d)
----
all Management Fees and Guarantee Fees paid during that fiscal period by
Borrower and its Subsidiaries, plus (e) all Tax Distributions made during
----
that fiscal period, plus (f) all Distributions made pursuant to Section
----
6.5(c) during that fiscal period.
"Gaming Board" means, collectively, the Michigan Gaming Control Board
------------
and any other Governmental Agency that holds regulatory, licensing or
permit authority over gambling, gaming or casino activities conducted by
the Licensee or over the Temporary Project, Borrower or any Subsidiary of
Borrower within its jurisdiction.
"Gaming Laws" means the Michigan Gaming Control and Revenue Act, the
-----------
administrative rules promulgated thereunder, and all other Laws pursuant to
which any Gaming Board possesses regulatory, licensing or permit authority
over gambling, gaming or casino activities conducted by Borrower and its
Subsidiaries within its jurisdiction.
"Generally Accepted Accounting Principles" means, as of any date of
----------------------------------------
determination, accounting principles (a) set forth as generally accepted in
then currently effective Opinions of the Accounting Principles Board of the
American Institute of Certified Public Accountants, (b) set forth as
generally accepted in then currently effective Statements of the Financial
Accounting Standards Board or (c) that are then approved by such other
entity as may be approved by a significant segment of the accounting
profession in the United States of America. The term "consistently
------------
applied," as used in connection therewith, means that the accounting
-------
principles applied are consistent in all material respects with those
applied at prior dates or for prior periods.
"Government Securities" means readily marketable (a) direct full faith
---------------------
and credit obligations of the United States of America or obligations
guaranteed by the full faith and credit of the United States of America and
(b) obligations of an agency or instrumentality of, or corporation owned,
controlled or sponsored by, the United States of America that are generally
considered in the securities industry to be implicit obligations of the
United States of America.
-14-
"Governmental Agency" means (a) any international, foreign, federal,
-------------------
state, county or municipal government, or political subdivision thereof,
(b) any governmental or quasi-governmental agency, authority, board,
bureau, commission, department, instrumentality or public body or (c) any
court or administrative tribunal of competent jurisdiction.
"Guarantee Fee" means, for any Fiscal Quarter, fees payable by
-------------
Borrower to the Company on the last day of such Fiscal Quarter in an amount
which is equal to 1% per annum of the principal amount of the Obligations
as of such date pursuant to that certain Guarantee Fee Agreement between
the Company and Borrower dated as of March 31, 1999.
"Guaranty" means the continuing guaranty of the Obligations of the
--------
Borrower to be executed and delivered by the Company, as the same may from
time to time be supplemented, modified, amended, extended or supplanted.
"Guaranty Obligation" means, as to any Person (without duplication),
-------------------
any (a) guarantee by that Person of Indebtedness of, or other obligation
performable by, any other Person or (b) assurance given by that Person to
an obligee of any other Person with respect to the performance of an
obligation by, or the financial condition of, such other Person, whether
direct, indirect or contingent, including any purchase or repurchase
---------
agreement covering such obligation or any collateral security therefor, any
agreement to provide funds (by means of loans, capital contributions or
otherwise) to such other Person, any agreement to support the solvency or
level of any balance sheet or income statement item of such other Person or
any "keep-well" or other arrangement of whatever nature given for the
purpose of assuring or holding harmless such obligee against loss with
respect to any obligation of such other Person; provided, however, that the
-------- -------
term Guaranty Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of
any Guaranty Obligation in respect of Indebtedness shall be deemed to be an
amount equal to the stated or determinable amount of the related
Indebtedness (unless the Guaranty Obligation is limited by its terms to a
lesser amount, in which case to the extent of such amount) or, if not
stated or determinable, the maximum reasonably anticipated liability in
respect thereof as determined by the Person in good faith. The amount of
any other Guaranty Obligation shall be deemed to be zero unless and until
the amount thereof has been (or in accordance with Financial Accounting
Standards Board Statement No. 5 should be) quantified and reflected or
disclosed in the consolidated financial statements (or notes thereto) of
Borrower and its Subsidiaries.
"Hazardous Materials" means substances defined as "hazardous
-------------------
substances" pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. (S) 9601 et seq., or as
"hazardous", "toxic" or "pollutant"
-15-
substances or as "solid waste" pursuant to the Hazardous Materials
Transportation Act, 49 U.S.C. (S) 1801, et seq., the Resource Conservation
and Recovery Act, 42 U.S.C. (S) 6901, et seq., or as "friable asbestos"
pursuant to the Toxic Substances Control Act, 15 U.S.C. (S) 2601 et seq.,
in each case as such Laws are amended from time to time.
"Hazardous Materials Laws" means all Laws governing the treatment,
------------------------
transportation or disposal of Hazardous Materials applicable to any of the
Real Property.
"Indebtedness" means, as to any Person (without duplication), (a)
------------
indebtedness of such Person for borrowed money or for the deferred purchase
price of Property (excluding trade and other accounts payable in the
ordinary course of business in accordance with ordinary trade terms),
including any Guaranty Obligation for any such indebtedness, (b)
---------
indebtedness of such Person of the nature described in clause (a) that is
non-recourse to the credit of such Person but is secured by assets of such
Person, to the extent of the value of such assets, (c) Capital Lease
Obligations of such Person, (d) indebtedness of such Person arising under
bankers' acceptance facilities or under facilities for the discount of
accounts receivable of such Person, (e) any direct or contingent
obligations of such Person under letters of credit issued for the account
of such Person and (f) any net obligations of such Person under Swap
Agreements.
"Intangible Assets" means assets that are considered intangible assets
-----------------
under Generally Accepted Accounting Principles, including customer lists,
---------
goodwill, computer software, copyrights, trade names, trademarks and
patents.
"Interest Charges" means, for any Person, as of the last day of any
----------------
fiscal period, the sum of (a) all interest, fees, charges and related
------
expenses paid or payable (without duplication) for that fiscal period by
that Person to a lender in connection with borrowed money (including any
---------
obligations for fees, charges and related expenses payable to the issuer of
any letter of credit) or the deferred purchase price of assets that are
considered "interest expense" under Generally Accepted Accounting
Principles, plus (b) the portion of rent paid or payable (without
----
duplication) for that fiscal period by that Person under Capital Lease
Obligations that should be treated as interest in accordance with Financial
Accounting Standards Board Statement No. 13.
"Interest Differential" means, with respect to any prepayment of a
---------------------
Eurodollar Rate Loan on a day other than the last day of the applicable
Eurodollar Period and with respect to any failure to borrow a Eurodollar
Rate Loan on the date or in the amount specified in any Request for Loan,
(a) the Eurodollar Rate payable (or, with respect to a failure to borrow,
the Eurodollar Rate which would have been payable) with respect to the
Eurodollar Rate Loan minus (b) the Eurodollar Rate on, or as near
-----
-16-
as practicable to, the date of the prepayment or failure to borrow for a
Eurodollar Rate Loan with an Eurodollar Period commencing on such date and
ending on the last day of the Eurodollar Period of the Eurodollar Rate Loan
so prepaid or which would have been borrowed on such date.
"Investment" means, when used in connection with any Person, any
----------
investment by or of that Person, whether by means of purchase or other
acquisition of stock or other securities of any other Person or by means of
a loan, advance creating a debt, capital contribution, guaranty or other
debt or equity participation or interest in any other Person, including any
---------
partnership and joint venture interests of such Person. The amount of any
Investment shall be the amount actually invested (minus any return of
-----
capital with respect to such Investment which has actually been received in
Cash or Cash Equivalents or has been converted into Cash or Cash
Equivalents), without adjustment for subsequent increases or decreases in
the value of such Investment.
"Issuing Lender" means Bank of America National Trust and Savings
--------------
Association.
"Landlord" means Lodge/Xxxxxx Associates L.L.C., a Michigan limited
--------
liability company, and its successors and assigns.
"Landlord Consent" means the Landlord Consent executed by the Landlord
----------------
in favor of the Administrative Agent with respect to the Lease.
"Laws" means, collectively, all international, foreign, federal, state
----
and local statutes, treaties, rules, regulations, ordinances, codes and
administrative or judicial precedents.
"Lease" means the Lease and Building Lease dated as of May 1, 1998
-----
between the Licensee and the Landlord, which Lease has been assigned to
Borrower pursuant to the Assignment and Assumption Agreement, as amended as
of the Closing Date.
"Lender" means each lender whose name is set forth in the signature
------
pages of this Agreement and each lender which may hereafter become a party
to this Agreement pursuant to Section 11.8 (and to the extent a party to a
Secured Swap Agreement, any Affiliate of a Lender).
"Letters of Credit" means any of the Standby Letters of Credit or
-----------------
Commercial Letters of Credit issued by the Issuing Lender under the
Commitment pursuant to Section 2.4, either as originally issued or as the
same may be supplemented, modified, amended, renewed, extended or
supplanted.
-17-
"License Revocation" means the revocation, failure to renew or
------------------
suspension of, or the appointment of a receiver, conservator, supervisor or
similar official with respect to, any casino, gambling or gaming license
issued by any Gaming Board to the Licensee, Borrower or any other Person
with respect to the Temporary Project.
"Licensee" means MGM Grand Detroit, LLC, a Delaware limited liability
--------
company, its successors and permitted assigns.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
----
assignment for security, security interest, encumbrance, lien or charge of
any kind, whether volun tarily incurred or arising by operation of Law or
otherwise, affecting any Property, including any agreement to grant any of
---------
the foregoing, any conditional sale or other title retention agreement, any
lease in the nature of a security interest, and/or the filing of or
agreement to give any financing statement (other than a precautionary
----- ----
financing statement with respect to a lease that is not in the nature of a
security interest) under the Uniform Commercial Code or comparable Law of
any jurisdiction with respect to any Property.
"Loan" means the aggregate of the Advances made at any one time by the
----
Lenders pursuant to Article 2.
"Loan Documents" means, collectively, this Agreement, the Notes, the
--------------
Collateral Documents, the Guaranty, each Request for Loan, each Request for
Letter of Credit, each Pricing Certificate, each Compliance Certificate,
any Secured Swap Agreement and any other agreements of any type or nature
hereafter executed and delivered by Borrower or any of its Subsidiaries to
the Administrative Agent or to any Lender in any way relating to or in
furtherance of this Agreement, in each case either as originally executed
or as the same may from time to time be supplemented, modified, amended,
restated, extended or supplanted.
"Maintenance Capital Expenditure" means a Capital Expenditure for the
-------------------------------
maintenance, repair, restoration or refurbishment of tangible Property of
Borrower or its Subsidiaries, but excluding any Capital Expenditure which
---------
adds to or further improves any such Property.
"Management Fees" means, for any Fiscal Quarter, fees payable to the
---------------
Company by Borrower in an amount which is equal to 4% per annum of Borrower
EBITDAM for the immediately preceding Fiscal Quarter pursuant to that
certain Management Fee Agreement between the Company and Borrower dated as
of March 31, 1999.
"Margin Stock" means "margin stock" as such term is defined in
------------
Regulation U.
-18-
"Material Adverse Effect" means any set of circumstances or events
-----------------------
which (a) has or could reasonably be expected to have any material adverse
effect whatsoever upon the validity or enforceability of any Loan Document,
(b) where the phrase modifies Borrower and its Subsidiaries, is or could
reasonably be expected to be material and adverse to the business or
condition (financial or otherwise) of Borrower and its Subsidiaries, taken
as a whole and with a view to the totality of circumstances then existing,
(c) where the phrase modifies the Company and its Subsidiaries, is or could
reasonably be expected to be material and adverse to the business or
condition (financial or otherwise) of Company and its Subsidiaries, taken
as a whole and with a view to the totality of circumstances then existing,
or (d) materially impairs or could reasonably be expected to materially
impair the ability of Borrower and its Subsidiaries or the Company and its
Subsidiaries (in each case taken as a whole) to perform their respective
Obligations, provided that it is understood that clauses (b) and (c) shall
--------
not be deemed to expand the obligations of the Company, Borrower or any
other Party under any express covenants set forth herein, but is rather
understood to describe a set of circumstances or events which, although not
the subject of a specific covenant, are material and adverse in the manner
described above.
"Material Documents" means the Lease, the Assignment and Assumption
------------------
Agreement, the Sublease and the Landlord Consent, the Management Fee
Agreement referred to in the definition of Management Fees and the
Guarantee Fee Agreement referred to in the definition of Guarantee Fees.
"Maturity Date" means the earliest to occur of (i) June 30, 2004, (ii)
-------------
forty-five months after the Opening Date, and (iii) the date upon which the
Permanent Project is first open for gaming customers.
"Moody's" means Xxxxx'x Investors Service, Inc.
-------
"Mortgage" means the Mortgage executed by Borrower in favor of the
--------
Administrative Agent with respect to its interest as owner of the Fee
Property and as tenant under the Lease and as sublessor under the Sublease.
"Multiemployer Plan" means any employee benefit plan of the type
------------------
described in Section 4001(a)(3) of ERISA to which Borrower or any of its
ERISA Affiliates contribute or are obligated to contribute.
"Negative Pledge" means a Contractual Obligation that contains a
---------------
covenant binding on Borrower or any of its Subsidiaries that prohibits
Liens on any of its or their Property, other than (a) any such covenant
----- ----
contained in a Contractual Obligation granting a Lien permitted under
Section 6.8 which affects only the Property that is the subject of such
permitted Lien and (b) any such covenant that does not apply to Liens
-19-
securing the Obligations or any indebtedness which is used, directly or
indirectly, to refinance the Obligations.
"Net Income" means, with respect to any fiscal period and with respect
----------
to any Person, the consolidated net income of that Person from continuing
operations for that period, determined in accordance with Generally
Accepted Accounting Principles, consistently applied.
"Note" means each promissory note made by Borrower to a Lender
----
evidencing the Advances made by that Lender under its Pro Rata Share of the
Commitment, substantially in the form of Exhibit C, either as originally
executed or as the same may from time to time be supplemented, modified,
amended, renewed, extended or supplanted.
"Obligations" means all present and future obligations of every kind
-----------
or nature of Borrower or the Company at any time and from time to time owed
to the Administrative Agent, the Issuing Lender or the Lenders or any one
or more of them, under any one or more of the Loan Documents, whether due
or to become due, matured or unmatured, liquidated or unliquidated, or
contingent or noncontingent, including obligations of performance as well
---------
as obligations of payment, and including interest that accrues after the
---------
commencement of any proceeding under any Debtor Relief Law by or against
Borrower or Affiliate of Borrower, whether or not allowed as a claim in
such proceeding.
"Opening Date" means the first date upon which the Temporary Project
------------
is open for business to gaming patrons.
"Opinions" means the favorable written legal opinions of (a)
--------
Christensen, Miller, Fink, Jacobs, Xxxxxx, Xxxx & Xxxxxxx, LLP, (b) Lionel,
Xxxxxx & Xxxxxxx, special Nevada counsel to Borrower, and (c) Xxxxxxxxx
Xxxxxx PLLC, Special Michigan counsel to Borrower, together with copies of
all factual certificates and legal opinions upon which such counsel have
relied.
"Outstanding Obligations" means, as of each date of determination, and
-----------------------
giving effect to the making of any such credit accommodations requested on
that date, the sum of (i) the aggregate principal amount of the outstanding
---
Loans, plus (ii) the Aggregate Effective Amount of all Letters of Credit.
----
"Party" means any Person other than the Creditors and the Arranger
-----
which is now or hereafter is a party to any of the Loan Documents.
-20-
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
----
thereof established under ERISA.
"Pension Plan" means any "employee pension benefit plan" (as such term
------------
is defined in Section 3(2) of ERISA), other than a Multiemployer Plan,
----------
which is subject to Title IV of ERISA and is maintained by Borrower or any
of its Subsidiaries or to which Borrower or any of its Subsidiaries
contributes or has an obligation to contribute.
"Permanent Project" means a permanent hotel and casino project the
-----------------
majority of which is owned, directly or indirectly by the Company, the
Licensee or the Borrower, and located in the Detroit, Michigan area on the
site described on Schedule 1.2.
"Permitted Encumbrances" means:
----------------------
(a) inchoate Liens incident to construction on or maintenance of
Property; or Liens incident to construction on or maintenance of
Property now or hereafter filed of record for which adequate reserves
have been set aside (or deposits made pursuant to applicable Law) and
which are being contested in good faith by appropriate proceedings and
have not proceeded to judgment, provided that, by reason of nonpayment
--------
of the obligations secured by such Liens, no such Property is subject
to a material risk of loss or forfeiture;
(b) Liens for taxes and assessments on Property which are not
yet past due; or Liens for taxes and assessments on Property for which
adequate reserves have been set aside and are being contested in good
faith by appropriate proceedings and have not proceeded to judgment,
provided that, by reason of nonpayment of the obligations secured by
--------
such Liens, no such Property is subject to a material risk of loss or
forfeiture;
(c) minor defects and irregularities in title to any Property
which in the aggregate do not materially impair the fair market value
or use of the Property for the purposes for which it is or may
reasonably be expected to be held;
(d) easements, exceptions, reservations, or other agreements for
the purpose of pipelines, conduits, cables, wire communication lines,
power lines and substations, streets, trails, walkways, drainage,
irrigation, water, and sewerage purposes, dikes, canals, ditches, the
removal of oil, gas, coal, or other minerals, and other like purposes
affecting Property, facilities, or equipment which in the aggregate do
not materially burden or impair the fair market value
-21-
or use of such Property for the purposes for which it is or may
reasonably be expected to be held;
(e) easements, exceptions, reservations, or other agreements for
the purpose of facilitating the joint or common use of Property in or
adjacent to a shopping center or similar project affecting Property
which in the aggregate do not materially burden or impair the fair
market value or use of such Property for the purposes for which it is
or may reasonably be expected to be held;
(f) rights reserved to or vested in any Governmental Agency to
control or regulate, or obligations or duties to any Governmental
Agency with respect to, the use of any Property;
(g) rights reserved to or vested in any Governmental Agency to
control or regulate, or obligations or duties to any Governmental
Agency with respect to, any right, power, franchise, grant, license,
or permit;
(h) present or future zoning laws and ordinances or other laws
and ordinances restricting the occupancy, use, or enjoyment of
Property;
(i) statutory Liens, other than those described in clauses (a)
or (b) above, arising in the ordinary course of business with respect
to obligations which are not delinquent or are being contested in good
faith, provided that, if delinquent, adequate reserves have been set
--------
aside with respect thereto and, by reason of nonpayment, no Property
is subject to a material risk of loss or forfeiture;
(j) covenants, conditions, and restrictions affecting the use of
Property which in the aggregate do not materially impair the fair
market value or use of the Property for the purposes for which it is
or may reasonably be expected to be held;
(k) rights of tenants under leases and rental agreements
covering Property entered into in the ordinary course of business of
the Person owning such Property;
(l) Liens consisting of pledges or deposits to secure
obligations under workers' compensation laws or similar legislation,
including Liens of judgments thereunder which are not currently
dischargeable;
(m) Liens consisting of pledges or deposits of Property to
secure performance in connection with operating leases made in the
ordinary course
-22-
of business to which Borrower or a Subsidiary of Borrower is a party
as lessee, provided the aggregate value of all such pledges and
--------
deposits in connection with any such lease does not at any time exceed
20% of the annual fixed rentals payable under such lease;
(n) Liens consisting of deposits of Property to secure bids made
with respect to, or performance of, contracts (other than contracts
----- ----
creating or evidencing an extension of credit to the depositor);
(o) Liens consisting of any right of offset, or statutory
bankers' lien, on bank deposit accounts maintained in the ordinary
course of business so long as such bank deposit accounts are not
established or maintained for the purpose of providing such right of
offset or bankers' lien;
(p) Liens consisting of deposits of Property to secure statutory
obligations of Borrower or a Subsidiary of Borrower;
(q) Liens consisting of deposits of Property to secure (or in
lieu of) surety, appeal or customs bonds in proceedings to which
Borrower or a Subsidiary of Borrower is a party;
(r) Liens created by or resulting from any litigation or legal
proceeding involving Borrower or a Subsidiary of Borrower in the
ordinary course of its business which is currently being contested in
good faith by appropriate proceedings, provided that such Lien is
--------
junior to the Lien of the Collateral Documents and, in any event,
adequate reserves have been set aside and no material Property is
subject to a material risk of loss or forfeiture; and
(s) other non-consensual Liens incurred in the ordinary course
of business but not in connection with an extension of credit, which
do not in the aggregate, when taken together with all other Liens,
materially impair the value or use of the Property of the Borrower and
the Subsidiaries of Borrower, taken as a whole.
"Permitted Right of Others" means a Right of Others consisting of (a)
-------------------------
an interest (other than a legal or equitable co-ownership interest, an
option or right to acquire a legal or equitable co-ownership interest and
any interest of a ground lessor under a ground lease), that does not
materially impair the value or use of Property for the purposes for which
it is or may reasonably be expected to be held, (b) an option or right to
acquire a Lien that would be a Permitted Encumbrance, (c) the subordination
of a lease or sublease in favor of a financing entity, (d) a lease, rental
or similar agreement covering Property entered into in the ordinary course
of business and (e) a
-23-
license, or similar right, of or to Intangible Assets granted in the
ordinary course of business.
"Person" means any individual or entity, including a trustee,
------ ---------
corporation, limited liability company, general partnership, limited
partnership, joint stock company, trust, estate, unincorporated
organization, business association, firm, joint venture, Governmental
Agency, or other entity.
"Plans and Budget" means the plans, specifications, construction
----------------
budget, construction plan and timetable prepared by or for Borrower, as the
same may be amended or supplemented from time to time, all of which plans
and specifications describe the construction of the Temporary Project.
"Pre-Opening Expenses" means, with respect to any fiscal period, the
--------------------
amount of expenses (other than Interest Charges) classified as "pre-opening
----- ----
expenses" on the applicable financial statements of the Borrower and the
Company and its Restricted Subsidiaries for such period, prepared in
accordance with Generally Accepted Accounting Principles consistently
applied.
"Pricing Certificate" means a certificate substantially in the form of
-------------------
Exhibit D, properly completed and signed by a Senior Officer of the
Licensee on behalf of Borrower.
"Pricing Matrix" means the following matrix, upon which interest rates
--------------
and certain fees hereunder shall be determined on the basis of the Company
Rating (expressed below in basis points):
Company Eurodollar Base Rate Commitment Letter of
Rating Spread Spread Fee Credit Fees
------ ------ ------ ---------- -----------
BBB+/Baa1 67.50 0.0 15.0 67.50
BBB/Baa2 87.50 0.0 17.50 87.50
BBB-/Baa3 100.0 0.0 20.0 100.00
BB+/Ba1 125.0 0.0 22.5 125.00
BB/Ba2 or lower 162.5 37.50 25.0 162.50;
provided however that during each Pricing Period for which the Company
-------- -------
Leverage Ratio (determined as of the last day of the Fiscal Quarter ending
approximately 45 days prior to the commencement of such Pricing Period) (a)
is below 1.00, 10.0 basis points shall be deducted from the Eurodollar
Spreads and Letter of Credit Fees set forth above, and (b) exceeds 3.50,
10.0 basis points will be added to the Eurodollar Spreads and Letter of
Credit Fees set forth above.
-24-
"Pricing Period" means (a) the period commencing on the Closing Date
--------------
and ending on May 15, 1999, and (b) the subsequent concurrent quarterly
periods of approximately 90 days each commencing on each November 16,
February 16, May 16 and August 16.
"Projections" means the financial projections for Borrower and its
-----------
Subsidiaries attached hereto as Schedule 4.17 prepared on behalf of
Borrower and heretofore distributed to the Lenders.
"Property" means any interest in any kind of property or asset,
--------
whether real, personal or mixed, or tangible or intangible.
"Pro Rata Share" means, with respect to each Lender, the percentage of
--------------
the Commitment, the Loans and the Letters of Credit held by that Lender (or
by an SPC (as defined in Section 11.8(g)) for which that Lender is the
Granting Lender). As of the Closing Date, the Pro Rata Share of each
Lender is set forth opposite the name of that Lender on Schedule 1.1. The
percentage Pro Rata Share of each Lender (but without the consent of that
Lender not the dollar amount thereof) is subject to adjustment as set forth
in Section 2.7 or pursuant to any Assignment Agreement executed in
accordance with Section 11.8.
"Quantified New York Exposure" means, as of each date of
----------------------------
determination, the amount required by Generally Accepted Accounting
Principles to be set forth on the Company's consolidated balance sheet (and
not merely as a footnote) as the exposure of the Company and its
Subsidiaries with respect to the "New York Keep Well" or any other then
effective "New York Contingent Obligation" (as such terms are defined in
the Company Loan Agreement as of the date of this Agreement).
"Quarterly Payment Date" means each September 30, December 31, March
----------------------
31 and June 30.
"Real Property" means, as of any date of determination, all real
-------------
Property then or theretofore owned, leased or occupied by Borrower or any
of its Subsidiaries.
"Reduction Amount" means, as to each Reduction Date, and subject to
----------------
Section 2.5(b), an amount equal to the greater of (a) $19,200,000, or (b) 8
-------
1/3% of the sum of (i) principal amount of the Commitment in effect on the
Closing Date plus (ii) the amount of any increases in the Commitment which
----
have occurred as of that Reduction Date pursuant to Section 2.7.
-25-
"Reduction Date" means (a) the earlier of (i) March 31, 2001, and (ii)
--------------
the last day of the first calendar quarter ending one year or more after
the Opening Date, and (b) each Quarterly Payment Date thereafter.
"Reference Rate" means the rate of interest publicly announced from
--------------
time to time by Bank of America in San Francisco, California, as its
"reference rate." It is a rate set by Bank of America based upon various
factors including Bank of America's costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced
rate. Any change in the Reference Rate announced by Bank of America shall
take effect at the opening of business on the day specified in the public
announcement of such change.
"Regulations D, T, U and X" means Regulations D, T, U and X, as at any
-------------------------
time amended, of the Board of Governors of the Federal Reserve System, or
any other regulations in substance substituted therefor.
"Request for Letter of Credit" means a written request for a Letter of
----------------------------
Credit substantially in the form of Exhibit E, signed by a Responsible
Official of Borrower, on its behalf, and properly completed to provide all
information required to be included therein.
"Request for Loan" means a written request for a Loan substantially in
----------------
the form of Exhibit F, signed by a Responsible Official of Borrower, on its
behalf, and properly completed to provide all information required to be
included therein.
"Requirement of Law" means, as to any Person, the articles or
------------------
certificate of incorporation and by-laws or other organizational or
governing documents of such Person, and any Law, or judgment, award,
decree, writ or determination of a Governmental Agency, in each case
applicable to or binding upon such Person or any of its Property or to
which such Person or any of its Property is subject.
"Requisite Lenders" means (a) as of any date of determination if the
-----------------
Commitment is then in effect, Lenders having Pro Rata Shares which are, in
the aggregate, 51% or more of the Pro Rata Shares of the Commitment then
in effect and (b) as of any date of determination if the Commitment has
then been terminated and there are then any Obligations outstanding,
Lenders or other creditors holding 51% or more of the Outstanding
Obligations.
"Responsible Official" means (a) when used with reference to the
--------------------
Borrower, the Sole Member, (b) when used with reference to a Person other
than Borrower and other than an individual, any officer or manager of such
Person, general partner of
-26-
such Person, officer of a corporate or limited liability company general
partner of such Person, officer of a corporate or limited liability company
general partner of a partnership that is a general partner of such Person,
or any other responsible official thereof duly acting on behalf thereof,
and (c) when used with reference to a Person who is an individual, such
Person. The Lenders shall be entitled to conclusively rely upon any
document or certificate that is signed or executed by a Responsible
Official of Borrower or any of its Subsidiaries as having been authorized
by all necessary corporate, limited liability company, partnership and/or
other action on the part of Borrower or such Subsidiary of Borrower.
"Restricted Subsidiaries" has the meaning set forth in the Company
-----------------------
Loan Agreement from time to time.
"Right of Others" means, as to any Property in which a Person has an
---------------
interest, any legal or equitable right, title or interest (other than a
Lien) held by any other Person in that Property, and any option or right
held by any other Person to acquire any such right, title or interest in
that Property, including any option or right to acquire a Lien; provided,
--------- --------
however, that (a) any covenant restricting the use or disposition of
Property of such Person contained in any Contractual Obligation of such
Person and (b) any provision contained in a contract creating a right of
payment or performance in favor of a Person that conditions, limits,
restricts, diminishes, transfers or terminates such right, shall not be
deemed to constitute a Right of Others.
"Secured Swap Agreement" means a Swap Agreement between Borrower and a
----------------------
Lender or an Affiliate of a Lender (but, in the case of any such Affiliate,
only to the extent that the same expressly relates to the Obligations).
"Security Agreement" means the Security Agreement executed by Borrower
------------------
as of the Closing Date, as the same may from time to time be supplemented,
modified, amended, renewed, extended, supplanted or replaced.
"Senior Officer" means the (a) chief executive officer or manager, (b)
--------------
president, (c) executive vice president, (d) senior vice president, (e)
chief financial officer, (f) treasurer, (g) assistant treasurer, (h)
secretary, or (i) assistant secretary of the Licensee.
"Sole Member" means the Licensee, the only member of Borrower as of
-----------
the Closing Date.
"Special Eurodollar Circumstance" means the application or adoption
-------------------------------
after the Closing Date of any Law or interpretation, or any change therein
or thereof, or any change in the interpretation or administration thereof
by any Governmental Agency,
-27-
central bank or comparable authority charged with the interpretation or
administration thereof, or compliance by any Lender or its Eurodollar
Lending Office with any request or directive (whether or not having the
force of Law) of any such Governmental Agency, central bank or comparable
authority, or the existence or occurrence of circumstances affecting the
Designated Eurodollar Market generally that are beyond the reasonable
control of the Lenders.
"Standby Letter of Credit" means each Letter of Credit that is not a
------------------------
Commercial Letter of Credit.
"Standby Letter of Credit Fee" means, as of each date of
----------------------------
determination, the applicable percentage set forth opposite the effective
Company Rating in the Pricing Matrix.
"Sublease" means the Temporary Casino Sublease dated as of March 31,
--------
1999 between Borrower, as sublandlord, and the Licensee, as subtenant with
respect to the Temporary Project Site.
"Subordinated Obligations" means unsecured Indebtedness of Borrower
------------------------
(but not Indebtedness of any Subsidiary of Borrower), which:
(a) does not require amortization prior to the Maturity Date;
(b) is governed by agreements which contain no representations,
warranties, covenants, defaults and other provisions which are more
restrictive upon, or onerous to, Borrower and its Subsidiaries than
the provisions of the Loan Documents; and
(c) is subordinated in right of payment to the Obligations
pursuant to subordination provisions which are acceptable to the
Requisite Lenders in the exercise of their sole discretion.
"Subsidiary" means, as of any date of determination and with respect
----------
to any Person, any corporation, limited liability company or partnership
(whether or not, in either case, characterized as such or as a "joint
venture"), whether now existing or hereafter organized or acquired: (a) in
the case of a corporation or limited liability company, of which a majority
of the securities having ordinary voting power for the election of
directors or other governing body (other than securities having such power
only by reason of the happening of a contingency) are at the time
beneficially owned by such Person and/or one or more Subsidiaries of such
Person, or (b) in the case of a partnership, of which a majority of the
partnership or other ownership interests are at the time beneficially owned
by such Person and/or one or more of its Subsidiaries.
-28-
"Swap Agreement" means a written agreement between Borrower and one or
--------------
more financial institutions providing for "swap", "cap", "collar" or other
interest rate protection with respect to any Indebtedness.
"S&P" means Standard & Poor's Ratings Group (a division of McGraw
---
Hill, Inc.).
"Tax Distributions" means, during any fiscal period, Distributions
-----------------
made by Borrower to the Licensee or the Company in an amount which is equal
to the actual cash tax liability of such Persons (without duplication)
arising by reason of the tax attributes of the Borrower.
"Temporary Project" means the proposed design, development and
-----------------
construction by Borrower and its Subsidiaries of a temporary casino on the
Fee Property and the premises subject to the Lease, together with all
facilities incidental thereto.
"to the best knowledge of" means, when modifying a representation,
------------------------
warranty or other statement of any Person, that the fact or situation
described therein is known by the Person (or, (i) in the case of Borrower,
a Responsible Official of the Licensee, and (ii) in the case of any other
Person other than a natural Person and other than Borrower, known by a
Responsible Official of that Person) making the representation, warranty or
other statement, or with the exercise of reasonable due diligence under the
circumstances (in accordance with the standard of what a reasonable Person
in similar circumstances would have done) would have been known by the
Person (or, (i) in the case of Borrower, would have been known by a
Responsible Official of the Licensee, and (ii) in the case of a Person
other than a natural Person and other than Borrower, would have been known
by a Responsible Official of that Person).
"Total Assets" means, as of any date of determination, the
------------
consolidated total assets of Borrower and its Subsidiaries on that date,
determined in accordance with Generally Accepted Accounting Principles.
"Trademark Security Interest Assignment" means the Trademark Security
--------------------------------------
Interest Assignment executed and delivered by Borrower substantially in the
form of Exhibit G pursuant to Section 5.12, either as originally executed
or as it may from time to time be supplemented, modified, amended, extended
or supplanted.
"type", when used with respect to any Loan or Advance, means the
----
designation of whether such Loan or Advance is a Base Rate Loan or Advance,
or a Eurodollar Rate Loan or Advance.
-29-
"Unrelated Person" means any Person other than (i) an employee stock
---------------- ----- ----
ownership plan or other employee benefit plan covering the employees of
Borrower and its Subsidiaries or (ii) an Affiliate of any Person or group
of related Persons which as of the date of this Agreement is the beneficial
owner of 25% or more (in the aggregate) of the outstanding common stock of
Borrower.
"Unrestricted Subsidiaries" has the meaning set forth for that term in
-------------------------
the Company Loan Agreement from time to time.
"Year 2000 Issue" means failure of computer software, hardware and
---------------
firmware systems, and equipment containing embedded computer chips, to
properly receive, transmit, process, manipulate, store, retrieve, re-
transmit or in any other way utilize data and information due to the
occurrence of the year 2000 or the inclusion of dates on or after January
1, 2000.
1.2 Use of Defined Terms. Any defined term used in the plural shall
--------------------
refer to all members of the relevant class, and any defined term used in the
singular shall refer to any one or more of the members of the relevant class.
1.3 Accounting Terms - Fiscal Periods. All accounting terms not
---------------------------------
specifically defined in this Agreement shall be construed in conformity with,
and all financial data required to be submitted by this Agreement shall be
prepared in conformity with, Generally Accepted Accounting Principles applied on
a consistent basis, except as otherwise specifically prescribed herein. In the
------
event that Generally Accepted Accounting Principles or Borrower's Fiscal Year or
Fiscal Quarters change during the term of this Agreement such that the cove
nants contained in Sections 6.11 and 6.12 would then be calculated for different
periods, in a different manner or with different components, (a) Borrower and
the Lenders agree to amend this Agreement in such respects as are necessary to
conform those covenants as criteria for evaluating Borrower's financial
condition to substantially the same criteria as were effective prior to such
change in Fiscal Year, Fiscal Quarters or in Generally Accepted Accounting
Principles and (b) Borrower shall be deemed to be in compliance with the
covenants contained in the aforesaid Sections if and to the extent that Borrower
would have been in compliance therewith for the pre-existing fiscal periods and
under Generally Accepted Accounting Principles as in effect immediately prior to
such change, but shall have the obligation to deliver each of the materials
described in Article 7 to the Creditors, on the dates therein specified, with
financial data presented for its pre-existing fiscal periods and in a manner
which conforms with Generally Accepted Accounting Principles as in effect
immediately prior to such change.
1.4 Rounding. Any financial ratios required to be maintained by
--------
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which
-30-
such ratio is expressed in this Agreement and rounding the result up or down to
the nearest number (with a round-up if there is no nearest number) to the number
of places by which such ratio is expressed in this Agreement.
1.5 Exhibits and Schedules. All Exhibits and Schedules to this
----------------------
Agreement, either as originally existing or as the same may from time to time be
supplemented, modified or amended, are incorporated herein by this reference. A
matter disclosed on any Schedule shall be deemed disclosed on all Schedules.
1.6 Miscellaneous Terms. In the Loan Documents, the term "or" is
-------------------
disjunctive; the term "and" is conjunctive. The term "shall" is mandatory; the
term "may" is permissive. Masculine terms also apply to females; feminine terms
also apply to males. The term "including" is by way of example and not
limitation.
-31-
Article 2
LOANS AND LETTERS OF CREDIT
---------------------------
2.1 Loans-General.
-------------
(a) Subject to the terms and conditions set forth in this
Agreement, at any time and from time to time from the Closing Date through
the Business Day immediately prior to the Maturity Date, each Lender shall,
pro rata according to that Lender's Pro Rata Share of the then applicable
Commitment, make Advances to Borrower under the Commitment in such amounts
as Borrower may request that do not result in the Outstanding Obligations
being in excess of the then effective Commitment. Subject to the
limitations set forth herein, the Advances by each Lender under its Pro
Rata Share of the Commitment may be prepaid without premium or penalty.
(b) Subject to the next sentence, each Loan shall be made
pursuant to a Request for Loan which shall specify the requested (i) date
of such Loan, (ii) type of Loan, (iii) amount of such Loan, and (iv) in the
case of a Eurodollar Rate Loan, the Eurodollar Period for such Loan.
Unless the Administrative Agent, in its sole and absolute discretion, has
notified Borrower to the contrary, a Loan may be requested by telephone by
a Responsible Official of Borrower, in which case Borrower shall confirm
such request by promptly delivering a Request for Loan in person or by
telecopier conforming to the preceding sentence to the Administrative
Agent. The Administrative Agent shall incur no liability whatsoever
hereunder in acting upon any telephonic request purportedly made by a
Responsible Official of Borrower, and Borrower hereby agrees to indemnify
each Creditor from any loss, cost, expense or liability as a result of so
acting.
(c) Promptly following receipt of a Request for Loan, the
Administrative Agent shall notify each Lender by telephone or telecopier
(and if by telephone, promptly confirmed by telecopier) of the date and
type of the Loan, any applicable Eurodollar Period, and that Lender's Pro
Rata Share of the Loan. Not later than 11:00 a.m., California local time,
on the date specified for any Loan (which must be a Business Day), each
Lender shall make its Pro Rata Share of the Loan in immediately available
funds available to the Administrative Agent at the Administ rative Agent's
Office. Upon satisfaction or waiver of the applicable conditions set forth
in Article 8, all Advances shall be transferred by wire transfer of
immediately available funds to the Deposit Account.
-32-
(d) Unless the Requisite Lenders otherwise consent, each Loan
shall be in an integral multiple of $1,000,000 which is not less than
$5,000,000.
(e) The Advances made by each Lender shall be evidenced by that
Lender's Note.
(f) A Request for Loan shall be irrevocable upon the
Administrative Agent's first notification thereof.
(g) If no Request for Loan (or telephonic request for Loan
referred to in the second sentence of Section 2.1(b), if applicable) has
been made within the requisite notice periods set forth in Section 2.2 or
2.3 prior to the end of the Eurodollar Period for any Eurodollar Rate Loan,
then on the last day of such Eurodollar Period, such Eurodollar Rate Loan
shall be automatically converted into a Base Rate Loan in the same amount.
(h) If a Loan is to be made on the same date that another Loan is
due and payable:
(i) the Lenders shall make available to the Administrative
Agent (or the Administrative Agent shall make available to the
Lenders) the net amount of funds giving effect to both such Loans and
the effect for purposes of this Agreement shall be the same as if
separate transfers of funds had been made with respect to each such
Loan; and
(ii) in the case where the same Party is the primary
borrower of both such Loans, Borrower shall make available to the
Administrative Agent (or the Administrative Agent shall make available
to such Party) the net amount of funds giving effect to both such
Loans and the effect for purposes of this Agreement shall be the same
as if separate transfers of funds had been made with respect to each
such Loan.
2.2 Base Rate Loans. Each request by Borrower for a Base Rate Loan
---------------
shall be made pursuant to a Request for Loan (or telephonic or other request for
loan referred to in the second sentence of Section 2.1(b), if applicable)
received by the Administrative Agent, at the Administrative Agent's Office, not
later than 9:00 a.m. California local time, on the date (which must be a
Business Day) of the requested Base Rate Loan. All Loans shall constitute Base
Rate Loans unless properly designated as a Eurodollar Rate Loan pursuant to
Section 2.3.
-33-
2.3 Eurodollar Rate Loans.
---------------------
(a) Each request by Borrower for a Eurodollar Rate Loan
shall be made pursuant to a Request for Loan (or telephonic or other
request for Loan referred to in the second sentence of Section 2.1(b), if
applicable) received by the Administrative Agent, at the Administrative
Agent's Office, not later than 9:00 a.m., California local time, at least
three Eurodollar Business Days before the first day of the applicable
Eurodollar Period.
(b) On the date which is two Eurodollar Business Days before
the first day of the applicable Eurodollar Period, the Administrative Agent
shall confirm its determination of the applicable Eurodollar Rate (which
determination shall be conclusive in the absence of manifest error) and
promptly shall give notice of the same to Borrower and the Lenders by
telephone or telecopier (and if by telephone, promptly confirmed by
telecopier).
(c) Unless the Administrative Agent and the Requisite
Lenders otherwise consent, no more than seven Eurodollar Rate Loans shall
be outstanding at any one time.
(d) No Eurodollar Rate Loan may be requested during the
continuation of a Default or Event of Default.
(e) Nothing contained herein shall require any Lender to
fund any Eurodollar Rate Advance in the Designated Eurodollar Market.
2.4 Letters of Credit.
-----------------
(a) Subject to the terms and conditions hereof, at any time
and from time to time from the Closing Date through the Business Day
immediately prior to the Maturity Date, the Issuing Lender shall issue such
Letters of Credit under the Commit ment as Borrower may request by a
Request for Letter of Credit; provided that (i) giving effect to all such
--------
Letters of Credit, the Outstanding Obligations do not exceed the then
applicable Commitment, and (ii) the Aggregate Effective Amount under all
outstanding Letters of Credit shall not exceed $20,000,000. Each Letter of
Credit shall be in a form reasonably acceptable to the Issuing Lender.
Unless all the Lenders otherwise consent in a writing delivered to the
Administrative Agent, the term of any Letter of Credit shall not exceed one
year or extend beyond the Maturity Date.
(b) Each Request for Letter of Credit shall be submitted to
the Issuing Lender, with a copy to the Administrative Agent, at least five
Business Days
-34-
prior to the date upon which the related Letter of Credit is proposed to be
issued. The Administrative Agent shall promptly notify the Issuing Lender
whether such Request for Letter of Credit, and the issuance of a Letter of
Credit pursuant thereto, conforms to the requirements of this Agreement.
Upon issuance of a Letter of Credit, the Issuing Lender shall promptly
notify the Administrative Agent, and the Administrative Agent shall
promptly notify the Lenders, of the amount and terms thereof.
(c) Upon the issuance of a Letter of Credit, each Lender
shall be deemed to have purchased at par a pro rata participation in such
Letter of Credit from the Issuing Lender in an amount equal to that
Lender's Pro Rata Share. Without limiting the scope and nature of each
Lender's participation in any Letter of Credit, to the extent that the
Issuing Lender has not been reimbursed by Borrower for any payment required
to be made by the Issuing Lender under any Letter of Credit, each Lender
shall, pro rata according to its Pro Rata Share, pay the purchase price for
such participation to the Issuing Lender through the Administrative Agent
promptly upon demand therefor. The obligation of each Lender to so pay the
participation purchase price to the Issuing Lender shall be absolute and
unconditional and shall not be affected by the occurrence of an Event of
Default or any other occurrence or event. Any such payment of the purchase
price shall not relieve or otherwise impair the obligation of Borrower to
reimburse the Issuing Lender for the amount of any payment made by the
Issuing Lender under any Letter of Credit together with interest as
hereinafter provided.
(d) Borrower agrees to pay to the Issuing Lender through the
Administrative Agent an amount equal to any payment made by the Issuing
Lender with respect to each Letter of Credit within one Business Day after
written demand made by the Issuing Lender therefor, together with interest
on such amount from the date of any payment made by the Issuing Lender at
the rate applicable to Base Rate Loans for three Business Days and
thereafter at the Default Rate. The principal amount of any such payment
shall be used to reimburse the Issuing Lender for the payment made by it
under the Letter of Credit and, to the extent that the Lenders have not
reimbursed the Issuing Lender pursuant to Section 2.4(c), the interest
amount of any such payment shall be for the account of the Issuing Lender.
Each Lender that has paid the participation purchase price to the Issuing
Lender pursuant to Section 2.4(c) shall thereupon acquire a pro rata
participation, to the extent of such payment, in the claim of the Issuing
Lender against Borrower for reimbursement of principal and interest under
this Section 2.4(d) and shall share, in accordance with that pro rata
participation, in any principal payment made by Borrower with respect to
such claim and in any interest payment made by Borrower (but only with
respect to periods subsequent to the date such Lender paid the
participation purchase price to the Issuing Lender) with respect to such
claim.
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(e) Borrower may, pursuant to a Request for Loan, request
that Advances be made pursuant to Section 2.1(a) to provide funds for the
payment required by Section 2.4(d) and, for this purpose, the conditions
precedent set forth in Article 8 shall not apply. The proceeds of such
Advances shall be paid directly to the Issuing Lender to reimburse it for
the payment made by it under the Letter of Credit.
(f) If Borrower fails to make the payment required by
Section 2.4(d) on a timely basis then, in lieu of the payment of the
participation purchase price to the Issuing Lender under Section 2.4(c),
the Issuing Lender may (but is not required to), without notice to or the
consent of Borrower, instruct the Administrative Agent to cause Advances to
be made by the Lenders under their Pro Rata Shares of the Commitment in an
aggregate amount equal to the amount paid by the Issuing Lender with
respect to that Letter of Credit and, for this purpose, the conditions
precedent set forth in Article 8 shall not apply. The proceeds of such
Advances shall be paid directly to the Issuing Lender to reimburse it for
the payment made by it under the Letter of Credit.
(g) The issuance of any supplement, modification, amendment,
renewal, or extension to or of any Letter of Credit shall be treated in all
respects the same as the issuance of a new Letter of Credit, except that
the Issuing Lender's issuance fees shall be payable as set forth in the
letter agreement referred to in Section 3.5.
