LIDO CASINO RESORT, LLC
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of October 19, 2001 and entered
into by and among LIDO CASINO RESORT, LLC ("Borrower"), THE FINANCIAL
INSTITUTIONS FROM TIME TO TIME PARTY HERETO (each individually referred to
herein as a "Lender" and collectively as "Lenders"), and THE BANK OF NOVA SCOTIA
("ScotiaBank"), as administrative agent for Lenders (in such capacity,
"Administrative Agent").
R E C I T A L S
WHEREAS, Borrower is an indirect wholly-owned subsidiary of
Venetian Casino Resort, LLC ("Venetian") and Las Vegas Sands, Inc. ("LVSI") and
the owner of the Land (this and other capitalized terms used herein shall have
the meanings given in subsection 1.1 of this Agreement) on which Borrower
intends to develop and construct Phase II of the casino resort property being
developed by LVSI, Venetian and their Subsidiaries;
WHEREAS, Borrower has requested that Lender extend certain senior
credit facilities to Borrower on the terms and conditions set forth herein, to
be used, among other things, to (i) provide a letter of credit for the account
of Borrower and for the benefit of Scotiabank, as agent for the lenders under
the LVSI/Venetian Credit Agreement, (ii) pay for certain predevelopment
activities (such as planning, design and permitting) in connection with Phase II
during the term of the facilities, (iii) pay interest, fees and transaction
costs associated with such credit facilities and (iv) pay for other general
corporate expenditures, including loans and distributions to Affiliates to the
extent permitted hereunder.
WHEREAS, subject to the terms and conditions hereof Lenders are
willing to extend such senior secured credit facilities to Borrower; and
WHEREAS, Borrower is willing to secure all of the Obligations
hereunder and under the other Loan Documents by granting to Administrative Agent
on behalf of Lenders a First Priority Lien on the Collateral.
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, Borrower, Lenders and
Administrative Agent agree as follows:
Section 1. DEFINITIONS
1.1 Certain Defined Terms.
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The following terms used in this Agreement shall have the
following meanings:
"Xxxxxxx" means Xxxxxxx X. Xxxxxxx, an individual.
"Adjusted Eurodollar Rate" means, for any Interest Rate
Determination Date with respect to an Interest Period for a
Eurodollar Rate Loan, the rate per annum obtained by dividing (i)
the arithmetic average (rounded upward to the nearest 1/16 of one
percent) of the offered quotations to first class banks in the
interbank Eurodollar market by Scotiabank for U.S. dollar
deposits of amounts in same day funds comparable to the
respective principal amounts of the Eurodollar Rate Loans of
Scotiabank for which the Adjusted Eurodollar Rate is then being
determined with maturities comparable to such Interest Period as
of approximately 10:00 A.M. (New York time) on such Interest Rate
Determination Date by (ii) a percentage equal to 100% minus the
stated maximum rate of all reserve requirements (including any
marginal, emergency, supplemental, special or other reserves)
applicable on such Interest Rate Determination Date to any member
bank of the Federal Reserve System in respect of "Eurocurrency
liabilities" as defined in Regulation D (or any successor
category of liabilities under Regulation D).
"Administrative Agent" has the meaning assigned to that term in
the introduction to this Agreement and also means and includes
any successor Administrative Agent appointed pursuant to
subsection 9.5.
"Affected Lender" has the meaning assigned to that term in
subsection 2.6C.
"Affected Loans" has the meaning assigned to that term in
subsection 2.6C.
"Affiliate", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under
direct or indirect common control with, that Person. For the
purposes of this definition, "control" (including, with
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correlative meanings, the terms "controlling", "controlled by"
and "under common control with"), as applied to any Person, means
the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of that
Person, whether through the ownership of voting securities or by
contract or otherwise.
"Agreement" means this Credit Agreement dated as of October 19,
2001.
"Aggregate Amounts Due" has the meaning assigned to that term in
subsection 10.5.
"Applied Amount" has the meaning assigned to that term in
subsection 2.4B(iv)(b).
"Asset Sale" means the sale by a Borrower or any of its
Subsidiaries to any Person of (i) any of the stock of any of such
Person's Subsidiaries, (ii) substantially all of the assets of
any division or line of business of a Borrower or any of its
Subsidiaries, or (iii) any other assets (whether tangible or
intangible) of a Borrower or any of its Subsidiaries (other than
(a) inventory or goods (other than equipment) sold in the
ordinary course of business, (b) any other assets to the extent
that the aggregate fair market value of such assets sold during
any Fiscal Year, is less than or equal to $250,000.
"Assignment Agreement" means an Assignment Agreement in
substantially the form of Exhibit X annexed hereto.
"Bankruptcy Code" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any
successor statute.
"Base Rate" means, at any time, the higher of (x) the Prime Rate
or (y) the rate which is 1/2 of 1% in excess of the Federal Funds
Effective Rate.
"Base Rate Loans" means Loans bearing interest at rates
determined by reference to the Base Rate as provided in
subsection 2.2A.
"Borrower" has the meaning assigned to that term in the
introduction to this Agreement.
"Business Day" means (i) for all purposes other than as covered
by clause (ii) below, any day excluding Saturday, Sunday and any
day which is a legal holiday under the laws of the State of New
York or Nevada or is a day on which banking institutions located
in either such state are authorized or required by law or other
governmental action to close, and (ii) with respect to all
notices, determinations, fundings and payments in connection with
the Adjusted Eurodollar Rate or any Eurodollar Rate Loans, any
day that is a Business Day described in clause (i) above and that
is also a day for trading by and between banks in Dollar deposits
in the London interbank market.
"Capital Lease", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as
lessee that, in conformity with GAAP, is accounted for as a
capital lease on the balance sheet of that Person.
"Cash" means (i) money, (ii) currency or (iii) a credit balance
in a Deposit Account.
"Cash Equivalents" means (a) [intentionally deleted], (b)(i)
direct obligations of the United States of America (including
obligations issued or held in book-entry form on the books of the
Department of the Treasury of the United States of America) or
obligations fully guaranteed by the United States of America,
(ii) obligations, debentures, notes or other evidence of
indebtedness issued or guaranteed by any other agency or
instrumentality of the United States, (iii) interest-bearing
demand or time deposits (which may be represented by certificates
of deposit) issued by banks having general obligations rated (on
the date of acquisition thereof) at least "A" or the equivalent
by Standard & Poor's Ratings Group, a division of McGraw Hill,
Inc. (together with its successors, "S&P") or Xxxxx'x Investors
Service, Inc. (together with its successors, "Moody's") (S&P and
Moody's together with any other nationally recognized credit
rating agency if neither of such corporations is then currently
rating the pertinent currently rating the pertinent obligations,
a "Rating Agency") or, if not so rated, secured at all times, in
the manner and to the extent provided by law, by collateral
security in clause (i) or (ii) of this definition, of a market
value of no less than the amount of monies so invested, (iv)
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commercial paper rated (on the date of acquisition thereof) at
least "A-1" or "P-1" or the equivalent by any Rating Agency
issued by any Person, (v) repurchase obligations for underlying
securities of the types described in clause (i) or (ii) above,
entered into with any commercial bank or any other financial
institution having long-term unsecured debt securities rated (on
the date of acquisition thereof) at least "A" or "A2" or the
equivalent by any Rating Agency in connection with which such
underlying securities are held in trust or by a third-party
custodian, (vi) guaranteed investment contracts of any financial
institution which has a long-term debt rated (on the date of
acquisition thereof) at least "A" or "A2" or the equivalent by
any Rating Agency, (vii) obligations (including both taxable and
non-taxable municipal securities) issued or guaranteed by, and
any other obligations the interest on which is excluded from
income for Federal income tax purposes issued by, and any state
of the United States of America or District of Columbia or the
Commonwealth of Puerto Rico or any political subdivision, agency,
authority or instrumentality thereof, which issuer or guarantor
has (A) a short-term debt rated (on the date of acquisition
thereof) at least "A-1" or "P-1" or the equivalent by any Rating
Agency and (B) a long-term debt rated (on the date of acquisition
thereof) at least "A" or "A2" or the equivalent by any Rating
Agency, (viii) investment contracts of any financial institution
either (A) fully secured by (1) direct obligations of the United
States, (2) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States
or (3) securities or receipts evidencing ownership interest in
obligations or special portions thereof described in clause (1)
or (2), in each case guaranteed as full faith and credit
obligations of the United States of America, having a market
value at least equal to 102% of the amount deposited thereunder,
or (B) with long-term debt rated (on the date of acquisition
thereof) at least "A" or "A2" or the equivalent by any Rating
Agency and short-term debt rated (on the date of acquisition
thereof) at least "A-1" or "P-1" or the equivalent by any Rating
Agency, (ix) a contract or investment agreement with a provider
or guarantor (A) which provider or guarantor is rated (on the
date of acquisition thereof) at least "A" or "A2" or the
equivalent by any Rating Agency (provided that if a guarantor is
a party to the rating, the guaranty must be unconditional and
must be confirmed in writing prior to any assignment by the
provider to any subsidiary of such guarantor), (B) providing that
monies invested shall be payable to Administrative Agent without
condition (other than notice) and without brokerage fee or other
penalty, upon not more than two Business Days' notice for
application when and as required or permitted under the
Collateral Documents, and (C) stating that such contract or
agreement is unconditional, expressly disclaiming any right of
setoff and providing for immediate termination in the event of
insolvency of the provider and termination upon demand of
Administrative Agent (which demand shall only be made at the
direction of the Borrower) after any payment or other covenant
default by the provider, or (x) any debt instruments of any
Person which instruments are rated (on the date of acquisition
thereof) at least "X," "X0", "X-0" or "P-1" or the equivalent by
any Rating Agency, provided that in each case of clauses (i)
through (x), such investments are denominated in Dollars and
maturing not more than 13 months from the date of acquisition
thereof; (c) investments in any money market fund which is rated
(on the date of acquisition thereof) at least "A" or "A2" or the
equivalent by any Rating Agency; (d) investments in mutual funds
sponsored by any securities broker-dealer of recognized national
standing having an investment policy that requires substantially
all the invested assets of such fund to be invested in
investments described in any one or more of the foregoing clauses
and having a rating of at least "A" or "A2" or the equivalent by
any Rating Agency; or (e) investments in both taxable and
nontaxable (i) periodic auction reset securities which have final
maturities between one and 30 years from the date of issuance and
are repriced through a dutch auction or other similar method
every 35 days or (ii) auction preferred shares which are senior
securities of leveraged closed end municipal bond funds and are
repriced pursuant to a variety of rate reset periods, in each
case having a rating (on the date of acquisition thereof) of at
least "A" or "A2" or the equivalent of any Rating Agency.
"Certificate re Non-Bank Status" means a certificate
substantially in the form of Exhibit VI annexed hereto delivered
by a Lender to Administrative Agent pursuant to subsection
2.7B(iii).
"Chase Credit Agreement" means the unsecured bank line of credit
of Borrower with The Chase Manhattan Bank, as amended May 31,
2001.
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"Class" means, as applied to Lenders, each of the following two
classes of Lenders: (i) Lenders having Term Loan Exposure and
(ii) Lenders having Revolving Loan Exposure.
"Closing Date" means the date, on or before October 19, 2001, on
which this Agreement is executed and delivered and all conditions
for the occurrence thereof set forth in subsection 4.1 shall have
been satisfied or waived by Administrative Agent.
"Code" means the Internal Revenue Code of 1986, as amended to the
date hereof and from time to time hereafter, and any successor
statute.
"Collateral" means, collectively, all of the real, personal and
mixed property (including capital stock) in which Liens are
purported to be granted pursuant to the Collateral Documents as
security for the Obligations.
"Collateral Documents" means the Company Security Agreement, the
Deed of Trust, any Subsidiary Security Agreements and all other
instruments or documents delivered by a Loan Party pursuant to
this Agreement or any of the other Loan Documents in order to
grant to Administrative Agent on behalf of Lenders a Lien on any
real, personal or mixed property of that Loan Party as security
for the Obligations.
"Commercial Letter of Credit" means any letter of credit or
similar instrument issued for the purpose of providing the
primary payment mechanism in connection with the purchase of any
materials, goods or services by Borrower in the ordinary course
of business of Borrower.
"Commitment" means the commitment of a Lender to make Loans as
set forth in subsection 2.1A, and "Commitments" means such
commitments of all Lenders in the aggregate.
"Company Security Agreement" means the Company Security Agreement
executed and delivered by Borrower on the date hereof,
substantially in the form of Exhibit VII annexed hereto.
"Compliance Certificate" means a certificate substantially in the
form of Exhibit IV annexed hereto delivered to Lender by Borrower
pursuant to subsection 6.1(iv).
"Contingent Obligation", as applied to any Person, means any
direct or indirect liability, contingent or otherwise, of that
Person (i) with respect to any Indebtedness, lease, dividend or
other obligation of another if the primary purpose or intent
thereof by the Person incurring the Contingent Obligation is to
provide assurance to the obligee of such obligation of another
that such obligation of another will be paid or discharged, or
that any agreements relating thereto will be complied with, or
that the holders of such obligation will be protected (in whole
or in part) against loss in respect thereof, (ii) with respect to
any letter of credit issued for the account of that Person or as
to which that Person is otherwise liable for reimbursement of
drawings, or (iii) under Interest Rate Agreements. Contingent
Obligations shall include (a) the direct or indirect guaranty,
endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation
of another, (b) the obligation to make take-or-pay or similar
payments if required regardless of non-performance by any other
party or parties to an agreement, and (c) any liability of such
Person for the obligation of another through any agreement
(contingent or otherwise) (X) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital
contributions or otherwise) or (Y) to maintain the solvency or
any balance sheet item, level of income or financial condition of
another if, in the case of any agreement described under
subclauses (X) or (Y) of this sentence, the primary purpose or
intent thereof is as described in the preceding sentence. The
amount of any Contingent Obligation shall be equal to the amount
of the obligation so guaranteed or otherwise supported or, if
less, the amount to which such Contingent Obligation is
specifically limited.
"Contractual Obligation", as applied to any Person, means any
provision of any Security issued by that Person or of any
material indenture, mortgage, deed of trust, contract,
undertaking, agreement or other instrument to which that Person
is a party or by which it or any of its properties is bound or to
which it or any of its properties is subject.
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"Contractors" means any architects, consultants, designers,
contractors, subcontractors, suppliers, laborers or any other
Person engaged by Borrower.
"Contracts" means, collectively, the contracts entered into, from
time to time, between Borrower and any Contractor for performance
of services or sale of goods.
"Cooperation Agreement" means that certain Amended and Restated
Reciprocal Easement, Use and Operating Agreement dated as of
November 14, 1997 by and between Venetian, Grand Canal Shops Mall
Construction, LLC (replaced by Grand Canal Shops Mall Subsidiary,
LLC pursuant to an amendment dated December 20, 1999) and
Interface.
"Debt Service Reserve Amount" means $1,000,000, provided that if
the aggregate amount of Term Loans and Revolving Loan Commitments
is increased above $17,500,000, such amount shall be increased by
the product of 0.057 times the aggregate amount by which the Term
Loans and Revolving Loan Commitments are increased.
"Deed of Trust" means that certain Deed of Trust, Assignment of
Rents and Leases and Security Agreement in the form of Exhibit
VIII annexed hereto, dated effective as of the Closing Date
granted by Borrower to Nevada Title Company, for the benefit of
Administrative Agent, as agent for the Lenders.
"Deposit Account" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union
or like organization, other than an account evidenced by a
negotiable certificate of deposit.
"Dollars" and the sign "$" mean the lawful money of the United
States of America.
"Eligible Assignee" means (A) (i) a commercial bank organized
under the laws of the United States or any state thereof; (ii) a
savings and loan association or savings bank organized under the
laws of the United States or any state thereof; (iii) a
commercial bank organized under the laws of any other country or
a political subdivision thereof; provided that (x) such bank is
acting through a branch or agency located in the United States or
(y) such bank is organized under the laws of a country that is a
member of the Organization for Economic Cooperation and
Development or a political subdivision of such country; and (iv)
any other entity which is an "accredited investor" (as defined in
Regulation D under the Securities Act) which extends credit or
buys loans as one of its businesses including insurance
companies, mutual funds and lease financing companies; and (B)
any Lender and any Affiliate of any Lender; provided that no
Affiliate of Borrower shall be an Eligible Assignee; provided
further that so long as no Event of Default shall have occurred
and be continuing, no (i) Person that owns or operates a casino
located in the State of Nevada or the State of New Jersey (or is
an Affiliate of such a Person) (provided that a passive
investment constituting less than 20% of the common stock of any
such casino shall not constitute ownership thereof for the
purposes of this definition), (ii) Person that owns or operates a
convention, trade show or exhibition facility in Las Vegas,
Nevada or Xxxxx County, Nevada (or an Affiliate of such a Person)
(provided that a passive investment constituting less than 20% of
the common stock of any such convention or trade show facility
shall not constitute ownership for the purpose of this
definition), or (iii) union pension fund (provided that any
intermingled fund or managed account which has as part of its
assets under management the assets of a union pension fund shall
not be disqualified from being an Eligible Assignee hereunder so
long as the manager of such fund is not controlled by a union),
shall be an Eligible Assignee, in each case which Person shall
not have been denied an approval or a license, or found
unsuitable under the Nevada Gaming Laws applicable to Lenders.
"Employee Benefit Plan" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is or was maintained or
contributed to by Borrower, any of its Subsidiaries or any of
their respective ERISA Affiliates.
"Environmental Claim" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement
order or other order or directive (conditional or otherwise), by
any governmental authority or any other Person, arising (i)
pursuant to or in connection with any actual or alleged violation
of any Environmental Law, (ii) in connection with any Hazardous
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Materials or any actual or alleged Hazardous Materials Activity,
or (iii) in connection with any actual or alleged damage, injury,
threat or harm to health, safety, natural resources or the
environment.
"Environmental Laws" means any and all current or future
statutes, ordinances, orders, rules, regulations, judgments,
Permits, or any other requirements of governmental authorities
relating to (i) environmental matters, including those relating
to any Hazardous Materials Activity, (ii) the generation, use,
storage, transportation or disposal of Hazardous Materials, or
(iii) occupational safety and health, industrial hygiene, land
use or the protection of human, plant or animal health or
welfare, in any manner applicable to Borrower or any of its
Subsidiaries or any Facility, including the Comprehensive
Environmental Response, Compensation, and Liability Act (42
X.X.X.xx. 9601 et seq.), the Hazardous Materials Transportation
Act (49 X.X.X.xx. 1801 et seq.), the Resource Conservation and
Recovery Act (42 X.X.X.xx. 6901 et seq.), the Federal Water
Pollution Control Act (33 X.X.X.xx. 1251 et seq.), the Clean Air
Act (42 X.X.X.xx. 7401 et seq.), the Toxic Substances Control Act
(15 X.X.X.xx. 2601 et seq.), the Federal Insecticide, Fungicide
and Rodenticide Act (7 U.S.C.ss.136 et seq.), the Occupational
Safety and Health Act (29 X.X.X.xx. 651 et seq.), the Oil
Pollution Act (33 X.X.X.xx. 2701 et seq.) and the Emergency
Planning and Community Right-to-Know Act (42 X.X.X.xx. 11001 et
seq.), each as amended or supplemented, any analogous present or
future state or local statutes or laws, and any regulations
promulgated pursuant to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor thereto.
"ERISA Affiliate" means, as applied to any Person, (i) any
corporation which is a member of a controlled group of
corporations within the meaning of Section 414(b) of the Code of
which that Person is a member; (ii) any trade or business
(whether or not incorporated) which is a member of a group of
trades or businesses under common control within the meaning of
Section 414(c) of the Code of which that Person is a member; and
(iii) any member of an affiliated service group within the
meaning of Section 414(m) or (o) of the Code of which that
Person, any corporation described in clause (i) above or any
trade or business described in clause (ii) above is a member. Any
former ERISA Affiliate of Borrower or any of its Subsidiaries
shall continue to be considered an ERISA Affiliate of Borrower or
such Subsidiary within the meaning of this definition with
respect to the period such entity was an ERISA Affiliate of
Borrower or such Subsidiary and with respect to liabilities
arising after such period for which Borrower or such Subsidiary
could be liable under the Code or ERISA.
"ERISA Event" means (i) a "reportable event" within the meaning
of Section 4043 of ERISA and the regulations issued thereunder
with respect to any Pension Plan (excluding those for which the
provision for 30-day notice to the PBGC has been waived by
regulation); (ii) the failure to meet the minimum funding
standard of Section 412 of the Code with respect to any Pension
Plan (whether or not waived in accordance with Section 412(d) of
the Code) or the failure to make by its due date a required
installment under Section 412(m) of the Code with respect to any
Pension Plan or the failure to make any required contribution to
a Multiemployer Plan; (iii) the provision by the administrator of
any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a
notice of intent to terminate such plan in a distress termination
described in Section 4041(c) of ERISA; (iv) the withdrawal by
Borrower, any of its Subsidiaries or any of their respective
ERISA Affiliates from any Pension Plan with two or more
contributing sponsors or the termination of any such Pension Plan
resulting in liability pursuant to Section 4063 or 4064 of ERISA;
(v) the institution by the PBGC of proceedings to terminate any
Pension Plan, or the occurrence of any event or condition which
might constitute grounds under ERISA for the termination of, or
the appointment of a trustee to administer, any Pension Plan;
(vi) the imposition of liability on Borrower, any of its
Subsidiaries or any of their respective ERISA Affiliates pursuant
to Section 4062(e) or 4069 of ERISA or by reason of the
application of Section 4212(c) of ERISA; (vii) the withdrawal of
Borrower, any of its Subsidiaries or any of their respective
ERISA Affiliates in a complete or partial withdrawal (within the
meaning of Sections 4203 and 4205 of ERISA) from any
Multiemployer Plan if there is any potential liability therefor,
or the receipt by Borrower, any of its Subsidiaries or any of
their respective ERISA Affiliates of notice from any
Multiemployer Plan that it is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA, or that it intends to
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terminate or has terminated under Section 4041A or 4042 of ERISA;
(viii) the occurrence of an act or omission which could give rise
to the imposition on Borrower, any of its Subsidiaries or any of
their respective ERISA Affiliates of fines, penalties, taxes or
related charges under Chapter 43 of the Code or under Section
409, Section 502(c), (i) or (l), or Section 4071 of ERISA in
respect of any Employee Benefit Plan; (ix) the assertion of a
material claim (other than routine claims for benefits) against
any Employee Benefit Plan other than a Multiemployer Plan or the
assets thereof, or against Borrower, any of its Subsidiaries or
any of their respective ERISA Affiliates in connection with any
Employee Benefit Plan; (x) receipt from the Service of notice of
the failure of any Pension Plan (or any other Employee Benefit
Plan intended to be qualified under Section 401(a) of the Code)
to qualify under Section 401(a) of the Code, or the failure of
any trust forming part of any Pension Plan to qualify for
exemption from taxation under Section 501(a) of the Code; or (xi)
the imposition of a Lien pursuant to Section 401(a)(29) or 412(n)
of the Code or pursuant to ERISA with respect to any Pension
Plan.
"Eurodollar Rate Loans" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as
provided in subsection 2.2A.
"Event of Default" means each of the events set forth in Section
8.
"Event of Loss" means, with respect to any property or asset
(tangible or intangible, real or personal), any of the following:
(A) any loss, destruction or damage of such property or asset;
(B) any actual condemnation, seizure or taking by exercise of the
power of eminent domain or otherwise of such property or asset,
or confiscation of such property or asset or the requisition of
the use of such property or asset; or (C) any settlement in lieu
of clause (B) above.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"Facilities" means any and all real property (including all
buildings, fixtures or other improvements located thereon) now,
hereafter or heretofore owned, leased, operated or used by
Borrower or any of its Subsidiaries or any of their respective
predecessors including, without limitation, the Land.
"FDIC" means the Federal Deposit Insurance Corporation.
"Federal Funds Effective Rate" means, for any period, a
fluctuating interest rate equal for each day during such period
to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of
the quotations for such day on such transactions received by
Administrative Agent from three Federal funds brokers of
recognized standing selected by Administrative Agent.
"First Priority" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document,
that such Lien is the only Lien (other than Liens permitted
pursuant to subsection 7.2) to which such Collateral is subject.
"Fiscal Quarter" means a fiscal quarter of any Fiscal Year.
"Fiscal Year" means the fiscal year of Borrower ending on
December 31 of each calendar year.
"Funding and Payment Office" means (i) the office of Lender
located at 000 Xxxxxxxxx Xxxxxx XX, Xxxxx 0000, Xxxxxxx, Xxxxxxx
00000 or (ii) such other office of Administrative Agent as may
from time to time hereafter be designated as such in a written
notice delivered by Administrative Agent to Borrower and each
Lender.
"Funding Date" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, generally accepted
accounting principles set forth in opinions and pronouncements of
the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a
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significant segment of the accounting profession, in each case as
the same are applicable to the circumstances as of the Closing
Date.
"Gaming License" means every license, franchise or other
authorization to own, lease, operate or otherwise conduct gaming
activities of the Borrower or any of its Subsidiaries, including
without limitation, all such licenses granted under the Nevada
Gaming Control Act, and the regulations promulgated pursuant
thereto, and other applicable federal, state, foreign or local
laws.
"Governmental Acts" has the meaning assigned to that term in
subsection 3.5A.
"Governmental Instrumentality" means any national, state or local
government (whether domestic or foreign), any political
subdivision thereof or any other governmental,
quasi-governmental, judicial, public or statutory
instrumentality, authority, body, agency, bureau or entity,
(including the Nevada Gaming Authorities, any zoning authority,
the FDIC, the Comptroller of the Currency or the Federal Reserve
Board, any central bank or any comparable authority) or any
arbitrator with authority to bind a party at law.
"Xxxxxx'x Shared Roadway Agreement" means an agreement between
Venetian and Xxxxxx'x Casino Resort, as contemplated by the
existing letter of intent between the parties with respect to the
sharing of the common road between the parties and certain plans
with respect to the improvements to be made thereto. "Hazardous
Materials" means (i) any chemical, material or substance at any
time defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials",
"extremely hazardous waste", acutely hazardous waste",
"radioactive waste", "biohazardous waste", "pollutant", "toxic
pollutant", "contaminant", "restricted hazardous waste",
"infectious waste", "toxic substances", or any other term or
expression intended to define, list or classify substances by
reason of properties harmful to health, safety or the indoor or
outdoor environment (including harmful properties such as
ignitability, corrosivity, reactivity, carcinogenicity, toxicity,
reproductive toxicity, "TCLP toxicity" or "EP toxicity" or words
of similar import under any applicable Environmental Laws); (ii)
any oil, petroleum, petroleum fraction or petroleum derived
substance; (iii) any drilling fluids, produced waters and other
wastes associated with the exploration, development or production
of crude oil, natural gas or geothermal resources; (iv) any
flammable substances or explosives; (v) any radioactive
materials; (vi) any asbestos-containing materials; (vii) urea
formaldehyde foam insulation; (viii) electrical equipment which
contains any oil or dielectric fluid containing polychlorinated
biphenyls; (ix) pesticides; and (x) any other chemical, material
or substance, exposure to which is prohibited, limited or
regulated by any governmental authority or which may or could
pose a hazard to the health and safety of the owners, occupants
or any Persons in the vicinity of any Facility or to the indoor
or outdoor environment.
"Hazardous Materials Activity" means any past, current, proposed
or threatened activity, event or occurrence involving any
Hazardous Materials, including the use, manufacture, possession,
storage, holding, presence, existence, location, Release,
threatened Release, discharge, placement, generation,
transportation, processing, construction, treatment, abatement,
removal, remediation, disposal, disposition or handling of any
Hazardous Materials, and any corrective action or response action
with respect to any of the foregoing.
"Improvements" means any buildings, fixtures and other
improvements to be situated on the Land.
"Included Taxes" has the meaning assigned to that term in
subsection 2.7B(i).
"Increasing Lender" has the meaning assigned to that term in
subsection 2.1A(iii).
"Indebtedness", as applied to any Person, means (i) all
indebtedness for borrowed money, (ii) that portion of obligations
with respect to Capital Leases that is properly classified as a
liability on a balance sheet in conformity with GAAP, (iii) notes
payable and drafts accepted representing extensions of credit
whether or not representing obligations for borrowed money, (iv)
any obligation owed for all or any part of the deferred purchase
price of property or services (excluding any such obligations
incurred under ERISA and trade payables and accruals incurred in
9
the ordinary course of business), and (v) all indebtedness
secured by any Lien on any property or asset owned or held and
under Contracts by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that
Person or is nonrecourse to the credit of that Person.
"Indemnitee" has the meaning assigned to that term in subsection
10.3.
"Independent Financial Advisor" means an accounting, appraisal or
investment banking firm of nationally recognized standing that
is, in the judgment of Borrower's managing member (i) qualified
to perform the task for which it has been engaged and (ii)
disinterested and independent with respect to the Borrower and
its Subsidiaries, if any, and each Affiliate of LVSI and Xxxxxxx.
"Intellectual Property" means all patents, trademarks, trade
names, copyrights, technology, know-how and processes used in or
necessary for the conduct of the business of Borrower as proposed
to be conducted pursuant to the Operative Documents that are
material to the condition (financial or otherwise), business or
operations of the Borrower.
"Interest Payment Date" means (i) with respect to any Base Rate
Loan, each March 31, June 30, September 30 and December 31 of
each year, commencing on December 31, 2001, and (ii) with respect
to any Eurodollar Rate Loan, the last day of each Interest Period
applicable to such Loan, provided that in the case of each
Interest Period of longer than three months "Interest Payment
Date" shall also include each date that is three months, or an
integral multiple thereof, after the commencement of such
Interest Period.
"Interest Period" has the meaning assigned to that term in
subsection 2.2B.
"Interest Rate Determination Date" means, with respect to any
Interest Period, two Business Days prior to the first day of such
Interest Period.
"Interface" means Interface Group-Nevada, Inc., a Nevada
corporation.
"Investment" means (i) any direct or indirect purchase or other
acquisition by Borrower or any of its Subsidiaries of, or of a
beneficial interest in, any Securities of any other Person
(including any Subsidiary), (ii) any direct or indirect
redemption, retirement, purchase or other acquisition for value,
by Borrower or any of its Subsidiaries from any Person, of any
equity Securities of any Subsidiary of Borrower, or (iii) any
direct or indirect loan, advance (other than advances to
employees for moving, entertainment and travel expenses, drawing
accounts and similar expenditures in the ordinary course of
business) or capital contribution by Borrower or any of its
Subsidiaries to any other Person, including all indebtedness and
accounts receivable from that other Person that are not current
assets or did not arise from sales to that other Person in the
ordinary course of business. The amount of any Investment shall
be the original cost of such Investment plus the cost of all
additions thereto, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment.
"Issuing Lender" means, with respect to any Letter of Credit, the
Lender which agrees or is otherwise obligated to issue such
Letter of Credit, determined as provided in subsection 3.1B(ii).
"Joint Venture" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership, limited
liability company or other legal form; provided that in no event
shall any corporate Subsidiary of any Person be considered to be
a Joint Venture to which such Person is a party.
"Land" means the real property owned in fee by Borrower
consisting of approximately 15.46 acres as described in more
detail on Exhibit XII attached hereto.
"Legal Requirements" means all laws, statutes, orders, decrees,
injunctions, licenses, permits, approvals, agreements and
regulations of any Governmental Instrumentality having
jurisdiction over the matter in question.
"Lender" and "Lenders" means the persons identified as "Lenders"
and listed on the signature pages of this Agreement and any new
Lenders, together with their respective successors and permitted
assigns pursuant to subsection 10.1; provided that the term
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"Lenders", when used in the context of a particular Commitment,
shall mean Lenders having that Commitment.
"Letter of Credit" or "Letters of Credit" means Commercial
Letters of Credit and Standby Letters of Credit issued or to be
issued by Issuing Lenders for the account of Borrower pursuant to
subsection 3.1.
"Letter of Credit Usage" means, as at any date of determination,
the sum of (i) the maximum aggregate amount which is or at any
time thereafter may become available for drawing under all
Letters of Credit then outstanding plus (ii) the aggregate amount
of all drawings under Letters of Credit honored by Issuing
Lenders and not theretofore reimbursed by Borrower (including any
such reimbursement out of the proceeds of Revolving Loans
pursuant to subsection 3.3B).
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in
respect of such asset, whether or not filed, recorded or
otherwise perfected under applicable law (including any
conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give
a security interest in and any filing of or agreement to give any
financing statement under the UCC).
"Liquidated Damages" means any proceeds or liquidated damages
paid pursuant to any obligation, default or breach under the
Contracts (net of actual and documented reasonable costs incurred
by Borrower in connection with adjustment or settlement thereof,
including taxes and any reasonable provisions made in respect of
such costs and expenses (including any such taxes paid or payable
by an owner of Borrower or any of its Subsidiaries)). For
purposes of this definition, so-called "liquidated damages"
insurance policies shall be deemed to be Contracts.
"Loan" or "Loans" means one or more of the Term Loans or the
Revolving Loans or any combination thereof made pursuant to
Section 2.1A.
"Loan Documents" means this Agreement, the Notes, the Letters of
Credit (and any applications for, or reimbursement agreements or
other documents or certificates executed by Borrower in favor of
an Issuing Lender relating to, the Letters of Credit), any
Subsidiary Guaranties, and the Collateral Documents.
"Loan Party" means Borrower and any Subsidiary of Borrower which
may hereafter become a party to any Loan Document and "Loan
Parties" means all such Persons, collectively.
"Loss Proceeds" means the proceeds of any insurance policy
required to be maintained by the Borrower hereunder.
"LVSI" has the meaning set forth in the Recitals hereto.
"LVSI/Venetian Credit Agreement" means that certain Amended and
Restated Credit Agreement, dated as of September 17, 2001 by and
among LVSI and Venetian, as borrowers, certain lenders party
thereto from time to time and Scotiabank as administrative agent.
"Margin Stock" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve
System as in effect from time to time.
