LAS VEGAS SANDS, INC., VENETIAN CASINO RESORT, LLC
and GRAND CANAL SHOPS MALL CONSTRUCTION, LLC
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of November 14, 1997 and
entered into by and among LAS VEGAS SANDS, INC. ("LVSI"), a Nevada corporation,
VENETIAN CASINO RESORT, LLC ("Venetian"), a Nevada limited liability company,
GRAND CANAL SHOPS MALL CONSTRUCTION, LLC ("Mall Construction Subsidiary"), a
Delaware limited liability company, as joint and several obligors (each of LVSI,
Venetian and Mall Construction Subsidiary, "a Borrower" and, collectively, the
"Borrowers"), and GMAC COMMERCIAL MORTGAGE CORPORATION, a California corporation
("Lender").
R E C I T A L S
WHEREAS, Borrowers propose to develop and own the Project (such
defined term and other defined terms used in these Recitals shall have the
meanings given in subsection 1.1 of this Agreement), including the Mall;
WHEREAS, Borrowers desire to finance the development and
construction of the Project with (i) equity contributions to Borrowers from
Xxxxxxx in an aggregate amount of $320,000,000 consisting of the Real Estate
Contribution (approximately 14 acres of which will be released to the Phase II
Subsidiary upon the completion of a subdivision of such land) and cash, (ii)
proceeds of the issuance of senior secured Mortgage Notes in an aggregate
principal amount of not less than $425,000,000, (iii) proceeds of the issuance
of Senior Subordinated Notes of approximately $90,000,000, (iv) the proceeds of
the Bank Credit Facility in an aggregate principal amount of not less than
$170,000,000, (v) the proceeds of an equipment finance loan from the FF&E
Lenders of not less than approximately $98,000,000 to finance furniture,
fixtures and equipment (including, without limitation, gaming equipment and
power station equipment) a portion of which may be financed on an interim basis
with proceeds of the revolving loan portion of the senior secured credit
facilities contemplated by the Bank Credit Facility, (vi) the proceeds of a
contribution from a joint venture between Atlantic Thermal Systems, Inc., and
Pacific Enterprises Energy Services, in an amount up to approximately
$70,000,000 as necessary to purchase, construct and install (x) certain
equipment that will be located at or used in connection with the heating,
ventilation and air conditioning facility for the Project and (y) certain
equipment that will be part of the Project's mechanical or electrical systems;
and (vii) the senior secured credit facilities contemplated hereby;
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WHEREAS, Borrowers desire that Lender extend the senior secured
credit facilities contemplated hereby to Borrowers to provide a portion of the
financings necessary to develop and construct the Project;
WHEREAS, subject to the terms and conditions hereof Lender is
willing to extend such senior secured credit facilities to Borrowers, the
proceeds of which will be used, together with certain proceeds of the other
financing sources described above, to fund the development and construction of
the Project;
WHEREAS, Borrowers desire to secure all of the Obligations
hereunder and under the other Loan Documents by granting to Lender, a Lien on
the Collateral; and
WHEREAS, Mall Intermediate Holding Company, LLC, a subsidiary of
Venetian, shall guaranty the Obligations pursuant to Mall Intermediate Holding
Guaranty.
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, Borrowers and Lender
agree as follows:
Section 1. DEFINITIONS
1.1 Certain Defined Terms.
The following terms used in this Agreement shall have the
following meanings:
"Additional Billboard Space" shall have the meaning assigned that
term in the Cooperation Agreement.
"Xxxxxxx" means Xxxxxxx X. Xxxxxxx, an individual.
"Xxxxxxx Completion Guaranty" means that certain Completion
Guaranty executed and delivered by Xxxxxxx on the Closing Date.
"Xxxxxxx Contributions" means the Real Estate Contribution and
the Xxxxxxx Equity Contribution.
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"Xxxxxxx Equity Contribution" means the cash equity contribution
received by Venetian from Xxxxxxx or his Affiliates in existence on the date
hereof in the aggregate amount of $95,000,000.
"Xxxxxxx Guaranty" means that certain Guaranty in favor of Lender
executed and delivered by Xxxxxxx on the Closing Date, substantially in the form
of Exhibit A hereto.
"Xxxxxxx Intercreditor Agreement" means the Intercreditor
Agreement (Xxxxxxx) dated as of November 14, 1997 among Xxxxxxx, Venetian, Mall
Construction Subsidiary, Bank Agent, Mortgage Notes Indenture Trustee, the
Subordinated Notes Indenture Trustee and Lender in substantially the form of
Exhibit B hereto.
"Adjustable Rate" means the sum of (i) the Current Index plus
(ii) the Margin.
"Advance Confirmation Notice" shall have the meaning assigned
that term in the Disbursement Agreement.
"Advance Request" shall have the meaning assigned that term in
the Disbursement Agreement.
"Affiliate", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including, with
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 November 14,
1997.
"Applicable Tax Percentage" means the highest aggregate effective
marginal rate of federal, state and local income tax or, when applicable,
alternative minimum tax, to which any direct or indirect member or S corporation
shareholder of Borrowers subject to the highest marginal rate of tax would be
subject in the relevant year of determination (as certified to Lender by a
nationally recognized tax accounting firm), taking into account only that
member's or S corporation shareholder's share of income and deductions
attributable to its interest in Borrowers.
"Approved Equipment Funding Commitment" shall have the meaning
assigned that term in the Disbursement Agreement.
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"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
$5,000,000) or (c) any transfers or dispositions permitted by clauses (iv)
through (xvii) inclusive of subsection 6.6.
"Assignment Agreement" means an Assignment Agreement in
substantially the form of Exhibit C hereto.
"Bank Agent" means Scotiabank, as administrative agent under the
Bank Credit Agreement, and any successor thereto.
"Bank Credit Agreement" means the credit agreement dated as of
the Closing Date among LVSI, Venetian, the Bank Agent, Xxxxxxx Xxxxx Credit
Partners L.P. and the Bank Lenders.
"Bank Credit Facility" means the credit facility in an aggregate
amount of $170,000,000 to be made available to Borrowers by the Bank Lenders
under the Bank Credit Agreement.
"Bank Lenders" means the financial institutions from time to time
parties to the Bank Credit Agreement as lenders.
"Bank Notes" means the promissory notes issued by Borrowers
pursuant to the Bank Credit Facility.
"Bankruptcy Code" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor statute.
"Billboard" means X.X. of Las Vegas, Inc., a Nevada corporation.
"Billboard Master Lease" means that certain Lease Agreement dated
November 14, 1997 between Venetian and Mall Construction Subsidiary pursuant to
which the Mall Construction Subsidiary is leasing from Venetian the Additional
Billboard Space.
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"Billboard Operating Lease" means that certain restaurant lease
dated June 26, 1997 between Venetian and Billboard as assigned by Venetian to
Mall Construction Subsidiary prior to the Closing Date (together with all
assignments, modifications, amendments, rights and addenda thereto).
"Billboard Space" means the space covered by the Billboard
Operating Lease (including the Additional Billboard Space).
"Borrowers" shall have the meaning assigned that term in the
introduction to this Agreement and shall mean, as the context requires, any or
all of Borrowers.
"Borrowers Security Agreement" means the Borrowers Security
Agreement executed and delivered by Borrowers to Lender, Bank Agent,
Disbursement Agent, Intercreditor Agent and the Mortgage Notes Indenture Trustee
on the Closing Date, in substantially the form of Exhibit D hereto.
"Business Day" means any day excluding Saturday, Sunday and any
day which is a legal holiday under the laws of the State of Nevada or State of
New York or is a day on which banking institutions located in such state are
authorized or required by law or other governmental action to close.
"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 money, currency or a credit balance in a Deposit
Account.
"Cash Equivalents" means (a) Dollars, (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 Corporation ("S&P") or Xxxxx'x Investors Service, Inc. ("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
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security in clause (i) or (ii) of this definition, of a market value of no less
than the amount of monies so invested, (iv) 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 or 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 the acquisition) 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 the
Disbursement Agent while the Disbursement Agreement is in effect and thereafter
to Lender 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 the Disbursement Agent
while the Disbursement Agreement is in effect and thereafter of Lender (which
demand shall only be made at the direction of Borrowers) 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
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investments are denominated in Dollars and maturing not more than 13 months
after 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; or (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 ("APS") which are
senior securities of leveraged closed and 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.
"Casino Lease" means that certain Casino Lease between LVSI, as
lessee and Venetian, as lessor dated as of the Closing Date with respect to the
operation of the casino for the Project.