(h) The obligation of Borrower to pay to the Issuing Lender
the amount of any payment made by the Issuing Lender under any Letter of
Credit shall be absolute, unconditional, and irrevocable, subject only to
performance by the Issuing Lender of its obligations to Borrower under
Uniform Commercial Code Section 5109. Without limiting the foregoing, the
obligations of Borrower to the Issuing Lender shall not be affected by any
of the following circumstances:
(i) any lack of validity or enforceability of the
Letter of Credit, this Agreement, or any other agreement or instrument
relating thereto;
(ii) any amendment or waiver of or any consent to
departure from the Letter of Credit, this Agreement, or any other
agreement or instrument relating thereto, with the consent of
Borrower;
(iii) the existence of any claim, setoff, defense, or
other rights which Borrower may have at any time against the Issuing
Lender, the Administrative Agent or any Lender, any beneficiary of the
Letter of Credit
-36-
(or any persons or entities for whom any such beneficiary may be
acting) or any other Person, whether in connection with the Letter of
Credit, this Agreement, or any other agreement or instrument relating
thereto, or any unrelated transactions;
(iv) any demand, statement, or any other document
presented under the Letter of Credit proving to be forged, fraudulent,
invalid, or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect whatsoever so long as any such
document appeared to comply with the terms of the Letter of Credit;
(v) payment by the Issuing Lender in good faith
under the Letter of Credit against presentation of a draft or any
accompanying document which does not strictly comply with the terms of
the Letter of Credit;
(vi) the existence, character, quality, quantity,
condition, packing, value or delivery of any Property purported to be
represented by documents presented in connection with any Letter of
Credit or any difference between any such Property and the character,
quality, quantity, condition, or value of such Property as described
in such documents;
(vii) the time, place, manner, order or contents of
shipments or deliveries of Property as described in documents
presented in connection with any Letter of Credit or the existence,
nature and extent of any insurance relative thereto;
(viii) the solvency or financial responsibility of any
party issuing any documents in connection with a Letter of Credit;
(ix) any failure or delay in notice of shipments or
arrival of any Property;
(x) any error in the transmission of any message
relating to a Letter of Credit not caused by the Issuing Lender, or
any delay or interruption in any such message;
(xi) any error, neglect or default of any
correspondent of the Issuing Lender in connection with a Letter of
Credit (but without prejudice to any claim by Borrower against such
correspondent);
-37-
(xii) any consequence arising from acts of God, war,
insurrection, civil unrest, disturbances, labor disputes, emergency
conditions or other causes beyond the control of the Issuing Lender;
(xiii) so long as the Issuing Lender in good faith
determines that the contract or document appears to comply with the
terms of the Letter of Credit, the form, accuracy, genuineness or
legal effect of any contract or document referred to in any document
submitted to the Issuing Lender in connection with a Letter of Credit;
and
(xiv) where the Issuing Lender has acted in good faith
and observed general banking usage, any other circumstances
whatsoever.
(i) The Issuing Lender shall be entitled to the protection
accorded to the Administrative Agent pursuant to Article 10, mutatis
-------
mutandis.
--------
(j) The Uniform Customs and Practice for Documentary
Credits, as published in its most current version by the International
Chamber of Commerce, shall be deemed a part of this Section and shall apply
to all Letters of Credit to the extent not inconsistent with applicable
Law.
2.5 Voluntary Reduction of Commitment.
---------------------------------
(a) Borrower shall have the right, at any time and from time
to time, without penalty or charge, upon at least three Business Days'
prior written notice by a Responsible Official of Borrower to the
Administrative Agent, voluntarily to reduce, permanently and irrevocably,
in aggregate principal amounts in an integral multiple of $1,000,000 but
not less than $5,000,000, or to terminate, all or a portion of the then
undisbursed portion of the Commitment; provided that the Commitment may not
--------
be so reduced below an amount equal to the sum of (i) the aggregate
--- --
principal amount outstanding under the Notes, plus (ii) the Aggregate
----
Effective Amount of all outstanding Letters of Credit. The Administrative
Agent shall promptly notify the Lenders of any reduction or termination of
the Commitment under this Section.
(b) Any voluntary reduction of the Commitment under this
Section shall be applied to reduce the Reduction Amount on such Reduction
Dates as may be specified by Borrower or, if no such specification is made,
to reduce the Reduction Amount for the most remote Reduction Date (to the
extent of such reduction) and thereafter to earlier Reduction Dates (to the
extent not previously applied) in the inverse order of their occurrence.
-38-
2.6 Scheduled Reductions of Commitment. Subject to Section 2.5, on
----------------------------------
each Reduction Date, the Commitment shall automatically be permanently reduced
by the then applicable Reduction Amount.
2.7 Optional Increases to the Commitment.
------------------------------------
(a) Provided that no Default or Event of Default then exists,
--------
Borrower may at any time subsequent to the Closing Date and prior to the
first anniversary of the Closing Date request in writing that the then
effective Commitment be increased to an amount which is not greater than
$250,000,000 minus the amount of any reductions to the Commitment which
-----
have then occurred pursuant to Sections 2.5 or 2.6, in accordance with the
provisions of this Section. Any request under this Section shall be
submitted by Borrower to the Lenders through the Administrative Agent not
less than thirty days prior to the proposed increase, specify the proposed
effective date and amount of such increase and be accompanied by (i) a
Certificate of a Responsible Official, signed by a Senior Officer of the
Licensee on behalf of Borrower, stating that no Default or Event of Default
exists as of the date of the request or will result from the requested
increase and (ii) a written consent to the increase in the amount of the
Commitment executed by the Company. Borrower may also specify any fees
offered to those Lenders which agree to an increase in the amount of their
Pro Rata Share of the Commitment (which fees may be variable based upon the
amount which any such Lender is willing to assume as an increase to the
amount of its Pro Rata Share of the increased Commitment). The consent of
the Lenders, as such, shall not be required for an increase in the amount
of the Commitment pursuant to this Section.
(b) Each Lender may approve or reject a request for an increase in
the amount of the Commitment in its sole and absolute discretion and,
absent an affirmative written response within fifteen days after receipt of
such request, shall be deemed to have rejected the request. The rejection
of such a request by any number of Lenders shall not affect Borrower's
right to increase the Commitment pursuant to this Section. No Lender which
rejects a request for an increase in the Commitment shall be subject to
removal as a Lender.
(c) In responding to a request under this Section, each Lender which
is willing to increase the amount of its Pro Rata Share of the increased
Commitment shall specify the amount of the proposed increase which it is
willing to assume. Each consenting Lender shall be entitled to participate
ratably (based on its Pro Rata Share of the Commitment before such
increase) in any resulting increase in the Commitment, subject to the right
of the Administrative Agent to adjust allocations of the increased
Commitment so as to result in the amounts of the Pro Rata Shares of the
Lenders being in integral multiples of $1,000,000.
-39-
(d) If the aggregate principal amount offered to be assumed by the
consenting Lenders is less than the amount requested, Borrower may (i)
reject the proposed increase in its entirety, (ii) accept the offered
amounts or (iii) designate new lenders who qualify as Eligible Assignees
and which are reasonably acceptable to the Administrative Agent as
additional Lenders hereunder in accordance with clause (e) of this Section
(each, a "New Lender"), which New Lenders may assume the amount of the
increase in the Commitment that has not been assumed by the consenting
Lenders.
(e) Each New Lender designated by Borrower and reasonably acceptable
to the Administrative Agent shall become an additional party hereto as a
New Lender concurrently with the effectiveness of the proposed increase in
the Commitment upon its execution of an instrument of joinder to this
Agreement which is in form and substance acceptable to the Administrative
Agent and which, in any event, contains the representations, warranties,
indemnities and other protections afforded to the Administrative Agent and
the other Lenders which would be granted or made by an Eligible Assignee by
means of the execution of a Commitment Assignment and Acceptance.
(f) Subject to the foregoing, any increase to the Commitment
requested under this Section shall be effective as of the date proposed by
Borrower and shall be in the principal amount equal to (i) the amount which
consenting Lenders are willing to assume as increases to the amount of
their Pro Rata Share plus (ii) the amount offered by any New Lenders. Upon
----
the effectiveness of any such increase, Borrower shall issue replacement
Notes to each affected Lender and new Notes to each New Lender, and the
percentage Pro Rata Shares of each Lender will be adjusted to give effect
to the increase in the Commitment and set forth in a new Schedule 1.1
issued by the Administrative Agent.
2.8 Optional Termination of Commitment. Following the occurrence of
----------------------------------
a Change in Control, the Requisite Lenders may in their sole and absolute
discretion elect, during the thirty day period immediately subsequent to the
later of (a) such occurrence or (b) the earlier of (i) receipt of written notice
-------- -------
to the Administrative Agent of the Change in Control from Borrower, or (ii) if
no such notice has been received by the Administrative Agent, the date upon
which the Administrative Agent has actual knowledge thereof, to terminate the
Commitment, in which case the Commitment shall be terminated effective on the
date which is thirty days subsequent to written notice from the Administrative
Agent to Borrower thereof.
2.9 Administrative Agent's Right to Assume Funds Available for
----------------------------------------------------------
Advances. Unless the Administrative Agent shall have been notified by any Lender
--------
no later than 10:00 a.m. on the Business Day of the proposed funding by the
Administrative Agent of any
-40-
Loan that such Lender does not intend to make available to the Administrative
Agent such Lender's portion of the total amount of such Loan, the Administrative
Agent may assume that such Lender has made such amount available to the
Administrative Agent on the date of the Loan and the Administrative Agent may,
in reliance upon such assumption, make available to Borrower a corresponding
amount. If the Administrative Agent has made funds available to Borrower based
on such assumption and such corresponding amount is not in fact made available
to the Administrative Agent by such Lender, the Administrative Agent shall be
entitled to recover such corresponding amount on demand from such Lender. If
such Lender does not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent promptly shall
notify Borrower who shall pay such corresponding amount to the Administrative
Agent. The Administrative Agent also shall be entitled to recover from such
Lender interest on such corresponding amount in respect of each day from the
date such corresponding amount was made available by the Administrative Agent to
Borrower to the date such corresponding amount is recovered by the
Administrative Agent, at a rate per annum equal to the daily Federal Funds Rate.
Nothing herein shall be deemed to relieve any Lender from its obligation to
fulfill its share of the Commitment or to prejudice any rights which the
Administrative Agent or Borrower may have against any Lender as a result of any
default by such Lender hereunder.
2.1 Collateral and Guaranty. The Obligations of the Borrower under
-----------------------
this Agreement and under the other Loan Documents shall be guaranteed by the
Company and secured by the Collateral pursuant to the Collateral Documents.
-41-
Article 3
PAYMENTS AND FEES
-----------------
3.1 Principal and Interest.
----------------------
(a) Interest shall be payable on the outstanding daily unpaid
principal amount of each Advance from the date thereof until payment in
full is made and shall accrue and be payable at the rates set forth or
provided for herein before and after Default, before and after maturity,
before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law, with interest on overdue interest
at the Default Rate to the fullest extent permitted by applicable Laws.
(b) Interest accrued on each Base Rate Loan on the first Business
Day of each calendar month shall be due and payable on that day. Except as
------
otherwise provided in Section 3.9, the unpaid principal amount of any Base
Rate Loan shall bear interest at a fluctuating rate per annum equal to the
Base Rate plus the applicable Base Rate Margin. Each change in the
----
interest rate under this Section 3.1(b) due to a change in the Base Rate
shall take effect simultaneously with the corresponding change in the Base
Rate.
(c) Interest accrued on each Eurodollar Rate Loan which is for a
term of three months or less shall be due and payable on the last day of
the related Eurodollar Period. Interest accrued on each other Eurodollar
Rate Loan shall be due and payable on the date which is three months after
the date such Eurodollar Rate Loan was made (and, in the event that all of
the Lenders have approved a Eurodollar Period of longer than six months,
every three months thereafter through the last day of the Eurodollar
Period) and on the last day of the related Eurodollar Period. Except as
------
otherwise provided in Section 3.9, the unpaid principal amount of any
Eurodollar Rate Loan shall bear interest at a rate per annum equal to the
Eurodollar Rate for that Eurodollar Rate Loan plus the applicable
----
Eurodollar Margin.
(d) If not sooner paid, the principal Indebtedness evidenced by
the Notes shall be payable as follows:
(i) the amount, if any, by which the Outstanding Obligations
at any time exceed the then applicable Commitment (as the same may
reduced on any Reduction Date), shall be payable immediately; and
-42-
(ii) the principal Indebtedness evidenced by the Notes shall
in any event be payable on the Maturity Date.
(e) The Notes may, at any time and from time to time, voluntarily
be paid or prepaid in whole or in part without premium or penalty, except
------
that with respect to any voluntary prepayment under this Section (i) any
partial prepayment shall be not less than $5,000,000, or in integral
multiples of $1,000,000 which are in excess of $5,000,000, (ii) the
Administrative Agent shall have received written notice of any prepayment
by 9:00 a.m., California local time, on the Business Day prior to the date
of prepayment (which must be a Business Day) in the case of a Base Rate
Loan, and, in the case of a Eurodollar Rate Loan, three Business Days
before the date of prepayment, which notice shall identify the date and
amount of the prepayment and the Loan(s) being prepaid, (iii) each
prepayment of principal on any Eurodollar Rate Loan shall be accompanied by
payment of interest accrued to the date of payment on the amount of
principal paid and (iv) any payment or prepayment of all or any part of any
Eurodollar Rate Loan on a day other than the last day of the applicable
Eurodollar Period shall be subject to Section 3.8(e). Promptly following
receipt of a notice of prepayment under clause (ii) above, the
Administrative Agent shall notify each Lender by telephone or telecopier
(and if by telephone, promptly confirmed by telecopier) of the date and
amount thereof.
(f) Each payment of principal by Borrower hereunder shall be
applied ratably to the Advances made to Borrower which are then due and
payable, provided that if the Obligations are then accelerated or have been
--------
deemed to have been accelerated, each payment of principal hereunder shall
be applied ratably to the outstanding Advances.
3.2 Arranger's Fees. On the Closing Date, Borrower shall pay to
---------------
Arranger through the Administrative Agent underwriting fees in the amount
heretofore agreed upon by letter agreement between Borrower and the Arranger.
These fees are for the services of the Arranger in arranging the credit
facilities under this Agreement and are fully earned when paid and are
nonrefundable.
3.3 Upfront Fees. On the Closing Date, Borrower shall pay to the
------------
Administrative Agent, for the account of each Lender, upfront fees in an amount
equal to that Lender's allocated Pro Rata Share of the Commitment times a fee
-----
percentage based upon the amount of the offered commitment of that Lender to the
credit facilities described herein, as set forth in a writing delivered to that
Lender by the Arranger, provided that the fee percentage for Bank of America
--------
shall be as set forth in a letter agreement with Bank of America. Such upfront
fees are for the credit facilities committed by each Lender under this
-43-
Agreement and are fully earned when paid. The upfront fees paid to each Lender
are solely for its own account and are nonrefundable.
3.4 Commitment Fees. From the Closing Date, Borrower shall pay to
---------------
the Administrative Agent, for the ratable accounts of the Lenders pro rata
according to their Pro Rata Share, a commitment fee equal to the Commitment Fee
Rate in effect from time to time times the average daily amount by which the
-----
Commitment exceeds the sum of (a) the aggregate principal amount outstanding
------
under the Notes plus (b) the Aggregate Effective Amount under all outstanding
----
Standby Letters of Credit. The commitment fee shall be pay able quarterly in
arrears on each Quarterly Payment Date, on the Maturity Date, upon the date of
any partial reduction or termination of the Commitment pursuant to Sections 2.5,
2.6 or 2.8 and upon any increase to the Commitment pursuant to Section 2.7.
3.5 Letter of Credit Fees. With respect to each Letter of Credit,
---------------------
Borrower shall pay the following fees:
(a) concurrently with the issuance of each Standby Letter of
Credit, a letter of credit issuance fee to the Issuing Lender for the sole
account of the Issuing Lender, in an amount set forth in a letter agreement
between Borrower and the Issuing Lender;
(b) concurrently with the issuance of each Standby Letter of
Credit, to the Administrative Agent for the ratable account of the Lenders
in accordance with their Pro Rata Share, a standby letter of credit fee in
an amount equal to the applicable Standby Letter of Credit Fee per annum as
of the date of such issuance times the face amount of such Standby Letter
-----
of Credit through the termination or expiration of such Standby Letter of
Credit, which the Administrative Agent shall promptly pay to the Lenders;
and
(c) concurrently with each issuance, negotiation, drawing or
amendment of each Commercial Letter of Credit, to the Issuing Lender for
the sole account of the Issuing Lender, issuance, negotiation, drawing and
amendment fees in the amounts set forth from time to time as the Issuing
Lender's published scheduled fees for such services.
Each of the fees payable with respect to Letters of Credit under this Section is
earned when due and is nonrefundable.
3.6 Agency Fees. On the Closing Date and annually thereafter,
-----------
Borrower shall pay to the Administrative Agent an agency fee in such amounts as
heretofore agreed upon by letter agreement between Borrower and Bank of America
and the Arranger. The agency fee is
-44-
for the services to be performed by the Administrative Agent in acting as
Administrative Agent and is fully earned on the date paid. The agency fee paid
to the Administrative Agent is solely for its own account and is nonrefundable.
3.7 Increased Commitment Costs. If any Lender shall determine in
--------------------------
good faith that the introduction after the Closing Date of any applicable law,
rule, regulation or guideline regarding capital adequacy, or any change therein
or any change in the interpretation or administration thereof by any central
bank or other Governmental Agency charged with the interpretation or
administration thereof, or compliance by such Lender (or its Eurodollar Lending
Office) or any corporation controlling the Lender, with any request, guideline
or directive regarding capital adequacy (whether or not having the force of Law)
of any such central bank or other authority, affects or would affect the amount
of capital required or expected to be maintained by such Lender or any
corporation controlling such Lender and (taking into consideration such Lender's
or such corporation's policies with respect to capital adequacy and such
Lender's desired return on capital) determines in good faith that the amount of
such capital is increased, or the rate of return on capital is reduced, as a
consequence of its obligations under this Agreement, then, within ten Business
Days after demand of such Lender, Borrower shall pay to such Lender, from time
to time as specified in good faith by such Lender, additional amounts sufficient
to compensate such Lender in light of such circumstances, to the extent
reasonably allocable to such obligations under this Agreement, provided that
--------
Borrower shall not be obligated to pay any such amount which arose prior to the
date which is ninety days preceding the date of such demand or is attributable
to periods prior to the date which is ninety days preceding the date of such
demand. Each Lender's determination of such amounts shall be conclusive in the
absence of manifest error. Any request for compensation by a Lender under this
Section shall set forth the basis upon which it has been determined that such an
amount is due from Borrower, a calculation of the amount due, and a
certification that the corresponding costs or diminished rate of return on
capital have been incurred or sustained by the Lender. If Borrower becomes
obligated to pay a material amount under this Section to any Lender, that Lender
will be subject to removal in accordance with Section 11.26; provided that
--------
Borrower shall have paid such amount to that Lender and that Borrower, within
the thirty day period following the date of such payment, shall have notified
that Lender in writing of their intent to so remove the Lender.
3.8 Eurodollar Costs and Related Matters.
------------------------------------
(a) In the event that any Governmental Agency imposes on any
Lender any reserve or comparable requirement (including any emergency,
---------
supplemental or other reserve) with respect to the Eurodollar Obligations
of that Lender, Borrower shall pay that Lender within five Business Days
after demand all amounts necessary to compensate such Lender (determined as
though such Lender's
-45-
Eurodollar Lending Office had funded 100% of its Eurodollar Rate Advance in
the Designated Eurodollar Market) in respect of the imposition of such
reserve requirements. The Lender's determination of such amount shall be
conclusive in the absence of manifest error.
(b) If, after the date hereof, the existence or occurrence of any
Special Eurodollar Circumstance:
(1) shall subject any Lender or its Eurodollar Lending Office to
any tax, duty or other charge or cost with respect to any Eurodollar
Rate Advance, any of its Notes evidencing Eurodollar Rate Advances or
its obligation to make Eurodollar Rate Advances, or shall change the
basis of taxation of payments to any Lender attributable to the
principal of or interest on any Eurodollar Rate Advance or any other
amounts due under this Agreement in respect of any Eurodollar Rate
Advance, any of its Notes evidencing Eurodollar Rate Advances or its
obligation to make Eurodollar Rate Advances, excluding (i) taxes
---------
imposed on or measured in whole or in part by its overall net income,
gross income or gross receipts, (ii) franchise taxes imposed by (A)
any jurisdiction (or political subdivision thereof) in which it is
organized or maintains its principal office or Eurodollar Lending
Office or (B) any jurisdiction (or political subdivision thereof) in
which it is "doing business," and (iii) any withholding taxes or other
taxes based on gross income imposed by the United States of America
for any period with respect to which it has failed to provide Borrower
with the appropriate form or forms required by Section 11.21, to the
extent such forms are then available under applicable Laws;
(2) shall impose, modify or deem applicable any reserve not
applicable or deemed applicable on the date hereof (including any
---------
reserve imposed by the Board of Governors of the Federal Reserve
System, special deposit, capital or similar requirements against
assets of, deposits with or for the account of, or credit extended by,
any Lender or its Eurodollar Lending Office); or
(3) shall impose on any Lender or its Eurodollar Lending Office
or the Designated Eurodollar Market any other condition affecting any
Eurodollar Rate Advance, any of its Notes evidencing Eurodollar Rate
Advances, its obligation to make Eurodollar Rate Advances or this
Agreement, or shall otherwise affect any of the same;
and the result of any of the foregoing, as determined in good faith by such
Lender, increases the cost to such Lender or its Eurodollar Lending Office
of making or
-46-
maintaining any Eurodollar Rate Advance or in respect of any Eurodollar
Rate Advance, any of its Notes evidencing Eurodollar Rate Advances or its
obligation to make Eurodollar Rate Advances or reduces the amount of any
sum received or receivable by such Lender or its Eurodollar Lending Office
with respect to any Eurodollar Rate Advance, any of its Notes evidencing
Eurodollar Rate Advances or its obligation to make Eurodollar Rate Advances
(assuming such Lender's Eurodollar Lending Office had funded 100% of its
Eurodollar Rate Advance in the Designated Eurodollar Market), then, within
five Business Days after demand by such Lender (with a copy to the
Administrative Agent), Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender for such increased cost or
reduction (determined as though such Lender's Eurodollar Lending Office had
funded 100% of its Eurodollar Rate Advance in the Designated Eurodollar
Market). A statement of any Lender claiming compensation under this
subsection and setting forth in reasonable detail the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error.
(c) If, after the date hereof, the existence or occurrence of any
Special Eurodollar Circumstance shall, in the good faith opinion of any
Lender, make it unlawful or impossible for such Lender or its Eurodollar
Lending Office to make, maintain or fund its portion of any Eurodollar Rate
Advance or materially restrict the authority of such Lender to purchase or
sell, or to take deposits of, Dollars in the Designated Eurodollar Market,
or to determine or charge interest rates based upon the Eurodollar Rate,
and such Lender shall so notify the Administrative Agent, then such
Lender's obligation to make Eurodollar Rate Advances shall be suspended for
the duration of such illegality or impossibility and the Administrative
Agent forthwith shall give notice thereof to the other Lenders and
Borrower. Upon receipt of such notice, the outstanding principal amount of
such Lender's Eurodollar Rate Advances, together with accrued interest
thereon, automatically shall be converted to Base Rate Advances on either
(1) the last day of the Eurodollar Period(s) applicable to such Eurodollar
Rate Advances if such Lender may lawfully continue to maintain and fund
such Eurodollar Rate Advances to such day(s) or (2) immediately if such
Lender may not lawfully continue to fund and maintain such Eurodollar Rate
Advances to such day(s), provided that in such event the conversion shall
--------
not be subject to payment of a prepayment fee under clause (e) of this
Section. Each Lender agrees to endeavor promptly to notify Borrower of any
event of which it has actual knowledge, occurring after the Closing Date,
which will cause that Lender to notify the Administrative Agent under this
Section, and agrees to designate a different Eurodollar Lending Office if
such designation will avoid the need for such notice and will not, in the
good faith judgment of such Lender, otherwise be materially disadvantageous
to such Lender. In the event that any Lender is unable, for the reasons
set forth above, to make, maintain or fund its portion of any Eurodollar
Rate Loan or Advance, such
-47-
Lender shall fund such amount as a Base Rate Advance for the same period of
time, and such amount shall be treated in all respects as a Base Rate
Advance. Any Lender whose obligation to make Eurodollar Rate Advances has
been suspended under this Section shall promptly notify the Administrative
Agent and Borrower of the cessation of the Special Eurodollar Circumstance
which gave rise to such suspension.
(d) If, with respect to any proposed Eurodollar Rate Loan:
(1) the Administrative Agent reasonably determines that, by
reason of circumstances affecting the Designated Eurodollar Market
generally that are beyond the reasonable control of the Lenders,
deposits in Dollars (in the applicable amounts) are not being offered
to any Lender in the Designated Eurodollar Market for the applicable
Eurodollar Period; or
(2) the Requisite Lenders advise the Administrative Agent that
the Eurodollar Rate as determined by the Administrative Agent (i) does
not represent the effective pricing to such Lenders for deposits in
Dollars in the Designated Eurodollar Market in the relevant amount for
the applicable Eurodollar Period, or (ii) will not adequately and
fairly reflect the cost to such Lenders of making the applicable
Eurodollar Rate Advances;
then the Administrative Agent forthwith shall give notice thereof to
Borrower and the Lenders, whereupon until the Administrative Agent notifies
Borrower that the circumstances giving rise to such suspension no longer
exist, the obligation of the Lenders to make any future Eurodollar Rate
Advances shall be suspended unless (but only if clause (2) above is the
------
basis for such suspension) Borrower notifies the Administrative Agent in
writing that Borrower elects to pay the Enhanced Eurodollar Margin with
respect to all Eurodollar Rate Loans made during such period.
(e) Upon payment or prepayment of any Eurodollar Rate Advance
(other than as the result of a conversion required under clause (c) of this
----- ----
Section) on a day other than the last day in the applicable Eurodollar
Period (whether voluntarily, involuntarily, by reason of acceleration, or
otherwise), or upon the failure of Borrower (for a reason other than the
failure of a Lender to make an Advance) to borrow on the date or in the
amount specified for a Eurodollar Rate Advance in any Request for Loan or
Request for Competitive Bids, or upon the failure of Borrower to prepay a
Eurodollar Rate Loan or Advance on the date specified in a notice of
prepayment delivered to the Administrative Agent pursuant to Section
3.1(d), Borrower shall pay to the appropriate Lender within ten Business
Days after demand a prepayment fee, failure to borrow fee or failure to
prepay fee, as the case may be (determined as though
-48-
100% of that Lender's Eurodollar Rate Advance had been funded in the
Designated Eurodollar Market), equal to the sum of:
--- --
(1) the principal amount of the Eurodollar Rate Advance prepaid
or not borrowed or prepaid, as the case may be, times [the number of
-----
days from and including the date of prepayment or failure to borrow or
prepay, as applicable, to but excluding the last day in the applicable
Eurodollar Period], divided by 360, times the applicable Interest
---------- -----
Differential (provided that the product of the foregoing formula must
--------
be a positive number); plus
----
(2) all out-of-pocket expenses incurred by the Lender reasonably
attributable to such payment, prepayment or failure to borrow.
Each Lender's determination of the amount of any prepayment fee, failure to
borrow fee or failure to prepay fee payable under this Section shall be
conclusive in the absence of manifest error.
(f) Each Lender agrees to endeavor promptly to notify Borrower of
any event of which it has actual knowledge, occurring after the Closing
Date, which will entitle such Lender to compensation pursuant to clause (a)
or clause (b) of this Section, and agrees to designate a different
Eurodollar Lending Office if such designation will avoid the need for or
reduce the amount of such compensation and will not, in the good faith
judgment of such Lender, otherwise be materially disadvantageous to such
Lender. Any request for compensation by a Lender under this Section shall
set forth the basis upon which it has been determined that such an amount
is due from Borrower, a calculation of the amount due, and a certification
that the corresponding costs have been incurred by the Lender.
(g) If any Lender claims compensation or is excused from making
or continuing Eurodollar Rate Loans or Advances under this Section:
(i) Borrower may at any time, upon at least four (4)
Eurodollar Business Days' prior notice to the Administrative Agent and
such Lender and upon payment in full of the amounts provided for in
this Section through the date of such payment plus any prepayment fee
----
(subject to clause (c) of this Section) required by clause (e) of this
Section, pay in full the affected Eurodollar Rate Advances of such
Lender or request that such Eurodollar Rate Advances be converted to
Base Rate Advances; and
(ii) In the case where Borrower becomes obligated to pay a
material amount under this Section to any Lender, that Lender will be
-49-
subject to removal in accordance with Section 11.26; provided that
--------
Borrower shall have paid such amount to that Lender and that Borrower,
within the thirty day period following the date of such payment, shall
have notified that Lender in writing of Borrower's intent to so remove
the Lender.
3.9 Late Payments. If any installment of principal or interest or
-------------
any fee or cost or other amount payable under any Loan Document to the
Administrative Agent, the Issuing Bank or any Lender is not paid when due, it
shall thereafter bear interest at a fluctuating interest rate per annum at all
times equal to the sum of the then applicable interest rate as to such amount
---
(including the Base Rate Margin or Eurodollar Spread, as applicable) plus 3%, to
----
the fullest extent permitted by applicable Laws. Accrued and unpaid interest on
past due amounts (including interest on past due interest) shall be compounded
---------
monthly, on the last day of each calendar month, to the fullest extent permitted
by applicable Laws.
3.10 Computation of Interest and Fees. Computation of interest on
--------------------------------
Base Rate Loans shall be calculated on the basis of a year of 365 or 366 days,
as the case may be, and the actual number of days elapsed; computation of
interest on Eurodollar Rate Loans and all fees under this Agreement shall be
calculated on the basis of a year of 360 days and the actual number of days
elapsed. Borrower acknowledges that such latter calculation method will result
in a higher yield to the Lenders than a method based on a year of 365 or 366
days. Interest shall accrue on each Loan for the day on which the Loan is made;
interest shall not accrue on a Loan, or any portion thereof, for the day on
which the Loan or such portion is paid. Any Loan that is repaid on the same day
on which it is made shall bear interest for one day. Notwithstanding anything
in this Agreement to the contrary, interest in excess of the maximum amount
permitted by applicable Laws shall not accrue or be payable hereunder or under
the Notes, and any amount paid as interest hereunder or under the Notes which
would otherwise be in excess of such maximum permitted amount shall instead be
treated as a payment of principal.
3.11 Non-Business Days. If any payment to be made by Borrower or any
-----------------
other Party under any Loan Document shall come due on a day other than a
Business Day, payment shall instead be considered due on the next succeeding
Business Day and the extension of time shall be reflected in computing interest
and fees.
3.12 Manner and Treatment of Payments.
--------------------------------
(a) Each payment hereunder (except payments pursuant to Sections
------
3.7, 3.8, 11.3, 11.11 and 11.22) or on the Notes or under any other Loan
Document shall be made without setoff, counterclaim or deduction of any
kind to the Administrative Agent, at the Administrative Agent's Office, for
the account of each of the Lenders or the Administrative Agent, as the case
may be, in immediately available
-50-
funds not later than 11:00 a.m., California local time, on the day of
payment (which must be a Business Day). All payments received after such
time, on any Business Day, shall be deemed received on the next succeeding
Business Day. The amount of all payments received by the Administrative
Agent for the account of each Lender shall be immediately paid by the
Administrative Agent to the applicable Lender in immediately available
funds and, if such payment was received by the Administrative Agent by
11:00 a.m., California local time, on a Business Day and not so made avail-
able to the account of a Lender on that Business Day, the Administrative
Agent shall reimburse that Lender for the cost to such Lender of funding
the amount of such payment at the Federal Funds Rate. All payments shall be
made in lawful money of the United States of America.
(b) Each payment or prepayment on account of any Loan shall be
applied pro rata according to the outstanding Advances made by each Lender
comprising such Loan.
(c) Each Lender shall use its best efforts to keep a record
(which may be in tangible or electronic or other intangible form) of
Advances made by it and payments received by it with respect to each of its
Notes and, subject to Section 10.6(g), such record shall, as against
Borrower, be presumptive evidence of the amounts owing. Notwithstanding the
foregoing sentence, the failure by any Lender to keep such a record shall
not affect Borrower's obligations to pay the Obligations.
(d) Each payment of any amount payable by Borrower or any other
Party under this Agreement or any other Loan Document shall be made free
and clear of, and without reduction by reason of, any taxes, assessments or
other charges imposed by any Governmental Agency, central bank or
comparable authority, excluding (i) taxes imposed on or measured in whole
---------
or in part by overall net income, gross income or gross receipts, (ii)
franchise taxes imposed on any Lender by (A) any jurisdiction (or political
subdivision thereof) in which it is organized or maintains its principal
office or Eurodollar Lending Office or (B) any jurisdiction (or political
subdivision thereof) in which it is "doing business", (iii) any withholding
taxes or other taxes based on gross income imposed by the United States of
America that are not attributable to any change in any Law or the
interpretation or administration of any Law by any Governmental Agency and
(iv) any withholding tax or other taxes based on gross income imposed by
the United States of America for any period with respect to which it has
failed to provide Borrower with the appropriate form or forms required by
Section 11.21, to the extent such forms are then available under applicable
Laws (all such non-excluded taxes, assessments or other charges being
hereinafter referred to as "Taxes"). To the extent that Borrower or any
other Party is obligated by
-51-
applicable Laws to make any deduction or withholding on account of Taxes
from any amount payable to any Lender under this Agreement, they shall (i)
make such deduction or withholding and pay the same to the relevant
Governmental Agency and (ii) pay such additional amount to that Lender as
is necessary to result in that Lender's receiving a net after-Tax amount
equal to the amount to which that Lender would have been entitled under
this Agreement absent such deduction or withholding. If and when receipt of
such payment results in an excess payment or credit to that Lender on
account of such Taxes, that Lender shall promptly refund such excess to
Borrower or the relevant Party. If Borrower or any such Party becomes
obligated to pay a material amount under this Section to any Lender, that
Lender will be subject to removal in accordance with Section 11.26;
provided that Borrower or the relevant Party shall have paid such amount
--------
to that Lender and that Borrower, within the thirty day period following
the date of such payment, shall have notified that Lender in writing of
Borrower's intent to so remove the Lender.
3.13 Funding Sources. Nothing in this Agreement shall be deemed to
---------------
obligate any Lender to obtain the funds for any Loan or Advance in any
particular place or manner or to constitute a representation by any Lender that
it has obtained or will obtain the funds for any Loan or Advance in any
particular place or manner, provided that each Lender severally represents and
--------
warrants that it has obtained the funds for its Advances in compliance with
applicable Laws and that the making of its Advances will not constitute
"prohibited transactions" as such term is defined in ERISA.
3.14 Failure to Charge Not Subsequent Waiver. Any decision by the
---------------------------------------
Administrative Agent or any Lender not to require payment of any interest
(including interest at the Default Rate), fee, cost or other amount payable
---------
under any Loan Document, or to calculate any amount payable by a particular
method, on any occasion shall in no way limit or be deemed a waiver of the
Administrative Agent's or such Lender's right to require full payment of any
interest (including interest at the Default Rate), fee, cost or other amount
---------
payable under any Loan Document, or to calculate an amount payable by another
method that is not inconsistent with this Agreement, on any other or subsequent
occasion.
3.15 Administrative Agent's Right to Assume Payments Will be Made by
---------------------------------------------------------------
Borrower. Unless the Administrative Agent shall have been notified by Borrower
--------
prior to the date on which any payment to be made by Borrower hereunder is due
that Borrower does not intend to remit such payment, the Administrative Agent
may, in its discretion, assume that Borrower has remitted such payment when so
due and the Administrative Agent may, in its discretion and in reliance upon
such assumption, make available to each Lender on such payment date an amount
equal to such Lender's share of such assumed payment. If Borrower has not in
fact remitted such payment to the Administrative Agent, each Lender shall
forthwith on demand repay to the Administrative Agent the amount of such assumed
payment
-52-
made available to such Lender, together with interest thereon in respect of each
day from and including the date such amount was made available by the
Administrative Agent to such Lender to the date such amount is repaid to the
Administrative Agent at the Federal Funds Rate.
3.16 Fee Determination Detail. The Administrative Agent and any
------------------------
Lender shall provide reasonable detail to Borrower regarding the manner in which
the amount of any payment to the Creditors, or that Lender, under Article 3 has
been determined, concurrently with demand for such payment.
3.17 Survivability. All of Borrower's obligations under Sections 3.7
-------------
and 3.8 shall survive for ninety days following the date on which the Commitment
is terminated, all Obligations hereunder are fully paid and all Letters of
Credit have expired.
-53-
Article 4
REPRESENTATIONS AND WARRANTIES
------------------------------
Borrower represents and warrants to the Lenders that:
4.1 Existence and Qualification; Power; Compliance With Laws.
--------------------------------------------------------
Borrower is a limited liability company duly formed, validly existing and in
good standing under the Laws of Delaware. The Company is a corporation duly
formed, validly existing and in good standing under the Laws of Delaware.
Borrower and the Company are duly qualified or registered to transact business
and are in good standing in each other jurisdiction in which the conduct of
their business or the ownership or leasing of their Properties makes such
qualification or registration necessary, except where the failure so to qualify
------
or register and to be in good standing would not constitute a Material Adverse
Effect. Borrower and the Company have all requisite company, corporate or other
organizational power and authority to conduct their business, to own and lease
their Properties and to execute and deliver each Loan Document to which each is
a Party and to perform the Obligations. All outstanding shares of the capital
stock of Borrower are duly authorized, validly issued, fully paid and non-
assessable, and no holder thereof has any enforceable right of rescission under
any applicable state or federal securities Laws. Borrower is in compliance with
all Requirements of Law applicable to its business as at present conducted, has
obtained all authorizations, consents, approvals, orders, licenses and permits
from, and has accomplished all filings, registrations and qualifications with,
or obtained exemptions from any of the foregoing from, any Governmental Agency
that are necessary for the transaction of its business as at present conducted,
except where the failure so to comply, file, register, qualify or obtain
------
exemptions does not constitute a Material Adverse Effect.
4.2 Authority; Compliance With Other Agreements and Instruments and
---------------------------------------------------------------
Government Regulations. The execution, delivery and performance by Borrower and
----------------------
the Company of the Loan Documents to which it is a Party have been duly
authorized by all necessary corporate or other organizational action, and do not
and will not:
(a) Require any consent or approval not heretofore obtained of
any member, partner, director, stockholder, security holder or creditor of
such Party;
(b) Violate or conflict with any provision of such Party's
operating agreement, charter, articles of incorporation, operating
agreement or bylaws, as applicable;
-54-
(c) Result in or require the creation or imposition of any Lien
or Right of Others upon or with respect to any Property now owned or leased
or hereafter acquired by such Party;
(d) Violate any Requirement of Law applicable to such Party,
subject to obtaining the authorizations from, or filings with, the
Governmental Agencies described in Schedule 4.3;
(e) Result in a breach of or constitute a default under, or cause
or permit the acceleration of any obligation owed under, any indenture or
loan or credit agreement or any other Contractual Obligation to which such
Party is a party or by which such Party or any of its Property is bound or
affected;
and neither Borrower nor the Company is in violation of, or default under, any
Requirement of Law or Contractual Obligation, or any indenture, loan or credit
agreement described in Section 4.2(e), in any respect that constitutes a
Material Adverse Effect.
4.3 No Governmental Approvals Required. Except as set forth in
---------------------------------- ------
Schedule 4.3 or previously obtained or made, no authorization, consent,
approval, order, license or permit from, or filing, registration or
qualification with, any Governmental Agency is or will be required to authorize
or permit under applicable Laws the execution, delivery and performance by
Borrower and its Subsidiaries of the Loan Documents to which it is a Party.
Except as set forth in Schedule 4.3, all authorizations from, or filings with,
------
any Governmental Agency described in Schedule 4.3 will be accomplished as of the
Closing Date.
4.4 Subsidiaries. Borrower does not own any capital stock, equity
------------
interest or debt security which is convertible, or exchangeable, for capital
stock or equity interests in any Person, other than Subsidiaries of Borrower as
to which Borrower has complied with Section 5.14.
4.5 Company Financials; Borrower's Opening Balance Sheet. As of the
----------------------------------------------------
Closing Date, no Material Adverse Effect has occurred with respect to the
Company since December 31, 1998. Borrower has furnished to the Lenders its pro
forma opening balance sheet, which fairly presents in all material respects the
financial condition, results of operations and changes in financial position of
Borrower as of the date of this Agreement.
4.6 No Other Liabilities. Borrower does not have any material
--------------------
liability or material contingent liability required under Generally Accepted
Accounting Principles to be reflected or disclosed and not reflected or
disclosed in the pro forma opening balance sheet described in Section 4.5.
-55-
4.7 Title to Property. Borrower and its Subsidiaries have valid
-----------------
title to the Property reflected in the opening balance sheet described in
Section 4.5, other than immaterial items of Property and Property subsequently
sold or disposed of in the ordinary course of business, free and clear of all
Liens and Rights of Others, other than Permitted Encumbrances, Permitted Rights
----------
of Others and Liens or Rights of Others described in Schedule 4.7 or permitted
by Section 6.8.
4.8 Intangible Assets. Borrower and its Subsidiaries own, or possess
-----------------
the right to use to the extent necessary in their businesses, all material
trademarks, trade names, copyrights, patents, patent rights, computer software,
licenses and other Intangible Assets that are used in the conduct of their
businesses, and no such Intangible Asset, to the best knowledge of Borrower,
conflicts with the valid trademark, trade name, copyright, patent, patent right
or Intangible Asset of any other Person to the extent that such conflict
constitutes a Material Adverse Effect. Schedule 4.8 sets forth all material
patents, trademarks, tradenames, trade styles and copyrights owned by Borrower
and its Subsidiaries. Neither Borrower nor any of its Subsidiaries owns any
trademarks, trade names or trade styles, other than trademarks, trade names and
trade styles as to which Borrower and its Subsidiaries have complied with
Section 5.12.
4.9 Public Utility Holding Company Act. Neither Borrower nor any of
----------------------------------
its Subsidiaries is a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
4.10 Litigation. Except for (a) any matter fully covered as to
---------- ------
subject matter and amount (subject to applicable deductibles and retentions) by
insurance as to which the insurance carrier has been notified and has not
asserted lack of subject matter coverage or reserved its right to do so, (b) any
matter, or series of related matters, involving a claim against Borrower or any
of its Subsidiaries of less than $1,000,000, (c) matters of an administrative
nature not involving a claim or charge against Borrower or any of its Subsid-
iaries and (d) matters set forth in Schedule 4.10, there are no actions, suits,
proceedings or investigations pending as to which Borrower or any of its
Subsidiaries have been served or have received notice or, to the best knowledge
of Borrower, threatened against or affecting Borrower or any of its Subsidiaries
or any Property of any of them before any Governmental Agency.
4.11 Binding Obligations. The Lease, the Sublease and the Landlord
-------------------
Consent constitute the legal, valid and binding obligation of each party
thereto, enforceable against such party in accordance with its terms, except as
------
enforcement may be limited by Debtor Relief Laws, Gaming Laws or equitable
principles relating to the granting of specific performance and other equitable
remedies as a matter of judicial discretion. Each of the Loan
-56-
Documents to which Borrower or any of its Subsidiaries is a Party will, when
executed and delivered by such Party, constitute the legal, valid and binding
obligation of such Party, enforceable against such Party in accordance with its
terms, except as enforcement may be limited by Debtor Relief Laws, Gaming Laws
------
or equitable principles relating to the granting of specific performance and
other equitable remedies as a matter of judicial discretion.
4.12 No Default. No event has occurred and is continuing that is a
----------
Default or Event of Default.
4.13 ERISA.
-----
(a) With respect to each Pension Plan:
(i) such Pension Plan complies in all material respects
with ERISA and any other applicable Laws to the extent that
noncompliance could reasonably be expected to have a Material Adverse
Effect;
(ii) such Pension Plan has not incurred any "accumulated
funding deficiency" (as defined in Section 302 of ERISA) that could
reasonably be expected to have a Material Adverse Effect;
(iii) no "reportable event" (as defined in Section 4043
of ERISA) has occurred that could reasonably be expected to have a
Material Adverse Effect; and
(iv) neither Borrower nor any of its Subsidiaries has
engaged in any non-exempt "prohibited transaction" (as defined in
Section 4975 of the Code) that could reasonably be expected to have a
Material Adverse Effect.
(b) Neither Borrower nor any of its Subsidiaries has incurred or
expects to incur any withdrawal liability to any Multiemployer Plan that
could reasonably be expected to have a Material Adverse Effect.
4.14 Regulations T, U and X; Investment Company Act. The sum of (a)
----------------------------------------------
the fair market value of the portion of the Collateral which is not Margin Stock
plus (b) one-half of the value of the Collateral which does consist of Margin
----
Stock is and at all times following the Closing Date shall be in excess of the
Outstanding Obligations. No part of the proceeds of any Loan hereunder will be
used to purchase or carry, or to extend credit to others for the purpose of
purchasing or carrying, any Margin Stock in violation of Regulations T, U and X.
-57-
Neither Borrower nor any of its Subsidiaries is or is required to be registered
as an "investment company" under the Investment Company Act of 1940.
4.15 Disclosure. No written statement made by a Senior Officer of the
----------
Licensee on behalf of Borrower or the Company to the Administrative Agent or any
Lender in connection with this Agreement, or in connection with any Loan, as of
the date thereof contained any untrue statement of a material fact or omitted a
material fact necessary to make the statement made not misleading in light of
all the circumstances existing at the date the statement was made.
4.16 Tax Liability. Borrower and its Subsidiaries have filed all tax
-------------
returns which are required to be filed, and have paid, or made provision for the
payment of, all taxes with respect to the periods, Property or transactions
covered by said returns, or pursuant to any assessment received by Borrower or
its Subsidiaries, except (a) such taxes, if any, as are being contested in good
------
faith by appropriate proceedings and as to which adequate reserves have been
established and maintained and (b) immaterial taxes so long as no material
Property of Borrower or any of its Subsidiaries is in jeopardy of being seized,
levied upon or forfeited.
4.17 Projections. As of the Closing Date, to the best knowledge of
-----------
Borrower, the assumptions set forth in the Projections are reasonable and
consistent with each other and with all facts known to Borrower and its
Subsidiaries, and the Projections are reasonably based on such assumptions.
Nothing in this Section shall be construed as a representation or covenant that
the Projections in fact will be achieved. The Creditors acknowledge that the
Projections are forward-looking statements and that actual financial results for
Borrower and its Subsidiaries could differ materially from those set forth in
the Projections.
4.18 Hazardous Materials. Except as described in Schedule 4.18, (a)
-------------------
neither Borrower nor any of its Subsidiaries at any time has disposed of,
discharged, released or threatened the release of any Hazardous Materials on,
from or under the Real Property in violation of any Hazardous Materials Law that
would individually or in the aggregate constitute a Material Adverse Effect, (b)
to the best knowledge of Borrower, no condition exists that violates any
Hazardous Material Law affecting any Real Property except for such violations
that would not individually or in the aggregate have a Material Adverse Effect,
(c) no Real Property or any portion thereof is or has been utilized by Borrower
or any of its Subsidiaries as a site for the manufacture of any Hazardous
Materials and (d) to the extent that any Hazardous Materials are used, generated
or stored by Borrower or any of its Subsidiaries on any Real Property, or
transported to or from such Real Property by Borrower or any of its
Subsidiaries, such use, generation, storage and transportation are in compliance
in all material respects with all Hazardous Materials Laws.