"Material Adverse Effect" means (i) a material adverse effect
upon the business, operations, properties, assets, condition
(financial or otherwise) or prospects of LVSI and its
Subsidiaries, taken as a whole to the extent such material
adverse effect could reasonably be expected to materially impair
the ability of Venetian to perform its obligations under the
Phase II Lease, (ii) a material adverse effect upon the
Collateral, taken as a whole (including without limitation the
value thereof) or the financial condition of Borrower and its
Subsidiaries, if any, taken as a whole, (iii) the material
impairment of the ability of any Loan Party to observe or
perform, or of Administrative Agent or Lenders to enforce, the
Obligations, provided that any adverse effect of the type
described in clauses (i), (ii) or (iii) above occurring prior to
the date hereof as a result of the events of September 11, 2001,
shall not constitute a Material Adverse Effect hereunder, so long
as such adverse effect does not worsen in any material respect
following the date hereof.
11
"Material Contract" means (i) the Phase II Lease, and (ii) any
other contract or other arrangement to which Borrower, or any of
its Subsidiaries are a party (other than the Loan Documents) for
which breach, nonperformance, cancellation or failure to renew
could reasonably be expected to have a Material Adverse Effect.
"Mortgage Policy" has the meaning assigned to that term in
Subsection 4.1C of this Agreement.
"Mortgaged Property" means the real property described in
Schedule 5.5.
"Multiemployer Plan" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"Net Asset Sale Proceeds" means the aggregate cash proceeds
received by Borrower or any of its Subsidiaries in respect of any
Asset Sale, net of (i) the direct costs relating to such Asset
Sale (including, without limitation legal, accounting and
investment banking fees and expenses, employee severance and
termination costs, any trade payables or similar liabilities
related to the assets sold and required to be paid by the seller
as a result thereof and sales, finders' or broker's commission),
and any relocation expenses incurred as a result thereof and
taxes paid or payable as result thereof (including, without
limitation, any such taxes paid or payable by an owner of
Borrower or any of its Subsidiaries) (after taking into account
any available tax credits or deductions and any tax sharing
arrangements), (ii) amounts required to be applied to the
repayment of Indebtedness secured by a Lien (or amounts permitted
by the terms of such Indebtedness to be otherwise reinvested in
the Project to the extent so reinvested) which is prior to the
Lien under the Collateral Documents on the asset or assets that
are the subject of such Asset Sale, (iii) all distributions and
other payments required to be made to minority interest holders
in a Subsidiary or joint venture as a result of the Asset Sale
and (iv) any reasonable reserve for adjustment in respect of the
sale price of such asset or assets or any liabilities associated
with the asset disposed of in such Asset Sale.
"New Lenders" has the meaning assigned to that term under
subsection 2.1A(iii).
"Net Loss Proceeds" means the aggregate cash proceeds received by
Borrower or any of its Subsidiaries in respect of any Event of
Loss, including, without limitation, insurance proceeds,
condemnation awards or damages awarded by any judgment, net of
the direct costs in recovery of such Net Loss Proceeds
(including, without limitation, legal, accounting, appraisal and
insurance adjuster fees and expenses) and any taxes paid or
payable as a result thereof (including, without limitation, any
such taxes paid or payable by an owner of Borrower or any of its
Subsidiaries) (after taking into account any available tax
credits or deductions and any tax sharing arrangements) and
amounts required to be applied to the repayment of Indebtedness
secured by a Lien (or amounts permitted by the terms of such
Indebtedness to be otherwise reinvested in the Project to the
extent so reinvested) which is prior to the Liens of Lender under
the Collateral Documents on the asset or assets that are the
subject of the Event of Loss. Notwithstanding the foregoing, all
proceeds of so-called "liquidated damages" insurance policies
shall not be Net Loss Proceeds but shall be Liquidated Damages.
"Net Proceeds Amount" has the meaning assigned to that term in
subsection 2.4B(iii)(d).
"Nevada Gaming Authorities" shall mean, collectively, the Nevada
Gaming Commission, the Nevada State Gaming Control Board, and the
Xxxxx County Liquor and Gaming Licensing Board.
"Nevada Gaming Laws" shall mean the Nevada Gaming Control Act, as
modified in Chapter 463 of the Nevada Revised Statutes, as
amended from time to time, and the regulations of the Nevada
Gaming Commission promulgated thereunder, as amended from time to
time.
"Non-US Lender" has the meaning assigned to that term in
subsection 2.7B(iii)(a).
"Note" means one or more of the Term Notes or Revolving Notes or
any combination thereof.
"Notice of Borrowing" means a notice substantially in the form of
Exhibit I annexed hereto delivered by Borrower to Administrative
Agent pursuant to subsection 2.1B with respect to a proposed
borrowing.
12
"Notice of Conversion/Continuation" means a notice substantially
in the form of Exhibit II annexed hereto delivered to
Administrative Agent pursuant to subsection 2.2D with respect to
a proposed conversion or continuation of the applicable basis for
determining the interest rate with respect to the Loans specified
therein.
"Notice of Issuance of Letter of Credit" means a notice
substantially in the form of Exhibit IX annexed hereto delivered
by Borrower to Administrative Agent pursuant to subsection
3.1B(i) with respect to the proposed issuance of a Letter of
Credit.
"Obligations" means all obligations of every nature of each Loan
Party from time to time owed to Administrative Agent, Lenders, or
any of them under the Loan Documents, whether for principal,
interest, reimbursement of amounts drawn under Letters of Credit,
fees, expenses, indemnification or otherwise.
"Officers' Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its
chairman of the board (if an officer) or its president or one of
its vice presidents and by its chief financial officer or its
treasurer (in their capacity as such officer); provided that
every Officers' Certificate with respect to the compliance with a
condition precedent to the making of any Loans hereunder shall
include (i) a statement that the officer or officers making or
giving such Officers' Certificate have read such condition and
any definitions or other provisions contained in this Agreement
relating thereto, (ii) a statement that, in the opinion of the
signers, they have made or have caused to be made such
examination or investigation as is reasonably necessary to enable
them to express an informed opinion as to whether or not such
condition has been complied with, and (iii) a statement as to
whether, in the opinion of the signers, such condition has been
complied with in all material respects.
"Operating Lease" means, as applied to any Person, any lease
(including leases that may be terminated by the lessee at any
time) of any property (whether real, personal or mixed) that is
not a Capital Lease other than any such lease under which that
Person is the lessor.
"Operative Documents" means the Loan Documents and the Project
Documents.
"Organizational Documents" means (i) with respect to any
corporation, its certificate or articles of incorporation and its
bylaws, (ii) with respect to any limited partnership, its
certificate of limited partnership and its partnership agreement,
(iii) with respect to any general partnership, its partnership
agreement, (iv) with respect to any limited liability company,
its articles or certificate of organization and its operating
agreement and (v) with respect to any other entity, its
equivalent organizational, governing documents.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Code
or Section 302 of ERISA.
"Permits" means all authorizations, consents, decrees, permits,
waivers, privileges, approvals from and filings with all
Governmental Instrumentalities including, without limitation, the
Nevada Gaming Authorities necessary for the conduct of the
business of Borrower and its Subsidiaries, including development
of Phase II.
"Permitted Liens" means the following types of Liens (excluding
any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of
the Code or by ERISA, any such Lien relating to or imposed in
connection with any Environmental Claim, and any such Lien
expressly prohibited by any applicable terms of any of the
Collateral Documents provided in each case that such Liens do not
secure Indebtedness for borrowed money):
(i) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by
subsection 6.3;
(ii) statutory Liens of landlords, statutory Liens of banks
and rights of set-off, statutory Liens of carriers, warehousemen,
mechanics, repairmen, workmen and materialmen, and other Liens
imposed by law, in each case incurred in the ordinary course of
13
business (a) for amounts not yet overdue or (b) for amounts that
are overdue and that (in the case of any such amounts overdue for
a period in excess of 5 days) are being contested in good faith
by appropriate proceedings, so long as (1) such reserves or other
appropriate provisions, if any, as shall be required by GAAP
shall have been made for any such contested amounts, and (2) in
the case of a Lien with respect to any portion of the Collateral,
such contest proceedings conclusively operate to stay the sale of
any portion of the Collateral on account of such Lien;
(iii) Liens incurred or deposits made in the ordinary course
of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to
secure the performance of tenders, statutory obligations, surety
and appeal bonds, bids, leases, government contracts, trade
contracts, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment of
borrowed money), incurred in the ordinary course of business (a)
for amounts not yet overdue or (b) for amounts that are overdue
and that (in the case of any such amounts overdue for a period in
excess of 5 days) are being contested in good faith by
appropriate proceedings, so long as (1) such reserves or other
appropriate provisions, if any, as shall be required by GAAP
shall have been made for any such contested amounts and (2) in
the case of a Lien with respect to any portion of the Collateral,
such contest proceedings conclusively operate to stay the sale of
any portion of the Collateral on account of such Lien;
(iv) any attachment or judgment Lien not constituting an
Event of Default under subsection 8.8;
(v) easements, rights-of-way, restrictions, encroachments,
and other minor defects or irregularities in title, in each case
which do not and will not interfere in any material respect with
the ordinary conduct of the business of a Borrower or any of its
Subsidiaries or result in a material diminution in the value of
any Collateral as security for the Obligations;
(vi) the Phase II Lease and any leasehold mortgage in favor
of any party financing the lessee under such lease provided that
(a) neither Borrower nor any of its Subsidiaries is liable for
the payment of any principal of, or interest, premiums or fees
on, such financing and (b) the affected lease and leasehold
mortgage are expressly made subject and subordinate to the Lien
of the Deed of Trust;
(vii) leases listed on Schedule 5.5 as in effect on the date
hereof so long as each such lease is terminable on not more than
30 days notice.
(viii) Liens arising from filing UCC financing statements
relating solely to leases permitted by this Agreement;
(ix) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in
connection with the importation of goods;
(x) any zoning or similar law or right reserved to or vested
in any governmental office or agency to control or regulate the
use of any real property;
(xi) Liens created or contemplated by the Cooperation
Agreement (as in effect on the date hereof);
(xii) Liens on real property of Borrower arising pursuant to
that certain Xxxxxx'x Shared Roadway Agreement (as in effect on
November 14, 1997);
(xiii) Liens incurred in connection with the construction of
a pedestrian bridge or a pedestrian tunnel under Las Vegas
Boulevard and Sands Avenue provided that such Liens will not (i)
materially interfere with, impair or detract from the operation
of the business of Borrower and its Subsidiaries and (ii) cause a
material decrease in the value of the Collateral;
(xiv) licenses of patents, trademarks and other intellectual
property rights granted by Borrower or any of its Subsidiaries in
the ordinary course of business and not interfering in any
material respect with the ordinary conduct of the business of
Borrower or such Subsidiary;
(xv) Liens created under the Predevelopment Agreement (as in
effect on November 14, 1997);
14
(xvi) easements, restrictions, rights of way, encroachments
and other minor defects or irregularities in title incurred in
connection with the traffic study relating to increased traffic
on Las Vegas Boulevard as a result of completion of the
hotel/casino project developed by LVSI and its Subsidiaries; and
(xvii) Liens listed on Schedule 7.2.
"Person" means and includes natural persons, corporations,
limited partnerships, general partnerships, limited liability
companies, limited liability partnerships, joint stock companies,
Joint Ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations,
whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political
subdivisions thereof) and agencies or other administrative or
regulatory bodies thereof.
"Phase I LOC" means the letter of credit required to be
maintained under the terms of Section 7.21 of the LVSI/Venetian
Credit Agreement.
"Phase II" means a hotel, casino and mall complex proposed to be
developed on the Land.
"Phase II Lease" means that certain lease between Borrower as
lessor and Venetian as lessee for the portion of the Land
identified therein and dated as of the date hereof.
"Potential Event of Default" means a condition or event that,
after notice or lapse of time or both, would constitute an Event
of Default.
"Predevelopment Agreement" means the Sands Resort Hotel Casino
Agreement dated February 18, 1997 by and between Xxxxx County and
LVSI.
"Prime Rate" means the rate that Scotiabank announces from its
New York office from time to time as its Dollar prime lending
rate, as in effect from time to time. The Prime Rate is a
reference rate and does not necessarily represent the lowest or
best rate actually charged to any customer. Scotiabank or any
other Lender may make commercial loans or other loans at rates of
interest at, above or below the Prime Rate.
"Proceedings" has the meaning assigned to that term in subsection
6.1(x).
"Project Documents" means the Cooperation Agreement, the Phase II
Lease, the Predevelopment Agreement, the Xxxxxx'x Shared Roadway
Agreement, the Chase Credit Agreement, the operating agreements
for each of Borrower and Borrower's managing member and any other
document or agreement entered into on, prior to or after Closing
Date, in accordance with Section 7.13 relating to the
development, construction, maintenance or operation of any
Improvements to be constructed on the Land.
"Pro Rata Share" means (i) with respect to all payments,
computations and other matters relating to the Term Loan
Commitment or the Term Loan of any Lender, the percentage
obtained by dividing (x) the Term Loan Exposure of that Lender by
(y) the aggregate Term Loan Exposure of all Lenders, (ii) with
respect to all payments, computations and other matters relating
to the Revolving Loan Commitment or the Revolving Loans of any
Lender or any Letters of Credit issued or participations therein
purchased by any Lender, the percentage obtained by dividing (x)
the Revolving Loan Exposure of that Lender by (y) the aggregate
Revolving Loan Exposure of all Lenders, and (iii) for all other
purposes with respect to each Lender, the percentage obtained by
dividing (x) the sum of the Term Loan Exposure of that Lender
plus the Revolving Loan Exposure of that Lender by (y) the sum of
the aggregate Term Loan Exposure of all Lenders plus the
aggregate Revolving Loan Exposure of all Lenders, in any such
case as the applicable percentage may be adjusted by assignments
permitted pursuant to subsection 10.1. The initial Pro Rata Share
of each Lender for purposes of each of clauses (i), (ii) and
(iii) of the preceding sentence is set forth opposite the name of
that Lender in Schedule 2.1 annexed hereto.
"Quarterly Date" means the last day of each Fiscal Quarter.
"Register" has the meaning assigned to that term in subsection
2.1D.
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
15
"Reimbursement Date" has the meaning assigned to that term in
subsection 3.3B.
"Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge,
dispersal, dumping, leaching or migration of Hazardous Materials
into the indoor or outdoor environment (including the abandonment
or disposal of any barrels, containers or other closed
receptacles containing any Hazardous Materials), including the
movement of any Hazardous Materials through the air, soil,
surface water or groundwater.
"Required LOC Amount" means the face amount of the Phase I LOC
required to be maintained under the terms of the LVSI/Venetian
Credit Agreement, as such face amount may be reduced from time to
time in accordance with the terms of the LVSI/Venetian Credit
Agreement.
"Requisite Class Lenders" means, at any time of determination (i)
for the Class of Lenders having Term Loan Exposure, Lenders
having or holding more than 50% of the sum of the aggregate Term
Loan Exposure of all Lenders and (ii) for the Class of Lenders
having Revolving Loan Exposure, Lenders having or holding more
than 50% of the aggregate Revolving Loan Exposure of all Lenders.
"Requisite Lenders" means Lenders having or holding more than 50%
of the sum of the aggregate Term Loan Exposure and Revolving Loan
Exposure.
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any
class of stock or membership interests of Borrower now or
hereafter outstanding, (ii) any redemption, retirement, sinking
fund or similar payment, purchase or other acquisition for value,
direct or indirect, of any shares of any class of stock or
membership interests of Borrower now or hereafter outstanding and
(iii) any payment made to retire, or to obtain the surrender of,
any outstanding warrants, options or other rights to acquire
shares of any class of stock or membership interests of Borrower
now or hereafter outstanding.
"Revolving Loan Commitment" means the commitment of a Lender to
make Revolving Loans to Borrower pursuant to subsection 2.1A(ii),
and "Revolving Loan Commitments" means such commitments of all
Lenders in the aggregate. "Revolving Loan Commitment Termination
Date" means June 30, 2003.
"Revolving Loan Exposure" means, with respect to any Lender as of
any date of determination (i) prior to the termination of the
Revolving Loan Commitments, that Lender's Revolving Loan
Commitment and (ii) after the termination of the Revolving Loan
Commitments, the sum of (a) the aggregate outstanding principal
amount of the Revolving Loans of that Lender plus (b) in the
event that Lender is an Issuing Lender, the aggregate Letter of
Credit Usage in respect of all Letters of Credit issued by that
Lender (in each case net of any participations purchased by other
Lenders in such Letters of Credit or any unreimbursed drawings
thereunder) plus (c) the aggregate amount of all participations
purchased by that Lender in any outstanding Letters of Credit or
any unreimbursed drawings under any Letters of Credit.
"Revolving Loans" means the Loans made by Lenders to Borrower
pursuant to subsection 2.1A(ii).
"Revolving Notes" means (i) the promissory notes of Borrower
issued pursuant to subsection 2.1E on the Closing Date and (ii)
any promissory notes issued by Borrower pursuant to the last
sentence of subsection 10.1B(i) in connection with assignments of
the Revolving Loan Commitments and Revolving Loans of any
Lenders, in each case substantially in the form of Exhibit III-B
annexed hereto, as they may be amended, supplemented or otherwise
modified from time to time.
"Scotiabank" has the meaning assigned to that term in the
introduction to this Agreement.
"Securities" means any stock, shares, partnership interests,
member interests, voting trust certificates, certificates of
interest or participation in any profit-sharing agreement or
arrangement, options, warrants, bonds, debentures, notes, or
other evidences of indebtedness, secured or unsecured,
convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to
subscribe to, purchase or acquire, any of the foregoing.
16
"Securities Act" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"Solvent" means, with respect to any Person, that as of the date
of determination both (A) (i) the then fair saleable value of the
property of such Person is (y) greater than the total amount of
liabilities (including contingent liabilities) of such Person and
(z) not less than the amount that will be required to pay the
probable liabilities on such Person's then existing debts as they
become absolute and matured considering all financing
alternatives and potential asset sales reasonably available to
such Person; (ii) such Person's capital is not unreasonably small
in relation to its business or any contemplated or undertaken
transaction; and (iii) such Person does not intend to incur, or
believe (nor should it reasonably believe) that it will incur,
debts beyond its ability to pay such debts as they become due;
and (B) such Person is "solvent" within the meaning given that
term and similar terms under applicable laws relating to
fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time
shall be computed as the amount that, in light of all of the
facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or
matured liability.
"Standby Letter of Credit" means the Phase I LOC and any standby
letter of credit or similar instrument issued for the purpose of
supporting (i) Indebtedness of Borrower in respect of industrial
revenue or development bonds or financings, (ii) workers'
compensation liabilities of Borrower, (iii) the obligations of
third party insurers of Borrower arising by virtue of the laws of
any jurisdiction requiring third party insurers, (iv) obligations
with respect to Capital Leases or Operating Leases of Borrower or
with respect to the Xxxxxx'x Shared Roadway Agreement, and (v)
performance, payment, deposit or surety obligations of Borrower,
in any case if required by law or governmental rule or regulation
(including, without limitation, if required by any Governmental
Instrumentality or otherwise necessary in order to obtain any
Permit related to the Project) or in accordance with custom and
practice in the industry; provided that Standby Letters of Credit
may not be issued for the purpose of supporting (a) trade
payables or (b) any Indebtedness constituting "antecedent debt"
(as that term is used in Section 547 of Bankruptcy Code).
"Subsidiary" means, with respect to any Person, any corporation,
partnership , limited liability company, association , joint
venture or other business entity of which more than 50% of the
total voting power of shares of stock or other ownership
interests entitled (without regard to the occurrence of any
contingency) to vote in the election of the Person or Persons
(whether directors, managers, trustees or other Persons
performing similar functions) having the power to direct or cause
the direction of the management and policies thereof is at the
time owned or controlled, directly or indirectly, by that Person
or one or more of the other Subsidiaries of that Person or a
combination thereof.
"Subsidiary Guarantor" means any Subsidiary of Borrower that
executes and delivers a counterpart of the Subsidiary Guaranty
from time to time pursuant to Subsection 6.10.
"Subsidiary Guaranty" means any Subsidiary Guaranty, each such
Subsidiary Guaranty to be in form and substance reasonably
satisfactory to Administrative Agent, executed and delivered by
any Subsidiary of Borrower from time to time in accordance with
subsection 6.10.
"Subsidiary Security Agreement" means each Subsidiary Security
Agreement executed and delivered by any Subsidiary Guarantor from
time to time in accordance with subsection 6.10, each such
Subsidiary Security Agreement to be in form and substance
reasonably satisfactory to Administrative Agent.
"Supplemental Agent" or "Supplemental Agents" means has the
meaning assigned to that term in subsection 9.1B.
"Supplier Joint Venture" means any Person that supplies or
provides materials or services to any Borrower or any contractor
in the Phase II project or Phase II predevelopment and in which a
Borrower or one of its Subsidiaries have Investments.
"Tax" or "Taxes" means any present or future tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature and
whatever called, by whomsoever, on whomsoever and wherever
imposed, levied, collected, withheld or assessed; provided that
"Tax on the overall net income" of a Person shall be construed as
17
a reference to a tax imposed by the jurisdiction in which that
Person is organized or in which that Person's principal office
(and/or, in the case of Lender, its lending office) is located or
in which that Person (and/or, in the case of Lender, its lending
office) is deemed to be doing business on all or part of the net
income, profits or gains (whether worldwide, or only insofar as
such income, profits or gains are considered to arise in or to
relate to a particular jurisdiction, or otherwise) of that Person
(and/or, in the case of Lender, its lending office).
"Term Loan Commitment" means the commitment of a Lender to make a
Term Loan to Borrower pursuant to subsection 2.1A(i), and "Term
Loan Commitments" means such commitments of all Lenders in the
aggregate.
"Term Loan Exposure" means, with respect to any Lender as of any
date of determination (i) prior to the funding of the Term Loans,
that Lender's Term Loan Commitment and (ii) after the funding of
the Term Loans, the outstanding principal amount of the Term Loan
of that Lender.
"Term Loans" means the Loans made by Lenders to Borrower pursuant
to subsection 2.1A(i).
"Term Loan Funding Date" means the Funding Date on which the Term
Loans are funded in accordance with subsection 2.1A(iii) and
subsection 4.2 hereof.
"Term Notes" means (i) the promissory notes of Borrower issued
pursuant to subsection 2.1E(i) on the Term Loan Funding Date and
(ii) any promissory notes issued by Borrower pursuant to the last
sentence of subsection 10.1B(i) in connection with assignments of
the Term Loan Commitments or Term Loans of any Lenders, in each
case substantially in the form of Exhibit III-A annexed hereto.
"Title Company" means, Chicago Title Insurance Company and First
American Title Insurance Company or an Affiliate thereof and/or
one or more other title insurance companies reasonably
satisfactory to Administrative Agent.
"Total Utilization of Revolving Loan Commitments" means, as at
any date of determination, the sum of (i) the aggregate principal
amount of all outstanding Revolving Loans (other than Revolving
Loans made for the purpose of reimbursing the applicable Issuing
Lender for any amount drawn under any Letter of Credit but not
yet so applied) plus (ii) the Letter of Credit Usage.
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable
jurisdiction.
"Venetian" has the meaning set forth in the Recitals hereto.
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations
--- ------------------------------------------------------------------
Under Agreement.
----------------
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Borrower to Lenders pursuant to clauses (i), (ii) or
(iii) of subsection 6.1 shall be prepared in accordance with GAAP as in effect
at the time of such preparation. Calculations in connection with the
definitions, covenants and other provisions of this Agreement shall utilize
accounting principles and policies in conformity with those used to prepare the
financial statements referred to in subsection 5.3.
1.3 Other Definitional Provisions and Rules of Construction.
--- --------------------------------------------------------
A. Any of the terms defined herein may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference.
B. References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Agreement unless otherwise
specifically provided.
C. The use in any of the Loan Documents of the word "include" or
"including", when following any general statement, term or matter, shall not be
construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
18
matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.
D. Any reference to any agreement or instrument shall be deemed
to include a reference to such agreement or instrument as assigned, amended,
supplemented or otherwise modified from time to time in accordance with
subsection 7.13.
Section 2. AMOUNTS AND TERMS OF COMMITMENT AND LOANS
2.1 Commitments; Making of Loans; the Register; Notes.
--- --------------------------------------------------
A. Commitments. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Borrower
herein set forth, each Lender hereby severally agrees to make the Loans
described in this subsection 2.1A.
(i) Term Loans. Each Lender with a Term Loan Commitment severally
agrees to lend to the Borrower on the Term Loan Funding Date,
which shall be not later than June 30, 2003, an aggregate amount
not exceeding its Pro Rata Share of the aggregate amount of the
Term Loan Commitments to be used for the purposes identified in
subsection 2.5A. The amount of each Lender's Term Loan Commitment
as of the date hereof is zero; provided that the Term Loan
Commitments of Lenders shall be adjusted to give effect to (a)
any Term Loan increases pursuant to subsection 2.1A(iii) and (b)
any assignments of the Term Loan Commitments pursuant to
subsection 10.1B; and provided, further that the amount of the
Term Loan Commitments shall be reduced from time to time by the
amount of any reductions thereto made pursuant to subsections
2.4B(ii) and 2.4B(iii). Each Lender's Term Loan Commitments shall
expire immediately and without further action on June 30, 2003
and no Term Loans shall be made after such date. Amounts borrowed
under this subsection 2.1A and subsequently repaid or prepaid may
not be reborrowed.
(ii) Revolving Loans. Each Lender severally agrees, subject to
the limitations set forth below with respect to the maximum
amount of Revolving Loans permitted to be outstanding from time
to time, to lend to Borrower from time to time during the period
from the Closing Date to but excluding the Revolving Loan
Commitment Termination Date an aggregate amount not exceeding its
Pro Rata Share of the aggregate amount of the Revolving Loan
Commitments to be used for the purposes identified in subsection
2.5A. The original amount of each Lender's Revolving Loan
Commitment is set forth opposite its name on Schedule 2.1 annexed
hereto and the aggregate original amount of the Revolving Loan
Commitments is $17,500,000, provided that the Revolving Loan
Commitments of Lenders shall be adjusted to give effect to (a)
any Revolving Loan Commitment increases pursuant to subsection
2.1A(iii) and (b) any assignments of the Revolving Loan
Commitments pursuant to subsection 10.1B; provided further, that
the amount of the Revolving Loan Commitments shall be reduced
from time to time by the amount of any reductions thereto made
pursuant to subsection 2.4B(ii) and 2.4B(iii). Lenders' Revolving
Loan Commitments shall expire on the Revolving Loan Commitment
Termination Date and all Revolving Loans and all other amounts
owed hereunder with respect to the Revolving Loans and the
Revolving Loan Commitments shall be paid in full no later than
that date. Amounts borrowed under this subsection 2.1A may be
repaid and reborrowed to but excluding the Revolving Loan
Commitment Termination Date.
Anything contained in this Agreement to the contrary notwithstanding, (i) a
portion of the Revolving Loan Commitments equal to the Required LOC Amount, as
in effect from time to time, may only be used for issuance and maintenance of
the Phase I LOC, (ii) in no event shall the Total Utilization of Revolving Loan
Commitments exceed an amount equal to the aggregate Revolving Loan Commitments
then in effect less the Debt Service Reserve Amount except for Revolving Loans
the proceeds of which are used to pay obligations hereunder and(iii) in no event
shall the Total Utilization of Revolving Loan Commitments at any time exceed the
Revolving Loan Commitments then in effect.
(iii) Increases of the Term Loans or Revolving Loan Commitments.
At the mutual discretion of Borrower and Administrative Agent,
Borrower may request in writing at any time during the period
from the date hereof to and including the day preceding the
Revolving Loan Commitment Termination Date that (x) the then
effective aggregate principal amount of Term Loans be increased,
and/or (y) the then effective aggregate principal amount of
Revolving Loan Commitments be increased; provided that (1) the
aggregate principal amount of the increases in Term Loans and/or
19
Revolving Loan Commitments pursuant to this subsection 2.1A(iii)
shall not exceed $12,500,000, (2) Borrower may not make more than
one request for such increase in Term Loans and/or Revolving Loan
Commitments, (3) no Event of Default or Potential Event of
Default shall have occurred and be continuing or shall occur as a
result of such increases in Term Loans and/or Revolving Loan
Commitments, (4) Borrower shall, and shall cause its Subsidiaries
to, execute and deliver such documents and instruments and take
such other actions (including, without limitation, obtaining
appropriate endorsements to title insurance policies) as may be
reasonably requested by Administrative Agent in connection with
such increases. Any request under this subsection 2.1A(iii) shall
be submitted by Borrower to Administrative Agent (which shall
forward copies to Lenders), specify the proposed effective date
and amount of such increase and be accompanied by an Officer's
Certificate stating that no Event of Default or Potential Event
of Default exists or will occur as a result of such increase. No
Lender shall have any obligation, express or implied, to offer to
increase the aggregate principal amount of its Term Loan or
Revolving Loan Commitment, as the case may be. Only the consent
of any Lender agreeing to increase its Term Loans or Revolving
Loan Commitments, as the case may be (each an "Increasing
Lender") shall be required for an increase in the aggregate
principal amount of Term Loans or Revolving Loan Commitments, as
the case may be, pursuant to this subsection 2.1A(iii). No Lender
which elects not to increase the principal amount of its Term
Loan or Revolving Loan Commitment, as the case may be, may be
replaced in respect of its existing Term Loan or Revolving Loan
Commitment, as the case may be, as a result thereof without such
Lender's consent.
Each Increasing Lender shall as soon as
practicable specify the amount of the proposed increase which it
is willing to assume. Borrower may accept some or all of the
offered amounts or designate new lenders who qualify as Eligible
Assignees and which are reasonably acceptable to Administrative
Agent as additional Lenders hereunder in accordance with this
subsection 2.1A(iii) (each such new lender being a "New Lender"),
which New Lender may assume all or a portion of the increase in
the aggregate principal amount of the Term Loans or Revolving
Loan Commitments, as the case may be provided that any addition
of a New Lender with a Revolving Loan Commitment shall be subject
to the prior approval of Administrative Agent and each Issuing
Lender (which approval may be given or withheld in their sole
discretion). Borrower and Administrative Agent shall have
discretion jointly to adjust the allocation of the increased
aggregate principal amount of Term Loans or Revolving Loan
Commitments, as the case may be, among Increasing Lenders and New
Lenders. Xxxxxxx Xxxxx, Dresdner Bank, Regiment Capital and Union
Bank of Switzerland shall be deemed to be acceptable to
Administrative Agent for purposes of this section, provided that
Regiment Capital shall be deemed acceptable only as a Term
Lender.
Each New Lender designated by Borrower and
acceptable to Administrative Agent shall become an additional
party hereto as a New Lender concurrently with the effectiveness
of the proposed increase in the aggregate principal amount of the
Term Loans or Revolving Loan Commitments, as the case may be,
upon its execution of an Agreement of Joinder in the form of
Exhibit XIII.
Subject to the foregoing, any increase requested
by Borrower shall be effective as of the date proposed by
Borrower and shall be in the principal amount equal to (i) the
principal amount which Increasing Lenders are willing to assume
as increases to the principal amount of their Term Loans or
Revolving Loan Commitments, as the case may be, plus (ii) the
principal amount offered by New Lenders with respect to Term
Loans or Revolving Loan Commitments, as the case may be, in
either case as adjusted by Borrower and Administrative Agent
pursuant to this subsection 2.1A(iii). All new Term Loans to be
made under this subsection 2.1A(iii) shall be made to Borrower on
the same day as such increase in Term Loans under this subsection
2.1A(iii) becomes effective (the "Term Loan Funding Date") and
proceeds of such Term Loans shall be applied first to reduce any
Revolving Loans then outstanding. In addition, if any New Lenders
and/or Increasing Lender increase their Revolving Loan
Commitments or assume new Revolving Loan Commitments and any
Revolving Loans are then outstanding (after giving effect to any
prepayment to occur on such date in accordance with the
immediately preceding sentence), borrowings shall be made by
Borrower on the date such lenders become New Lenders or
Increasing Lenders and applied to prepay outstanding Revolving
Loans of Lenders holding Revolving Loan Commitments prior to such
increase (in accordance with their Pro Rata Shares in effect
20
before giving effect to such increase) to the extent necessary so
that after giving effect to such borrowings and prepayments, the
outstanding Revolving Loans of each Lender with a Revolving Loan
Commitment shall be in accordance with such Lender's Pro Rata
Share. Such New Lenders and/or Increasing Lenders shall be deemed
to have, and each such Lender agrees to, purchase a participation
in all outstanding Letters of Credit and any drawings honored
thereunder equal to such New Lender's and/or Increasing Lender's
Pro Rata Share from each of the other Lenders with Revolving Loan
Commitments. Upon effectiveness of any such increase, the Pro
Rata Share of each Lender will be adjusted to give effect to the
increase in Term Loans or Revolving Loan Commitments, as the case
may be, Administrative Agent shall distribute to Lenders a
revised Schedule 2.1 reflecting the Term Loan, Revolving Loan
Commitment and Pro Rata Share of each Lender after giving effect
to such increase. To the extent that the adjustment of Pro Rata
Shares results in loss or expenses to any Lender as a result of
the prepayment of any Adjusted Eurodollar Rate Loan on a date
other than the scheduled last day of the applicable Interest
Period, Borrower shall be responsible for such loss or expense
pursuant to subsection 2.6D. Notwithstanding anything in Sections
2.2 , 2.3, 3.2 and 3.3D(ii) to the contrary, to the extent the
Revolving Loan Commitments are added after the Closing Date, any
portion of commitment fees or interest accrued in respect of
Revolving Loans or Revolving Loan Commitments prior to the date
of such increase in Revolving Loan Commitments shall not be
payable in respect of such added Revolving Loan Commitments but
shall be payable only to Lenders holding Revolving Loan
Commitments prior to such increase in accordance with their
respective Pro Rata Shares as in effect prior to such increase in
the Revolving Loan Commitments.
B. Borrowing Mechanics. Term Loans or Revolving Loans made on any
Funding Date other than Revolving Loans made pursuant to subsection 3.3B for the
purpose of reimbursing any Issuing Lender for the amount of a drawing under a
Letter of Credit issued by it), shall be in an aggregate minimum amount of (x)
$500,000 and integral multiples of $100,000 in excess of that amount in the case
of Term Loans and (y) $500,000 and integral multiples of $100,000 in the case of
Revolving Loans.
Whenever Borrower desires that Lenders make Loans it shall
deliver to Administrative Agent a Notice of Borrowing no later than 10:00 A.M.
(New York City time) at least three Business Days in advance of the proposed
Funding Date (in the case of a Eurodollar Rate Loan) or at least one Business
Day in advance of the proposed Funding Date (in the case of a Base Rate Loan).