"Change of Control" shall have the meaning assigned that term in
the Indentures.
"Closing Date" means November 14, 1997.
"Collateral" means, collectively, all of the real, personal and
mixed property in which Liens are purported to be granted pursuant to the
Collateral Documents as security for the Obligations.
"Collateral Account Agreement" means that certain Collateral
Account Agreement dated as of the date hereof entered into between Xxxxxxx and
Lender, in substantially the form of Exhibit E hereto.
"Collateral Documents" means the Mall Construction Subsidiary
Security Agreement, the Deed of Trust, the Leasehold Deed of Trust, Xxxxxxx
Guaranty, Borrowers Security Agreement, Collateral Account Agreement,
Third-Party Account Agreement, 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 Lender a Lien on any real, personal or mixed property of that
Loan Party as security for the Obligations.
"Collection Account" shall have the meaning assigned that term in
the Disbursement Agreement.
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"Commitment" means the commitment of Lender to make Loans as set
forth in subsection 2.1A.
"Commitment Termination Date" means the earlier of (i) Mall
Release Date and (ii) the Outside Completion Deadline.
"Completion Date" shall have the meaning assigned that term in
the Disbursement Agreement.
"Completion Guaranty" means each of the Direct Construction
Guaranty, the Indirect Construction Guaranty and the Xxxxxxx Completion Guaranty
or any one of them and "Completion Guaranties" means the Direct Construction
Guaranty, the Indirect Construction Guaranty and the Xxxxxxx Completion Guaranty
collectively.
"Completion Guaranty Loan" means any amounts advanced by Xxxxxxx
under the Xxxxxxx Completion Guaranty, which is treated as a loan to Borrowers
in an aggregate principal amount not to exceed $25,000,000 at any time plus
accrued and unpaid interest thereon, evidenced by a Completion Guaranty Note and
subject to the terms of the Xxxxxxx Intercreditor Agreement.
"Completion Guaranty Note" means a note in the form of Exhibit F
to the Xxxxxxx Completion Guaranty (as in effect on the Closing Date).
"Consents" means consents to the collateral assignment by
Borrowers of Project Documents in substantially the form of Exhibit S to the
Disbursement Agreement.
"Construction Agency Agreement" means that certain Construction
Agency Agreement dated as of the date hereof by and between HVAC Provider and
Venetian.
"Construction Consultant" means Tishman Construction Corporation
of Nevada, or any other person designated from time to time by the Bank Agent,
Lender and the Mortgage Notes Indenture Trustee, in their sole discretion,
acting pursuant to the Disbursement Agreement, to serve as the Construction
Consultant under the Disbursement Agreement.
"Construction Consultant Engagement Agreement" means that certain
engagement letter dated as of November 14, 1997 by and among the Construction
Consultant, Borrowers, Bank Agent, Lender, the Mortgage Notes Indenture Trustee,
the Permanent Mall Lender and Xxxxxxx Xxxxx & Co.
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"Construction Management Agreement" means that certain
Construction Management Agreement dated as of February 15, 1997 between
Borrowers and Construction Manager for the construction of the Project, as
amended and assigned to Venetian pursuant to a certain Assignment, Assumption
and Amendment of Construction Management Agreement dated as of the date hereof.
"Construction Manager" means Xxxxxx XxXxxxxx Bovis Inc., a New
York corporation and wholly owned subsidiary of Direct Construction Guarantor.
"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, or (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. 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.
"Contractor" means any architects, consultants, designers,
contractors, subcontractors, suppliers, laborers or any other Person engaged by
any Borrower(s) in connection with the design, engineering, installation and
construction of the Project (other than Construction Manager).
"Contracts" means, collectively, the contracts entered into, from
time to time, between any Borrower(s) and any Contractor for performance of
services or sale of goods in connection with the design, engineering,
installation or construction of the Project.
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"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.
"Cooperation Agreement" means that certain Amended and Restated
Reciprocal Easement, Use and Operating Agreement dated on or about the date
hereof by and among LVSI, Venetian, Mall Construction Subsidiary and Interface,
as the same may from time to time be supplemented, amended, modified or extended
in accordance with the provisions of this Agreement.
"Current Index" means the Index determined as of the immediately
preceding Rate Adjustment Date.
"Deed of Trust" means that certain First Deed of Trust,
Assignment of Leases and Rents and Security Agreement in the form of Exhibit G
hereto, dated as of the Closing Date granted by Venetian to Title Company for
the benefit of Lender.
"Deemed Debt Service Coverage Ratio" shall mean the ratio of (a)
the Deemed NOI during the one year period following the Primary Maturity Date to
(b) an amount equal to the projected debt service on outstanding and projected
Indebtedness attributable to the Mall during such period, including without
limitation, the Loans, with such debt service calculated based on an interest
rate equal to the Current Index in effect on the date of determination plus
three hundred and fifty (350) basis points, and with principal amortization
based on a 25 year schedule.
"Deemed NOI" shall mean annual net operating income projected for
the applicable period as a result of the operation of the Mall, which shall
equal Total Gross Revenue from the Mall less Expenses attributable to the Mall,
with all of such amounts being projected on a basis reasonably acceptable to
Lender consistent with the budgets provided by Borrowers to Lender.
"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.
"Development Agreements" means, collectively, (i) that certain
Sands Resort Hotel Casino Agreement dated as of February 18, 1997 between the
County of Xxxxx and LVSI which agreement is commonly referred to as the
"Predevelopment Agreement" and other development agreements to be enumerated by
Nevada counsel.
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"Direct Construction Guarantor" means Bovis, Inc., a New York
corporation and an indirect wholly-owned Subsidiary of Indirect Construction
Guarantor.
"Direct Construction Guaranty" means that certain Guaranty of
Performance dated as of August 19, 1997 executed by the Direct Construction
Guarantor in favor of LVSI.
"Disbursement Account" shall have the meaning assigned that term
in the Disbursement Agreement.
"Disbursement Agent" means Scotiabank, in its capacity as
Disbursement Agent under the Disbursement Agreement, and any successor
Disbursement Agent appointed pursuant to the terms of the Disbursement
Agreement.
"Disbursement Agreement" means that certain Funding Agents'
Disbursement and Administration Agreement in the form of Exhibit H hereto and
dated as of the date hereof among Borrowers, the Bank Agent, the Mortgage Notes
Indenture Trustee, the Subordinated Notes Indenture Trustee, Lender, the HVAC
Provider and the Disbursement Agent.
"Disbursement Agreement Event of Default" means any Event of
Default under and as defined in the Disbursement Agreement.
"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 Borrowers shall be an Eligible Assignee; and
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
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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 Lender.
"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
Borrowers, any of its Subsidiaries or any of their respective ERISA Affiliates.
"Employee Repurchase Notes" has the meaning set forth in
subsection 6.1.
"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 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, guidance documents, 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 Borrowers or any of its Subsidiaries or any
Facility, including the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. ss. 9601 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. ss. 1801 et seq.), the Resource Conservation and
Recovery Act (42 U.S.C. ss. 6901 et seq.), the Federal Water Pollution Control
Act (33 U.S.C. ss. 1251 et seq.), the Clean Air Act (42 U.S.C. ss. 7401 et
seq.), the Toxic Substances Control Act (15 U.S.C. ss. 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 U.S.C. ss. 651 et seq.), the Oil
Pollution Act (33 U.S.C. ss. 2701 et seq) and the Emergency Planning and
Community Right-to-Know Act (42 U.S.C. ss. 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.
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"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 Internal Revenue 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 Internal Revenue 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 Internal Revenue 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 Borrowers or any of
their Subsidiaries shall continue to be considered an ERISA Affiliate of
Borrowers or such Subsidiary within the meaning of this definition with respect
to the period such entity was an ERISA Affiliate of Borrowers or such Subsidiary
and with respect to liabilities arising after such period for which Borrowers or
such Subsidiary could be liable under the Internal Revenue 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 Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of the
Internal Revenue Code) or the failure to make by its due date a required
installment under Section 412(m) of the Internal Revenue 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 Borrowers, 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 Borrowers, 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 Borrowers, 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 Borrowers, 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
13
4241 or 4245 of ERISA, or that it intends to 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 Borrowers, any of its Subsidiaries or
any of their respective ERISA Affiliates of fines, penalties, taxes or related
charges under Chapter 43 of the Internal Revenue 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 Borrowers, any of its Subsidiaries or any of
their respective ERISA Affiliates in connection with any Employee Benefit Plan;
(x) receipt from the Internal Revenue 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 Internal Revenue Code) to qualify under Section 401(a) of
the Internal Revenue 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
Internal Revenue Code; or (xi) the imposition of a Lien pursuant to Section
401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA with
respect to any Pension Plan.