-58-
4.19 Security Interests. The Security Agreement creates valid and
------------------
perfected first priority security interests in the Collateral described therein
securing the Obligations (subject only to Permitted Encumbrances, Permitted
Rights of Others, purchase money liens permitted under Section 6.8(e) and to
such qualifications and exceptions as are contained in the Uniform Commercial
Code with respect to the priority of security interests perfected by means other
than the filing of a financing statement or with respect to the creation of
security interests in Property to which Article 9 of the Uniform Commercial Code
does not apply) and all actions necessary to perfect the security interest so
created have been taken and completed. The Trademark Security Interest
Assignment (if then in effect) creates a valid first priority collateral
assignment of the Collateral described therein securing the Obligations and all
action necessary to perfect the collateral assignment so created, other than the
filing thereof with the United States Patent and Trademark Office will have been
taken and completed. The Mortgage creates a valid Lien in the Collateral
described therein securing the Obligations, other than those arising under
----- ----
Sections 4.18, 5.10 and 11.22, (and is of first priority subject only to
Permitted Encumbrances, Permitted Rights of Others), and all action necessary to
perfect the Lien so created, other than recordation or filing thereof with the
----- ----
appropriate Governmental Agencies, has been taken and completed.
4.20 Year 2000. Borrower and its Subsidiaries have reviewed the
---------
effect of the Year 2000 Issue on the computer software, hardware and firmware
systems and equipment containing embedded microchips owned or operated by or for
Borrower and its Subsidiaries. The costs to Borrower and its Subsidiaries of any
reprogramming required as a result of the Year 2000 Issue to permit the proper
functioning of such systems and equipment and the proper processing of data, and
the testing of such reprogramming, and of required systems changes are not
reasonably expected to result in a Default or to have a material adverse effect
on the business, financial position, results of operations or prospects of
Borrower and its Subsidiaries, considered as a whole.
-59-
Article 5
AFFIRMATIVE COVENANTS
---------------------
(OTHER THAN INFORMATION AND
--------------------------
REPORTING REQUIREMENTS)
----------------------
So long as any Advance remains unpaid, or any Letter of Credit remains
outstanding or any other Obligation remains unpaid, or any portion of the
Commitment remains in force, Borrower shall, and shall cause each of its
Subsidiaries to, unless the Administrative Agent (with the written approval of
the Requisite Lenders) otherwise consents:
5.1 Payment of Taxes and Other Potential Liens. Pay and discharge
------------------------------------------
promptly all taxes, assessments and governmental charges or levies imposed upon
any of them, upon their respective Property or any part thereof and upon their
respective income or profits or any part thereof, except that Borrower and its
------
Subsidiaries shall not be required to pay or cause to be paid (a) any tax,
assessment, charge or levy that is not yet past due, or is being contested in
good faith by appropriate proceedings so long as the relevant entity has
established and maintains adequate reserves for the payment of the same or (b)
any immaterial tax so long as no material Property of Borrower or any of its
Subsidiaries is in jeopardy of being seized, levied upon or forfeited.
5.2 Preservation of Existence. Preserve and maintain their
-------------------------
respective existences in the jurisdiction of their formation and all material
authorizations, rights, franchises, privileges, consents, approvals, orders,
licenses, permits, or registrations from any Governmental Agency that are
necessary for the transaction of their respective business except (a) where the
------
failure to so preserve and maintain the existence of any Subsidiary of Borrower
and such authorizations, rights, franchises, privileges, consents, approvals,
orders, licenses, permits, or registrations would not constitute a Material
Adverse Effect and (b) that a merger permitted by Section 6.3 shall not
constitute a violation of this covenant; and qualify and remain qualified to
transact business in each jurisdiction in which such qualification is necessary
in view of their respective business or the ownership or leasing of their
respective Properties except where the failure to so qualify or remain qualified
------
would not constitute a Material Adverse Effect.
5.3 Maintenance of Properties. Maintain, preserve and protect all of
-------------------------
their respective Properties in good order and condition, subject to wear and
tear in the ordinary course of business, and not permit any waste of their
respective Properties, except that the failure to maintain, preserve and protect
------
a particular item of Property that is not of significant value, either
intrinsically or to the operations of Borrower and its Subsidiaries, taken as a
whole, shall not constitute a violation of this covenant.
-60-
5.4 Maintenance of Insurance. Maintain liability, casualty and other
------------------------
insurance (subject to customary deductibles and retentions) with responsible
insurance companies in such amounts and against such risks as is carried by
responsible companies engaged in similar businesses and owning similar assets in
the general areas in which Borrower and its Subsidiaries operate and, in any
event, such insurance as is required under the Mortgage.
5.5 Compliance With Laws. Comply, within the time period, if any,
--------------------
given for such compliance by the relevant Governmental Agency with enforcement
authority, with all Requirements of Law noncompliance with which constitutes a
Material Adverse Effect, except that Borrower and its Subsidiaries need not
comply with a Requirement of Law then being contested by any of them in good
faith by appropriate proceedings.
5.6 Inspection Rights. Upon reasonable notice, at any time during
-----------------
regular business hours and as often as reasonably requested (but not so as to
materially interfere with the business of Borrower or any of its Subsidiaries)
permit the Administrative Agent or any Lender, or any authorized employee, agent
or representative thereof, to examine, audit and make copies and abstracts from
the records and books of account of, and to visit and inspect the Properties of,
Borrower and its Subsidiaries and to discuss the affairs, finances and accounts
of Borrower and its Subsidiaries with any of their officers, managers, key
employees or accountants and, upon request, furnish promptly to the
Administrative Agent or any Lender true copies of all financial information made
available to the board of directors or audit committee of the board of directors
of Borrower.
5.7 Keeping of Records and Books of Account. Keep adequate records and
---------------------------------------
books of account reflecting all financial transactions in conformity with
Generally Accepted Accounting Principles, consistently applied, and in material
conformity with all applicable requirements of any Governmental Agency having
regulatory jurisdiction over Borrower or any of its Subsidiaries.
5.8 Compliance With Agreements. Promptly and fully comply with all
--------------------------
Contractual Obligations under all material agreements, indentures, leases and/or
instruments to which any one or more of them is a party, whether such material
agreements, indentures, leases or instruments are with a Lender or another
Person, except for any such Contractual Obligations (a) the performance of which
------
would cause a Default or (b) then being contested by any of them in good faith
by appropriate proceedings or if the failure to comply with such agreements,
indentures, leases or instruments does not constitute a Material Adverse Effect.
5.9 Use of Proceeds. Use the proceeds of Loans (a) on the Closing
---------------
Date, to refinance funds invested prior to the Closing Date by the Company and
the Licensee in the Temporary Project, (b) to finance expenses associated with
the transactions contemplated herein, (c) to finance design, development and
construction expenses associated with the
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Temporary Project, including without limitation obligations incurred by the
Licensee prior to the date hereof and assumed by the Borrower, (d) to finance
other Capital Expenditures, Acquisitions and Investments permitted under Article
6 hereof, (e) for other general corporate purposes associated with the Temporary
Project, and (f) in the event that the Company elects to construct the Permanent
Project through the Borrower, for the initial development and construction costs
for the Permanent Project in an amount not to exceed $50,000,000.
5.10 Hazardous Materials Laws. Keep and maintain all Real Property and
------------------------
each portion thereof in compliance in all material respects with all applicable
Hazardous Materials Laws and promptly notify the Administrative Agent in writing
(attaching a copy of any pertinent written material) of (a) any and all material
enforcement, cleanup, removal or other governmental or regulatory actions
instituted, completed or threatened in writing by a Governmental Agency pursuant
to any applicable Hazardous Materials Laws, (b) any and all material claims made
or threatened in writing by any Person against Borrower or its Subsidiaries
relating to damage, contribution, cost recovery, compensation, loss or injury
resulting from any Hazardous Materials and (c) discovery by any Senior Officer
of the Licensee of any material occurrence or condition on Property adjoining or
in the vicinity of such Real Property that could reasonably be expected to cause
such Real Property or any part thereof to be subject to any restrictions on the
ownership, occupancy, transferability or use of such Real Property under any
applicable Hazardous Materials Laws.
5.11 Change of Name. Notify the Administrative Agent in writing of any
--------------
change of the name of Borrower or any of its Subsidiaries within five Business
Days of such change, and promptly (and in any event within ten Business Days of
request) execute such amendments to any of the Collateral Documents and take
such other actions as may be requested by the Administrative Agent to reflect
such change of its name.
5.12 Additional Collateral; the Temporary Project.
--------------------------------------------
(a) Concurrently with the acquisition by Borrower or any
Subsidiary of Borrower of any fee or leasehold interest in Real Property,
Borrower or the relevant Subsidiary shall execute and deliver to the
Administrative Agent, a first mortgage with respect thereto (in a form
reasonably acceptable to the Administrative Agent and in any event
providing substantive remedies no less favorable to the Creditors than the
Mortgage), together with the following, in each case at Borrower's sole
expense:
(i) at Borrower's option, either (A) any endorsements to the
ALTA policy of lenders title insurance referred to in Section 8.1 as
may be reasonably requested by the Administrative Agent, or (B) a new
ALTA policy of lenders title insurance concerning such interest in
Real Property;
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(ii) a "Phase I" environmental report with respect to the
underlying Real Property prepared by a qualified independent
environmental expert reasonably acceptable to the Administrative Agent
and having results reasonably satisfactory to the Administrative Agent
and the Requisite Lenders; and
(iii) such other assurances, insurance certificates, opinions and
the like as the Administrative Agent may reasonably request;
(b) Concurrently with the acquisition by Borrower or any
Subsidiary of Borrower of any trademark, trade name or trade style,
Borrower or the relevant Subsidiary shall execute and deliver to the
Administrative Agent the Trademark Security Interest Assignment or a
joinder thereto, as applicable.
(c) Until the Opening Date Borrower and its Subsidiaries shall:
(i) comply in all material respects with all existing Laws and
requirements of all Governmental Agencies having jurisdiction over the
Company, the Licensee, Borrower, its Subsidiaries and the Temporary
Project, and Borrower and its Subsidiaries shall comply, as of the
date when compliance is required, with all future Laws and
requirements that become applicable to the Temporary Project;
(ii) Permit CSG to monitor the construction of the Temporary
Project and, subject to Section 11.14, provide CSG with such
information and access to the Temporary Project and individuals
employed by Borrower and its relevant Subsidiaries, and the architect
and contractor for the Temporary Project as CSG or the Administrative
Agent it may reasonably request for that purpose;
(iii) Permit the Administrative Agent, or any Lender, at any
reasonable time to enter and visit the Temporary Project for the
purposes of performing an appraisal, observing the work of
construction and examining all materials, plans, specifications,
working drawings and other matters relating to the construction and\or
redevelopment thereof, and maintain at Borrower's sole cost all
insurance required by the Landlord to permit such entry, visitation
and other work; and
(iv) Promptly pay when due (subject to applicable retentions) or
otherwise discharge all claims and Liens for labor done and materials
and services furnished in connection with the Temporary Project's
construction or
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redevelopment, except for claims contested in good faith by
------
appropriate proceedings to the extent that the same constitute
Permitted Encumbrances, provided that any such claims are covered by
--------
such payment bonds or title insurance policy endorsements as may be
reasonably requested by the Administrative Agent.
5.13 Completion Certificates. As promptly as practicable following the
-----------------------
Opening Date for the Temporary Project, promptly provide the Administrative
Agent with:
(a) a written certificate executed by the primary architect, engineer
and contractor and reasonably acceptable to the Administrative Agent
certifying that the Temporary Project has been completed in all material
respects in accordance with the plans therefor and complies in all material
respects with all applicable zoning, building and land use Laws and that
the Temporary Project is ready to be opened for business; and
(b) Any endorsements to the title insurance policy referred to in
Section 8.1(a) as are requested by the Administrative Agent, at the sole
expense of Borrower.
5.14 New Subsidiaries. Concurrently with the formation or acquisition
----------------
of any Subsidiary, cause such Subsidiary to execute and deliver to the
Administrative Agent a guarantee of the Obligations of Borrower hereunder and
under the other Loan Documents and Collateral Documents granting a first
priority perfected Lien in the Property of such Subsidiary (subject only to
Permitted Encumbrances), in each case which are in form and substance reasonably
acceptable to the Administrative Agent.
5.15 Year 2000. Borrower shall make, and shall cause each of its
---------
Subsidiaries to make, all required systems changes by December 31, 1999, in
computer software, hardware and firmware systems and equipment containing
embedded microchips owned or operated by or for Borrower and its Subsidiaries
required as a result of the Year 2000 Issue to permit the proper functioning of
such computer systems and other equipment, except to the extent that the failure
to take any such action could not reasonably be expected to result in a Default
or to have a material adverse effect on the business, financial position,
results of operations or prospects of Borrower and its Subsidiaries, considered
as a whole. At the request of any Lender, Borrower shall provide, and shall
cause each of its Subsidiaries to provide, to such Lender reasonable assurance
of its compliance with the preceding sentence.
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Article 6
NEGATIVE COVENANTS
------------------
So long as any Advance remains unpaid, or any Letter of Credit remains
outstanding or any other Obligation remains unpaid, or any portion of the
Commitment remains in force, Borrower shall not, and shall not permit any of its
Subsidiaries to, unless the Administrative Agent (with the written approval of
the Requisite Lenders or, if required by Section 11.2, of all of the Lenders)
otherwise consents:
6.1 Payment of Subordinated Obligations. Pay any principal (including
----------------------------------- ---------
sinking fund payments) or any other amount (other than scheduled interest
----------
payments) with respect to any Subordinated Obligation, or purchase or redeem (or
offer to purchase or redeem) any Subordinated Obligation, or deposit any monies,
securities or other Property with any trustee or other Person to provide
assurance that the principal or any portion thereof of any Subordinated
Obligation will be paid when due or otherwise to provide for the defeasance of
any Subordinated Obligation provided that so long as no Default or Event of
-------------
Default then exists or would result therefrom, (a) Borrower may make payments of
scheduled interest on any Subordinated Obligation, and (b) Borrower may redeem
Subordinated Obligations held by Persons which are subject to a Disqualification
in an aggregate amount which does not exceed $5,000,000 during the term of this
Agreement.
6.2 Disposition of Property. Make any Disposition of its Property,
-----------------------
whether now owned or hereafter acquired, other than (i) pursuant to the
----------
Sublease, (ii) other Dispositions of Property not necessary to the conduct of
the business of the Temporary Facility in an aggregate amount not to exceed
$10,000,000 during the term of this Agreement, and (iii) provided that all
Obligations of Borrower under this Agreement are concurrently paid in full,
Dispositions of temporary casino facilities associated with the Temporary
Project after their use has terminated.
6.3 Mergers. Merge or consolidate with or into any Person, except
-------
mergers and consolidations of a Subsidiary of Borrower into Borrower or another
Subsidiary of Borrower.
6.4 Hostile Acquisitions. Directly or indirectly use the proceeds of
--------------------
any Loan in connection with the acquisition of part or all of a voting interest
of five percent (5%) or more in any corporation or other business entity if such
acquisition is opposed by the board of directors or management of such
corporation or business entity.
6.5 Distributions. Make any Distribution, whether from capital, income
-------------
or otherwise, and whether in Cash or other Property, except:
------
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(a) Distributions by a Subsidiary of Borrower to Borrower or to a
Subsidiary of Borrower;
(b) Tax Distributions made when no Default or Event of Default
exists; and
(c) other Distributions of Cash, Cash Equivalents or other securities
paid to members of Borrower after the Opening Date in an aggregate amount
which does not exceed, during any Fiscal Quarter, EBITDAM for the
immediately preceding Fiscal Quarter, provided that (i) no Default or Event
-------- ----
of Default then exists or would result therefrom, and (ii) after giving
effect to the making of such Distribution as of the last day of such
immediately preceding Fiscal Quarter, Borrower was in pro forma compliance
with the covenant set forth in Section 6.11;
6.6 ERISA. (a) At any time, permit any Pension Plan to (i) engage in
-----
any non-exempt "prohibited transaction" (as defined in Section 4975 of the
Code), (ii) fail to comply with ERISA or any other applicable Laws, (iii) incur
any material "accumulated funding deficiency" (as defined in Section 302 of
ERISA), or (iv) terminate in any manner, which, with respect to each event
listed above, could reasonably be expected to result in a Material Adverse
Effect, or (b) withdraw, completely or partially, from any Multiemployer Plan if
to do so could reasonably be expected to result in a Material Adverse Effect.
6.7 Change in Nature of Business. Make any material change in the
----------------------------
nature of the business of Borrower and its Subsidiaries, taken as a whole.
6.8 Liens and Negative Pledges. Create, incur, assume or suffer to
--------------------------
exist any Lien or Negative Pledge of any nature upon or with respect to any of
its Properties, or engage in any sale and leaseback transaction with respect to
any of its Properties, whether now owned or hereafter acquired, except:
------
(a) Permitted Encumbrances;
(b) Liens and Negative Pledges under the Loan Documents;
(c) Liens and Negative Pledges existing on the Closing Date and
disclosed in Schedule 4.7 and any renewals/extensions or amendments
thereof, provided that the obligations secured or benefited thereby are not
--------
increased;
(d) Liens on Property acquired by Borrower or any of its
Subsidiaries after the Closing Date that are in existence at the time of
such acquisition and are not created in contemplation of such acquisition;
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(e) Liens securing Indebtedness permitted by Section 6.9(d) on
and limited to the capital assets acquired, constructed or financed with
the proceeds of such Indebtedness or with the proceeds of any Indebtedness
directly or indirectly refinanced by such Indebtedness, provided that the
--------
obligations secured or benefitted thereby are not increased;
(f) any Lien or Negative Pledge created by an agreement or
instrument entered into by Borrower or a Subsidiary of Borrower in the
ordinary course of its business which consists of a restriction on the
assignability, transfer or hypothecation of such agreement or instrument;
and
(g) to the extent that the same may be construed to be a Lien or
Negative Pledge, the Sublease.
6.9 Indebtedness and Guaranty Obligations. Create, incur or assume
-------------------------------------
any Indebtedness or Guaranty Obligation except, subject to Section 6.14:
------
(a) Indebtedness and Guaranty Obligations existing on the Closing
Date and disclosed in Schedule 6.9 (and other Indebtedness and Guaranty
Obligations existing on the Closing Date but unintentionally omitted from
that Schedule, but only to the extent that the aggregate amount of such
Indebtedness and the amount so guaranteed does not exceed $500,000), and
refinancings, renewals, extensions or amendments thereto by the same
obligors that do not increase the amount thereof;
(b) Indebtedness and Guaranty Obligations under the Loan
Documents;
(c) Indebtedness and Guaranty Obligations owed to Borrower or a
Subsidiary by Borrower or a Subsidiary of Borrower;
(d) Indebtedness consisting of Capital Lease Obligations, or
otherwise incurred to finance the purchase or construction of capital
assets (which shall be deemed to exist if the Indebtedness is incurred at
or within 90 days before or after the purchase or construction of the
capital asset), or to refinance any such Indebtedness, provided that the
--------
aggregate principal amount of such Indebtedness outstanding at any time
does not exceed $25,000,000;
(e) Indebtedness consisting of one or more Swap Agreements;
provided, that the aggregate notional amount of Indebtedness covered by all
--------
Secured Swap Agreements shall not exceed the amount of the Commitment;
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(f) Subordinated Obligations incurred when no Default or Event of
Default exists;
(g) Guaranty Obligations in support of contracts reasonably
related to the business of Borrower and its Subsidiaries issued to
creditors of contractors, vendors and tenants of Borrower and its
Subsidiaries, to the extent issued in the ordinary course of business; and
(h) Guaranty Obligations in support of the obligations of a
Subsidiary of Borrower.
6.10 Transactions with Affiliates. Enter into any transaction of any
----------------------------
kind with any Affiliate of Borrower other than (a) salary, bonus, employee stock
----------
option and other compensation arrangements with directors, officers or managers
in the ordinary course of business, (b) transactions that are fully disclosed to
the member(s) and manager(s) of Borrower and expressly authorized by a
resolution of the member(s) (if Borrower is managed by its members) or
manager(s) (if Borrower is managed by its managers) of Borrower which is
approved by a majority of the member(s) or manager(s), if and as applicable, not
having an interest in the transaction, (c) transactions between or among
Borrower and its Subsidiaries, (d) Acquisition(s) of assets of the Licensee, to
the extent that such Acquisition(s) occur on the Closing Date, (e) the Sublease,
(f) refinancing of investments made by the Company and described in Section
5.9(a), to the extent that such refinancing occurs on the Closing Date, (g)
transactions entered into when no Default or Event of Default has occurred and
remains continuing and which are disclosed to the Administrative Agent in
writing and in advance in an aggregate amount not to exceed $1,000,000 in any
Fiscal Year, and (h) transactions on overall terms at least as favorable to
Borrower or its Subsidiaries as would be the case in an arm's-length transaction
between unrelated parties of equal bargaining power.
6.11 Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage
---------------------------
Ratio (a) as of the last day of the first Fiscal Quarter ending following the
Opening Date, to be less than 1.10 to 1.00, and (b) as of the last day of each
subsequent Fiscal Quarter, to be less than 1.25 to 1.00.
6.12 Capital Expenditures. Make, or become legally obligated to make,
--------------------
any Capital Expenditure except for Capital Expenditures (including Maintenance
Capital Expenditures) for (i) development and construction of the Temporary
Project in a manner which is consistent with the Plans and Budget, construction,
maintenance, repair, restoration or refurbishment of the Temporary Project, and
(ii) provided that no Default or Event of Default has occurred and is
continuing, in the event that the Company elects to pursue development of the
Permanent Project through the Borrower, then, following the opening of
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the Temporary Project, development and construction of the Permanent Project in
an aggregate amount not to exceed $50,000,000.
6.1 Investments and Acquisitions. Make any Acquisition or enter into
----------------------------
any agreement to make any Acquisition, or suffer to exist any Investment, other
-----
than:
----
(a) Investments in existence on the Closing Date and disclosed on
Schedule 6.15;
(b) Investments consisting of Cash Equivalents;
(c) Investments consisting of advances to officers, managers,
directors and employees of Borrower and its Subsidiaries for travel,
entertainment, relocation and analogous ordinary business purposes;
(d) Investments in Subsidiaries of Borrower;
(e) Investments consisting of or evidencing the extension of
credit to customers or suppliers of Borrower and its Subsidiaries in the
ordinary course of business and any Investments received in satisfaction or
partial satisfaction thereof;
(f) Investments received in connection with the settlement of a
bona fide dispute with another Person;
(g) Investments representing all or a portion of the sales price
of Property sold or services provided to another Person in the ordinary
course of business;
(h) Investments consisting of Guaranty Obligations permitted by
Section 6.9, and to the extent that no Default or Event of Default has
occurred and remains continuing, payments thereunder; and
(i) Acquisitions permitted pursuant to Section 6.10(d).
6.1 Subsidiary Indebtedness and Guaranty Obligations. Permit any
------------------------------------------------
Subsidiary of Borrower to create, incur, assume or suffer to exist any
Indebtedness or Guaranty Obligation (even if Borrower would be permitted to
incur the same under Section 6.9), except Indebtedness owed to Borrower or
------
another Subsidiary of Borrower;
6.1 The Lease and Sublease. (a) Amend or modify the terms of the
----------------------
Lease or the Sublease in any manner (i) which increases the amount of rent
payable by Borrower under
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the Lease or otherwise materially alters the terms of the Lease, (ii) which
reduces the amount of rent payable to Borrower under the Sublease or otherwise
materially alters the terms of the Sublease, or (iii) without prior written
notice to the Administrative Agent, or (b) waive or fail to enforce any material
provision of the Lease or the Sublease.
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Article 7
INFORMATION AND REPORTING REQUIREMENTS
--------------------------------------
7.1 Financial and Business Information. So long as any Advance remains
----------------------------------
unpaid, or any Letter of Credit remains outstanding or any other Obligation
remains unpaid, or any portion of the Commitment remains in force, Borrower
shall, unless the Administrative Agent (with the written approval of the
Requisite Lenders) otherwise consents, at Borrower's sole expense, deliver to
the Administrative Agent for distribution by it to the Lenders, a sufficient
number of copies for all of the Lenders of the following:
(a) As soon as practicable, and in any event within 60 days after
the end of each Fiscal Quarter (other than the fourth Fiscal Quarter in any
----- ----
Fiscal Year), the consolidated and consolidating balance sheet of Borrower
and its Subsidiaries as at the end of such Fiscal Quarter and the
consolidated and consolidating statement of operations for such Fiscal
Quarter, and its statement of cash flows for the portion of the Fiscal Year
ended with such Fiscal Quarter, all in reasonable detail. Such financial
statements shall be certified by a Senior Officer of the Licensee on behalf
of Borrower as fairly presenting the financial condition, results of
operations and cash flows of Borrower and its Subsidiaries in accordance
with Generally Accepted Accounting Principles (other than footnote
----- ----
disclosures), consistently applied, as at such date and for such periods,
subject only to normal year-end accruals and audit adjustments;
(b) As soon as practicable, and in any event within 45 days after
the end of each Fiscal Quarter, a Pricing Certificate setting forth a
preliminary calculation of the Company Leverage Ratio as of the last day of
such Fiscal Quarter, and providing reasonable detail as to the calculation
thereof, which calculations shall be based on the preliminary unaudited
financial statements of the Company for such Fiscal Quarter, and as soon as
practicable thereafter, in the event of any material variance in the actual
calculation of the Company Leverage Ratio from such preliminary
calculation, a revised Pricing Certificate setting forth the actual
calculation thereof;
(c) As soon as practicable, and in any event within 105 days
after the end of each Fiscal Year, (i) the consolidated and consolidating
balance sheet of Borrower and its Subsidiaries as at the end of such Fiscal
Year and the consolidated and consolidating statements of operations,
shareholders' equity and cash flows, in each case of Borrower and its
Subsidiaries for such Fiscal Year, in each case as at the end of and for
the Fiscal Year, all in reasonable detail. Such financial statements shall
be prepared in accordance with Generally Accepted Accounting Principles,
consist ently applied, and such consolidated balance sheet and consolidated
statements shall
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be accompanied by a report of one of the six largest public accounting
firms in the United States of America or other independent public
accountants of recognized standing selected by Borrower and reasonably
satisfactory to the Requisite Lenders, which report shall be prepared in
accordance with generally accepted auditing standards as at such date, and
shall not be subject to any qualifications or exceptions as to the scope of
the audit nor to any other qualification or exception determined by the
Requisite Lenders in their good faith business judgment to be adverse to
the interests of the Lenders. Such accountants' report shall be accompanied
by a certificate stating that, in making the examination pursuant to
generally accepted auditing standards necessary for the certification of
such financial statements and such report, such accountants have obtained
no knowledge of any Default or, if, in the opinion of such accountants, any
such Default shall exist, stating the nature and status of such Default,
and stating that such accountants have reviewed Borrower's financial
calculations as at the end of such Fiscal Year (which shall accompany such
certificate) under Sections 6.11 and 6.12, have read such Sections
(including the definitions of all defined terms used therein) and that
nothing has come to the attention of such accountants in the course of such
examination that would cause them to believe that the same were not
calculated by Borrower in the manner prescribed by this Agreement;
(d) As soon as practicable, and in any event within 45 days after
the commencement of each Fiscal Year, a budget and projection by Fiscal
Quarter for that Fiscal Year and by Fiscal Year for the next two succeeding
Fiscal Years, including for the first such Fiscal Year, projected
---------
consolidated balance sheets, statements of operations and statements of
cash flow and, for the second and third such Fiscal Years, projected
consolidated condensed balance sheets and statements of operations and cash
flows, of Borrower and its Subsidiaries, all in reasonable detail;
(e) Promptly after request by the Administrative Agent or any
Lender, copies of any detailed audit reports or documents sent to the
Company or the Licensee by Borrower or any of its Subsidiaries in
connection with the accounts or books of Borrower or any of its
Subsidiaries, or any audit of any of them;
(f) Promptly after request by the Administrative Agent or any
Lender, copies of any other report or other document that was filed by
Borrower or any of its Subsidiaries with any Governmental Agency (other
-----
than any report regarding Borrower and its Subsidiaries and their
----
confidential business or financial information);
(g) As soon as practicable, and in any event within ten Business
Days after a Senior Officer of the Licensee becomes aware of the
occurrence, with
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respect to Borrower, of any (i) "reportable event" (as such term is defined
in Section 4043 of ERISA) or (ii) "prohibited transaction" (as such term is
defined in Section 406 of ERISA or Section 4975 of the Code) in connection
with any Pension Plan or any trust created thereunder, telephonic notice
specifying the nature thereof, and, no more than five Business Days after
such telephonic notice, written notice again specifying the nature thereof
and specifying what action Borrower or any of its Subsidiaries is taking or
proposes to take with respect thereto, and, when known, any action taken by
the Internal Revenue Service with respect thereto;
(h) As soon as practicable, and in any event within two (2)
Business Days after a Senior Officer of the Licensee becomes aware of the
existence of any condition or event which constitutes a Default or Event of
Default, telephonic notice specifying the nature and period of existence
thereof, and, no more than two (2) Business Days after such telephonic
notice, written notice again specifying the nature and period of existence
thereof and specifying what action Borrower or its Subsidiaries are taking
or propose to take with respect thereto;
(i) Promptly upon a Senior Officer of the Licensee becoming aware
that (i) any Person has commenced a legal proceeding with respect to a
claim against Borrower or any of its Subsidiaries that is $5,000,000 or
more in excess of the amount thereof that is fully covered by insurance,
(ii) any creditor or lessor under a written credit agreement or material
lease has asserted a default thereunder on the part of Borrower or any of
its Subsidiaries, (iii) any Person has commenced a legal proceeding with
respect to a claim against Borrower or any of its Subsidiaries under a
contract that is not a credit agreement or material lease in excess of
$5,000,000 or which otherwise may reasonably be expected to result in a
Material Adverse Effect, (iv) any labor union has notified Borrower of its
intent to strike Borrower or any of its Subsidiaries on a date certain and
such strike would involve more than 100 employees of Borrower or its
Subsidiaries, or (v) any Gaming Board has indicated its intent to consider
or act upon a License Revocation or a fine or penalty of $1,000,000 or more
with respect to Borrower or any of its Subsidiaries, a written notice
describing the pertinent facts relating thereto and what action Borrower or
its Subsidiaries are taking or propose to take with respect thereto;
(j) Not later than the twentieth day of each calendar month, a
construction progress report with respect to the Temporary Project as of
the last day of the preceding calendar month in a form reasonably
acceptable to the Administrative Agent, which report shall compare the
status of construction and amounts expended to the construction timetable
and budget;
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(k) As soon as practicable, and in any event by the thirtieth day
in the next following month, an operating revenue report for the preceding
calendar month with respect to each operating casino property of Borrower
and its Subsidiaries, segmented for each such casino property and otherwise
in a form reasonably acceptable to the Administrative Agent, together with
a written narrative statement discussing any significant trends reflected
therein signed by a Senior Officer of the Licensee on behalf of Borrower;
(l) Promptly following receipt thereof, copies of all material
changes to the construction plans, budget, timetable and the related
architectural, construction and engineering contracts for the Temporary
Project, and with an advance draft copy of any proposed such change that
involves more than $10,000,000;
(m) Promptly following any Senior Officer of the Licensee
becoming aware of any change in the credit ratings assigned by Xxxxx'x or
S&P to the Company Loan Agreement (whether senior secured or senior
unsecured) written notice of such change and, if the same will result in a
revision to the Company Rating, a revised Pricing Certificate setting forth
the revised Company Rating;
(n) Promptly and in any event within two Business Days following
the receipt of Borrower any notices under the Lease or the Sublease, and
concurrently with the delivery by Borrower of any notices to the
counterparties under the Lease or the Sublease, copies of such notices;
(o) Concurrently with their delivery to the Administrative Agent
and the Banks under the Company Loan Agreement, copies of all financial
statements of the Company delivered in connection with the Company Loan
Agreement;
(p) As soon as practicable, and in any event not less than 10
days (or, if acceptable to the Administrative Agent, a shorter period)
prior to the proposed effective date thereof, written notice of any
proposed material amendment, material modification or material waiver of
the material terms and provisions of any of the Material Documents or the
Plans and Budget; and
(q) Such other data and information as from time to time may be
reasonably requested by the Administrative Agent, any Lender (through the
Administrative Agent) or the Requisite Lenders.
7.2 Compliance Certificates. So long as any Advance remains unpaid, or
-----------------------
any Letter of Credit remains outstanding or any other Obligation remains unpaid
or unperformed, or any portion of the Commitment remains outstanding, Borrower
shall, at Borrower's sole
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expense, deliver to the Administrative Agent for distribution by it to the
Lenders concurrently with the financial statements required pursuant to Sections
7.1(a) and 7.1(c), Compliance Certificates signed by a Senior Officer of the
Licensee on behalf of Borrower.
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Article 8
CONDITIONS
----------
8.1 Initial Advances on the Closing Date. The obligation of each
------------------------------------
Lender to make the initial Advance to be made by it on the Closing Date, is
subject to the following conditions precedent, each of which shall be satisfied
prior to the making of the initial Advances (unless all of the Lenders, in their
sole and absolute discretion, shall agree otherwise):
(a) The Administrative Agent shall have received all of the fol-
lowing, each of which shall be originals unless otherwise specified, each
properly executed by a Responsible Official of each party thereto, each
dated as of the Closing Date and each in form and substance satisfactory to
the Administrative Agent and its legal counsel (unless otherwise specified
or, in the case of the date of any of the following, unless the
Administrative Agent otherwise agrees or directs):
(1) at least one (1) executed counterpart of this Agreement,
together with arrangements satisfactory to the Administrative Agent for
additional executed counterparts, sufficient in number for distribution to
the Lenders and Borrower;
(2) Notes executed by Borrower in favor of each Lender, each in a
principal amount equal to that Lender's Pro Rata Share of $230,000,000;
(3) with respect to Borrower, the Licensee and the Company, such
documentation as the Administrative Agent may require to establish the due
organization, valid existence and good standing of Borrower, the Licensee
and the Company, their qualification to engage in business in each material
juris diction in which it is engaged in business or required to be so
qualified, its authority to execute, deliver and perform any Loan Documents
to which it is a Party, the identity, authority and capacity of each
Responsible Official thereof authorized to act on its behalf, including (if
---------
applicable) certified copies of articles of incorporation or organization
and amendments thereto, bylaws or operating agreements and amendments
thereto, certificates of good standing and/or qualification to engage in
business, tax clearance certificates, certificates of corporate or other
organizational resolutions, incumbency certificates, Certificates of
Responsible Officials, and the like;
(4) a Certificate of a Senior Officer of the Licensee on behalf
of Borrower attaching true, correct and complete copies of each of the
Material Documents.
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(5) the Mortgage executed by Borrower, together with appropriate
commitments from First American Title Insurance Company for the
issuance of an ALTA title insurance policy in the amount of the
Commitment insuring the Mortgage as a first priority Lien on the
Temporary Project, subject only to Permitted Encumbrances, Permitted
Rights of Others and other matters acceptable to the Administrative
Agent, and with such endorsements to coverage and reinsurance as the
Administrative Agent may reasonably require;
(6) the Landlord Consent executed by the Landlord;
(7) the Security Agreement executed by Borrower;
(8) such financing statements on Form UCC-1 executed by Borrower
with respect to the Security Agreement as the Administrative Agent may
request;
(9) the Guaranty executed by the Company;
(10) a certificate of insurance issued by Borrower's insurance
carrier or agent with respect to the insurance required to be
maintained pursuant to the Mortgage, together with lenders' loss
payable endorsements thereof on Form 438BFU or other form acceptable
to the Administrative Agent;
(11) the Opinions;
(12) a Request for Loan in compliance with Article 2;
(13) a completed Pricing Certificate;
(14) the fee letter described in Sections 3.2, 3.3, 3.5 and 3.6;
(15) such assurances as the Administrative Agent reasonably deems
appropriate that the relevant Gaming Boards have approved the transactions
contemplated by the Loan Documents to the extent that such approval is
required by applicable Gaming Laws;
(16) such assurances as the Administrative Agent reasonably deems
appropriate that, except as set forth in Schedule 4.3, Licensee and
Borrower have obtained all licenses, permits, and necessary approvals of
all relevant Gaming Boards and Governmental Agencies necessary with respect
to the Temporary Project, and that all of such licenses, permits and other
approvals are in full force and effect;
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(17) a Certificate signed by a Senior Officer of the Licensee on
behalf of Borrower certifying that the conditions specified in Sections
8.1(e), 8.1(f) and 8.1(g) have been satisfied;
(18) a Certificate signed by a Senior Officer of the Licensee on
behalf of Borrower attaching the Plans and Budget; and
(19) such other assurances, certificates, documents, consents or
opinions as the Administrative Agent reasonably may require.
(b) The upfront fees payable on the Closing Date pursuant to
Section 3.3 shall have been paid.
(c) The agency fees payable on the Closing Date pursuant to
Section 3.6 shall have been paid.
(d) The reasonable costs and expenses of the Administrative
Agent in connection with the preparation of the Loan Documents payable
pursuant to Section 11.3, and invoiced to Borrower prior to the Closing
Date, shall have been paid.
(e) The representations and warranties of Borrower contained in
Article 4 shall be true and correct.
(f) Borrower and any other Parties shall be in compliance with
all the terms and provisions of the Loan Documents, and giving effect to
the initial Advance, no Default or Event of Default shall have occurred and
be continuing.
(g) No Material Adverse Effect (as defined in the Company Loan
Agreement) shall have occurred with respect to the Company, and no set of
circum stances or events which is or could reasonably be expected to be
material and adverse to the business, operations or prospects of Borrower
shall have occurred with respect to the Borrower since December 31, 1998.
(h) All legal matters relating to the Loan Documents shall be
satisfactory to Sheppard, Mullin, Xxxxxxx & Xxxxxxx, LLP, special counsel
to the Administrative Agent.
8.2 Any Advance. The obligation of each Lender to make any Advance,
-----------
and the obligation of the Issuing Lender to issue a Letter of Credit, is subject
to the following conditions precedent (unless the Requisite Lenders, in their
sole and absolute discretion, shall agree otherwise):
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(a) except (i) for representations and warranties which expressly
------
speak as of a particular date or are no longer true and correct as a result
of a change which is permitted by this Agreement or (ii) as disclosed by
Borrower and approved in writing by the Requisite Lenders, the
representations and warranties contained in Article 4 (other than Sections
----------
4.4, 4.6, 4.10, 4.17 and 4.18 (but only if Borrower and its Subsidiaries
are diligently engaged in measures that will result in compliance with all
Hazardous Materials Laws)) shall be true and correct on and as of the date
of the Advance as though made on that date;
(b) other than matters described in Schedule 4.10 or not required
as of the Closing Date to be therein described, there shall not be then
pending or threatened any action, suit, proceeding or investigation against
or affecting Borrower or any of its Subsidiaries or any Property of any of
them before any Governmental Agency that constitutes a Material Adverse
Effect;
(c) the Administrative Agent shall have timely received a Request
for Loan in compliance with Article 2 (or telephonic or other request for
Loan referred to in the second sentence of Section 2.1(b), if applicable)
or the Issuing Lender shall have received a Request for Letter of Credit,
as the case may be, in compliance with Article 2; and
(d) the Administrative Agent shall have received, in form and
substance satisfactory to the Administrative Agent, such other assurances,
certificates, documents or consents related to the foregoing as the
Administrative Agent or Requisite Lenders reasonably may require.
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Article 9
EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT
----------------------------------------------------
9.1 Events of Default. The existence or occurrence of any one or more
-----------------
of the following events, whatever the reason therefor and under any
circumstances whatsoever, shall constitute an Event of Default so long as such
event is continuous and has not been waived in accordance with Section 11.2:
(a) Borrower fails to pay any principal on any of the Notes, or
any portion thereof, on the date when due; or
(b) Borrower fails to pay any interest on any of the Notes, or
any fees under Sections 3.4, 3.5 or 3.6, or any portion thereof, within
five Business Days after the date when due; or fails to pay any other fee
or amount payable to the Lenders under any Loan Document, or any portion
thereof, within five Business Days after demand therefor; or
(c) Borrower fails to comply with any of the covenants contained
in Article 6, other than the covenants contained in Sections 6.6, 6.7, or
----- ----
6.10; or
(d) Borrower fails to comply with Section 7.1(h) in any respect
that is materially adverse to the interests of the Lenders; or
(e) Borrower, any of its Subsidiaries or any other Party fails to
perform or observe any other covenant or agreement (not specified in clause
(a), (b), (c), or (d) above) contained in any Loan Document on its part to
be performed or observed within (i) ten Business Days after the giving of
notice by the Administrative Agent on behalf of the Requisite Lenders of
such Default or (ii) if the nature of the covenant or agreement is such
that the violation can be cured, thirty Business Days after the giving of
such notice so long as Borrower diligently pursues in good faith the cure
or correction of such violation continuously during such period; or
(f) Any representation or warranty of Borrower or any of its
Subsidiaries or any other Party made in any Loan Document, or in any
certificate or other writing delivered by Borrower or such Subsidiary or
Party pursuant to any Loan Document, proves to have been incorrect when
made or reaffirmed in any respect that is materially adverse to the
interests of the Lenders; or
(g) The Licensee, Borrower or any of its Subsidiaries (i) fails
to pay the principal, or any principal installment, of any present or
future Indebtedness of
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$5,000,000 or more, or any guaranty of present or future Indebtedness of
$5,000,000 or more, on its part to be paid, when due (or within any stated
grace period), whether at the stated maturity, upon acceleration, by reason
of required prepayment or otherwise or (ii) fails to perform or observe any
other term, covenant or agreement on its part to be performed or observed,
or suffers any event of default to occur, in connection with any present or
future Indebtedness of $5,000,000 or more, or of any guaranty of present or
future Indebtedness of $5,000,000 or more, if as a result of such failure
or sufferance any holder or holders thereof (or an agent or trustee on its
or their behalf) has the right to declare such Indebtedness due before the
date on which it otherwise would become due or the right to require the
Licensee, Borrower or any of its Subsidiaries to redeem or purchase, or
offer to redeem or purchase, all or any portion of such Indebtedness; or
(h) Any Default or Event of Default occurs under the Company Loan
Agreement (as such terms are defined therein from time to time);
(i) In the event that the Company Loan Agreement has been
refinanced or otherwise terminated, the Company (with respect to any
obligation or indebtedness other than the Loan Agreement) (i) fails to pay
the principal, or any principal installment, of any present or future
Indebtedness of $100,000,000 or more, or any guaranty of present or future
Indebtedness of $100,000,000 or more, on its part to be paid, when due (or
within any stated grace period), whether at the stated maturity, upon
acceleration, by reason of required prepayment or otherwise or (ii) fails
to perform or observe any other term, covenant or agreement on its part to
be performed or observed, or suffers any event of default to occur, in
connection with any present or future Indebtedness of $100,000,000 or more,
or of any guaranty of present or future Indebtedness of $100,000,000 or
more, if as a result of such failure or sufferance any holder or holders
thereof (or an agent or trustee on its or their behalf) has the right to
declare such Indebtedness due before the date on which it otherwise would
become due or the right to require the Company or any of its Subsidiaries
to redeem or purchase, or offer to redeem or purchase, all or any portion
of such Indebtedness; or
(j) Any event occurs which gives the holder or holders of any
Subordinated Obligation (or an agent or trustee on its or their behalf) the
right to declare such Subordinated Obligation due before the date on which
it otherwise would become due, or the right to require the issuer thereof
to redeem or purchase, or offer to redeem or purchase, all or any portion
of any Subordinated Obligation; or
(k) Any Loan Document, at any time after its execution and
delivery and for any reason other than the agreement or action (or omission
----- ----
to act) of
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the Administrative Agent or any of the Lenders or satisfaction in full of
all the Obligations ceases to be in full force and effect or is declared
by a court of competent jurisdiction to be null and void, invalid or
unenforceable in any respect which, in any such event in the reasonable
opinion of the Requisite Lenders, is materially adverse to the interests of
the Lenders; or any Party thereto denies in writing that it has any or
further liability or obligation under any Loan Document, or purports to
revoke, terminate or rescind same; or
(l) Borrower (i) fails to pay any present or future installment
of rent under the Lease when due (or within any stated grace period), or
(ii) fails to perform or observe any other term, covenant or agreement on
its part to be performed or observed under the Lease, or suffers any event
of default to occur under the Lease, if as a result of such failure or
sufferance the Landlord has the right to terminate the Lease before its
scheduled termination, or (iii) the Lease is otherwise terminated prior to
the repayment of the Obligations and the termination of the Commitment
(unless Borrower shall have exercised its option thereunder to purchase the
fee interest underlying the Lease from the Landlord); or
(m) Borrower receives any notice from the Licensee that it has
failed to perform or observe any term, covenant or agreement on its part to
be performed or observed under the Sublease and that as a result of such
failure the Licensee has the right to terminate the Sublease before its
scheduled termination, or the Sublease is otherwise terminated prior to the
repayment of the Obligations and the termination of the Commitment; or
(n) A final judgment against the Company, the Licensee, the
Borrower or any of its Subsidiaries is entered for the payment of money in
excess of $1,000,000 and, absent procurement of a stay of execution, such
judgment remains unsatisfied for thirty calendar days after the date of
entry of judgment, or in any event later than five days prior to the date
of any proposed sale thereunder; or any writ or warrant of attachment or
execution or similar process is issued or levied against all or any
material part of the Property of any such Person and is not released,
vacated or fully bonded within thirty calendar days after its issue or
levy; or
(o) The Company, the Licensee, Borrower or any of its
Subsidiaries institutes or consents to the institution of any proceeding
under a Debtor Relief Law relating to it or to all or any material part of
its Property, or is unable or admits in writing its inability to pay its
debts as they mature, or makes an assignment for the benefit of creditors;
or applies for or consents to the appointment of any receiver, trustee,
custodian, conservator, liquidator, rehabilitator or similar officer for it
or for all or any material part of its Property; or any receiver, trustee,
custodian, conservator,
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liquidator, rehabilitator or similar officer is appointed without the
application or consent of that Person and the appointment continues
undischarged or unstayed for sixty calendar days; or any proceeding under a
Debtor Relief Law relating to any such Person or to all or any part of its
Property is instituted without the consent of that Person and continues
undismissed or unstayed for sixty calendar days; or
(p) The occurrence of an Event of Default (as such term is or may
hereafter be specifically defined in any other Loan Document) under any
other Loan Document; or
(q) A final unstayed judgment is entered by a court of competent
jurisdiction that any Subordinated Obligation is not subordinated in
accordance with its terms to the Obligations; or
(r) Any Pension Plan maintained by Borrower or any of its
Subsidiaries is determined to have a material "accumulated funding
deficiency" as that term is defined in Section 302 of ERISA and the result
is a Material Adverse Effect or Borrower or any its ERISA Affiliates incurs
any withdrawal liability in respect of any Multiemployer Plan which is in
an amount in excess of $5,000,000 which withdrawal liability is not paid or
otherwise satisfied within thirty days; or
(s) The occurrence of a License Revocation that continues for
seven consecutive calendar days.