The Notice of Borrowing shall specify (i) the proposed Funding Date (which shall
be a Business Day), (ii) the amount and type of Loans requested, (iii) whether
such Loans shall be Base Rate Loans or Eurodollar Rate Loans, and (iv) in the
case of any Loans requested to be made as Eurodollar Rate Loans, the initial
Interest Period requested therefore. Borrower shall notify Administrative Agent
prior to the funding of any Loans in the event that any of the matters to which
Borrower is required to certify in the applicable Notice of Borrowing is no
longer true and correct as of the applicable Funding Date, and the acceptance by
Borrower of the proceeds of any Loans shall constitute a re-certification by
Borrower, as of the applicable Funding Date, as to the matters to which Borrower
is required to certify in the applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G,
a Notice of Borrowing for a Eurodollar Rate Loan shall be irrevocable on and
after the related Interest Rate Determination Date, and Borrower shall be bound
to make a borrowing in accordance therewith.
C. Disbursement of Funds. All Loans of a particular type under
this Agreement shall be made by Lenders holding Commitments for loans of that
type simultaneously and proportionately to their respective Pro Rata Shares, it
being understood that no Lender shall be responsible for any default by any
other Lender in that other Lender's obligation to make a Loan requested
hereunder nor shall the Commitment of any Lender to make the particular type of
Loan requested be increased or decreased as a result of a default by any other
Lender in that other Lender's obligation to make a Loan requested hereunder.
Promptly after receipt by Administrative Agent of a Notice of Borrowing pursuant
to subsection 2.1B, Administrative Agent shall notify each Lender of the
proposed borrowing. Each Lender shall make the amount of its Loan available to
Administrative Agent not later than 12:00 Noon (New York City time) on the
applicable Funding Date, in same day funds in Dollars, at the Funding and
Payment Office. Except as provided in subsection 3.3B with respect to Revolving
Loans used to reimburse any Issuing Lender for the amount of a drawing under a
Letter of Credit issued by it, upon satisfaction or waiver of the conditions
precedent specified in subsection 4.2, Administrative Agent shall make the
aggregate amount of the Loans received by Administrative Agent from Lenders
available by crediting the account of Borrower at the Funding and Payment Office
in the amount of such Loans provided that if Scotiabank is the only Lender
hereunder, Scotiabank agrees to fund such Loans directly to such account of
Borrower as Borrower shall designate in a written notice to Scotiabank.
Unless Administrative Agent shall have been notified by any
21
Lender prior to the Funding Date for any Loans that such Lender does not intend
to make available to Administrative Agent the amount of such Lender's Loan
requested on such Funding Date, Administrative Agent may assume that such Lender
has made such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Borrower a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the customary rate set by Administrative Agent for the
correction of errors among banks for three Business Days and thereafter at the
Base Rate. If such Lender does not pay such corresponding amount forthwith upon
Administrative Agent's demand therefor, Administrative Agent shall promptly
notify Borrower and Borrower shall immediately pay such corresponding amount to
Administrative Agent together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Administrative Agent, at the
rate payable under this Agreement for Base Rate Loans. Nothing in this
subsection 2.1C shall be deemed to relieve any Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that Borrower may
have against any Lender as a result of any default by such Lender hereunder.
D. The Register.
(i) Administrative Agent shall maintain a register for the
recordation of the names and address of Lenders and the
Commitments and Loans of each Lender from time to time (the
"Register"). The Register shall be available for inspection by
Borrower at any reasonable time and from time to time upon
reasonable prior notice.
(ii) Administrative Agent shall record in the Register the
Commitment and the Loans from time to time of each Lender, and
each repayment or prepayment in respect of the principal amount
of the Loans of each Lender. Any such recordation shall be
conclusive and binding on Borrower and each Lender absent
manifest error; provided that failure to make any such
recordation, or any error in such recordation, shall not affect
any Lender's Commitments or Borrower's Obligations in respect of
any applicable Loans.
(iii) Each Lender shall record on its internal records (including
the Notes held by such Lender) the amount of each Loan made by it
and each payment in respect thereof. Any such recordation shall
be conclusive and binding on Borrower, absent manifest error;
provided that failure to make any such recordation, or any error
in such recordation, shall not affect any Lender's Commitments or
Borrower's Obligations in respect of any applicable Loans;
provided further that in the event of any inconsistency between
the Register and any Lender's records, the recordations in the
Register shall govern.
(iv) Administrative Agent and Lenders shall deem and treat the
Persons listed as Lenders in the Register as the holders and
owners of the corresponding Commitments and Loans listed therein
for all purposes hereof, and no assignment or transfer of any
such Commitment or Loan shall be effective, in each case unless
and until an Assignment Agreement effecting the assignment or
transfer thereof shall have been accepted by Administrative Agent
and recorded in the Register as provided in subsection 10.1B(ii).
Prior to such recordation, all amounts owed with respect to the
applicable Commitment or Loan shall be owed to the Lender listed
in the Register as the owner thereof, and any request, authority
or consent of any Person who, at the time of making such request
or giving such authority or consent, is listed in the Register as
a Lender shall be conclusive and binding on any subsequent
holder, assignee or transferee of the corresponding Commitments
or Loans.
E. Note.
Borrower shall execute and deliver (i) on the Term Loan Funding
Date to each Lender with a Term Loan Commitment (or to
Administrative Agent for that Lender) a Term Note substantially
in the form of Exhibit III-A annexed hereto to evidence that
Lender's Term Loans, in the principal amount of that Lender's
Term Loan Commitment and (ii) on the Closing Date to each Lender
with a Revolving Loan Commitment (or to Administrative Agent for
that Lender) a Revolving Note substantially in the form of
Exhibit III-B annexed hereto to evidence that Lender's Revolving
Loans, in the principal amount of that Lender's Revolving Loan
Commitment and with other appropriate insertions on the Closing
Date to each Lender with a Revolving Commitment (or to
Administrative Agent for that Lender).
Administrative Agent may deem and treat the payee of any Note as
22
the owner thereof for all purposes hereof unless and until an
Assignment Agreement effecting the assignment or transfer thereof
shall have been accepted by Administrative Agent as provided in
subsection 10.1B(ii). Any request, authority or consent of any
person or entity who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall
be conclusive and binding on any subsequent holder, assignee or
transferee of that Note or of any Note or Notes issued in
exchange therefor.
2.2 Interest on the Loans.
--- ----------------------
A. Rate of Interest. Subject to the provisions of subsections 2.6
and 2.7, each Loan shall bear interest on the unpaid principal amount thereof
from the date made through maturity (whether by acceleration or otherwise) at a
rate determined by reference to the Base Rate or the Adjusted Eurodollar Rate.
The applicable basis for determining the rate of interest with respect to any
Loan shall be selected by Borrower initially at the time a Notice of Borrowing
is given with respect to such Loan pursuant to subsection 2.1B, and the basis
for determining the interest rate with respect to any Loan may be changed from
time to time pursuant to subsection 2.2D. If on any day a Loan is outstanding
with respect to which notice has not been delivered to Administrative Agent in
accordance with the terms of this Agreement specifying the applicable basis for
determining the rate of interest, then for that day that Loan shall bear
interest determined by reference to the Base Rate.
(i) Revolving Loans. Subject to the provisions of subsections
2.2E and 2.7, the Revolving Loans shall bear interest through
maturity as follows: (a) if a Base Rate Loan, at the sum of the
Base Rate plus 3%; or (b) if a Eurodollar Rate Loan, then at
the sum of the Adjusted Eurodollar Rate plus 4%.
(ii) Term Loans. Subject to the provisions of subsections 2.2E
and 2.7, the Revolving Loans shall bear interest through maturity
as follows: (a) if a Base Rate Loan, at the sum of the Base Rate
plus 3%; or (b) if a Eurodollar Rate Loan, then at the sum of the
Adjusted Eurodollar Rate plus 4%.
B. Interest Periods. In connection with each Eurodollar Rate
Loan, Borrower may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"Interest Period") to be applicable to such Loan, which Interest Period shall
be, at Borrower's option, either a one, two, three or six month period; provided
that:
(i) the initial Interest Period for any Eurodollar Rate Loan
shall commence on the Funding Date in respect of such Loan, in
the case of a Loan initially made as a Eurodollar Rate Loan, or
on the date specified in the applicable Notice of
Conversion/Continuation, in the case of a Loan converted to a
Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate Loan continued as such pursuant
to a Notice of Conversion/Continuation, each successive Interest
Period shall commence on the day on which the next preceding
Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day that
is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided that, if any Interest
Period would otherwise expire on a day that is not a Business Day
but is a day of the month after which no further Business Day
occurs in such month, such Interest Period shall expire on the
next preceding Business Day;
(iv) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (v) of this subsection
2.2B, end on the last Business Day of a calendar month;
(v) no Interest Period with respect to any portion of the Loans
shall extend beyond June 30, 2003;
(vi) no Interest Period shall extend beyond a date on which
Borrowers are required to make a scheduled payment of principal
of the Loans or a permanent reduction of the Revolving Loan
Commitments is scheduled to occur unless the sum of (a) the
aggregate principal amount of Loans that are Base Rate Loans plus
(b) the aggregate principal amount of Loans that are Eurodollar
Rate Loans with Interest Periods expiring on or before such date
plus (c) the excess of the Commitments then in effect over the
23
aggregate principal amount of the Loans then outstanding equals
or exceeds the principal amount required to be paid on the Loans,
or the permanent reduction of the Commitments that is scheduled
to occur, on such date;
(vii) there shall be no more than 6 Interest Periods outstanding
at any time provided that if, in accordance with the terms of
this Agreement, the amount of Loans outstanding exceeds
$15,000,000, then during the period in which the Loans exceed
that amount, the maximum number of Interest Periods shall be
increased to 8; and
(viii) in the event Borrower fails to specify an Interest Period
for any Eurodollar Rate Loan in the applicable Notice of
Borrowing or Notice of Conversion/Continuation, Borrower shall be
deemed to have selected an Interest Period of one month.
C. Interest Payments. Subject to the provisions of subsection
2.2E, interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity).
D. Conversion or Continuation. Subject to the provisions of
subsection 2.6, Borrower shall have the option (i) to convert at any time all or
any part of its outstanding Loans equal to $500,000 and integral multiples of
$100,000 in excess of that amount from Loans bearing interest at a rate
determined by reference to one basis to Loans bearing interest at a rate
determined by reference to an alternative basis or (ii) upon the expiration of
any Interest Period applicable to a Eurodollar Rate Loan, to continue all or any
portion of such Loan equal to $500,000 and integral multiples of $100,000 in
excess of that amount as a Eurodollar Rate Loan; provided, however, that a
Eurodollar Rate Loan may only be converted into a Base Rate Loan on the
expiration date of an Interest Period applicable thereto.
Borrower shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 10:00 A.M. (New York City time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). A Notice of Conversion/Continuation
shall specify (i) the proposed conversion/continuation date (which shall be a
Business Day), (ii) the amount and type of the Loan to be converted/continued,
(iii) the nature of the proposed conversion/continuation, (iv) in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan, the requested
Interest Period, and (v) in the case of a conversion to, or a continuation of, a
Eurodollar Rate Loan, that no Potential Event of Default or Event of Default has
occurred and is continuing. In lieu of delivering the above-described Notice of
Conversion/Continuation, Borrower may give Administrative Agent telephonic
notice by the required time of any proposed conversion/continuation under this
subsection 2.2D; provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Conversion/Continuation to Administrative
Agent on or before the proposed conversion/continuation date. Upon receipt of
written or telephonic notice of any proposed conversion/continuation under this
subsection 2.2D, Administrative Agent shall promptly transmit such notice by
telefacsimile or telephone to each Lender.
Neither Administrative Agent nor any Lender shall incur any
liability to Borrower in acting upon any telephonic notice referred to above
that Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Borrower or
for otherwise acting in good faith under this subsection 2.2D, and upon
conversion or continuation of the applicable basis for determining the interest
rate with respect to any Loans in accordance with this Agreement pursuant to any
such telephonic notice Borrower shall have effected a conversion or
continuation, as the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G,
a Notice of Conversion/Continuation for conversion to, or continuation of, a
Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable
on and after the related Interest Rate Determination Date, and Borrower shall be
bound to effect a conversion or continuation in accordance therewith.
E. Default Rate. Upon the occurrence and during the continuation
of any Event of Default, the outstanding principal amount of all Loans and, to
the extent permitted by applicable law, any interest payments thereon not paid
when due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable upon
demand at a rate that is 2% per annum in excess of the interest rate otherwise
payable under this Agreement with respect to the applicable Loans (or, in the
case of any such fees and other amounts, at a rate which is 2% per annum in
excess of the interest rate otherwise payable under this Agreement for Base Rate
Loans); provided that, in the case of Eurodollar Rate Loans, upon the expiration
of the Interest Period in effect at the time any such increase in the interest
rate is effective such Eurodollar Rate Loans shall thereupon become Base Rate
24
Loans and shall thereafter bear interest payable upon demand at a rate which is
2% per annum in excess of the interest rate otherwise payable under this
Agreement for Base Rate Loans. Payment or acceptance of the increased rates of
interest provided for in this subsection 2.2E is not a permitted alternative to
timely payment and shall not constitute a waiver of any Event of Default or
otherwise prejudice or limit any rights or remedies of Administrative Agent or
any Lender.
F. Computation of Interest. Interest on the Loans shall be
computed on the basis of (i) a 360-day year, in the case of Eurodollar Rate
Loans and (ii) a 365-day year, in respect of Base Rate Loans, in each case for
the actual number of days elapsed in the period during which it accrues. In
computing interest on any Loan, the date of the making of such Loan or the first
day of an Interest Period applicable to such Loan or, with respect to a Base
Rate Loan being converted from a Eurodollar Rate Loan, the date of conversion of
such Eurodollar Rate Loan to such Base Rate Loan, as the case may be, shall be
included, and the date of payment of such Loan or the expiration date of an
Interest Period applicable to such Loan or, with respect to a Base Rate Loan
being converted to a Eurodollar Rate Loan, the date of conversion of such Base
Rate Loan to such Eurodollar Rate Loan, as the case may be, shall be excluded;
provided that if a Loan is repaid on the same day on which it is made, one day's
interest shall be paid on that Loan.
2.3 Commitment Fees.
--- ----------------
A. Commitment Fees. Borrower agrees to pay to Administrative
Agent, for distribution to each Lender with a Revolving Loan Commitment in
proportion to that Lender's Pro Rata Share, commitment fees for the period from
and including the Closing Date to and excluding the Revolving Loan Commitment
Termination Date equal to the average of the daily excess of Revolving Loan
Commitments over the sum of (i) the aggregate principal amount of outstanding
Revolving Loans but not the Letter of Credit Usage, plus (ii) the Letter of
Credit Usage multiplied by half of 1% per annum, such commitment fees to be
calculated on the basis of a 360-day year and the actual number of days elapsed
and to be payable quarterly in arrears on March 31, June 30, September 30 and
December 31 of each year, commencing on the first such date to occur after the
Closing Date, and on the Commitment Termination Date.
B. Annual Administrative Fee. Borrower agrees to pay
Administrative Agent an annual administrative fee in the amount and at the times
separately agreed to by Administrative Agent and Borrower.
2.4 Repayments, Prepayments and Reductions in Commitment; General
--- -------------------------------------------------------------
Provisions Regarding Payments.
------------------------------
A. Payment at Maturity. Borrower shall repay all Loans
outstanding hereunder on June 30, 2003, or any earlier acceleration of the
maturity thereof pursuant to Section 8 hereof, together with all accrued and
unpaid interest thereon, and all other Obligations then outstanding hereunder.
B. Prepayments and Unscheduled Reductions in Commitments.
(i) Voluntary Prepayments. Borrower may, upon not less than one
Business Day's prior written or telephonic notice, in the case of
Base Rate Loans, and three Business Days' prior written or
telephonic notice, in the case of Eurodollar Rate Loans, in each
case given to Administrative Agent (which original written or
telephonic notice Administrative Agent will promptly transmit by
telefacsimile or telephone to each Lender) by 12:00 Noon (New
York City time) on the date required and, if given by telephone,
promptly confirmed in writing to Administrative Agent at any time
and from time to time prepay any Loans on any Business Day in
whole or in part in an aggregate minimum amount of $1,000,000 and
integral multiples of $500,000 in excess of that amount;
provided, however, that with respect to any Eurodollar Rate Loan
not prepaid on the expiration of the Interest Period applicable
thereto Borrower shall pay any amount payable pursuant to
subsection 2.6D. Notice of prepayment having been given as
aforesaid, the principal amount of the Loans specified in such
notice shall become due and payable on the prepayment date
specified therein. Any such voluntary prepayment shall be applied
as specified in subsection 2.4B(iv).
(ii) Voluntary Reductions of Revolving Loan Commitments. Borrower
may, upon not less than three Business Days' prior written or
telephonic notice confirmed in writing to Administrative Agent
(which original written or telephonic notice Administrative Agent
will promptly transmit by telefacsimile or telephone to each
Lender) at any time and from time to time terminate in whole or
permanently reduce in part, without premium or penalty, the
Revolving Loan Commitments in an amount up to the amount by which
the Revolving Loan Commitments exceed the Total Utilization of
Revolving Loan Commitments at the time of such proposed
25
termination or reduction; provided that any such partial
reduction of the Revolving Loan Commitments shall be in an
aggregate minimum amount of $1,000,000 and integral multiples of
$500,000 in excess of that amount. Borrower's notice to
Administrative Agent shall designate the date (which shall be a
Business Day) of such termination or reduction and the amount of
any partial reduction, and such termination or reduction of the
Revolving Loan Commitments shall be effective on the date
specified in Borrower's notice and shall reduce the Revolving
Loan Commitment of each Lender proportionately to its Pro Rata
Share. Any such voluntary reduction of the Revolving Loan
Commitments shall be applied as specified in subsection 2.4B(iv).
(iii) Mandatory Prepayments and Mandatory Reductions of
Commitments. The Loans shall be prepaid and/or the Commitments
shall be permanently reduced in the amounts and under the
circumstances set forth below, all such prepayments and
reductions to be applied as set forth below or more specifically
provided in subsection 2.4B(iv):
(a) Prepayments and Reductions From Net Asset Sale Proceeds.
No later than the first Business Day following the date of
receipt by Borrower or any of its Subsidiaries of any Net Asset
Sale Proceeds in respect of any Asset Sale (other than Net Asset
Sale Proceeds in respect of the sale of any obsolete, worn out or
surplus assets or assets no longer used or useful in the business
of the Phase II project disposed of in accordance with Section
7.7(ii)), Borrower shall prepay the Loans and/or the Revolving
Loan Commitments shall be permanently reduced in an aggregate
amount equal to such Net Asset Sale Proceeds.
(b) Prepayments and Reductions from Net Loss Proceeds and
Liquidated Damages. Except as provided in subsection 6.4, no
later than the second Business Day following receipt by Borrower
or any of its Subsidiaries of any Loss Proceeds or Liquidated
Damages, Borrower shall prepay the Loans and/or the Revolving
Loan Commitments shall be permanently reduced in an amount equal
to the Loss Proceeds or Liquidated Damages, as applicable.
(c) Prepayments and Reductions Due to Default or Termination
Payments Under the Phase II Lease. On the first Business Day
following receipt by Borrower or any of its Subsidiaries of any
payment from Venetian under the Phase II Lease resulting from a
default by Venetian under the Phase II Lease or from the
termination thereof, whether such payment shall be characterized
as damages, accelerated rent or otherwise, Borrower shall prepay
the Loans and/or the Revolving Loan Commitments shall be
permanently reduced in an aggregate amount equal to such payment.
(d) Calculations of Net Proceeds Amounts; Additional
Prepayments and Reductions Based on Subsequent Calculations.
Concurrently with any prepayment of the Loans and/or the
reduction of Revolving Loan Commitments pursuant to subsections
2.4B(iii)(a)-(c), Borrower shall deliver to Administrative Agent
an Officers' Certificate demonstrating the calculation of the
amount (the "Net Proceeds Amount") of the applicable Net Asset
Sale Proceeds, Loss Proceeds, Liquidated Damages or other
amounts, as the case may be, that gave rise to such prepayment
and/or reduction. In the event that Borrower shall subsequently
determine that the actual Net Proceeds Amount was greater than
the amount set forth in such Officers' Certificate, Borrower
shall promptly make an additional prepayment of the Loans
(and/or, if applicable, the Revolving Loan Commitments shall be
permanently reduced) in an amount equal to the amount of such
excess, and Borrower shall concurrently therewith deliver to
Administrative Agent an Officers' Certificate demonstrating the
derivation of the additional Net Proceeds Amount resulting in
such excess.
(e) Prepayments Due to Reductions or Restrictions of
Revolving Loan Commitments. Borrower shall from time to time
prepay the Revolving Loans to the extent necessary (1) so that
the Total Utilization of Revolving Loan Commitments shall not at
any time exceed the Revolving Loan Commitment then in effect and
(2) to give effect to the limitations set forth in the second
paragraph of Section 2.1A(ii).
(iv) Application of Prepayments and Unscheduled Reductions of
Revolving Loan Commitments.
(a) Application of Voluntary Prepayments by Type of Loan.
Any voluntary prepayments pursuant to subsection 2.4B(i) shall be
applied as specified by Borrower in the applicable notice of
prepayment; provided that in the event Borrower fails to specify
the Loans to which any such prepayment shall be applied, such
prepayment shall be applied first to repay outstanding Revolving
26
Loans to the full extent thereof on a pro rata basis, and second
to repay outstanding Term Loans on a pro rata basis.
(b) Application of Mandatory Prepayments by Type of Loans.
Any amount (the "Applied Amount") required to be applied as a
mandatory prepayment of the Loans and/or a reduction of the
Revolving Loan Commitments pursuant to subsections
2.4B(iii)(a)-(d) shall be applied to first prepay the Term Loans
and Revolving Loans then outstanding on a pro rata basis to the
full extent thereof (and to further permanently reduce the
Revolving Loan Commitments by the amount of such prepayment of
Revolving Loans), and second, to the extent of any remaining
portion of the Applied Amount, to further permanently reduce the
Revolving Loan Commitments to the full extent thereof.
(c) Application of Prepayments to Base Rate Loans and
Eurodollar Rate Loans. Considering Loans being prepaid
separately, any prepayment thereof shall be applied first to Base
Rate Loans to the full extent thereof before application to
Eurodollar Rate Loans, in each case in a manner which minimizes
the amount of any payments required to be made by Borrower
pursuant to subsection 2.6D.
C. General Provisions Regarding Payments.
(i) Manner and Time of Payment. All payments by Borrower of
principal, interest, fees and other Obligations hereunder
and under the Notes shall be made in Dollars in same day
funds, without defense, setoff or counterclaim, free of any
restriction or condition, and delivered to Administrative
Agent not later than 12:00 Noon (New York City time) on the
date due at the Funding and Payment Office for the account
of Lenders; funds received by Administrative Agent after
that time on such due date shall be deemed to have been paid
by Borrower on the next succeeding Business Day. Borrower
hereby authorizes Administrative Agent to charge its
accounts with Administrative Agent in order to cause timely
payment to be made to Administrative Agent of all principal,
interest, fees and expenses due hereunder (subject to
sufficient funds being available in its accounts for that
purpose).
(ii) Application of Payments to Principal and Interest. All
payments in respect of the principal amount of any Loan
shall include payment of accrued interest on the principal
amount being repaid or prepaid, and all such payments shall
be applied to the payment of interest before application to
principal.
(iii) Apportionment of Payments. Aggregate principal and
interest payments in respect of Term Loans and Revolving
Loans shall be apportioned among all outstanding Loans to
which such payments relate proportionately to Lenders'
respective Pro Rata Shares. Administrative Agent shall
promptly distribute to each Lender, at its primary address
set forth below its name on the appropriate signature page
hereof or at such other address as such Lender may request,
its Pro Rata Share of all such payments received by
Administrative Agent and the commitment fees of such Lender
when received by Administrative Agent pursuant to subsection
2.3. Notwithstanding the foregoing provisions of this
subsection 2.4C(iii), if, pursuant to the provisions of
subsection 2.6C, any Notice of Conversion/Continuation is
withdrawn as to any Affected Lender or if any Affected
Lender makes Base Rate Loans in lieu of its Pro Rata Share
of any Eurodollar Rate Loans, Administrative Agent shall
give effect thereto in apportioning payments received
thereafter.
(iv) Payments on Business Days. Whenever any payment to be
made hereunder shall be stated to be due on a day that is
not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be
included in the computation of the payment of interest
hereunder or of the commitment fees hereunder, as the case
may be.
(v) Notation of Payment. Lender agrees that before disposing
of any Note held by it, or any part thereof (other than by
granting participations therein), Lender will make a
notation thereon of all Loans evidenced by that Note and all
principal payments previously made thereon and of the date
27
to which interest thereon has been paid; provided that the
failure to make (or any error in the making of) a notation
of any Loan made under such Note shall not limit or
otherwise affect the obligations of Borrower hereunder or
under such Note with respect to any Loan or any payments of
principal or interest on such Note.
2.5 Use of Proceeds.
--- ----------------
A. Loans. The proceeds of the Loans shall be applied by Borrower
for (i) predevelopment of the Land for Phase II, interest, fees and other
obligations hereunder (ii) transaction costs related to the transactions
contemplated hereby and (iii) other general corporate purposes, including loans
and distributions to Affiliates permitted under Section 7.3 or 7.5 hereof.
B. Margin Regulations. No portion of the proceeds of any
borrowing under this Agreement shall be used by Borrower or any of its
Subsidiaries in any manner that might cause the borrowing or the application of
such proceeds to violate Regulation U, Regulation T or Regulation X of the Board
of Governors of the Federal Reserve System or any other regulation of such Board
or to violate the Exchange Act, in each case as in effect on the date or dates
of such borrowing and such use of proceeds.
2.6 Special Provisions Governing Eurodollar Rate Loans.
--- ---------------------------------------------------
Notwithstanding any other provision of this Agreement to the
contrary, the following provisions shall govern with respect to Eurodollar Rate
Loans as to the matters covered:
A. Determination of Applicable Interest Rate. As soon as
practicable after 10:00 A.M. (New York City time) on each Interest Rate
Determination Date, Administrative Agent shall determine (which determination
shall, absent manifest error, be final, conclusive and binding upon all parties)
the interest rate that shall apply to the Eurodollar Rate Loans for which an
interest rate is then being determined for the applicable Interest Period and
shall promptly give notice thereof (in writing or by telephone confirmed in
writing) to Borrower and each Lender.
B. Inability to Determine Applicable Interest Rate. In the event
that Administrative Agent shall have determined (which determination shall be
final and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the interbank Eurodollar market adequate and fair means
do not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Adjusted Eurodollar Rate, Administrative
Agent shall on such date give notice (by telefacsimile or by telephone confirmed
in writing) to Borrower and each Lender of such determination, whereupon (i) no
Loans may be made as, or converted to, Eurodollar Rate Loans until such time as
Administrative Agent notifies Borrower and Lenders that the circumstances giving
rise to such notice no longer exist and (ii) any Notice of Borrowing or Notice
of Conversion/Continuation given by Borrower with respect to the Loans in
respect of which such determination was made shall be deemed to be made with
respect to Base Rate Loans.
C. Illegality or Impracticability of Eurodollar Rate Loans. In
the event that on any date any Lender shall have determined (which determination
shall be final and conclusive and binding upon all parties hereto but shall be
made only after consultation with Borrower and Administrative Agent) that the
making, maintaining or continuation of its Eurodollar Rate Loans (i) has become
unlawful as a result of compliance by such Lender in good faith with any law,
treaty, governmental rule, regulation, guideline or order not in effect on the
date such Person became a Lender (or would conflict with any such treaty,
governmental rule, regulation, guideline or order not having the force of law
even though the failure to comply therewith would not be unlawful), or (ii)
would cause Lender material financial hardship as a result of contingencies
occurring after the date of this Agreement which materially and adversely affect
the interbank Eurodollar market or the position of such Lender in that market,
then, and in any such event, such Lender shall be an "Affected Lender" and it
shall on that day give notice (by telefacsimile or by telephone confirmed in
writing) to Borrower and Administrative Agent of such determination (which
notice Administrative Agent shall promptly transmit to each other Lender).
Thereafter (a) the obligation of the Affected Lender to make Loans as, or to
convert Loans to, Eurodollar Rate Loans shall be suspended until such notice
shall be withdrawn by the Affected Lender (which such Affected Lender shall do
at the earliest practicable date), (b) to the extent such determination by the
Affected Lender relates to a Eurodollar Rate Loan then being requested by
Borrower pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, the Affected Lender shall make such Loan as (or convert
such Loan to, as the case may be) a Base Rate Loan, (c) the Affected Lender's
obligation to maintain its outstanding Eurodollar Rate Loans (the "Affected
Loans") shall be terminated at the earlier to occur of the expiration of the
Interest Period then in effect with respect to the Affected Loans or when
required by law, and (d) the Affected Loans shall automatically convert into
28
Base Rate Loans on the date of such termination. Except as provided in the
immediately preceding sentence, nothing in this subsection 2.6C shall affect the
obligation of any Lender other than an Affected Lender to make or maintain Loans
as, or to convert Loans to, Eurodollar Rate Loans in accordance with the terms
of this Agreement.
D. Compensation For Breakage or Non-Commencement of Interest
Periods. Borrower shall compensate each Lender, upon written request by that
Lender (which request shall set forth the basis for requesting such amounts),
for all reasonable losses, expenses and liabilities (including any interest paid
by that Lender to lenders of funds borrowed by it to make or carry its
Eurodollar Rate Loans and any loss, expense or liability sustained by that
Lender in connection with the liquidation or re-employment of such funds) which
that Lender may sustain: (i) if for any reason (other than a default by that
Lender) a borrowing of any Eurodollar Rate Loan does not occur on a date
specified therefor in a Notice of Borrowing or a telephonic request for
borrowing, as applicable, or a conversion to or continuation of any Eurodollar
Rate Loan does not occur on a date specified therefor in a Notice of
Conversion/Continuation or a telephonic request for conversion or continuation,
(ii) if any prepayment (including any prepayment pursuant to subsection 2.4) or
other principal payment or any conversion of any of its Eurodollar Rate Loans
occurs on a date prior to the last day of an Interest Period applicable to that
Loan, (iii) if any prepayment of any of its Eurodollar Rate Loans is not made on
any date specified in a notice of prepayment given by Borrower, or (iv) as a
consequence of any other default by Borrower in the repayment of its Eurodollar
Rate Loans when required by the terms of this Agreement.
E. Booking of Eurodollar Rate Loans. Any Lender may make, carry
or transfer Eurodollar Rate Loans at, to, or for the account of any of its
branch offices or the office of an Affiliate of that Lender.
F. Assumptions Concerning Funding of Eurodollar Rate Loans.
Calculation of all amounts payable to a Lender under this subsection 2.6 and
under subsection 2.7A shall be made as though that Lender had actually funded
each of its relevant Eurodollar Rate Loans through the purchase of a Eurodollar
deposit bearing interest at the rate obtained pursuant to clause (i) of the
definition of Adjusted Eurodollar Rate in an amount equal to the amount of such
Eurodollar Rate Loan and having a maturity comparable to the relevant Interest
Period and through the transfer of such Eurodollar deposit from an offshore
office of that Lender to a domestic office of that Lender in the United States
of America; provided, however, that each Lender may fund each of its Eurodollar
Rate Loans in any manner it sees fit and the foregoing assumptions shall be
utilized only for the purposes of calculating amounts payable under this
subsection 2.6 and under subsection 2.7A.
G. Eurodollar Rate Loans After Default. After the occurrence of
and during the continuation of a Potential Event of Default or an Event of
Default, (i) Borrower may not elect to have a Loan be made or maintained as, or
converted to, a Eurodollar Rate Loan after the expiration of any Interest Period
then in effect for that Loan and (ii) subject to the provisions of subsection
2.6D, any Notice of Borrowing or Notice of Conversion/Continuation given by
Borrower with respect to a requested borrowing or conversion/continuation that
has not yet occurred shall be deemed made with respect to Base Rate Loans.
2.7 Increased Costs; Taxes; Capital Adequacy.
--- -----------------------------------------
A. Compensation for Increased Costs and Taxes. Subject to the
provisions of subsection 2.7B (which shall be controlling with respect to the
matters covered thereby), in the event that any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the date
hereof, or compliance by such Lender with any guideline, request or directive
issued or made after the date hereof by any central bank or other governmental
or quasi-governmental authority (whether or not having the force of law):
(i) subjects such Lender (or its applicable lending office) to
any additional Tax (other than any Tax on the overall net income
of such Lender) with respect to this Agreement or any of its
obligations hereunder or any payments to such Lender (or its
applicable lending office) of principal, interest, fees or any
other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve (including
any marginal, emergency, supplemental, special or other reserve),
special deposit, compulsory loan, FDIC insurance or similar
requirement against assets held by, or deposits or other
liabilities in or for the account of, or advances or loans by, or
other credit extended by, or any other acquisition of funds by,
any office of such Lender (other than any such reserve or other
requirements with respect to Eurodollar Rate Loans that are
reflected in the definition of Adjusted Eurodollar Rate); or
29
(iii) imposes any other condition (other than with respect to a
Tax matter) on or affecting such Lender (or its applicable
lending office) or its obligations hereunder or the interbank
Eurodollar market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, Borrower shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to Borrower (with a copy to Administrative
Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Lender under this subsection
2.7A, which statement shall be conclusive and binding upon all parties hereto
absent manifest error.
B. Withholding of Taxes.
(i) Payments to Be Free and Clear. All sums payable by Borrower
under this Agreement and the other Loan Documents shall (except
to the extent required by law) be paid free and clear of, and
without any deduction or withholding on account of, any Tax
(other than a Tax on the overall net income of any Lender)
imposed, levied, collected, withheld or assessed by or within the
United States of America or any political subdivision in or of
the United States of America or any other jurisdiction from or to
which a payment is made by or on behalf of Borrower or by any
federation or organization of which the United States of America
or any such jurisdiction is a member at the time of payment, all
such non-excluded Taxes being hereinafter collectively referred
to as "Included Taxes".