"Estimation Period" means the period for which a shareholder,
partner or member, who is an individual is required to estimate for federal
income tax purposes his allocation of taxable income from a Subchapter S
corporation or a partnership for federal income tax purposes in connection with
determining his estimated federal income tax liability for such period.
"Event of Default" means each of the events set forth in Section
7.
"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.
"Expenses" shall mean, for any specified projected period, all
ordinary, necessary and reasonable operating and capital expenses projected to
be paid on a cash basis during such period and which are related to the
ownership and operation of the Mall during such period. Such projected Expenses
shall include, by way of example rather than of limitation, projected expenses
resulting from: (1) property taxes and assessments; (2) utility charges; (3)
costs of providing elevator, janitorial, trash removal and maintenance service;
(4) costs of maintaining and repairing the Mall; (5) management fees (of no less
than 2% of gross annual revenues); (6) an equipment and property reserve of no
less than 1% of gross annual revenues; and (7) tenant improvements provided by
14
Borrower and lease commission expenses, in each case amortized over the term of
the applicable lease. Expenses shall not include the following projected
expenses for: (a) any overhead incurred in connection with the management of the
Mall; (b) all amounts paid to Borrowers or an affiliate of Borrowers in excess
of amounts that would reasonably be paid in an arms-length transaction to a
person or entity that is not an affiliate of Borrowers; (c) non-cash deductions
of Borrowers and their affiliates; (d) distributions paid or made to any
partner, officer, director or shareholder of Borrowers or an affiliate of
Borrower; or (e) the cost of federal, state or local income taxes, franchise
taxes or other taxes of Borrowers and their affiliates (other than real property
taxes for the Mall).
"Extended Maturity Date" means November 14, 2000.
"Extension Election Notice" shall have the meaning assigned that
term in subsection 2.1A(i).
"Extension Fee" shall have the meaning assigned that term in
subsection 2.3A.
"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 Borrowers or any of their
Subsidiaries or any of their respective predecessors or Affiliates including,
without limitation, the Site.
"Facility Agreements" shall have the meaning assigned that term
in the Disbursement Agreement.
"FDIC" means the Federal Deposit Insurance Corporation.
"FF&E Facility" means the credit facilities, equipment leases or
similar agreements with the FF&E Lenders in an aggregate principal amount of
approximately $98,000,000 (plus accrued and unpaid interest thereon) to finance
the purchase and installment of the Specified FF&E.
"FF&E Facility Agreement" means (i) the credit agreement among
Borrowers, General Electric Capital Corporation and the other FF&E Lenders party
thereto evidencing the debt facility on the terms described in the Approved
Equipment Funding Commitment or otherwise on terms reasonably acceptable to
Lender, (ii) such other agreements among FF&E Lender(s) and Borrowers providing
for all or a portion of the FF&E Facility (not covered under clause (i)) on
substantially the same terms as described in the Approved Equipment Funding
Commitment or otherwise reasonably satisfactory to Lender, provided in each case
that the applicable FF&E Lender(s) have entered into an intercreditor agreement
in form and substance satisfactory to Lender.
15
"FF&E Intercreditor Agreement" means the Intercreditor Agreements
entered into between Lender, FF&E Lenders and such other Persons as may be
necessary parties thereunder in each case in form and substance satisfactory to
Lender.
"FF&E Lenders" means (i) General Electric Capital Corporation and
the other lenders that are parties to the FF&E Facility Agreement described in
clause (i) of the definition of such term and (ii) any other lenders under any
other FF&E Facility Agreement, provided that each such other lender described in
clause (ii) would be an Eligible Assignee hereunder.
"Final Completion Date" shall have the meaning assigned that term
in the Disbursement Agreement.
"Financial Plan" shall have the meaning assigned that term in
subsection 5.1(xiii).
"Financing Agreements" means, collectively, this Agreement, the
Bank Credit Agreement, the Disbursement Agreement, the Mortgage Notes Indenture,
the Collateral Documents, the Other Security Documents, the Completion
Guaranties, the Mortgage Notes, the Tranche A Take Out Commitment, the Tranche B
Take Out Commitment, the Tranche B Guaranty and Security Documents, the
Tri-Party Agreement, the Approved Equipment Funding Commitment, the FF&E
Facility Agreements, any Completion Guaranty Note, any Substitute Tranche B
Note, and any other loan or security agreements entered into on, prior to or
after the Closing Date to finance the Project in accordance with subsection 6.12
and, while applicable, the Disbursement Agreement.
"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 Permitted Liens permitted pursuant to subsection 6.2)
to which such Collateral is subject.
"Fiscal Quarter" means a fiscal quarter of any Fiscal Year.
"Fiscal Year" means the fiscal year of Borrowers ending on
December 31 of each calendar year.
"Funding and Payment Office" means (i) the office of Lender
located at 000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000 or (ii)
such other office of Lender as may from time to time hereafter be designated as
such in a written notice delivered by Lender to Borrowers and each Lender.
"Funding Date" means the date of the funding of a Loan.
16
"Future Financing" shall have the meaning set forth in Section
5.11.
"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 significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of deter mination.
"Gaming License" means every license, franchise or other
authorization to run, lease, operate or otherwise conduct gaming activities of
Borrowers or any of their 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.
"GECC Commitment" means the commitment of General Electric
Capital Corporation to advance the loans to Venetian pursuant to that certain
Agreement dated as of October 20, 1997 between Venetian and General Electric
Capital Corporation.
"GECC Intercreditor Agreement" means that certain Intercreditor
Agreement to be entered between General Electric Capital Corporation in favor of
Lender, the Bank Agent and the Mortgage Notes Indenture Trustee within a period
reasonably acceptable to Lender.
"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.
"Guaranty Deposit Account" shall have the meaning assigned that
term in the Xxxxxxx Completion Guaranty.
"Xxxxxx'x Shared Roadway Agreement" shall have the meaning
assigned that term in the Disbursement Agreement.
17
"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.
"HC/Mall Component" shall have the meaning assigned that term in
Exhibit A to the Disbursement Agreement.
"HVAC Ground Lease" means that certain Ground Lease made
effective as of the date hereof between Venetian and the HVAC Provider.
"HVAC Component" shall have the meaning assigned that term in
Exhibit A to the Disbursement Agreement.
"HVAC Letters of Credit" has the meaning given to that term in
Section 2.4 of the Disbursement Agreement.
18
"HVAC Provider" means Atlantic-Pacific, Las Vegas LLC, a Delaware
limited liability company or its permitted successors under the HVAC Services
Agreement.
"HVAC Services Agreement" means collectively (i) that certain
Energy Services Agreement of even date herewith between Venetian and the HVAC
Provider, (ii) the HVAC Ground Lease, (iii) the Construction Agency Agreement
and (iv) that certain Energy Services Agreement of even date herewith between
Mall Construction Subsidiary and the HVAC Provider.
"Improvements" means the buildings, fixtures and other
improvements to be situated on the Mall.
"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 the
ordinary course of business), and (v) all indebtedness secured by any Lien on
any property or asset owned or held 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. All obligations under the Financing
Agreements shall constitute Indebtedness. Obligations under the HVAC Services
Agreement (as in effect on the date hereof) shall be treated as a service
contract and not Indebtedness.
"Indemnitee" shall have the meaning assigned that term in
subsection 8.4.
"Indentures" means the Mortgage Notes Indenture and the
Subordinated Notes Indenture or either one of them.
"Independent Consultants" means collectively the Construction
Consultant, the Insurance Advisor or in either case their successors appointed
pursuant to the Disbursement Agreement.
"Independent Financial Advisor" means an accounting, appraisal or
investment banking firm of nationally recognized standing that is, in the
judgment of LVSI's Board of Directors, (i) qualified to perform the task for
which it has been engaged and (ii) disinterested and independent with respect to
LVSI and its Subsidiaries and each Affiliate of LVSI and Xxxxxxx.
19
"Index" means the London interbank offered rates ("LIBOR") for a
term of thirty (30) days published in the Wall Street Journal on the second
(2nd) Business Day immediately preceding the Rate Adjustment Date; provided that
in the event the 30-day LIBOR rate is not published in the Wall Street Journal,
Index means the 30-day LIBOR rate provided on Telerate page 3750 on such date.
"Indirect Construction Guarantor" means The Peninsular and
Oriental Steam Navigation Company, a corporation organized under the laws of
England and Wales.