9.2 Remedies Upon Event of Default. Without limiting any other rights
------------------------------
or remedies of the Creditors provided for elsewhere in this Agreement, or the
other Loan Documents, or by applicable Law, or in equity, or otherwise:
(a) Upon the occurrence, and during the continuance, of any Event of
Default other than an Event of Default described in Section 9.1(o):
----- ----
(1) the Commitment to make Advances, the obligation of the Issuing
Lender to issue Letters of Credit and all other obligations of the
Creditors and all rights of Borrower and any other Parties under the
Loan Documents shall be suspended without notice to or demand upon
Borrower, which are expressly waived by Borrower, except that all of
------
the Lenders or the Requisite Lenders (as the case may be, in
accordance with Section 11.2) may waive an Event of Default or,
without waiving, determine, upon terms and conditions satisfactory to
the Lenders or Requisite Lenders, as the case may be, to reinstate the
Commitment and such other obligations and rights and make further
Advances, and cause the Issuing Lender to issue further Letters of
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Credit which waiver or determination shall apply equally to, and shall
be binding upon, all the Lenders;
(2) the Issuing Lender may, with the approval of the
Administrative Agent on behalf of the Requisite Lenders, demand
immediate payment by Borrower of an amount equal to the aggregate
amount of all outstanding Letters of Credit to be held by the Issuing
Lender in an interest-bearing cash collateral account as collateral
hereunder; and
(3) the Requisite Lenders may request the Administrative Agent
to, and the Administrative Agent thereupon shall, terminate the
Commitment and/or declare all or any part of the unpaid principal of
all Notes, all interest accrued and unpaid thereon and all other
amounts payable under the Loan Documents to be forthwith due and
payable, whereupon the same shall become and be forthwith due and
payable, without protest, presentment, notice of dishonor, demand or
further notice of any kind, all of which are expressly waived by
Borrower.
(b) Upon the occurrence, and during the continuance, of any Event
of Default described in Section 9.1(o):
(1) the Commitment to make Advances, the obligation of the
Issuing Lender to issue Letters of Credit and all other obligations of
the Creditors and all rights of Borrower and any other Parties under
the Loan Documents shall terminate without notice to or demand upon
Borrower, which are expressly waived by Borrower, except that all of
------
the Lenders may waive the Event of Default or, without waiving,
determine, upon terms and conditions satisfactory to all the Lenders,
to reinstate the Commitment and such other obligations and rights and
make further Advances and to cause the Issuing Lender to issue further
Letters of Credit, which determination shall apply equally to, and
shall be binding upon, all the Lenders;
(2) an amount equal to the aggregate amount of all outstanding
Letters of Credit shall be immediately due and payable to the Issuing
Lender without notice to or demand upon Borrower, which are expressly
waived by Borrower, to be held by the Issuing Lender in an interest-
bearing cash collateral account as collateral hereunder; and
(3) the unpaid principal of all Notes, all interest accrued and
unpaid thereon and all other amounts payable under the Loan Documents
shall be forthwith due and payable, without protest, presentment,
notice of dishonor,
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demand or further notice of any kind, all of which are expressly
waived by Borrower.
(c) Upon the occurrence, and during the continuance, of any Event
of Default, the Creditors, or any of them, without notice to (except as
------
expressly provided for in any Loan Document) or demand upon Borrower, which
are expressly waived by Borrower (except as to notices expressly provided
------
for in any Loan Document), may proceed (but only with the consent of the
Requisite Lenders) to protect, exercise and enforce their rights and
remedies under the Loan Documents against Borrower and any other Party and
such other rights and remedies as are provided by Law or equity.
(d) In addition to any other rights and remedies, if an Event of
Default occurs prior to the Opening Date for the Temporary Project, the
Creditors shall have the right to take possession of the Temporary Project,
whether in person or through a designee or receiver, and take such steps as
the Creditors reasonably deem necessary or appropriate to complete
construction of the Temporary Project, including making any changes to the
---------
construction plans, budget or timetable and/or terminating or amending any
of the architects contracts, engineering contracts, construction contracts
or any other contract or arrangement related to the Temporary Project;
provided, however, that the Administrative Agent shall be responsible for
--------
any breach of contract resulting from any such change, termination or
amendment. Any such action shall not be construed as an assumption of
responsibility by the Creditors to complete the Temporary Project, and such
steps may be discontinued at any time. Any such action shall not be
construed to make any of the Creditors a partner or joint venturer with
Borrower or any of Borrower's Affiliates. All amounts expended by the
Creditors for the completion of the Temporary Project shall be deemed
additional Advances and shall be secured by the Collateral Documents.
(e) The order and manner in which the Creditors' rights and
remedies are to be exercised shall be determined by the Requisite Lenders
in their sole discretion, and all payments received by the Creditors, or
any of them, shall be applied first to the costs and expenses (including
reasonable attorneys' fees and disbursements and the reasonably allocated
costs of attorneys employed by any of the Creditors) of the Creditors, and
thereafter paid pro rata to the Lenders in the same proportions that the
aggregate Obligations owed to each Lender under the Loan Documents bear to
the aggregate Obligations owed under the Loan Documents to all the Lenders,
without priority or preference among the Lenders. Regardless of how each
Lender may treat payments for the purpose of its own accounting, for the
purpose of computing the Obligations hereunder and under the Notes,
payments shall be applied first, to the costs and expenses of the
-----
Creditors, as set forth above, second, to the payment of
------
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accrued and unpaid interest due under any Loan Documents to and including
the date of such application (ratably, and without duplication, according
to the accrued and unpaid interest due under each of the Loan Documents),
and third, to the payment of all other amounts (including principal and
-----
fees) then owing to the Creditors under the Loan Documents. Amounts due to
a Lender under a Secured Swap Agreement shall be considered a principal
amount for purposes of the preceding sentence. No applica tion of payments
will cure any Event of Default, or prevent acceleration, or continued
acceleration, of amounts payable under the Loan Documents, or prevent the
exercise, or continued exercise, of rights or remedies of the Lenders
hereunder or thereunder or at Law or in equity.
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Article 10
THE ADMINISTRATIVE AGENT
------------------------
10.1 Appointment and Authorization. Subject to Section 10.8, each
-----------------------------
Lender hereby irrevocably appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers under the
Loan Documents as are delegated to the Administrative Agent by the terms thereof
or are reasonably incidental, as determined by the Administrative Agent,
thereto. This appointment and authorization is intended solely for the purpose
of facilitating the servicing of the Loans and does not constitute appointment
of the Administrative Agent as trustee for any Lender or as representative of
any Lender for any other purpose and, except as specifically set forth in the
------
Loan Documents to the contrary, the Administrative Agent shall take such action
and exercise such powers only in an administrative and ministerial capacity.
10.2 Administrative Agent and Affiliates. Bank of America (and each
-----------------------------------
successor Administrative Agent) has the same rights and powers under the Loan
Documents as any other Lender and may exercise the same as though it were not
the Administrative Agent, and the term "Lender" or "Lenders" includes Bank of
America in its individual capacity. Bank of America (and each successor
Administrative Agent) and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of banking, trust or other business with
Borrower, any Subsidiary thereof, or any Affiliate of Borrower or any Subsidiary
thereof, as if it were not the Administrative Agent and without any duty to
account therefor to the Lenders. Bank of America (and each successor
Administrative Agent) need not account to any other Lender for any monies
received by it for reimbursement of its costs and expenses as Administrative
Agent hereunder, or for any monies received by it in its capacity as a Lender
hereunder. The Administrative Agent shall not be deemed to hold a fiduciary or
other special relationship with any Lender and no implied covenants, functions,
responsi bilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent.
10.3 Proportionate Interest in any Collateral. The Administrative
----------------------------------------
Agent, on behalf of all the Lenders, shall hold in accordance with the Loan
Documents all items of any collateral or interests therein received or held by
the Administrative Agent. Subject to the Administrative Agent's and the Lenders'
rights to reimbursement for their costs and expenses hereunder (including
---------
reasonable attorneys' fees and disbursements and other professional services and
the reasonably allocated costs of attorneys employed by the Administrative Agent
or a Lender) and subject to the application of payments in accordance with
Section 9.2(e), each Lender shall have an interest in the Lenders' interest in
the Collateral or interests therein in the same proportions that the aggregate
Obligations owed such Lender under the Loan Documents bear to the aggregate
Obligations owed under the Loan Documents to all the
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Lenders, without priority or preference among the Lenders, except that
------
Obligations owed to any Lender under a Secured Swap Agreement shall be secured
on a pari passu basis with all other Obligations up to an amount equal to the
---- -----
Administrative Agent's then customary credit risk factor for Swap Agreements
times the notional amount of Indebtedness covered by such Secured Swap Agreement
and shall be secured on a subordinate basis as to amounts in excess of such
amount.
10.4 Lenders' Credit Decisions. Each Lender agrees that it has,
-------------------------
independently and without reliance upon the Administrative Agent, any other
Creditor or the directors, officers, agents, employees or attorneys thereof, and
instead in reliance upon information supplied to it by or on behalf of Borrower
and its Subsidiaries and upon such other informa tion as it has deemed
appropriate, made its own independent credit analysis and decision to enter into
this Agreement. Each Lender also agrees that it shall, independently and without
reliance upon the Administrative Agent, any other Creditor or the directors,
officers, agents, employees or attorneys thereof, continue to make its own
independent credit analyses and decisions in acting or not acting under the Loan
Documents.
10.5 Action by Administrative Agent.
------------------------------
(a) Absent actual knowledge of the Administrative Agent of the
existence of a Default, the Administrative Agent may assume that no Default
has occurred and is continuing, unless the Administrative Agent has
received notice from Borrower stating the nature of the Default or has
received notice from a Lender stating the nature of the Default and that
such Lender considers the Default to have occurred and to be continuing.
(b) The Administrative Agent has only those obligations under the
Loan Documents as are expressly set forth therein.
(c) Except for any obligation expressly set forth in the Loan
------
Documents and as long as the Administrative Agent may assume that no Event
of Default has occurred and is continuing, the Administrative Agent may,
but shall not be required to, exercise its discretion to act or not act,
except that the Administrative Agent shall be required to act or not act
------
upon the instructions of the Requisite Lenders (or of all the Lenders, to
the extent required by Section 11.2) and those instructions shall be
binding upon the Administrative Agent and all the Lenders, provided that
--------
the Administrative Agent shall not be required to act or not act if to do
so would be contrary to any Loan Document or to applicable Law or could
result, in the judgment of the Administrative Agent, in a material risk of
liability to the Administrative Agent.
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(d) If the Administrative Agent has received a notice specified
in clause (a), the Administrative Agent shall immediately give notice
thereof to the Lenders and shall act or not act upon the instructions of
the Requisite Lenders (or of all the Lenders, to the extent required by
Section 11.2), provided that the Administrative Agent shall not be required
--------
to act or not act if to do so would be contrary to any Loan Document or to
applicable Law or could result, in the judgment of the Administrative
Agent, in a material risk of liability to the Administrative Agent, and
except that if the Requisite Lenders (or all the Lenders, if required under
------
Section 11.2) fail, for five Business Days after the receipt of notice from
the Administrative Agent, to instruct the Administrative Agent, then the
Administrative Agent, in its sole discretion, may act or not act as it
deems advisable for the protection of the interests of the Lenders.
(e) The Administrative Agent shall have no liability to any
Lender for acting, or not acting, as instructed by the Requisite Lenders
(or all the Lenders, if required under Section 11.2), notwithstanding any
other provision hereof.
10.6 Liability of Administrative Agent. Neither the Administrative
---------------------------------
Agent nor any of its directors, officers, agents or employees shall be liable
for any action taken or not taken by them under or in connection with the Loan
Documents, except for their own gross negligence or willful misconduct. Without
------
limitation on the foregoing, the Administrative Agent and its directors,
officers, agents and employees:
(a) May treat the payee of any Note as the holder thereof until
the Administrative Agent receives notice of the assignment or transfer
thereof, in form satisfactory to the Administrative Agent, signed by the
payee, and may treat each Lender as the owner of that Lender's interest in
the Obligations for all purposes of this Agreement until the Administrative
Agent receives notice of the assignment or transfer thereof, in form
satisfactory to the Administrative Agent, signed by that Lender;
(b) May consult with legal counsel (including in-house legal
---------
counsel), accountants (including in-house accountants) and other
---------
professionals or experts selected by it, or with legal counsel, accountants
or other professionals or experts for Borrower and/or its Subsidiaries or
the Lenders, and shall not be liable for any action taken or not taken by
it in good faith in accordance with any advice of such legal counsel,
accountants or other professionals or experts;
(c) Shall not be responsible to any Lender for any statement,
warranty or representation made in any of the Loan Documents or in any
notice, certificate, report, request or other statement (written or oral)
given or made in connection with any of the Loan Documents;
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(d) Shall have no duty to ask or inquire as to the performance or
observance by Borrower or its Subsidiaries of any of the terms, conditions
or covenants of any of the Loan Documents or to inspect any Collateral or
the Property, books or records of Borrower or its Subsidiaries;
(e) Will not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, effectiveness, sufficiency
or value of any Loan Document, any other instrument or writing furnished
pursuant thereto or in connection therewith, or any Collateral;
(f) Will not incur any liability by acting or not acting in
reliance upon any Loan Document, notice, consent, certificate, statement,
request or other instrument or writing believed in good faith by it to be
genuine and signed or sent by the proper party or parties; and
(g) Will not incur any liability for any arithmetical error in
computing any amount paid or payable by the Borrower or any Subsidiary or
Affiliate thereof or paid or payable to or received or receivable from any
Lender under any Loan Document, including, principal, interest, commitment
---------
fees, Advances and other amounts; provided that, promptly upon discovery of
--------
such an error in computation, the Administrative Agent, the Lenders and (to
the extent applicable) Borrower and/or its Subsidiaries or Affiliates shall
make such adjustments as are necessary to correct such error and to restore
the parties to the position that they would have occupied had the error not
occurred.
10.7 Indemnification. Each Lender shall, ratably in accordance with
---------------
its Pro Rata Share (if the Commitment is then in effect) or in accordance with
its proportion of the aggregate Indebtedness then evidenced by the Notes (if the
Commitment has then been terminated), indemnify and hold the Administrative
Agent and its directors, officers, agents, employees and attorneys harmless
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever (including, without limitation, reasonable attorneys' fees and
---------
disbursements and allocated costs of attorneys employed by the Administrative
Agent) that may be imposed on, incurred by or asserted against it or them in
such capacity in any way relating to or arising out of the Loan Documents (other
than losses incurred by reason of the failure of Borrower to pay the
Indebtedness represented by the Notes) or any action taken or not taken by it as
Administrative Agent thereunder, except such as result from its own gross
------
negligence or willful misconduct. Without limitation on the foregoing, each
Lender shall reimburse the Administrative Agent upon demand for that Lender's
Pro Rata Share of any out-of-pocket cost or expense incurred by the
Administrative Agent in connection with the negotiation, preparation, execution,
delivery, amendment, waiver, restructuring, reorganization (including
---------
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a bankruptcy reorganization), enforcement or attempted enforcement of the Loan
Documents, to the extent that Borrower or any other Party is required by Section
11.3 to pay that cost or expense but fails to do so upon demand. Nothing in
this Section shall entitle the Administrative Agent to recover any amount from
the Lenders if and to the extent that such amount has theretofore been recovered
from Borrower or any other Party. To the extent that the Administrative Agent
is later reimbursed such cost or expense by Borrower or any other Party, it
shall return the amounts paid to it by the Lenders in respect of such cost or
expense.
10.8 Successor Administrative Agent. The Administrative Agent may,
------------------------------
and at the request of the Requisite Lenders shall, resign as Administrative
Agent upon thirty days' notice to the Lenders and Borrower. If the
Administrative Agent shall resign as Administrative Agent under this Agreement,
the Requisite Lenders shall appoint from among the Lenders a successor
Administrative Agent for the Lenders, which successor Administrative Agent shall
be approved by Borrower (and such approval shall not be unreasonably withheld or
delayed), provided that, to the extent required by applicable Gaming Laws, the
--------
incumbent Administrative Agent shall remain the collateral agent for the
Creditors with respect to any Collateral for which a lienholder must be
qualified under such Gaming Laws until the new Administrative Agent can be so
qualified (but the incumbent Administrative Agent shall be entitled to the
indemnities and other protections provided to the Administrative Agent hereunder
in such capacity). If no successor Administrative Agent is appointed prior to
the effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after consulting with the Lenders and the
Borrower, a successor Administrative Agent from among the Lenders. Upon the
acceptance of its appointment as successor Administrative Agent hereunder, such
successor Administrative Agent shall succeed to all the rights, powers and
duties of the retiring Administrative Agent and the term "Administrative Agent"
shall mean such successor Administrative Agent and the retiring Administrative
Agent's appointment, powers and duties as Administrative Agent shall be
terminated. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article 10, and Sections 11.3,
11.11 and 11.22, shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Administrative Agent under this Agreement. If
(a) the Administrative Agent has not been paid its agency fees under Section 3.6
or has not been reimbursed for any expense reimbursable to it under Section
11.3, in either case for a period of at least one (1) year and (b) no successor
Administrative Agent has accepted appointment as Administrative Agent by the
date which is thirty days following a retiring Administrative Agent's notice of
resignation, the retiring Administrative Agent's resignation shall nevertheless
thereupon become effective and the Lenders shall perform all of the duties of
the Administrative Agent hereunder until such time, if any, as the Requisite
Lenders appoint a successor Administrative Agent as provided for above.
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10.9 Foreclosure on Collateral. In the event of foreclosure or
-------------------------
enforcement of the Lien created by any of the Collateral Documents, title to the
Collateral covered thereby shall be taken and held by the Administrative Agent
(or an Affiliate or designee thereof) pro rata for the benefit of the Lenders in
accordance with the Obligations outstanding to each of them and shall be
administered in accordance with the standard form of collateral holding
participation agreement used by the Administrative Agent in comparable
syndicated credit facilities.
10.10 Attornment Agreements. Provided that no Default or Event of
---------------------
Default has then occurred, the Administrative Agent is hereby irrevocably
authorized by the other Creditors to enter into attornment, non-disturbance and
estoppel agreements acceptable to the Administrative Agent with lessees of
interests in leases of real property from Borrower and its Subsidiaries
permitted hereby, provided in each case that not less than 10 Business Days
--------
prior to entering into any such arrangement or agreement, the Administrative
Agent shall circulate drafts thereof to the Lenders, and the Requisite Lenders
shall not have objected to the form thereof.
10.11 No Obligations of Borrower. Nothing contained in this Article
--------------------------
10 shall be deemed to impose upon Borrower any obligation in respect of the due
and punctual performance by the Administrative Agent of its obligations to the
Lenders under any provision of this Agreement, and Borrower shall have no
liability to the Administrative Agent or any of the Lenders in respect of any
failure by the Administrative Agent or any Lender to perform any of its
obligations to the Creditors under this Agreement. Without limiting the
generality of the foregoing, where any provision of this Agreement relating to
the payment of any amounts due and owing under the Loan Documents provides that
such payments shall be made by Borrower to the Administrative Agent for the
account of the Lenders, Borrower's obligations to the Lenders in respect of such
payments shall be deemed to be satisfied upon the making of such payments to the
Administrative Agent in the manner provided by this Agreement.
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Article 11
MISCELLANEOUS
-------------
11.1 Cumulative Remedies; No Waiver. The rights, powers, privileges
------------------------------
and remedies of the Creditors provided herein or in any Note or other Loan
Document are cumulative and not exclusive of any right, power, privilege or
remedy provided by Law or equity. No failure or delay on the part of the
Administrative Agent or any Lender in exercising any right, power, privilege or
remedy may be, or may be deemed to be, a waiver thereof; nor may any single or
partial exercise of any right, power, privilege or remedy preclude any other or
further exercise of the same or any other right, power, privilege or remedy.
The terms and conditions of Article 8 hereof are inserted for the sole benefit
of the Creditors; the same may be waived in whole or in part, with or without
terms or conditions, in respect of any Loan or Letter of Credit without
prejudicing the Administrative Agent's or the Lenders' rights to assert them in
whole or in part in respect of any other Loan.
11.2 Amendments; Consents. Each amendment, modification, supplement,
--------------------
extension, termination, waiver, approval and consent under this Agreement and
the other Loan Documents shall be subject to the terms of all applicable Laws,
including Gaming Laws. No amendment, modification, supplement, extension,
termination or waiver of any provision of this Agreement or any other Loan
Document, no approval or consent thereunder, and no consent to any departure by
the Borrower or any other Party therefrom, may in any event be effective unless
in writing signed by the Administrative Agent with the approval of Requisite
Lenders (and, in the case of any amendment, modification or supplement of or to
any Loan Document to which any of the Borrower or any of its Subsidiaries is a
Party, signed by each such Party, and, in the case of any amendment,
modification or supplement to Article 10, signed by the Administrative Agent),
and then only in the specific instance and for the specific purpose given; and,
without the approval in writing of all the Lenders, no amendment, modification,
supplement, termination, waiver or consent may be effective:
(a) To (i) amend or modify the principal of, or the amount of
principal, principal prepayments on, any Note, or (ii) amend (except as
provided in Section 2.7) the amount of the Commitment or the Pro Rata Share
of any Lender or (iii) decrease the rate of interest payable to any Lender,
the amount of any commitment fee payable to any Lender, or any other fee or
amount payable to any Lender under the Loan Documents or (iv) waive an
Event of Default consisting of the failure of Borrower to pay when due
principal, interest or any commitment fee
(b) To postpone any Reduction Date or any other date fixed for
any payment of principal of, prepayment of principal of or any installment
of interest on,
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any Note or any installment of any commitment fee, or to extend the term of
the Commitment;
(c) To permit the term of any Letter of Credit to exceed one
year or extend beyond the Maturity Date;
(d) To release the Guaranty or any material portion of the
Collateral, provided that if no Default or Event of Default exists, the
--------
Administrative Agent may without the consent of any Lender (and shall at
the request of Borrower), (i) release its Lien in any personal property
financed or leased by the Borrower or its Subsidiaries in accordance with
Section 6.9(d), (ii) release its Lien in any other Collateral as otherwise
may be expressly provided for in any Loan Document, (iii) release its Lien
in the equity securities of any Subsidiary of Borrower which is the subject
of a Disposition permitted hereunder or which has Property having a value
of less than $50,000 as of the date of such release, (iv) subordinate its
Lien with respect to any Property which is the subject of a Disposition
permitted hereunder, and (v) release its Lien in any Property which is the
subject of a Distribution permitted under Section 6.5(c).
(e) To amend the definitions of "Reduction Amount", "Reduction
---------------- ---------
Date", Requisite Lenders" or "Maturity Date";
---- ----------------- -------------
(f) To amend or waive Article 8, Section 6.4 or this Section; or
(g) To amend any provision of this Agreement that expressly
requires the consent or approval of all the Lenders.
Any amendment, modification, supplement, termination, waiver or consent pursuant
to this Section shall apply equally to, and shall be binding upon, all the
Lenders and the Administrative Agent.
11.3 Costs, Expenses and Taxes. Borrower shall pay within five Business
-------------------------
Days after demand, accompanied by an invoice therefor, the reasonable costs and
expenses of the Administrative Agent and the Arranger in connection with the
negotiation, preparation, syndication, execution and delivery of the Loan
Documents, and the reasonable costs and expenses of the Administrative Agent in
connection with any amendment thereto or waiver thereof. Borrower shall also pay
on demand, accompanied by an invoice therefor, the reasonable costs and expenses
of the Creditors and the Arranger in connection with the refinancing,
restructuring, reorganization (including a bankruptcy reorganization) and
---------
enforcement or attempted enforcement of the Loan Documents, and any matter
related thereto. The foregoing costs and expenses shall include filing fees,
recording fees, title insurance fees,
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appraisal fees, search fees, and other out-of-pocket expenses and the reasonable
fees and out-of-pocket expenses of any legal counsel (including reasonably
---------
allocated costs of legal counsel employed by the Administrative Agent or any
Lender), independent public accountants and other outside experts retained by
the Administrative Agent or any Lender, whether or not such costs and expenses
are incurred or suffered by the Administrative Agent or any Lender in connection
with or during the course of any bankruptcy or insolvency proceedings of
Borrower or any Subsidiary thereof. Such costs and expenses shall also include,
in the case of any amendment or waiver of any Loan Document requested by
Borrower, the administrative costs of the Administrative Agent reasonably
attributable thereto. Borrower shall pay any and all documentary and other
taxes, excluding (i) taxes imposed on or measured in whole or in part by overall
---------
net income, gross income or gross receipts and franchise taxes imposed on any
Lender by (A) any jurisdiction (or political subdivision thereof) in which it is
organized or maintains its principal office or Eurodollar Lending Office or (B)
any jurisdiction (or political subdivision thereof) in which it is "doing
business", (ii) any withholding taxes or other taxes based on gross income
imposed by the United States of America that are not attributable to any change
in any Law or the interpretation or administration of any Law by any
Governmental Agency and (iii) any withholding tax or other taxes based on gross
income imposed by the United States of America for any period with respect to
which it has failed to provide Borrower with the appropriate form or forms
required by Section 11.21, to the extent such forms are then required by
applicable Laws, and all costs, expenses, fees and charges payable or determined
to be payable in connection with the filing or recording of this Agreement, any
other Loan Document or any other instrument or writing to be delivered here
under or thereunder, or in connection with any transaction pursuant hereto or
thereto, and shall reimburse, hold harmless and indemnify on the terms set forth
in Section 11.11 the Creditors from and against any and all loss, liability or
legal or other expense with respect to or resulting from any delay in paying or
failure to pay any such tax, cost, expense, fee or charge or that any of them
may suffer or incur by reason of the failure of any Party to perform any of its
Obligations. Any amount payable to the Administrative Agent or any Lender under
this Section shall bear interest from the second Business Day following the date
of demand for payment at the Default Rate.
11.4 Nature of Lenders' Obligations. The obligations of the Lenders
------------------------------
hereunder are several and not joint or joint and several. Nothing contained in
this Agreement or any other Loan Document and no action taken by the Creditors
or any of them pursuant hereto or thereto may, or may be deemed to, make the
Lenders a partnership, an association, a joint venture or other entity, either
among themselves or with the Borrower or any Affiliate of Borrower. Each
Lender's obligation to make any Advance pursuant hereto is several and not joint
or joint and several, and in the case of the initial Advance only is conditioned
upon the performance by all other Lenders of their obligations to make initial
Advances. A default by any Lender will not increase the Pro Rata Share of any
other Lender. Any Lender not in default may, if it desires, assume in such
proportion as the nondefaulting Lenders agree the
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obligations of any Lender in default, but is not obligated to do so. The
Administrative Agent agrees that it will use its best efforts either to induce
the other Lenders to assume the obligations of a Lender in default or to obtain
another Lender, reasonably satisfactory to Borrower, to replace such a Lender in
default.
11.5 Survival of Representations and Warranties. All representations
------------------------------------------
and warranties contained herein or in any other Loan Document, or in any
certificate or other writing delivered by or on behalf of any one or more of the
Parties to any Loan Document, will survive the making of the Loans hereunder and
the execution and delivery of the Notes, and have been or will be relied upon by
the Administrative Agent and each Lender, notwithstanding any investigation made
by the Administrative Agent or any Lender or on their behalf.
11.6 Notices. Except as otherwise expressly provided in the Loan
------- ------
Documents, all notices, requests, demands, directions and other communications
provided for hereunder or under any other Loan Document must be in writing and
must be mailed, telegraphed, telecopied, dispatched by commercial courier or
delivered to the appropriate party at the address set forth on the signature
pages of this Agreement or other applicable Loan Document or, as to any party to
any Loan Document, at any other address as may be designated by it in a written
notice sent to all other parties to such Loan Document in accordance with this
Section. Except as otherwise expressly provided in any Loan Document, if any
------
notice, request, demand, direction or other communication required or permitted
by any Loan Document is given by mail it will be effective on the earlier of
receipt or the fourth Business Day after deposit in the United States mail with
first class or airmail postage prepaid; if given by telegraph or cable, when
delivered to the telegraph company with charges prepaid; if given by telecopier,
when sent; if dispatched by commercial courier, on the scheduled delivery date;
or if given by personal delivery, when delivered.
11.7 Execution of Loan Documents. Unless the Administrative Agent
---------------------------
otherwise specifies with respect to any Loan Document, (a) this Agreement and
any other Loan Document may be executed in any number of counterparts and any
party hereto or thereto may execute any counterpart, each of which when executed
and delivered will be deemed to be an original and all of which counterparts of
this Agreement or any other Loan Document, as the case may be, when taken
together will be deemed to be but one and the same instrument and (b) execution
of any such counterpart may be evidenced by a telecopier transmission of the
signature of such party followed by prompt transmission of an original
signature. The execution of this Agreement or any other Loan Document by any
party hereto or thereto will not become effective until counterparts hereof or
thereof, as the case may be, have been executed by all the parties hereto or
thereto.
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11.8 Binding Effect; Assignment.
--------------------------
(a) This Agreement and the other Loan Documents to which
Borrower is a Party will be binding upon and inure to the benefit of
Borrower, the Administrative Agent, the Issuing Lender, each of the
Lenders, and their respective successors and assigns, except that Borrower
------
may not assign its respective rights hereunder or thereunder or any
interest herein or therein without the prior written consent of all the
Lenders. Each Lender represents that it is not acquiring its Note with a
view to the distribution thereof within the meaning of the Securities Act
of 1933, as amended (subject to any requirement that disposition of such
Note must be within the control of such Lender). Any Lender may at any time
pledge its Note or any other instrument evidencing its rights as a Lender
under this Agreement to a Federal Reserve Bank, but no such pledge shall
release that Lender from its obligations hereunder or grant to such Federal
Reserve Bank the rights of a Lender hereunder absent foreclosure of such
pledge.
(b) From time to time, each Lender may assign to one or more
Eligible Assignees all or any portion of its Pro Rata Share, provided that
--------
(i) such Eligible Assignee, if not then a Lender or an Affiliate of the
assigning Lender, shall be approved by each of the Administrative Agent and
(if no Event of Default then exists) Borrower (none of which approvals
shall be unreasonably withheld or delayed), (ii) such assignment shall be
evidenced by an Assignment Agreement, a copy of which shall be furnished to
the Administrative Agent as hereinbelow provided, (iii) except in the case
------
of an assignment to an Affiliate of the assigning Lender, to another Lender
or of the entire remaining Commitment of the assigning Lender, the
assignment shall not assign a Pro Rata Share that is less than $10,000,000,
(iv) the effective date of any such assignment shall be as specified in the
Assignment Agreement, but not earlier than the date which is five Business
Days after the date the Administrative Agent has received the Assignment
Agreement, and (v) shall be of a constant and non-varying percentage of the
Pro Rata Share of the assigning Lender. Upon the effective date of such
Assignment Agreement, the Eligible Assignee named therein shall be a Lender
for all purposes of this Agreement, with the Pro Rata Share set forth
therein and, to the extent of such Pro Rata Share, the assigning Lender
shall be released from its further obligations under this Agreement.
Borrower agrees that Borrower shall execute and deliver (against delivery
by the assigning Lender to Borrower of its Note) to such assignee Lender, a
Note evidencing that assignee Lender's Pro Rata Share, and to the assigning
Lender, a Note evidencing the remaining balance Pro Rata Share retained by
the assigning Lender.
(c) By executing and delivering an Assignment Agreement, the
Eligible Assignee thereunder acknowledges and agrees that: (i) other than
the
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representation and warranty that it is the legal and beneficial owner of
the Pro Rata Share being assigned thereby free and clear of any adverse
claim, the assigning Lender has made no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the
execution, legality, validity, enforceability, genuineness or sufficiency
of this Agreement or any other Loan Document; (ii) the assigning Lender has
made no representation or warranty and assumes no responsibility with
respect to the financial condition of Borrower or its Subsidiaries or the
performance by Borrower and its Subsidiaries of the Obligations; (iii) it
has received a copy of this Agreement, together with copies of the most
recent financial statements delivered pursuant to Section 7.1 and such
other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment Agreement;
(iv) it will, independently and without reliance upon the Administrative
Agent or any Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) it appoints and
authorizes the Administrative Agent to take such action and to exercise
such powers under this Agreement as are delegated to the Administrative
Agent by this Agreement; and (vi) it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.
(d) The Administrative Agent shall maintain at the
Administrative Agent's Office a copy of each Assignment Agreement delivered
to it and a register (the "Register") of the names and address of each of
the Lenders and the Pro Rata Share held by each Lender, giving effect to
each Assignment Agreement. The Register shall be available during normal
business hours for inspection by Borrower or any Lender upon reasonable
prior notice to the Administrative Agent. After receipt of a completed
Assignment Agreement executed by any Lender and an Eligible Assignee, and
receipt of an assignment fee of $3,500 from such Lender or Eligible
Assignee, the Administrative Agent shall, promptly following the effective
date thereof, provide to Borrower and the Lenders a revised Schedule 1.1
giving effect thereto. Borrower and the Creditors shall deem and treat the
Persons listed as Lenders in the Register as the holders and owners of the
Pro Rata Share listed therein for all purposes hereof, and no assignment or
transfer of any such Pro Rata Share shall be effective, in each case unless
and until an Assignment Agreement effecting the assignment or transfer
thereof shall have been accepted by the Administrative Agent and recorded
in the Register as provided above. Prior to such recordation, all amounts
owed with respect to the applicable Pro Rata Share shall be owed to the
Lender listed in the Register as the owner thereof, and any request,
authority or consent of any Person who, at the time of making such request
or giving such authority or consent, is listed in the Register as a
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Lender shall be conclusive and binding on any subsequent holder, assignee
or transferee of the corresponding Pro Rata Share.
(e) Each Lender may from time to time grant participations to
one or more banks or other financial institutions (including another
---------
Lender) in a portion of its Pro Rata Share; provided, however, that (i)
-------- -------
such Lender's obligations under this Agreement shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) the participating banks or other
financial institutions shall not be a Lender hereunder for any purpose
except, if the participation agreement so provides, for the purposes of
------
Sections 3.7, 3.8, 11.11 and 11.22 but only to the extent that the cost of
such benefits to Borrower does not exceed the cost which Borrower would
have incurred in respect of such Lender absent the participation, (iv)
Borrower, the Administrative Agent and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement, (v) the participation interest
shall be expressed as a percentage of the granting Lender's Pro Rata Share
as it then exists and shall not restrict an increase in the Commitment, or
in the granting Lender's Pro Rata Share, so long as the amount of the
participation interest is not affected thereby, and (vi) the consent of the
holder of such participation interest shall not be required for amendments
or waivers of provisions of the Loan Documents other than those which (A)
----- ----
extend any Reduction Date, the Maturity Date or any other date upon which
any payment of money is due to the Lenders, (B) reduce the rate of interest
on the Notes, any fee or any other monetary amount payable to the Lenders,
(C) reduce the amount of any installment of principal due under the Notes,
(D) release the Guaranty or collateral for the Obligations (except to the
extent permitted under Section 11.2(d), or (E) change the definition of
"Requisite Lenders."
(f) Notwithstanding anything in this Section to the contrary,
the rights of the Lenders to make assignments of, and grant participations
in, their Pro Rata Shares of the Commitment shall be subject to the
approval of any Gaming Board, to the extent required by applicable Gaming
Laws, and to compliance with applicable securities laws, if any.
(g) Notwithstanding anything to the contrary contained herein,
any Lender (a "Granting Lender") may grant to a special purpose funding
vehicle (an "SPC") of such Granting Lender, identified as such in writing
from time to time by the Granting Lender to the Administrative Agent and
the Borrower the option to provide all or any part of any Loan or Advance
that such Granting Lender would otherwise be obligated to make pursuant to
Sections 2.1, 2.2 or 2.3, provided that (i) nothing herein shall constitute
a commitment to make any Loan by any SPC, (ii) if an SPC elects not to
exercise such option or otherwise fails to provide all or any part of such
Loan, the
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Granting Lender shall be obligated to make such Loan pursuant to the terms
hereof, and (iii) the rights of any such SPC shall be derivative of the
rights of the Granting Lender, and each SPC shall be subject to all of the
restrictions upon the Granting Lender herein contained. Each SPC shall be
conclusively presumed to have made arrangements with its Granting Lender
for the exercise of voting and other rights hereunder in a manner which is
acceptable to the SPC, and the Administrative Agent, the other Creditors,
Borrower and each other Party shall be entitled to rely upon and deal
solely with the Granting Lender with respect to Loans and Advances made by
or through its SPC. The making of a Loan by an SPC hereunder shall utilize
the Commitment of the Granting Lender to the same extent, and as if, such
Loan were made by the Granting Lender. Each party hereto hereby agrees that
no SPC shall be liable for any indemnity or similar payment obligation
under this Agreement (all liability for which shall remain with the related
Granting Lender). In furtherance of the foregoing, each party hereto hereby
agrees (which agreement shall survive the termination of this Agreement)
that, prior to the date that is one year and one day after the payment in
full of all outstanding senior indebtedness of any SPC, it will not
institute against, or join any other person in instituting against, such
SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or similar proceedings under the laws of the United States or
any State thereof, provided that the Granting Lender for each SPC hereby
-------- ----
agrees to indemnify, save, and hold harmless each other party hereto for
any loss, cost, damage and expense arising out of their inability to
institute any such proceeding against its SPC. In addition, notwithstanding
anything to the contrary contained in this Section 11.8, any SPC may (i)
with notice to, but without the prior written consent of, the Borrower or
the Administrative Agent and without paying any processing fee therefor,
assign all or a portion of its interests in any Loans to its Granting
Lender or to any financial institutions providing liquidity and/or credit
facilities to or for the account of such SPC to fund the Loans made by such
SPC or to support the securities (if any) issued by such SPC to fund such
Loans (but nothing contained herein shall be construed in derogation of the
obligation of the Granting Lender to make Loans hereunder), provided that
-------- ----
neither the consent of the SPC or of any such assignee shall be required
for amendments or waivers of provisions of the Loan Documents except for
those amendments or waivers for which the consent of participants is
required under Section 11.8(e)(vi), and (ii) disclose on a confidential
basis (in the same manner described in Section 11.14) any non-public
information relating to its Loans to any rating agency, commercial paper
dealer or provider of a surety, guarantee or credit or liquidity
enhancement to such SPC.
11.9 Right of Setoff. If an Event of Default has occurred and is
---------------
continuing, the Administrative Agent or any Lender (but in each case only with
the consent of the Requisite Lenders) may exercise its rights under Article 9 of
the Uniform Commercial Code
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and other applicable Laws and, to the extent permitted by applicable Laws, apply
any funds in any deposit account maintained with it by Borrower and/or any of
their Property in its possession against the Obligations.
11.10 Sharing of Setoffs. Each Lender severally agrees that if it,
------------------
through the exercise of any right of setoff, banker's lien or counterclaim
against Borrower or otherwise, receives payment of the Obligations held by it
that is ratably more than any other Lender (except by means of removal of that
Lender in accordance with Section 11.26), through any means, receives in payment
of the Obligations held by that Lender, then, subject to applicable Laws: (a)
the Lender exercising the right of setoff, banker's lien or counterclaim or
otherwise receiving such payment shall purchase, and shall be deemed to have
simultaneously purchased, from the other Lender a participation in the
Obligations held by the other Lender and shall pay to the other Lender a
purchase price in an amount so that the share of the Obligations held by each
Lender after the exercise of the right of setoff, banker's lien or counterclaim
or receipt of payment shall be in the same proportion that existed prior to the
exercise of the right of setoff, banker's lien or counterclaim or receipt of
payment; and (b) such other adjustments and purchases of participations shall be
made from time to time as shall be equitable to ensure that all of the Lenders
share any payment obtained in respect of the Obligations ratably in accordance
with each Lender's share of the Obligations immediately prior to, and without
taking into account, the payment; provided that, if all or any portion of a
--------
disproportionate payment obtained as a result of the exercise of the right of
setoff, banker's lien, counterclaim or otherwise is thereafter recovered from
the purchasing Lender by Borrower or any Person claiming through or succeeding
to the rights of Borrower, the purchase of a participation shall be rescinded
and the purchase price thereof shall be restored to the extent of the recovery,
but without interest. Each Lender that purchases a participation in the
Obligations pursuant to this Section shall from and after the purchase have the
right to give all notices, requests, demands, directions and other
communications under this Agreement with respect to the portion of the
Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Obligations purchased. Borrower expressly consents to
the foregoing arrangements and agrees that any Lender holding a participation in
an Obligation so purchased may exercise any and all rights of setoff, banker's
lien or counterclaim with respect to the participation as fully as if the Lender
were the original owner of the Obligation purchased.
11.11 Indemnity by Borrower. Borrower agrees to indemnify, save
---------------------
and hold harmless the Administrative Agent and each Lender and their directors,
officers, agents, attorneys and employees (collectively the "Indemnitees") from
-----------
and against: (a) any and all claims, demands, actions or causes of action
(except a claim, demand, action, or cause of action for any amount excluded from
------
the definition of "Taxes" in Section 3.12(d)) if the claim, demand, action or
cause of action arises out of or relates to any act or omission (or alleged act
or omission) of Borrower, its Subsidiaries or any of their officers, directors
or stockholders
-101-
relating to the Commitment, the use or contemplated use of proceeds of any Loan,
or the relationship of Borrower and the Lenders under this Agreement; (b) any
administrative or investigative proceeding by any Governmental Agency arising
out of or related to a claim, demand, action or cause of action described in
clause (a) above; and (c) any and all liabilities, losses, costs or expenses
-
(including reasonable attorneys' fees and the reasonably allocated costs of
attorneys employed by any Indemnitee and disbursements of such attorneys and
other professional services) that any Indemnitee suffers or incurs as a result
of the assertion of any foregoing claim, demand, action or cause of action;
provided that no Indemnitee shall be entitled to indemnification under this
--------
Section for any loss caused by its own gross negligence or willful misconduct or
for any loss asserted against it by another Indemnitee. If any claim, demand,
action or cause of action is asserted against any Indemnitee, such Indemnitee
shall promptly notify Borrower, but the failure to so promptly notify Borrower
shall not affect Borrower's obligations under this Section unless such failure
materially prejudices Borrower's right to participate in the contest of such
claim, demand, action or cause of action, as hereinafter provided. Such
Indemnitee may (and shall, if requested by Borrower in writing (and at
Borrower's sole expense)) contest the validity, applicability and amount of such
claim, demand, action or cause of action and shall permit Borrower to
participate in such contest. Any Indemnitee that proposes to settle or
compromise any claim or proceeding for which Borrower may be liable for payment
of indemnity hereunder shall give Borrower written notice of the terms of such
proposed settlement or compromise reasonably in advance of settling or
compromising such claim or proceeding and shall obtain Borrower's prior consent
(which shall not be unreasonably withheld or delayed). In connection with any
claim, demand, action or cause of action covered by this Section against more
than one Indemnitee, all such Indemnitees shall be represented by the same legal
counsel (which may be a law firm engaged by the Indemnitees or attorneys
employed by an Indemnitee or a combination of the foregoing) selected by the
Indemnitees and reasonably acceptable to Borrower; provided, that if such legal
--------
counsel determines in good faith that representing all such Indemnitees would or
could result in a conflict of interest under Laws or ethical principles
applicable to such legal counsel or that a defense or counterclaim is available
to an Indemnitee that is not available to all such Indemnitees, then to the
extent reasonably necessary to avoid such a conflict of interest or to permit
unqualified assertion of such a defense or counterclaim, each Indemnitee shall
be entitled to separate representation by legal counsel selected by that
Indemnitee and reasonably acceptable to Borrower, with all such legal counsel
using reasonable efforts to avoid unnecessary duplication of effort by counsel
for all Indemnitees; and further provided that the Administrative Agent (as an
------- --------
Indemnitee) shall at all times be entitled to representation by separate legal
counsel (which may be a law firm or attorneys employed by the Administrative
Agent or a combination of the foregoing). Any obligation or liability of
Borrower to any Indemnitee under this Section shall survive the expiration or
termination of this Agreement, the repayment of all Loans, the expiration or
termination of all Letters of Credit and the payment and performance of all
other Obligations owed to the Lenders.
-102-
11.12 Nonliability of the Lenders. Borrower acknowledges and
---------------------------
agrees that:
(a) Any inspections of any Property of Borrower and its
Subsidiaries made by or through the Creditors are for purposes of
administration of the Loans and Letters of Credit only and Borrower and its
Affiliates are not entitled to rely upon the same (whether or not such
inspections are at the expense of Borrower or its Subsidiaries);
(b) By accepting or approving anything required to be observed,
performed, fulfilled or given to the Creditors pursuant to the Loan
Documents, neither the Administrative Agent nor the Lenders shall be deemed
to have warranted or represented the sufficiency, legality, effectiveness
or legal effect of the same, or of any term, provision or condition
thereof, and such acceptance or approval thereof shall not constitute a
warranty or representation to anyone with respect thereto by the Creditors;
(c) The relationship between Borrower and the Creditors is, and
shall at all times remain, solely that of borrowers and lenders; neither
the Administrative Agent nor the Lenders shall under any circumstance be
construed to be partners or joint venturers of Borrower or its Affiliates;
neither the Administrative Agent nor the Lenders shall under any
circumstance be deemed to be in a relationship of confidence or trust or a
fiduciary or other "special" relationship with Borrower or its Affiliates,
or to owe any fiduciary duty to Borrower or its Affiliates; neither the
Administrative Agent nor the Lenders undertake or assume any responsibility
or duty to Borrower or its Affiliates to select, review, inspect,
supervise, pass judgment upon or inform Borrower or its Affiliates of any
matter in connection with their Property or the operations of Borrower or
its Affiliates; Borrower and its Affiliates shall rely entirely upon their
own judgment with respect to such matters; and any review, inspection,
supervision, exercise of judgment or supply of information undertaken or
assumed by the Creditors in connection with such matters is solely for the
protection of the Creditors and neither Borrower nor any other Person is
entitled to rely thereon; and
(d) The Creditors shall not be responsible or liable to any
Person for any loss, damage, liability or claim of any kind relating to
injury or death to Persons or damage to Property caused by the actions,
inaction or negligence of Borrower and/or its Affiliates and Borrower
hereby indemnifies and holds the Creditors harmless on the terms set forth
in Section 11.11 from any such loss, damage, liability or claim.
11.13 No Third Parties Benefited. This Agreement is made for the
--------------------------
purpose of defining and setting forth certain obligations, rights and duties of
Borrower and the Creditors
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in connection with the Loans, and is made for the sole benefit of Borrower, the
Creditors, and the Creditors' successors and assigns. Except as provided in
------
Sections 11.8 and 11.11, no other Person shall have any rights of any nature
hereunder or by reason hereof.
11.14 Confidentiality . Each Lender agrees to hold any confidential
---------------
information that it may receive from Borrower pursuant to this Agreement in
confidence, except for disclosure: (a) to other Lenders; (b) to legal counsel
------
and accountants for Borrower or any Lender; (c) to other professional advisors
to Borrower or any Lender, provided that the recipient has accepted such
information subject to a confidentiality agreement substantially similar to this
Section; (d) to regulatory officials having jurisdiction over that Lender; (e)
to any Gaming Board having regulatory jurisdiction over Borrower or its
Subsidiaries, provided that each Lender agrees to use its best efforts to notify
Borrower of any such disclosure unless prohibited by applicable Laws; (f) as
required by Law or legal process or in connection with any legal proceeding to
which that Lender and Borrower or any of its Subsidiaries are adverse parties;
and (g) to another financial institution in connection with a disposition or
proposed disposition to that financial institution of all or part of that
Lender's interests hereunder or a participation interest in its Note, provided
that the recipient has accepted such information subject to a confidentiality
agreement substantially similar to this Section. For purposes of the foregoing,
"confidential information" shall mean any information respecting Borrower or its
Subsidiaries reasonably considered by Borrower to be confidential, other than
----------
(i) information previously filed with any Governmental Agency and available to
the public, (ii) information previously published in any public medium from a
source other than, directly or indirectly, that Lender, and (iii) information
previously disclosed by Borrower or its Subsidiaries to any Person not
associated with Borrower without a confidentiality agreement or obligation
substantially similar to this Section. Nothing in this Section shall be
construed to create or give rise to any fiduciary duty on the part of the
Creditors to Borrower or any other Party.