(ii) Grossing-up of Payments. If Borrower or any other Person is
required by law to make any deduction or withholding on account
of any such Included Tax from any sum paid or payable by Borrower
to Administrative Agent or any Lender under any of the Loan
Documents:
(a) Borrower shall notify Administrative Agent of any such
requirement or any change in any such requirement as soon as
Borrower becomes aware of it;
(b) Borrower shall pay any such Included Tax before the date
on which penalties attach thereto, such payment to be made (if
the liability to pay is imposed on Borrower) for its own account
or (if that liability is imposed on Administrative Agent or such
Lender, as the case may be) on behalf of and in the name of
Administrative Agent or such Lender;
(c) the sum payable by Borrower in respect of which the
relevant deduction, withholding or payment is required shall be
increased to the extent necessary to ensure that, after the
making of that deduction, withholding or payment, Administrative
Agent or such Lender, as the case may be receives on the due date
a net sum equal to what it would have received had no such
deduction, withholding or payment been required or made; and
(d) within 30 days after paying any sum from which it is
required by law to make any deduction or withholding, and within
30 days after the due date of payment of any Included Tax which
it is required by clause (b) above to pay, Borrower shall deliver
to Administrative Agent evidence satisfactory to the other
affected parties of such deduction, withholding or payment and of
the remittance thereof to the relevant taxing or other authority;
provided that no such additional amount shall be required to be paid to any
Lender under clause (c) above except to the extent that any change after the
date hereof (in the case of each Lender listed on the signature pages hereof) or
after the date of the Assignment Agreement or joinder agreement pursuant to
which such Lender became a Lender (in the case of each other Lender) in any such
requirement for a deduction, withholding or payment as is mentioned therein
shall result in an increase in the rate of such deduction, withholding or
payment from that in effect at the date of this Agreement or at the date of such
Assignment Agreement or joinder agreement, as the case may be, in respect of
payments to such Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is organized under the laws of any
jurisdiction other than the United States or any state or other
political subdivision thereof (for purposes of this subsection
2.7B(iii), a "Non-US Lender") shall deliver to Administrative
30
Agent for transmission to Borrower, on or prior to the Closing
Date (in the case of a Lender listed on the signature pages
hereof) or on or prior to the date of the Assignment Agreement or
joinder agreement pursuant to which it becomes a Lender (in the
case of each other Lender) and at such other times as may be
necessary in the determination of Borrower or Administrative
Agent (each in the reasonable exercise of its discretion), (1)
two original copies of Internal Revenue Service Form W-8BEN or
W-8ECI (or any successor forms), properly completed and duly
executed by such Lender, together with any other certificate or
statement of exemption required under the Code or the regulations
issued thereunder to establish that such Lender is not subject to
deduction or withholding of United States federal income tax with
respect to any payments to such Lender of principal, interest,
fees or other amounts payable under any of the Loan Documents or
(2) if such Lender is not a "bank" or other Person described in
Section 881(c)(3) of the Code and cannot deliver either Internal
Revenue Service Form 1001 or 4224 pursuant to clause (1) above, a
Certificate re: Non-Bank Status together with two original copies
of Internal Revenue Service Form W-8BEN or W-8ECI (or any
successor form), properly completed and duly executed by such
Lender, together with any other certificate or statement of
exemption required under the Code or the regulations issued
thereunder to establish that such Lender is not subject to
deduction or withholding of United States federal income tax with
respect to any payments to such Lender of interest payable under
any of the Loan Documents.
(b) Each Lender required to deliver any forms, certificates
or other evidence with respect to United States federal income
tax withholding matters pursuant to subsection 2.7B(iii)(a)
hereby agrees, from time to time after the initial delivery by
such Lender of such forms, certificates or other evidence,
whenever a lapse in time or change in circumstances renders such
forms, certificates or other evidence obsolete or inaccurate in
any material respect, that Lender shall promptly (1) deliver to
Administrative Agent for transmission to Borrower two new
original copies of Internal Revenue Service Form 1001 or 4224, or
a Certificate re Non-Bank Status and two original copies of
Internal Revenue Service Form W-8BEN or W-8ECI, as the case may
be, properly completed and duly executed by such Lender, together
with any other certificate or statement of exemption required in
order to confirm or establish that such Lender is not subject to
deduction or withholding of United States federal income tax with
respect to payments to such Lender under the Loan Documents or
(2) notify Administrative Agent and Borrower of its inability to
deliver any such forms, certificates or other evidence.
(c) Borrower shall not be required to pay any additional amount
to any Non-US Lender under clause (c) of subsection 2.7B(ii) if such Lender
shall have failed to satisfy the requirements of clause (a) or (b)(1) of this
subsection 2.7B(iii); provided that if such Lender shall have satisfied the
requirements of subsection 2.7B(iii)(a) on the Closing Date (in the case of each
Lender listed on the signature pages hereof) or on the date of the Assignment
Agreement or joinder agreement pursuant to which it became a Lender (in the case
of each other Lender), nothing in this subsection 2.7B(iii)(c) shall relieve
Borrower of its obligation to pay any additional amounts pursuant to clause (c)
of subsection 2.7B(ii) in the event that, as a result of any change in any
applicable law, treaty or governmental rule, regulation or order, or any change
in the interpretation, administration or application thereof, such Lender is no
longer properly entitled to deliver forms, certificates or other evidence at a
subsequent date establishing the fact that such Lender is not subject to
withholding as described in subsection 2.7B(iii)(a).
C. Capital Adequacy Adjustment. If any Lender shall have
determined that the adoption, effectiveness, phase-in or applicability after the
date hereof of any law, rule or regulation (or any provision thereof) regarding
capital adequacy, or any change therein or in the interpretation or
administration thereof after the date hereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its applicable lending
office) with any guideline, request or directive regarding capital adequacy
(whether or not having the force of law) of any such governmental authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on the capital of such Lender or any corporation controlling such
Lender as a consequence of, or with reference to, such Lender's Loans or
Commitments or Letters of Credit or participations therein or other obligations
hereunder with respect to the Loans or the Letters of Credit to a level below
that which such Lender or such controlling corporation could have achieved but
for such adoption, effectiveness, phase-in, applicability, change or compliance
(taking into consideration the policies of such Lender or such controlling
corporation with regard to capital adequacy), then from time to time, within
five Business Days after receipt by Borrower from such Lender of the statement
referred to in the next sentence, Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such controlling
corporation on an after-tax basis for such reduction. Such Lender shall deliver
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to Borrower (with a copy to Administrative Agent) a written statement, setting
forth in reasonable detail the basis of the calculation of such additional
amounts, which statement shall be conclusive and binding upon all parties hereto
absent manifest error.
2.8 Obligation of Lenders to Mitigate.
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Each Lender and Issuing Lender agrees that, as promptly as
practicable after the officer of such Lender or Issuing Lender responsible for
administering the Loans or Letters of Credit of such Lender or Issuing Lender,
as the case may be, becomes aware of the occurrence of an event or the existence
of a condition that would cause such Lender or Issuing Lender to become an
Affected Lender or that would entitle such Lender or Issuing Lender to receive
payments under subsection 2.7 or subsection 3.6 it will, to the extent not
inconsistent with the internal policies of such Lender or Issuing Lender and any
applicable legal or regulatory restrictions, use reasonable efforts (i) to make,
issue, fund or maintain the Commitments of such Lender or Issuing Lender or the
affected Loans or Letters of Credit of such Lender or Issuing Lender through
another lending office of such Lender or Issuing Lender or (ii) take such other
measures as such Lender or Issuing Lender may deem reasonable, if as a result
thereof the circumstances which would cause such Lender or Issuing Lender to
become an Affected Lender would cease to exist or the additional amounts which
would otherwise be required to be paid to Lender pursuant to subsection 2.7
would be materially reduced and if, as determined by such Lender or Issuing
Lender in its sole discretion, the making, issuing, funding or maintaining of
such Commitments or Loans or Letters of Credit through such other lending office
or in accordance with such other measures, as the case may be, would not
otherwise materially adversely affect such Commitments or Loans or Letters of
Credit or the interests of such Lender or Issuing Lender; provided that such
Lender or Issuing Lender will not be obligated to utilize such other lending
office pursuant to this subsection 2.8 if such Lender or Issuing Lender would
incur incremental expenses as a result of utilizing such other lending office as
described in clause (i) above. A certificate as to the amount of any such
expenses payable by Borrower pursuant to this subsection 2.8 (setting forth in
reasonable detail the basis for requesting such amount) submitted by such Lender
or Issuing Lender to Borrower shall (with a copy to Administrative Agent) be
conclusive absent manifest error. Each Lender and Issuing Lender agrees that it
will not request compensation under subsection 2.7 unless such Lender or Issuing
Lender requests compensation from borrowers under other lending arrangements
with such Lender or Issuing Lender who are similarly situated.
Section 3. LETTERS OF CREDIT
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations
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Therein.
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A. Letters of Credit. In addition to Borrower requesting that
Lenders make Revolving Loans pursuant to subsection 2.1A(ii), Borrower may
request, in accordance with the provisions of this subsection 3.1, from time to
time during the period from the Closing Date to the date ninety days prior to
the Revolving Loan Commitment Termination Date, that one or more Lenders with a
Revolving Loan Commitment issue Letters of Credit for the account of Borrower
for the purposes specified in the definitions of Commercial Letters of Credit
and Standby Letters of Credit. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Borrower
herein set forth, any one or more Lender with a Revolving Loan Commitment may,
but (except as provided in subsection 3.1B(ii)) shall not be obligated to, issue
such Letters of Credit in accordance with the provisions of this subsection 3.1;
provided that Borrower shall not request that any Lender issue (and no Lender
shall issue):
(i) any Letter of Credit if, after giving effect to such
issuance, the Total Utilization of Revolving Loan Commitment
would exceed the Revolving Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to such
issuance, the Letter of Credit Usage would exceed $16,500,000;
(iii) any Standby Letter of Credit having an expiration date
later than the earlier of (a) the Revolving Loan Commitment
Termination Date and (b) the date which is one year from the date
of issuance of such Standby Letter of Credit; provided that the
immediately preceding clause (b) shall not prevent (x) the
Issuing Lender for the Phase I LOC from issuing such Letter of
Credit with an expiration date of October 31, 2002 or (y) any
Issuing Lender from agreeing that a Standby Letter of Credit will
automatically be extended for one or more successive periods not
to exceed one year each unless such Issuing Lender elects not to
extend for any such additional period; and provided, further that
such Issuing Lender shall elect not to extend such Standby Letter
of Credit if it has knowledge that an Event of Default has
32
occurred and is continuing (and has not been waived in accordance
subsection 10.6) at the time such Issuing Lender must elect
whether or not to allow such extension;
(iv) any Commercial Letter of Credit having an expiration date
(a) later than the earlier of (X) the date which is 30 days prior
to the Revolving Loan Commitment Termination Date and (Y) the
date which is 180 days from the date of issuance of such
Commercial Letter of Credit or (b) that is otherwise unacceptable
to the applicable Issuing Lender in its reasonable discretion; or
(v) any Letter of Credit denominated in a currency other than
Dollars.
B. Mechanics of Issuance.
(i) Notice of Issuance. Whenever Borrower desires the issuance of
a Letter of Credit, it shall deliver to Administrative Agent a
Notice of Issuance of Letter of Credit substantially in the form
of Exhibit IX annexed hereto no later than 12:00 Noon (New York
City time) at least three Business Days (in the case of Standby
Letters of Credit) or five Business Days (in the case of
Commercial Letters of Credit), or in each case such shorter
period as may be agreed to by the Issuing Lender in any
particular instance, in advance of the proposed date of issuance.
The Notice of Issuance of Letter of Credit shall specify (a) the
proposed date of issuance (which shall be a Business Day), (b)
whether the Letter of Credit is to be a Standby Letter of Credit
or a Commercial Letter of Credit, (c) the face amount of the
Letter of Credit, (d) the expiration date of the Letter of
Credit, (e) the name and address of the beneficiary, and (f)
either the verbatim text of the proposed Letter of Credit or the
proposed terms and conditions thereof, including a precise
description of any documents to be presented by the beneficiary
which, if presented by the beneficiary prior to the expiration
date of the Letter of Credit, would require the Issuing Lender to
make payment under the Letter of Credit; provided that the
Issuing Lender, in its reasonable discretion, may require changes
in the text of the proposed Letter of Credit or any such
documents; and provided, further that no Letter of Credit shall
require payment against a conforming draft to be made thereunder
on the same business day (under the laws of the jurisdiction in
which the office of the Issuing Lender to which such draft is
required to be presented is located) that such draft is presented
if such presentation is made after 10:00 A.M. (in the time zone
of such office of the Issuing Lender) on such business day.
Borrower shall notify the applicable Issuing Lender (and
Administrative Agent, if Administrative Agent is not such Issuing
Lender) prior to the issuance of any Letter of Credit in the
event that any of the matters to which Borrower is required to
certify in the applicable Notice of Issuance of Letter of Credit
is no longer true and correct as of the proposed date of issuance
of such Letter of Credit, and upon the issuance of any Letter of
Credit Borrower shall be deemed to have re-certified, as of the
date of such issuance, as to the matters to which Borrower is
required to certify in the applicable Notice of Issuance of
Letter of Credit.
(ii) Determination of Issuing Lender. Upon receipt by
Administrative Agent of a Notice of Issuance of Letter of Credit
pursuant to subsection 3.1B(i) requesting the issuance of a
Letter of Credit, in the event Administrative Agent elects to
issue such Letter of Credit, Administrative Agent shall promptly
so notify Borrower, and Administrative Agent shall be the Issuing
Lender with respect thereto. In the event that Administrative
Agent, in its sole discretion, elects not to issue such Letter of
Credit, Administrative Agent shall promptly so notify Borrower,
whereupon Borrower may request any other Lender with a Revolving
Loan Commitment to issue such Letter of Credit by delivering to
such Lender a copy of the applicable Notice of Issuance of Letter
of Credit. Any Lender so requested to issue such Letter of Credit
shall promptly notify Borrower and Administrative Agent whether
or not, in its sole discretion, it has elected to issue such
Letter of Credit, and any such Lender which so elects to issue
such Letter of Credit shall be the Issuing Lender with respect
thereto. In the event that all other Lenders with Revolving Loan
Commitments shall have declined to issue such Letter of Credit,
notwithstanding the prior election of Administrative Agent not to
issue such Letter of Credit, so long as all other conditions set
forth in this Agreement for issuance of such Letter of Credit are
satisfied, Administrative Agent shall be obligated to issue such
Letter of Credit and shall be the Issuing Lender with respect
thereto, notwithstanding the fact that the Letter of Credit Usage
with respect to such Letter of Credit and with respect to all
other Letters of Credit issued by Administrative Agent, when
33
aggregated with Administrative Agent's outstanding Revolving
Loans, may exceed Administrative Agent's Revolving Loan
Commitment then in effect.
(iii) Issuance of Letter of Credit. Upon satisfaction or waiver
(in accordance with subsection 10.6) of the conditions set forth
in subsection 4.3, the Issuing Lender shall issue the requested
Letter of Credit in accordance with the Issuing Lender's standard
operating procedures.
(iv) Notification to Lenders. Upon the issuance of any Letter of
Credit the applicable Issuing Lender shall promptly notify
Administrative Agent and each other Lender with a Revolving Loan
Commitment of such issuance, which notice shall be accompanied by
a copy of such Letter of Credit. Promptly after receipt of such
notice (or, if Administrative Agent is the Issuing Lender,
together with such notice), Administrative Agent shall notify
each Lender with a Revolving Loan Commitment of the amount of
such Lender's respective participation in such Letter of Credit,
determined in accordance with subsection 3.1C.
(v) Reports to Lenders. Within 15 days after the end of each
calendar quarter ending after the Closing Date, so long as any
Letter of Credit shall have been outstanding during such calendar
quarter, each Issuing Lender shall deliver to each other Lender
with a Revolving Loan Commitment a report setting forth for such
calendar quarter the daily aggregate amount available to be drawn
under the Letters of Credit issued by such Issuing Lender that
were outstanding during such calendar quarter.
C. Lenders' Purchase of Participations in Letters of Credit.
Immediately upon the issuance of each Letter of Credit, each Lender with a
Revolving Loan Commitment shall be deemed to, and hereby agrees to, have
irrevocably purchased from the Issuing Lender a participation in such Letter of
Credit and any drawings honored thereunder in an amount equal to such Lender's
Pro Rata Share of the maximum amount which is or at any time may become
available to be drawn thereunder.
3.2 Letter of Credit Fees.
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Borrower agrees to pay the following amounts with respect to
Letters of Credit issued hereunder:
(i) with respect to each Standby Letter of Credit, (a) a fronting
fee payable directly to the applicable Issuing Lender for its own
account, equal to the greater of (X) $5,000 and (Y) 0.25% per
annum of the daily amount available to be drawn under such
Standby Letter of Credit and (b) a letter of credit fee, payable
to Administrative Agent for the account of Lenders with Revolving
Loan Commitments equal to the product of (y) 4.00% times, (z) the
daily maximum amount available to be drawn under such Standby
Letter of Credit, each such fronting fee or letter of credit fee
to be payable in arrears on and to (but excluding) each March 31,
June 30, September 30 and December 31 of each year and computed
on the basis of a 360-day year for the actual number of days
elapsed;
(ii) with respect to each Commercial Letter of Credit, (a) a
fronting fee payable directly to the applicable Issuing Lender
for its own account, equal to 0.25% per annum of the daily amount
available to be drawn under such Commercial Letter of Credit and
(b) a letter of credit fee payable to Administrative Agent for
the account of Lenders with Revolving Loan Commitments, equal to
the product of (y) 4.00% times, (z) the daily maximum amount
available to be drawn under such Commercial Letter of Credit,
each such fronting fee or letter of credit fee to be payable in
arrears on and to (but excluding) each March 31, June 30,
September 30 and December 31 of each year and computed on the
basis of a 360-day year for the actual number of days elapsed;
and
(iii) with respect to the issuance, amendment or transfer of each
Letter of Credit and each payment of a drawing made thereunder
(without duplication of the fees payable under clauses (i) and
(ii) above), documentary and processing charges payable directly
to the applicable Issuing Lender for its own account in
accordance with such Issuing Lender's standard schedule for such
charges in effect at the time of such issuance, amendment,
transfer or payment, as the case may be.
For purposes of calculating any fees payable under clauses (i) and (ii) of this
subsection 3.2, the daily amount available to be drawn under any Letter of
Credit shall be determined as of the close of business on any date of
determination. Promptly upon receipt by Administrative Agent of any amount
34
described in clause (i)(b) or (ii)(b) of this subsection 3.2, Administrative
Agent shall distribute to each Lender with a Revolving Loan Commitment its Pro
Rata Share of such amount.
3.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit.
--- -------------------------------------------------------------------
A. Responsibility of Issuing Lender With Respect to Drawings. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, Issuing Lender shall be responsible only to examine the
documents delivered under such Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in accordance with the terms
and conditions of such Letter of Credit.
B. Reimbursement by Borrower of Amounts Paid Under Letters of
Credit. In the event an Issuing Lender has determined to honor a drawing under a
Letter of Credit issued by it, such Issuing Lender shall immediately notify
Borrower and Administrative Agent, and Borrower shall reimburse such Issuing
Lender on or before the Business Day immediately following the date on which
such drawing is honored (the "Reimbursement Date") in an amount in Dollars and
in same day funds equal to the amount of such honored drawing; provided that,
anything contained in this Agreement to the contrary notwithstanding, unless
Borrower shall have notified Administrative Agent and such Issuing Lender prior
to 10:00 A.M. (New York City time) on the date such drawing is honored that
Borrower intends to reimburse such Issuing Lender for the amount of such honored
drawing with funds other than the proceeds of Revolving Loans, Borrower shall be
deemed to have given a timely Notice of Borrowing to Administrative Agent
requesting Lenders to make Revolving Loans that are Base Rate Loans on the
Reimbursement Date in an amount in Dollars equal to the amount of such honored
drawing and Lenders with Revolving Loan Commitments shall, on the Reimbursement
Date, make Revolving Loans that are Base Rate Loans in the amount of such
honored drawing, the proceeds of which shall be applied directly by
Administrative Agent to reimburse such Issuing Lender for the amount of such
honored drawing; and provided, further that if for any reason proceeds of
Revolving Loans are not received by such Issuing Lender on the Reimbursement
Date in an amount equal to the amount of such honored drawing, Borrower shall
reimburse such Issuing Lender, on demand, in an amount in same day funds equal
to the excess of the amount of such honored drawing over the aggregate amount of
such Revolving Loans, if any, which are so received. Nothing in this subsection
3.3B shall be deemed to relieve any Lender from its obligation to make Revolving
Loans on the terms and conditions set forth in this Agreement, and Borrower
shall retain any and all rights it may have against any Lender resulting from
the failure of such Lender to make such Revolving Loans under this subsection
3.3B.
C. Payment by Lenders of Unreimbursed Amounts Paid Under Letters
of Credit.
(i) Payment by Lenders. In the event that Borrower shall fail for
any reason to reimburse any Issuing Lender as provided in
subsection 3.3B in an amount equal to the amount of any drawing
honored by such Issuing Lender under a Letter of Credit issued by
it, such Issuing Lender shall promptly notify each other Lender
with a Revolving Loan Commitment of the unreimbursed amount of
such honored drawing and of such other Lender's respective
participation therein based on such Lender's Pro Rata Share. Each
Lender with a Revolving Loan Commitment shall make available to
such Issuing Lender an amount equal to its respective
participation, in Dollars and in same day funds, at the office of
such Issuing Lender specified in such notice, not later than
12:00 Noon (New York City time) on the first business day (under
the laws of the jurisdiction in which such office of such Issuing
Lender is located) after the date notified by such Issuing
Lender. In the event that any Lender with a Revolving Loan
Commitment fails to make available to such Issuing Lender on such
business day the amount of such Lender's participation in such
Letter of Credit as provided in this subsection 3.3C, such
Issuing Lender shall be entitled to recover such amount on demand
from such Lender together with interest thereon at the rate
customarily used by such Issuing Lender for the correction of
errors among banks for three Business Days and thereafter at the
Base Rate. Nothing in this subsection 3.3C shall be deemed to
prejudice the right of any Lender with a Revolving Loan
Commitment to recover from any Issuing Lender any amounts made
available by such Lender to such Issuing Lender pursuant to this
subsection 3.3C in the event that it is determined by the final
judgment of a court of competent jurisdiction that the payment
with respect to a Letter of Credit by such Issuing Lender in
respect of which payment was made by such Lender constituted
gross negligence or willful misconduct on the part of such
Issuing Lender.
(ii) Distribution to Lenders of Reimbursements Received From
Borrowers. In the event any Issuing Lender shall have been
reimbursed by other Lenders pursuant to subsection 3.3C(i) for
all or any portion of any drawing honored by such Issuing Lender
35
under a Letter of Credit issued by it, such Issuing Lender shall
distribute to each other Lender with a Revolving Loan Commitment
which has paid all amounts payable by it under subsection 3.3C(i)
with respect to such honored drawing such other Lender's Pro Rata
Share of all payments subsequently received by such Issuing
Lender from Borrower in reimbursement of such honored drawing
when such payments are received. Any such distribution shall be
made to a Lender at its primary address set forth below its name
on the appropriate signature page hereof or at such other address
as such Lender may request.
D. Interest on Amounts Paid Under Letters of Credit.
(i) Borrower agrees to pay to each Issuing Lender, with respect
to drawings honored under any Letters of Credit issued by it,
interest on the amount paid by such Issuing Lender in respect of
each such honored drawing from the date such drawing is honored
to but excluding the date such amount is reimbursed by Borrower
(including any such reimbursement out of the proceeds of
Revolving Loans pursuant to subsection 3.3B) at a rate equal to
(a) for the period from the date such drawing is honored to but
excluding the Reimbursement Date, the rate then in effect under
this Agreement with respect to Revolving Loans that are Base Rate
Loans and (b) thereafter, a rate which is 2% per annum in excess
of the rate of interest otherwise payable under this Agreement
with respect to Revolving Loans that are Base Rate Loans.
Interest payable pursuant to this subsection 3.3D(i) shall be
computed on the basis of a 365-day year for the actual number of
days elapsed in the period during which it accrues and shall be
payable on demand or, if no demand is made, on the date on which
the related drawing under a Letter of Credit is reimbursed in
full.
(ii) Distribution of Interest Payments by Issuing Lender.
Promptly upon receipt by any Issuing Lender of any payment of
interest pursuant to subsection 3.3D(i) with respect to a drawing
honored under a Letter of Credit issued by it, (a) such Issuing
Lender shall distribute to each other Lender with a Revolving
Loan Commitment, out of the interest received by such Issuing
Lender in respect of the period from the date such drawing is
honored to but excluding the date on which such Issuing Lender is
reimbursed for the amount of such drawing (including any such
reimbursement out of the proceeds of Revolving Loans pursuant to
subsection 3.3B), the amount that such other Lender would have
been entitled to receive in respect of the letter of credit fee
that would have been payable in respect of such Letter of Credit
for such period pursuant to subsection 3.2 if no drawing had been
honored under such Letter of Credit, and (b) in the event such
Issuing Lender shall have been reimbursed by other Lenders
pursuant to subsection 3.3C(i) for all or any portion of such
honored drawing, such Issuing Lender shall distribute to each
other Lender which has paid all amounts payable by it under
subsection 3.3C(i) with respect to such honored drawing such
other Lender's Pro Rata Share of any interest received by such
Issuing Lender in respect of that portion of such honored drawing
so reimbursed by other Lenders for the period from the date on
which such Issuing Lender was so reimbursed by other Lenders to
but excluding the date on which such portion of such honored
drawing is reimbursed by Borrowers. Any such distribution shall
be made to a Lender at its primary address set forth below its
name on the appropriate signature page hereof or at such other
address as such Lender may request.
3.4 Obligations Absolute.
--- ---------------------
The obligation of Borrower to reimburse each Issuing Lender for
drawings honored under the Letters of Credit issued by it and to repay any
Revolving Loans made by Lenders pursuant to subsection 3.3B and the obligations
of Lenders under subsection 3.3C(i) shall be unconditional and irrevocable and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances including, without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit;
(ii) the existence of any claim, set-off, defense or other right
which Borrower or any Lender may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any
Persons for whom any such transferee may be acting), any Issuing
Lender or other Lender or any other Person or in the case of a
Lender, against Borrower, whether in connection with this
Agreement, the transactions contemplated herein or any unrelated
transaction (including any underlying transaction between
Borrower or one of its Subsidiaries and the beneficiary for which
any Letter of Credit was procured);
36
(iii) any draft or other document presented under any 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;
(iv) payment by the applicable Issuing Lender under any Letter of
Credit against presentation of a draft or other document which
does not substantially comply with the terms of such Letter of
Credit;
(v) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of
Borrower;
(vi) any breach of this Agreement or any other Loan Document by
any party thereto;
(vii) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential Event of
Default shall have occurred and be continuing;
provided, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).
3.5 Indemnification; Nature of Issuing Lenders' Duties.
--- ---------------------------------------------------
A. Indemnification. In addition to amounts payable as provided in
subsection 3.6, Borrower hereby agrees to protect, indemnify, pay and save
harmless each Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which such Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by such Issuing
Lender, other than as a result of (a) the gross negligence or willful misconduct
of such Issuing Lender as determined by a final judgment of a court of competent
jurisdiction or (b) subject to the following clause (ii), the wrongful dishonor
by such Issuing Lender of a proper demand for payment made under any Letter of
Credit issued by it or (ii) the failure of such Issuing Lender to honor a
drawing under any such Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto
government or governmental authority (all such acts or omissions herein called
"Governmental Acts").
B. Nature of Issuing Lenders' Duties. As between Borrower and any
Issuing Lender, Borrower assumes all risks of the acts and omissions of, or
misuse of the Letters of Credit issued by such Issuing Lender by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, such Issuing Lender shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) failure of the beneficiary of
any such Letter of Credit to comply fully with any conditions required in order
to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any such
Letter of Credit or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing under
such Letter of Credit; or (viii) any consequences arising from causes beyond the
control of such Issuing Lender, including without limitation any Governmental
Acts, and none of the above shall affect or impair, or prevent the vesting of,
any of such Issuing Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the
specific provisions set forth in the first paragraph of this subsection 3.5B,
any action taken or omitted by any Issuing Lender under or in connection with
the Letters of Credit issued by it or any documents and certificates delivered
thereunder, if taken or omitted in good faith, shall not put any Issuing Lender
under any resulting liability to Borrower.
Notwithstanding anything to the contrary contained in this
subsection 3.5, Borrower shall retain any and all rights it may have against any
Issuing Lender for any liability arising solely out of the gross negligence or
willful misconduct of such Issuing Lender, as determined by a final judgment of
a court of competent jurisdiction.
37
3.6 Increased Costs and Taxes Relating to Letters of Credit.
--- --------------------------------------------------------
Subject to the provisions of subsection 2.7B (which shall be
controlling with respect to the matters covered thereby), in the event that any
Issuing Lender or Lender with a Revolving Loan Commitment shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the date
hereof, or compliance by any Issuing Lender or Lender with a Revolving Loan
Commitment with any guideline, request or directive issued or made after the
date hereof by any central bank or other governmental or quasi-governmental
authority (whether or not having the force of law):
(i) subjects such Issuing Lender or Lender (or its applicable
lending or letter of credit office) to any additional Tax (other
than any Tax on the overall net income of such Issuing Lender or
Lender) with respect to the issuing or maintaining of any Letters
of Credit or the purchasing or maintaining of any participations
therein or any other obligations under this Section 3, whether
directly or by such being imposed on or suffered by any
particular Issuing Lender or Lender;
(ii) imposes, modifies or holds applicable any reserve (including
without limitation any marginal, emergency, supplemental, special
or other reserve), special deposit, compulsory loan, FDIC
insurance or similar requirement in respect of any Letters of
Credit issued by any Issuing Lender or participations therein
purchased by any Lender; or
(iii) imposes any other condition (other than with respect to a
Tax matter) on or affecting such Issuing Lender or Lender (or its
applicable lending or letter of credit office) regarding this
Section 3 or any Letter of Credit or any participation therein;
and the result of any of the foregoing is to increase the cost to such Issuing
Lender or Lender of agreeing to issue, issuing or maintaining any Letter of
Credit or agreeing to purchase, purchasing or maintaining any participation
therein or to reduce any amount received or receivable by such Issuing Lender or
Lender (or its applicable lending or letter of credit office) with respect
thereto; then, in any case, Borrower shall promptly pay to such Issuing Lender
or Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts as may be necessary to compensate such Issuing
Lender or Lender for any such increased cost or reduction in amounts received or
receivable hereunder. Such Issuing Lender or Lender shall deliver to Borrower a
written statement, setting forth in reasonable detail the basis for calculating
the additional amounts owed to such Issuing Lender or Lender under this
subsection 3.6, which statement shall be conclusive and binding upon all parties
hereto absent manifest error.
Section 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans and issue Letters of
Credit hereunder are subject to the satisfaction (or waiver by Lenders in their
sole discretion) of the following conditions.
4.1 Conditions to the Occurrence of the Closing Date.
--- -------------------------------------------------
The conditions to the occurrence of the Closing Date are:
A. Borrower's Documents. Borrower shall have delivered to Lenders
(or to Administrative Agent for Lenders with sufficient executed copies, where
appropriate, for each Lender and its counsel) the following with respect to
Borrower, each, unless otherwise noted, dated the Closing Date:
(i) Copies of its Organizational Documents, certified by the
Secretary of State of its jurisdiction of organization if such
certification is generally available dated a recent date prior to
the Closing Date and in each other case, by its secretary or
assistant secretary;
(ii) To the extent generally available, a good standing
certificate from the Secretary of State of its jurisdiction of
organization and a certificate or other evidence of good standing
as to payment of any applicable franchise or similar taxes from
the appropriate taxing authority of such jurisdiction, each dated
a recent date prior to the Closing Date;
38
(iii) Resolutions of LVSI's Board of Directors acting as ultimate
managing member of Borrower approving and authorizing the
execution, delivery and performance by Borrower of the Loan
Documents being executed on the Closing Date to which it is a
party, certified as of the Closing Date by LVSI's secretary or an
assistant secretary as being in full force and effect without
modification or amendment;
(iv) Signature and incumbency certificates of the officers of
LVSI executing the Loan Documents being executed on behalf of
Borrower on the Closing Date;
(v) Executed originals of the Loan Documents to which it is a
party; and
(vi) Such other documents as Administrative Agent may reasonably
request.
B. No Material Adverse Effect. Since December 31, 2000, no event
or circumstance shall have occurred which has had or in the judgment of
Administrative Agent could reasonably be expected to have a Material Adverse
Effect.
C. Deed of Trust and Title Insurance. Administrative Agent shall
have received from Borrower (i) a fully executed and notarized Deed of Trust, in
form and substance reasonably satisfactory to Administrative Agent duly recorded
in the appropriate filing or recording office in the jurisdiction in which the
Mortgaged Property is located, or evidence that such Deed of Trust has been
irrevocably delivered to the Title Company for such recordation, and (ii) (a) a
1970 (amended October 17, 1970) ALTA mortgagee title insurance policy or
policies or unconditional commitment therefore (the "Mortgage Policy") issued by
the Title Company with respect to the Mortgaged Property in an amount not less
than the maximum aggregate amount of the Commitment, in each case, insuring for
the benefit of Administrative Agent that the Deed of Trust creates a valid and
enforceable First Priority deed of trust Lien on the Mortgaged Property, subject
only to Permitted Liens, which Mortgage Policy (1) shall include an endorsement
for mechanics' liens, for future advances under this Agreement and for any other
matters reasonably requested by Administrative Agent, (2) shall provide for
affirmative insurance and such reinsurance as Administrative Agent may
reasonably request, all of the foregoing in form and substance satisfactory to
Administrative Agent and (3) shall not have a creditor's rights exception; and
(b) evidence reasonably satisfactory to Administrative Agent that Borrower has
or has caused to be (x) delivered to the Title Company all certificates and
affidavits required by the Title Company in connection with the issuance of the
Mortgage Policy and (y) paid to the Title Company or to the appropriate
governmental authorities all expenses and premiums of the Title Company in
connection with the issuance of the Mortgage Policy and all recording and stamp
taxes (including mortgage recording and intangible taxes) payable in connection
with recording the Deed of Trust in the appropriate real estate records.