"Indirect Construction Guaranty" means that certain Guaranty
dated as of August 19, 1997 executed by Indirect Construction Guarantor in favor
of LVSI.
"Insurance Advisor" means Xxxxxxxx Xxxxx of Tennessee, Inc., or
its successor, appointed pursuant to the Disbursement Agreement.
"Intellectual Property" means all patents, trademarks,
tradenames, copyrights, technology, know-how and processes used in or necessary
for the conduct of the business of Borrowers and Mall Construction Subsidiary as
proposed to be conducted pursuant to the Operative Documents that are material
to the condition (financial or otherwise), business or operations of Borrowers
and Mall Construction Subsidiary.
"Intercreditor Agent" means Scotiabank, in its capacity as
Intercreditor Agent under the Intercreditor Agreement, and any successor
Intercreditor Agent appointed pursuant to the terms of the Intercreditor
Agreement.
"Intercreditor Agreement" means that certain Intercreditor
Agreement dated as of the Closing Date among Lender, the Intercreditor Agent,
the Mortgage Notes Indenture Trustee, the Bank Lenders and the Subordinated
Notes Indenture Trustee, in substantially the form of Exhibit I hereto.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement.
"Interface" means Interface Group-Nevada, Inc., a Nevada
corporation.
"Interface Holding" means Interface Group Holding Company, Inc.,
a Nevada corporation.
20
"Interface Lease" means the lease agreement dated November 1,
1996 between Interface and LVSI.
"Interim Construction Loan" means the loan from Xxxxxxx Xxxxx
Credit Partners L.P. to Borrowers in a maximum principal amount of $45,000,000,
to be repaid in full on the
Closing Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended to the date hereof and from time to time hereafter, and any successor
statute.
"Investment" means (i) any direct or indirect purchase or other
acquisition by Borrowers or any of their 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 Borrowers or any of their Subsidiaries from any Person, of any equity
Securities of any Subsidiary of Borrowers, 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 Borrowers or any of their 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.
"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.
"Leasehold Deed of Trust" means that certain First Leasehold Deed
of Trust, Assignment of Leases and Rents and Security Agreement in the form of
Exhibit J hereto, dated as of the Closing Date granted by Mall Construction
Subsidiary to Title Company for the benefit of Lender.
"Lender" means GMAC Commercial Mortgage Corporation together with
its successors and permitted assigns pursuant to subsection 8.1.
"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
21
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 statements under the UCC.
"Liquidated Damages" means any proceeds or liquidated damages
paid pursuant to any obligation, default or breach under the Contracts and
Indirect Construction Guaranty and Direct Construction Guaranty (net of actual
and documented reasonable costs incurred by Borrowers 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 any of Borrowers or any of their 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 Tranche A Loans or the
Tranche B Loans or any combination thereof.
"Loan Documents" means this Agreement, the Notes, Disbursement
Agreement and the Collateral Documents.
"Loan Party" means each Borrower and each Subsidiary and
Affiliate of a Borrower which is a party to or may hereafter become a party to
any Loan Document and "Loan Parties" means all such Persons, collectively.
"Loss Proceeds" shall have the meaning assigned that term in the
Disbursement Agreement.
"LVSI" means Las Vegas Sands, Inc., a Nevada corporation.
"Mall" means the mall space together with all Improvements and
equipment that are part of or attached or affixed thereto or located therein
described in more detail on Exhibit T-7 to the Disbursement Agreement.
"Mall Assets" means the assets described in subsection 5.9(A).
"Mall Collateral" means all of Borrowers' and their Subsidiaries'
right, title and interest in (i) prior to the Mall Parcel Creation Date, the
leasehold estate created by the Mall Lease and, thereafter, the Mall Parcel;
(ii) the leasehold estate created by the Billboard Master Lease; (iii) all
Improvements and equipment that are a part of or attached or affixed to the Mall
or located therein; (iv) any reserves established by Borrowers or any of their
Subsidiaries relating to the Mall;
22
(v) all easements and other rights and interests granted to the owner of the
Mall in the Cooperation Agreement; (vi) all warranties relating to the Mall and
the above-described Improvements and equipment that are given pursuant to or in
connection with, the Contracts; and (vii) all contracts (including space leases)
entered into by, or assigned to, Mall Construction Subsidiary, relating to the
foregoing Mall Collateral or any portion thereof, and all rights under such
contracts.
"Mall Construction Subsidiary" means Grand Canal Shops Mall
Construction, LLC, a Delaware limited liability company and a wholly owned
subsidiary of Venetian.
"Mall Construction Subsidiary Security Agreement" means the
Security Agreement dated as of the date hereof entered into between Lender and
Mall Construction Subsidiary in substantially the form of Exhibit K hereto.
"Mall Direct Holdings" means Grand Canal Shops Mall Holding
Company, LLC, a Delaware limited liability company initially owned 99% by Mall
Intermediate Holdings and 1% by Mall Manager.
"Mall Escrow Agreement" shall have the meaning assigned to that
term in the Disbursement Agreement.
"Mall Intermediate Holdings" means Mall Intermediate Holdings
Company, LLC, a Delaware limited liability company and a wholly owned Subsidiary
of Venetian.
"Mall Intermediate Holding Guaranty" means that certain guaranty
of even date herewith executed by Mall Intermediate Holding in favor of Lender
in substantially the form of Exhibit L hereto.
"Mall Lease" means that certain Indenture of Lease dated as of
the date hereof between Venetian and Mall Construction Subsidiary pursuant to
which Mall Construction Subsidiary will lease the Mall from Venetian.
"Mall Management Agreement" means that certain Management
Agreement between LVSI and Mall Operator pursuant to which Mall Operator has
agreed to perform certain management services related to the Mall as assigned by
LVSI to Mall Construction Subsidiary as of the Closing Date.
"Mall Manager" means Grand Canal Shops Mall MM, Inc., a Nevada
corporation and a wholly owned Subsidiary of LVSI.
23
"Mall Operator" means Forest City Commercial Management, Inc., an
Ohio corporation.
"Mall Parcel" means the mall space subdivided from the Site as
one or more legally separate parcels and recorded with the applicable
Governmental Authorities and recorded with the applicable Governmental
Authorities as described in more detail in Exhibit T-7 to the Disbursement
Agreement.
"Mall Parcel Creation Date" shall have the meaning assigned that
term in the Disbursement Agreement.
"Mall Release Conditions" shall have the meaning assigned that
term in the Disbursement Agreement.
"Mall Release Date" shall have the meaning assigned that term in
the Disbursement Agreement.
"Mall Retainage/Punchlist Account" shall have the meaning
assigned that term in the Mall Escrow Agreement.
"Mall Subsidiary" means Grand Canal Shops Mall LLC, a Delaware
limited liability company.
"Mall TESA" means that certain Energy Services Agreement dated as
of November 14, 1997 between Mall Construction Subsidiary and the HVAC Provider.
"Margin" shall mean two hundred seventy-five (275) basis points,
which is equivalent to 2.75% per annum; provided that in the event that the Mall
Parcel Creation Date does not occur on or before July 10, 1998, the Margin shall
be increased to be three hundred seventy-five (375) basis points, effective as
of April 10, 1998, with interest based on such retroactive increase in the
Margin; provided the Margin shall be two hundred seventy-five (275) basis points
after the Mall Parcel Creation Date.
"Margin Stock" shall have the meaning assigned 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 Borrowers and any
24
of their Subsidiaries, taken as a whole or Mall Subsidiary or (ii) the material
impairment of the ability of any Loan Party to observe or perform, or of Lender
to enforce, the Obligations.
"Maturity Date" means the Primary Maturity Date, unless the
Maturity Date is extended pursuant to Section 2.1(A) hereof, in which event the
Maturity Date shall be the Extended Maturity Date.
"Material Contract" means any contract or other arrangement to
which any Borrower(s), or any of their 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 Note(s)" means the 12.25% Mortgage Note(s) Due 2004
issued by Borrowers pursuant to the Mortgage Notes Indenture.
"Mortgage Note Holder(s)" means the holder(s) of the Mortgage
Note(s).
"Mortgage Notes Indenture" means that certain Indenture dated as
of November 14, 1997 between Borrowers, certain guarantors named therein and the
Mortgage Notes Indenture Trustee.
"Mortgage Notes Indenture Trustee" means First Trust National
Association in its capacity as the trustee under the Mortgage Notes Indenture
and its successors in such capacity.
"Mortgage Notes Proceeds" means the gross proceeds from the
issuance of the Mortgage Notes in the amount of at least $425,000,000 (before
deduction for underwriter's discounts, fees and expenses).