11.15 Further Assurances. Borrower and its Subsidiaries shall, at
------------------
their expense and without expense to the Lenders or the Administrative Agent,
do, execute and deliver such further acts and documents as the Requisite Lenders
or the Administrative Agent from time to time reasonably require for the
assuring and confirming unto the Lenders or the Administrative Agent of the
rights hereby created or intended now or hereafter so to be, or for carrying out
the intention or facilitating the performance of the terms of any Loan Document.
11.16 Integration. This Agreement, together with the other Loan
-----------
Documents and the letter agreements referred to in Sections 3.2, 3.3, 3.5 and
3.6, comprises the complete and integrated agreement of the parties on the
subject matter hereof and supersedes all prior agreements, written or oral, on
the subject matter hereof. In the event of any conflict between the provisions
of this Agreement and those of any other Loan Document, the provisions of this
Agreement shall control and govern; provided that the inclusion of supplemental
--------
rights or
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remedies in favor of the Creditors in any other Loan Document shall not be
deemed a conflict with this Agreement. Each Loan Document was drafted with the
joint participation of the respective parties thereto and shall be construed
neither against nor in favor of any party, but rather in accordance with the
fair meaning thereof.
11.17 Governing Law. Except to the extent otherwise provided
------------- ------
therein, each Loan Document shall be governed by, and construed and enforced in
accordance with, the local Laws of Nevada.
11.18 Severability of Provisions. Any provision in any Loan
--------------------------
Document that is held to be inoperative, unenforceable or invalid as to any
party or in any jurisdiction shall, as to that party or jurisdiction, be
inoperative, unenforceable or invalid without affecting the remaining provisions
or the operation, enforceability or validity of that provision as to any other
party or in any other jurisdiction, and to this end the provisions of all Loan
Documents are declared to be severable.
11.19 Headings. Article and Section headings in this Agreement and
--------
the other Loan Documents are included for convenience of reference only and are
not part of this Agreement or the other Loan Documents for any other purpose.
11.20 Time of the Essence. Time is of the essence of the Loan
-------------------
Documents.
11.21 Foreign Lenders and Participants. Each Lender that is
--------------------------------
incorporated or otherwise organized under the Laws of a jurisdiction other than
the United States of America or any State thereof or the District of Columbia
shall deliver to Borrower (with a copy to the Administrative Agent), within
twenty (20) days after the Closing Date (or after accepting an assignment or
receiving a participation interest herein pursuant to Section 11.8, if
applicable) two duly completed copies, signed by a Responsible Official, of
either Form 1001 (relating to such Lender and entitling it to a complete
exemption from withholding on all payments to be made to such Lender by Borrower
pursuant to this Agreement) or Form 4224 (relating to all payments to be made to
such Lender by Borrower pursuant to this Agreement) of the United States
Internal Revenue Service or such other evidence (including, if reasonably
---------
necessary, Form W-9) satisfactory to Borrower and the Administrative Agent that
no withholding under the federal income tax laws is required with respect to
such Lender. Thereafter and from time to time, each such Lender shall upon
request by Borrower (a) promptly submit to Borrower (with a copy to the
Administrative Agent), such additional duly completed and signed copies of one
of such forms (or such successor forms as shall be adopted from time to time by
the relevant United States taxing authorities) as may then be available under
then current United States laws and regulations to avoid, or such evidence as is
satisfactory to Borrower and the Administrative Agent of any available exemption
from, United States withholding taxes in respect of all payments to be made to
such Lender by Borrower pursuant to this Agreement
-105-
and (b) take such steps as shall not be materially disadvantageous to it, in the
reasonable judgment of such Lender, and as may be reasonably necessary
(including the re-designation of its Eurodollar Lending Office, if any) to avoid
any requirement of applicable Laws that Borrower make any deduction or
withholding for taxes from amounts payable to such Lender. In the event that
Borrower or the Administrative Agent become aware that a participation has been
granted pursuant to Section 11.8(e) to a financial institution that is
incorporated or otherwise organized under the Laws of a jurisdiction other than
the United States of America, any State thereof or the District of Columbia,
then, upon request made by Borrower or the Administrative Agent to the Lender
which granted such participation, such Lender shall cause such participant
financial institution to deliver the same documents and information to Borrower
and the Administrative Agent as would be required under this Section if such
financial institution were a Lender.
11.22 Hazardous Material Indemnity. Borrower hereby agrees to
----------------------------
indemnify, hold harmless and defend (by counsel reasonably satisfactory to the
Administrative Agent) the Administrative Agent and each of the Lenders (and any
successor to a Lender) and their respective directors, officers, employees and
agents from and against any and all claims, losses, damages, liabilities, fines,
penalties, charges, administrative and judicial proceedings and orders,
judgments, remedial action requirements, enforcement actions of any kind, and
all costs and expenses incurred in connection therewith (including reasonable
---------
attorneys' fees and the reasonably allocated costs of attorneys employed by the
Administrative Agent or any Lender, and expenses to the extent that the defense
of any such action has not been assumed by Borrower), arising directly or
indirectly out of (i) the presence on, in, under or about any Real Property of
any Hazardous Materials, or any releases or discharges of any Hazardous
Materials on, under or from any Real Property and (ii) any activity carried on
or undertaken on or off any Real Property by Borrower, its Subsidiaries or any
of their predecessors in title, whether prior to or during the term of this
Agreement, and whether by Borrower, its Subsidiaries or any predecessor in title
or any employees, agents, contractors or subcontractors of Borrower, its
Subsidiaries or any predecessor in title, or any third persons at any time
occupying or present on any Real Property (other than a Lender or a
----- ----
representative of a Lender), in connection with the handling, treatment,
removal, storage, decontamination, clean-up, transport or disposal of any
Hazardous Materials at any time located or present on, in, under or about any
Real Property. The foregoing indemnity shall further apply to any residual
contamination on, in, under or about any Real Property, or affecting any natural
resources, and to any contamination of any Property or natural resources arising
in connection with the generation, use, handling, storage, transport or disposal
of any such Hazardous Materials, and irrespective of whether any of such
activities were or will be undertaken in accordance with applicable Laws, but
the foregoing indemnity shall not apply to Hazardous Materials on any Real
Property, the presence of which is caused by the Creditors. Borrower hereby
acknowledges and agrees that, notwithstanding any other provision of this
Agreement or any of the other Loan Documents to the contrary, the obligations of
Borrower under this
-106-
Section (and under Sections 4.18 and 5.10) shall be unlimited corporate
obligations of Borrower and shall not be secured by any deed
---
of trust or mortgage on any Real Property. Any obligation or liability of
Borrower to any Indemnitee under this Section shall survive the expiration or
termination of this Agreement, the repayment of all Loans, the expiration or
termination of all Letters of Credit and the payment and performance of all
other Obligations owed to the Lenders.
11.23 Gaming Boards. The Administrative Agent and each of the
-------------
Lenders agree to cooperate with all Gaming Boards in connection with the
administration of their regulatory jurisdiction over Borrower and its
Subsidiaries, including the provision of such documents or other information as
---------
may be requested by any such Gaming Board relating to Borrower or any of its
Subsidiaries or to the Loan Documents.
11.24 Lien Releases. The Administrative Agent shall release any
-------------
Lien granted to or held by the Administrative Agent on any Collateral (i) sold,
transferred or otherwise disposed of in connection with any transaction not
prohibited by the Loan Documents, (ii) constituting Property leased to Borrower
or its Subsidiaries under a lease which has expired or been terminated in a
transaction not prohibited by the Loan Documents or which will concurrently
expire and which has not been, and is not intended by Borrower or the relevant
Subsidiary of Borrower to be, renewed or extended, (iii) consisting of an
instrument, if the Indebtedness evidenced by such instrument has been finally
repaid in full, (iv) if approved or consented to by those of the Lenders
required by Section 11.2, or (v) as otherwise expressly required by the Loan
Documents. Upon the request of the Administrative Agent, each Lender shall
promptly provide written confirmation of the authority of the Administrative
Agent to release such Liens upon any one or more items of Collateral under this
Section.
11.25 Termination; Release of Liens. Upon (a) the expiration or
-----------------------------
termination of the Commitment, (b) the full and final payment in Cash of the
Loans, all interest and fees with respect thereto, (c) the reimbursement of all
draws under Letters of Credit and the payment of all fees with respect thereto,
(d) the expiration of all Letters of Credit or the deposit of Cash collateral
with the Issuing Lender in the effective face amount thereof, (e) the payment of
all amounts then demanded by any Lender or indemnitee under Sections 3.7, 3.8,
11.11 and 11.22 and (f) the payment of all other amounts then due under the Loan
Documents, the Administrative Agent is hereby authorized by the Lenders to, and
the Administrative Agent shall, upon the request of Borrower, execute and
deliver to Borrower discharges from further compliance with the covenants
contained in Articles 5, 6, and 7 and releases of the Liens created by the
Collateral Documents, and shall return any Property pledged to the
Administrative Agent as Collateral for the Obligations, notwithstanding the
survival of any provisions of this Agreement herein provided for.
-107-
11.26 Removal of a Lender. Borrower shall have the right to remove
--------------------
a Lender as a party to this Agreement in accordance with this Section (a) under
the circumstances set forth in Sections 3.7, 3.8(g) and 3.12(d) and (b) if such
Lender is the subject of a Disqualification. If Borrower is entitled to remove
a Lender pursuant to this Section either:
------
(x) Upon notice from Borrower, the Lender being removed shall execute
and deliver an Assignment Agreement (but shall not be obligated to pay
any assignment fee) covering that Lender's Pro Rata Share in favor of
one or more Eligible Assignees designated by Borrower (and acceptable
to the Administrative Agent, which acceptance shall not be
unreasonably delayed or withheld), subject to (i) payment of a
purchase price by such Eligible Assignee equal to all principal and
accrued interest, fees and other amounts payable to such Lender under
this Agreement through the date of assignment and (ii) the written
release of the Issuing Lender of such Lender's obligations under
Section 2.4(c) or delivery by such Eligible Assignee of such
appropriate assurances and indemnities (which may include letters of
credit) as such Lender may reasonably require with respect to its
participation interest in any Letters of Credit then outstanding; or
(y) Borrower may reduce the Commitment pursuant to Section 2.5 (and,
for this purpose, the numerical requirements of such Section shall not
apply) by an amount equal to that Lender's Pro Rata Share, pay and
provide to such Lender the amounts, assurances and indemnities
described in subclauses (i) and (ii) of clause (x) above and release
such Lender from its Pro Rata Share. In the event that the Commitment
is reduced pursuant to this clause (y), subsequent Reduction Amounts
shall be reduced by a proportional amount.
11.27 No Liability of Tracinda. In the event that (i) there is a
------------------------
default or alleged default by the Company or any of its Subsidiaries under any
Loan Document, or (ii) any Lender has or may have any claim arising from or
relating to the terms of any Loan Documents, no Lender shall commence any
lawsuit or otherwise seek to impose any liability upon Tracinda Corporation or
the shareholders thereof (collectively, "Tracinda"). Tracinda shall have no
liability whatsoever with respect to the Loan Documents or matters arising
therefrom. No Lender shall have any right to assert or permit any party
claiming through it to assert a claim or impose any liability against Tracinda
as to any matter or thing arising out of or relating to the Loan Documents or
any alleged breach or default under the Loan Documents, In addition, Tracinda
is not a party to this Agreement or any Loan Document and is not liable for any
alleged breach or default thereof by any party thereto.
11.28 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS
--------------------------------
AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF
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ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR
IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTY
HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS
RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES
AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT
TO TRIAL BY JURY.
11.29 PURPORTED ORAL AMENDMENTS. BORROWER EXPRESSLY ACKNOWLEDGES
-------------------------
THAT THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY ONLY BE AMENDED OR
MODIFIED, OR THE PROVISIONS HEREOF OR THEREOF WAIVED OR SUPPLEMENTED, BY AN
INSTRUMENT IN WRITING THAT COMPLIES WITH SECTION 11.2. BORROWER AGREES THAT
BORROWER WILL NOT RELY ON ANY COURSE OF DEALING, COURSE OF PERFORMANCE, OR
-109-
ORAL OR WRITTEN STATEMENTS BY ANY REPRESENTATIVE OF THE ADMINISTRATIVE AGENT OR
ANY LENDER THAT DOES NOT COMPLY WITH SECTION 11.2 TO EFFECT AN AMENDMENT,
MODIFICATION, WAIVER OR SUPPLEMENT TO THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
MGM GRAND DETROIT II, LLC, a Delaware limited liability
company
By: MGM Grand Detroit, LLC, a Delaware limited
liability company, managing member
By: Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx, Secretary
[Name and title]
Address for Borrower:
00 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxx Xxxxxx
Telecopier: 000-000-0000
Telephone: 000-000-0000
With copies to:
Xxx Xxxxxx, Chief Financial Officer
MGM Grand, Inc.
0000 Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000-0000
Telephone: 702/000-0000
Telecopier 702/891-1114 FAX
and to:
Xxxx X. Xxxxxx, Esq.
Christensen, Miller, et al
2121 Avenue of the Stars, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Administrative Agent
By: Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx, Vice President
Address:
Bank of America National Trust and Savings Association
Agency Management Services
000 Xxxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxxx, Vice President
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a Lender
By: Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx, Managing Director
By: Xxx Xxxxxxx
Xxx Xxxxxxx, Managing Director
Address:
Bank of America National Trust and Savings Association
000 Xxxxx Xxxxxx Xxxxxx, #0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxx Xxxxxxx, Managing Director
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
With a copy to:
Bank of America National Trust and Savings Association
000 Xxxxx Xxxxxx Xxxxxx (XX-0000)
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Managing Director
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
THE FIRST NATIONAL BANK OF CHICAGO
By: Xxxxx Xxxxxxx-Xxxxxxxx
Title: Customer Service Officer
Address for notices:
The First National Bank of Chicago
One First Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn.: Xxxxxx Xxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
COMERICA BANK
By: Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
Account Officer
Address for notices:
Comerica Bank
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn.: Xxxxxxx X. Xxxxxx, Legal Officer
Corporate Legal - 3391
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
MICHIGAN NATIONAL BANK
By: Xxxxxxx Xxxxx
Title: Relationship Manager
Address for notices:
Michigan National Bank
00000 Xxxxxxx Xxxx, 00-00
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Attn.: Xxxxxxx Xxxxxx, Relationship Manager
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
OLD KENT BANK
By: Xxxxxx X. Xxxxxx
Title: Vice President & Manager
Address for domestic notices:
Old Kent Bank
000 Xxxx Xxxxxx, X.X.
Xxxxx Xxxxxx, Xxxxxxxx 00000
Attn.: Xxxxxx X. Xxxxxx, Vice President & Manager
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Address for eurodollar notices:
Old Kent Bank
0000 Xxxx Xxxxx
Xxxxx Xxxxxx, Xxxxxxxx 00000
Attn.: Xxx Xxxx, International Assistant
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
NATIONAL CITY BANK
By: Xxxxx X. Xxxxxx
Title: Vice President
Address for notices:
National City Bank
0000 Xxxx Xxxxx Xxxxxx, XX 00-0000
Xxxxxxxxx, Xxxx 00000
Attn.: Xxx Xxx Lewalshi
Facsimile: 000-000-0000
Telephone: 000-000-0000
BANK OF SCOTLAND
By: Xxxxx Xxxx Tat
Title: Senior Vice President
Address for notices:
Bank of Scotland
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxx Xxxxxxx, Banking Associate
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
THE BANK OF NOVA SCOTIA
By: Xxxxx Xxxxxxxxxx
Title: Relationship Manager
Address for notices:
The Bank of Nova Scotia
San Francisco Agency
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn.: Xxxxx Xxxxxxxxxx, Relationship Manager
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
DEUTSCHE BANK AG NEW YORK BRANCH AND/OR
CAYMAN ISLANDS BRANCH
By: Xxxxxxxxx Xxxxx
Title: Associate
By: Xxxxxxx X. Xxxxxxxxx
Title: Director
Address for domestic notices:
Deutsche Bank AG New York Branch
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxxx Xxxxxxxx
Attn.: _________________________
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Address for eurodollar notices:
Deutsche Bank AG Cayman Islands Branch
c/o Deutsche Bank AG New York Branch
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxxx Xxxxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
SOCIETE GENERALE
By: Xxxxxx X. Xxxxxxxx
Title: Managing Director
Address for notices:
Societe Generale
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn.: Xxxxxx Xxxxxxxx, Managing Director
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
FIRST INDEPENDENCE NATIONAL BANK OF DETROIT
By: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
Address for notices:
First Independence National Bank of Detroit
00 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn.: Xxxxxxx X. Xxxxxx, Senior Vice President
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
COMMERZBANK AG, LOS ANGELES BRANCH
By: Christian Jagenberg
Title: Senior Vice President and Manager
By: Xxxxxx Xxxxxxxxxxx
Title: Vice President
Address for notices:
Commerzbank AG - Los Angeles Branch
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn.: Xxxxxx Xxxxxxxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
PNC BANK, NATIONAL ASSOCIATION
By: Xxxxxx X. Xxxxxx
Title: Vice President
Address for notices:
PNC Bank, National Association
Xxx Xxxxx Xxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000
Attn.: Xxxxxx X. Xxxxxx, Vice President
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
SHOREBANK, DETROIT
By: Xxxxxx X. Xxxxxxxxx
Title: Senior Vice President
Address for notices:
ShoreBank, Detroit
00000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn.: Xxxxxx Xxxx, Senior Credit Analyst
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
THE FIRST NATIONAL BANK OF CHICAGO
By: _____________________________________________
Title: ___________________________________________
Address for notices:
The First National Bank of Chicago
One First Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn.: Xxxxxx Xxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
[Exhibit A to Loan Agreement]
ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT ("Agreement") dated as of ________________
is made with reference to that certain Loan Agreement dated as of March 31, 1999
(as amended from time to time, the "Loan Agreement") by and among MGM Grand
Detroit II, LLC, a Delaware limited liability company (the "Borrower"), the
Lenders therein named, and Bank of America National Trust and Savings
Association, as Administrative Agent and is entered into between the "Assignor"
below, in its capacity as a Lender under the Loan Agreement, and the "Assignee"
described below.
Assignor and Assignee hereby represent, warrant and agree as follows:
1. Definitions. Capitalized terms defined in the Loan Agreement are
-----------
used herein with the meanings set forth for such terms in the Loan Agreement.
As used in this Agreement, the following capitalized terms shall have the
meanings set forth below:
"Assignee" means ___________________________________.
--------
"Assigned Pro Rata Share" means _________________% of the Commitment of the
-----------------------
Lenders under the Loan Agreement which equals $__________.
"Assignor" means _______________________.
--------
"Effective Date" means _____________, the effective date of this Agreement.
--------------
2. Representations and Warranties of the Assignor. The Assignor
----------------------------------------------
represents and warrants to the Assignee as follows:
a. As of the date hereof, the Pro Rata Share of the Assignor is
___________% of the Commitment (without giving effect to assignments thereof
which have not yet become effective). The Assignor is the legal and beneficial
owner of the Assigned Pro Rata Share and the Assigned Pro Rata Share is free and
clear of any adverse claim.
-1-
b. As of the date hereof, the outstanding principal balance of
Advances made by the Assignor under the Assignor's Note is $___________________,
and the amount of Assignor's participation in outstanding Letters of Credit is
$____________.
c. The Assignor has full power and authority, and has taken all
action necessary, to execute and deliver this Agreement and any and all other
documents required or permitted to be executed or delivered by it in connection
with this Agreement and to fulfill its obligations under, and to consummate the
transactions contemplated by, this Agreement, and no governmental authorizations
or other authorizations are required in connection therewith; and
d. This Agreement constitutes the legal, valid and binding
obligation of the Assignor.
The Assignor makes no representation or warranty and assumes no responsibility
with respect to the financial condition of Borrower or the performance by
Borrower of the Obligations, and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the Loan
Agreement or the execution, legality, validity, enforceability, genuineness, or
sufficiency of the Loan Agreement or any Loan Document other than as expressly
set forth above.
3. Representations and Warranties of the Assignee. The Assignee hereby
----------------------------------------------
represents and warrants to the Assignor as follows:
(a) The Assignee has full power and authority, and has taken all
action necessary, to execute and deliver this Agreement, and any and all other
documents required or permitted to be executed or delivered by it in connection
with this Agreement and to fulfill its obligations under, and to consummate the
transactions contemplated by, this Agreement, and no governmental authorizations
or other authorizations are required in connection therewith;
(b) This Agreement constitutes the legal, valid and binding
obligation of the Assignee;
(c) The Assignee has independently and without reliance upon the
Administrative Agent or Assignor and based on such documents and information as
the Assignee has deemed appropriate, made its own credit analysis and decision
to enter into this Agreement. The Assignee will, independently and without
reliance upon the Administrative Agent or any Lender, and based upon such
documents and
-2-
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Loan Agreement;
(d) The Assignee has received copies of such of the Loan Documents
delivered pursuant to Section 8.1 of the Loan Agreement as it has requested,
together with copies of the most recent financial statements delivered pursuant
to Section 7.1 of the Loan Agreement;
(e) The Assignee will perform in accordance with their respective
terms all of the obligations which by the terms of the Loan Agreement are
required to be performed by it as a Lender; and
(f) The Assignee is an Eligible Assignee.
4. Assignment. On the terms set forth herein, the Assignor, as of
----------
the Effective Date, hereby irrevocably sells, assigns and transfers to the
Assignee all of the rights and obligations of the Assignor under the Loan
Agreement, the other Loan Documents and the Assignor's Note to the extent of the
Assigned Pro Rata Share, and the Assignee irrevocably accepts such assignment of
rights and assumes such obligations from the Assignor on such terms and
effective as of the Effective Date. As of the Effective Date, the Assignee shall
have the rights and obligations of a "Lender" under the Loan Documents, except
to the extent of any arrangements with respect to payments referred to in
Section 5 hereof. Assignee hereby appoints and authorizes the Administrative
Agent to take such action and to exercise such powers under the Loan Agreement
as are delegated to the Administrative Agent by the Loan Agreement.
5. Payment. On the Effective Date, the Assignee shall pay to the
-------
Assignor, in immediately available funds, an amount equal to the purchase price
of the Assigned Pro Rata Share, as agreed between the Assignor and the Assignee.
Assignor and Assignee have separately agreed upon the amount of interest, fees,
and other payments with respect to the Assigned Pro Rata Share which are to be
retained by the Assignor.
The Assignor and the Assignee hereby agree that if either receives any
payment of interest, principal, fees or any other amount under the Loan
Agreement, their respective Notes or any other Loan Documents which is for the
account of the other, it shall hold the same in trust for such party to the
extent of such party's interest therein and shall promptly pay the same to such
party.
-3-
6. Principal, Interest, Fees, etc. Any principal that would be
-------------------------------
payable and any interest, fees and other amounts that would accrue from and
after the Effective Date to or for the account of the Assignor pursuant to the
Loan Agreement and the Note shall be payable to or for the account of the
Assignor and the Assignee, in accordance with their respective interests as
adjusted pursuant to this Agreement.
7. Notes. The Assignor and the Assignee shall make appropriate
-----
arrangements with the Borrower concurrently with the execution and delivery
hereof so that a replacement Note is issued to the Assignor and a new Note is
issued to the Assignee, in each case in principal amounts reflecting their Pro
Rata Shares of the Commitment or their outstanding Advances (as adjusted
pursuant to this Agreement).
8. Further Assurances. Concurrently with the execution of this
------------------
Agreement, the Assignor shall execute two counterpart original Requests for
Registration, in the form of Exhibit A to this Agreement, to be forwarded to the
Administrative Agent. The Assignor and the Assignee further agree to execute and
deliver such other instruments, and take such other action, as either party may
reasonably request in connection with the transactions contemplated by this
Agreement, and the Assignor specifically agrees to cause the delivery of (i) two
original counterparts of this Agreement and (ii) the Request for Registration,
to the Administrative Agent for the purpose of registration of the Assignee as a
"Lender" pursuant to Section 11.8 of the Loan Agreement.
9. Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACTUAL
-------------
OBLIGATION UNDER, AND SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LOCAL LAWS OF THE STATE OF NEVADA. FOR ANY DISPUTE ARISING
IN CONNECTION WITH THIS AGREEMENT, THE ASSIGNEE HEREBY IRREVOCABLY SUBMITS TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEVADA.
10. Notices. All communications among the parties or notices in
-------
connection herewith shall be in writing, hand delivered or sent by registered
airmail, postage prepaid, or by telex, addressed to the appropriate party at its
address set forth on the signature pages hereof. All such communications and
notices shall be effective upon receipt.
11. Binding Effect. This Agreement shall be binding upon and inure
--------------
to the benefit of the parties and their respective successors and assigns;
provided, however, that the Assignee shall not assign its rights or obligations
under this
-4-
Agreement without the prior written consent of the Assignor and any purported
assignment, absent such consent, shall be void. Nothing contained in this
Section shall restrict the assignment by Assignee of its rights under the Loan
Documents following the Effective Date, in accordance with the terms of the Loan
Agreement.
12. Interpretation. The headings of the various sections hereof are
--------------
for convenience of reference only and shall not affect the meaning or
construction of any provision hereof.
-5-
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officials, officers or agents
thereunto duly authorized as of the date first above written.
"Assignor"
______________________________________
By:___________________________________
Its:________________________________
Address: ____________________________
____________________________
____________________________
Telephone: __________________________
Telecopier: __________________________
"Assignee"
______________________________________
By:___________________________________
Its:________________________________
Address: _____________________________
_____________________________
_____________________________
Telephone: ___________________________
Telecopier: __________________________
-6-
Exhibit A to Assignment Agreement
---------------------------------
REQUEST FOR REGISTRATION
------------------------
To: Bank of America National Trust and Savings Association, as Administrative
Agent, and MGM Grand Detroit II, LLC
THIS REQUEST FOR REGISTRATION OF ASSIGNEE is made as of the date of
the enclosed Assignment Agreement with reference to that certain Loan Agreement,
dated as of March 31, 1999 by and among MGM Grand Detroit II, LLC, a Delaware
limited liability company ("Borrower"), the Lenders therein named (collectively,
the "Lenders" and individually, a "Lender") and Bank of America National Trust
and Savings Association, as Administrative Agent (as amended as of the date
hereof, the "Loan Agreement").
The Assignor and the Assignee described below hereby request that
Administrative Agent register the Assignee as a Lender pursuant to Section 11.8
of the Loan Agreement effective as of the Effective Date described in the
Assignment Agreement.
Enclosed with this Request are two counterpart originals of the
Assignment Agreement as well as the original Note of Borrower in favor of the
Assignor in the principal amount of $______________. The Assignor and the
Assignee hereby jointly request that Administrative Agent cause Borrower to
issue a replacement Note, dated as of the Effective Date, pursuant to Section
11.8 of the Loan Agreement in favor of Assignor in the principal amount of the
remainder of its Pro Rata Share of the Commitment and a new Note in favor of the
Assignee in the amount of the Assigned Pro Rata Share.
-7-
IN WITNESS WHEREOF, the Assignor and Assignee have executed this
Request for Registration by their duly authorized officers as of this ___ day of
__________, _____.
"Assignor" "Assignee"
_________________________ _________________________
By:______________________ By:______________________
Its: ____________________ Its: ____________________
-8-
CONSENT OF ADMINISTRATIVE AGENT AND BORROWER
--------------------------------------------
[When Required Pursuant to Loan Agreement]
------------------------------------------
TO: The Assignor and the Assignee referred to in the above Request for
Registration
When countersigned by both Borrower and Administrative Agent below, this
document shall certify that:
[ ] [WHEN REQUIRED PURSUANT TO SECTION 11.8(b)(i) OF THE Loan Agreement:]
[1.] Borrower has consented, pursuant to the terms of the Loan Documents,
to the assignment by the Assignor to the Assignee of the Assigned Pro Rata
Share.
[2.] Administrative Agent has registered the Assignee as a Lender under
the Loan Agreement, effective as of the Effective Date described above, with a
Pro Rata Share of the Commitment corresponding to the Assigned Pro Rata Share
and has adjusted the registered Pro Rata Share of the Commitment of the Assignor
to reflect the assignment of the Assigned Pro Rata Share.
Approved:
MGM Grand Detroit II, LLC, a Bank of America National Trust and
Delaware limited liability company Savings Association, as Administrative
Agent
By:__________________________ By:___________________________
Its:_________________________ Its:__________________________
-9-
[Exhibit B to Loan Agreement]
COMPLIANCE CERTIFICATE
TO: BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Administrative Agent
This Compliance Certificate is delivered with reference to that
certain Loan Agreement dated as of March 31, 1999, among MGM Grand Detroit II,
LLC, a Delaware limited liability company ("Borrower"), the Lenders therein
named, and Bank of America National Trust and Savings Association, as
Administrative Agent (as amended, extended, renewed, supplemented or otherwise
modified from time to time, the "Loan Agreement"). Terms defined in the Loan
Agreement and not otherwise defined in this Compliance Certificate shall have
the meanings defined for them in the Loan Agreement. Section references herein
are to the Loan Agreement unless stated otherwise.
This Certificate is delivered in accordance with Section 7.2 of the
Loan Agreement by a Senior Officer of the Licensee on behalf of Borrower. This
Certificate is delivered as of the last day of the Fiscal Quarter (the "Test
Period") ended _________________, ____, (the "Test Date"). Computations
indicating compliance with respect to the covenant contained in Section 6.11 of
the Loan Agreement are set forth below.
I. Section 6.11 - Fixed Charge Coverage Ratio. The Fixed Charge Coverage
------------------------------------------
Ratio for the Test Period was _____:1.00.
Minimum Required Ratio: _______: 1.00
----------------------
Fixed Charge Coverage Ratio is calculated as follows:
----------------------------------------------------
(a) Borrower EBITDAM (as calculated below)
for the four Fiscal Quarter period ending
on the Test Date (the "Annual Period") $____________
divided by (b) Fixed Charges for the Annual Period: $____________
----------
Interest Charge Coverage Ratio = [(a)/(b)] = ______:1.00
-1-
II. A review of the activities of Borrower during the Test Period covered by
this Certificate has been made under the supervision of the undersigned with a
view to determining whether during such Test Period Borrower performed and
observed all of its respective Obligations. To the best knowledge of the
undersigned, during the Test Period, all covenants and conditions have been so
performed and observed and no Default or Event of Default has occurred and is
continuing, with the exceptions set forth below in response to which Borrower
has taken or proposes to take the following actions (if none, so state).
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________
III. Attached hereto are component calculations for the various financial
covenants described above.
IV. The undersigned Senior Officer of Borrower certifies that the calculations
made and the information contained herein are derived from the books and records
of Borrower and that each and every matter contained herein correctly reflects
those books and records.
V. To the best knowledge of the undersigned no event or circumstance has
occurred that constitutes a Material Adverse Effect since the date the most
recent Compliance Certificate was executed and delivered.
Dated: _______________, _____
_________________________________
_________________________________
Printed Name and Title of Senior
Officer of MGM Grand Detroit, LLC, on behalf
of MGM Grand Detroit II, LLC
-2-
Borrower EBITDAM - Component Calculations
-----------------------------------------
In the above calculations, Borrower EBITDAM for the Annual Period is
calculated as follows, in each case as determined in accordance with Generally
Accepted Accounting Principles:
(a) EBITDA of Borrower and its Subsidiaries
for the Annual Period (as calculated below) $___________
plus (b) Management Fee and Guarantee Fees
----
paid during the Annual Period $___________
Borrower EBITDAM = [(a)+(b)] = $__________
EBITDA - Component Calculations
-------------------------------
In the above calculation, EBITDA of Borrower and its Subsidiaries for the
Annual Period is calculated as follows, in each case as determined in
accordance with Generally Accepted Accounting Principles:
(a) Net Income of Borrower and its
Subsidiaries $_________________
plus (b) any extraordinary loss
----
reflected in such Net Income $_________________
minus (c) any extraordinary gain
-----
reflected in such Net Income [$________________]
plus (d) Interest Charges of Borrower
----
and its Subsidiaries $_________________
plus (e) the aggregate amount of federal,
----
state and local taxes on or measured
by income of Borrower and its
Subsidiaries (whether or not
payable during the Annual Period)
(to the extent deducted in arriving
at Net Income of Borrower and its
Subsidiaries) $_________________
-3-
plus (f) depreciation, amortization and
----
all other non-cash expenses $_________________
plus (g) expenses classified as "pre-
----
opening expenses" on the
applicable financial statements
of Borrower and its Subsidiaries $_________________
equals EBITDA
------
[(a)+(b)-(c)+(d)+(e)+(f)+(g)] $_________________
-4-
[Exhibit C to Loan Agreement]
NOTE
----
$______________ March 31, 1999
Las Vegas, Nevada
FOR VALUE RECEIVED, the undersigned agrees to pay to the order of
_________________ (the "Lender"), the principal amount of
____________________ AND NO/100 DOLLARS ($_______________) or such
lesser aggregate amount of Advances as may be made by the Lender pursuant to the
Loan Agreement referred to below, together with interest thereon payable as
hereinafter set forth.
Reference is made to the Loan Agreement dated as of March 31, 1999 (as
amended from time to time, the "Loan Agreement") by and among the undersigned,
the Lenders therein named, and Bank of America National Trust and Savings
Association, as Administrative Agent for the benefit of the Lenders (the "Loan
Agreement"). Terms defined in the Loan Agreement and not otherwise defined
herein are used herein with the meanings defined for those terms in the Loan
Agreement. This is one of the Notes referred to in the Loan Agreement, and any
holder hereof is entitled to all of the rights, remedies, benefits and
privileges provided for in the Loan Agreement as originally executed or as it
may from time to time be supplemented, modified or amended. The Loan Agreement,
among other things, contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events upon the terms and conditions
therein specified.
The principal indebtedness evidenced by this Note shall be payable as
provided in the Loan Agreement and in any event on the Maturity Date.
Interest shall be payable on the outstanding daily unpaid principal
amount of Advances from the date of each such Advance until payment in full and
shall accrue and be payable at the rates and on the dates set forth in the Loan
Agreement, both before and after default and before and after maturity and
judgment, with interest on overdue principal and interest to bear interest at
the rate set forth in Section 3.9 of the Loan Agreement, to the fullest extent
permitted by applicable Law.
-1-
Each payment hereunder shall be made without setoff, counterclaim or
deduction of any kind to the Administrative Agent at the Administrative Agent's
Office for the account of the Lender in immediately available funds not later
than 11:00 a.m., California local time, on the day of payment (which must be a
Business Day). All payments received after 11:00 a.m., California local time,
on any particular Business Day shall be deemed received on the next succeeding
Business Day. All payments shall be made in lawful money of the United States
of America.
The Lender shall use its best efforts to keep a record of Advances
made by it as parts of Loans and payments received by it with respect to this
Note, and such record shall be presumptive evidence of the amounts owing under
this Note.
The undersigned hereby agrees to pay all costs and expenses of any
rightful holder hereof incurred in collecting the undersigned's obligations
hereunder or in enforcing or attempting to enforce any of such holder's rights
hereunder, including reasonable attorneys' fees and disbursements, whether or
not an action is filed in connection therewith.
The undersigned hereby waives presentment, demand for payment,
dishonor, notice of dishonor, protest, notice of protest and any other notice or
formality, to the fullest extent permitted by applicable Laws.
This Note shall be delivered to and accepted by the Lender in the
State of Nevada, and shall be governed by, and construed and enforced with, the
local laws thereof.
MGM GRAND DETROIT II, LLC, a Delaware
limited liability company
By MGM GRAND DETROIT, LLC,
Managing Member
By ____________________________
____________________________
[Printed name and title]
-2-
SCHEDULE OF ADVANCES AND
PAYMENTS OF PRINCIPAL
Date Amount Interest Amount of Unpaid Notation
of Period Principal Principal Made by
Advance Paid Balance
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
[Exhibit D to Loan Agreement]
PRICING CERTIFICATE
TO: BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Administrative Agent
This Pricing Certificate is delivered with reference to that certain
Loan Agreement dated as of March 31, 1999, among MGM Grand Detroit II, LLC, A
Delaware limited liability company ("Borrower"), the Lenders therein named, and
Bank of America National Trust and Savings Association, as Administrative Agent
(as amended, extended, renewed, supplemented or otherwise modified from time to
time, the "Loan Agreement"). Terms used in this Pricing Certificate have the
meanings defined for them in the Loan Agreement unless otherwise indicated.
Section references herein are to the Loan Agreement unless stated otherwise.
This Certificate is delivered in accordance with Section 7.1(b) of the
------
Loan Agreement by a Senior Officer of the Licensee on behalf of Borrower. This
Certificate is delivered as of the last day of the Fiscal Quarter (the "Test
Period") ended _________________, _____ (the "Test Date").
As of the Test Date, the Company Rating was _____________.
The following is a preliminary calculation of the Company Leverage
Ratio as of the Test Date.
The Company Leverage Ratio (as calculated below) for the Test Period
was ________:1:00 calculated as follows.
(a) Company Total Debt as of the Test
Date $______________________
divided by
----------
(b) Company Annualized Cash Flow as of the
Test Date $______________________
-1-
equals Company Leverage Ratio [(a)/(b)] ________:1.00
------
Preliminary calculations of the components of the Company Leverage
Ratio are attached to this certificate. The undersigned is not aware of any
facts or circumstances which would make any of the calculations set forth above
or attached hereto materially incorrect. On the basis of the foregoing, the
undersigned Senior Officer certifies that the calculations made and the
information contained herein are derived from the books and records of Borrower
and that each and every matter contained herein correctly reflects those books
and records.
_________________________________
_________________________________
Printed Name and Title of Senior
Officer of MGM Grand Detroit, LLC, Managing
Member of MGM Grand Detroit II, LLC
-2-
Company Total Debt Calculation: Company Total Debt as of the Test Date is the
------------------------------
sum without duplication of:
---
(a) Company Average Quarterly Funded Debt
as of the Test Date (average of the
three amounts set forth below): $_________________
Company Funded Debt as of the
last day of the first month in the Test Period
$_______________________
Company Funded Debt as of the
last day of the second month in the Test Period
$_______________________
Company Funded Debt as of the
Test Date:
$________________________
plus (b) Quantified New York Exposure as
----
Of the Test Date. $_________________
Company Annualized Cash Flow calculation: Company Annualized Cash Flow for the
----------------------------------------
Test Period, and without duplication, is the sum of:
--- --
(a) EBITDA (as defined in the Company
Loan Agreement) of the Company
and its Restricted Subsidiaries
for the four Fiscal Quarters
ended on the Test Date
(exclusive of the Unrestricted
Subsidiaries) (as calculated below) $_________________
plus (b) Pre-Opening Expenses (as defined
----
-3-
in the Company Loan Agreement)
for the four Fiscal Quarters ended
on the Test Date (determined in accordance
with Generally Accepted Accounting
Principles) $_________________
plus (c) EBITDA (as defined in the Company Loan
----
Agreement) of the Australia Companies
(to the extent that the same are then
directly or indirectly owned by the Company)
for the four Fiscal Quarters ended on the
Test Date (as calculated below) $_________________
plus (d) New York Available EBITDA (as
----
defined in the Company Loan Agreement)
for the four Fiscal Quarters ended on
the Test Date (determined in accordance
with Generally Accepted Accounting
Principles)(as calculated below) $_________________
Company Annualized Cash Flow [(a)+(b)+(c)+(d)] $_________________
EBITDA Component Calculation - Company and its Restricted Subsidiaries
----------------------------------------------------------------------
In the above calculation, EBITDA (as defined in the Company Loan Agreement)
of Company and its Restricted Subsidiaries (exclusive of the Unrestricted
Subsidiaries) (the "Company Group@) for the four Fiscal Quarters ended on the
Test Date is calculated as follows, in each case as determined in accordance
with Generally Accepted Accounting Principles:
(a) Net Income (as defined in the Company
Loan Agreement) of the Company Group $_________________
plus (b) any extraordinary loss reflected in such
----
Net Income (as defined in the Company
Loan Agreement) $_________________
-4-
minus (c) any extraordinary gain reflected in such
-----
Net Income (as defined in the Company
Loan Agreement) [$________________]
plus (d) Interest Charges (as defined in the
----
Company Loan Agreement) of the
Company Group $_________________
plus (e) the aggregate amount of federal,
----
state and local taxes on or measured
by income of the Company Group
(whether or not payable during such
period) $_________________
plus (f) depreciation, amortization and all
----
other non-cash expenses $_________________
plus (g) expenses classified as "pre-opening
----
expenses" on the applicable financial
statements of the Company Group $_________________
equals EBITDA (as defined in the Company Loan
------
Agreement) of the Company Group
[(a)+(b)-(c)+(d)+(e)+(f)+(g)] $_________________
EBITDA Component Calculation - Australia Companies
--------------------------------------------------
In the above calculation, EBITDA (as defined in the Company Loan Agreement)
of the Australia Companies (to the extent that the same are then directly or
indirectly owned by the Company)(the "Australia Group") for the four Fiscal
Quarters ended on the Test Date is calculated as follows, in each case as
determined in accordance with Generally Accepted Accounting Principles:
(a) Net Income (as defined in the Company
Loan Agreement) of the Australia Group
$_________________
-5-
plus (b) any extraordinary loss reflected in such
----
Net Income (as defined in the Company
Loan Agreement) $_________________
minus (c) any extraordinary gain reflected in such
-----
Net Income (as defined in the Company
Loan Agreement) [$________________]
plus (d) Interest Charges (as defined in the
----
Company Loan Agreement) of the
Australia Group $_________________
plus (e) the aggregate amount of federal,
----
state and local taxes on or measured
by income of the Australia Group
(whether or not payable during such
period) $_________________
plus (f) depreciation, amortization and all
----
other non-cash expenses $_________________
plus (g) expenses classified as "pre-opening
----
expenses" on the applicable financial
statements of the Australia Group $_________________
equals EBITDA (as defined in the Company
------
Loan Agreement) of the Australia Group
[(a)+(b)-(c)+(d)+(e)+(f)+(g)] $_________________
Component Calculation - New York Available EBITDA
-------------------------------------------------
In the above calculation of New York Available EBITDA (as defined in the
Company Loan Agreement) for the four Fiscal Quarters ended on the Test Date, a
component of New York Available EBITDA (as defined in the Company Loan
Agreement), New York EBITDA, is calculated as follows for the four fiscal
quarters ended on the Test Date, in each case determined in accordance with
Generally Accepted Accounting Principles, consistently applied:
-6-
(a) EBITDA (as defined in the Company
Loan Agreement) of New York-New York
Hotel & Casino LLC, a Nevada limited
liability company ("New York") for that
fiscal period (as calculated below) $_________________
plus (b) expenses classified as "pre-opening
----
expenses" on the applicable financial
statements of New York for that fiscal
period $_________________
plus (c) any write-off of assets associated with
----
their premature demolition to the extent
necessary to accommodate expansion of
New York's hotel/casino complex $_________________
equals New York Available EBITDA (as
------
defined in the Company Loan Agreement)
[(a)+(b)+(c)] $________________
EBITDA Component Calculation - New York
---------------------------------------
In the above calculation, EBITDA (as defined in the Company Loan
Agreement) of New York for the four Fiscal Quarters ended on the Test Date is
calculated as follows, in each case as determined in accordance with Generally
Accepted Accounting Principles:
(a) Net Income (as defined in the Company
Loan Agreement) of New York $_________________
plus (b) any extraordinary loss reflected in such
----
Net Income (as defined in the Company
Loan Agreement) $_________________
minus (c) any extraordinary gain reflected in such
-----
Net Income (as defined in the Company
-7-
Loan Agreement) [$________________]
plus (d) Interest Charges (as defined
----
in the Company Loan Agreement)
of New York $_________________
plus (e) the aggregate amount of federal,
----
state and local taxes on or measured
by income of New York (whether or
not payable during such period) $_________________
plus (f) depreciation, amortization and all
----
other non-cash expenses $_________________
plus (g) expenses classified as "pre-opening
----
expenses" on the applicable financial
statements of New York $_________________
equals EBITDA (as defined in the Company
------
Loan Agreement) of New York
[(a)+(b)-(c)+(d)+(e)+(f)+(g)] $_________________
-8-
[Exhibit E to Loan Agreement]
REQUEST FOR LETTER OF CREDIT
This REQUEST FOR LETTER OF CREDIT is executed and delivered by MGM
Grand Detroit II, LLC, a Delaware limited liability company (the "Borrower") to
Bank of America National Trust and Savings Association, as Administrative Agent,
pursuant to the Loan Agreement (the ALoan Agreement@) dated as of March 31,
1999, entered into by and among the Borrower, the Lenders that are party
thereto, and Administrative Agent. Any terms used herein and not defined herein
shall have the meanings defined in the Loan Agreement.
Borrower hereby requests that the Issuing Lender issue a Letter of
Credit for the account of Borrower pursuant to the Loan Agreement, as follows:
Face Amount of Letter of Credit: $___________________.
Date of Issuance: ______________, _____.
Beneficiary under Letter of Credit:
Name: ______________________
Address: ______________________
______________________
______________________
Expiry Date: _______________, ____.
In connection with the Letter of Credit requested herein, Borrower
hereby represents, warrants and certifies to the Lenders that, as of the date of
the Letter of Credit requested herein
(i) except as disclosed by Borrower and approved in writing by
the Requisite Lenders, the representations and warranties contained in
Article 4 (other than Sections 4.6, 4.10, 4.17 and 4.18 (but only if
----- ----
Borrower and its Subsidiaries are diligently engaged in measures that will
result in compliance with all Hazardous Materials Laws)) are true and
correct on and as of the date hereof; and
(ii) other than matters described on Schedule 4.10 or not
required as of the Closing Date to be therein described, there is no
pending or threatened action, suit, proceeding or investigation against or
affecting Borrower or any of its
-1-
Subsidiaries or any Property of any of them before any Governmental Agency
that constitutes a Material Adverse Effect; and
(iii) no Default or Event of Default exists.
This Request for Letter of Credit is executed on ____________, _____
on behalf of the undersigned by its duly authorized officer. The undersigned,
in such capacity, hereby certifies each and every matter contained herein to be
true and correct.
MGM GRAND DETROIT II, LLC
By: __________________________
Its: __________________________
-2-
[Exhibit F to Loan Agreement]
REQUEST FOR LOAN
1. This Request for Loan is executed and delivered by MGM Grand
Detroit II, LLC, a Delaware limited liability company ("Borrower"), to Bank of
America National Trust and Savings Association, as the Administrative Agent
("Administrative Agent") pursuant to that certain Loan Agreement (as amended,
modified or extended, the "Agreement") dated as of March 31, 1999, among
Borrower, the Lenders that are parties thereto, and Administrative Agent. Any
terms used herein and not defined herein shall have the meanings defined in the
Agreement.