D. A.L.T.A. Survey. Administrative Agent shall have received an
A.L.T.A. survey of the Land satisfactory in form and substance to the Title
Company and the Administrative Agent reasonably current and certified to
Administrative Agent by a licensed surveyor satisfactory to Administrative
Agent, showing (a) as to the Land, the exact location and dimensions thereof,
including the location of all means of access thereto and all easements relating
thereto and showing the perimeter within which all foundations are or are to be
located; (b) that there are no gaps, gores, projections, protrusions or other
survey defects other than Permitted Liens; (c) whether the Land or any portion
thereof is located in a special earthquake or flood hazard zone; and (d) that
there are no other matters that could reasonably be expected to be disclosed by
a survey constituting a defect in title other than Permitted Liens.
E. Security Interests in Personal and Mixed Property.
Administrative Agent shall have received evidence reasonably satisfactory to it
that Borrower shall have taken or caused to be taken all actions, executed and
delivered or caused to be executed and delivered all such agreements, documents
and instruments, and made or caused to be made all such filings and recordings
that may be necessary or in the reasonable opinion of Administrative Agent,
desirable in order to create in favor of Administrative Agent, for the benefit
of Lenders, a valid and perfected security interest in the Collateral securing
all of the Obligations. Without limiting the generality of the foregoing
Borrower shall have (i) delivered to Administrative Agent (a) the results of a
recent search, by a Person satisfactory to Administrative Agent to all effective
UCC financing statements and fixture filings and all judgment and tax lien
filings which may have been made with respect to any personal or mixed property
of any Loan Party, together with copies of all such filings disclosed by such
search, and (b) UCC termination statements duly executed by all applicable
Persons for filing in all applicable jurisdictions as may be necessary to
terminate any effective UCC financing statements or fixture filings disclosed in
such search (other than any such financing statements or fixture filings in
respect of Liens permitted to remain outstanding pursuant to the terms of this
Agreement and (ii) delivered to Administrative Agent UCC financing statements
and, where appropriate, fixture filings, duly executed by each applicable Loan
Party with respect to all personal and mixed property Collateral of such Loan
Party, for filing in all jurisdictions as may be necessary or, in the opinion of
39
Administrative Agent, desirable to perfect the security interests created in
such Collateral pursuant to the Collateral Documents.
F. Opinions of Counsel to Borrower. Lenders and their respective
counsel shall have received (i) originally executed copies of one or more
favorable written opinions of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, counsel
for Borrower, and (ii) originally executed copies of one or more favorable
written opinions of Xxxxxx Xxxxxx & Xxxxxxx, Nevada counsel for Borrower, each
in form and substance reasonably satisfactory to Administrative Agent and its
counsel, dated as of the Closing Date and setting forth substantially the
matters in the opinions designated in Exhibits V-A and V-B annexed hereto,
respectively, and as to such other matters as Administrative Agent acting on
behalf of Lenders may reasonably request. Borrower hereby acknowledges and
confirms that it has requested such counsel to deliver such opinions to Lenders.
G. Fees. Borrower shall have paid to Administrative Agent the
fees payable on the Closing Date referred to in subsection 2.3 and all
transaction costs payable under Section 10.2 due at that time.
H. Matters Relating to Flood Hazards. (a) Administrative Agent
shall have received evidence, which may be in the form of a letter from an
insurance broker or a municipal engineer, as to whether the Mortgaged Property
is located in an area designated by the Federal Emergency Management Agency as
having special flood or mud slide hazards and if so, whether the community in
which the Mortgaged Property is located participates in the National Flood
Insurance Program, (b) if the Mortgaged Property is located in an area
designated by the Federal Emergency management Agency as having special flood or
mud slide hazards, written acknowledgment from Borrower of receipt of written
notification from Administrative Agent (1) that the Mortgaged Property is
located in a special flood hazard area and (2) as to whether the community in
which the Mortgaged Property is located is participating in the National Flood
Insurance Program, and (c) in the event the Mortgaged Property is located in a
community that participates in the National Flood Insurance Program, evidence
that Borrower have obtained flood insurance in respect of the Mortgaged Property
to the extent required under the applicable regulations of the Board of
Governors of the Federal Reserve System.
I. Real Estate Appraisals. Administrative Agent shall have
received an appraisal from an independent real estate appraiser satisfactory to
the Administrative Agent in form, scope and substance satisfactory to the
Administrative Agent and satisfying the requirements of any applicable laws and
regulations of the Land showing a minimum value of $100,000,000 for the Land.
J. Environmental Reports. Administrative Agent shall have
received reports and other information, in form, scope and substance
satisfactory to Administrative Agent, regarding environmental matters relating
to the Borrower and the Land, which reports shall include a Phase I
environmental assessment for the Land and the improvements thereon (the "Phase I
Report") which (a) conforms to the ASTM Standard Practice for Environmental Site
Assessments: Phase I Environmental Site Assessment Process, E 1527 and (b) was
conducted no more than six months prior to the Closing Date by EMG or another
environmental consulting firm or firms reasonably satisfactory to the
Administrative Agent.
K. Environmental Indemnity. If requested by Administrative Agent,
an environmental indemnity agreement, reasonably satisfactory in form and
substance to Administrative Agent and its counsel, with respect to the
indemnification of Administrative Agent and Lenders for any liabilities that may
be imposed on or incurred by any of them as a result of any Hazardous Materials
Activity.
L. Financial Statements. Delivery to Administrative Agent of the
audited consolidated and consolidating financial statements for LVSI and its
Subsidiaries (including Borrower) for the period ended December 31, 2000 and the
unaudited consolidated and consolidating financial statements for LVSI and its
Subsidiaries for June 30, 2001.
M. Solvency Assurances. On the Closing Date, Administrative Agent
shall have received a Financial Condition Certificate from the Borrower dated
the Closing Date, substantially in the form of Exhibit XI annexed hereto and
with appropriate attachments, in each case demonstrating that, after giving
effect to the transactions contemplated by this Agreement, the other Loan
Documents and the other Operative Documents, Borrower will be Solvent.
N. Phase II Lease. Borrower and Venetian shall have entered into
the Phase II Lease, which Phase II Lease shall be in form and substance
satisfactory to Administrative Agent.
O. Evidence of Insurance. Administrative Agent shall have
received a certificate from Company's insurance broker or other evidence
satisfactory to it that all insurance required to be maintained pursuant to
subsection 6.4 is in full force an effect and that Administrative Agent on
behalf of Lenders has been named as additional insured and/or loss payee
thereunder to the extent required under subsection 6.4.
40
P. Representations and Warranties; Performance Agreements.
Company shall have delivered to Administrative Agent an Officers' Certificate,
in form and substance satisfactory to Administrative Agent, to the effect that
(i) the representations and warranties in Section 5 hereof are true, correct and
compete in all material respects on and as of the Closing Date to the same
extent as though made on and as of that date (or, to the extent such
representations and warranties specifically relate to an earlier date, that such
representations and warranties were true, correct and complete in all material
respects on and as of such earlier date) (ii) Borrower shall have performed in
all material respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or before the
Closing Date except as otherwise disclosed to and agreed to in writing by
Administrative Agent and (iii) no Event of Default or Potential Event of Default
shall then exist and be continuing or would result form the consummation of the
transaction contemplated hereby.
Q. Update Regarding Bovis Litigation. An update from counsel to
LVSI and its Subsidiaries regarding the status of the construction litigation
with Bovis, in form and substance reasonably satisfactory to the Administrative
Agent.
R. Completion of Proceedings. All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all documents incidental thereto not previously found reasonably acceptable by
Administrative Agent and its counsel shall be reasonably satisfactory in form
and substance to Administrative Agent and such counsel, and Administrative Agent
and such counsel shall have received all such counterpart originals or certified
copies of such documents as Administrative Agent may reasonably request.
4.2 Conditions to all Loans on or after the Closing Date.
--- -----------------------------------------------------
The obligations of Lenders to make Loans on or after the Closing
Date on any Funding Date are subject to the following further conditions
precedent:
A. Administrative Agent shall have received before that Funding
Date, in accordance with the provisions of subsection 2.1B, an originally
executed Notice of Borrowing, in each case signed by the chief executive
officer, the chief financial officer or the treasurer of Borrower or of the
managing member of Borrower or by any executive officer of Borrower or managing
member designated by any of the above-described officers on behalf of Borrower
in a writing delivered to Administrative Agent.
B. As of that Funding Date:
(i) The representations and warranties contained herein and in
the other Loan Documents shall be true, correct and complete in
all material respects on and as of that Funding Date to the same
extent as though made on and as of that date, except to the
extent such representations and warranties specifically relate to
an earlier date, in which case such representations and
warranties shall have been true, correct and complete in all
material respects on and as of such earlier date;
(ii) No event shall have occurred and be continuing or would
result from the consummation of the borrowing contemplated by
such Notice of Borrowing that would constitute an Event of
Default or a Potential Event of Default;
(iii) Each Loan Party shall have performed in all material
respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or
before that Funding Date;
(iv) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain Lender
from making the Loans to be made by it on that Funding Date;
(v) The making of the Loans requested on such Funding Date shall
not violate any law including, Regulation T, Regulation U or
Regulation X of the Board of Governors of the Federal Reserve
System; and
(vi) There shall not be pending or, to the knowledge of Borrower,
threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting Borrower or any
of its Subsidiaries or any property of Borrower or any of its
Subsidiaries that is required to be disclosed under, and has not
been disclosed by Borrower in writing pursuant to, subsection 5.6
or 6.1(x) prior to the making of the last preceding Loans (or, in
the case of the initial Loans, prior to the execution of this
Agreement), and there shall have occurred no development not so
41
disclosed in any such action, suit, proceeding, governmental
investigation or arbitration so disclosed, that, in either event,
in the reasonable opinion of Administrative Agent or Requisite
Lenders, would have a Material Adverse Effect.
4.3 Conditions to Letters of Credit.
--- --------------------------------
The issuance of any Letter of Credit hereunder (whether or not
the applicable Issuing Lender is obligated to issue such Letter of Credit) on or
after the Closing Date is subject to the following conditions precedent:
A. On or before the date of issuance of such Letter of Credit,
Administrative Agent shall have received, in accordance with the provisions of
subsection 3.1B(i), an originally executed Notice of Issuance of Letter of
Credit, in each case signed by the chief executive officer, the chief financial
officer or the treasurer of Borrower or the managing member of Borrower or by
any executive officer of Borrower or managing member designated by any of the
above-described officers on behalf of Borrower in a writing delivered to
Administrative Agent, together with all other information specified in
subsection 3.1B(i) and such other documents or information as the applicable
Issuing Lender may reasonably require in connection with the issuance of such
Letter of Credit.
B. On the date of issuance of such Letter of Credit, all
conditions precedent described in subsection 4.2B shall be satisfied to the same
extent as if the issuance of such Letter of Credit were the making of a Loan and
the date of issuance of such Letter of Credit were a Funding Date.
Section 5. BORROWER'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to
make or continue the Loans, as applicable, and to induce Issuing Lenders to
issue or continue Letters of Credit, as applicable, Borrower represents and
warrants to each Lender that, on the Closing Date, on each Funding Date for
Loans and on the date of issuance of each Letter of Credit, the following
statements are true, correct and complete:
5.1 Organization, Powers, Qualification, Good Standing, Business and
--- ----------------------------------------------------------------
Subsidiaries.
-------------
A. Organization and Powers. Each Loan Party is a corporation or
limited liability company duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization as specified in Schedule 5.1A
annexed hereto. Each Loan Party has all requisite corporate or limited liability
company power and authority to own and operate its properties, to carry on its
business as now conducted and as proposed to be conducted, to enter into the
Loan Documents and Project Documents to which it is a party and to carry out the
transactions contemplated thereby.
B. Qualification and Good Standing. Each Loan Party is qualified
to do business and in good standing in every jurisdiction where its assets are
located and wherever necessary to carry out its business and operations, except
in jurisdictions where the failure to be so qualified or in good standing has
not had and will not have a Material Adverse Effect. C. Ownership of Borrower.
The equity interests in Borrower are duly authorized, validly issued and (if
applicable) fully paid and nonassessable and, as of the Closing Date, none of
such equity interests constitute Margin Stock. Schedule 5.1C, as it may be
supplemented from time to time, correctly sets forth the ownership of Borrower.
D. Subsidiaries. As of the Closing Date, Borrower has no
Subsidiaries.
E. Rights to Acquire Equity. There are no options, warrants,
convertible securities or other rights to acquire any equity interests in
Borrower or any of its Subsidiaries except as set forth as Schedule 5.1E.
F. Conduct of Business. Borrower and its Subsidiaries are engaged
only in the businesses permitted to be engaged in pursuant to subsection 7.12.
5.2 Authorization of Borrowing, etc.
--- --------------------------------
A. Authorization of Borrowing. The execution, delivery and
performance of the Loan Documents and the Project Documents have been duly
authorized by all necessary corporate action on the part of each Loan Party that
is a party thereto.
B. No Conflict. The execution, delivery and performance by Loan
Parties of the Loan Documents and Project Documents to which they are parties
and the consummation of the transactions contemplated by the Loan Documents and
such Project Documents do not and will not (i) violate any provision of (a) any
law or any governmental rule or regulation applicable to Borrower or any of its
Subsidiaries, (b) the Organizational Documents of Borrower or any of its
42
Subsidiaries or (c) any order, judgment or decree of any court or other agency
of government binding on Borrower or any of its Subsidiaries, (ii) conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default under any Contractual Obligation of Borrower or any of its
Subsidiaries, (iii) result in or require the creation or imposition of any Lien
upon any of the properties or assets of Borrower or any of its Subsidiaries
(other than any Liens created under any of the Loan Documents in favor of
Administrative Agent on behalf of Lenders), or (iv) require any approval of
stockholders or any approval or consent of any Person under any Contractual
Obligation of Borrower or any of its Subsidiaries except for such approvals or
consents which will be obtained on or before the Closing Date and disclosed in
writing to Lenders and except for such violations, conflicts, approvals and
consents the failure of which to obtain could reasonably be expected to have a
Material Adverse Effect.
C. Governmental Consents. The execution, delivery and performance
by Loan Parties of the Loan Documents to which they are parties and the
consummation of the transactions contemplated by the Loan Documents do not and
will not require any registration with, consent or approval of, or notice to, or
other action to, with or by, any federal, state or other governmental authority
or regulatory body.
D. Binding Obligation. Each of the Loan Documents and Project
Documents has been duly executed and delivered by Loan Parties that are parties
hereto or thereto, as applicable, and is the legally valid and binding
obligation of Loan Parties, enforceable against such Loan Party in accordance
with its respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally or by equitable principles relating to enforceability, whether
brought in a proceeding in equity or at law.
5.3 Financial Condition.
--- --------------------
Borrower has heretofore delivered to Lenders, at Lenders'
request, the following financial statements and information: (i) the audited
consolidated and consolidating balance sheets of LVSI and its Subsidiaries as at
December 31, 2000 and the related consolidated and consolidating statements of
income, stockholders' equity and cash flows of LVSI and its Subsidiaries for the
Fiscal Year then ended and (ii) the unaudited consolidated and consolidating
balance sheets of LVSI and its Subsidiaries as at June 30, 2001 and the related
unaudited consolidated and consolidating statements of income, stockholders'
equity and cash flows of LVSI and its Subsidiaries for the six months then
ended. All such statements were prepared in conformity with GAAP and fairly
present, in all material respects, the financial position (on a consolidated
and, where applicable, consolidating basis) of the entities described in such
financial statements as at the respective dates thereof and the results of
operations and cash flows (on a consolidated and, where applicable,
consolidating basis) of the entities described therein for each of the periods
then ended, subject, in the case of any such unaudited financial statements, to
changes resulting from audit and normal year-end adjustments. Except for
obligations under the Operative Documents, Borrower does not (and will not
following the funding of the initial Loans) have any Contingent Obligation,
contingent liability or liability for taxes, long-term lease or forward or
long-term commitment that is not reflected in the foregoing financial statements
or the notes thereto and which in any such case is material in relation to the
business, operations, properties, assets, financial condition or prospects of
Borrower and its Subsidiaries taken as a whole.
5.4 No Material Adverse Change; No Restricted Junior Payments.
--- ----------------------------------------------------------
Since December 31, 2000, no event or change has occurred that has
caused or evidences, either in any case or in the aggregate, a Material Adverse
Effect. Except as set forth on Schedule 5.4, neither Borrower nor any of its
Subsidiaries have directly or indirectly declared, ordered, paid or made, or set
apart any sum or property for, any Restricted Junior Payment or agreed to do so
except as permitted by subsection 7.5.
5.5 Title to Properties; Liens; Real Property.
--- ------------------------------------------
A. Title to Properties; Liens. Borrower and its Subsidiaries have
(i) good marketable and insurable fee simple title to (in the case of fee
interests in real property), (ii) valid leasehold interests in (in the case of
leasehold interests in real or personal property), or (iii) good title to (in
the case of all other personal property), all of their respective material
properties and assets reflected in the financial statements referred to in
subsection 5.3 or in the most recent financial statements delivered pursuant to
subsection 6.1, in each case except for assets disposed of since the date of
such financial statements in the ordinary course of business or as otherwise
permitted under subsection 7.7. Except as permitted by this Agreement, all such
properties and assets are held free and clear of Liens.
43
B. Real Property. As of the Closing Date, Schedule 5.5 annexed
hereto contains a true, accurate and complete list of (i) all material
properties owned by Borrower or any of its Subsidiaries and (ii) all material
leases, subleases or assignments of leases (together with all amendments,
modifications, supplements, renewals or extensions of any thereof) affecting
real estate of properties owned by Borrower or any of its Subsidiaries
regardless of whether a Borrower or such Subsidiary is the landlord or tenant
(whether directly or as an assignee or successor in interest) under such lease,
sublease or assignment. Except as specified in Schedule 5.5 annexed hereto, each
agreement listed in clause (ii) of the immediately preceding sentence is in full
force and effect and Borrower does not have knowledge of any default that has
occurred and is continuing thereunder, and each such agreement constitutes the
legally valid and binding obligation of each applicable Borrower, enforceable
against such Borrower in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
except to the extent that the failure of such agreement to be in full force and
effect could not reasonably be expected to have a Material Adverse Effect.
5.6 Litigation; Adverse Facts.
--- --------------------------
Except as set forth in Schedule 5.6 annexed hereto, there are no
actions, suits, proceedings, arbitrations or governmental investigations
(whether or not purportedly on behalf of Borrower or any of its Subsidiaries) at
law or in equity, or before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign (including any Environmental Claims) that are pending or, to
the knowledge of Borrower, threatened against or affecting Borrower or any of
its Subsidiaries or any property of Borrower or any of its Subsidiaries and
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect. Neither Borrower nor any of its Subsidiaries (i)
is in violation of any applicable laws (including Environmental Laws) that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect, or (ii) is subject to or in default with respect to any
final judgments, writs, injunctions, decrees, rules or regulations of any court
or any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.
5.7 Payment of Taxes.
--- -----------------
Except to the extent permitted by subsection 6.3, all tax returns
and reports of Borrower required to be filed by them have been timely filed, and
all taxes shown on such tax returns to be due and payable and all material
assessments, fees and other governmental charges upon Borrower and upon their
respective properties, assets, income, businesses and franchises which are due
and payable have been paid when due and payable. Borrower knows of no proposed
tax assessment against Borrower or any of its Subsidiaries which is not being
actively contested by Borrower or such Subsidiary in good faith and by
appropriate proceedings; provided that such reserves or other appropriate
provisions, if any, as shall be required in conformity with GAAP shall have been
made or provided therefor.
5.8 Performance of Agreements; Materially Adverse Agreements; Material
--- ------------------------------------------------------------------
Contracts.
----------
A. Neither Borrower nor any of its Subsidiaries is in default in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences of such default or
defaults, if any, would not have a Material Adverse Effect.
B. Schedule 5.8 contains a true, correct and complete list of all the Material
Contracts in effect on the Closing Date. Except as described on Schedule 5.8,
all such Material Contracts are, to the knowledge of Borrower, in full force and
effect and no material defaults currently exist thereunder.
5.9 Governmental Regulation.
--- ------------------------
Neither Borrower nor any of its Subsidiaries is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, or the Interstate Commerce Act or registration under the Investment
Company Act of 1940 or under any other federal or state statute or regulation
which may limit its ability to incur Indebtedness other than the Nevada Gaming
Laws or which may otherwise render all or any portion of the Obligations
unenforceable. Incurrence of the Obligations under the Loan Documents complies
with all applicable provisions of the Nevada Gaming Laws.
44
5.10 Securities Activities.
---- ----------------------
A. Neither Borrower nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each Loan, not more
than 25% of the value of the assets (either of Borrower only or of Borrower and
its Subsidiaries on a consolidated basis) subject to the provisions of
subsection 7.2 or 7.7 or subject to any restriction contained in any agreement
or instrument, between Borrower and any Lender or any Affiliate of any Lender,
relating to Indebtedness and within the scope of subsection 8.2, will be Margin
Stock.
5.11 Employee Benefit Plans.
---- -----------------------
A. Borrower, each of its Subsidiaries and each of their
respective ERISA Affiliates are in material compliance with all applicable
provisions and requirements of ERISA and the regulations thereunder with respect
to each Employee Benefit Plan, and have performed all their obligations under
each Employee Benefit Plan. Each Employee Benefit Plan which is intended to
qualify under Section 401(a) of the Code is so qualified.
B. No ERISA Event has occurred or is reasonably expected to occur
which has resulted or would be reasonably likely to result in a liability in the
aggregate amount of $1,000,000 or more.
C. Except to the extent required under Section 4980B of the Code
or except as set forth in Schedule 5.11 annexed hereto, no Employee Benefit Plan
provides health or welfare benefits (through the purchase of insurance or
otherwise) for any retired or former employee of Borrower, any of its
Subsidiaries or any of their respective ERISA Affiliates.
D. As of the most recent valuation date for any Pension Plan, the
amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of
ERISA), individually or in the aggregate for all Pension Plans (excluding for
purposes of such computation any Pension Plans with respect to which assets
exceed benefit liabilities), does not exceed $1,000,000.
E. As of the most recent valuation date for each Multiemployer
Plan for which the actuarial report is available, the potential liability of
Borrower, its Subsidiaries and their respective ERISA Affiliates for a complete
withdrawal from such Multiemployer Plan (within the meaning of Section 4203 of
ERISA), when aggregated with such potential liability for a complete withdrawal
from all Multiemployer Plans, based on information available pursuant to Section
4221(e) of ERISA, does not exceed $1,000,000.
5.12 Certain Fees.
---- -------------
No broker's or finder's fee or commission will be payable with
respect to this Agreement or any of the transactions contemplated hereby (other
than fees payable to Lenders under subsection 2.3), and Borrower hereby
indemnifies Lenders against, and agrees that it will hold Lenders harmless from,
any claim, demand or liability for any such broker's or finder's fees alleged to
have been incurred in connection herewith or therewith and any expenses
(including reasonable fees, expenses and disbursements of counsel) arising in
connection with any such claim, demand or liability.
5.13 Environmental Protection.
---- -------------------------
Except as set forth in Schedule 5.13 annexed hereto:
(i) neither Borrower nor any of its Subsidiaries nor any of their
respective Facilities, including the Land, or operations are
subject to any outstanding written order, consent decree or
settlement agreement with any Person relating to (a) any
Environmental Law, (b) any Environmental Claim, or (c) any
Hazardous Materials Activity;
(ii) neither Borrower nor any of its Subsidiaries has received
any letter or request for information under Section 104 of the
Comprehensive Environmental Response, Compensation, and Liability
Act (42 X.X.X.xx. 9604) or any comparable state law;
(iii) there are and, to Borrower's knowledge, have been no
conditions, occurrences, or Hazardous Materials Activities on the
Land or any other Facility which could reasonably be expected to
form the basis of an Environmental Claim against Borrower or any
of its Subsidiaries;
(iv) neither Borrower nor any of its Subsidiaries nor, to
45
Borrower's knowledge, any predecessor of Borrower or any of its
Subsidiaries has filed any notice under any Environmental Law
indicating past or present treatment of Hazardous Materials at
any Facility, and none of Borrower's or any of its Subsidiaries'
operations involves the generation, transportation, treatment,
storage or disposal of hazardous waste, as defined under 40
C.F.R. Parts 260-270 or any state equivalent;
(v) compliance with all current or reasonably foreseeable future
requirements pursuant to or under Environmental Laws will not,
individually or in the aggregate, have a reasonable possibility
of giving rise to a Material Adverse Effect.
Notwithstanding anything in this subsection 5.13 to the contrary,
no event or condition has occurred or is occurring with respect to Borrower or
any of its Subsidiaries relating to any Environmental Law, any Release of
Hazardous Materials, or any Hazardous Materials Activity, including any matter
disclosed on Schedule 5.13 annexed hereto, which individually or in the
aggregate has had or could reasonably be expected to have a Material Adverse
Effect.
5.14 Employee Matters.
---- -----------------
There is no strike or work stoppage in existence or threatened
involving Borrower that could reasonably be expected to have a Material Adverse
Effect.
5.15 Solvency.
---- ---------
Borrower is, and, upon the incurrence of any Obligations by
Borrower on any date on which this representation is made, will be, Solvent.
5.16 Matters Relating to Collateral.
---- -------------------------------
A. Creation, Perfection and Priority of Liens. The execution and
delivery of the Collateral Documents by Borrower and its Subsidiaries, together
with the actions taken on or prior to the Closing Date pursuant to subsection
4.1 are effective to create in favor of Administrative Agent for the benefit of
Lenders as security for the Secured Obligations (as defined in the applicable
Collateral Document in respect of any Collateral), a valid and perfected Lien on
all of the Collateral, and all filings and other actions necessary to perfect
and maintain the perfection and priority status of such Liens have been duly
made or taken and remain in full force and effect, other than the filing of any
UCC financing statements delivered to Administrative Agent or the Title Company
for filing (but not yet filed) and the periodic filing of UCC continuation
statements in respect of UCC financing statements filed by or on behalf of
Administrative Agent.
B. Permits. No authorization, approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for either (i) the pledge or grant by Borrower and its Subsidiaries of
the Liens purported to be created in favor of Administrative Agent for the
benefit of the Lenders pursuant to any of the Collateral Documents or (ii) the
exercise by Administrative Agent of any rights or remedies in respect of any
Collateral (whether specifically granted or created pursuant to any of the
Collateral Documents or created or provided for by applicable law), except for
filings or recordings contemplated by subsection 5.16A.
C. Absence of Third-Party Filings. Except such as may have been
filed in favor of Administrative Agent as contemplated by subsection 5.16A or
filed to perfect a Lien permitted under subsection 7.2, no effective UCC
financing statement, fixture filing or other instrument similar in effect
covering all or any part of the Collateral is on file in any filing or recording
office.
D. Information Regarding Collateral. All information supplied to
Administrative Agent by or on behalf of Borrower with respect to any of the
Collateral (in each case taken as a whole with respect to any particular
Collateral) is accurate and complete in all material respects.
5.17 Proper Subdivision .
---- --------------------
For all purposes the Land is, and may be mortgaged, conveyed and
otherwise dealt with, as a separate legal lot or parcel.
Section 6. BORROWER'S AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations and the cancellation or expiration of all
46
Letters of Credit, unless Requisite Lenders shall otherwise give prior written
consent, Borrower shall perform, and shall cause each of its Subsidiaries to
perform, all covenants set forth in this Section 6.
6.1 Financial Statements and Other Reports.
--- ---------------------------------------
Borrower shall, and shall cause its Subsidiaries to, maintain a
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. Borrower will deliver to Administrative Agent and Lenders:
(i) promptly and in any event within 3 days of receipt thereof,
copies of all financial statements, reports and certifications
delivered to Borrower under the Phase II Lease;
(ii) as soon as available and in any event within 45 days after
the end of each Fiscal Quarter, (a) the consolidated balance
sheets of Borrower and its subsidiaries as at the end of such
Fiscal Quarter and the related consolidated statements of income,
stockholders' equity and cash flows of Borrower and its
subsidiaries for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such
Fiscal Quarter, setting forth in each case in comparative form
the corresponding figures for the corresponding periods of the
previous Fiscal Year, all in reasonable detail and certified by
the chief financial officer of LVSI, on behalf of Borrower, that
they fairly present, in all material respects, the financial
condition of Borrower and its Subsidiaries as at the dates
indicated and the results of their operations and their cash
flows for the periods indicated, subject to changes resulting
from audit and normal year-end adjustments; and (b) a narrative
report describing the operations of Borrower and its Subsidiaries
in the form prepared for presentation to senior management for
such Fiscal Quarter and for the period from the beginning of the
then current Fiscal Year to the end of such Fiscal Quarter.
(iii) as soon as available and in any event within 90 days after
the end of each Fiscal Year, (a) the consolidated balance sheets
of Borrower and its Subsidiaries as at the end of such Fiscal
Year and the related consolidated statements of income,
stockholders' equity and cash flows of Borrower and its
Subsidiaries for such Fiscal Year, setting forth in each case in
comparative form the corresponding figures for the previous
Fiscal Year, all in reasonable detail and certified by the chief
financial officer of LVSI, on behalf of Borrower, that they
fairly present, in all material respects, the financial condition
of Borrower and its Subsidiaries as at the dates indicated and
the results of their operations and their cash flows for the
periods indicated; (b) a narrative report describing the
operations of Borrower and its Subsidiaries in the form prepared
for presentation to senior management for such Fiscal Year; and
(c) a report thereon of Price Waterhouse LLP or other independent
certified public accountants of recognized national standing
selected by Borrower and reasonably satisfactory to
Administrative Agent, which report shall be unqualified as to
scope of audit, shall express no doubts about the ability of the
Persons covered thereby to continue as a going concern, and shall
state that such consolidated financial statements fairly present,
in all material respects, the consolidated financial position of
Borrower and its Subsidiaries, respectively as at the dates
indicated and the results of their operations and their cash
flows for the periods indicated in conformity with GAAP applied
on a basis consistent with prior years (except as otherwise
disclosed in such financial statements) and that the examination
by such accountants in connection with such consolidated
financial statements has been made in accordance with generally
accepted auditing standards;
(iv) Officers' and Compliance Certificates: together with each
delivery of financial statements pursuant to subdivisions (i),
(ii) and (iii) above, (a) an Officers' Certificate of Borrower
stating that the signer, on behalf of Borrower, has reviewed the
terms of this Agreement and has made, or caused to be made under
his/her supervision, a review in reasonable detail of the
transactions and condition of Borrower and its Subsidiaries
during the accounting period covered by such financial statements
and that such review has not disclosed the existence during or at
the end of such accounting period, and that the signers do not
have knowledge of the existence as at the date of such Officers'
Certificate, of any condition or event that constitutes an Event
of Default or Potential Event of Default, or, if any such
condition or event existed or exists, specifying the nature and
period of existence thereof and what action Borrower has taken,
is taking and proposes to take with respect thereto; and (b) a
Compliance Certificate demonstrating in reasonable detail
47
compliance during and at the end of the applicable accounting
periods with the restrictions contained in Section 7;
(v) Reconciliation Statements: if, as a result of any change in
accounting principles and policies from those used in the
preparation of the audited financial statements last delivered
pursuant to this Agreement, the consolidated financial statements
of Borrower and its Subsidiaries delivered pursuant to
subdivisions (ii) or (iii) of this Section 6.1 will differ in any
material respect from the consolidated financial statements that
would have been delivered pursuant to such subdivisions had no
such change in accounting principles and policies been made, then
together with the first delivery of financial statements pursuant
to subdivision (ii) or (iii) of this Section 6.1 following such
change, consolidated financial statements of Borrower and its
Subsidiaries for (y) the current Fiscal Year to the effective
date of such change and (z) the two full Fiscal Years immediately
preceding the Fiscal Year in which such change is made, in each
case prepared on a pro forma basis as if such change had been in
effect during such periods.