"Mortgages Note Proceeds Account" shall have the meaning assigned
that term in Section 2.3.2. of the Disbursement Agreement.
"Mortgage Policy" shall have the meaning assigned that term in
subsection 3.1 of this Agreement.
"Mortgaged Property" means the property described in Schedule
4.5.
"Multiemployer Plan" means any Employee Benefit Plan which is a
"Multiemployer plan" as defined in Section 3(37) of ERISA.
25
"Net Asset Sale Proceeds" means the aggregate cash proceeds
received by any Borrower or any of its Subsidiaries in respect of any Asset
Sale, net of 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), 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, 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 any 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.
"Net Loss Proceeds" means the aggregate cash proceeds received by
any 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), 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 required 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
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.
"Nevada Gaming Authorities" shall mean, collectively, the Nevada
1Gaming 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.
26
"Notes" means (i) the promissory notes of Borrowers issued
pursuant to subsection 2.1 on the Closing Date and (ii) any promissory notes
issued by Borrowers pursuant to the last sentence of subsection 8.1 in
connection with assignments of the Loan Commitments or Loans, in each case
substantially in the form of Exhibit M-1 and M-2 hereto.
"Notice of Funding Request" shall have the meaning assigned that
term in the Disbursement Agreement.
"Obligations" means all obligations of every nature of each Loan
Party from time to time owed to Lender under the Loan Documents, whether for
principal, interest, fees, expenses, indemnification or otherwise.
"Offer Notice" shall have the meaning set forth in Section 5.11.
"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 Financing Agreements and the
Project Documents.
"Option Period" shall have the meaning set forth in Section 5.11.
"Other Indebtedness" means (i) the Indebtedness of any Borrower
or any of its Subsidiaries evidenced by the Mortgage Notes, (ii) the
Indebtedness of any Borrower or any of its Subsidiaries evidenced by the
Subordinated Notes, (iii) the Indebtedness of any Borrower or any of
27
its Subsidiaries evidenced by the Bank Credit Facility, (iv) the Indebtedness of
any Borrower or any of its Subsidiaries evidenced by the FF&E Facility
Agreements, (v) any Indebtedness of any Borrower or any of its Subsidiaries in
respect of the Substitute Tranche B Loan or the Completion Guaranty Loan, and
(vi) any Indebtedness of any Borrower under an Employee Repurchase Note.
"Other Security Documents" means the Security Documents as
defined in the Disbursement Agreement, other than the Collateral Documents.
"Outside Completion Deadline" means April 21, 1999, or such later
date as may be extended pursuant to Section 6.4 of the Disbursement Agreement.
"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 Internal Revenue Code
or Section 302 of ERISA.
"Permanent Mall Lender" means Xxxxxxx Sachs Mortgage Company or
any successor or replacement thereto permitted under the Tri-Party Agreement.
"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 realization of the Project in accordance with the Operative
Documents.
"Permitted Employee Repurchase" has the meaning set forth in
subsection 6.1.
"Permitted Liens" means the following types of Liens (excluding
any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue 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 4.7;
(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
28
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;
(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 7.8;
(v) leases or subleases granted to third parties in accordance
with any applicable terms of this Agreement and the Collateral Documents
and not interfering in any material respect with the ordinary conduct of
the business of a Borrower or any of its Subsidiaries;
(vi) 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;
(vii) leases permitted under subsection 6.6 and any leasehold
mortgage in favor of any party financing the lessee under any lease
permitted under subsection 6.6 provided that (a) none of Borrowers nor
any of their 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;
29
(viii) Liens created or contemplated by the Cooperation Agreement
(as in effect on the Closing Date);
(ix) Liens on real property of Borrowers arising pursuant to that
certain Xxxxxx'x Shared Roadway Agreement (as in effect on the Closing
Date);
(x) 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 Borrowers
and their Subsidiaries or the construction or operation of the Project or
(ii) cause a material decrease in value of the Collateral.
(xi) Liens arising from filing UCC financing statements relating
solely to leases permitted by this Agreement;
(xii) 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;
(xiii) 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;
(xiv) licenses of patents, trademarks and other intellectual
property rights granted by a 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 such Borrower or such
Subsidiary;
(xv) Liens created or contemplated by the HVAC Services Agreement
(as in effect on the Closing Date);
(xvi) Liens created under the Predevelopment Agreement as in
effect on the Closing Date;
(xvii) easements, restrictions, rights of way, encroachments and
other minor defects or irregularities in title created in connection with
the traffic study relating to increased traffic on Las Vegas Boulevard as
a result of completion of the Project;
(xviii) Liens incurred in connection with Interest Rate Agreements
permitted under Section 6.2(ix);
30
(xix) restrictions created under the Sale and Contribution
Agreement as in effect on the Closing Date;
(xx) prior to the Mall Release Date any "Permitted Liens" under
the Disbursement Agreement; and
(xxi) Liens listed as exceptions to the Mortgage Policy.
"Permitted Quarterly Tax Distributions" means quarterly
distributions of Tax Amounts determined on the basis of the estimated taxable
income of LVSI or Venetian, as the case may be (in each case including any such
taxable income attributable to such entity's ownership of interest in any other
pass-through entity for Federal income tax purposes except that if all or any
portion of the Completion Guaranty Loan or the Substitute Tranche B Loan is
outstanding and held by Xxxxxxx or a Related Party and is not paying current
cash interest, then such estimated taxable income shall be determined without
giving effect to any non-cash interest payments on such loans held by Xxxxxxx or
the Related Parties to the extent such non-cash interest is deductible), for the
related Estimation Period, as in a statement filed with the Administrative
Agent, provided, however, that (A) prior to any distributions of Tax Amounts
Borrowers shall deliver an officers' certificate with a statement to the effect
that in the case of distributions to be made by Venetian, Venetian qualifies as
a partnership or a substantially similarly treated pass-through entity for
federal income tax purposes or that, in the case of distributions to be made by
LVSI, LVSI qualifies as a Subchapter S corporation under the Code or a
substantially similarly treated pass-through entity for federal income tax
purposes, as the case may be, and (B) at the time of such distributions, the
most recent audited financial statements of LVSI reflect that LVSI was treated
as a Subchapter S corporation under the Code or a substantially similarly
treated pass-through entity for federal income tax purposes and Venetian was
treated as a partnership or substantially similarly treated pass-through entity
for Federal income tax purposes for the period covered by such financial
statements; provided, further, that, for an Estimation Period that includes a
True-up Determination Date, (A) if the True-up Amount is due to the members or
shareholders, as the case may be, the Permitted Quarterly Tax Distribution
payable by LVSI or Venetian, as the case may be, for the Estimation Period shall
be increased by such True-up Amount, and (B) if the True-up Amount is due to
LVSI or Venetian, the Permitted Quarterly Tax Distribution payable by LVSI or
Venetian as the case may be, for the Estimation Period shall be reduced by such
True-up Amount and the excess, if any, of the True-up Amount over such Permitted
Quarterly Tax Distribution shall be applied to reduce the immediately following
Permitted Quarterly Tax Distribution(s) until such True-up Amount is entirely
offset. The amount of Permitted Quarterly Tax Distribution relating to an
Estimation Period including a True-up Determination Date shall
be determined by a Tax Amounts CPA, and the amount of Permitted Quarterly Tax
Distribution relating to all other Estimation Periods shall be determined by
LVSI or Venetian, as the case may be.
31
"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 II" means a hotel, casino and mall complex proposed to be
developed on the Phase II Land.
"Phase II Direct Holding Company" means Lido Casino Resort
Holding Company, LLC, a Delaware limited liability company.
"Phase II Land" means the real property consisting of
approximately 14 acres of the Real Estate Contribution as described in more
detail on Exhibit T-5 of the Disbursement Agreement with all improvements
thereon.
"Phase II Manager" means Lido Casino Resort MM, Inc., a Nevada
corporation, and wholly owned subsidiary of LVSI and the managing member of
Phase II Subsidiary.
"Phase II Subsidiary" means Lido Casino Resorts, LLC, a Nevada
limited liability company.
"Plans and Specifications" shall have the meaning assigned that
term in the Disbursement Agreement.
"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, as
amended, restated and modified from time to time.
"Primary Maturity Date" means May 1, 2000.
"Professional Services Agreement" means that certain Agreement
between Venetian and Project Architect dated on or about the date hereof.