2. Borrower hereby requests that the Lenders make a Loan pursuant to
the Agreement as follows:
(a) AMOUNT OF REQUESTED LOAN:
$_________________________
(b) FUNDING DATE OF LOAN:
__________________________
(c) INTEREST PERIOD OF LOAN ENDS
__________________________
(d) TYPE OF LOAN (Check one box only):
[_] BASE RATE
[_] EURODOLLAR RATE FOR AN INTEREST PERIOD OF ________ MONTHS
3. In connection with the requested Loan, the undersigned certifies that
(a) if this Request for Loan is for a Loan which will increase the
principal amount outstanding under the Notes, now and as of the date of the
requested Loan, except (i) for representations and warranties which
expressly speak as of a particular date or are no longer true and correct
as a result of a change which is permitted by the Loan Agreement and (ii)
as disclosed by Borrower and approved in writing by the Requisite Lenders,
each representation and warranty contained in Article 4 of the Agreement
(other than Sections 4.6, 4.10, 4.17 and 4.18 (but only if Borrower and its
----------
Subsidiaries are diligently engaged in measures that will result in
compliance with all
-1-
Hazardous Materials Laws)) are true and correct, both immediately before
and after giving effect to such Loan, as though such representations and
warranties were made on and as of that date; and
(b) other than matters described on Schedule 4.10 or not required as
of the Closing Date to be therein described, there is no pending or
threatened action, suit, proceeding or investigation against or affecting
Borrower or any of its Subsidiaries or any Property of any of them before
any Governmental Agency that constitutes a Material Adverse Effect.
This Request is executed on _______________ on behalf of the
undersigned by its duly authorized officer.
MGM GRAND DETROIT II, LLC
By:___________________________
Title:________________________
-2-
[Exhibit G to Loan Agreement]
TRADEMARK SECURITY INTEREST ASSIGNMENT
--------------------------------------
This TRADEMARK SECURITY INTEREST ASSIGNMENT (the "Assignment") is made
and entered into as of _______________, ______ by
_____________________________________, together with each other Person who may
become a party hereto pursuant to Section 9 of this Assignment (each a "Grantor"
-
and collectively, "Grantors"), jointly and severally, in favor of Bank of
America National Trust and Savings Association, as the Administrative Agent
under the Loan Agreement referred to below for the ratable benefit of each of
the Lenders which are parties to the Loan Agreement from time to time, as
Secured Party, with reference to the following facts:
RECITALS
--------
A. Pursuant to the Loan Agreement (as such agreement may from time to
time be amended, extended, renewed, supplemented or otherwise modified, the
"Loan Agreement") dated as of March 31, 1999, among MGM Grand Detroit II, LLC, a
Delaware limited liability company ("Borrower"), the Lenders which are party
thereto, and Bank of America National Trust and Savings Association, as
Administrative Agent, Lenders have agreed to provide a revolving credit facility
to Borrower subject to the terms and conditions set forth therein.
B. It is a condition to the continued availability of the credit
facilities under the Loan Agreement that Grantors enter into this Assignment.
AGREEMENT
NOW, THEREFORE, in order to induce the Lenders to extend the
aforementioned credit facilities to Borrower, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Grantors hereby jointly and severally represent, warrant, covenant and agree as
follows:
1. Definitions. This Assignment is the Trademark Security Interest
-----------
Assignment referred to in the Loan Agreement. Terms defined in the Loan
Agreement and not otherwise defined in this Assignment shall have the meanings
defined for those terms in the Loan Agreement. As used in this Assignment, the
following terms shall have the meanings respectively set forth after each:
-1-
"Assignment" means this Trademark Security Interest Assignment, and
----------
any extensions, modifications, renewals, restatements, supplements or amendments
hereof, including, without limitation, any documents or agreements by which
---------
additional Grantors become party hereto.
"Collateral" means and includes all of the following: (a) all of
----------
Grantors' now-existing, or hereafter acquired, right, title, and interest in and
to all of Grantors' trademarks, trade names, trade styles, and service marks;
all prints and labels on which said trademarks, trade names, trade styles, and
service marks appear, have appeared, or will appear, and all designs and general
intangibles of a like nature; all applications, registrations, and recordings
relating to the foregoing in the United States Patent and Trademark Office
("USPTO") or in any similar office or agency of the United States, any State
thereof, or any political subdivision thereof, or in any other countries, and
all reissues, extensions, and renewals thereof, including those trademarks,
terms, designs, and applications described in Schedule 1 hereto (the
"Trademarks"); (b) the goodwill of the business symbolized by each of the
Trademarks, including, without limitation, all customer lists and other records
relating to the distribution of products or services bearing the Trademarks; and
(c) any and all proceeds of any of the foregoing, including any claims by
Grantors against third parties for past, present and future infringement of the
Trademarks or any licenses with respect thereto.
"Grantors" means those entities that become parties hereto as provided
--------
in Section 5.14 of the Loan Agreement or Section 9 hereof, and each of them, and
---- -
any one or more of them, jointly and severally.
"Secured Obligations" means (a) in the case of Borrower (if Borrower
-------------------
is a Grantor hereunder), any and all present and future Obligations of any type
or nature of Borrower to the Administrative Agent, the Lenders, and any one or
more of them, arising under or relating to the Loan Documents or any one or more
of them, and (b) in the case of each other Grantor, the obligations of that
Grantor under the guaranty which that Grantor has executed in favor of Secured
Party with respect to the obligations of Borrower to Secured Party, in each case
whether due or to become due, matured or unmatured, liquidated or unliquidated,
or contingent or noncontingent, including Obligations of performance as well as
---------
Obligations of payment, and including interest that accrues after the
---------
commencement of any bankruptcy or insolvency proceeding by or against any
Grantor.
"Secured Party" means the Administrative Agent who shall receive and
-------------
hold the assignments made hereunder for the ratable benefit of each of the
Lenders which are parties to the Loan Agreement from time to time. Subject to
the terms and conditions of the Loan Agreement, any right, remedy, privilege, or
power of Secured Party shall be exercised by the Administrative Agent.
-2-
2. Assignment. For valuable consideration, Grantors and each of them
----------
hereby jointly and severally grant and assign to Secured Party a security
interest, to secure the prompt and indefeasible payment and performance of the
Secured Obligations, and each of them, in and to all of the presently existing
and hereafter acquired Collateral. This Assignment is a continuing and
irrevocable agreement and all the rights, powers, privileges and remedies
hereunder shall apply to any and all Secured Obligations, including those
arising under successive transactions which shall either continue the Secured
Obligations, increase or decrease them and notwithstanding the bankruptcy of any
Grantor or any other event or proceeding affecting any Grantor.
3. Representations, Warranties and Covenants. Grantors, and each of
-----------------------------------------
them, represent, warrant and agree that:
(a) All of the existing Collateral is valid and subsisting in
full force and effect, and Grantors own the sole, full, and clear title
thereto, and the right and power to grant the security interests granted
hereunder. Grantors will, at their expense, perform all acts and execute
all documents necessary to maintain the existence of the Collateral as
valid, subsisting, and registered trademarks, including, without
limitation, the filing of any renewal affidavits and applications. The
Collateral is not subject to any Liens, claims, mortgages, assignments or
licenses of any nature whatsoever, whether recorded or unrecorded, except
------
as permitted by the Loan Agreement.
(b) As of the date hereof, none of Grantors or their
Subsidiaries has any Trademarks registered, or subject to pending
applications, in the USPTO, or any similar office or agency in the United
States, or any other country that are material to the conduct of the
business of Grantors and their Subsidiaries, taken as a whole, other than
those described in Schedule 1.
----------
(c) No Grantor nor any Subsidiary of any Grantor shall file any
application for the registration of a trademark with the USPTO or any
similar office or agency in the United States, any State therein, or any
other country, unless such Grantor or Subsidiary has informed Secured Party
of such action in advance or informs Secured Party promptly thereafter.
Upon request of Secured Party, Grantors shall execute and deliver to
Secured Party any and all agreements, instruments, documents, and such
other papers as may be requested by Secured Party to evidence the
assignment of a security interest to Secured Party of such trademark. Each
Grantor authorizes Secured Party to modify this Assignment by amending
Schedule 1 to include any new trademark or service xxxx, and any trademark
----------
or service xxxx renewal of any Grantor applied for and obtained hereafter.
-3-
(d) No Grantor nor any Subsidiary of any Grantor has abandoned
any of the Trademarks, and no Grantor nor any Subsidiary of any Grantor
will do any act, or omit to do any act, whereby the Trademarks may become
abandoned, canceled, invalidated, unenforceable, avoided, or avoidable,
where such abandonment, cancellation, invalidation, unenforceability,
avoidance or avoidability may constitute a Material Adverse Effect. Each
Grantor shall notify Secured Party promptly if it knows, or has reason to
know, of any reason why any application, registration, or recording may
become abandoned, canceled, invalidated, or unenforceable.
(e) Grantors will render any assistance, as Secured Party may
reasonably determine is necessary, to Secured Party in any proceeding
before the USPTO, any federal or state court, or any similar office or
agency in the United States, or any State therein, or any other country, to
protect Secured Party's security interest in the Trademarks.
(f) Grantors assume all responsibility and liability arising
from the use of the Trademarks, and each Grantor hereby indemnifies and
holds the Administrative Agent and each of the Lenders harmless from and
against any claim, suit, loss, damage, or expense (including reasonable
attorneys' fees) arising out of any alleged defect in any product
manufactured, promoted, or sold by any Grantor (or any Affiliate or
Subsidiary thereof) in connection with any Trademark or out of the
manufacture, promotion, labeling, sale, or advertisement of any such
product by any Grantor or any Affiliate or Subsidiary thereof.
(g) Grantors shall promptly notify Secured Party in writing of
any adverse determination in any proceeding in the USPTO or any other
foreign or domestic Governmental Agency, court or body, regarding any
Grantor's ownership of any of the Trademarks. In the event of any material
infringement of any of the Trademarks by a third party, Grantors shall
promptly notify Secured Party of such infringement and xxx for and
diligently pursue damages for such infringement.
(h) Each Grantor shall, at its sole expense, do, make, execute
and deliver all such additional and further acts, things, assurances, and
instruments, in each case in form and substance satisfactory to Secured
Party, relating to the creation, validity, or perfection of the security
interests provided for in this Assignment under 35 U.S.C. Section 261, 15
U.S.C. Section 1051 et seq., the Uniform Commercial Code or other Law of
-- ---
the United States, the State of Nevada, or of any countries or other States
as Secured Party may from time to time reasonably request, and shall take
all such other action as the Secured Party may reasonably require to more
completely vest in and assure to Secured Party its security interest in any
of the Collateral, and each Grantor hereby irrevocably authorizes Secured
Party or its designee, at such Grantor's expense, to execute such
documents, and file such financing statements with respect
-4-
thereto with or without such Grantor's signature, as Secured Party may
reasonably deem appropriate. In the event that any recording or refiling
(or the filing of any statement of continuation or assignment of any
financing statement) or any other action, is required at any time to
protect and preserve such security interest, Grantors shall, at their sole
cost and expense, cause the same to be done or taken at such time and in
such manner as may be necessary and as may be reasonably requested by
Secured Party. Each Grantor further authorizes Secured Party to have this
or any other similar security agreement recorded or filed with the
Commissioner of Patents and Trademarks or other appropriate federal, state
or government office.
(i) Secured Party is hereby irrevocably appointed by each
Grantor as its lawful attorney and agent, with full power of substitution
to execute and deliver on behalf of and in the name of any or all Grantors,
such financing statements and other documents and agreements, and to take
such other action as Secured Party may deem necessary for the purpose of
perfecting, protecting or effecting the security interests granted herein
and effected hereby, and any mortgages or Liens necessary or desirable to
implement or effectuate the same, under any applicable Law, and Secured
Party is hereby authorized to file on behalf of and in the name of any or
all Grantors, at Grantors' sole expense, such financing statements,
documents and agreements in any appropriate governmental office.
(j) Secured Party may, in its sole discretion, pay any amount,
or do any act which Grantors fail to pay or do as required hereunder to
preserve, defend, protect, maintain, record, amend, or enforce the Secured
Obligations, the Collateral, or the security interest granted hereunder,
including, but not limited to, all filing or recording fees, court costs,
collection charges, and reasonable attorneys' fees. Grantors will be liable
to Secured Party for any such payment, which payment shall be deemed an
advance by the Lenders to Grantors, shall be payable on demand, together
with interest at the rate(s) set forth in the Loan Agreement, and shall be
part of the Secured Obligations.
4. Events of Default. Any "Event of Default" as defined in the Loan
-----------------
Agreement shall constitute an Event of Default hereunder.
5. Rights and Remedies. Upon the occurrence and during the
-------------------
continuance of any such Event of Default, in addition to all other rights and
remedies of Secured Party, whether provided under Law, the Loan Agreement or
otherwise, Secured Party may enforce its security interest hereunder which may
be exercised without notice to, or consent by, any Grantor, except as such
------
notice or consent is expressly provided for hereunder. Upon such enforcement:
-5-
(a) Secured Party may use any of the Trademarks for the sale of
goods, completion of work in process, or rendering of services in
connection with enforcing any security interest granted to Secured Party by
Grantors or any Subsidiary of any Grantor.
(b) Secured Party may grant such license or licenses relating to
the Collateral for such term or terms, on such conditions and in such
manner, as Secured Party shall, in its sole discretion, deem appropriate.
Such license or licenses may be general, special, or otherwise, and may be
granted on an exclusive or nonexclusive basis throughout all or part of the
United States of America, its territories and possessions, and all foreign
countries.
(c) Secured Party may assign, sell, or otherwise dispose of the
Collateral, or any part thereof, either with or without special conditions
or stipulations, except that Secured Party agrees to provide Grantors with
------
five (5) days' prior written notice of any proposed disposition of the
Collateral. The requirement of sending notice conclusively shall be met if
such notice is mailed, first class mail, postage prepaid, to Borrower, on
behalf of all Grantors. Each Grantor hereby irrevocably appoints Borrower
as its agent for the purpose of receiving notice of sale hereunder, and
agrees that such Grantor conclusively shall be deemed to have received
notice of sale when notice of sale has been given to Borrower. Each
Grantor expressly waives any right to receive notice of any public or
private sale of any Collateral or other security for the Secured
Obligations except as expressly provided in this Section 5(c). Secured
------ ----
Party shall have the power to buy the Collateral, or any part thereof, and
Secured Party shall also have the power to execute assurances and perform
all other acts which Secured Party may, in Secured Party's sole discretion,
deem appropriate or proper to complete such assignment, sale, or
disposition. In any such event, Grantors shall be liable for any
deficiency.
(d) In addition to the foregoing, in order to implement the
assignment, sale or other disposition of any of the Collateral pursuant to
Section 5(c) hereof, Secured Party may, at any time, execute and deliver,
----
on behalf of Grantors, and each of them, pursuant to the authority granted
in powers of attorney, one or more instruments of assignment of the
Trademarks (or any application, registration, or recording relating
thereto), in form suitable for filing, recording, or registration. Grantors
agree to pay Secured Party, on demand, all costs incurred in any such
transfer of the Collateral, including, but not limited to any taxes, fees,
and reasonable attorneys' fees.
(e) Secured Party may first apply the proceeds actually received
from any such use, license, assignment, sale, or other disposition of
Collateral first to the reasonable costs and expenses thereof, including,
without limitation, reasonable
-6-
attorneys' fees and all legal, travel, and other expenses which may be
incurred by Secured Party. Thereafter, Secured Party may apply any
remaining proceeds to such of the Secured Obligations as provided in the
Loan Agreement. Grantors shall remain liable to Secured Party for any
expenses or Secured Obligations remaining unpaid after the application of
such proceeds, and Grantors will pay Secured Party, on demand, any such
unpaid amount, together with interest at the rate(s) set forth in the Loan
Agreement.
(f) Upon request of Secured Party, Grantors shall supply to
Secured Party, or Secured Party's designee, Grantors' knowledge and
expertise relating to the manufacture and sale of the products and services
bearing the Trademarks and Grantors' customer lists and other records
relating to the Trademarks and the distribution thereof.
Nothing contained herein shall be construed as requiring Secured Party
to take any such action at any time. All of Secured Party's rights and remedies,
whether provided under Law, the Loan Agreement, this Assignment, or otherwise
shall be cumulative, and none is exclusive of any right or remedy otherwise
provided herein or in any of the other Loan Documents, at law or in equity. Such
rights and remedies may be enforced alternatively, successively, or
concurrently.
6. Waivers.
-------
(a) Each Grantor hereby waives any and all rights that it may
have to a judicial hearing, if any, in advance of the enforcement of any of
Secured Party's rights hereunder, including, without limitation, its rights
following any Event of Default and during the continuance thereof to take
immediate possession of the Collateral and exercise its rights with respect
thereto.
(b) Secured Party shall not be required to marshal any present
or future security for (including, but not limited to, this Assignment and
the Collateral subject to a security interest hereunder), or guaranties of,
the Secured Obligations or any of them, or to resort to such security or
guaranties in any particular order. Each Grantor hereby agrees that it will
not invoke any Law relating to the marshalling of collateral which might
cause delay in or impede the enforcement of Secured Party's rights under
this Assignment or any other instrument evidencing any of the Secured
Obligations or by which any of such Secured Obligations is secured or
guaranteed, and each Grantor hereby irrevocably waives the benefits of all
such Laws.
(c) Except for notices specifically provided for herein, each
Grantor hereby expressly waives demand, notice, protest, notice of
acceptance of this Assignment, notice of loans made, credit extended,
collateral received or delivered or
-7-
other action taken in reliance hereon and all other demands and notices of
any description. With respect both to Secured Obligations and any
collateral therefor, each Grantor assents to any extension or postponement
of the time of payment or any other indulgence, to any substitution, of any
Person primarily or secondarily liable, to the acceptance of partial
payment thereon and the settlement, compromising or adjusting of any
thereof, all in such manner and at such time or times as Secured Party may
deem advisable. Secured Party shall have no duty as to the protection of
the Collateral or any income thereon, nor as to the preservation of rights
against prior parties, nor as to the preservation of any rights pertaining
thereto except as otherwise required by Law. Secured Party may exercise its
rights with respect to the Collateral without resorting or regard to other
collateral or sources of reimbursement for liability. Secured Party shall
not be deemed to have waived any of its rights upon or under the Loan
Agreement or the Collateral unless such waiver be in writing and signed by
the Secured Party. The exercise of the rights under this Assignment are not
intended by the parties to constitute an "action" within the meaning of
Nevada Revised Statutes ' 40.430. No delay or omission on the part of the
Secured Party in exercising any right shall operate as a waiver of any
right on any future occasion. All rights and remedies of the Secured Party
under the Loan Agreement or on the Collateral, whether evidenced hereby or
by any other instrument or papers, shall be cumulative and may be exercised
singularly or concurrently.
7. Costs and Expenses.
------------------
(a) Grantors will pay any and all charges, costs and taxes
incurred in implementing or subsequently amending this Assignment,
including, without limitation, recording and filing fees, appraisal fees,
stamp taxes, and reasonable fees and disbursements of Secured Party's
counsel incurred by Secured Party, and the allocated cost of in-house
counsel to Secured Party, in connection with this Assignment, and in the
enforcement of this Assignment and in the enforcement or foreclosure of any
Liens, security interests or other rights of the Secured Party under this
Assignment, or under any other documentation heretofore, now, or hereafter
given to Secured Party in furtherance of the transactions contemplated
hereby.
(b) Grantors agree to reimburse Secured Party for and indemnify
it against, any and all losses, expenses and liabilities (including
liabilities for penalties) of whatever kind or nature sustained and
reasonably incurred in connection with any claim, demand, suit or legal or
arbitration proceeding relating to this Assignment, or the exercise of any
rights or powers hereunder, including reasonable attorneys' fees and
disbursements, and the allocated cost of in-house counsel to the Secured
Party, except losses, expenses and liabilities arising out of Secured
------
Party's own gross negligence or willful misconduct.
-8-
8. Continuing Effect. This Assignment shall remain in full force and
-----------------
effect and continue to be effective should any petition be filed by or against
any Grantor for liquidation or reorganization, should any Grantor become
insolvent or make an assignment for the benefit of creditors or should a
receiver or trustee be appointed for all or any significant part of any
Grantor's assets.
9. Joinder. Any other Person may become a Grantor hereunder and
-------
become bound by the terms and conditions of this Assignment by executing and
delivering to Administrative Agent an Instrument of Joinder substantially in the
form attached hereto as Exhibit A, accompanied by such documentation as
---------
Administrative Agent may require to establish the due organization, valid
existence and good standing of such Person, its qualification to engage in
business in each material jurisdiction in which it is required to be so
qualified, its authority to execute, deliver and perform this Assignment, and
the identity, authority and capacity of each Responsible Official thereof
authorized to act on its behalf.
10. Release of Grantors. This Assignment and all Secured Obligations
-------------------
of Grantors hereunder shall be released when all Secured Obligations have been
paid in full in cash or otherwise performed in full and when no portion of the
Commitment remains outstanding. Upon such release of Grantors' Secured
Obligations hereunder, Secured Party shall return any Collateral to Grantors, or
to the Person or Persons legally entitled thereto, and shall endorse, execute,
deliver, record and file all instruments and documents, and do all other acts
and things, reasonably required for the return of the Collateral to Grantors, or
to the Person or Persons legally entitled thereto, and to evidence or document
the release of Secured Party's interests arising under this Assignment, all as
reasonably requested by, and at the sole expense of, Grantors.
11. Additional Powers and Authorization. Secured Party shall be
-----------------------------------
entitled to the benefits accruing to it as Administrative Agent under the Loan
Agreement and the other Loan Documents. Notwithstanding anything contained
herein to the contrary, Secured Party may employ agents, trustees, or attorneys-
in-fact and may vest any of them with any Property (including, without
limitation, any Collateral assigned hereunder), title, right or power deemed
necessary for the purposes of such appointment.
12. WAIVER OF JURY TRIAL. EACH GRANTOR AND SECURED PARTY EXPRESSLY
--------------------
WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS ASSIGNMENT, THE
LOAN AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY
ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER NOW EXISTING OR
HEREAFTER ARISING AND WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR
-9-
OTHERWISE. EACH GRANTOR AND SECURED PARTY AGREE THAT ANY SUCH CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY.
WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE
RIGHTS TO A TRIAL BY JURY ARE WAIVED BY OPERATION OF THIS SECTION AS TO ANY
ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO
CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS ASSIGNMENT, THE LOAN AGREEMENT
OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS ASSIGNMENT, THE LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS. ANY PARTY
HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT
AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.
13. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
-------------
ACCORDANCE WITH AND GOVERNED BY THE FEDERAL LAWS OF THE UNITED STATES OF AMERICA
AND THE LOCAL LAWS OF THE STATE OF NEVADA.
14. Miscellaneous.
-------------
(a) Grantors and Secured Party may from time to time agree in
writing to the release of certain of the Collateral from the security
interest created hereby.
(b) Any notice, request, demand or other communication required
or permitted under this Assignment shall be in writing and shall be deemed
to be properly given if done in accordance with Section 11.6 of the Loan
----
Agreement.
(c) Except as otherwise set forth in the Loan Agreement, the
provisions of this Assignment may not be modified, amended, restated or
supplemented, whether or not the modification, amendment, restatement or
supplement is supported by new consideration, except by a written
------
instrument duly executed and delivered by Secured Party and Grantors.
(d) Except as otherwise set forth in the Loan Agreement or this
Assignment, any waiver of the terms and conditions of this Assignment, or
any Event of Default and its consequences hereunder or thereunder, and any
consent or approval required or permitted by this Assignment to be given,
may be made or given with, but
-10-
only with, the written consent of Secured Party on such terms and
conditions as specified in the written instrument granting such waiver,
consent or approval.
(e) Any failure or delay by Secured Party to require strict
performance by Grantors of any of the provisions, warranties, terms, and
conditions contained herein, or in any other agreement, document, or
instrument, shall not affect Secured Party's right to demand strict
compliance and performance therewith, and any waiver of any default shall
not waive or affect any other default, whether prior or subsequent thereto,
and whether of the same or of a different type. None of the warranties,
conditions, provisions, and terms contained herein, or in any other
agreement, document, or instrument, shall be deemed to have been waived by
any act or knowledge of Secured Party, its agents, officers, or employees,
but only by an instrument in writing, signed by an officer of Secured Party
and directed to Grantors, specifying such waiver.
(f) If any term or provision of this Assignment conflicts with
any term or provision of the Loan Agreement, the term or provision of the
Loan Agreement shall control.
(g) If any provision hereof shall be deemed to be invalid by any
court, such invalidity shall not affect the remainder of this Assignment.
(h) This Assignment supersedes all prior oral and written
assignments and agreements between the parties hereto on the subject matter
hereof.
(i) This Assignment shall be binding upon, and for the benefit
of, the parties hereto and their respective legal representatives,
successors, and assigns.
(j) This Assignment may be executed in one or more counterparts,
each of which shall be deemed an original and all of which, taken together,
shall constitute one and the same agreement.
-11-
IN WITNESS WHEREOF, each Grantor has executed this Assignment by
its duly authorized officer as of the date first written above.
"Grantor"
______________________________,
a ____________________
By: __________________________
_______________________________
[Printed name and title]
ACCEPTED AND AGREED
AS OF THE DATE FIRST
ABOVE WRITTEN:
"Secured Party"
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION,
as Administrative Agent, and for
and on behalf of the Lenders
By:______________________________
Xxxxxx Xxxxxxx, Vice President
-12-
SCHEDULE 1
----------
Existing and Pending Trademarks
-------------------------------
Registration Registration
Xxxx Class Number Date
---- ----- ------------ ---------
See attachment for Trademarks and trade names for which protection is presently
being applied for with the United States Patent and Trademark Office.
Schedule 1
Page 1 of 1
EXHIBIT A
TO
TRADEMARK SECURITY INTEREST ASSIGNMENT
INSTRUMENT OF JOINDER
---------------------
THIS INSTRUMENT OF JOINDER ("Joinder") is executed as of
_________________, _____, by ______________________________, a
___________________________ ("Joining Party"), and delivered to Bank of America
National Trust and Savings Association, as Administrative Agent, pursuant to the
Trademark Security Interest Assignment dated as of ______________, _____ made by
[the Grantors party thereto] in favor of the Administrative Agent and the
Lenders (the "Assignment"). Terms used but not defined in this Joinder shall
have the meanings defined for those terms in the Assignment.
RECITALS
--------
(A) The Assignment was made by the Grantors in favor of the
Administrative Agent for the benefit of the Lenders that are parties to that
certain Loan Agreement dated as of March 31, 1999 by and among MGM Grand Detroit
II, LLC, a Delaware limited liability company ("Borrower"), the Lenders which
are parties thereto and Bank of America National Trust and Savings Association,
as the Administrative Agent for the Lenders.
(B) Joining Party has become a Subsidiary of Borrower, and as such is
required pursuant to Section 5.14 of the Loan Agreement to become a Grantor.
------------
(C) Joining Party expects to realize direct and indirect benefits as
a result of the availability to Borrower of the credit facilities under the Loan
Agreement.
NOW THEREFORE, Joining Party agrees as follows:
AGREEMENT
---------
(1) By this Joinder, Joining Party becomes a "Grantor" under and
pursuant to Section 9 of the Assignment. Joining Party agrees that, upon its
---------
execution hereof, it will become a Grantor under the Assignment with respect to
the Secured Obligations, and will be bound by all terms, conditions, and duties
applicable to a Grantor under the Assignment.
(2) The effective date of this Joinder is _________, ______.
"Joining Party"
Exhibit A
Page 1 0f 2
___________________________________,
a _________________________________
By:________________________________
Title:_____________________________
ACKNOWLEDGED:
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION,
as Administrative Agent
By:___________________________
Title:________________________
Exhibit A
Page 2 of 2
GUARANTY
--------
This GUARANTY ("Guaranty"), dated as of March 31, 1999, is made by MGM
Grand, Inc., a Delaware corporation ("Guarantor") in favor of Bank of America
National Trust and Savings Association, as Administrative Agent for the benefit
of the Lenders that are party to the Loan Agreement referred to below
(collectively with the Lenders, "Beneficiary"), with reference to the following
facts:
RECITALS
--------
A. Pursuant to the Loan Agreement (as such agreement may from time to
time be amended, extended, renewed, supplemented or otherwise modified, the
"Loan Agreement") of even date herewith, among MGM Grand Detroit II, LLC, a
Delaware limited liability company ("Borrower"), the Lenders which are party
thereto, and Bank of America National Trust and Savings Association, as
Administrative Agent, Lenders have agreed to provide a revolving credit facility
to Borrower subject to the terms and conditions set forth therein.
B. The Loan Agreement provides, as a condition to the availability of
such credit facilities , that Guarantor enter into a continuing guaranty of the
Obligations of Borrower, and that Guarantor guarantee the completion of the
Temporary Facility as set forth herein.
C. Guarantor, as the indirect owner of a majority in interest of
Borrower, shall realize direct and indirect benefits as the result of the
availability of the aforementioned credit facilities to Borrower.
AGREEMENT
---------
NOW, THEREFORE, in order to induce Beneficiary to extend the
aforementioned credit facilities, and for other good and valuable consideration,
the receipt and adequacy of which hereby are acknowledged, Guarantor hereby
represents, warrants, covenants, agrees and guaranties as follows:
1. Definitions. This Guaranty is the Guaranty referred to in the
-----------
Loan Agreement and is one of the Loan Documents. Terms defined in the Loan
Agreement and not otherwise defined in this Guaranty shall have the meanings
given those terms in the Loan Agreement when used herein and such definitions
are incorporated herein as though set forth
-1-
in full. In addition, as used herein, the following terms shall have the
meanings respectively set forth after each:
"Beneficiary" means the Administrative Agent (acting as the
-----------
Administrative Agent and/or on behalf of the Lenders), and
the Lenders, and each of them, and any one or more of them.
Subject to the terms of the Loan Agreement, any right,
remedy, privilege or power of Beneficiary may be exercised
by the Administrative Agent, or by the Requisite Lenders, or
by any Lender acting with the consent of the Requisite
Lenders.
"Contribution" means a contribution by Guarantor to Borrower
------------
in cash for common equity of Borrower.
"Guarantied Obligations" means all Obligations of Borrower
----------------------
at any time and from time to time owed to Beneficiary under
the Loan Agreement or any of the other Loan Documents,
whether due or to become due, matured or unmatured,
liquidated or unliquidated, or contingent or noncontingent,
including obligations of performance as well as obligations
of payment, and including interest that accrues after the
commencement of any bankruptcy or insolvency proceeding by
or against Guarantor, Borrower or any other Person.
"Guarantor" means MGM Grand, Inc., a Delaware corporation.
---------
"Guaranty" means this Guaranty, and any extensions,
--------
modifications, renewals, restatements, reaffirmations,
supplements or amendments hereof.
2. Guaranty.
--------
(a) Guarantee of Payment and Performance. Guarantor hereby
------------------------------------
irrevocably, unconditionally guaranties and promises to pay and perform on
demand the Guarantied Obligations and each and every one of them, including
---------
all amendments, modifications, supplements, renewals or extensions of any
of them, whether such amendments, modifications, supplements, renewals or
extensions are evidenced by new or additional instruments, documents or
agreements or change the rate of interest on any Guarantied Obligation or
the security therefor, or otherwise.
(b) Equity Contributions - Commitment Reductions. Without
--------------------------------------------
limitation as to the foregoing provisions of this Section, in the event
that Borrower fails for any reason to repay the Loans on any Reduction Date
in the manner required by Section 3.1(d)(i) of the Loan Agreement,
Guarantor shall immediately pay to the
-2-
Administrative Agent, for the account of the Lenders, the amount of the
required repayment. Guarantor agrees (and by executing this Guaranty in the
space below, Borrower hereby consents) that each such payment to the
Administrative Agent by Guarantor shall be deemed a Contribution.
(c) Completion Guarantee. Without limitation as to the foregoing
--------------------
provisions of this Section 2, Guarantor agrees that it shall cause Borrower
to Complete the Temporary Facility not later than March 31, 2000. As used
in this clause (c), "Complete" means (i) the Temporary Facility has been
--------
constructed in material conformity with the Plans and Budget (including any
material amenities described in the Plans and Budget) and is open and ready
to accommodate and gaming patrons, (ii) all necessary governmental
approvals and certifications have been issued or obtained which are
required for the operation of the Temporary Facility, and (iii) that the
Temporary Facility is free and clear of all Liens (other than Permitted
Encumbrances and those described in Schedule B to the Title Policy issued
to the Administrative Agent on the Closing Date (the "Policy") and other
Liens and encumbrances permitted under the Loan Agreement or which are
approved in writing by the Requisite Lenders in their sole discretion).
(d) Endorsements to Title Policy. Within 90 days following the date
----------------------------
upon which the Temporary Facility is Complete, Guarantor shall provide the
Administrative Agent with an endorsement reasonably acceptable to the
Administrative Agent to its ALTA policy of title insurance assuring the
absence of all materialmens', contractors, and all other Liens other than
those set forth on Schedule B to the Policy as of the date hereof and other
Liens permitted under clause (c) of this Section.
(e) Indemnification. Guarantor shall indemnify the Beneficiary
---------------
from any loss, cost, damage or expense (including reasonable attorneys
fees) which may be caused by its failure to perform its obligations under
this Section 2 or the other provisions of this Guaranty.
3. Nature of Guaranty. This Guaranty is irrevocable and continuing
------------------
in nature and relates to any Guarantied Obligations now existing or hereafter
arising. This Guaranty is a guaranty of prompt and punctual payment and
performance and is not merely a guaranty of collection.
4. Relationship to Other Agreements. Nothing herein shall in any
--------------------------------
way modify or limit the effect of terms or conditions set forth in any other
document, instrument or agreement executed by Guarantor or in connection with
the Guarantied Obligations, but each and every term and condition hereof shall
be in addition thereto. All provisions contained in the Loan Agreement or any
other Loan Document that apply to Loan Documents generally are fully applicable
to this Guaranty and are incorporated herein by this reference.
-3-
5. Subordination of Indebtedness of Borrower to Guarantor to the
-------------------------------------------------------------
Guarantied Obligations. Guarantor agrees that:
----------------------
(a) Subject to the next sentence, all obligations and
indebtedness of Borrower now or hereafter owed to Guarantor (including,
without limitation, the Management Fees and the Guarantee Fees) are hereby
subordinated to the Guarantied Obligations.
(b) If Beneficiary so requests, upon the occurrence and during
the continuance of any Event of Default, all such obligations and
indebtedness of Borrower owed to Guarantor shall be collected, enforced and
received by Guarantor as trustee for Beneficiary and shall be paid over to
Beneficiary in kind on account of the Guarantied Obligations, but without
reducing or affecting in any manner the obligations of Guarantor under the
other provisions of this Guaranty.
(c) Should Guarantor fail to collect or enforce any such
indebtedness of Borrower now or hereafter owed to Guarantor and pay the
proceeds thereof to Beneficiary in accordance with Section 5(b) hereof,
Beneficiary as Guarantor's attorney-in-fact may do such acts and sign such
documents in Guarantor's name as Beneficiary considers necessary or
desirable to effect such collection, enforcement and/or payment.
(d) Notwithstanding this Section 5, when no Default or Event of
Default has occurred and remains continuing, Borrower may make and
Guarantor may take and receive (i) currently due payments of Management
Fees and Guarantee Fees and (ii) Tax Distributions permitted by Section 6.5
of the Loan Agreement. Upon the occurrence of any Default or Event of
Default, no such payments shall be made by Borrower or received by
Guarantor, but such amounts shall continue to accrue at the same rates. In
the event of any dissolution, liquidation or insolvency of Borrower or its
Subsidiaries, all amounts payable to the Creditors under the Loan Agreement
and the other Loan Documents shall be paid in full and in cash before any
payment is made on account of any obligations or indebtedness of Borrower
to Guarantor.
6. Statutes of Limitations and Other Laws. Until the Guarantied
--------------------------------------
Obligations shall have been paid and performed in full, all the rights,
privileges, powers and remedies granted to Beneficiary hereunder shall continue
to exist and may be exercised by Beneficiary at any time and from time to time
irrespective of the fact that any of the Guarantied Obligations may have become
barred by any statute of limitations. Guarantor expressly waives the benefit of
any and all statutes of limitation, and any and all Laws providing for exemption
of property from execution or for evaluation and appraisal upon foreclosure, to
the maximum extent permitted by applicable Laws.
-4-
7. Waivers and Consents. Guarantor acknowledges that the obligations
--------------------
undertaken herein involve the guaranty of obligations of Persons other than
Guarantor and, in full recognition of that fact, consents and agrees that
Beneficiary may, at any time and from time to time, without notice or demand,
and without affecting the enforceability or continuing effectiveness hereof:
(a) supplement, modify, amend, extend, renew, accelerate or otherwise change the
time for payment or the terms of the Guarantied Obligations or any part thereof,
including any increase or decrease of the rate(s) of interest thereon; (b)
---------
supplement, modify, amend or waive, or enter into or give any agreement,
approval or consent with respect to, the Guarantied Obligations or any part
thereof, or any of the Loan Documents to which Guarantor is not a party or any
additional security or guaranties, or any condition, covenant, default, remedy,
right, representation or term thereof or thereunder; (c) accept new or
additional instruments, documents or agreements in exchange for or relative to
any of the Loan Documents or the Guarantied Obligations or any part thereof; (d)
accept partial payments on the Guarantied Obligations; (e) receive and hold
additional security or guaranties for the Guarantied Obligations or any part
thereof; (f) release, reconvey, terminate, waive, abandon, fail to perfect,
subordinate, exchange, substitute, transfer and/or enforce any security or
guaranties, and apply any security and direct the order or manner of sale
thereof as Beneficiary in its sole and absolute discretion may determine; (g)
release any Person from any personal liability with respect to the Guarantied
Obligations or any part thereof; (h) settle, release on terms satisfactory to
Beneficiary or by operation of applicable Laws or otherwise liquidate or enforce
any Guarantied Obligations and any security or guaranty therefor in any manner,
consent to the transfer of any security and bid and purchase at any sale; and/or
(i) consent to the merger, change or any other restructuring or termination of
the corporate existence of Borrower, Guarantor or any other Person, and
correspondingly restructure the Guarantied Obligations, and any such merger,
change, restructuring or termination shall not affect the liability of Guarantor
or the continuing effectiveness hereof, or the enforceability hereof with
respect to all or any part of the Guarantied Obligations.
Upon the occurrence and during the continuance of any Event of
Default, Beneficiary may enforce this Guaranty independently as to Guarantor and
independently of any other remedy or security Beneficiary at any time may have
or hold in connection with the Guarantied Obligations. Guarantor expressly
waives any right to require Beneficiary to marshal assets in favor of Guarantor,
and agrees that Beneficiary may proceed against Borrower, or upon or against any
security or remedy, before proceeding to enforce this Guaranty, in such order as
it shall determine in its sole and absolute discretion. Beneficiary may file a
separate action or actions against Borrower and/or Guarantor without respect to
whether action is brought or prosecuted with respect to any security or against
any other Person, or whether any other Person is joined in any such action or
actions. Guarantor agrees that Beneficiary, Borrower and any Affiliates of
Borrower may deal with each other in connection with the Guarantied Obligations
or otherwise, or alter any contracts or agreements now or hereafter existing
between any of them, in any manner whatsoever, all without in any way altering
or affecting the security of this Guaranty. Beneficiary's rights hereunder
shall be reinstated and revived, and the enforceability of this Guaranty shall
continue, with respect to
-5-
any amount at any time paid on account of the Guarantied Obligations which
thereafter shall be required to be restored or returned by Beneficiary upon the
bankruptcy, insolvency or reorganization of Borrower or any other Person, or
otherwise, all as though such amount had not been paid. The rights of
Beneficiary created or granted herein and the enforceability of this Guaranty
with respect to Guarantor at all times shall remain effective to guaranty the
full amount of all the Guarantied Obligations even though the Guarantied
Obligations, or any part thereof, or any security or guaranty therefor, may be
or hereafter may become invalid or otherwise unenforceable as against Borrower
or any other guarantor or surety and whether or not Borrower shall have any
personal liability with respect thereto. Guarantor expressly waives any and all
defenses now or hereafter arising or asserted by reason of (a) any disability or
other defense of Borrower with respect to the Guarantied Obligations, (b) the
unenforceability or invalidity of any security or guaranty for the Guarantied
Obligations or the lack of perfection or continuing perfection or failure of
priority of any security for the Guarantied Obligations, (c) the cessation for
any cause whatsoever of the liability of Borrower (other than by reason of the
full payment and performance of all Guarantied Obligations), (d) any failure of
Beneficiary to marshal assets in favor of Borrower or any other Person, (e)
except as otherwise provided in this Guaranty, any failure of Beneficiary to
give notice of sale or other disposition of Collateral to Guarantor or any other
Person or any defect in any notice that may be given in connection with any sale
or disposition of Collateral, (f) any failure of Beneficiary to comply with
applicable Laws in connection with the sale or other disposition of any
Collateral or other security for any Guarantied Obligation, including without
limitation, any failure of Beneficiary to conduct a commercially reasonable sale
or other disposition of any Collateral or other security for any Guarantied
Obligation, (g) any act or omission of Beneficiary or others that directly or
indirectly results in or aids the discharge or release of Borrower or the
Guarantied Obligations or any security or guaranty therefor by operation of law
or otherwise, (h) any Law which provides that the obligation of a surety or
guarantor must neither be larger in amount nor in other respects more burdensome
than that of the principal or which reduces a surety's or guarantor's obligation
in proportion to the principal obligation, (i) any failure of Beneficiary to
file or enforce a claim in any bankruptcy or other proceeding with respect to
any Person, (j) the election by Beneficiary, in any bankruptcy proceeding of any
Person, of the application or non-application of Section 1111(b)(2) of the
United States Bankruptcy Code, (k) any extension of credit or the grant of any
Lien under Section 364 of the United States Bankruptcy Code, (l) any use of cash
collateral under Section 363 of the United States Bankruptcy Code, (m) any
agreement or stipulation with respect to the provision of adequate protection in
any bankruptcy proceeding of any Person, (n) the avoidance of any Lien in favor
of Beneficiary for any reason, (o) any bankruptcy, insolvency, reorganization,
arrangement, readjustment of debt, liquidation or dissolution proceeding
commenced by or against any Person, including any discharge of, or bar or stay
---------
against collecting, all or any of the Guarantied Obligations (or any interest
thereon) in or as a result of any such proceeding, (p) to the extent permitted
in paragraph 40.495(4) of the Nevada Revised Statutes ("NRS"), the benefits of
the one-action rule under NRS Section 40.430, or (q) any action taken by
Beneficiary that is authorized by this Section or any other provision of any
Loan Document. Guarantor expressly waives all setoffs and
-6-
counterclaims and all presentments, demands for payment or performance, notices
of nonpayment or nonperformance, protests, notices of protest, notices of
dishonor and all other notices or demands of any kind or nature whatsoever with
respect to the Guarantied Obligations, and all notices of acceptance of this
Guaranty or of the existence, creation or incurrence of new or additional
Guarantied Obligations.
8. Condition of Borrower and Borrower=s Subsidiaries. Guarantor
-------------------------------------------------
represents and warrants to Beneficiary that Guarantor has established adequate
means of obtaining from Borrower and Borrower=s Subsidiaries, on a continuing
basis, financial and other information pertaining to the businesses, operations
and condition (financial and otherwise) of Borrower and Borrower=s Subsidiaries
and their Properties, and Guarantor now is and hereafter will be completely
familiar with the businesses, operations and condition (financial and otherwise)
of Borrower and Borrower=s Subsidiaries and their Properties. Guarantor hereby
expressly waives and relinquishes any duty on the part of Beneficiary (should
any such duty exist) to disclose to Guarantor any matter, fact or thing related
to the businesses, operations or condition (financial or otherwise) of Borrower
or Borrower=s Subsidiaries or their Properties, whether now known or hereafter
known by Beneficiary during the life of this Guaranty. With respect to any of
the Guarantied Obligations, Beneficiary need not inquire into the powers of
Borrower or any Subsidiaries thereof or the officers or employees acting or
purporting to act on their behalf, and all Guarantied Obligations made or
created in good faith reliance upon the professed exercise of such powers shall
be secured hereby.
9. Liens on Real Property. In the event that all or any part of the
----------------------
Guarantied Obligations at any time are secured by any one or more deeds of trust
or mortgages or other instruments creating or granting Liens on any interests in
real Property, Guarantor authorizes Beneficiary, upon the occurrence of and
during the continuance of any Event of Default, at its sole option, without
notice or demand and without affecting any Guarantied Obligations of Guarantor,
the enforceability of this Guaranty, or the validity or enforceability of any
Liens of Beneficiary on any Collateral, to foreclose any or all of such deeds of
trust or mortgages or other instruments by judicial or nonjudicial sale.
Guarantor expressly waives all rights and defenses to the enforcement of this
Guaranty or any rights of Beneficiary created or granted hereby or to the
recovery by Beneficiary against Borrower, Guarantor or any other Person liable
therefor of any deficiency after a judicial or nonjudicial foreclosure or sale
because all or any part of the Guarantied Obligations is secured by real
Property. This means, among other things: (1) Beneficiary may collect from
Guarantor or any other guarantor of the Guarantied Obligations without first
foreclosing on any real or personal Property collateral pledged by Borrower, and
(2) if the Beneficiary forecloses on any real Property collateral pledged by
Borrower: (A) the amount of the Guarantied Obligations may be reduced only by
the price for which that collateral is sold at the foreclosure sale, even if the
collateral is worth more than the sale price, and (B) the Beneficiary may
collect from Guarantor or any other guarantor of the Guarantied Obligations even
if the Beneficiary, by foreclosing on the real Property collateral, has
destroyed any right Guarantor or any such
-7-
other guarantor may have to collect from Borrower. This is an unconditional and
irrevocable waiver of any rights and defenses Guarantor may have because all or
any part of the Guarantied Obligations is secured by real Property. Guarantor
expressly waives any defenses or benefits that may be derived from California
Code of Civil Procedure '' 580a, 580b, 580d or 726, or comparable provisions of
the Laws of any other jurisdiction, including, without limitation, NRS Section
40.430 and judicial decisions relating thereto, and NRS Sections 40.451, 40.455,
40.457 and 40.459, and all other suretyship defenses it otherwise might or would
have under Nevada Law or other applicable Law. Guarantor expressly waives any
right to receive notice of any judicial or nonjudicial foreclosure or sale of
any real Property or interest therein subject to any such deeds of trust or
mortgages or other instruments and Guarantor=s or any other Person=s failure to
receive any such notice shall not impair or affect Guarantor=s Obligations or
the enforceability of this Guaranty or any rights of Beneficiary created or
granted herein.
10. Waiver of Rights of Subrogation. Notwithstanding anything to the
-------------------------------
contrary elsewhere contained herein or in any other Loan Document to which
Guarantor is a Party, Guarantor hereby expressly waives with respect to Borrower
and its successors and assigns (including any surety) and any other Person which
---------
is directly or indirectly a creditor of Borrower or any surety for Borrower, any
and all rights at Law or in equity to subrogation, to reimbursement, to
exoneration, to contribution, to setoff or to any other rights that could accrue
to a surety against a principal, to a guarantor against a maker or obligor, to
an accommodation party against the party accommodated, or to a holder or
transferee against a maker, and which Guarantor may have or hereafter acquire
against Borrower or any other such Person in connection with or as a result of
Guarantor's execution, delivery and/or performance of this Guaranty or any other
Loan Document to which Guarantor is a party. Guarantor agrees that it shall not
have or assert any such rights against Borrower or its successors and assigns or
any other Person (including any surety) which is directly or indirectly a
---------
creditor of Borrower or any surety for Borrower, either directly or as an
attempted setoff to any action commenced against Guarantor by Borrower (as
borrower or in any other capacity), Beneficiary or any other such Person.