(vi) Accountants' Certification: together with each delivery of
any consolidated financial statements pursuant to subdivision
(iii) above, a written statement by the independent certified
public accountants giving the report thereon (a) stating that
their audit examination has included a review of the terms of
this Agreement and the other Loan Documents as they relate to
accounting matters, (b) stating whether, in connection with their
audit examination, any condition or event that constitutes an
Event of Default or Potential Event of Default has come to their
attention and, if such a condition or event has come to their
attention, specifying the nature and period of existence thereof;
provided that such accountants shall not be liable by reason of
any failure to obtain knowledge of any such Event of Default or
Potential Event of Default that would not be disclosed in the
course of their audit examination, and (c) stating that based on
their audit examination nothing has come to their attention that
causes them to believe either or both that the information
contained in the certificates delivered therewith pursuant to
subdivision (iii) above is not correct;
(vii) Accountants' Reports: promptly upon receipt thereof (unless
restricted by applicable professional standards), copies of all
reports submitted to Borrower or any of its Subsidiaries by
independent certified public accountants in connection with each
annual, interim or special audit of the financial statements of
Borrower and its Subsidiaries made by such accountants, including
any comment letter submitted by such accountants to management in
connection with their annual audit;
(viii) Press Releases and Other Reports: promptly upon their
becoming available, copies of all press releases and other
statements made available generally by Borrower and any of its
Subsidiaries to the public concerning material developments in
the business of Borrower and its Subsidiaries;
(ix) Events of Default, etc.: promptly upon any officer of
Borrower obtaining knowledge (a) of any condition or event that
constitutes an Event of Default or Potential Event of Default, or
becoming aware that any Lender has given any notice (other than
to Administrative Agent) or taken any other action with respect
to a claimed Event of Default or Potential Event of Default, (b)
that any Person has given any notice to Borrower or any of its
Subsidiaries or taken any other action with respect to a claimed
default or event or condition of the type referred to in
subsection 8.2, (c) of any condition or event that would be
required to be disclosed in a current report filed by Borrower
with the Securities and Exchange Commission on Form 8-K (Items 1,
2, 4, 5 and 6 of such Form as in effect on the Closing Date) if
Borrower were required to file such reports under the Exchange
Act, or (d) of the occurrence of any event or change that has
caused or evidences, either in any case or in the aggregate, a
Material Adverse Effect, an Officers' Certificate specifying the
nature and period of existence of such condition, event or
change, or specifying the notice given or action taken by any
such Person and the nature of such claimed Event of Default,
Potential Event of Default, default, event or condition, and what
action Borrower has taken, is taking and proposes to take with
respect thereto;
(x) Litigation or Other Proceedings: (a) promptly upon any
officer of Borrower obtaining knowledge of (X) the non-frivolous
institution of, or threat of, any action, suit, proceeding
(whether administrative, judicial or otherwise), governmental
investigation or arbitration against or affecting Borrower or any
of its Subsidiaries, or any property of Borrower or any of its
48
Subsidiaries (collectively, "Proceedings") not previously
disclosed in writing by Borrower to Lenders or (Y) any material
development in any Proceeding that, in any case:
(1) if adversely determined, has a reasonable possibility of
giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the consummation
of, or to recover any damages or obtain relief as a result of,
the transactions contemplated hereby;
written notice thereof together with such other information as may be reasonably
available to Borrower to enable Lenders and their counsel to evaluate such
matters; and (b) within twenty days after the end of each Fiscal Quarter, a
schedule of all Proceedings involving an alleged liability of, or claims against
or affecting, Borrower or any of its Subsidiaries equal to or greater than
$250,000, and promptly after request by Administrative Agent such other
information as may be reasonably requested by Administrative Agent to enable
Administrative Agent and its counsel to evaluate any of such Proceedings;
(xi) ERISA Events: promptly upon becoming aware of the occurrence
of or forthcoming occurrence of any ERISA Event, a written notice
specifying the nature thereof, what action Borrower or any of its
respective ERISA Affiliates has taken, is taking or proposes to
take with respect thereto and, when known, any action taken or
threatened by the Internal Revenue Service, the Department of
Labor or the PBGC with respect thereto;
(xii) ERISA Notices: with reasonable promptness, copies of (a)
each Schedule B (Actuarial Information) to the annual report
(Form 5500 Series) filed by Borrower, any of its Subsidiaries or
any of their respective ERISA Affiliates with the Internal
Revenue Service with respect to each Pension Plan; (b) all
notices received by Borrower or any of its respective ERISA
Affiliates from a Multiemployer Plan sponsor concerning an ERISA
Event; and (c) copies of such other documents or governmental
reports or filings relating to any Employee Benefit Plan as
Administrative Agent shall reasonably request;
(xiii) Insurance: as soon as practicable and in any event by the
last day of each Fiscal Year, a report in form and substance
reasonably satisfactory to Administrative Agent outlining all
material insurance coverage maintained as of the date of such
report by Borrower and its Subsidiaries and all material
insurance coverage planned to be maintained by Borrower and its
Subsidiaries in the immediately succeeding Fiscal Year;
(xiv) New Subsidiaries: promptly upon any Person becoming a
Subsidiary of Borrower, a written notice setting forth with
respect to such Person (a) the date on which such Person became a
Subsidiary of Borrower and (b) all of the data required to be set
forth in Schedule 5.1 annexed hereto with respect to all
Subsidiaries of Borrower (it being understood that such written
notice shall be deemed to supplement Schedule 5.1 annexed hereto
for all purposes of this Agreement);
(xv) Material Contracts: promptly, and in any event within ten
Business Days after any Material Contract of Borrower or any of
its Subsidiaries is terminated or amended in a manner that is
materially adverse to Borrower or any of its Subsidiaries or any
new Material Contract is entered into, or upon becoming aware of
any material default by any Party under a Material Contract, a
written statement describing such event with copies of such
material amendments or new contracts, and an explanation of any
actions being taken with respect thereto;
(xvi) UCC Search Report: As promptly as practicable after the
date of delivery to Lender of any UCC financing statement
executed by any Loan Party pursuant to subsection 6.9 or 6.10,
copies of completed UCC searches evidencing the proper filing,
recording and indexing of all such UCC financing statement and
listing all other effective financing statements that name such
Loan Party as debtor, together with copies of all such other
financing statements not previously delivered to Administrative
Agent by or on behalf of such Loan Party;
(xvii) Notices under Operative Documents: promptly upon receipt,
copies of all notices provided to the Borrower or its Affiliates
pursuant to any Operative Documents relating to material defaults
or material delays and promptly upon execution and delivery
thereof, copies of all amendments to any of the Operative
Documents; and
49
(xviii) Other Information: with reasonable promptness, such other
information and data with respect to Borrower or any of its
Subsidiaries as from time to time may be reasonably requested by
any Lender.
6.2 Corporate Existence, etc.
--- -------------------------
Borrower will, and will cause each of its Subsidiaries to, at all
times preserve and keep in full force and effect their corporate or limited
liability company existence and all rights and franchises material to its
business provided that any Subsidiary of Borrower may be merged into Borrower or
another wholly-owned Subsidiary of Borrower and provided further that no
Subsidiary of Borrower shall be required to preserve any such right or franchise
if the Board of Directors (or managing member thereof, if applicable) shall
determine (and shall notify Administrative Agent), that the preservation thereof
is no longer desirable in the conduct of the business of such Subsidiary and the
loss thereof is not disadvantageous in any material respect to Borrower and its
Subsidiaries or any Lender.
6.3 Payment of Taxes and Claims; Tax Consolidation.
--- -----------------------------------------------
A. Borrower will, and will cause each of its Subsidiaries to, pay
all material taxes, assessments and other governmental charges imposed upon it
or any of its properties or assets or in respect of any of its income,
businesses or franchises before any penalty accrues thereon, and all material
claims (including claims for labor, services, materials and supplies) for sums
that have become due and payable and that by law have or may become a Lien upon
any of its properties or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; provided that no such charge or claim
need be paid if it is being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted, so long as (1) such reserve or
other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made therefor and (2) in the case of a charge or claim
which has or may become a Lien against any of the Collateral, such contest
proceedings conclusively operate to stay the sale of any portion of the
Collateral to satisfy such charge or claim.
B. Borrower will not, nor will it permit any of its Subsidiaries
to, file or consent to the filing of any consolidated income tax return with any
Person (other than LVSI or any of its Subsidiaries) unless Borrower and its
Subsidiaries shall have entered into, a tax sharing agreement with such Person,
in form and substance satisfactory to Administrative Agent.
6.4 Maintenance of Properties; Insurance; Application of Net Loss
--- -------------------------------------------------------------
Proceeds.
---------
A. Maintenance of Properties. Borrower will, and will cause each
of its Subsidiaries to, maintain or cause to be maintained in good repair,
working order and condition, ordinary wear and tear excepted, all material
properties used or useful in the business of Borrower and its Subsidiaries and
from time to time will make or cause to be made all appropriate repairs,
renewals and replacements thereof except to the extent that the Borrower
determines in good faith not to maintain, repair, renew or replace such property
if such property is no longer desirable in the conduct of their business and the
failure to do so is not disadvantageous in any material respect to the Borrower
and its Subsidiaries or the Lenders.
B. Insurance. Borrower will maintain or cause to be maintained,
with financially sound and reputable insurers, such public liability insurance,
third party property damage insurance, business interruption insurance and
casualty insurance with respect to liabilities, losses or damage in respect of
the assets, properties and businesses of Borrower, and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by corporations
of established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for
corporations similarly situated in the industry. Without limiting the generality
of the foregoing, Borrower will maintain or cause to be maintained (i) flood
insurance with respect to the Mortgaged Property that is located in a community
that participates in the National Flood Insurance Program, in each case in
compliance with any applicable regulations of the Board of Governors of the
Federal Reserve System, and (ii) replacement value casualty insurance on the
Collateral under such policies of insurance, with such insurance companies, in
such amounts, with such deductibles, and covering such risks as are at all times
satisfactory to Administrative Agent in its commercially reasonable judgment, it
being understood, however, that Borrower shall not be required to maintain any
such casualty insurance if neither Borrower nor any of its Subsidiaries has
insurable assets of any material value. Each such policy of insurance shall (a)
name Administrative Agent as an additional insured thereunder as its interests
may appear and (b) in the case of each business interruption and casualty
insurance policy, contain a loss payable clause or endorsement, satisfactory in
50
form and substance to Administrative Agent, that names Administrative Agent as
the loss payee thereunder for any covered loss in excess of $250,000 and
provides for at least 30 days prior written notice to Administrative Agent of
any modification or cancellation of such policy.
C. Application of Net Loss Proceeds and Liquidated Damages.
(i) Upon receiving Loss Proceeds or Liquidated Damages Borrower
shall (a) so long as no Event of Default or Potential Event of
Default shall have occurred and be continuing and the amount of
Loss Proceeds and Liquidated Damages received by Borrower is less
than $250,000, promptly and diligently apply the Loss Proceeds or
Liquidated Damages to pay or reimburse the costs of repairing,
restoring or replacing the assets in respect of which such Loss
Proceeds or Liquidated Damages were received or, to the extent
not so applied, to repay the Loans as provided in subsection
2.4B(iii)(b), (b) if an Event of Default or Potential Event of
Default shall have occurred and be continuing, Borrower shall
apply an amount equal to such Loss Proceeds or Liquidated Damages
to repay the Loans as provided in Subsection 2.4B(iii)(b), and
(c) if the amount of Loss Proceeds or Liquidated Damages received
by Borrower equals or exceeds $250,000 and no Event of Default or
Potential Event of Default shall have occurred, Borrower shall
within two (2) Business Days of the receipt thereof deposit such
funds with Administrative Agent and, so long as Borrower proceeds
diligently to repair, restore or replace the assets of Borrower
in respect of which such Loss Proceeds or Liquidated Damages were
received, Administrative Agent shall from time to time disburse
to Borrower from such account, to the extent of any such Loss
Proceeds or Liquidated Damages remaining therein in respect of
the applicable covered loss, amounts necessary to pay the cost of
such repair, restoration or replacement after the receipt by
Administrative Agent or invoices or other documentation
reasonably satisfactory to Lender relating to the amount of costs
so incurred and the work performed (including, if required by
Administrative Agent , lien releases and architects'
certificates); provided, however, that if at any time
Administrative Agent reasonably determines (A) that Borrower is
not proceeding diligently with such repair, restoration or
replacement or (B) that such repair, restoration or replacement
cannot be completed with the Loss Proceeds or Liquidated Damages
then held by Administrative Agent for such purposes, together
with funds otherwise available to Borrower for such purpose, or
that such repair, restoration or replacement cannot be completed
within 180 days after the receipt by Administrative Agent of such
Loss Proceeds or Liquidated Damages, Administrative Agent shall,
and Borrower hereby authorizes Administrative Agent to, apply
such Loss Proceeds or Liquidated Damages to repay the Loans as
provided in subsection 2.4B(iii)(b).
(ii) Upon receipt by Administrative Agent of any Loss Proceeds as
loss payee, or Liquidated Damages in respect of any covered loss
(a) and if and to the extent Borrower would have been required to
apply such Loss Proceeds or Liquidated Damages (if it had
received them directly) to repay the Loans, Administrative Agent
shall, and Borrower hereby authorizes Administrative Agent to,
apply such Loss Proceeds to Liquidated Damages to repay the Loans
as provided in subsection 2.4B(iii)(b), and (b) to the extent the
foregoing clause (a) does not apply and (1) the aggregate amount
of such Loss Proceeds or Liquidated Damages received (and
reasonably expected to be received) by Administrative Agent in
respect of any covered loss does not exceed $250,000, Lender
shall deliver such Loss Proceeds or Liquidated Damages to
Borrower, and Borrower shall promptly apply such Loss Proceeds or
Liquidated Damages to the cost of repairing, restoring, or
replacing the assets in respect of which such Loss Proceeds or
Liquidated Damages were received, and (2) if the aggregate amount
of Loss Proceeds or Liquidated Damages received (and reasonably
expected to be received) by Administrative Agent in respect of
any covered loss equals or exceeds $250,000 Lender shall hold
such Loss Proceeds or Liquidated Damages and, so long as Borrower
proceeds diligently to repair, restore or replace the assets of
Borrower in respect of which such Loss Proceeds or Liquidated
Damages were received, Lender shall from time to time disburse to
Borrower, to the extent of any such Loss Proceeds or Liquidated
Damages remaining therein in respect of the applicable covered
loss, amounts necessary to pay the cost of such repair,
restoration or replacement after the receipt by Administrative
Agent of invoices or other documentation reasonably satisfactory
to Administrative Agent relating to the amount of costs so
incurred and the work performed (including, if required by
Administrative Agent, lien releases and architects'
certificates); provided, however, that if at any time
Administrative Agent reasonably determines (A) that Borrower is
not proceeding diligently with such repair, restoration or
replacement or (B) that such repair, restoration or replacement
51
cannot be completed with the Loss Proceeds or Liquidated Damages
then held by Administrative Agent for such purposes, together
with funds otherwise available to Borrower for such purpose, or
that such repair, restoration or replacement cannot be completed
within 180 days after the receipt by Administrative Agent of such
Loss Proceeds or Liquidated Damages, Administrative Agent shall,
and Borrower hereby authorizes Administrative Agent to, apply
such Loss Proceeds or Liquidated Damages to repay the Loan as
provided in subsection 2.4B(iii)(b).
6.5 Inspection; Lender Meeting.
--- ---------------------------
A. Inspection Rights. Borrower shall, and shall cause each of its
Subsidiaries to, permit any authorized representatives designated by
Administrative Agent or any Lender to visit and inspect any of the properties of
Borrower and its Subsidiaries, to inspect, copy and take extracts from its and
their financial and accounting records, and to discuss its and their affairs,
finances and accounts with its and their officers and independent public
accountants, if requested by Administrative Agent (provided that Borrower may,
if it so chooses, be present at or participate in any such discussion), all upon
reasonable notice and at such reasonable times during normal business hours and
as often as may reasonably be requested.
B. Lender Meeting. Borrower will, upon the request of
Administrative Agent or Requisite Lenders, participate in a meeting of
Administrative Agent and Lenders once during each Fiscal Year to be held at
Borrower's corporate offices (or at such other location as may be agreed to by
Borrower and Administrative Agent) at such time as may be agreed to by Borrower
and Administrative Agent.
6.6 Compliance with Laws, etc.; Permits.
A. Borrower shall, shall cause each of its Subsidiaries to, and
shall use commercially reasonable efforts to cause all other Persons on or
occupying any Facilities to, comply with the requirements of all applicable
laws, rules, regulations and orders of any governmental authority (including all
Environmental Laws), noncompliance with which could reasonably be expected to
cause, individually or in the aggregate, a Material Adverse Effect.
B. Borrower shall, and shall cause each of its Subsidiaries to,
from time to time obtain, maintain, retain, observe, keep in full force and
effect and comply in all material respects with the terms, conditions and
provisions of all Permits as shall now or hereafter be necessary under
applicable laws except any thereof the noncompliance with which could not
reasonably be expected to have a Material Adverse Effect.
6.7 Environmental Review and Investigation, Disclosure, Etc.; Borrower's
--- --------------------------------------------------------------------
Actions Regarding Hazardous Materials Activities, Environmental Claims
----------------------------------------------------------------------
and Violations of Environmental Laws.
-------------------------------------
A. Environmental Review and Investigation. Borrower agrees that
Administrative Agent may, from time to time and in its reasonable discretion,
(i) retain, at Borrower's expense, an independent professional consultant to
review any environmental audits, investigations, analyses and reports relating
to Hazardous Materials in respect of the Land, the Land or the Project prepared
by or for Borrower and (ii) conduct their own investigation of any Facility;
provided that, in the case of any Facility no longer owned, leased, operated or
used by Borrower or any of its Subsidiaries or Affiliates, Borrower shall only
be obligated to use its best efforts to obtain permission for Administrative
Agent's professional consultant to conduct an investigation of such Facility.
For purposes of conducting such a review and/or investigation, Borrower hereby
grants to Administrative Agent and its agents, employees, consultants and
contractors the right to enter into or onto the Land and any other Facilities
currently owned, leased, operated or used by Borrower or any of its Subsidiaries
and to perform such tests on such property (including taking samples of soil,
groundwater and suspected asbestos-containing materials) as are reasonably
necessary in connection therewith. Any such investigation of any Facility shall
be conducted, unless otherwise agreed to by Borrower and Administrative Agent,
during normal business hours and, to the extent reasonably practicable, shall be
conducted so as not to interfere with the ongoing operations at such Facility or
to cause any damage or loss to any property at such Facility. Borrower and
Administrative Agent hereby acknowledge and agree that any report of any
investigation conducted at the request of Administrative Agent pursuant to this
subsection 6.7A will be obtained and shall be used by Administrative Agent and
Lenders for the purposes of Lenders' internal credit decisions, to monitor and
police the Loans and to protect Lenders' security interests, if any, created by
the Loan Documents. Administrative Agent agrees to deliver a copy of any such
report to Borrower with the understanding that Borrower acknowledges and agree
that (x) it will indemnify and hold harmless Administrative Agent and each
Lender from any costs, losses or liabilities relating to Borrower's use of or
reliance on such report, (y) neither Administrative Agent nor any Lender makes
any representation or warranty with respect to such report, and (z) by
52
delivering such report to Borrower, neither Administrative Agent nor any Lender
requiring or recommending the implementation of any suggestions or
recommendations contained in such report.
B. Environmental Disclosure. Borrower will deliver to
Administrative Agent and Lenders:
(i) Environmental Audits and Reports. As soon as practicable
following receipt thereof, copies of all environmental audits,
investigations, analyses and reports of any kind or character,
whether prepared by personnel of Borrower or any of its
Subsidiaries or Affiliates or by independent consultants,
governmental authorities or any other Persons, with respect to
significant environmental matters at any Facility or with respect
to any Environmental Claims;
(ii) Notice of Certain Releases, Remedial Actions, Etc. Promptly
upon the occurrence thereof, written notice describing in
reasonable detail (a) any Release required to be reported to any
federal, state or local governmental or regulatory agency under
any applicable Environmental Laws, (b) any remedial action taken
by Borrower or any other Person in response to (1) any Hazardous
Materials Activities the existence of which has a reasonable
possibility of resulting in one or more Environmental Claims
having, individually or in the aggregate, a Material Adverse
Effect, or (2) any Environmental Claims that, individually or in
the aggregate, have a reasonable possibility of resulting in a
Material Adverse Effect.
(iii) Written Communications Regarding Environmental Claims,
Releases, Etc. As soon as practicable following the sending or
receipt thereof by Borrower or any of its Subsidiaries or
Affiliates, a copy of any and all written communications with
respect to (a) any Environmental Claims that, individually or in
the aggregate, have a reasonable possibility of giving rise to a
Material Adverse Effect, (b) any Release required to be reported
to any federal, state or local governmental or regulatory agency,
and (c) any request for information from any governmental agency
that suggests such agency is investigating whether Borrower or
any of its Subsidiaries may be potentially responsible for any
Hazardous Materials Activity.
(iv) Notice of Certain Proposed Actions Having Environmental
Impact. Prompt written notice describing in reasonable detail (a)
any proposed acquisition of stock, assets, or property by
Borrower or any of its Subsidiaries that could reasonably be
expected to (1) expose Borrower or any of its Subsidiaries to, or
result in, Environmental Claims that could reasonably be expected
to have, individually or in the aggregate, a Material Adverse
Effect or (2) affect the ability of Borrower or any of its
Subsidiaries to maintain in full force and effect all material
Permits required under any Environmental Laws for their
respective operations and (b) any proposed action to be taken by
Borrower or any of its Subsidiaries to modify current operations
in a manner that could reasonably be expected to subject Borrower
or any of its Subsidiaries to any material additional obligations
or requirements under any Environmental Laws that could
reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect.
(v) Other Information. With reasonable promptness, such other
documents and information as from time to time may be reasonably
requested by Administrative Agent in relation to any matters
disclosed pursuant to this subsection 6.7.
C. Borrower's Actions Regarding Hazardous Materials Activities,
Environmental Claims and Violations of Environmental Laws.
(i) Remedial Actions Relating to Hazardous Materials Activities.
Borrower shall promptly undertake, and shall cause each of its
Subsidiaries promptly to undertake, any and all investigations,
studies, sampling, testing, abatement, cleanup, removal,
remediation or other response actions necessary to remove,
remediate, clean up or xxxxx any Hazardous Materials Activity on,
under or about any Facility that is in violation of any
Environmental Laws or that presents a material risk of giving
rise to an Environmental Claim. In the event Borrower or any of
its Subsidiaries undertake any such action with respect to any
Hazardous Materials, Borrower or such Subsidiary shall conduct
and complete such action in compliance in all material respects
with all applicable Environmental Laws and in accordance with the
policies, orders and directives of all federal, state and local
governmental authorities except when, and only to the extent
that, Borrower's or such Subsidiary's liability with respect to
such Hazardous Materials Activity is being contested in good
faith by Borrower or such Subsidiary.
53
(ii) Actions with Respect to Environmental Claims and Violations
of Environmental Laws. Borrower shall promptly take, and shall
cause each of its Subsidiaries promptly to take, any and all
actions necessary to (i) cure any material violation of
applicable Environmental Laws by Borrower or its Subsidiaries and
(ii) make an appropriate response to any Environmental Claim
against Borrower or any of its Subsidiaries and discharge any
obligations it may have to any Person thereunder.
6.8 Compliance with Material Contracts.
--- -----------------------------------
A. Borrower shall, and shall cause each of its Subsidiaries to,
comply, duly and promptly, in all material respects with its respective
obligations and enforce all of its respective rights under all Material
Contracts, including all Operative Documents, except where the failure to comply
could not reasonably be expected to have a Material Adverse Effect.
B. Notwithstanding anything in Section 6.8A to the contrary,
Borrower shall diligently enforce its rights under the Phase II Lease and shall
use diligent efforts to cause Venetian to perform its obligations thereunder.
6.9 Further Assurances.
--- -------------------
A. Assurances. Without expense or cost to the Administrative
Agent or the Lenders, Borrower shall, and shall cause each of its Subsidiaries
to, from time to time hereafter, execute, acknowledge, file, record, do and
deliver all and any further acts, deeds, conveyances, mortgages, deeds of trust,
deeds to secure debt, security agreements, hypothecations, pledges, charges,
assignments, financing statements and continuations thereof, notices of
assignment, transfers, certificates, assurances and other instruments as the
Administrative Agent may from time to time reasonably require in order to carry
out more effectively the purposes of this Agreement or the other Loan Documents,
including to subject any items of Collateral, intended to now or hereafter be
covered, to the Liens created by the Collateral Documents, to perfect and
maintain such Liens, and to assure, convey, assign, transfer and confirm unto
the Administrative Agent the property and rights hereby conveyed and assigned or
intended to now or hereafter be conveyed or assigned or which Borrower or any
such Subsidiary may be or may hereafter become bound to convey or to assign to
the Administrative Agent or for carrying out the intention of or facilitating
the performance of the terms of this Agreement, or any other Loan Documents or
for filing, registering or recording this Agreement or any other Loan Documents.
Promptly, upon a reasonable request, Borrower shall, and shall cause each of its
Subsidiaries to, execute and deliver, and hereby authorizes the Administrative
Agent to execute and file in the name of Borrower or such Subsidiary, to the
extent the Administrative Agent may lawfully do so, one or more financing
statements, chattel mortgages or comparable security instruments to evidence
more effectively the Liens of the Collateral Documents upon the Collateral.
B. Filing and Recording Obligations. Borrower shall pay or cause
to be paid all filing, registration and recording fees and all expenses incident
to the execution and acknowledgment of the Deed of Trust or any other Loan
Document, including any instrument of further assurance described in subsection
6.9A, and shall pay or cause to be paid all mortgage recording taxes, transfer
taxes, general intangibles taxes and governmental stamp and other taxes, duties,
imposts, assessments and charges arising out of or in connection with the
execution, delivery, filing, recording or registration of any Collateral
Document or any other Loan Document, the Phase II Lease or memoranda thereof,
including any instrument of further assurance described in subsection 6.9A, or
by reason of its interest in, or measured by amounts payable under, the Notes,
any Collateral Document or any other Loan Document, including any instrument of
further assurance described in subsection 6.9A, and shall pay all stamp taxes
and other taxes required to be paid on the Notes or any other Loan Document, but
excluding in the case of each Lender and the Administrative Agent, Taxes imposed
on its income by a jurisdiction under the laws of which it is organized or in
which its principal executive office is located or in which its applicable
lender office for funding or booking its Loans hereunder is located. If Borrower
fails to make or cause to be made any of the payments described in the preceding
sentence within 15 days after notice thereof from the Administrative Agent (or
such shorter period as is necessary to protect the loss of or diminution in
value of any Collateral by reason of tax foreclosure or otherwise, as determined
by the Administrative Agent, in its sole discretion) accompanied by
documentation verifying the nature and amount of such payments, the
Administrative Agent may (but shall not be obligated to) pay the amount due and
Borrower shall reimburse all amounts in accordance with the terms hereof.
C. Costs of Defending and Upholding the Lien. Administrative
Agent may, upon at least five days' prior notice to the Borrower, (i) appear in
and defend any action or proceeding, in the name and on behalf of Administrative
Agent or Lenders in which Administrative Agent or any Lender is named or which
the Administrative Agent in its sole discretion determines is reasonably likely
to materially adversely affect the Mortgaged Property, any other Collateral, any
Collateral Document, the Lien thereof or any other Loan Document and (ii)
institute any action or proceeding which the Administrative Agent reasonably
determines should be instituted to protect the interest or rights of
54
Administrative Agent and Lenders in the Mortgaged Property or other Collateral
or under this Agreement or any other Loan Document. The Borrower agrees that all
reasonable costs and expenses expended or otherwise incurred pursuant to this
subsection (including reasonable attorneys' fees and disbursements) by the
Administrative Agent shall be paid by the Borrower or reimbursed to the Lender,
as the case may be, promptly after demand.
D. Costs of Enforcement. The Borrower agrees to bear and shall
pay or reimburse the Administrative Agent and Lenders in accordance with the
terms of subsection 10.2 for all reasonable sums, costs and expenses incurred by
the Administrative Agent and Lenders (including reasonable attorneys' fees and
the expenses and fees of any receiver or similar official) of or incidental to
the collection of any of the Obligations, any foreclosure (or transfer in lieu
of foreclosure) of this Agreement, any Collateral Document or any other Loan
Document or any sale of all or any portion of the Mortgaged Property or all or
any portion of the other Collateral.
6.10 Execution of Subsidiary Guaranty and Personal Property Collateral
---- -----------------------------------------------------------------
Documents by Future Subsidiaries.
---------------------------------
A. Execution of Subsidiary Guaranty and Personal Property
Collateral Documents. In the event that any Person becomes a Subsidiary on or
after the Closing Date, Borrower will promptly notify Administrative Agent of
that fact and cause such Subsidiary to execute and deliver to Administrative
Agent a Subsidiary Guaranty and a Subsidiary Security Agreement and to take all
such further actions and execute all such further documents and instruments as
may be necessary or, in the reasonable opinion of Administrative Agent,
desirable to create in favor of Administrative Agent for the benefit of Lenders,
a valid and perfected First Priority Lien on all of the personal and mixed
property assets of such Subsidiary.
B. Subsidiary Charter Documents, Legal Opinions, Etc. Borrower
shall deliver to Administrative Agent, together with such Loan Documents, (i)
certified copies of such Subsidiary's Organizational Documents, together with a
good standing certificate from the Secretary of State of the jurisdiction of its
organization and each other state in which such Person is qualified as a foreign
corporation to do business and, to the extent generally available, a certificate
or other evidence of good standing as to payment of any applicable franchise or
similar taxes from the appropriate taxing authority of each of such
jurisdictions, each to be dated a recent date prior to their delivery to
Administrative Agent, (ii) a certificate executed by the secretary or an
assistant secretary of such Subsidiary as to (a) the fact that the attached
resolutions of the Board of Directors or managing member of such Subsidiary
approving and authorizing the execution, delivery and performance of such Loan
Documents are in full force and effect and have not been modified or amended and
(b) the incumbency and signatures of the officers of such Subsidiary executing
such Loan Documents, and (iii) a favorable opinion of counsel to such
Subsidiary, in form and substance reasonably satisfactory to Administrative
Agent and its counsel, as to (a) the due organization and good standing of such
Subsidiary, (b) the due authorization, execution and delivery by such Subsidiary
of such Loan Documents, (c) the enforceability of such Loan Documents against
such Subsidiary, (d) such other matters (including matters relating to the
creation and perfection of Liens in any Collateral pursuant to such Loan
Documents) as Administrative Agent may reasonably request, all of the foregoing
to be reasonably satisfactory in form and substance to Administrative Agent and
its counsel.
C. Real Estate Collateral Documents. Borrower shall deliver to
Administrative Agent together with such Loan Documents all such further
documents and instruments and take such further action necessary to create in
favor of Administrative Agent for the benefit of Lenders a valid and perfected
first priority security interest on any real property assets of such Subsidiary,
as Administrative Agent may reasonably request from time to time.
Section 7. BORROWER'S NEGATIVE COVENANTS
Borrower covenants and agrees that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations and the cancellation or expiration of all
Letters of Credit, unless Requisite Lenders shall otherwise give prior written
consent, Borrower shall perform, and shall cause each of its Subsidiaries to
perform, all of the covenants set forth in this Section 7.
7.1 Indebtedness.
--- -------------
Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create, incur, assume or guaranty, or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i) Borrower and its Subsidiaries may become and remain liable
with respect to the Obligations;
55
(ii) Borrower and its Subsidiaries may become and remain liable
with respect to Contingent Obligations permitted by subsection
7.4 and (other than with respect to clauses (ii), (iii) and (iv)
of subsection 7.4) upon any matured obligations actually arising
pursuant thereto, the Indebtedness corresponding to the
Contingent Obligations so extinguished;
(iii) Borrower may remain liable with respect to unsecured
Indebtedness under the Chase Credit Agreement in an aggregate
principal amount not to exceed $1,100,000 at any time;
(iv) Borrower and its Subsidiaries may become and remain liable
in respect of unsecured Indebtedness to Xxxxxxx or any of his
Affiliates to the extent permitted under Section 7.18; and
(v) Borrower and its Subsidiaries may become and remain liable
with respect to other unsecured Indebtedness in an aggregate
principal amount not to exceed $12,500,000 at any time
outstanding reduced by (i) the aggregate amount of any increases
in Term Loans and/or Revolving Loan Commitments under subsection
2.1A(iii) and (ii) the aggregate amount of any Contingent
Obligations incurred pursuant to Subsection 7.4(ii) and 7.4(iv);
.
7.2 Liens and Related Matters.
--- --------------------------
A. Prohibition on Liens. Borrower shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, create, incur, assume or
permit to exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of such Borrower or Subsidiary, whether now owned or hereafter
acquired, or any income or profits therefrom, or file or permit the filing of,
or permit to remain in effect, any financing statement or other similar notice
of any Lien with respect to any such property, asset, income or profits under
the Uniform Commercial Code of any State or under any similar recording or
notice statute, except:
(i) Permitted Liens; and
(ii) Liens granted pursuant to the Collateral Documents.
B. Equitable Lien in Favor of Lenders. If Borrower or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 7.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; provided that, notwithstanding the foregoing,
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 7.2A.
C. No Further Negative Pledges. Neither Borrower nor any of its
Subsidiaries, shall enter into any agreement prohibiting the creation or
assumption of any Lien upon any of its properties or assets, whether now owned
or hereafter acquired other than (x) as provided herein or in the other Loan
Documents, or (y) as required by applicable law or any applicable rule or order
of any Gaming Authority.
D. No Restrictions on Subsidiary Distributions to Borrower or
Other Subsidiaries. Except as provided herein, Borrower will not, and will not
permit any of its Subsidiaries to, create or otherwise cause or suffer to exist
or become effective any consensual encumbrance or restriction of any kind on the
ability of any of its Subsidiaries to (i) pay dividends or make any other
distributions on any of such Subsidiary's capital stock owned by Borrower or any
other Subsidiary of Borrower, (ii) repay or prepay any Indebtedness owed by any
such Subsidiaries to Borrower, (iii) make loans or advances to Borrower, or (iv)
transfer any of its property or assets to Borrower other than (x) as provided
herein or in the other Loan Documents, or (y) as required by applicable law or
any applicable rule or order of any Gaming Authority.
7.3 Investments; Joint Ventures; Formation of Subsidiaries.
--- -------------------------------------------------------
Borrower shall not, and shall not permit any of its Subsidiaries,
to, directly or indirectly, make or own any Investment in any Person, including
any Joint Venture or otherwise form or create any Subsidiary, except:
(i) Borrower and its Subsidiaries may make and own Investments in
Cash Equivalents;
(ii) Borrower may make expenditures, for predevelopment of Phase
II to the extent permitted by subsection 7.14;
(iii) Borrower may make Investments in Venetian or a newly formed
56
Restricted Subsidiary (as defined in the Indentures (as defined
in the LVSI/Venetian Credit Agreement)) the proceeds of which are
used for the Phase I-A Project (as defined in the LVSI/Venetian
Credit Agreement), provided that such Investment must be made no
later than December 31, 2002; and
(iv) Borrower may make and own other Investments in an aggregate
amount not to exceed at any time $1,000,000.
7.4 Contingent Obligations.
--- -----------------------
Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create or become or remain liable with respect to
any Contingent Obligation, except:
(i) Borrower and its Subsidiaries may become and remain liable
with respect to Contingent Obligations under the Loan Documents;
(ii) to the extent such incurrence does not result in the
incurrence by Borrower or any of its Subsidiaries of any
obligation for the payment of borrowed money, Borrower may become
and remain liable with respect to Contingent Obligations incurred
solely in respect of performance bonds, completion guaranties and
standby letters of credit or bankers' acceptances, provided that
such Contingent Obligations are incurred in the ordinary course
of business and do not at any time exceed $2,000,000 in the
aggregate;
(iii) Borrower and its Subsidiaries may become and remain liable
for customary indemnities under Project Documents as in effect on
the Closing Date; and
(iv) Borrower and its Subsidiaries may become liable for other
Contingent Obligations in an aggregate amount not to exceed
$1,000,000 at any time.
7.5 Restricted Junior Payments.
--- ---------------------------
Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, declare, order, pay, make or set apart any sum for
any Restricted Junior Payment, except:
(i) Borrower may make distributions of cash through its parent
and other Subsidiaries of LVSI to LVSI, provided that such
distributions must be made no later than December 31, 2002;
(ii) Borrower and its Subsidiaries may redeem or purchase any
equity interests in Borrower or its Subsidiaries or any
Indebtedness to the extent required by any Nevada Gaming
Authority in order to preserve a material Gaming License,
provided that so long as such efforts do not jeopardize any
material Gaming License, Borrower shall have diligently tried to
find a third-party purchaser for such equity interests or
Indebtedness and no third-party purchasers acceptable to the
Nevada Gaming Authority is willing to purchase such equity
interests or Indebtedness within a time period acceptable to the
Nevada Gaming Authority; and
(iii) Any Subsidiary of Borrower may make distributions to any
other wholly-owned Subsidiary of Borrower or to Borrower.