32
"Project" means the Venetian-themed hotel, casino, retail,
meeting and entertainment complex, with related heating, ventilation and air
conditioning and power station facilities to be developed at the Site, all as
more particularly described in Exhibit T-1 to the Disbursement Agreement.
"Project Architect" means collectively, TSA of Nevada, LLP, and
WAT&G, Inc. Nevada.
"Project Budget" has the meaning assigned that term in the
Disbursement Agreement.
"Project Documents" means the Construction Management Agreement,
the Direct Construction Guaranty, the Indirect Construction Guaranty, the
Completion Guaranties, the Approved Equipment Funding Commitments, the
Contracts, the GECC Intercreditor Agreement, the Cooperation Agreement, the
Professional Services Agreement, the HVAC Services Agreement, the HVAC Ground
Lease, the Mall Management Agreement, the Construction Agency Agreement, the
Predevelopment Agreement, the Work Continuation Agreement, the Billboard Master
Lease, the Services Agreement, the Sale and Contribution Agreement, the Mall
Lease, the Casino Lease, the Xxxxxxxx Agreement, the Billboard Master Lease, the
Billboard Operating Lease, the Mall TESA, the SECC TESA, the Development
Agreements, the operating agreements or By-laws, as the case may be, for each of
LVSI, Venetian, Mall Direct Holdings, Mall Subsidiary and Mall Intermediate
Holdings, while applicable, the Disbursement Agreement relating to the
development, construction, maintenance or operation of the Project.
"Project Schedule" shall have the meaning assigned that term in
the Disbursement Agreement.
"Puck JV Letter of Intent" means the letter of intent dated May
16, 1997 between LVSI and Xxxxxxxx Xxxx Food Company, L.P.
"Quarterly Payment Period" means the period commencing on the
tenth day and ending and including the twentieth day of each month in which
federal estimated tax payments are due (provided that payments in respect of
estimated state income taxes due in January may instead, at the option of
Borrowers, be paid during the last five days of the immediately preceding
December).
33
"Rate Adjustment Date" means the first day of each calendar month
during the period between the Closing Date and the Commitment Termination Date,
unless it is not a Business Day, in which case, the first Business Day
immediately following such date.
"Real Estate Contribution" shall have the meaning assigned that
term in the introduction to this Agreement as described in more detail in
Schedule 4.5.
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"Related Parties" means and shall include: (i) Family Members, as
hereafter defined; (ii) directors of LVSI and Venetian and employees of LVSI or
Venetian who are senior managers or officers of LVSI, Venetian, Interface or any
of their Affiliates; (iii) any person who receives an interest in LVSI or
Venetian from any individual referenced in clauses (i)-(ii) in a gratuitous
transfer, whether by gift, bequest or otherwise, to the extent of such interest;
(iii) the estate of any individual referenced in clauses (i)-(iii); (iv) a trust
for the benefit of one or more of the individuals referenced in clauses
(i)-(iii); and/or (v) an entity owned or controlled, directly or indirectly, by
one or more of the individuals, estates of trusts referenced in clauses
(i)-(iv). For the purpose of this paragraph, a `Family Member' shall include:
(i) Xxxxxxx X. Xxxxxxx; (ii) Xx. Xxxxxx Xxxxxxx; (iii) any sibling of either of
the foregoing; (iv) any issue of any one or more of the individuals referenced
in the preceding clauses (i)-(iii); and (v) the spouse or issue of the spouse of
one or more of the individuals referenced in the preceding clauses (i)-(iv).
"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.
"Replacement FF&E Lenders" means any lender or lenders who commit
to replace the GECC Commitment, provided that each such lender shall be an
Eligible Assignee reasonably acceptable to Lender.
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of any Borrower now or hereafter outstanding, except a dividend or distribution
payable solely in shares of that class of stock to the holders of that class (or
the accretion of such dividends or distribution), (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or
34
indirect, of any shares of any class of stock of any Borrower now or hereafter
outstanding, (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 of any Borrower now or hereafter outstanding, (iv) any payment or
prepayment of principal of, premium, if any, or interest on, or redemption,
purchase, retirement, defeasance (including in-substance or legal defeasance),
sinking fund or similar payment with respect to Other Indebtedness other than
payments with respect to the Bank Credit Facility which are permitted pursuant
to the Intercreditor Agreement, and (v) any payment in respect of a repayment or
reimbursement of amounts advanced to Borrowers or any of their Subsidiaries by
Xxxxxxx or any Affiliate of Xxxxxxx under the Xxxxxxx Completion Guaranty or the
Tranche B Guaranty.
"Sale and Contribution Agreement" means that certain Sale and
contribution Agreement dated as of the date hereof between Venetian, Mall
Construction Subsidiary and Mall Subsidiary.
"Sands Expo and Convention Center" means the exposition and
meeting facilities commonly known as the Sands Expo and Convention Center.
"Scotiabank" means The Bank of Nova Scotia, a Canadian chartered
bank.
"SECC TESA" means that certain Energy Services Agreement dated as
of November 14, 1997 between Interface and HVAC Provider.
"Securities" means any stock, shares, partnership interests,
membership interests of a limited liability company, 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.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"Services Agreement" means that amended and restated Services
Agreement dated as of the date hereof by and among LVSI, Interface, Interface
Holding Company, Inc., and the parties stated on the schedule thereto.
35
"Site" means the land on which the Project is to be constructed
as described in more detail in Exhibit T-4 to the Disbursement Agreement.
"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.
"Specified FF&E" means any furniture, fixtures, equipment and
other personal property financed with the proceeds from the FF&E Facility.
"Stop Funding Notice" shall have the meaning assigned that term
in the Disbursement Agreement.
"Subordinated Indebtedness" means (i) the Indebtedness in respect
of the Subordinated Notes and (ii) any Indebtedness in respect of the Substitute
Tranche B Loan or the Completion Guaranty.
"Subordinated Notes" means the $97,500,000 in aggregate principal
amount of Split Coupon Senior Subordinated Notes due 2005 of Borrowers issued
pursuant to the Subordinated Notes Indenture.
"Subordinated Notes Indenture" means the Indenture dated as of
November 14, 1997 between Borrowers, certain guarantors named therein and the
Subordinated Notes Indenture Trustee.
"Subordinated Notes Indenture Trustee" means First Union National
Bank in its capacity as trustee under the Subordinated Notes Indenture and its
successors in such capacity.
36
"Subsidiary" means, with respect to any Person, (i) 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 and (ii) any partnership or limited liability company of
which more than 50% of such entities' capital accounts, distribution rights,
general or limited partnership interests or membership interests are owned or
controlled directly or indirectly by such Person or one or more other
Subsidiaries of that Person or a combination thereof. Notwithstanding the
foregoing, Mall Subsidiary, Phase II Subsidiary, Phase II Manager, Phase II
Direct Holding Company, Mall Manager, Mall Direct Holdings and their respective
Subsidiaries shall not constitute Subsidiaries under this Agreement or any other
Loan Document, except for purposes of Article 4 (representations and warranties)
(other than subsection 4.8), and subsection 5.1 and for purposes of any
definitions as used in Article 4 or subsection 5.1.
"Substitute Tranche B Loan" means (i) any amount which is
received by Lender pursuant to the Tranche B Guaranty and Security Documents
funded by Xxxxxxx upon a draw under the Tranche B Collateral which Xxxxxxx
elects to have treated as a subordinated loan to Venetian, (ii) any refinancing
of the loans described under clauses (i) or (ii) provided in the case of clauses
(i), (ii) and (iii) that such refinancing loan is in an amount not to exceed at
any time an aggregate principal amount of $35,000,000, (plus accrued and unpaid
interest thereon) is evidenced by a Substitute Tranche B Note and is subject to
the terms of the Xxxxxxx Intercreditor Agreement.
"Substitute Tranche B Note" means a note substantially in the
form of Exhibit N hereto (as in effect on the date hereof).
"Supplier Joint Venture" means any Person that supplies or
provides materials or services to any Borrower or the Construction Manager or
any contractor in the Project 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 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 a Lender, its lending
37
office) is located or in which that Person (and/or, in the case of a 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 a Lender, its lending office).