Guarantor hereby acknowledges and agrees that this waiver is intended to benefit
Borrower and Beneficiary and shall not limit or otherwise affect Guarantor's
liability hereunder, under any other Loan Document to which Guarantor is a
party, or the enforceability hereof or thereof.
11. Understandings With Respect to Waivers and Consents. Guarantor
---------------------------------------------------
warrants and agrees that each of the waivers and consents set forth herein are
made with full knowledge of their significance and consequences, with the
understanding that events giving rise to any defense or right waived may
diminish, destroy or otherwise adversely affect rights which Guarantor otherwise
may have against Borrower, Beneficiary or others, or against any Collateral, and
that, under the circumstances, the waivers and consents herein given are
reasonable and not contrary to public policy or Law. Guarantor acknowledges
that it has either consulted with legal counsel regarding the effect of this
Guaranty and the waivers and consents set forth herein, or has made an informed
decision not to do so. If this Guaranty or
-8-
any of the waivers or consents herein are determined to be unenforceable under
or in violation of applicable Law, this Guaranty and such waivers and consents
shall be effective to the maximum extent permitted by Law.
12. Representations and Warranties. Guarantor hereby makes each and
------------------------------
every representation and warranty applicable to Guarantor set forth in Article 4
---------
of the Loan Agreement as if set forth in full herein.
13. Costs and Expenses. Guarantor agrees to pay to Beneficiary all
------------------
costs and expenses (including, without limitation, reasonable attorneys' fees
---------
and disbursements) incurred by Beneficiary in the enforcement or attempted
enforcement of this Guaranty, whether or not an action is filed in connection
therewith, and in connection with any waiver or amendment of any term or
provision hereof. All advances, charges, costs and expenses, including
---------
reasonable attorneys' fees and disbursements (including the reasonably allocated
cost of legal counsel employed by Beneficiary), incurred or paid by Beneficiary
in exercising any right, privilege, power or remedy conferred by this Guaranty,
or in the enforcement or attempted enforcement thereof, shall be subject hereto
and shall become a part of the Guarantied Obligations and shall be paid to
Beneficiary by Guarantor, immediately upon demand, together with interest
thereon at the rate(s) provided for under the Loan Agreement.
14. Construction of this Guaranty. This Guaranty is intended to give
-----------------------------
rise to absolute and unconditional obligations on the part of Guarantor; hence,
--------------------------
in any construction hereof, notwithstanding any provision of any Loan Document
--------------------------------------------------
to the contrary, this Guaranty shall be construed strictly in favor of
---------------
Beneficiary in order to accomplish its stated purpose.
15. Liability. Notwithstanding anything to the contrary elsewhere
---------
contained herein or in any Loan Document to which Guarantor is a Party, the
aggregate liability of Guarantor hereunder for payment and performance of the
Guarantied Obligations shall not exceed an amount which, in the aggregate, is
$1.00 less than that amount which if so paid or performed would constitute or
result in a "fraudulent transfer", "fraudulent conveyance", or terms of similar
import, under applicable state or federal Law, including without limitation,
Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code. The liability of Guarantor
hereunder is independent of any other guaranties at any time in effect with
respect to all or any part of the Guarantied Obligations, and Guarantor's
liability hereunder may be enforced regardless of the existence of any such
guaranties. Any termination by or release of any guarantor in whole or in part
shall not affect the continuing liability of Guarantor hereunder, and no notice
of any such termination or release shall be required. The execution hereof by
Guarantor is not founded upon an expectation or understanding that there will be
any other guarantor of the Guarantied Obligations.
16. No Liability of Tracinda. In the event that (i) there is a
------------------------
default or alleged default by the Guarantor or any of its Subsidiaries under
this Guaranty or any other Loan Document, or (ii) any Beneficiary or any Lender
has or may have any claim arising from
-9-
or relating to the terms of any this Guaranty or any of the other Loan
Documents, neither Beneficiary nor any Lender shall commence any lawsuit or
otherwise seek to impose any liability upon Tracinda Corporation or the
shareholders thereof (collectively, "Tracinda"). Tracinda shall have no
liability whatsoever with respect to this Guaranty or the other Loan Documents
or matters arising therefrom. Neither Beneficiary nor any Lender shall have any
right to assert or permit any party claiming through it to assert a claim or
impose any liability against Tracinda as to any matter or thing arising out of
or relating to the Loan Documents or any alleged breach or default under the
Loan Documents, In addition, Tracinda is not a party to this Guaranty nor any
Loan Document and is not liable for any alleged breach or default thereof by any
party thereto.
17. WAIVER OF JURY TRIAL. GUARANTOR AND BENEFICIARY EXPRESSLY WAIVE
--------------------
THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS GUARANTY, THE LOAN
AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY
OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER NOW EXISTING OR
HEREAFTER ARISING AND WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR
OTHERWISE. GUARANTOR AND BENEFICIARY AGREE THAT ANY SUCH CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO
A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE
THE VALIDITY OR ENFORCEABILITY OF THIS GUARANTY, THE LOAN AGREEMENT OR THE OTHER
LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO
ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
GUARANTY, THE LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS. ANY PARTY HERETO MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT
TO TRIAL BY JURY.
18. THIS GUARANTY SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LOCAL LAWS
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OF THE STATE OF NEVADA WITHOUT REFERENCE TO THE CONFLICT OF LOCAL LAWS OR CHOICE
OF LAW PRINCIPLES THEREOF.
IN WITNESS WHEREOF, Guarantor has executed this Guaranty by its duly
authorized officer as of the date first written above.
"Guarantor"
MGM GRAND, INC.,
a Delaware corporation
By:__________________________
Xxxxx Xxxxxxxx, Secretary
Address:
0000 Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxxx, XX 00000-0000
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
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_________________________________________________________________
(Space above for Recorder's Use)
MORTGAGE
THIS DOCUMENT CONSTITUTES A CONSTRUCTION MORTGAGE FOR PURPOSES OF ARTICLE 9 OF
THE MICHIGAN UNIFORM COMMERCIAL CODE. THIS IS A FUTURE ADVANCE MORTGAGE.
This Mortgage ("Mortgage"), dated as of March 31, 1999, is made by MGM
GRAND DETROIT II, LLC, a Delaware limited liability company, as mortgagor
("Mortgagor"), in favor of BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, a national banking association, as "Administrative Agent" for the
"Lenders" and the "Issuing Lender" (as each of those three terms is defined in
the Loan Agreement, as defined below), as mortgagee and secured party
("Mortgagee").
RECITALS
A. Mortgagor is or will be justly indebted to Lenders in the aggregate
principal amount of up to the Commitment (which is initially $230,000,000 and
which may be increased pursuant to Section 2.7 of the Loan Agreement (as defined
below) to $250,000,000), or so much thereof as is advanced under a Loan
Agreement dated of even date herewith executed by the Mortgagee, the Mortgagor,
certain Lenders referred to therein (such Loan
-1-
Agreement, together with all amendments thereto and extensions, substitutions,
renewals and replacements thereof, is referred to in this Mortgage as the "Loan
Agreement"), together with interest thereon in accordance with the Loan
Agreement. Any capitalized terms used herein and not defined in this Mortgage
shall have the respective meanings set forth in the Loan Agreement.
B. The Loan Agreement obligates the Lenders to make Advances to Mortgagor
in amounts not in excess of the principal sum referred to in the foregoing
paragraph and permits Mortgagor to borrow, repay, and reborrow up to such
principal sum, subject to the terms and conditions of such Loan Agreement. All
Advances under the Loan Agreement are evidenced by, among other things, Notes
from Mortgagor to each Lender. Prior to the maturity, whether by acceleration
or otherwise, Mortgagor shall make payments of interest on the outstanding
unpaid principal amount of Advances as provided in the Loan Agreement. All
amounts outstanding under the Loan Agreement are payable not later than June 30,
2004.
C. Mortgagor has requested Mortgagee to accept this Mortgage to secure
Mortgagor's obligations under the Loan Documents.
The Mortgagor therefore agrees as follows, which agreements shall, to the
extent permitted by law, be deemed to run with the land:
1. Grant and Secured Obligations.
-----------------------------
1.1 Grant. For the purpose of securing payment and performance
-----
of the Secured Obligations defined and described in Section 1.2, Mortgagor
hereby irrevocably and unconditionally mortgages, warrants, grants, bargains,
conveys, sells, transfers and assigns to Mortgagee, with power of sale and right
of entry and possession, all estate, right, title and interest which Mortgagor
now has or may later acquire in and to the following property (all or any part
of such property, or any interest in all or any part of it, as the context may
require, the "Property"):
(a) The real property located in the County of Xxxxx (the
"County"), State of Michigan, described as Parcel 2 on Exhibit A attached
hereto, together with all existing and
-2-
future easements and rights affording access to it (the "Fee Land");
together with
(b) The real property located in the County, State of
Michigan, described as Parcel 1 on Exhibit A attached hereto, together with
all existing and future easements and rights affording access to it (the
"Leasehold Land," the Fee Land and the Leasehold Land are hereinafter
collectively referred to as the "Land");
(c) All of Mortgagor's right, title and interest in, to and
under that certain Land and Building Lease (the "Existing Ground Lease")
dated as of May 1, 1998, by and between Lodge/Xxxxxx Associates L.L.C., a
Michigan limited liability company ("Landlord"), and MGM Grand Detroit,
LLC, a Delaware limited liability company ("Original Tenant"), as tenant, a
memorandum of which (entitled " Memorandum of Lease") was recorded on July
24, 1998, at Liber 29912 Page 937 of the Official Real Estate Records of
Xxxxx County, Michigan ("Official Records"), including without limitation,
(i) the leasehold estate in the portion of the Leasehold Land created under
the Existing Ground Lease, (ii) all options to extend or renew the Existing
Ground Lease (and the leasehold estate for the term of each extension or
renewal); (iii) all options and rights of first refusal contained in the
Existing Ground Lease to purchase all or a portion of the Property which is
subject to the Existing Ground Lease, and (iv) all of Mortgagor's other
rights, titles and interests under the Existing Ground Lease. All of
Original Tenant's rights, titles and interests under the Existing Ground
Lease were assigned by Original Tenant to Mortgagor by assignment dated
March 31, 1999, a memorandum of which (entitled "Memorandum of Assignment")
dated March 31, 1999, is duly recorded concurrently herewith in the
Official Records.
(d) All buildings, structures and improvements now located or
later to be constructed on the Land, including all parking areas, roads,
driveways, walks, fences, walls, docks, berms, landscaping, recreation
facilities, drainage facilities, lighting facilities and other site
improvements (the "Improvements"); together with
-3-
(e) All existing and future appurtenances, privileges,
easements, franchises, hereditaments and tenements of the Land, including
all minerals, oil, gas, other hydrocarbons and associated substances,
sulphur, nitrogen, carbon dioxide, helium and other commercially valuable
substances which may be in, under or produced from any part of the Land,
all development rights and credits, air rights, water, water courses, water
rights (whether riparian, appropriative or otherwise, and whether or not
appurtenant), water stock and water permits (together with the statutory
right to file applications to change, and any and all applications to
change), rights of way, rights of ingress and egress, drainage rights,
gores or strips of land, any land lying in the streets, highways, ways,
sidewalks, alleys, passages, roads or avenues, open or proposed, in front
of or adjoining the Land and Improvements, any land in the bed of any body
of water adjacent to the Land, any land adjoining the Land created by
artificial means or by accretion, all air space and rights to use such air
space, and all development and similar rights; together with
(f) Subject to Article 2, below, all existing and future
leases, subleases, subtenancies, licenses (except for gaming licenses,
liquor licenses and any other licenses that are not transferrable),
occupancy agreements, concessions and any other agreement devising any
portion of the Property or relating to the use and enjoyment of all or any
part of the Land and Improvements, and any and all guaranties and other
agreements relating to or made in connection with any of the foregoing,
whether written or oral and whether in existence at or upon the recordation
of this Mortgage or entered into after the recordation of this Mortgage
(some or all collectively, as the context may require, "Leases"), and all
rents, security deposits, royalties, issues, profits, receipts, earnings,
revenue, income, products and proceeds and other benefits of the Land and
Improvements, whether now due, past due or to become due, including all
prepaid rents, security deposits, fixed, additional and contingent rents,
deficiency rents and liquidated damages, license fees, occupancy charges,
hotel room charges, cabana charges, casino revenues, show ticket
-4-
revenues, food and beverage revenues, room service revenues, merchandise
sales revenues, parking, maintenance, common area, tax, insurance, utility
and service charges and contributions, proceeds of sale of electricity,
gas, heating, air conditioning, cable and other utilities and services,
instruction fees, membership charges, restaurant, snack bar and shop
revenues, liquidated damages, and all other rights to payments (some or all
collectively, as the context may require, "Rents"); together with
(g) All real property and improvements on it, and all
appurtenances and other property and interests of any kind or character,
whether described in Exhibit A or not, which may be reasonably necessary or
desirable to promote the present and any reasonable future beneficial use
and enjoyment of the Land and Improvements; together with
(h) All goods, materials, supplies, chattels, furniture,
fixtures, equipment, machinery and other property now or later to be
attached to, placed in or on, or used in connection with the use,
enjoyment, occupancy or operation of all or any part of the Land and
Improvements, whether stored on the Land or elsewhere, including all
pumping plants, engines, pipes, ditches and flumes, and also all gas,
electric, cooking, heating, cooling, air conditioning, lighting,
refrigeration and plumbing fixtures and equipment, all water, sanitary and
storm sewer, drainage, electricity, steam, gas, telephone, cable and other
utility equipment and facilities, all plumbing, lighting, heating,
ventilating, air conditioning, refrigerating, incinerating, compacting,
fire protection and sprinkler, surveillance and security, vacuum cleaning,
public address and communications equipment and systems, all kitchen and
laundry appliances, screens, awnings, floor coverings, partitions,
elevators, escalators, motors, machinery, pipes, fittings and other items
of equipment and property of every kind and description, all of which shall
be considered to the fullest extent of the law to be real property for
purposes of this Mortgage; together with
(i) All building materials, equipment, work in process or other
personal property of any kind, whether stored
-5-
on the Land or elsewhere, which have been or later will be acquired for the
purpose of being delivered to, incorporated into or installed in or about
the Land or Improvements; together with
(j) All rights to the payment of money, accounts, accounts
receivable, reserves, deferred payments, refunds, cost savings, payments
and deposits, whether now or later to be received from third parties
(including all xxxxxxx money sales deposits) or deposited by Mortgagor with
third parties (including all utility deposits), contract rights,
development and use rights, governmental permits and licenses (except for
gaming licenses and liquor licenses that are not transferable),
authorizations, certificates, variances, consents and approvals,
applications, architectural and engineering plans, specifications and
drawings, as-built drawings, guaranties, warranties, management agreements,
operating and/or licensing agreements, supply and service contracts for
water, sanitary and storm sewer, drainage, electricity, steam, gas,
telephone, cable, satellite, and other utilities, property and title
insurance policies and proceeds thereof (including the right to assert,
prosecute and settle claims under such policies), chattel paper, instru-
ments, documents, notes, certificates of deposit, securities, other
investments, drafts and letters of credit (other than letters of credit in
favor of Mortgagee), which arise from or relate to construction on the Land
or to any business now or later to be conducted on it, or to the Land and
Improvements generally; together with
(k) All proceeds, including all rights and claims to, dividends
of and demands for them, of the voluntary or involuntary conversion of any
of the Land, Improvements or the other property described above into cash
or liquidated claims, including proceeds of all present and future fire,
hazard or casualty insurance policies (whether or not any such insurance
policy is required by this Mortgage or any other Loan Document) and all
condemnation awards or payments now or later to be made by any public body
or decree by any court of competent jurisdiction for any taking or in
connection with any condemnation or eminent domain proceeding, and all
causes
-6-
of action and their proceeds for any damage or injury to the Land,
Improvements or the other property described above or any part of them, or
breach of warranty in connection with the construction of the Improvements,
including causes of action arising in tort, contract, fraud or concealment
of a material fact; together with
(l) All books and records pertaining to any and all of the
property described above, including computer readable memory and any
computer hardware or software necessary to access and process such memory
("Books and Records"); together with
(m) All proceeds of, additions and accretions to, substitutions
and replacements for, changes in, and greater right, title and interest in,
to and under or derived from, any of the property described above and all
extensions, improvements, betterments, renewals, substitutions and
replacements thereof and additions and appurtenances thereto, including all
proceeds of any voluntary or involuntary disposition or claim, right and
remedy respecting any such property (arising out of any judgment,
condemnation or award, or otherwise arising) and all goods, documents,
general intangibles, chattel paper and accounts, wherever located, acquired
with cash proceeds of any of the foregoing or its proceeds.
(n) All split rights relating to, and all rights to make
divisions or subdivisions of, the Property under the Michigan Land Division
Act or otherwise.
Mortgagor shall and will warrant and forever defend the Property in the
quiet and peaceable possession of the Mortgagee, its successors and assigns
against all and every person or persons lawfully claiming or to claim the whole
or any part thereof. Mortgagor agrees that any greater title to the Property
hereafter acquired by Mortgagor during the term hereof shall be subject hereto.
-7-
1.2 Secured Obligations.
-------------------
1.2.1 Mortgagor makes the mortgage, grant, bargain,
conveyance, sale, transfer and assignment set forth in Section 1.1 and grants
the security interest set forth in Article 3 for the purpose of securing the
following obligations (collectively, the "Secured Obligations") in any order of
priority that Mortgagee may choose:
(a) Except as specified in Section 1.2.2 below, the payment
and performance of all Obligations of Mortgagor, including the payment and
performance of all Obligations under the Loan Agreement, including, but not
limited to the following: (i) payment of all amounts owing by Mortgagor
under the Notes, including principal in the aggregate amount of up to the
Commitment (which is initially $230,000,000 and which may be increased
pursuant to Section 2.7 of the Loan Agreement to $250,000,000) and interest
thereon; (ii) payment of all amounts owing by Mortgagor under Section
2.4(d) of the Loan Agreement for reimbursement of draws, and all amounts
owing by Mortgagor under Section 9.2(a)(2) of the Loan Agreement for
payment of cash collateral for the undrawn amounts, under the Letters of
Credit in the Aggregate Effective Amount of up to $20,000,000, and interest
thereon; (iii) payment of all amounts owing by Mortgagor under any and all
Secured Swap Agreements; (iv) payment of all fees, charges, costs and other
amounts owing by Mortgagor under the Loan Documents, including the agency
fees described in Section 3.6 of the Loan Agreement; and (vi) payment and
performance of all obligations of Mortgagor under this Mortgage; and
(b) The payment and performance of all future advances and
other obligations that Mortgagor or any other person may owe to Mortgagee
and/or any Lenders (whether as principal, surety or guarantor), when a
writing evidences Mortgagor's and Mortgagee's agreement that such advances
or obligations be secured by this Mortgage; and
(c) The payment and performance of all modifications,
amendments, extensions and renewals, however
-8-
evidenced, of any of the Secured Obligations described in clause (a) or
(b), above.
1.2.2 Notwithstanding any provision of this Mortgage or any other
Loan Document, the obligations and liability of Mortgagor under Sections 4.18,
5.10, and/or 11.22 of the Loan Agreement (and/or under any separate agreement
relating to Hazardous Materials which states that it is not secured by real
property) are not and shall not be Secured Obligations under this Mortgage.
1.2.3 All persons who may have or acquire an interest in all or any
part of the Property will be considered to have notice of, and will be bound by,
the terms of the Secured Obligations and each other agreement or instrument made
or entered into in connection with each of the Secured Obligations. Such terms
include any provisions in the Loan Agreement and the other Loan Documents which
either permit borrowing, repayment and reborrowing, or which provide that the
interest rate on one or more of the Secured Obligations may vary from time to
time.
1.3 Future Advances. This Mortgage secures future advances, together with
---------------
any interest thereon, and is intended to be a future advance mortgage, as both
of those phrases are defined in Act No. 348 of the Public Acts of Michigan of
1990, as amended.
2. Assignment of Rents and Leases.
------------------------------
2.1 Assignment. As additional security for the due and
----------
punctual performance and observance of the Secured Obligations, the Mortgagor
does hereby sell, assign, transfer and set over unto the Mortgagee, pursuant to
Act 210 of the Public Acts of Michigan of 1953, as amended, and Act 228 of the
Public Acts of Michigan of 1925, as amended, as applicable, all cash flows
whatsoever from the Property, including, without limitation, all Rents under all
Leases, however evidenced or denominated, upon or affecting the Property
(including any extensions, amendments or renewals thereof), whether such Rents
are due or are to become due, and including all Leases relating to the Property
which are now in existence or come into existence during the term of this
Mortgage. This assignment shall run with the land and be good and valid as
-9-
against the Mortgagor and those claiming by, under or through the Mortgagor,
from the date of this Mortgage, and shall be binding upon the tenants and
occupiers of the Property upon service of a copy of this Mortgage together with
a notice of default as required by statute. This assignment shall continue to
be operative during the foreclosure or any other proceedings taken to enforce
this Mortgage. In the event of a foreclosure sale which results in a
deficiency, this assignment shall stand as security during the redemption period
for the payment of such deficiency. This assignment is given as collateral
security only and does not obligate the Mortgagee to perform any of the
covenants or undertakings required to be performed by the Mortgagor in any
leases or occupancy agreements or arrangements.
2.2 Collection. (A) Immediately upon the occurrence of an
----------
Event of Default under this Mortgage, all of the Mortgagor's rights to and
interest in the Rents (including all Rents in the possession or control of the
Mortgagor or any agent of the Mortgagor as of the date of the event of default)
shall (to the fullest extent permitted by applicable law) automatically
terminate (all such rights and interest automatically vesting in the Mortgagee),
and the Mortgagee shall be thereafter entitled to, and Mortgagor hereby appoints
Mortgagee its attorney-in-fact to:
(a) Demand, receive and enforce payment of any and all Rents and any
other right, title and interest of Mortgagor under the Leases; or
(b) Give receipts, releases and satisfactions for any and all Rents
and any other obligations and duties under the Leases; or
(c) Xxx either in the name of Mortgagor or in the name of Mortgagee
for any and all Rents and to enforce any other obligations and
duties under the Leases.
Mortgagee shall apply the net proceeds of such Rents in the manner provided for
in Section 6.6.
(B) The Mortgagee and its duly authorized agents shall be entitled to
enter the Property for the purpose of delivering any
-10-
and all such notices and other communications to the tenants and occupiers
thereof as shall be necessary or desirable in the Mortgagee's discretion to
exercise its rights hereunder, and the Mortgagee and its agents shall have
absolutely no liability to the Mortgagor arising therefrom (except for
Mortgagee's gross negligence or intentional misconduct). The Mortgagee shall
not, however, be obligated to give any tenant or occupier of the Property any
notice by personal delivery and the Mortgagee may, in its sole discretion,
deliver all such notices and communications by ordinary first-class U. S. mail,
postage prepaid, or otherwise.
(C) In the event that the Mortgagor obstructs the Mortgagee in its
efforts to collect the fees, issues, deposits, rents, profits and income from
the Property, or after requested by the Mortgagee, unreasonably refuses, fails
or neglects to assist the Mortgagee in collecting such fees, issues, deposits,
rents, profits and income, the Mortgagee shall be entitled to the appointment of
a receiver of the Property and of the fees, issues, deposits, rents, profits and
income therefrom, with such powers as the court making such appointment may
confer.
2.3 Mortgagee Not Responsible. Under no circumstances shall
-------------------------
Mortgagee have any duty to produce Rents from the Property or maintain the
Leases. Regardless of whether or not Mortgagee, in person or by agent, takes
actual possession of the Land and Improvements, Mortgagee is not and shall not
be deemed to be:
(a) a "mortgagee in possession" for any purpose; or
(b) responsible for performing any of the obligations under any
Lease; or
(c) responsible for any waste committed by lessees or any other
parties, any dangerous or defective condition of the Property, or any
negligence in the management, upkeep, repair or control of the Property; or
(d) liable in any manner for the Property or the use, occupancy,
enjoyment or operation of all or any part of it.
-11-
2.4 Leasing. Without Mortgagee's prior written consent,
-------
Mortgagor shall not lease the Property or any part of it except strictly in
accordance with the Loan Documents. Notwithstanding the foregoing, Mortgagor
shall have the right to lease a portion of the Property to MGM Grand Detroit,
LLC, a Delaware limited liability company ("Casino Operator"), pursuant to that
certain lease ("Operating Sublease") dated March 31, 1999, between Mortgagor, as
sublandlord, and Casino Operator, as subtenant, a memorandum of such sublease
(entitled "Memorandum of Sublease"), dated March 31, 1999, is duly recorded
concurrently herewith in the Official Records. Mortgagor shall not extend,
renew, amend, modify, supplement, cancel or terminate the Operating Sublease,
nor accept a surrender of the Operating Sublease, without the prior written
consent of Mortgagee (which consent may be granted or withheld in the exercise
of Mortgagee's sole and absolute discretion). Mortgagor shall not collect or
accept any deposit or prepayment of Rents for any period exceeding one (1)
month. Mortgagor shall not apply any Rents in any manner prohibited by the Loan
Documents.
2.5 Subordination Agreements With Respect to Certain Leases.
-------------------------------------------------------
With respect to any lease of space within the Improvements entered into by
Mortgagor in the ordinary course of business, Mortgagee shall, within 30 days
following Mortgagor's request from time to time, enter into a Tenant Estoppel,
Subordination, Nondisturbance and Attornment Agreement with Mortgagor and such
tenant, on Mortgagee's then current form (or for a retail tenant, on a form
reasonably approved by Mortgagee), pursuant to which the applicable tenant
subordinates its interest in the Property to this Mortgage and Mortgagee agrees
that, so long as such tenant is not in default under such lease, a foreclosure
of this Mortgage will not disturb such tenant's possession under such lease; it
being specifically acknowledged by Mortgagor that, without limiting the
generality of the foregoing, Mortgagee's form (or such other form) for any such
agreement may provide that, in the event of a conflict between the Loan
Documents and such lease with respect to insurance or condemnation proceeds, the
Loan Documents shall prevail.
-12-
3. Grant of Security Interest.
--------------------------
3.1 Security Agreement. The parties intend for this Mortgage to
------------------
create a lien on and security interest in the Property, and an assignment of the
Rents and the Leases, all in favor of Mortgagee. The parties acknowledge that
some of the Property and some of the Rents and Leases may be determined under
applicable law to be personal property or fixtures. To the extent such
Property, Rents or Leases constitute personal property, Mortgagor, as debtor,
hereby grants to Mortgagee, as secured party, a security interest in all such
Property, Rents and Leases, to secure payment and performance of the Secured
Obligations, and Mortgagor, as debtor, also has granted a security interest in
such Property, Rents and Leases pursuant to that certain Security Agreement
dated as of even date herewith, executed by Mortgagor, as debtor, in favor of
Mortgagee, as secured party. This Mortgage constitutes a security agreement
under the Michigan Uniform Commercial Code, as amended or recodified from time
to time, covering all such Property, Rents and Leases. To the extent such
Property, Rents or Leases are not real property encumbered by the lien created
by Section 1.1, above, and are not absolutely assigned by the assignment set
forth in Section 2.1, above, it is the intention of the parties that such
Property, Rents and/or Leases shall constitute "proceeds, product, offspring,
rents or profits" (as defined in and for the purposes of Section 552(b) of the
United States Bankruptcy Code, as such Section may be modified or supplemented)
of the Land and Improvements, and/or "fees, charges, accounts, or other payments
for the use or occupancy of rooms and other public facilities in . . . lodging
properties," as applicable (as such terms are defined in and for the purpose of
Section 552(b) of the United States Bankruptcy Code, as such Section may be
modified or supplemented).
3.2 Financing Statements. Mortgagor shall execute one or more
--------------------
financing statements and such other documents as Mortgagee may from time to time
require to perfect or continue the perfection of Mortgagee's security interest
in any Property, Rents or Leases. As provided in Section 5.10, Mortgagor shall
pay all fees and costs that Mortgagee may incur in filing such documents in
public offices and in obtaining such record searches as Mortgagee may reasonably
require. If Mortgagor fails to execute any financing statements or
-13-
other documents which Mortgagee reasonably deems necessary or desirable for the
perfection or continuation of any security interest, Mortgagor hereby appoints
Mortgagee as its true and lawful attorney-in-fact (which appointment is
irrevocable and coupled with an interest) to execute any such documents on its
behalf. If any financing statement or other document is filed in the records
normally pertaining to personal property, that filing shall never be construed
as in any way derogating from or impairing this Mortgage or the rights or
obligations of the parties under it.
4. Fixture Filing; Construction Mortgage.
-------------------------------------
4.1 Fixture Filing. This Mortgage constitutes a financing
--------------
statement filed as a fixture filing under (S) 9-402(6) of the Michigan Uniform
Commercial Code (MCLA (S) 440.9402(6)), as amended or recodified from time to
time, covering any Property which now is or later may become fixtures attached
to the Land or Improvements. In connection therewith, the addresses of
Mortgagor, as debtor, and Mortgagee, as secured party, are as set forth in
Section 8.11, below. The foregoing address of Mortgagee, as secured party, is
also the address from which information concerning the security interest may be
obtained by any interested party. The Mortgagor's federal tax identification
number is 00-0000000. The property subject to this fixture filing is described
in Section 1.1, above. Portions of the property subject to this fixture filing
as identified in this Section are or are to become fixtures related to the real
estate described in Exhibit B attached hereto.
4.2 Construction Mortgage. This Mortgage constitutes a
---------------------
"construction mortgage" as that term is defined in MCLA (S) 440.9313(1)(c), as
amended or recodified from time to time, and as used in the Michigan Uniform
Commercial Code, as amended or recodified from time to time.
5. Rights and Duties of the Parties.
--------------------------------
5.1 Representations and Warranties. Mortgagor represents and
------------------------------
warrants that, except as previously disclosed to Mortgagee in a writing making
reference to this Section 5.1:
-14-
(a) Mortgagor lawfully possesses and holds (i) fee simple title
to the Fee Land (and the Improvements located thereon), and (ii) a
leasehold estate in the Leasehold Land (and Improvements located thereon);
(b) Mortgagor has or will have good title to all other Property
other than the Land and Improvements (other than personal property utilized
by Mortgagor under such equipment leases and similar financing arrangements
as were disclosed to Mortgagee in writing prior to the execution of this
Mortgage or as are hereafter entered into by Mortgagor in accordance with
the Loan Agreement);
(c) Mortgagor has the full and unlimited power, right and
authority to encumber the Property and assign the Rents and the Leases;
(d) This Mortgage creates a first and prior lien on and security
interest in the Property, subject only to the Permitted Encumbrances and
Permitted Right of Others;
(e) The Property includes all property and rights which may be
reasonably necessary or desirable to promote the present and any reasonable
future beneficial use and enjoyment of the Land and Improvements;
(f) Mortgagor owns any Property which is personal property free
and clear of any security agreements, reservations of title or conditional
sales contracts, and there is no financing statement affecting such
personal property on file in any public office (other than personal
property utilized by Mortgagor under such equipment leases and similar
financing arrangements as were disclosed to Mortgagee in writing prior to
the execution of this Mortgage or as are hereafter entered into by
Mortgagor in accordance with the Loan Agreement);
(g) Mortgagor's place of business, or its chief executive office
if it has more than one place of business, is located at the address
specified below; and
-15-
(h) None of the Property is located in an area having or
identified as having special flood hazards or any similar designation under
the National Flood Insurance Act of 1968, as amended or recodified from
time to time, or the Flood Disaster Protection Act of 1973, as amended or
recodified from time to time.
5.2 Taxes and Assessments. Mortgagor shall pay prior to
---------------------
delinquency all taxes, levies, charges and assessments, including assessments on
appurtenant water stock, imposed by any public or quasi-public authority or
utility company which are (or if not paid, may become) a lien on or security
interest in all or part of the Property or any interest in it, or which may
cause any decrease in the value of the Property or any part of it. If any such
taxes, levies, charges or assessments become delinquent, Mortgagee may require
Mortgagor to present evidence that they have been paid in full, on ten (10)
days' written notice by Mortgagee to Mortgagor. This Section 5.2 is subject to
the right granted in Section 5.1 of the Loan Agreement to contest in good faith
certain taxes, assessments, charges and levies.
5.3 Performance of Secured Obligations. Mortgagor shall promptly
----------------------------------
pay and perform each Secured Obligation in accordance with its terms.
5.4 Liens, Charges and Encumbrances. Mortgagor shall immediately
-------------------------------
discharge any lien on or security interest in the Property to which Mortgagee
has not consented in writing, except any Permitted Encumbrances and Permitted
------
Right of Others. Subject to any applicable rights to contest set forth in the
Loan Agreement, Mortgagor shall pay when due each obligation secured by or
reducible to a lien, security interest, charge or encumbrance which now does or
later may encumber or appear to encumber all or part of the Property or any
interest in it, whether the lien, security interest, charge or encumbrance is or
would be senior or subordinate to this Mortgage.
5.5 Damages and Insurance and Condemnation Proceeds.
-----------------------------------------------
5.5.1 Mortgagor hereby absolutely and irrevocably assigns to
Mortgagee, and authorizes the payor to pay to Mortgagee,
-16-
the following claims, causes of action, awards, payments and rights to payment:
(a) All awards of damages and all other compensation payable
directly or indirectly because of a condemnation, proposed condemnation or
taking for public or private use which affects all or part of the Property
or any interest in it; and
(b) All other awards, claims and causes of action, arising out
of any warranty affecting all or any part of the Property, or for damage or
injury to or decrease in value of all or part of the Property or any
interest in it if award (or any series of related awards) exceeds
$5,000,000; and
(c) All proceeds of any insurance policies payable because of
loss sustained to all or part of the Property in excess of $5,000,000,
regardless or whether or not any such insurance policy is required by this
Mortgage or any other Loan Document; and
(d) All interest which may accrue on any of the foregoing.
5.5.2 Mortgagor shall immediately notify Mortgagee in writing
if:
(a) Any damage occurs or any injury or loss is sustained in
the amount of $5,000,000 or more to all or part of the Property, or any
action or proceeding relating to any such damage, injury or loss is
commenced; or
(b) Any offer is made, or any action or proceeding is
commenced, which relates to any actual or proposed condemnation or taking
of all or part of the Property.
5.5.3 If Mortgagee chooses to do so, Mortgagee may in its own
name appear in or prosecute any action or proceeding to enforce any cause of
action based on warranty, or for damage, injury or loss to all or part of the
Property, and Mortgagee may
-17-
make any compromise or settlement of the action or proceeding. Mortgagee, if it
so chooses, may participate in any action or proceeding relating to condemnation
or taking of all or part of the Property, and may join Mortgagor in adjusting
any loss covered by insurance. Mortgagor hereby irrevocably appoints Mortgagee
its true and lawful attorney-in-fact for all such purposes. The power of
attorney granted hereunder is coupled with an interest and is irrevocable.
Mortgagor shall not settle, adjust or compromise any such action or proceeding
without the prior written approval of Mortgagee (which approval shall not be
unreasonably withheld).
5.5.4 All proceeds of these assigned claims, other property and
rights which Mortgagor may receive or be entitled to (collectively, "Proceeds")
shall be paid to Mortgagee. In each instance, Mortgagee shall apply such
Proceeds first toward reimbursement of all of Mortgagee's costs and expenses of
recovering the Proceeds, including attorneys' fees. If, in any instance, each
and all of the following conditions ("Restoration Condition") are satisfied in
Mortgagee's reasonable judgment, Mortgagee shall permit Mortgagor to use the
balance of such Proceeds ("Net Claims Proceeds") to pay costs of repairing or
reconstructing the Property in the manner described below:
(a) The plans and specifications, cost breakdown, construction
contract, construction schedule, contractor and payment and performance
bond for the work of repair or reconstruction must all be reasonably
acceptable to Mortgagee; and
(b) Mortgagee must receive evidence reasonably satisfactory to
it that, after repair or reconstruction, the Property will be at least as
valuable as it was immediately before the damage or condemnation occurred;
and
(c) The Net Claims Proceeds must be sufficient in Mortgagee's
reasonable determination to pay for the total cost of repair or
reconstruction, including all associated development costs and interest
projected to be payable on the Secured Obligations until the repair or
reconstruction is complete; or Mortgagor must provide its own funds in an
amount equal to the difference between the Net Claims Proceeds and a
-18-
reasonable estimate, made by Mortgagor and found reasonably acceptable by
Mortgagee, of the total cost of repair or reconstruction; and
(d) Mortgagee must receive evidence reasonably satisfactory to
it that all material Leases which Mortgagee may find acceptable will
continue after the repair or reconstruction is complete; and
(e) No Event of Default shall have occurred and be continuing.
If Mortgagee finds that such conditions have been met, Mortgagee shall hold the
Net Claims Proceeds and any funds which Mortgagor is required to provide in an
interest-bearing account and shall disburse them to Mortgagor on a monthly basis
to pay costs of repair or reconstruction in accordance with Mortgagee's
customary construction lending procedures. However, if Mortgagee finds that one
or more of such conditions have not been satisfied, Mortgagee may apply the Net
Claims Proceeds to pay or prepay (without premium) some or all of the Secured
Obligations in such order and proportions as Mortgagee in its absolute
discretion may choose (subject to the provisions for priority of application of
payments set forth in the Loan Agreement). Any and all Proceeds (including any
Net Claims Proceeds) held by Mortgagee from time to time shall be collateral for
the Secured Obligations, and Mortgagor hereby grants to Mortgagee a security
interest in and lien on such Proceeds and all rights and remedies available
under applicable laws with respect to such Proceeds, including all rights and
remedies under the Michigan Uniform Commercial Code. Mortgagor shall execute
and deliver to Mortgagee and the Lenders any and all documents reasonably
requested by Mortgagee in order to confirm, create and perfect such security
interest in and lien on such Proceeds. In the event that any Proceeds are
applied to pay any Secured Obligations, then Mortgagee shall have no obligation
to disburse or release such applied Proceeds to Mortgagor under this Section
5.5. Any amounts remaining undisbursed following completion of such repair or
reconstruction shall be disbursed to Mortgagor.
5.5.5 Mortgagor hereby specifically, unconditionally and
irrevocably waives all rights of a property owner
-19-
granted under applicable law which provide for allocation of condemnation
proceeds between a property owner and a lienholder, and any other law or
successor statute of similar import. Mortgagor hereby specifically,
unconditionally and irrevocably waives all right to recover against Mortgagee or
any Lender (or any officer, employee, agent or representative of Mortgagee or
any Lender) for any loss incurred by Mortgagor from any cause insured against or
required by any Loan Document to be insured against; provided, however, that
this waiver of subrogation shall not be effective with respect to any insurance
policy if the coverage thereunder would be materially reduced or impaired as a
result.
5.6 Maintenance and Preservation of Property.
----------------------------------------
5.6.1 Except for Capital Expenditures permitted under Section
6.12 of the Loan Agreement and except for such alterations to the Property as
may be required to convert the Improvements to a temporary casino site as shown
in plans and specifications approved by Mortgagee in its reasonable discretion,
Mortgagor shall not remove or demolish the Property or any part of it, or alter,
restore or add to the Property, or initiate or allow any change in any zoning or
other land use classification which affects the Property or any part of it.
5.6.2 If all or part of the Property becomes damaged or
destroyed, Mortgagor shall promptly and completely repair and/or restore the
Property in a good and workmanlike manner in accordance with sound building
practices, regardless of whether or not Mortgagee agrees to disburse insurance
proceeds or other sums to pay costs of the work of repair or reconstruction
under Section 5.5; provided, however, that notwithstanding the foregoing,
Mortgagor shall not be obligated to restore the Property in the event that (a)
the applicable casualty was fully insured (with the sole exception of any
deductible amount which was approved by Mortgagee and which does not exceed 10%
of the value of the Property), (b) Mortgagor is prevented from fulfilling the
Restoration Conditions within one hundred twenty (120) days following the
occurrence of the damage for reasons, not including financial difficulties of
Mortgagor, beyond Mortgagor's reasonable control, and (c) Mortgagee applies the
applicable insurance proceeds against the Secured Obligations as provided above.
-20
5.6.3 Mortgagor shall not commit or allow any act upon or use
of the Property which would violate: (i) any applicable law or order of any
Governmental Agency, whether now existing or later to be enacted and whether
foreseen or unforeseen (except to the extent that noncompliance would not cause
a Material Adverse Effect or a License Revocation); or (ii) any public or
private covenant, condition, restriction, equitable servitude, Contractual
Obligation or Right of Others affecting the Property. Mortgagor shall not bring
or keep any article on the Property or cause or allow any condition to exist on
it, that could invalidate or would be prohibited by any insurance coverage
required to be maintained by Mortgagor on the Property or any part of it under
this Mortgage.
5.6.4 Mortgagor shall not commit or allow waste of the
Property. Without limiting the generality of the forgoing, Mortgagor shall
protect and preserve all easements, rights-of-way and other appurtenances to the
Land and/or Improvements. Mortgagor shall not cause or allow any such easement,
right-of-way and other appurtenance to be canceled, rejected or otherwise
terminated, or materially modified.
5.6.5 Mortgagor shall perform all other acts which from the
character or use of the Property may be reasonably necessary to maintain and
preserve its value.
5.7 Insurance.
---------
5.7.1 Mortgagor shall maintain the following insurance with
respect to the Property:
(a) Mortgagor shall provide, maintain and keep in force at all
times during any period of construction with respect to the portion of the
Property affected by such construction a policy or policies of builder's
"all risk" insurance in nonreporting form in an amount not less than the
full insurable completed value of such portion of the Property on a
replacement cost basis. The policy or policies shall insure against loss
or damage by hazards customarily included within such "all risk" policies
and any other risks or hazards
-21-
which Mortgagee may reasonably specify (and shall include boiler and
machinery insurance), and each shall contain a Lender's Loss Payable
Endorsement (Form 438 BFU or equivalent) in favor of Mortgagee.
(b) Mortgagor shall provide, maintain and keep in force at all
times for all portions of the Property not covered by a policy or policies
described in Section 5.7.1(a), above, a policy or policies of fire and
hazards "all risk" insurance providing extended coverage, in an amount not
less than the full insurable value of such portions of the Property on a
replacement cost basis. The policy or policies shall insure against loss
or damage by hazards customarily included within "all risk" and "extended
coverage" policies and any other risks or hazards which Mortgagee may
reasonably specify (and shall include boiler and machinery insurance), and
each shall contain a Lender's Loss Payable Endorsement (Form 438 BFU or
equivalent) in favor of Mortgagee.
(c) From and after the earlier of the opening of the
Improvements, in whole or in part, for business, or the substantial
completion of the alteration of the Improvements for use as a casino site,
Mortgagor shall provide, maintain and keep in force at all times for all
portions of the Property any policy or policies of business interruption
insurance that Mortgagee reasonably requires (including insurance against
income loss during a period of at least one (1) year), and each such policy
shall contain a Lender's Loss Payable Endorsement (Form 438 BFU or
equivalent) in favor of Mortgagee.
(d) Mortgagor shall provide, maintain and keep in force at all
times a policy or policies of comprehensive liability insurance naming
Mortgagee and the Lenders as additional insureds, on an "occurrence" basis,
against claims for "personal injury" liability, including bodily injury,
death or property damage liability, with a limit of not less than One
Hundred Million Dollars ($100,000,000). Such insurance shall be primary
and noncontributory with any other insurance carried by Mortgagee and/or
any Lender(s).
-22-
(e) Mortgagor shall provide, maintain and keep in force at all
times such policies of worker's compensation insurance as may be required
by applicable laws (including employer's liability insurance, if required
by Mortgagee), covering all employees of Mortgagor and each contractor and
subcontractor.
(f) Mortgagor shall provide, maintain and keep in force at all
times any and all additional insurance that Mortgagee in its reasonable
judgment may from time to time require, so long as such insurance is
available in the commercial market at reasonable rates.
5.7.2 All such policies of insurance shall be issued by
companies approved by Mortgagee having a minimum A.M. Best's rating of A-:X. The
limits, coverage, forms, deductibles, inception and expiration dates and
cancellation provisions of all such policies shall be acceptable to Mortgagee.
Each property insurance policy maintained in connection with any of the Property
shall contain a Lender's Loss Payable Endorsement (Form 438 BFU or equivalent)
in favor of Mortgagee, and shall provide that all proceeds be payable to
Mortgagee to the extent of its interest. Each liability insurance policy
maintained in connection with any of the Property shall name Mortgagee and the
Lenders as additional insureds. An approval by Mortgagee is not, and shall not
be deemed to be, a representation of the solvency of any insurer or the
sufficiency of any amount of insurance. Each policy of insurance required
hereunder shall provide that it may not be modified or canceled without at least
thirty (30) days' prior written notice to Mortgagee, and shall permit a waiver
of subrogation by Mortgagor in favor of Mortgagee and the Lenders.
5.7.3 Mortgagor shall supply Mortgagee with certificates of
each policy required hereunder and any other policy of insurance maintained in
connection with any of the Property, together with an original or underlyer of
each such policy and all endorsements thereto, and a certificate of an insurance
broker ("Broker's Certificate") certifying that such insurance policies satisfy
the requirements of this Section 5.7 and that the issuers of such policies have
received written notice of Mortgagee's security interest therein. When any
insurance policy required
-23-
hereunder expires, Mortgagor shall furnish Mortgagee with proof acceptable to
Mortgagee that the policy has been reinstated or a new policy issued, continuing
in force the insurance covered by the policy which expired, together with a
Broker's Certificate for each such reinstated or new policy. If Mortgagor fails
to pay any such premium, Mortgagee shall have the right, but not the obligation,
to obtain current coverage and advance funds to pay the premiums for it.
Mortgagor shall repay Mortgagee immediately on demand for any advance for such
premiums, which shall be considered to be an additional loan to Mortgagor
bearing interest at the Default Rate, and secured by this Mortgage and any other
collateral held by Mortgagee in connection with the Secured Obligations.
5.8 Releases, Extensions, Modifications and Additional Security.
-----------------------------------------------------------
5.8.1 From time to time, Mortgagee may perform any of the
following acts without incurring any liability or giving notice to any person,
and without affecting the personal liability of any person for the payment of
the Secured Obligations (except as provided below), and without affecting the
security hereof for the full amount of the Secured Obligations on all Property
remaining subject hereto, and without the necessity that any sum representing
the value of any portion of the Property affected by Mortgagee's action(s) be
credited on the Secured Obligations:
(a) Release any person liable for payment or performance of any
Secured Obligation;
(b) Extend the time for payment, or otherwise alter the terms
of payment, of any Secured Obligation;
(c) Accept additional real or personal property of any kind as
security for any Secured Obligation, whether evidenced by deeds of trust,
mortgages, security agreements or any other instruments of security; or
(d) Alter, substitute or release any property securing the
Secured Obligations;
-24-
(e) Consent to the making of any plat or map of the Property or
any part of it;
(f) Join in granting any easement or creating any restriction
affecting the Property;
(g) Join in any subordination or other agreement affecting this
Mortgage or the lien or security interest of it; or
(h) Release the Property or any part of it without any
warranty.