7.6 [Intentionally Omitted.].
--- -------------------------
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions.
--- -----------------------------------------------------------------
Borrower shall not, and shall not permit any of its Subsidiaries
to, alter the corporate, capital or legal structure of Borrower or any of its
Subsidiaries, or enter into any transaction of merger or consolidation, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease or sub-lease (as lessor or sublessor),
transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any part of its business, property or assets, whether now
owned or hereafter acquired, or acquire by purchase or otherwise all or
substantially all the business, property or fixed assets of, or stock or other
evidence of beneficial ownership of, any Person or any division or line of
business of any Person, except:
(i) Borrower may make expenditures for predevelopment of Phase II
on the Land to the extent permitted under subsection 7.14;
(ii) Borrower and its Subsidiaries may dispose of obsolete, worn
out or surplus assets or assets no longer used or useful in the
57
business of Borrower and its Subsidiaries in each case to the
extent made in the ordinary course of business, provided that
either (i) such disposal does not materially affect the Mortgaged
Property or the Phase II or (ii) prior to or promptly following
such disposal any such property shall be replaced with other
property of substantially equal utility and a value at least
substantially equal to that of the replaced property when first
acquired and free from any Liens of any other Person subject only
to Permitted Liens and by such removal and replacement Borrower
and its Subsidiaries shall be deemed to have subjected such
replacement property to the lien of the Collateral Documents in
favor of Administrative Agent for the benefit of the Lenders, as
applicable;
(iii) Borrower and its Subsidiaries may sell or otherwise dispose
of assets in transactions that do not constitute Asset Sales,
provided that the aggregate value of any assets disposed of
pursuant to this clause (iii) may not exceed $1,000,000 in any
fiscal year and provided further that consideration received for
such assets shall be in an amount at least equal to the fair
market value thereof ;
(iv) Borrower may lease the Land to the Venetian pursuant to the
Phase II Lease, subject to terms of this Agreement and may
maintain the leases in existence on the date hereof and listed on
Schedule 5.5;
(v) Borrower and its Subsidiaries may incur Liens permitted under
Section 7.2, provided that any leases (whether or not
constituting Permitted Liens) shall be permitted only to the
extent provided in clause (iv) above;
(vi) Borrower may make cash contributions to any wholly-owned
Subsidiary of Borrower to the extent permitted by subsection 7.3
and any Subsidiary of Borrower may sell, lease or transfer assets
to Borrower or another wholly-owned Subsidiary of Borrower;
(vii) Borrower may dedicate space for the purpose of constructing
(i) a mass transit system, (ii) a pedestrian bridge over or a
pedestrian tunnel under Las Vegas Boulevard and Sands Avenue or
similar structures to facilitate pedestrians or traffic and (iii)
a right turn lane or other roadway dedication at or near the
project developed by LVSI and Venetian; provided in each case
that such dedication does not materially impair the value of the
Land; and
(viii) Borrowers may license trademarks and trade names in the
ordinary course of business.
7.8 Sales and Lease-Backs.
--- ----------------------
Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, become or remain liable as lessee or as a guarantor
or other surety with respect to any lease, whether an Operating Lease or a
Capital Lease, of any property (whether real, personal or mixed), whether now
owned or hereafter acquired, (i) which Borrower or any of its Subsidiaries has
sold or transferred or is to sell or transfer to any other Person or (ii) which
Borrower or any of its Subsidiaries intends to use for substantially the same
purpose as any other property which has been or is to be sold or transferred by
Borrower or any of its Subsidiaries to any Person in connection with such lease.
7.9 Sale or Discount of Receivables.
--- --------------------------------
Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, sell with recourse, or discount or otherwise sell
for less than the face value thereof, any of its notes or accounts receivable
other than an assignment for purposes of collection in the ordinary course of
business.
7.10 Transactions with Shareholders and Affiliates.
---- ----------------------------------------------
Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, enter into or permit to exist any transaction
(including the purchase, sale, lease or exchange of any property or the
rendering of any service) with any holder of 5% or more of any class of equity
Securities of LVSI or with any Affiliate of Borrower or of any such holder,
except, that Borrower may enter into and permit to exist:
(i) transactions that are on terms that are not less favorable to
that Borrower or that Subsidiary, as the case may be, than those
that might be obtained at the time from Persons who are not such
a holder or Affiliate, if (a) Borrower has delivered to
58
Administrative Agent (1) with respect to any transaction
involving an amount in excess of $500,000, an Officers
Certificate certifying that such transaction complies with this
subsection 7.10, (2) with respect to any transaction involving an
amount in excess of $1,000,000, a resolution adopted by a
majority of the disinterested non-employee directors of the
applicable Borrower or Subsidiary approving such transaction and
an Officers Certificate certifying that such transaction complies
with this subsection 7.10, at the time such transaction is
entered into and (c) with respect to any such transaction that
involves aggregate payments in excess of $10,000,000 or that is a
loan transaction involving a principal amount in excess of
$10,000,000, an opinion as to the fairness to the applicable
Borrower or Subsidiary from a financial point of view issued by
an Independent Financial Advisor at the time such transaction is
entered into,
(ii) any employment, indemnification, noncompetition or
confidentiality agreement entered into by Borrower or any of its
Subsidiaries with their employees or directors in the ordinary
course of business;
(iii) the payment of reasonable fees to directors of Borrower and
its Subsidiaries who are not employees of Borrower or their
Subsidiaries;
(iv) the transactions contemplated by the Cooperation Agreement;
and
(v) the Phase II Lease;
(vi) purchases of materials or services from a Supplier Joint
Venture by the Borrower or any of its Subsidiaries in the
ordinary course of business on arm's length terms;
(vii) transactions between or among Borrower and any of its
wholly-owned Subsidiaries; and
(viii) unsecured borrowings from Xxxxxxx or any of his Affiliates
to the extent permitted by Sections 7.1 and 7.18 hereof.
7.11 Disposal of Subsidiary Stock.
---- -----------------------------
Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly sell, assign, pledge or otherwise encumber or dispose
of any shares of capital stock or other equity Securities of its Subsidiaries,
except (i) to qualify directors if required by applicable law and (ii) to the
extent required by any Nevada Gaming Authority in order to preserve a material
Gaming License.
7.12 Conduct of Business.
---- --------------------
Borrower shall not, and shall not permit any of its Subsidiaries
to, engage in any business other than (i) in the case of Borrower owning the
Land and acting as lessor under the Phase II Lease; (ii) ownership of equity
interests in Subsidiaries; (iii) performing pre-development activities in
connection with Phase II including, but not limited to, structuring, planning,
design, and permitting; and (iv) posting the Phase I LOC under the LVSI/Venetian
Credit Agreement and making distributions and Investments permitted under the
terms of this Agreement.
7.13 Certain Restrictions on Changes to Operative Documents, Permits.
---- ----------------------------------------------------------------
A. Modifications of Certain Operative Documents and Permits; New
Material Contracts or Permits. Borrower shall not, and shall not permit any of
its Subsidiaries to, agree to any material amendment to, or waive any of its
material rights under, any Permit or Material Contract or enter into new
Material Contract or Permits (it being understood that any Material Contracts
which are covered by clause B below shall also be subject to the restrictions
set forth therein) without in each case obtaining the prior written consent of
Requisite Lenders if in any such case, such amendment or waiver or new Material
Contract or Permit could reasonably be expected to have a Material Adverse
Effect or otherwise adversely affect Lenders in any material respect.
B. Certain Other Restrictions on Amendments. Borrower shall not
directly or indirectly enter into, amend, modify, terminate (except in
accordance with its terms), supplement or waive a right or permit or consent to
the amendment, modification, termination (except in accordance with its terms),
supplement or waiver of any of the provisions of, or give any consent under (i)
the Cooperation Agreement without obtaining Administrative Agent's prior written
consent not to be reasonably withheld or delayed, provided that the Borrower and
its Subsidiaries may amend, modify, terminate, supplement or waive any provision
under (or provide a consent under) the Cooperation Agreement if such amendment,
59
modification, termination, supplement, waiver or consent has no material adverse
effect on any Lender or (ii) the Phase II Lease, without obtaining
Administrative Agent's prior written consent.
7.14 Borrower Expenditures.
---- ----------------------
Borrower shall not, and shall not permit its Subsidiaries to,
make or incur or commit to make or incur any expenditures, except that Borrower
and its Subsidiaries may make or incur, or commit to incur (i) expenditures in
connection with the pre-development of Phase II and for general corporate
purposes in an aggregate amount not to exceed $30,000,000, following the date of
this Agreement and (ii) expenditures of interest, fees, costs and expenses under
the Loan Documents and Indebtedness permitted under Section 7.1.
7.15 Fiscal Year.
---- ------------
Borrower shall not change its Fiscal Year-end from December 31.
7.16 Zoning and Contract Changes and Compliance.
---- -------------------------------------------
Without the prior written approval of Administrative Agent,
Borrower shall not, and shall not permit any of its Subsidiaries to, initiate or
consent to any zoning downgrade of the Mortgaged Property or seek any material
variance under any existing zoning ordinance or use or permit the use of the
Mortgaged Property in any manner that could result in such use becoming a
non-conforming use (other than a non-conforming use permissible under automatic
grandfathering provisions) under any zoning ordinance or any other applicable
land use law, rule or regulation. Borrower shall not, and shall not permit any
of its Subsidiaries to, initiate or consent to any change in any laws,
requirements of Governmental Authorities or obligations created by private
contracts which now or hereafter could reasonably be likely to materially and
adversely affect the ownership, occupancy, use or operation of the Mortgaged
Property without the prior written consent of the Administrative Agent.
7.17 No Joint Assessment; Separate Lots.
---- -----------------------------------
Without the prior written approval of Administrative Agent, which
approval may be granted, withheld, conditioned or delayed in its sole
discretion, Borrower shall not suffer, permit or initiate, and shall not permit
any of its Subsidiaries to, suffer, permit or initiate, the joint assessment of
the Mortgaged Property (i) with any other real property constituting a separate
tax lot and (ii) with any portion of the Mortgaged Property which may be deemed
to constitute personal property, or any other procedure whereby the lien of any
Taxes which may be levied against any such personal property shall be assessed
or levied or charged to the Mortgaged Property as a single lien. The Mortgaged
Property is comprised of one parcel, which, to the knowledge of the Borrower,
constitutes a separate tax lot and does not constitute a portion of any other
tax lot.
7.18 Restriction on Xxxxxxx Indebtedness.
---- ------------------------------------
Borrower agrees that the Borrower and its Subsidiaries shall not
incur any Indebtedness owed to Xxxxxxx or any of his Affiliates (other than with
respect to the Affiliates of Xxxxxxx, the Borrower and its Subsidiaries), except
upon terms and conditions (including subordination provisions) that are in form
and substance satisfactory to the Administrative Agent and Xxxxxxx. Nothing in
this subsection 7.18 shall in any way modify or limit the provisions of
Subsections 7.1 or 7.5.
Section 8. EVENTS OF DEFAULT
If any of the following conditions or events set forth in
subsections 8.1 through 8.16 inclusive below shall occur (any such conditions or
events collectively "Events of Default"):
8.1 Failure to Make Payments When Due.
--- ----------------------------------
Failure by Borrower to pay any installment of principal on any
Loan when due, whether at stated maturity, by acceleration, by notice of
voluntary prepayment, by mandatory prepayment or otherwise; failure by Borrower
to pay when due any amount payable to an Issuing Lender in reimbursement of any
drawings under any Letter of Credit; or failure by Borrower to pay any interest
on any Loan or any fee or any other amount due under this Agreement within five
days after the date due; or
8.2 Default under Other Indebtedness or Contingent Obligations.
--- -----------------------------------------------------------
(i) Failure of any Borrower or any of its Subsidiaries, to pay
when due any principal of or interest on or any other amount payable in respect
60
of one or more items of Indebtedness (other than Indebtedness referred to in
subsection 8.1) or Contingent Obligations in an individual principal amount of
$1,000,000 or more or with an aggregate principal amount of $2,500,000 or more,
in each case beyond the end of any grace period provided therefor; (ii) breach
or default by any Borrower or any of its Subsidiaries with respect to any other
material term of (a) one or more items of Indebtedness or Contingent Obligations
in the individual or aggregate principal amounts referred to in clause (i) above
or (b) any loan agreement, mortgage, indenture or other agreement relating to
such item(s) of Indebtedness or Contingent Obligation(s), if the effect of such
breach or default is to cause, or to permit the holder or holders of that
Indebtedness or Contingent Obligation(s) (or a trustee on behalf of such holder
or holders) to cause, that Indebtedness or Contingent Obligation(s) to become or
be declared due and payable prior to its stated maturity or the stated maturity
of any underlying obligation, as the case may be (upon the giving or receiving
of notice, lapse of time, both, or otherwise); or (iii) any Event of Default (as
defined under the LVSI/Venetian Credit Agreement) shall occur under the
LVSI/Venetian Credit Agreement, whether or not the default or event of default
under the LVSI/Venetian Credit Agreement giving rise to the Event of Default
hereunder shall be waived by the holders of the applicable Indebtedness or
Contingent Obligation or any agent or trustee thereof.
8.3 Breach of Certain Covenants.
--- ----------------------------
Failure of Loan Parties to perform or comply with any term or
condition contained in subsection 2.5, 6.2, 6.8B or Section 7 of this Agreement;
or
8.4 Breach of Warranty.
--- -------------------
Any representation, warranty, certification or other statement
made by Borrower or any of its Subsidiaries in any Loan Document or in any
statement or certificate at any time given by Borrower or any of its
Subsidiaries in writing pursuant hereto or thereto or in connection herewith or
therewith shall be false in any material respect on the date as of which made;
or
8.5 Other Defaults Under Loan Documents.
--- ------------------------------------
Any Loan Party shall default in the performance of or compliance
with any term contained in this Agreement or any of the other Loan Documents,
other than any such term referred to in any other subsection of this Section 8,
and such default shall not have been remedied or waived within 30 days after the
earlier of (i) an officer of Borrower or such Loan Party becoming aware of such
default or (ii) receipt by Borrower and such Loan Party of notice from
Administrative Agent or any Lender of such default provided; or
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.
--- -----------------------------------------------------
(i) A court having jurisdiction in the premises shall enter a
decree or order for relief in respect of LVSI, Venetian, Borrower or any of
their Subsidiaries in an involuntary case under the Bankruptcy Code or under any
other applicable bankruptcy, insolvency or similar law now or hereafter in
effect, which decree or order is not stayed; or any other similar relief shall
be granted under any applicable federal or state law; or (ii) an involuntary
case shall be commenced against LVSI, Venetian, Borrower or any of their
Subsidiaries, under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect; or a decree or
order of a court having jurisdiction in the premises for the appointment of a
receiver, liquidator, sequestrator, trustee, custodian or other officer having
similar powers over LVSI, Venetian, Borrower or any of their Subsidiaries, or
over all or a substantial part of its property, shall have been entered; or
there shall have occurred the involuntary appointment of an interim receiver,
trustee or other custodian of LVSI, Venetian, Borrower or any of their
Subsidiaries, for all or a substantial part of its property; or a warrant of
attachment, execution or similar process shall have been issued against any
substantial part of the property of LVSI, Venetian Borrower or any of their
Subsidiaries, and any such event described in this clause (ii) shall continue
for 60 days unless dismissed, bonded or discharged; or
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.
--- ---------------------------------------------------
(i) LVSI, Venetian, Borrower or any of their Subsidiaries shall
have an order for relief entered with respect to it or commence a voluntary case
under the Bankruptcy Code or under any other applicable bankruptcy, insolvency
or similar law now or hereafter in effect, or shall consent to the entry of an
order for relief in an involuntary case, or to the conversion of an involuntary
case to a voluntary case, under any such law, or shall consent to the
appointment of or taking possession by a receiver, trustee or other custodian
for all or a substantial part of its property; or LVSI, Venetian, Borrower or
any of their Subsidiaries shall make any assignment for the benefit of
creditors; or (ii) LVSI, Venetian, Borrower or any of their Subsidiaries shall
be unable, or shall fail generally, or shall admit in writing its inability, to
61
pay its debts as such debts become due and in each case a period of 30 days
shall have elapsed; or the Board of Directors of LVSI, Venetian, Borrower or any
of their Subsidiaries (or any committee thereof) or of its managing member shall
adopt any resolution or otherwise authorize any action to approve any of the
actions referred to in clause (i) above or this clause (ii); or
8.8 Judgments and Attachments.
--- --------------------------
Any money judgment, writ or warrant of attachment or similar
process involving (i) in any individual case an amount in excess of $1,000,000
or (ii) in the aggregate at any time an amount in excess of $2,500,000 (in
either case not adequately covered by insurance as to which a solvent and
unaffiliated insurance company has acknowledged coverage) shall be entered or
filed against Borrower or any of its Subsidiaries or any of their respective
assets and shall remain unpaid and undischarged, unvacated, unbonded or unstayed
for a period of 60 days (or in any event later than five days prior to the date
of any proposed sale thereunder); or
8.9 Dissolution.
--- ------------
Any order, judgment or decree shall be entered against LVSI,
Venetian, Borrower or any of their Subsidiaries decreeing the dissolution or
split up of such Person and such order shall remain undischarged or unstayed for
a period in excess of 30 days; or
8.10 Employee Benefit Plans.
---- -----------------------
There shall occur one or more ERISA Events which individually or
in the aggregate results in or might reasonably be expected to result in
liability of Borrower or any of its Subsidiaries or any of their respective
ERISA Affiliates in excess of $2,500,000 during the term of this Agreement; or
there shall exist an amount of unfunded benefit liabilities (as defined in
Section 4001(a)(18) of ERISA), individually or in the aggregate for all Pension
Plans (excluding for purposes of such computation any Pension Plans with respect
to which assets exceed benefit liabilities), which exceeds $5,000,000; or
8.11 Change in Control.
---- ------------------
There shall occur a breach of subsection 8.11 of the
LVSI/Venetian Credit Agreement as in effect on the date hereof; or
8.12 Failure of Guaranty; Repudiation of Obligations.
---- ------------------------------------------------
At any time after the execution and delivery thereof, (i) any
Subsidiary Guaranty for any reason, other than the satisfaction in full of all
Obligations, shall cease to be in full force or effect (other than in accordance
with its terms), or shall be declared null and void by a Governmental
Instrumentality of competent jurisdiction, (ii) any Collateral Document shall
cease to be in full force and effect (other than by reason of a release of
Collateral thereunder in accordance with the terms hereof or thereof, the
satisfaction in full of the Obligations or any other termination of such
Collateral Document in accordance with the terms hereof or thereof) or shall be
declared null and void by a Governmental Instrumentality of competent
jurisdiction, or Administrative Agent shall not have or shall cease to have a
valid and perfected Lien in the Collateral for any reason other than the failure
of Administrative Agent or any Lender to take any action within its control, or
(iii) any Loan Party shall contest the validity or enforceability of any Loan
Document in writing or deny in writing that it has any further liability prior
to the indefeasible payment in full of all Obligations, the cancellation of all
outstanding Letters of Credit and the termination of all Commitments, including
with respect to future advances by Lenders, under any Loan Document to which it
is a party; or
8.13 Default Under or Termination of Operative Documents.
---- ----------------------------------------------------
Any of the Operative Documents shall terminate or be terminated
or canceled, prior to its stated expiration date or Borrower shall be in default
(after the giving of any applicable notice and the expiration of any applicable
grace period) or any Affiliate of the Borrower shall be in default (after the
giving of any applicable notice and the expiration of any applicable grace
period) under any of the Operative Documents; provided that a default or
termination under any Project Document (other than the Phase II Lease) shall
constitute an Event of Default hereunder only if such default or termination may
reasonably be expected to cause a Material Adverse Effect; or
8.14 Default Under or Termination of Permits.
---- ----------------------------------------
Borrower or any of its Subsidiaries shall fail to observe,
satisfy or perform, or there shall be a violation or breach of, any of the
62
material terms, provisions, agreements, covenants or conditions attaching to or
under the issuance to such Person of any material Permit, or any such Permit or
any material provision thereof shall be terminated or fail to be in full force
and effect or any Governmental Instrumentality shall challenge or seek to revoke
any such Permit if such failure to perform, breach or termination could
reasonably be expected to have a Material Adverse Effect; or
8.15 Default Under or Termination of the Phase II Lease.
--------------------------------------------------
The Phase II Lease shall terminate (other than in accordance with
its terms) or shall be terminated (other than in accordance with its terms) or
cancelled prior to its stated expiration date or Venetian or Borrower shall be
in default thereunder (after the giving of any applicable notice and the
expiration of any applicable grace period) or any material amendment or
modification to the Phase II Lease shall be made without the prior written
consent of Requisite Lenders.
THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans, (b) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not any beneficiary
under any such Letter of Credit shall have presented, or shall be entitled at
such time to present, the drafts or other documents or certificates required to
draw under such Letter of Credit), and (c) all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by Borrower, and the obligation of each Lender to make any Loan and, the
obligation of Administrative Agent to issue any Letter of Credit and the right
of any Lender to issue any Letter of Credit hereunder shall thereupon terminate,
and (ii) upon the occurrence and during the continuation of any other Event of
Default, Administrative Agent shall upon the written request or with the written
consent of Requisite Lenders, by written notice to Borrower, declare all or any
portion of the amounts described in clauses (a) and (b) above to be, and the
same shall forthwith become, immediately due and payable, and the obligation of
each Lender to make any Loan, the obligation of Administrative Agent to issue
any Letter of Credit and the right of any Lender to issue any Letter of Credit
hereunder shall thereupon terminate provided that the foregoing shall not affect
in any way the obligations of Lenders under subsection 3.3C(i). Any amounts
described in clause (b) above, when received by Administrative Agent, shall be
held by Administrative Agent pursuant to a cash collateral arrangement
reasonably satisfactory to Administrative Agent.
Section 9. ADMINISTRATIVE AGENT
9.1 Appointment.
--- ------------
A. Appointment of Administrative Agent. Scotiabank is hereby
appointed Administrative Agent hereunder and under the other Loan Documents and
each Lender hereby authorizes Administrative Agent to act as its agent in
accordance with the terms of this Agreement and the other Loan Documents.
Administrative Agent agrees to act upon the express conditions contained in this
Agreement and the other Loan Documents, as applicable. The provisions of this
Section 9 are solely for the benefit of Administrative Agent and Lenders;
Borrower shall have no rights as a third party beneficiary of any of the
provisions thereof. In performing its functions and duties under this Agreement,
Administrative Agent shall act solely as an agent of Lenders and does not assume
and shall not be deemed to have assumed any obligation towards or relationship
of agency or trust with or for Borrower or any of its Subsidiaries.
B. Appointment of Supplemental Agents. It is the purpose of this
Agreement and the other Loan Documents that there shall be no violation of any
law of any jurisdiction denying or restricting the right of banking corporations
or associations to transact business as agent or trustee in such jurisdiction.
It is recognized that in case of litigation under this Agreement or any of the
other Loan Documents, and in particular in case of the enforcement of any of the
Loan Documents, or in case Administrative Agent deems that by reason of any
present or future law of any jurisdiction it may not exercise any of the rights,
powers or remedies granted herein or in any of the other Loan Documents or take
any other action which may be desirable or necessary in connection therewith, it
may be necessary that Administrative Agent appoint an additional individual or
institution as a separate trustee, co-trustee, collateral agent or collateral
co-agent (any such additional individual or institution being referred to herein
individually as a "Supplemental Agent" and collectively as "Supplemental
Agents").
In the event that Administrative Agent appoints a Supplemental
Agent with respect to any Collateral, (i) each and every right, power, privilege
or duty expressed or intended by this Agreement or any of the other Loan
Documents to be exercised by or vested in or conveyed to Administrative Agent
with respect to such Collateral shall be exercisable by and vest in such
Supplemental Agent to the extent, and only to the extent, necessary to enable
such Supplemental Agent to exercise such rights, powers and privileges with
respect to such Collateral and to perform such duties with respect to such
Collateral, and every covenant and obligation contained in the Loan Documents
63
and necessary to the exercise or performance thereof by such Supplemental Agent
shall run to and be enforceable by either Administrative Agent or such
Supplemental Agent, and (ii) the provisions of this Section 9 and of subsections
10.2 and 10.3 that refer to Administrative Agent shall inure to the benefit of
such Supplemental Agent and all references therein to Administrative Agent shall
be deemed to be references to Administrative Agent and/or such Supplemental
Agent, as the context may require.
Should any instrument in writing from Borrower or any other Loan
Party be required by any Supplemental Agent so appointed for more fully and
certainly vesting in and confirming to him or it such rights, powers, privileges
and duties, Borrower shall, or shall cause such Loan Party to, execute,
acknowledge and deliver any and all such instruments promptly upon request by
the Administrative Agent. In case any Supplemental Agent, or a successor
thereto, shall die, become incapable of acting, resign or be removed, all the
rights, powers, privileges and duties of such Supplemental Agent, to the extent
permitted by law, shall vest in and be exercised by Administrative Agent until
the appointment of a new Supplemental Agent.
9.2 Powers and Duties; General Immunity.
--- ------------------------------------
X. Xxxxxx; Duties Specified. Each Lender irrevocably authorizes
Administrative Agent to take such action on such Lender's behalf and to exercise
such powers, rights and remedies hereunder and under the other Loan Documents as
are specifically delegated or granted to Administrative Agent by the terms
hereof and thereof, together with such powers, rights and remedies as are
reasonably incidental thereto. Administrative Agent shall have only those duties
and responsibilities that are expressly specified in this Agreement and the
other Loan Documents. Administrative Agent may exercise such powers, rights and
remedies and perform such duties by or through its agents or employees.
Administrative Agent shall not have, by reason of this Agreement or any of the
other Loan Documents, a fiduciary relationship in respect of any Lender; and
nothing in this Agreement or any of the other Loan Documents, expressed or
implied, is intended to or shall be so construed as to impose upon
Administrative Agent any obligations in respect of this Agreement or any of the
other Loan Documents except as expressly set forth herein or therein.
B. No Responsibility for Certain Matters. Administrative Agent
shall not be responsible to any Lender for the execution, effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency of this
Agreement or any other Loan Document or for any representations, warranties,
recitals or statements made herein or therein or made in any written or oral
statements or in any financial or other statements, instruments, reports or
certificates or any other documents furnished or made by Administrative Agent to
Lenders or by or on behalf of Borrower to Administrative Agent or any Lender in
connection with the Loan Documents and the transactions contemplated thereby or
for the financial condition or business affairs of Borrowers or any other Person
liable for the payment of any Obligations, nor shall Administrative Agent be
required to ascertain or inquire as to the performance or observance of any of
the terms, conditions, provisions, covenants or agreements contained in any of
the Loan Documents or as to the use of the proceeds of the Loans or the use of
the Letters of Credit or as to the existence or possible existence of any Event
of Default or Potential Event of Default. Anything contained in this Agreement
to the contrary notwithstanding, Administrative Agent shall not have any
liability arising from confirmations of the amount of outstanding Loans or the
Letter of Credit Usage or the component amounts thereof.
C. Exculpatory Provisions. Neither Administrative Agent nor any
of its officers, directors, employees or agents shall be liable to Lenders for
any action taken or omitted by Administrative Agent under or in connection with
any of the Loan Documents except to the extent caused by Administrative Agent's
gross negligence or willful misconduct. Administrative Agent shall be entitled
to refrain from any act or the taking of any action (including the failure to
take an action) in connection with this Agreement or any of the other Loan
Documents or from the exercise of any power, discretion or authority vested in
it hereunder or thereunder unless and until Administrative Agent shall have
received instructions in respect thereof from Requisite Lenders (or such other
Lenders as may be required to give such instructions under subsection 10.6) and,
upon receipt of such instructions from Requisite Lenders (or such other Lenders,
as the case may be), Administrative Agent shall be entitled to act or (where so
instructed) refrain from acting, or to exercise such power, discretion or
authority, in accordance with such instructions. Without prejudice to the
generality of the foregoing, (i) Administrative Agent shall be entitled to rely,
and shall be fully protected in relying, upon any communication, instrument or
document believed by it to be genuine and correct and to have been signed or
sent by the proper person or persons, and shall be entitled to rely and shall be
protected in relying on opinions and judgments of attorneys (who may be
attorneys for Borrower and their Subsidiaries), accountants, experts and other
professional advisors selected by it; and (ii) no Lender shall have any right of
action whatsoever against Administrative Agent as a result of Administrative
Agent acting or (where so instructed) refraining from acting under this
Agreement or any of the other Loan Documents in accordance with the instructions
of Requisite Lenders (or such other Lenders as may be required to give such
instructions under subsection 10.6).
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D. Administrative Agent Entitled to Act as Lender. The agency
hereby created shall in no way impair or affect any of the rights and powers of,
or impose any duties or obligations upon, Administrative Agent in its individual
capacity as a Lender hereunder. With respect to its participation in the Loans
and the Letters of Credit, Administrative Agent shall have the same rights and
powers hereunder as any other Lender and may exercise the same as though it were
not performing the duties and functions delegated to it hereunder, and the term
"Lender" or "Lenders" or any similar term shall, unless the context clearly
otherwise indicates, include Administrative Agent in its individual capacity.
Administrative Agent and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of banking, trust, financial advisory or other
business with Borrower or any of its Affiliates as if it were not performing the
duties specified herein, and may accept fees and other consideration from
Borrower for services in connection with this Agreement and otherwise without
having to account for the same to Lenders.
9.3 Representations and Warranties; No Responsibility For Appraisal of
--- ------------------------------------------------------------------
Credit Worthiness.
------------------
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Borrower and
its Subsidiaries in connection with the making of the Loans and the issuance of
the Letters of Credit hereunder and that it has made and shall continue to make
its own appraisal of the creditworthiness of Borrower and its Subsidiaries.
Administrative Agent shall not have any duty or responsibility, either initially
or on a continuing basis, to make any such investigation or any such appraisal
on behalf of Lenders or to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter, and Administrative Agent
shall not have any responsibility with respect to the accuracy of or the
completeness of any information provided to Lenders.
9.4 Right to Indemnity.
--- -------------------
Each Lender, in proportion to its Pro Rata Share, severally
agrees to indemnify Administrative Agent, to the extent that Administrative
Agent shall not have been reimbursed by Borrower, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including counsel fees and disbursements) or disbursements of
any kind or nature whatsoever which may be imposed on, incurred by or asserted
against Administrative Agent in exercising its powers, rights and remedies or
performing its duties hereunder or under the other Loan Documents or otherwise
in its capacity as Administrative Agent in any way relating to or arising out of
this Agreement or the other Loan Documents; provided that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from Administrative Agent's gross negligence or willful misconduct. If any
indemnity furnished to Administrative Agent for any purpose shall, in the
opinion of Administrative Agent, be insufficient or become impaired,
Administrative Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished.
9.5 Successor Administrative Agent.
--- -------------------------------
Administrative Agent may resign at any time by giving 30 days'
prior written notice thereof to Lenders and Borrower, and Administrative Agent
may be removed at any time with or without cause by an instrument or concurrent
instruments in writing delivered to Borrower and Administrative Agent and signed
by Requisite Lenders. Upon any such notice of resignation or any such removal,
Requisite Lenders shall have the right, upon five Business Days' notice to
Borrower, to appoint a successor Administrative Agent (provided that such
successor is or simultaneously therewith becomes a Lender). Upon the acceptance
of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Administrative Agent and the retiring or removed
Administrative Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring or removed Administrative Agent's resignation
or removal hereunder as Administrative Agent, the provisions of this Section 9
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.
9.6 Collateral Documents and Subsidiary Guaranties.
--- -----------------------------------------------
Each Lender hereby further authorizes Administrative Agent, on
behalf of and for the benefit of Lenders, to enter into each Collateral Document
and Subsidiary Guaranty as secured party or beneficiary (as applicable), and
each Lender agrees to be bound by the terms of each Collateral Document and
Subsidiary Guaranty; provided that Administrative Agent shall not (i) enter into
or consent to any material amendment, modification, termination or waiver of any
65
provision contained in any Collateral Document or Subsidiary Guaranty, or (ii)
release any Collateral (except as otherwise expressly permitted or required
pursuant to the terms of this Agreement or the applicable Collateral Document),
in each case without the prior consent of Requisite Lenders (or, if required
pursuant to subsection 10.6, all Lenders); provided further, however, that,
without further written consent or authorization from Lenders, Administrative
Agent may execute any documents or instruments necessary to (i) release any
Subsidiary from the Subsidiary Guaranty to the extent the stock of such
Subsidiary is sold in a transaction permitted under this Agreement or otherwise
consented to by Requisite Lenders in accordance with subsection 10.6 or (ii)
release any Lien encumbering any item of Collateral that is the subject of a
sale or other disposition of assets permitted by this Agreement or to which
Requisite Lenders have otherwise consented in accordance with subsection 10.6.
And anything contained in any of the Loan Documents to the contrary
notwithstanding, Borrower, Administrative Agent and each Lender hereby agree
that (X) no Lender shall have any right individually to realize upon any of the
Collateral under any Collateral Document, it being understood and agreed that
all powers, rights and remedies under the Collateral Documents and each
Subsidiary Guaranty may be exercised solely by Administrative Agent for the
benefit of Lenders in accordance with the terms thereof, and (Y) in the event of
a foreclosure by Administrative Agent on any of the Collateral pursuant to a
public or private sale, Administrative Agent or any Lender may be the purchaser
of any or all of such Collateral at any such sale and Administrative Agent, as
agent for and representative of Lenders (but not any Lender or Lenders in its or
their respective individual capacities unless Requisite Lenders shall otherwise
agree in writing) shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the Obligations
as a credit on account of the purchase price for any collateral payable by
Administrative Agent at such sale.