"Tax Amount" means, with respect to a Estimation Period or a
taxable year, as the case may be an amount equal to (A) the product of (x) the
taxable income (including all separate items of income) of LVSI or Venetian, as
the case may be, for such Estimation Period or taxable year, as the case may be,
and (y) the Applicable Tax Percentage reduced by (B) to the extent not
previously taken into account, any income tax benefit attributable to LVSI or
Venetian, as the case may be, which could be utilized (without regard to the
actual utilization) by its members or shareholders, as the case may be, in the
current or prior taxable year, or portion thereof, commencing on or after the
Closing Date (including any tax losses or tax credits), computed at the
Applicable Tax Percentage of the year that such benefit is taken into account
for purposes of this computation; provided, however, that, the computation of
Tax Amount shall also take into account (C) the deductibility of state and local
taxes for federal income tax purposes, and (D) any difference in the Applicable
Tax Percentage resulting from the nature of taxable income (such as capital gain
as opposed to ordinary income).
"Tax Amounts CPA" means a nationally recognized certified public
accounting firm.
"Third-Party Account Agreement" means that certain Third-Party
Account Agreement dated as of the date hereof entered into among Lender, Xxxxxxx
and Xxxxxxx Xxxxx & Co., substantially in the form of Exhibit O hereto.
"Title Company" means Lawyers Title of Nevada, Inc. or an
Affiliate thereof and/or one or more other title insurance companies reasonably
satisfactory to Lender.
"Total Gross Revenue" shall mean, for any specified projected
period, the entire amount of fixed rental with respect to space in the Mall as
to which written, binding, fully executed leases have been signed plus the
amount of variable rent for such space in the Mall projected based on historical
levels of percentage rents yield pursuant to existing leases the term of which
extends through the projected period.
"Tranche A Commitment" means the commitment of Lender to make
Tranche A Loans as set forth in subsection 2.1A.
38
"Tranche A Loan" means the loans made under the Tranche A
Commitment in an aggregate principal amount of up to $105,000,000 made by Lender
to Borrowers pursuant to subsection 2.1A.
"Tranche A Take Out Commitment" means the commitment of Permanent
Mall Lender dated as of the date hereof to make a loan to Mall Subsidiary in the
amount of $105,000,000 to take out the Tranche A Loan or any other commitment to
make such a loan that replaces the commitment described above in accordance with
the Tri-Party Agreement.
"Tranche B Collateral" means amounts or securities deposited by
Xxxxxxx in an account to the security interest of Lender pursuant to the terms
of the Tranche B Guaranty and Security Documents.
"Tranche B Commitment" means the commitment of Lender to make
"Tranche B" Loans as set forth in subsection 2.1A.
"Tranche B Guaranty and Security Documents" means the Xxxxxxx
Guaranty, the Collateral Account Agreement and the Third-Party Account
Agreement.
"Tranche B Loan" means the loans made under the Tranche B
Commitment in an aggregate principal amount of up to $35,000,000 made by Lender
to Borrowers pursuant to subsection 2.1A.
"Tranche B Take Out Commitment" means the commitment of Xxxxxxx
contained in the Tri-Party Agreement to enter into and fund a loan to Mall
Subsidiary in the amount of $35,000,000 less amounts drawn under the Xxxxxxx
Guaranty to take out the Tranche B Loan or any other commitment to make such a
loan that replaces the commitment of Xxxxxxx in accordance with the Tri-Party
Agreement.
"Transaction Costs" means the fees, costs and expenses payable by
Borrowers on or before the Closing Date in connection with the transactions
contemplated by the Loan Documents and the Project Documents.
"Tri-Party Agreement" means the agreement between Venetian, LVSI,
Xxxxxxx, the Mall Construction Subsidiary, the Mall Subsidiary, Lender and the
Permanent Mall Lender.
"True-up Amount" means, in respect of a particular taxable
year, an amount determined by the Tax Amounts CPA equal to the difference
between (i) the aggregated Permitted Quarterly Tax Distributions actually
distributed in respect of such taxable year, without taking into
39
account any adjustments to such Permitted Quarterly Tax Distributions made with
respect to any other taxable year (including any adjustment to take into account
a True-up Amount for the immediately preceding taxable year) and (ii) the Tax
Amount permitted to be distributed in respect of such year as determined by
reference to LVSI's Internal Revenue Service Form 1120-S or Venetian's IRS Form
1065 filed for such year; provided, however, that if there is an audit or other
adjustment with respect to a return filed by the LVSI or Venetian (including a
filing of an amended return), upon a final determination or resolution of such
audit or other adjustment, the Tax Amounts CPA shall redetermine the True-up
Amount for the relevant taxable year. The amount equal to the excess, if any, of
the amount described in clause (i) above over the amount described in clause
(ii) above shall be referred to as the "True-up Amount due to LVSI" or the
"True-up Amount due to Venetian", as the case may be and the excess, if any, of
the amount described in clause (ii) over the amount described in clause (i)
shall be referred to as the "True-up Amount due to the shareholders or members."
"True-up Determination Date" means the date on which the Tax
Amounts CPA delivers a statement to the Administrative Agent indicating the
True-up Amount; provided, however, that the True-up Determination Date shall not
be later than 30 days after the occurrence of an event requiring the
determination of the True-up Amount (including, the filing of the federal and
state tax returns or the final determination or resolution of an audit or other
adjustment, as the case may be).
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.
"Venetian" means Venetian Casino Resort, LLC, a Nevada limited
liability company.
"Work Continuation Agreement" means that certain Work
Continuation Agreement for Construction of Sands Venetian Project, Las Vegas,
Nevada dated as of April 10, 1997 between the Construction Manager and the
Building and Construction Trades Council of Southern Nevada and its affiliated
local unions.
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
them in conformity with GAAP. Financial statements and other information
required to be delivered by Borrowers to Lender pursuant to clauses (i), (ii),
(iii) and (xiii) of subsection 5.1 shall be prepared in accordance with GAAP as
in effect at the time of such preparation (and delivered together with the
reconciliation statements
40
provided for in subsection 5.1(v)). 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 4.3.
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
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 6.12 and, while applicable, the Disbursement Agreement.
E. Any reference to a term defined in the Disbursement Agreement
shall have the meaning assigned that term in the Disbursement Agreement whether
or not such agreement remains in effect.
Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 Commitments; Making of Loans; Notes; Maturity.
A. Commitment. Subject to the terms and conditions of this Agreement
and, while in effect, the Disbursement Agreement and in reliance upon the
representations and warranties of Borrowers herein set forth and, while in
effect, the representations and warranties set forth in the Disbursement
Agreement, Lender hereby agrees to make the Loans described in this subsection
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2.1A. Lender agrees to lend to Borrowers from time to time during the period
from the Closing Date to but excluding the Commitment Termination Date an
aggregate amount not exceeding the aggregate amount of the Commitment to be used
for the purposes identified in subsection 2.5A. The amount of Lender's
Commitment is $105,000,000 under the Tranche A Commitment and $35,000,000 under
the Tranche B Commitment, with any Loans made by Lender to Borrowers pursuant to
this Agreement being deemed to be made pursuant to the Tranche B Commitment up
to the full amount of the Tranche B Commitment before any Loans are deemed to be
made pursuant to the Tranche A Commitment; provided that the Commitment of
Lender shall be adjusted to give effect to any assignments of the Loan or
Commitment pursuant to subsection 8.1; and provided, further that the amount of
the Commitment shall be reduced from time to time by the amount of any
reductions thereto made pursuant to subsections 2.4A or 2.4B. Amounts borrowed
under this subsection 2.1A and subsequently repaid or prepaid may not be
reborrowed.
B. Maturity. Subject to the conditions set forth in this subsection 2.1B
and subject to earlier acceleration, the Obligations shall be due and payable on
the Primary Maturity Date, provided that Borrowers shall have one (1) option to
extend the term of the Loans to the Extended Maturity Date, subject to the
satisfaction of the following conditions:
(i) Not less than thirty (30) nor more than sixty (60) days prior
to the Primary Maturity Date, all, and not less than all Borrowers shall
provide Lender with written notice of their election to extend the term
of the Loan (the "Extension Election Notice");
(ii) Borrowers shall have paid to Lender on or before the Primary
Maturity Date in immediately available funds the Extension Fee described
in subsection 2.3A;
(iii) At all times between the time the Extension Election Notice
is given and the Primary Maturity Date, no Event of Default or Potential
Event of Default shall have occurred and be continuing;
(iv) The Mall Parcel shall have been created prior to the Primary
Maturity Date;
(v) There shall be written, binding and fully executed, leases of
space in the Mall resulting in a Deemed Debt Service Coverage Ratio of
not less than 1.25 on the Tranche A Loan; and
(vi) There shall be no default under the Tranche A Take Out
Commitment, Tranche B Take Out Commitment and the Tranche B Guaranty and
Security Documents
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and each such agreement shall be in full force and effect and
unmodified except for modifications expressly and specifically
consented to in writing by Lender and each such agreement shall
not have expired or terminated prior to the Extended Maturity
Date.