5.9 Release. Upon the satisfaction of all of the conditions to the
-------
release hereof set forth in Section 11.25 of the Loan Agreement, Mortgagee shall
release the Property from the lien of this Mortgage.
5.10 Compensation, Exculpation, Indemnification.
------------------------------------------
5.1.1 Mortgagor agrees to pay fees in the maximum amounts
legally permitted, or reasonable fees as may be charged by Mortgagee when the
law provides no maximum limit, for any services that Mortgagee may render in
connection with this Mortgage, including Mortgagee's providing a statement of
the Secured Obligations or a release. Mortgagor shall also pay or reimburse all
of Mortgagee's costs and expenses which may be incurred in rendering any such
services. Mortgagor further agrees to pay or reimburse Mortgagee for all costs,
expenses and other advances which may be incurred or made by Mortgagee in any
efforts to enforce any terms of this Mortgage, including any rights or remedies
afforded to Mortgagee under Section 6.3, whether any lawsuit is filed or not, or
in defending any action or proceeding arising under or relating to this
Mortgage, including attorneys' fees and other legal costs, costs of any
Foreclosure Sale (as defined in Section 6.3.8) and any cost of evidence of
title. If Mortgagee chooses to dispose of the Property through more than one
Foreclosure Sale, Mortgagor shall pay all costs, expenses or other advances that
may be incurred or made by Mortgagee in each of such Foreclosure Sales.
-25-
5.10.2 Mortgagee shall not be directly or indirectly liable to
Mortgagor or any other person as a consequence of any of the following:
(a) Mortgagee's exercise of, or failure to exercise, any
rights, remedies or powers granted to Mortgagee in this Mortgage;
(b) Mortgagee's failure or refusal to perform or discharge any
obligation or liability of Mortgagor under any agreement related to the
Property or under this Mortgage; or
(c) Any loss sustained by Mortgagor or any third party
resulting from Mortgagee's failure to lease or operate the Property, or
from any other act or omission of Mortgagee in managing the Property, after
an Event of Default, unless the loss is caused by the willful misconduct
and bad faith of Mortgagee.
Mortgagor hereby expressly waives and releases all liability of the types
described above, and agrees that no such liability shall be asserted against or
imposed upon Mortgagee.
5.10.3 Mortgagor agrees to indemnify Mortgagee and the Lenders
(collectively, the "Indemnitees") against and hold them harmless from all
losses, damages, liabilities, claims, causes of action, judgments, court costs,
attorneys' fees and other legal expenses, cost of evidence of title, cost of
evidence of value, and other costs and expenses which any of them may suffer or
incur:
(a) In performing any act required or permitted by this
Mortgage or any of the other Loan Documents or by law;
(b) Because of any failure of Mortgagor to perform any of
Mortgagor's obligations; or
(c) Because of any alleged obligation of or undertaking by
Mortgagee to perform or discharge any of the representations, warranties,
conditions, covenants or other obligations in any document relating to the
Property other than the Loan Documents.
-26-
Notwithstanding the foregoing, no Indemnitee shall be entitled to
indemnification for any loss caused by its own gross negligence or willful
misconduct. Each obligation or liability of Mortgagor to any Indemnitee under
this Section 5.10.3 shall survive the release and cancellation of any or all of
the Secured Obligations and the full or partial release of this Mortgage.
5.10.4 Mortgagor shall pay all obligations to pay money arising
under this Section 5.10 immediately upon demand by Mortgagee. Each such
obligation shall be added to, and considered to be part of, the Secured
Obligations, and shall bear interest from the date the obligation arises at the
Default Rate.
5.11 Defense and Notice of Claims and Actions. At Mortgagor's sole
----------------------------------------
expense, Mortgagor shall protect, preserve and defend the Property and title to
and right of possession of the Property, and the security of this Mortgage and
the rights and powers of Mortgagee created under it, against all adverse claims.
Mortgagor shall give Mortgagee prompt notice in writing if any claim is asserted
which does or could affect any of such matters, or if any action or proceeding
is commenced which alleges or relates to any such claim.
5.12 Subrogation. Mortgagee shall be subrogated to the liens and
-----------
security interests of all encumbrances, whether released of record or not, which
are discharged in whole or in part by Mortgagee in accordance with this Mortgage
or with the proceeds of any Advance or other extension of credit secured by this
Mortgage.
5.13 Site Visits, Observation and Testing. Mortgagee and its agents
------------------------------------
and representatives shall have the right at any reasonable time to enter and
visit the Property for the purpose of performing appraisals. In addition, each
person indemnified by Mortgagor hereunder or under Section 11.22 of the Loan
Agreement (collectively, "Indemnified Parties") and their agents and
representatives shall have the right at any reasonable time to enter and visit
the Property for the purposes of observing the Property, taking and removing
soil or groundwater samples, and conducting tests on any part of the Property.
The Indemnified
-27-
Parties agree to conduct such appraisals and tests in such a manner as to
minimize interference with business operations on the Property, and no tests
will be conducted which unreasonably interfere with such business operations.
The Indemnified Parties have no duty, however, to visit or observe the Property
or to conduct tests, and no site visit, observation or testing by any
Indemnified Party shall impose any liability on any Indemnified Party. In no
event shall any site visit, observation or testing by any Indemnified Party be a
representation that Hazardous Materials are or are not present in, on, or under
the Property, or that there has been or shall be compliance with any Hazardous
Materials Law, or any other applicable governmental law. Neither Mortgagor nor
any other party is entitled to rely on any site visit, observation or testing by
any Indemnified Party. The Indemnified Parties owe no duty of care to protect
Mortgagor or any other party against, or to inform Mortgagor or any other party
of, any Hazardous Material or any other adverse condition affecting the
Property. Any Indemnified Party shall give Mortgagor reasonable notice before
entering the Property. In addition to the other requirements of this Section
5.13, the Indemnified Party shall make reasonable efforts to avoid interfering
with Mortgagor's use of the Property in exercising any rights provided in this
Section.
5.14 Notice of Change. Mortgagor shall give Mortgagee prior
----------------
written notice of (a) any change in the location of Mortgagor's place of
business or its chief executive office if it has more than one place of
business, (b) any change in the location of any of the Property, including the
Books and Records, and (c) any change to Mortgagor's name or business structure.
Unless otherwise approved by Mortgagee in writing, all Property that consists of
personal property (other than the Books and Records) will be located on the Land
and all Books and Records will be located at such Mortgagor's place of business
or chief executive office if such Mortgagor has more than one place of business.
5.15 Title Insurance. At any time and from time to time at the
---------------
reasonable request of Mortgagee, Mortgagor, at its sole cost and expense, shall
deliver to Mortgagee such additional or increased title insurance coverage and
title insurance indorsements and reinsurance issued by title insurance
companies, all in form and substance satisfactory to Mortgagee, with respect to
this
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Mortgage, including endorsements insuring that each advance is secured by this
Mortgage (without any exception not set forth in the policy of title insurance
insuring this Mortgage other than (i) liens for real estate taxes and
assessments not yet due and payable and (ii) Permitted Encumbrances insured to
be subordinate to this Mortgage), and endorsements insuring the priority of the
Mortgage over any mechanic's lien.
6. Accelerating Transfers, Defaults and Remedies.
---------------------------------------------
6.1 Accelerating Transfers.
----------------------
6.1.1 "Accelerating Transfer" means any sale, contract to sell,
conveyance, encumbrance, lease, alienation or further encumbrance not expressly
permitted under the Loan Agreement, or other transfer of all or any material
part of the Property or any interest in it, whether voluntary, involuntary, by
operation of law or otherwise, unless Mortgagee has given its prior written
consent to such "Accelerating Transfer," which consent may be given or not given
in the absolute discretion of Mortgagee. If Mortgagor is a corporation or
limited liability company, "Accelerating Transfer" also means a dissolution or
reorganization of the corporation or limited liability company under applicable
law, or any direct or indirect transfer or transfers of any share possessing
voting power or any other ownership interest in the corporation or limited
liability company. If Mortgagor becomes a partnership or limited liability
company, "Accelerating Transfer" also means withdrawal or removal of any general
partner or manager, as the case may be, dissolution or reorganization of the
partnership or limited liability company under applicable law, or any direct or
indirect transfer or transfers of any partnership interest or ownership interest
in the limited liability company.
6.1.2 Mortgagor acknowledges that Mortgagee and the Lenders are
making one or more advances under the Loan Agreement in reliance on the
expertise, skill and experience of Mortgagor; thus, the Secured Obligations
include material elements similar in nature to a personal service contract. In
consideration of Mortgagee's reliance, Mortgagor agrees that Mortgagor shall not
make any Accelerating Transfer, unless the transfer is preceded by Mortgagee's
written consent to the particular transaction and
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transferee. Mortgagee may withhold such consent in its absolute discretion. If
any Accelerating Transfer occurs, Mortgagee may, in its absolute discretion
(provided that it has received any consents or approvals of any other Lenders
required under the Loan Agreement), declare all of the Secured Obligations to be
immediately due and payable, and Mortgagee may invoke any rights and remedies
provided by Section 6.3 of this Mortgage.
6.2 Events of Default. Mortgagor will be in default under this
-----------------
Mortgage upon the occurrence of any one or more of the following events ("Events
of Default"):
(a) Mortgagor fails to perform any obligation to pay money which
arises under this Mortgage within five (5) Banking Days after demand
therefor; or
(b) Mortgagor fails to perform any other obligation arising under
this Mortgage within ten (10) Banking Days after the giving of written
notice by Mortgagee of such failure or, if the nature of the covenant or
agreement is such that the violation can be cured, thirty (30) Banking Days
after giving of such notice so long as Mortgagor diligently pursues in good
faith the cure or correction of such violation continuously during such
period; or
(c) Any Event of Default (as defined in the Loan Agreement or any
other Loan Document) occurs; or any other default occurs under any of the
Secured Obligations and continues uncured beyond any applicable cure period
(if any).
6.3 Remedies. At any time after the occurrence and during the
--------
continuance of an Event of Default and provided that Mortgagee has received any
consents or approvals of any other Lenders required under the Loan Agreement,
Mortgagee will be entitled to invoke any or all of the following rights and
remedies (subject to any restrictions on those rights and remedies imposed by
applicable Gaming Laws), all of which will be cumulative, and the exercise of
any one or more of which shall not constitute an election of remedies:
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6.3.1 Acceleration. Mortgagee may declare any or all of the
------------
Secured Obligations to be due and payable immediately.
6.3.2 Receiver. Mortgagee may apply to any court of competent
--------
jurisdiction for, and obtain appointment of, a receiver for the Property; and
Mortgagee may request, in connection with any foreclosure proceeding hereunder,
that the Michigan Gaming Control Board appoint a conservator to conduct the
normal gaming activities on the Property following such foreclosure proceeding.
The Mortgagor's failure to pay taxes and/or assessments assessed against the
Property, or any installment thereof, or any insurance premium upon policies
covering the Property or any part thereof, shall constitute waste (although the
meaning of the term "waste" shall not necessarily be limited to such
nonpayment), as provided by Act No. 236 of the Public Acts of Michigan of 1961,
as amended, and shall entitle the Mortgagee to all remedies provided for
therein. The Mortgagor further agrees to and does hereby consent to the
appointment of a receiver under such statute, should the Mortgagee elect to seek
such relief thereunder.
6.3.3 Entry. Mortgagee, in person, by agent or by court-
-----
appointed receiver, may enter, take possession of, manage and operate all or any
part of the Property, and may also do any and all other things in connection
with those actions that Mortgagee may in its absolute discretion consider
necessary and appropriate to protect the security of this Mortgage. Such other
things may include: taking and possessing all of Mortgagor's or the then owner's
Books and Records (to the extent permitted by applicable law); entering into,
enforcing, modifying, or canceling Leases on such terms and conditions as
Mortgagee may consider proper; obtaining and evicting tenants; fixing or
modifying Rents or Leases; collecting and receiving any payment of money owing
to Mortgagor; completing construction; and/or contracting for and making repairs
and alterations. If Mortgagee so requests, Mortgagor shall assemble all of the
Property that has been removed from the Land and make all of it available to
Mortgagee at the site of the Land. Mortgagor hereby irrevocably constitutes and
appoints Mortgagee as Mortgagor's attorney-in-fact (which appointment is coupled
with an interest and irrevocable) to perform such acts and execute such
documents as Mortgagee in its absolute discretion may consider to be appropriate
in connection with taking these
-31-
measures, including endorsement of Mortgagor's name on any instruments.
Regardless of any provision of this Mortgage or the Loan Agreement, Mortgagee
shall not be considered to have accepted any property other than cash or
immediately available funds in satisfaction of any obligation of Mortgagor to
Mortgagee unless Mortgagee has given express written notice of Mortgagee's
election of that remedy in accordance with (S) 9-505 of the Michigan Uniform
Commercial Code (MCLA (S) 440.9505), as it may be amended or recodified from
time to time.
6.3.4 Cure; Protection of Security. Mortgagee may cure any
----------------------------
breach or default of Mortgagor and, if it chooses to do so in connection with
any such cure, Mortgagee may also enter the Property and/or do any and all other
things which Mortgagee may, in its absolute discretion, consider necessary and
appropriate to protect the security of this Mortgage. Such other things may
include: appearing in and/or defending any action or proceeding which purports
to affect the security of, or the rights or powers of Mortgagee under, this
Mortgage; paying, purchasing, contesting or compromising any encumbrance,
charge, lien, security interest or claim of lien or security interest which (in
Mortgagee's sole judgment) is or may be senior in priority to this Mortgage,
such judgment of Mortgagee to be conclusive as among the parties to this
Mortgage; obtaining insurance and/or paying any premiums or charges for
insurance required to be carried under this Mortgage and the other Loan
Documents; otherwise caring for and protecting any and all of the Property;
and/or employing counsel, accountants, contractors and other appropriate persons
to assist Mortgagee . Mortgagee may take any of the actions permitted under this
Section 6.3.4 either with or without giving notice to any person.
6.3.5 Uniform Commercial Code Remedies. Mortgagee may exercise
--------------------------------
any or all of the remedies granted to a secured party under the Michigan Uniform
Commercial Code, as amended or recodified from time to time.
6.3.6 Judicial Action. Mortgagee may bring an action in any
---------------
court of competent jurisdiction to foreclose this Mortgage or to obtain specific
enforcement of any of the covenants or other terms of this Mortgage.
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6.3.7 Power of Sale. Under the power of sale hereby granted,
-------------
Mortgagee shall have the discretionary right to cause some or all of the
Property, including any Property which constitutes personal property, to be sold
or otherwise disposed of in any combination and in any manner permitted by
applicable law.
(a) Sales of Personal Property.
--------------------------
(1) For purposes of this power of sale, Mortgagee may
elect to treat as personal property any Property which is intangible
or which can be severed from the Land or Improvements without causing
structural damage. If it chooses to do so, Mortgagee may dispose of
any personal property separately from the sale of real property, in
any manner permitted by Article 9 of the Michigan Uniform Commercial
Code, as amended or recodified from time to time, including any public
or private sale, or in any manner permitted by any other applicable
law. Any proceeds of any such disposition shall not cure any Event of
Default or reinstate any Secured Obligation.
(2) In connection with any sale or other disposition of
such Property, Mortgagor agrees that the following procedures
constitute a commercially reasonable sale: Mortgagee shall mail
written notice of the sale to Mortgagor not later than five (5) days
prior to such sale. Once per week during the three weeks immediately
preceding such sale, Mortgagee will publish notice of the sale in a
local daily newspaper of general circulation. Upon receipt of any
written request, Mortgagee will make the Property available to any
bona fide prospective purchaser for inspection during reasonable
business hours. Notwithstanding any provision to the contrary,
Mortgagee shall be under no obligation to consummate a sale if, in its
judgment, none of the offers received by it equals the fair value of
the Property offered for sale. The foregoing procedures do not
constitute the only procedures that may be commercially reasonable.
-33-
(b) Sales of Real Property or Mixed Collateral.
------------------------------------------
(1) Mortgagee may choose to dispose of some or all of the
Property which consists solely of real property in any manner then
permitted by applicable law. In its discretion, Mortgagee may also or
alternatively choose to dispose of some or all of the Property, in any
combination consisting of both real and personal property, together in
one sale to be held in accordance with the law and procedures
applicable to real property, as permitted by Article 9 of the Michigan
Uniform Commercial Code, as amended or recodified from time to time.
Mortgagor agrees that such a sale of personal property together with
real property constitutes a commercially reasonable sale of the
personal property.
(2) The commencement by the Mortgagee of foreclosure
proceedings by advertisement or in equity shall be deemed an exercise
by the Mortgagee of its option set forth in paragraph 6.3.1 to
accelerate the due date of all sums secured hereby. The Mortgagor
hereby grants the power to the Mortgagee, in the event of the
occurrence of an Event of Default hereunder, to grant, bargain, sell,
release and convey the Property at public auction or venue, and upon
such sale to execute and deliver to the purchaser(s) instruments of
conveyance pursuant to the terms hereof and to the applicable laws.
The Mortgagor acknowledges that the foregoing sentence confers a power
of sale upon the Mortgagee, and that upon the occurrence of an Event
of Default this Mortgage may be foreclosed by advertisement as
described below and in the applicable Michigan statutes. The
Mortgagor understands that upon an Event of Default, the Mortgagee is
hereby authorized and empowered to sell the Property, or cause the
same to be sold and to convey the same to the purchaser in any lawful
manner, including but not limited to that provided by Chapter 32 of
the Revised Judicature Act of Michigan, entitled "Foreclosure of
Mortgage by Advertisement", which permits the Mortgagee to sell the
Property without affording the Mortgagor a hearing, or giving him
actual personal notice. The only
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notice required under such Chapter 32 is to publish notice in a local
newspaper and to post a copy of the notice on the Property.
WAIVER: By conferring this power of sale upon the Mortgagee, the
------
Mortgagor, for itself, its successors and assigns, after an opportunity for
consultation with its legal counsel, hereby voluntarily, knowingly and
intelligently waives all rights under the Constitution and Laws of the
United States and under the Constitution and Laws of the State of Michigan,
both to a hearing on the right to exercise and the exercise of the power of
sale, and to notice except as required by the Michigan statute which
provides for Foreclosure of Mortgages by Advertisement. Notwithstanding
the foregoing, if such right is available by law, the Mortgagor shall have
the right to timely contest the exercise of the power of sale by
instituting suit against the Mortgagee in the circuit court of the county
in which the Property is located or any other court of competent
jurisdiction.
6.3.8 Single or Multiple Foreclosure Sales. If the Property
------------------------------------
consists of more than one lot, parcel or item of property, Mortgagee may:
(a) Designate the order in which the lots, parcels and/or
items shall be sold or disposed of or offered for sale or disposition; and
(b) Elect to dispose of the lots, parcels and/or items through
a single consolidated sale or disposition to be held or made under the
power of sale granted in Sections 1.1 and 6.3.7, or in connection with
judicial proceedings, or by virtue of a judgment and decree of foreclosure
and sale; or through two or more such sales or dispositions; or in any
other manner Mortgagee may deem to be in its best interests (any such sale
or disposition being referred to herein as a "Foreclosure Sale").
If Mortgagee chooses to have more than one Foreclosure Sale, Mortgagee at its
option may cause the Foreclosure Sales to be held simultaneously or
successively, on the same day, or on such
-35-
different days and at such different times and in such order as Mortgagee may
deem to be in its best interests. No Foreclosure Sale shall terminate or affect
the liens or security interests of this Mortgage on any part of the Property
which has not been sold until all of the Secured Obligations have been paid in
full and the Commitment has been fully and finally terminated.
6.3.9 Other Permitted Remedies. Mortgagee and the Lenders may
------------------------
refuse to make any advance to, or issue any Letter of Credit for the account of,
Mortgagor, or any other Party. Mortgagee and the Lenders may exercise any and
all other rights and remedies available under the Loan Documents and applicable
law, including the right to file applications to change, and to exercise all
other rights and remedies available under applicable law with respect to, all
water permits and rights relating to the Property, provided however that,
notwithstanding the foregoing or any other provision contained in this Mortgage,
the remedies provided by this Mortgage shall not include the right to take any
action that violates applicable Gaming Laws.
6.4 Credit Bids. At any Foreclosure Sale, any person, including
-----------
Mortgagor or Mortgagee may bid for and acquire the Property or any part thereof
to the extent permitted by then applicable law. Instead of paying cash for such
property, Mortgagee may settle for the purchase price by crediting the sales
price of the property against the following obligations:
(a) First, the portion of the Secured Obligations attributable
to the expenses of sale, costs of any action and any other sums for which
Mortgagor is obligated to pay or reimburse Mortgagee or the Lenders under
Section 5.11; and
(b) Second, all other Secured Obligations in any order and
proportions as Mortgagee in its absolute discretion may choose (subject to
any applicable provisions for priority of application of payments set forth
in the Loan Agreement).
6.5 Application of Foreclosure Sale Proceeds. Mortgagee shall apply
----------------------------------------
the proceeds of any Foreclosure Sale in the manner required by applicable law,
provided that all proceeds that are to be applied against the Secured
Obligations shall, except as
-36-
otherwise required by applicable law, be applied against the Secured Obligations
in any order and proportions as Mortgagee in its absolute discretion may choose
(subject to any applicable provisions for priority of application of proceeds
set forth in the Loan Agreement).
6.6 Application of Rents and Other Sums. Mortgagee shall apply any
-----------------------------------
and all Rents collected by it, and any and all sums other than proceeds of a
Foreclosure Sale which Mortgagee may receive or collect under Section 6.3, in
the following manner:
(a) First, to pay the portion of the Secured Obligations
attributable to the costs and expenses of operation and collection that may
be incurred by Mortgagee or any receiver;
(b) Second, to pay all other Secured Obligations in any order
and proportions as Mortgagee in its absolute discretion may choose (subject
to the provisions for priority of application of payments set forth in the
Loan Agreement); and
(c) Third, to remit the remainder, if any, to the person or
persons legally entitled to it. Mortgagee shall have no liability for any
funds which it does not actually receive.
7. Leasehold Mortgage Provisions. The provisions of this Article 7
----------------------------- -
shall apply in the event that, and so long as, any portion of the Property
consists of Mortgagor's interests as tenant under any lease or leases
(collectively, including the Existing Ground Lease, the "Ground Leases").
Unless otherwise expressly provided, the lien of this Mortgage shall encumber
all of Mortgagor's rights and interests under and in connection with all Ground
Leases, including without limitation renewal and extension rights, options to
expand, and purchase options (all of which rights shall be collectively referred
to herein as a "Ground Leasehold"). Mortgagor hereby agrees, with respect to
each Ground Lease, as follows:
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7.1 Mortgagor shall timely perform its obligations in connection
with each Ground Lease. Without limiting the generality of Section 6.3.4,
-----
above, Mortgagor specifically acknowledges Mortgagee's right, while any default
by Mortgagor under any Ground Lease remains uncured, to perform the defaulted
obligations and take all other actions which Mortgagee deems necessary to
protect its interests with respect thereto, and Mortgagor hereby irrevocably
appoints Mortgagee its true and lawful attorney-in-fact (which appointment is
irrevocable and coupled with an interest) in its name or otherwise to execute
all documents, and perform all other acts, which Mortgagee reasonably deems
necessary to preserve its or Mortgagor's rights with respect to any Ground
Lease.
7.2 Mortgagor shall not, without Mortgagee's prior written consent,
modify, or cause or permit the termination of, any Ground Lease, or waive or in
any way release the landlord under any Ground Lease of or from any obligation or
condition.
7.3 Mortgagor shall notify Mortgagee promptly in writing of (i) the
occurrence of any default by the landlord under any Ground Lease and (ii) the
receipt by Mortgagor of any notice claiming the occurrence of any default by
Mortgagor under any Ground Lease or the occurrence of any event which, with the
passage of time or the giving of notice or both, would constitute a default by
Mortgagor under any Ground Lease (and Mortgagor shall also promptly deliver a
copy of any such notice to Mortgagee).
7.4 Unless Mortgagee otherwise consents in writing, so long as any
Secured Obligation remains outstanding, neither the fee title to, nor any other
estate or interest in, the real property subject to any Ground Lease shall merge
with any Ground Leasehold, notwithstanding the union of such estates in the
landlord or the tenant or in a third party. Any acquisition of the landlord's
interest in any Ground Lease by Mortgagor or any affiliate of Mortgagor shall be
accomplished in such a manner as to avoid a merger of the interests of landlord
and tenant unless Mortgagee consents to such merger in writing.
7.5 If Mortgagor acquires fee title to any portion of the real
property subject to any Ground Lease, this Mortgage shall automatically be a
lien on such fee title.
-38-
7.6 Mortgagor shall not subordinate any Ground Lease or Ground
Leasehold to any mortgage, deed of trust or other encumbrance of, or lien on,
any interest in the real property subject to such Ground Leasehold without the
prior written consent of Mortgagee. Any such subordination without such consent
shall, at Mortgagee's option, be void.
7.7 All subleases entered into by Mortgagor with respect to all or
any portion of the Property (and all existing subleases modified by Mortgagor)
shall provide that such subleases are subordinate to the lien of this Mortgage
and any modifications of this Mortgage and the obligations secured hereby;
provided, however, that (a) Mortgagee hereby agrees that if Mortgagee forecloses
under this Mortgage or enters into a new lease with any landlord under any
Ground Lease, the Operating Sublease shall not be cut-off, terminated or
extinguished as a result of any such foreclosure or new lease and the Casino
Operator shall attorn to Mortgagee or its assignee and the Operating Sublease
shall remain in full force and effect in accordance with its terms
notwithstanding the termination of the applicable Ground Lease; if Mortgagee
forecloses under this Mortgage or enters into a new lease with any landlord
under any Ground Lease pursuant to the provisions for a new lease, if any,
contained in the applicable Ground Lease or in any other document or agreement,
the subtenant shall attorn to Mortgagee or its assignee and the sublease shall
remain in full force and effect in accordance with its terms notwithstanding the
termination of the applicable Ground Lease. Mortgagee shall, if requested by
Mortgagor, enter into a subordination, non-disturbance and attornment agreement
with Casino Operator or any other sublessee under a sublease of a portion of the
Property (so long as such sublease is approved by Mortgagee or otherwise
permitted under this Mortgage).
7.8 Mortgagor shall exercise any option or right to renew or extend
the term of any Ground Lease at least six months prior to the date of
termination of any such option or right, shall give immediate written notice
thereof to Mortgagee, and shall execute, deliver and record any documents
requested by Mortgagee to evidence the lien of this Mortgage on such extended or
renewed lease term. If Mortgagor fails to exercise any such option or
-39-
right as required herein, Mortgagee may exercise the option or right as
Mortgagor's agent and attorney-in-fact pursuant to this Mortgage, or in
Mortgagee's own name or in the name of and on behalf of a nominee of Mortgagee,
as Mortgagee chooses in its absolute discretion.
7.9 As security for the Secured Obligations, Mortgagor hereby
assigns to Mortgagee a security interest in all prepaid rents and security
deposits and all other security which the landlords under the Ground Leases hold
for the performance of Mortgagor's obligations thereunder.
7.10 Promptly upon demand by Mortgagee, Mortgagor shall use
reasonable efforts to obtain from the landlord under any Ground Lease and
furnish to Mortgagee an estoppel certificate of such landlord stating the date
through which rent has been paid, whether or not there are any defaults, and the
specific nature of any claimed defaults.
7.11 Mortgagor shall notify Mortgagee promptly in writing of any
request by either party to any Ground Lease for arbitration, appraisal or other
proceedings relating to any Ground Lease and of the institution of any such
proceeding, and shall promptly deliver to Mortgagee a copy of all determinations
in any such proceeding. Mortgagee shall have the right, following written
notice to Mortgagor, to participate in any such proceeding in association with
Mortgagor or on its own behalf as an interested party. Mortgagor shall notify
Mortgagee promptly in writing of the institution of any legal proceeding
involving obligations under any Ground Lease, and Mortgagee may intervene in any
such legal proceeding and be made a party. Mortgagor shall promptly provide
Mortgagee with a copy of any decision rendered in connection with any such
proceeding.
7.12 To the extent permitted by law, the price payable by Mortgagor
or any other party in the exercise of the right of redemption, if any, from any
sale under, or decree of foreclosure of, this Mortgage shall include all rents
and other amounts paid and other sums advanced by Mortgagee on behalf of
Mortgagor as the tenant under the Ground Leases.
-40-
7.13 In addition to all other Events of Default described in this
Mortgage, the occurrence of any of the following shall be an Event of Default
hereunder:
(a) A breach or default by Mortgagor under any Ground Lease,
subject to any applicable cure period; or
(b) The occurrence of any event or circumstance which gives the
landlord under any Ground Lease a right to terminate such Ground Lease.
7.14 As used in this Mortgage, the "Bankruptcy Code" shall mean 11
U.S.C. (S)(S) 101 et seq., as modified and/or recodified from time to time.
-- ---
Notwithstanding anything to the contrary contained herein with respect to any
Ground Lease:
(a) The lien of this Mortgage attaches to all of Mortgagor's
rights under Subsection 365(h) of the Bankruptcy Code, including without
limitation any and all elections to be made thereunder, any and all rights
under any Ground Lease which Mortgagor is entitled to retain pursuant to 11
U.S.C. (S) 365(h)(1)(A)(ii) in the event of a rejection under the
Bankruptcy Code of such Ground Lease by the landlord thereunder (or any
trustee thereof), and any and all rights of offset under or as described in
11 U.S.C. (S) 365(h)(1)(B).
(b) Mortgagor acknowledges and agrees that, as the Mortgagee
under this Mortgage and by operation of 11 U.S.C. (S)365(h)(1)(D),
Mortgagee has, and until this Mortgage has been fully released or
reconveyed continuously shall have, whether before or after any default
under any of the Secured Obligations or the taking of any action to enforce
any of Mortgagee's rights and remedies under this Mortgage or any
foreclosure sale hereunder, the complete, unfettered and exclusive right,
in its sole and absolute discretion, to elect (the "365(h) Election")
whether (i) any Ground Lease that has been rejected under the Bankruptcy
Code by the landlord thereunder (or any trustee therefor) shall be treated
as terminated under 11 U.S.C. (S)365(h)(1)(A)(i), or (ii) the rights under
such Ground Lease that are in or appurtenant to the real property, as
described in 11 U.S.C.
-41-
(S)365(h)(1)(A)(ii), should be retained pursuant to that subsection. To the
extent that, notwithstanding the preceding sentence and 11 U.S.C.
(S)365(h)(1)(D), Mortgagor now or at any time in the future has any right
to make, or to participate in or otherwise in any manner affect the making
of, the 365(h) Election with respect to any Ground Lease, Mortgagor hereby
absolutely assigns and conveys to Mortgagee any and all such rights, and
all of Mortgagor's right, title, and interest therein, which may be used
and exercised by Mortgagee completely, exclusively, and without any
restriction whatsoever, in Mortgagee's sole and absolute discretion,
whether before or after any default upon any of the Secured Obligations,
the taking of any action to enforce any of Mortgagee's rights and remedies
under this Mortgage, or any foreclosure sale hereunder. Mortgagor hereby
unconditionally and irrevocably appoints Mortgagee as its attorney-in-fact
(which appointment is coupled with an interest) to exercise Mortgagor's
right, if any, to make, or participate in or otherwise in any matter affect
the making of, the 365(h) Election with respect to any Ground Lease.
Mortgagor shall not in any manner impede or interfere with any action taken
by Mortgagee and, at the request of Mortgagee, Mortgagor shall take or join
in the taking of any action to make, or participate in or otherwise in any
manner affect the making of, the 365(h) Election with respect to any Ground
Lease, in such manner as Mortgagee determines in its sole and absolute
discretion. Unless and until instructed to do so by Mortgagee (as
determined by Mortgagee in its sole and absolute discretion), Mortgagor
shall not take any action to make, or participate in or otherwise in any
manner affect the making of, the 365(h) Election with respect to any Ground
Lease, including in particular, but without limitation, any election to
treat any Ground Lease as terminated. Mortgagee shall have no obligation
whatsoever to Mortgagor or any other person or entity in connection with
the making of the 365(h) Election with respect to any Ground Lease or any
instruction by Mortgagee to Mortgagor given, withheld or delayed in respect
thereof, nor shall Mortgagee have any liability to Mortgagor or any other
person or entity arising from any of the same.
-42-
(c) As security for the Secured Obligations, Mortgagor hereby
irrevocably assigns to Mortgagee all of Mortgagor's rights to damages
arising from any rejection by any landlord (or any trustee thereof) of any
Ground Lease under the Bankruptcy Code. Mortgagee and Mortgagor shall
proceed jointly or in the name of Mortgagor in respect of any claim or
proceeding relating to the rejection of any Ground Lease, including without
limitation the right to file and prosecute any proofs of claim, complaints,
motions and other documents in any case in respect of such landlord under
the Bankruptcy Code. This assignment shall continue in effect until all of
the Secured Obligations have been satisfied in full. Any amounts received
by Mortgagee or Mortgagor as damages arising from the rejection of any
Ground Lease as aforesaid shall be applied first to all costs reasonably
incurred by Mortgagee (including attorneys' fees) in connection with this
subsection (c) and then in accordance with other applicable provisions of
this Mortgage.
(d) If, pursuant to the Bankruptcy Code, Mortgagor seeks to
offset against the rent reserved in any Ground Lease the amount of any
damages caused by the nonperformance of the landlord's obligations after
the rejection by the landlord (or any trustee thereof) of such Ground
Lease, Mortgagor shall, prior to effecting such offset, notify Mortgagee in
writing of its intent to do so, setting forth the amounts proposed to be
offset and, in the event that Mortgagee objects, Mortgagor shall not effect
any offset of the amounts to which Mortgagee objects. If Mortgagee fails
to object within 10 days following receipt of such notice, Mortgagor may
offset the amounts set forth in Mortgagor's notice.
(e) If any legal proceeding is commenced with respect to any
Ground Lease in connection with any case under the Bankruptcy Code,
Mortgagee and Mortgagor shall cooperatively conduct any such proceeding
with counsel reasonably agreed upon between Mortgagor and Mortgagee.
Mortgagor shall, upon demand, pay to Mortgagee all costs (including
attorneys' fees) reasonably incurred by Mortgagee in connection with any
such proceeding.
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(f) Mortgagor shall immediately notify Mortgagee orally upon
learning of any filing by or against any landlord of a petition under the
Bankruptcy Code. Mortgagor shall thereafter promptly give written notice
of such filing to Mortgagee, setting forth any information available to
Mortgagor with respect to the date of such filing, the court in which such
petition was filed, and the relief sought therein. Mortgagor shall
promptly deliver to Mortgagee all notices, pleadings and other documents
received by Mortgagor in connection with any such proceeding.
7.15 The generality of the provisions of this Mortgage shall not be
limited by any provision of this Article 7 that sets forth particular
-
obligations of Mortgagor as the tenant under the Ground Leases.
7.16 Mortgagor hereby represents and warrants to Mortgagee as
follows:
(a) The Existing Ground Lease is in full force and effect;
(b) Mortgagor owns the entire tenant's interest under the
Existing Ground Lease and has the right under the Existing Ground Lease to
execute this Mortgage; and
(c) No material default on the part of the tenant under the
Existing Ground Lease remains uncured, nor has any event occurred which,
with the passage of time or service of notice or both, would constitute
such a material default.
8. Miscellaneous Provisions.
------------------------
8.1 Additional Provisions. The Loan Documents fully state all of
---------------------
the terms and conditions of the parties' agreement regarding the matters
mentioned in or incidental to this Mortgage. The Loan Documents also grant
further rights to Mortgagee and contain further agreements and affirmative and
negative covenants by Mortgagor which apply to this Mortgage and to the
Property.
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8.2 No Waiver or Cure.
-----------------
8.2.1 Each waiver by Mortgagee must be in writing, and no waiver
shall be construed as a continuing waiver. No waiver shall be implied from any
delay or failure by Mortgagee to take action on account of any default of
Mortgagor. Consent by Mortgagee to any act or omission by Mortgagor shall not
be construed as a consent to any other or subsequent act or omission or to waive
the requirement for Mortgagee's consent to be obtained in any future or other
instance.
8.2.2 If any of the events described below occurs, that event
alone shall not: cure or waive any breach, Event of Default or notice of default
under this Mortgage or invalidate any act performed pursuant to any such default
or notice; or nullify the effect of any notice of default or sale (unless all
Secured Obligations then due have been paid and performed and all other defaults
under the Loan Documents have been cured); or impair the security of this
Mortgage; or prejudice Mortgagee or any receiver in the exercise of any right or
remedy afforded any of them under this Mortgage; or be construed as an
affirmation by Mortgagee of any tenancy, lease or option, or a subordination of
the lien or security interest of this Mortgage.
(a) Mortgagee, its agent or a receiver takes possession of all
or any part of the Property in the manner provided in Section 6.3.3.
(b) Mortgagee collects and applies Rents as permitted under
Sections 2.3 and 6.6 or exercises Mortgagor's right, title and interest
under the Leases, either with or without taking possession of all or any
part of the Property.
(c) Mortgagee receives and applies to any Secured Obligation
proceeds of any Property, including any proceeds of insurance policies,
condemnation awards, or other claims, property or rights assigned to
Mortgagee under Section 5.5.
(d) Mortgagee makes a site visit, observes the Property and/or
conducts tests as permitted under Section 5.13.
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(e) Mortgagee receives any sums under this Mortgage or any
proceeds of any collateral held for any of the Secured Obligations, and
applies them to one or more Secured Obligations.
(f) Mortgagee or any receiver invokes any right or remedy
provided under this Mortgage.
8.3 Powers of Mortgagee.
-------------------
8.3.1 If Mortgagee performs any act which it is empowered or
authorized to perform under this Mortgage, including any act permitted by
Section 5.8 or Section 6.3.4, that act alone shall not release or change the
personal liability of any person for the payment and performance of the Secured
Obligations then outstanding, or the lien or security interest of this Mortgage
on all or the remainder of the Property for full payment and performance of all
outstanding Secured Obligations. The liability of the original Mortgagor shall
not be released or changed if Mortgagee grants any successor in interest to
Mortgagor, or any other Party, any extension of time for payment, or
modification of the terms of payment, of any Secured Obligation. Mortgagee
shall not be required to comply with any demand by any original Mortgagor that
Mortgagee refuse to grant such an extension or modification to, or commence
proceedings against, any such successor in interest.
8.3.2 Mortgagee may take any of the actions permitted under
Sections 6.3.2 and/or 6.3.3 regardless of the adequacy of the security for the
Secured Obligations, or whether any or all of the Secured Obligations have been
declared to be immediately due and payable, or whether notice of default has
been given under this Mortgage.
8.3.3 From time to time, Mortgagee may apply to any court of
competent jurisdiction for aid and direction in enforcing the rights and
remedies created under this Mortgage. Mortgagee may from time to time obtain
orders or decrees directing, confirming or approving acts in and enforcing these
rights and remedies.
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8.4 Merger. No merger shall occur as a result of Mortgagee's
------
acquiring any other estate in or any other lien on or security interest in the
Property unless Mortgagee consents to a merger in writing.
8.5 Applicable Law. This Mortgage shall be governed by and
--------------
construed in accordance with the laws of the State of Michigan.
8.6 Successors in Interest. The terms, covenants and conditions of
----------------------
this Mortgage shall be binding upon and inure to the benefit of the heirs,
successors and assigns of the parties. However, this Section 8.6 does not waive
the provisions of Section 6.1.
8.7 Interpretation.
--------------
8.7.1 Whenever the context requires, all words used in the
singular will be construed to have been used in the plural, and vice versa, and
each gender will include any other gender. The captions of the sections of this
Mortgage are for convenience only and do not define or limit any terms or
provisions. The word "include(s)" means "include(s), without limitation," and
the word "including" means "including, but not limited to."
8.7.2 The word "obligations" is used in its broadest and most
comprehensive sense, and includes all primary, secondary, direct, indirect,
fixed and contingent obligations. It further includes all principal, interest,
reimbursement and indemnity obligations, prepayment charges, late charges, loan
fees and any other fees and charges accruing or assessed at any time, as well as
all obligations to perform acts or satisfy conditions.
8.7.3 No listing of specific instances, items or matters in any
way limits the scope or generality of any language of this Mortgage. All
Exhibits and/or Schedules attached to this Mortgage are hereby incorporated in
this Mortgage.
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8.7.4 Capitalized terms used and not otherwise defined herein
shall have the meanings given to them in the Loan Agreement.
8.8 In-House Counsel Fees. Whenever Mortgagor is obligated to pay
---------------------
or reimburse Mortgagee for any attorneys' fees, those fees shall include the
reasonably allocated costs for services of in-house counsel.
8.9 Waiver of Marshaling. To the extent permitted by applicable
--------------------
law, Mortgagor waives all rights, legal and equitable, it may now or hereafter
have to require marshalling of assets or to require foreclosure sales of assets
in a particular order. Each successor and assign of Mortgagor, including any
holder of a lien or security interest subordinate to this Mortgage, by
acceptance of its interest or lien or security interest, agrees that it shall be
bound by the above waiver, as if it had given the waiver itself.
8.10 Severability. Any provision in this Mortgage that is held to
------------
be inoperative, unenforceable or invalid as to any party or in any jurisdiction
shall, as to that party or jurisdiction, be inoperative, unenforceable or
invalid without affecting the remaining provisions or the operation,
enforceability or validity of that provision as to any other party or in any
other jurisdiction, and to this end the provisions of this Mortgage are declared
to be severable.
8.11 Notices. The address for Mortgagor set forth below is the
-------
mailing address of Mortgagor as debtor under the Michigan Uniform Commercial
Code, as amended or recodified from time to time. Mortgagee's address given
below is the address for Mortgagee as secured party under the Michigan Uniform
Commercial Code, as amended or recodified from time to time.
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Addresses Where
Notices to Mortgagor
Are to Be Sent:
MGM GRAND DETROIT II, LLC
0000 Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Attn: General Counsel
Addresses Where
Notices to Mortgagee
Are to Be Sent:
Bank of America NT&SA
Agency Management Services
#5596
000 Xxxxx Xxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxxx
8.1 Jury Trial Wavier. MORTGAGOR AND MORTGAGEE EACH HEREBY
-----------------
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS MORTGAGE, ANY LOAN DOCUMENT OR ANY OF THE OTHER DOCUMENTS
CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY
PARTY. THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE MORTGAGOR'S EXECUTION AND
DELIVERY OF THIS MORTGAGE AND FOR THE MORTGAGEE'S ACCEPTANCE OF THIS MORTGAGE
AND THE EXTENSION OF CREDIT TO MORTGAGOR.
[Remainder of this page is intentionally blank]
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IN WITNESS WHEREOF, this Mortgage has been executed as of the date
first written above.
Signed in the presence of: "Mortgagor":
____________________________ MGM GRAND DETROIT II, LLC,
Printed Name: ______________ a Delaware limited liability
company
____________________________
Printed Name: ______________ By: MGM GRAND DETROIT, LLC,
a Delaware limited
liability company,
Managing Member
By: __________________
Name: __________________
Title: __________________
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ACKNOWLEDGMENTS
---------------
STATE OF NEVADA )
) ss:
COUNTY OF XXXXX )
The foregoing instrument was acknowledged before me on March 30, 1999,
by _________________, who is ________________ of MGM GRAND DETROIT, LLC, a
Delaware limited liability company, Managing Member of MGM GRAND DETROIT II,
LLC, a Delaware limited liability company, on behalf of the company.
______________________________________
Notary Public, _____ County, _________
My Commission Expires: _______________
DRAFTED BY,
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Sheppard, Mullin, Xxxxxxx
& Xxxxxxx LLP
000 Xxxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxx, Esq.
-51-
EXHIBIT A
---------
(Legal Description of Land)
EXHIBIT A to MORTGAGE executed as of March 31, 1999, by MGM GRAND
DETROIT II, LLC, a Delaware limited liability company, as "Mortgagor", in favor
of BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking
association, as Administrative Agent for the Lenders and the Issuing Lender, as
"Mortgagee."
DESCRIPTION OF PROPERTY
-----------------------
That certain real property located in the County of Xxxxx, State of
Michigan, described below, and all improvements and fixtures thereon, and all
appurtenances thereto:
Parcel 1: Part of Xxx 0, Xxxxxxx Xxxxx Xxxxxxx Xxxx Xx. 0, according to the
recorded Plat thereof, as recorded in Liber 90 of Plats, Pages 85 and 86, Xxxxx
County Records, and being more particularly described as follows: Commencing at
the Southeast corner of Lot 4, of said subdivision, said point also being the
intersection of the west line of Third Avenue (142 feet wide) with the north
line of Xxxxxx Street (60 feet wide); thence South 60 degrees 00 minutes 45
seconds West along said north line; 212.00 feet to the point of beginning;
thence North 30 degrees 02 minutes 15 seconds West 382.00 feet; thence South 60
degrees 00 minutes 45 seconds West 349.28 feet to said easterly line of Xxxx X.
Lodge Freeway; thence South 39 degrees 09 minutes 45 seconds East along the
easterly line 42.52 feet; thence South 42 degrees 09 minutes 45 seconds East,
along said line, 61.38 feet; thence South 41 degrees 21 minutes 27 seconds East,
along said line, 166.12 feet; thence South 44 degrees 47 minutes 30 seconds
East, along said line, 121.19 feet to the north line of Xxxxxx Street; thence
North 60 degrees 00 minutes 45 seconds East, along said line, 266.17 feet to the
point of beginning.
Parcel 2: Part of Xxx 0, Xxxxxxx Xxxxx Xxxxxxx Xxxx Xx. 0, according to the
recorded Plat thereof, as recorded in Liber 90 of Plats, Pages 85 and 86, Xxxxx
County Records, and being more particularly described as follows: Commencing at
the Northwest
Exhibit A
---------
Page 1 of 2
corner of said Lot 4, said corner being at the intersection of the Southerly
right-of-way line of Michigan Avenue (100 feet wide) and the Easterly right-of-
way line of Xxxx X. Lodge Freeway, as now established; thence along said
Southerly right-of-way line of Michigan Avenue, North 89 degrees 57 minutes 55
seconds East, 668.78 feet to the Westerly right-of-way line of Third Avenue (142
feet wide); thence along said Westerly right-of-way line, South 30 degrees 02
minutes 15 seconds East, 46.70 feet to the point of beginning; thence continuing
along said Westerly right-of-way, South 30 degrees 02 minutes 15 seconds East,
630.00 feet to the Northerly right-of-way of Xxxxxx Street (60 feet wide);
thence along said northerly right-of-way line, South 60 degrees 00 minutes 45
seconds West, 212.00 feet; thence North 30 degrees 02 minutes 15 seconds West,
530.00 feet; thence North 60 degrees 00 minutes 45 seconds East, 212.00 feet to
the point of beginning.
Tax Parcel No. 000240 Xxxx 4 (as to Parcel 1)
Tax Parcel No. 000304-9 Xxxx 4 (as to Parcel 2)
Address (Parcel 1): 0000 Xxxx X. Xxxxx, Xxxx xx Xxxxxxx, Xxxxxx of Xxxxx, State
of Michigan
Exhibit A
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