Section 10. MISCELLANEOUS
10.1 Assignments and Participations in Loans.
---- ----------------------------------------
A. General. Subject to subsection 10.1B, each Lender shall have
the right at any time to (i) sell, assign or transfer to any Eligible Assignee,
or (ii) sell participations to any Eligible Assignee or any other Person with
the approval of Borrower in, all or any part of its Commitments or any Loan or
Loans made by it or its Letters of Credit or participations therein or any other
interest herein or in any other Obligations owed to it; provided that no such
sale, assignment, transfer or participation shall, without the consent of
Borrower, require Borrower to file a registration statement with the Securities
and Exchange Commission or apply to qualify such sale, assignment, transfer or
participation under the securities laws of any state; provided, further that no
such sale, assignment or transfer described in clause (i) above shall be
effective unless and until an Assignment Agreement effecting such sale,
assignment or transfer shall have been accepted by Administrative Agent and
recorded in the Register as provided in subsection 10.1B(ii) and provided,
further that no such sale, assignment, transfer or participation of any Letter
of Credit or any participation therein may be made separately from a sale,
assignment, transfer or participation of a corresponding interest in the
Commitment and the Loans of the Lender effecting such sale, assignment, transfer
or participation. Except as otherwise provided in this subsection 10.1, no
Lender shall, as between Borrower and such Lender, be relieved of any of its
obligations hereunder as a result of any sale, assignment or transfer of, or any
granting of participations in, all or any part of its Commitments or the Loans,
the Letters of Credit or participations therein, or the other Obligations owed
to such Lender.
B. Assignments.
(i) Amounts and Terms of Assignments. Each Commitment, Loan,
Letter of Credit or participation therein, or other Obligation
may in whole or in part (a) be assigned, in any amount to another
Lender, or to an Affiliate of the assigning Lender or another
Lender, or may be pledged to an Eligible Assignee in support of
its obligations to such assignee (without releasing the pledging
Lender from any of its obligations hereunder), with the giving of
notice to Borrower and Administrative Agent; provided that if
such assignment relates to Revolving Loans or Revolving Loan
Commitments, the assignee shall represent that it has the
financial resources to fulfill its commitments hereunder and such
assignment is consented to by Administrative Agent and Issuing
Lender (such consent not to be unreasonably withheld or delayed)
or (b) be assigned in an aggregate amount of not less than
$1,000,000 (or such lesser amount as shall constitute the
aggregate amount of the Commitments, Loans, Letters of Credit and
participations therein, and other Obligations of the assigning
Lender) to any other Eligible Assignee with the consent of
Borrower and Administrative Agent (which consent shall not be
unreasonably withheld or delayed); provided that any such
assignment in accordance with either clause (a) or (b) above
shall effect a pro rata assignment (based on the respective
principal amounts thereof then outstanding or in effect) of both
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the Term Loan Commitment and the Term Loans of the assigning
Lender, on the one hand, and the Revolving Loan Commitment and
the Revolving Loans of the assigning Lender, on the other hand,
except where such Lender does not hold both Revolving Loan
Commitments or Revolving Loans and Term Loan Commitments or Term
Loans and provided further that if such assignment relates to
Revolving Loans or Revolving Loan Commitments, the assignee shall
represent that it has the financial resources to fulfill its
commitments hereunder and such assignment is consented to by
Administrative Agent and Issuing Lender (which consent maybe
given or withheld in their sole discretion). To the extent of any
such assignment in accordance with either clause (a) or (b)
above, the assigning Lender shall be relieved of its obligations
with respect to its Commitments, Loans, Letters of Credit or
participations therein, or other Obligations or the portion
thereof so assigned. The assignor or assignee to each such
assignment shall execute and deliver to Administrative Agent, for
its acceptance and recording in the Register, an Assignment
Agreement, together with a processing and recordation fee of
$3,500 in respect of assignments, and such forms, certificates or
other evidence, if any, with respect to United States federal
income tax withholding matters as the assignee under such
Assignment Agreement may be required to deliver to Administrative
Agent pursuant to subsection 2.7B(iii)(a). Upon such execution,
delivery, acceptance and recordation, from and after the
effective date specified in such Assignment Agreement, (y) the
assignee thereunder shall be a party hereto and, to the extent
that rights and obligations hereunder have been assigned to it
pursuant to such Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and (z) the assigning Lender
thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment
Agreement, relinquish its rights (other than any rights which
survive the termination of this Agreement under subsection 10.9B)
and be released from its obligations under this Agreement (and,
in the case of an Assignment Agreement covering all or the
remaining portion of an assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party
hereto; provided that, anything contained in any of the Loan
Documents to the contrary notwithstanding, if such Lender is the
Issuing Lender with respect to any outstanding Letters of Credit
such Lender shall continue to have all rights and obligations of
an Issuing Lender with respect to such Letters of Credit until
the cancellation or expiration of such Letters of Credit and the
reimbursement of any amounts drawn thereunder). The Commitments
hereunder shall be modified to reflect the Commitment of such
assignee and any remaining Commitment of such assigning Lender
and, if any such assignment occurs after the issuance of Notes
hereunder, the assigning Lender shall, upon the effectiveness of
such assignment or as promptly thereafter as practicable,
surrender its applicable Notes to Administrative Agent for
cancellation, and thereupon new Notes shall be issued to the
assignee and to the assigning Lender, substantially in the form
of Exhibits III-A and III-B annexed hereto, as applicable, with
appropriate insertions, to reflect the new Commitments and/or
outstanding Loans, as the case may be, of the assignee and the
assigning Lender.
(ii) Acceptance by Administrative Agent; Recordation in Register.
Upon its receipt of an Assignment Agreement executed by an
assigning Lender and an assignee representing that it is an
Eligible Assignee, together with the processing and recordation
fee referred to in subsection 10.1B(i) and any forms,
certificates or other evidence with respect to United States
federal income tax withholding matters that such assignee may be
required to deliver to Administrative Agent pursuant to
subsection 2.7B(iii)(a), Administrative Agent shall, if
Administrative Agent has consented to the assignment evidenced
thereby (to the extent such consent is required pursuant to
subsection 10.1B(i)), (a) accept such Assignment Agreement by
executing a counterpart thereof as provided therein (which
acceptance shall evidence any required consent of Administrative
Agent to such assignment), (b) record the information contained
therein in the Register, and (c) give prompt notice thereof to
Borrower. Administrative Agent shall maintain a copy of each
Assignment Agreement delivered to and accepted by it as provided
in this subsection 10.1B(ii).
C. Participations. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the scheduled final maturity date of any
Loan allocated to such participation, (ii) a reduction of the principal amount
of or the rate of interest payable on any Loan allocated to such participation,
or (iii) releasing all or substantially all of the Collateral, and all amounts
payable by Borrower hereunder (including amounts payable to such Lender pursuant
67
to subsections 2.6D and 2.7) shall be determined as if such Lender had not sold
such participation. Borrower and each Lender hereby acknowledge and agree that,
solely for purposes of subsections 10.4 and 10.5, (a) any participation will
give rise to a direct obligation of Borrower to the participant and (b) the
participant shall be considered to be a "Lender".
D. Assignments to Federal Reserve Banks. In addition to the
assignments and participations permitted under the foregoing provisions of this
subsection 10.1, any Lender may assign and pledge all or any portion of its
Loans, the other Obligations owed to such Lender, and its Notes to any Federal
Reserve Bank as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any operating circular issued by
such Federal Reserve Bank; provided that (i) no Lender shall, as between
Borrower and such Lender, be relieved of any of its obligations hereunder as a
result of any such assignment and pledge and (ii) in no event shall such Federal
Reserve Bank be considered to be a "Lender" or be entitled to require the
assigning Lender to take or omit to take any action hereunder.
E. Information. Each Lender may furnish any information
concerning Borrowers and their Subsidiaries in the possession of that Lender
from time to time to assignees and participants (including prospective assignees
and participants), subject to subsection 10.19.
F. Representations of Lenders. Each Lender listed on the
signature pages hereof hereby represents and warrants that it is an Eligible
Assignee described in clause (A) of the definition thereof. Each Lender that
becomes a party hereto pursuant to an Assignment Agreement shall be deemed to
agree that the representations and warranties of such Lender contained in
Section 2(c) of such Assignment Agreement are incorporated herein by this
reference.
10.2 Expenses.
---- ---------
Whether or not the transactions contemplated hereby shall be
consummated, Borrower agrees to pay promptly (i) all the actual and reasonable
costs and expenses of preparation of the Loan Documents and any consents,
amendments, waivers or other modifications thereto; (ii) all the costs of
furnishing all opinions by counsel for Borrower (including any opinions
requested by Lenders as to any legal matters arising hereunder) and of
Borrower's performance of and compliance with all agreements and conditions on
its part to be performed or complied with under this Agreement and the other
Loan Documents including with respect to confirming compliance with
environmental, insurance and solvency requirements; (iii) the reasonable fees,
expenses and disbursements of counsel to Administrative Agent in connection with
the negotiation, preparation, execution and administration of the Loan Documents
and any consents, amendments, waivers or other modifications thereto and any
other documents or matters requested by Borrower; (iv) all the actual costs and
reasonable expenses of creating and perfecting Liens in favor of Administrative
Agent on behalf of Lenders pursuant to any Collateral Document, including filing
and recording fees, expenses and taxes, stamp or documentary taxes, search fees,
title insurance premiums, and reasonable fees, expenses and disbursements of
counsel to Administrative Agent and of counsel providing any opinions that
Administrative Agent or Requisite Lenders may request in respect of the
Collateral Documents or the Liens created pursuant thereto; (v) all the actual
costs and reasonable expenses (including the reasonable fees, expenses and
disbursements of any auditors, accountants or appraisers and any environmental
or other consultants, advisors and agents employed or retained by Administrative
Agent or its counsel) of obtaining and reviewing any appraisals provided for
under any Loan Documents, any environmental audits or reports provided for under
subsection 6.8B or in connection with the custody or preservation of any of the
Collateral; (vi) all other actual and reasonable costs and expenses incurred by
Administrative Agent in connection with the syndication of the Commitments and
the negotiation, preparation and execution of the Loan Documents and any
consents, amendments, waivers or other modifications thereto and the
transactions contemplated thereby; and (vii) after the occurrence of an Event of
Default, all costs and expenses, including reasonable attorneys' fees (including
allocated costs of internal counsel) and costs of settlement, incurred by
Administrative Agent and Lenders in enforcing any Obligations of or in
collecting any payments due from any Loan Party hereunder or under the other
Loan Documents by reason of such Event of Default (including in connection with
the sale of, collection from, or other realization upon any of the Collateral or
the enforcement of any Guaranty) or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a "work-out" or pursuant to any insolvency or bankruptcy proceedings.
10.3 Indemnity.
---- ----------
In addition to the payment of expenses pursuant to subsection
10.2, whether or not the transactions contemplated hereby shall be consummated,
Borrower agrees to defend (subject to Borrower's selection of counsel with the
consent of the Indemnitee, which shall not be unreasonably withheld), indemnify,
pay and hold harmless Administrative Agent, and Lenders and the officers,
directors, employees, agents and affiliates of Administrative Agent, and Lenders
(collectively called the "Indemnitees"), from and against any and all
68
Indemnified Liabilities (as hereinafter defined); provided that Borrower shall
not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise solely
from the gross negligence or willful misconduct of that Indemnitee as determined
by a final judgment of a court of competent jurisdiction.
As used herein, "Indemnified Liabilities" means, collectively,
any and all liabilities, obligations, losses, damages (including natural
resource damages), penalties, actions, judgments, suits, claims (including
Environmental Claims), costs (including the costs of any investigation, study,
sampling, testing, abatement, cleanup, removal, remediation or other response
action necessary to remove, remediate, clean up or xxxxx any Hazardous Materials
Activity), expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and disbursements of counsel for Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto, and any fees or expenses
incurred by Indemnitees in enforcing this indemnity), whether direct, indirect
or consequential and whether based on any federal, state or foreign laws,
statutes, rules or regulations (including securities and commercial laws,
statutes, rules or regulations and Environmental Laws), on common law or
equitable cause or on contract or otherwise, that may be imposed on, incurred
by, or asserted against any such Indemnitee, in any manner relating to or
arising out of (i) this Agreement or the other Loan Documents or the Project
Documents or the transactions contemplated hereby or thereby (including Lenders'
agreement to make the Loans hereunder or the use or intended use of the proceeds
thereof or the use or intended use of any thereof, or any enforcement of any of
the Loan Documents (including any sale of, collection from, or other realization
upon any of the Collateral or the enforcement of any Guaranty), (ii) the
statements contained in any commitment letter or term sheet delivered by Lender
to Borrower with respect thereto, or (iii) any Environmental Claim or any
Hazardous Materials Activity relating to or arising from, directly or
indirectly, any past or present activity, operation, land ownership, or practice
of Borrower or any of its Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and
hold harmless set forth in this subsection 10.3 may be unenforceable in whole or
in part because they are violative of any law or public policy, Borrower shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
10.4 Set-Off; Security Interest in Deposit Accounts.
---- -----------------------------------------------
In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default each Lender is hereby authorized by Borrower
at any time or from time to time, without notice to Borrower or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, including
Indebtedness evidenced by certificates of deposit, whether matured or unmatured,
but not including trust accounts) and any other Indebtedness at any time held or
owing by that Lender to or for the credit or the account of Borrower against and
on account of the obligations and liabilities of Borrower to that Lender under
this Agreement, the Letters of Credit and participations therein and the other
Loan Documents, including all claims of any nature or description arising out of
or connected with this Agreement, the Letters of Credit and participations
therein or any other Loan Document, irrespective of whether or not (i) that
Lender shall have made any demand hereunder or (ii) the principal of or the
interest on the Loans or any amounts in respect of the Letters of Credit or any
other amounts due hereunder shall have become due and payable pursuant to
Section 8 and although said obligations and liabilities, or any of them, may be
contingent or unmatured. Borrower hereby further grants to Administrative Agent
and each Lender a security interest in all deposits and accounts maintained with
Administrative Agent or such Lender as security for the Obligations.
10.5 Ratable Sharing.
---- ----------------
Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the "Aggregate
Amounts Due" to such Lender) which is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due to such other Lender,
then the Lender receiving such proportionately greater payment shall (i) notify
Administrative Agent and each other Lender of the receipt of such payment and
(ii) apply a portion of such payment to purchase participations (which it shall
be deemed to have purchased from each seller of a participation simultaneously
69
upon the receipt by such seller of its portion of such payment) in the Aggregate
Amounts Due to the other Lenders so that all such recoveries of Aggregate
Amounts Due shall be shared by all Lenders in proportion to the Aggregate
Amounts Due to them; provided that if all or part of such proportionately
greater payment received by such purchasing Lender is thereafter recovered from
such Lender upon the bankruptcy or reorganization of Borrowers or otherwise,
those purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such purchasing Lender ratably to the extent
of such recovery, but without interest. Borrower expressly consent to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by Borrower to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.
10.6 Amendments and Waivers.
---- -----------------------
A. No amendment, modification, termination or waiver of any
provision of this Agreement or of the Notes, and no consent to any departure by
Borrower therefrom, shall in any event be effective without the written
concurrence of Requisite Lenders; provided that no amendment, modification,
termination, waiver or consent shall, unless approved in writing and signed by
Borrower and all the Lenders, do any of the following: reduce the principal of,
or interest on, the Loans or any fees hereunder (other than any waiver of any
increase in the interest rate applicable to any of the Loans pursuant to
subsection 2.2E); change in any manner the definition of "Pro Rata Share" or the
definition of "Requisite Lenders" (it being understood that, with the consent of
Requisite Lenders, additional extensions of credit pursuant to this Agreement
may be included in "Pro Rata Share" and "Requisite Lenders" on substantially the
same terms as the Term Loan Commitments and the Term Loans and the Revolving
Loan Commitments and the Revolving Loans); change in any manner any provision of
this Agreement which, by its terms, expressly requires the approval or
concurrence of all Lenders; postpone any date fixed for the payment in respect
of principal of, or interest on, the Loans or any fees hereunder; reduce the
amount of; postpone the due date of any amount payable in respect of; extend the
expiration date of any Letter of Credit or change the obligations of Lenders
relating to the purchase of participations in Letters of Credit; release any
Lien granted in favor of Administrative Agent with respect to 25% or more in
aggregate fair market value of the Collateral; releases any Subsidiary Guarantor
from its obligations under its Guaranty, other than in accordance with the terms
of the Loan Documents; or change in any manner the provisions contained in
subsection 9.1 or this subsection 10.6; provided further that any such
amendment, modification, termination, waiver or consent which increases the
amount of the Commitment for any Lender shall be effective only if evidenced by
a writing signed by or on behalf of such Lender.
B. In addition, (i) any amendment, modification, termination or
waiver of any of the provisions contained in Section 4 shall be effective only
if evidenced by a writing signed by or on behalf of Administrative Agent and
Requisite Lenders, (ii) no amendment, modification, termination or waiver of any
provision of any Note shall be effective without the written concurrence of the
Lender which is the holder of that Note except that to the extent such
amendment, modification, termination or waiver would not otherwise require the
consent of all Lenders, only the holder of such Note or Notes up to the amount
constituting Requisite Lenders shall be required hereunder, (iii) no amendment,
modification, termination or waiver of any portion of any Letter of Credit shall
be effective without the consent of the Issuing Lender of such Letter of Credit
and no amendment, modification, termination or waiver of Section 3 that changes
in any manner the rights and obligations of any Issuing Lender in respect of any
Letter of Credit shall be effective without the consent of that Issuing Lender,
and (iv) no amendment, modification, termination or waiver of any provision of
Section 9 or of any other provision of this Agreement which, by its terms,
expressly requires the approval or concurrence of Administrative Agent shall be
effective without the written concurrence of Administrative Agent.
C. Administrative Agent may, but shall have no obligation to,
with the concurrence of any Lender, execute amendments, modifications, waivers
or consents on behalf of that Lender. Any waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given. No notice to or demand on Borrower in any case shall entitle Borrower to
any other or further notice or demand in similar or other circumstances. Any
amendment, modification, termination, waiver or consent effected in accordance
with this subsection 10.6 shall be binding upon each Lender at the time
outstanding, each future Lender and, if signed by Borrower, on Borrower.
D. Notwithstanding the foregoing, if any Lender does not agree to
any amendment hereunder requiring the consent of all Lenders and consented to by
the Requisite Lenders, then the Borrower may, at their sole expense and effort,
upon notice to such Lender and Administrative Agent, require such Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in subsection 10.1, including, without limitation, as a
condition precedent to such assignment, (i) Administrative Agent's consent to
the assignee unless not otherwise required by subsection 10.1 and (ii) payment
of the registration fee set forth in subsection 10.1B(i)), all its interests,
70
rights and obligations under this Agreement to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) such Lender shall have received irrevocable
payment in full in cash of an amount equal to the outstanding principal of its
Loans, accrued interest thereon, and accrued fees and all other Obligations and
other amounts payable to it hereunder from the assignee or the Borrower and (ii)
such assignment will result in such amendment being approved.
10.7 Independence of Covenants.
---- --------------------------
All covenants hereunder shall be given independent effect so that
if a particular action or condition is not permitted by any of such covenants,
the fact that it would be permitted by an exception to, or would otherwise be
within the limitations of, another covenant shall not avoid the occurrence of an
Event of Default or Potential Event of Default if such action is taken or
condition exists.
10.8 Notices.
---- --------
Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be in writing
and may be personally served, telexed or sent by telefacsimile or United States
mail or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; provided that notices to Administrative Agent shall not
be effective until received. For the purposes hereof, the address of each party
hereto shall be as set forth under such party's name on the signature pages
hereof or (i) as to Borrower and Administrative Agent such other address as
shall be designated by such Person in a written notice delivered to the other
party hereto and (ii) as to each other party, such other address as shall be
designated by such party in a written notice delivered to Administrative Agent.
10.9 Survival of Representations, Warranties and Agreements.
---- -------------------------------------------------------
A. All representations, warranties and agreements made herein
shall survive the execution and delivery of this Agreement and the making of the
Loans and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law
to the contrary, the agreements of Borrower set forth in subsections 2.6D, 2.7,
3.5, 3.6, 10.2, 10.3 and 10.4 and the agreements of Lenders set forth in
subsection 10.19 shall survive the payment of the Loans and the reimbursement of
any amounts drawn thereunder, and the termination of this Agreement.
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative.
----- ------------------------------------------------------
No failure or delay on the part of Administrative Agent or any
Lender in the exercise of any power, right or privilege hereunder or under any
other Loan Document shall impair such power, right or privilege or be construed
to be a waiver of any default or acquiescence therein, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
10.11 Marshalling; Payments Set Aside.
----- --------------------------------
Neither Administrative Agent nor any Lender shall be under any
obligation to marshal any assets in favor of Borrower or any other party or
against or in payment of any or all of the Obligations. To the extent that
Borrower makes a payment or payments to Administrative Agent or Lenders (or to
Administrative Agent for the benefit of Lenders) or Administrative Agent or
Lenders or enforce any security interests or exercise their rights of setoff,
and such payment or payments or the proceeds of such enforcement or setoff or
any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, any other state or federal law, common
law or any equitable cause, then, to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor or related thereto, shall be revived and continued in full
force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.
10.12 Severability.
----- -------------
In case any provision in or obligation under this Agreement or
the Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
71
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
10.13 Obligations Several; Independent Nature of Lenders' Rights.
----- -----------------------------------------------------------
The obligations of Lenders hereunder are several and no Lender
shall be responsible for the obligations or Commitments of any other Lender
hereunder. Nothing contained herein or in any other Loan Document, and no action
taken by Lenders pursuant hereto or thereto, shall be deemed to constitute
Lenders as a partnership, an association, a joint venture or any other kind of
entity.
10.14 Headings.
----- ---------
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
10.15 Applicable Law.
----- ---------------
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
10.16 Successors and Assigns.
----- -----------------------
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 10.1). Neither
Borrower's rights or obligations hereunder nor any interest therein may be
assigned or delegated by Borrower without the prior written consent of all
Lenders.
10.17 Consent to Jurisdiction and Service of Process.
----- -----------------------------------------------
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST BORROWER ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN XXX XXXXX, XXXXXX XXX XXXX XX XXX XXXX. BY EXECUTING AND
DELIVERING THIS AGREEMENT, BORROWER, FOR THEMSELVES AND IN CONNECTION WITH THEIR
PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING
IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, TO BORROWER AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SUBSECTION 10.8;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER BORROWER IN ANY
SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT LENDER RETAINS THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST
BORROWER IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.17 RELATING
TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE
FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW
SECTION 5-1402 OR OTHERWISE.
10.18 Waiver of Jury Trial.
----- ---------------------
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS WAIVER
IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN
ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
72
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED
ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO
RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL
AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 10.18 AND EXECUTED BY EACH OF
THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.
10.19 Confidentiality.
----- ----------------
Each Lender shall hold all non-public information obtained
pursuant to the requirements of this Agreement in accordance with such Lender's
customary procedures for handling confidential information of this nature and in
accordance with safe and sound banking or investment practices, it being
understood and agreed by Borrower that in any event such Lender may make
disclosures to Affiliates of such Lender or disclosures reasonably required by
any bona fide assignee, transferee or participant in connection with the
contemplated assignment or transfer by such Lender of any Loans or any
participations therein (provided that such assignee, transferee or participant
agrees to also be bound by this subsection 10.19), or disclosures required or
requested by any governmental agency or representative thereof or pursuant to
legal process; provided that, unless specifically prohibited by applicable law
or court order, each Lender shall notify Borrower of any request by any
governmental agency or representative thereof (other than any such request in
connection with any examination of the financial condition of such Lender by
such governmental agency) for disclosure of any such non-public information; and
provided, further that in no event shall any Lender be obligated or required to
return any materials furnished by Borrower or any of its Subsidiaries.
10.20 Counterparts; Effectiveness.
----- ----------------------------
This Agreement and any amendments, waivers, consents or
supplements hereto or in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Agreement shall become effective as of the date hereof.
10.21 Gaming Authorities.
----- -------------------
The Administrative Agent and each Lender agree to cooperate with
the Nevada Gaming Authorities in connection with the administration of their
regulatory jurisdiction over the Borrower and its Subsidiaries, including,
without limitation, to the extent not inconsistent with the internal policies of
such Lender or Issuing Lender and any applicable legal or regulatory
restrictions the provision of such documents or other information as may be
requested by any such Nevada Gaming Authority relating to the Administrative
Agent or any of the Lenders, or Borrower or any of its Subsidiaries, or to the
Loan Documents. Notwithstanding any other provision of the Agreement, Borrower
expressly authorizes Administrative Agent to cooperate with the Nevada Gaming
Authorities as described above.
10.22 No Recourse or Guaranty.
----- ------------------------
Lenders hereby acknowledges and agrees that the Loans to be made
hereunder shall constitute Indebtedness of the Borrower only and that no
recourse shall be had to LVSI, Venetian, Xxxxxxx or any of their Affiliates or
Subsidiaries (excluding the Borrower), or to any assets owned or held by any of
them, including, without limitation, the Venetian Casino Resort, for any and all
payments due hereunder, including, without limitation, for payments of
principal, interest, fees, indemnities, liabilities, costs and expenses. Lender
acknowledges further that Xxxxxxx, LVSI, Venetian, and any of their Affiliates
or Subsidiaries (excluding the Borrower) are not providing any guaranties,
collateral, security interests, or other credit enhancement or support in
connection with the Loans and the Commitments hereunder. Nothing set forth
herein shall limit any obligations of Venetian under the Phase II Lease.
[Remainder of page intentionally left blank]
73
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
BORROWER:
LIDO CASINO RESORT, LLC
By: Lido Casino Resort Holding Company, LLC,
as managing member
By: Lido Intermediate Holding Company, LLC,
as managing member
By: Venetian Casino Resort, LLC, as sole member
By: Las Vegas Sands Inc., as managing member
By: /s/Xxxxx Xxxxxxxx
----------------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Secretary
Notice Address:
0000 Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxxx 0X
Xxx Xxxxx, Xxxxxx 00000
Attention: General Counsel
Telefax: (000) 000-0000
S-1
AGENT AND LENDERS:
THE BANK OF NOVA SCOTIA, individually
and as Administrative Agent
By: /s/Xxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Managing Director
Notice Address:
The Bank of Nova Scotia
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxxxxx
Telefax: (000) 000-0000
With copy to:
The Bank of Nova Scotia
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Telefax: (000) 000-0000
S-2
CREDIT AGREEMENT
DATED AS OF OCTOBER 19, 2001
BETWEEN
LIDO CASINO RESORT, LLC
as Borrower,
and
THE BANK OF NOVA SCOTIA
as Administrative Agent
and
LENDERS party thereto
TABLE OF CONTENTS
Page
----
Section 1. DEFINITIONS.....................................................1
1.1 Certain Defined Terms...........................................1
1.2 Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Agreement ..................................18
1.3 Other Definitional Provisions and Rules of Construction........18
Section 2. AMOUNTS AND TERMS OF COMMITMENT AND LOANS......................19
2.1 Commitments; Making of Loans; the Register; Notes..............19
2.2 Interest on the Loans..........................................23
2.3 Commitment Fees................................................25
2.4 Repayments, Prepayments and Reductions in Commitment;
General Provisions Regarding Payments .........................25
2.5 Use of Proceeds................................................28
2.6 Special Provisions Governing Eurodollar Rate Loans.............28
2.7 Increased Costs; Taxes; Capital Adequacy.......................29
2.8 Obligation of Lenders to Mitigate..............................33
Section 3. LETTERS OF CREDIT..............................................33
3.1 Issuance of Letters of Credit and Lenders' Purchase of
Participations Therein ........................................33
3.2 Letter of Credit Fees..........................................35
3.3 Drawings and Reimbursement of Amounts Paid Under
Letters of Credit .............................................36
3.4 Obligations Absolute...........................................37
3.5 Indemnification; Nature of Issuing Lenders' Duties.............38
3.6 Increased Costs and Taxes Relating to Letters of Credit........39
Section 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT......................39
4.1 Conditions to the Occurrence of the Closing Date...............39
4.2 Conditions to all Loans on or after the Closing Date...........42
4.3 Conditions to Letters of Credit................................43
Section 5. BORROWER'S REPRESENTATIONS AND WARRANTIES......................43
5.1 Organization, Powers, Qualification, Good Standing,
Business and Subsidiaries .....................................43
5.2 Authorization of Borrowing, etc................................43
5.3 Financial Condition............................................44
5.4 No Material Adverse Change; No Restricted Junior
Payments ......................................................44
5.5 Title to Properties; Liens; Real Property......................44
5.6 Litigation; Adverse Facts......................................44
5.7 Payment of Taxes...............................................45
5.8 Performance of Agreements; Materially Adverse
Agreements; Material Contracts ................................45
5.9 Governmental Regulation........................................45
1
5.10 Securities Activities..........................................46
5.11 Employee Benefit Plans.........................................46
5.12 Certain Fees...................................................46
5.13 Environmental Protection.......................................46
5.14 Employee Matters...............................................47
5.15 Solvency.......................................................47
5.16 Matters Relating to Collateral.................................47
5.17 Proper Subdivision.............................................47
Section 6. BORROWER'S AFFIRMATIVE COVENANTS...............................48
6.1 Financial Statements and Other Reports.........................48
6.2 Corporate Existence, etc.......................................51
6.3 Payment of Taxes and Claims; Tax Consolidation.................51
6.4 Maintenance of Properties; Insurance; Application of
Net Loss Proceeds .............................................51
6.5 Inspection; Lender Meeting.....................................53
6.6 Compliance with Laws, etc.; Permits............................53
6.7 Environmental Review and Investigation, Disclosure,
Etc.; Borrower's Actions Regarding Hazardous Materials
Activities, Environmental Claims and Violations of
Environmental Laws ............................................53
6.8 Compliance with Material Contracts.............................55
6.9 Further Assurances.............................................55
6.10 Execution of Subsidiary Guaranty and Personal Property
Collateral Documents by Future Subsidiaries ...................56
Section 7. BORROWER'S NEGATIVE COVENANTS..................................56
7.1 Indebtedness...................................................56
7.2 Liens and Related Matters......................................57
7.3 Investments; Joint Ventures; Formation of Subsidiaries.........57
7.4 Contingent Obligations.........................................58
7.5 Restricted Junior Payments.....................................58
7.6 [Intentionally Omitted.].......................................58
7.7 Restriction on Fundamental Changes; Asset Sales and
Acquisitions ..................................................58
7.8 Sales and Lease-Backs..........................................59
7.9 Sale or Discount of Receivables................................59
7.10 Transactions with Shareholders and Affiliates..................59
7.11 Disposal of Subsidiary Stock...................................60
7.12 Conduct of Business............................................60
7.13 Certain Restrictions on Changes to Operative Documents,
Permits .......................................................60
7.14 Borrower Expenditures..........................................60
7.15 Fiscal Year....................................................61
7.16 Zoning and Contract Changes and Compliance.....................61
7.17 No Joint Assessment; Separate Lots.............................61
7.18 Restriction on Xxxxxxx Indebtedness............................61
Section 8. EVENTS OF DEFAULT..............................................61
2
8.1 Failure to Make Payments When Due..............................61
8.2 Default under Other Indebtedness or Contingent
Obligations ...................................................61
8.3 Breach of Certain Covenants....................................62
8.4 Breach of Warranty.............................................62
8.5 Other Defaults Under Loan Documents............................62
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc...........62
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.............62
8.8 Judgments and Attachments......................................63
8.9 Dissolution....................................................63
8.10 Employee Benefit Plans.........................................63
8.11 Change in Control..............................................63
8.12 Failure of Guaranty; Repudiation of Obligations................63
8.13 Default Under or Termination of Operative Documents............63
8.14 Default Under or Termination of Permits........................63
8.15 Default Under or Termination of the Phase II Lease.............64
Section 9. ADMINISTRATIVE AGENT...........................................64
9.1 Appointment....................................................64
9.2 Powers and Duties; General Immunity............................65
9.3 Representations and Warranties; No Responsibility For
Appraisal of Credit Worthiness ................................66
9.4 Right to Indemnity.............................................66
9.5 Successor Administrative Agent.................................66
9.6 Collateral Documents and Subsidiary Guaranties.................66
Section 10. MISCELLANEOUS..................................................67
10.1 Assignments and Participations in Loans........................67
10.2 Expenses ......................................................69
10.3 Indemnity .....................................................69
10.4 Set-Off; Security Interest in Deposit Accounts ................70
10.5 Ratable Sharing ...............................................70
10.6 Amendments and Waivers ........................................71
10.7 Independence of Covenants .....................................72
10.8 Notices .......................................................72
10.9 Survival of Representations, Warranties and Agreements ........72
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative .........72
10.11 Marshalling; Payments Set Aside ...............................72
10.12 Severability ..................................................72
10.13 Obligations Several; Independent Nature of Lenders'
Rights ........................................................73
10.14 Headings ......................................................73
10.15 Applicable Law ................................................73
10.16 Successors and Assigns ........................................73
10.17 Consent to Jurisdiction and Service of Process ................73
10.18 Waiver of Jury Trial ..........................................73
3
10.19 Confidentiality ...............................................74
10.20 Counterparts; Effectiveness ...................................74
10.21 Gaming Authorities ............................................74
10.22 No Recourse or Guaranty .......................................74
Signature pages .............................................................S-1
4
SCHEDULES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
5.1A JURISDICTION OF ORGANIZATIONS
5.1C OWNERSHIP OF BORROWER
5.1E OPTIONS
5.4 RESTRICTED JUNIOR PAYMENTS
5.5 REAL PROPERTY
5.6 LITIGATION
5.8 MATERIAL CONTRACTS
5.11 CERTAIN EMPLOYEE BENEFIT PLANS
5.13 ENVIRONMENTAL MATTERS
7.2 CERTAIN EXISTING LIENS
5
EXHIBITS
I FORM OF NOTICE OF BORROWING FOR LOANS
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III-A FORM OF TERM NOTE
III-B FORM OF REVOLVING NOTE
IV FORM OF COMPLIANCE CERTIFICATE
V-A FORM OF OPINION OF XXXX, WEISS, RIFKIND, XXXXXXX & XXXXXXXX
X-X FORM OF OPINION OF XXXXXX XXXXXX & XXXXXXX
VI FORM OF CERTIFICATE RE NON-BANK STATUS
VII FORM OF COMPANY SECURITY AGREEMENT
VIII FORM OF DEED OF TRUST
IX FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
X FORM OF ASSIGNMENT AGREEMENT
XI FORM OF FINANCIAL CONDITION CERTIFICATE
XII DESCRIPTION OF LAND
XIII FORM OF AGREEMENT OF JOINDER
6