C. Borrowing Mechanics. Whenever Borrowers desire Lender to make
Loans they shall deliver in accordance with and pursuant to the terms of
subsection 2.5 of the Disbursement Agreement such Advance Requests and Notices
of Funding Requests in the form, at the times and as required thereunder.
Notwithstanding the foregoing, in no case shall Lender have any obligation to
make Loans unless required pursuant to the Disbursement Agreement.
Borrowers shall notify Lender and Disbursement Agent prior to the
funding of any Loans in the event that any of the matters to which Borrowers are
required to certify in connection with the applicable Advance Request and Notice
of Funding Request is no longer true and correct as of the applicable Funding
Date, and the acceptance by Borrowers of the proceeds of any Loans shall
constitute a re-certification by Borrowers, as of the applicable Funding Date,
as to the matters to which Borrowers are required to certify in the applicable
Advance Request and Notice of Funding Request.
A Final Notice of Funding Request for a Loan shall be irrevocable
on and after the related Rate Adjustment Date, and Borrowers shall be bound to
make a borrowing in accordance therewith; provided that, in the event a Stop
Funding Notice is delivered with respect to any proposed Loans after delivery of
a Notice of Funding Request with respect thereto, Lender shall not make such
Loans, provided further that Borrower shall be obligated to make any payments
due pursuant to subsection 2.6 as a result thereof.
D. Disbursement of Funds. Upon satisfaction or waiver of the
conditions precedent specified in subsections 3.1 (in the case of Loans made on
the Closing Date) and 3.2 (in the case of all Loans), as evidenced by an Advance
Confirmation Notice issued by the Disbursement Agent, Lender shall make the
aggregate amount of the requested Loans available to the Disbursement Agent in
the Collection Account as required pursuant to the Disbursement Agreement on the
applicable Funding Date and the Disbursement Agent shall then make the proceeds
of such Loans available to Borrowers in accordance with and upon fulfillment of
conditions set forth in the Disbursement Agreement and in so doing Loans in such
amounts shall be deemed made to Borrowers hereunder.
In the event that the proceeds of any Loans are not disbursed by
the Disbursement Agent on the applicable Funding Date, the proceeds of such
Loans shall be held by the Disbursement Agent or returned to Lender in
accordance with the provisions set forth in the
43
Disbursement Agreement; provided, however that the proceeds of such Loans shall
continue to bear interest and be repayable in accordance with the provisions set
forth in this Agreement. In the event that Lender receives a Stop Funding Notice
from the Disbursement Agent in accordance with and pursuant to the terms of the
Disbursement Agreement, Lender shall have no obligation to advance the Loans and
no Loans already provided to the Collection Account (i) before issuance of the
Stop Funding Notice and (ii) before such Loans are drawn by Borrowers or
disbursed by Disbursement Agent to Borrowers, shall be made available to
Borrowers.
E. Statements. Lender shall record on its internal records the
amount of each Loan made by it and each payment in respect thereof. Any such
recordation shall be conclusive and binding on Borrowers, absent manifest error;
provided that failure to make any such recordation, or any error in such
recordation, shall not affect Lender's Commitment or Obligations in respect of
any applicable Loans.
F. Notes. Borrowers shall execute and deliver on the Closing Date
to Lender (i) a Tranche A Note in substantially the form of Exhibit M-1 hereto
to evidence the Loans, in the principal amount of $105,000,000 and with other
appropriate insertions; and (ii) a Tranche B Note in substantially the form of
Exhibit M-2 hereto to evidence the Loans, in the principal amount of $35,000,000
and with other appropriate insertions.
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 of interest equal to the Adjustable Rate.
B. Interest Payments. Subject to the provisions of subsection
2.2C, interest on each Loan shall be payable monthly in arrears on the last
Business Day of each calendar month, upon any prepayment of the Loans (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity).
C. 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 five hundred (500) basis points per annum in excess of
the interest rate otherwise payable under this Agreement with respect to the
applicable Loans. Payment or acceptance of the increased rates of interest
provided for in this subsection 2.2C shall not be a
44
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
Lender.
D. Computation of Interest. Interest on the Loans shall be
computed on the basis of a 360-day year 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 shall be included, and the date of payment of such
Loan 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, and provided
further that interest shall be paid on the date of the payment of a Loan if
payment is received after 12:00 noon Chicago time.
2.3 Fees.
A. Commitment Fees. Borrowers agree to pay to Lender, as
consideration of the opening of and for the making of the Loans, a commitment
fee, which shall be earned and payable in full upon the Closing Date, in the
amount of $2,100,000, to be allocated as set forth in a separate fee agreement
between Borrowers, Lender and Xxxxxxx, Xxxxx & Co. In addition, in the event
that Borrowers elect to extend the term of the Loans pursuant to subsection 2.1,
Borrowers agree to pay Lender an additional fee (the "Extension Fee"), payable
on or before the Primary Maturity Date, in the amount of $350,000.
B. Other Fees. Borrowers agree to pay to Lender such other fees
in the amounts and at the times separately agreed upon between Borrowers and
Lender.
2.4 Prepayments; General Provisions Regarding Payments; Application
of Proceeds of Collateral and Payments Under Intermediate Holding
Company Guaranty.
A. Prepayments. Borrowers may, upon not less than three Business
Days' prior written or telephonic notice given to Lender by 12:00 Noon (Chicago
time) on the date required and, if given by telephone, promptly confirmed in
writing to Lender, 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 Borrowers shall pay any amount payable pursuant to subsection 2.6, and
provided, further, that no such prepayment shall reduce the commitment fees
provided for in subsection 2.3. 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.
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Any such voluntary prepayment shall be applied as specified in subsection
2.4C(ii). Any prepayments shall be applied first to outstanding principal and
interest and other amounts owed under the Tranche A Loans and second to
outstanding principal and interest and other amounts owed under the Tranche B
Loans.
B. Mandatory Prepayments and Mandatory Reduction of Commitment.
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/or reductions to be applied as set forth below or as
more specifically provided in subsection 2.4C:
(i) Prepayments and Reductions From Net Asset Sale Proceeds. No
later than the first Business Day following the date of receipt by
Borrowers or any of their 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 Project or of construction
equipment having a fair market value not in excess of $4,000,000 prior
to Completion Date or during the first year following Completion Date,
but only in each case to the extent reinvested in the business of
Borrowers or such Subsidiary within 180 days of receipt), Borrowers
shall prepay the Loans and/or the Commitment shall be permanently
reduced in an aggregate amount equal to such Net Asset Sale Proceeds.
(ii) Prepayments and Reductions from Net Loss Proceeds and
Liquidated Damages. No later than the second Business Day on which Loss
Proceeds or Liquidated Damages are required to be applied to prepayment
of Loans under subsection 5.20 of the Disbursement Agreement, Article X,
sections 5 and 12 of the Cooperation Agreement or Article XII, section 8
of the Cooperation Agreement (as applicable), Borrowers shall prepay the
Loans and/or the Commitment shall be permanently reduced in an amount
equal to the Loss Proceeds or Liquidated Damages, as applicable,
available for such application under subsection 5.20 of the Disbursement
Agreement, Article X, sections 5 and 12 of the Cooperation Agreement or
Article XII, section 8 of the Cooperation Agreement (as applicable) but
not exceeding that portion thereof determined to be payable to Lender in
accordance with Section 4.5 of the Intercreditor Agreement.
(iii) Prepayments and Reductions Due to Issuance Debt or Equity.
On the first Business Day following the date of receipt by Borrowers or
any of their Subsidiaries, of the proceeds (including Cash, real
property or other property) (any such proceeds, net of underwriting
discounts and commissions and other reasonable costs and expenses
associated therewith, including reasonable legal fees and expenses,
being "Net
46
Proceeds") from the issuance of any debt or equity of Borrowers or any
of their Subsidiaries (other than any debt expressly permitted under
subsection 6.1 and any equity issuances to employees of Borrowers upon
exercise of options issued pursuant to employment agreements and option
plans as in effect on the Closing Date), Borrowers shall prepay the
Loans and/or the Commitment shall be permanently reduced in an aggregate
amount equal to (i) in the case of any equity issuance, 75% of such Net
Proceeds and (ii) in the case of any debt, 100% of such Net Proceeds.
Notwithstanding the foregoing, (y) Borrowers shall not be required to
prepay the Loans and/or reduce Commitment from any proceeds (including
Cash, real property or other property), of equity contributions from, or
equity issuances to, Xxxxxxx or any of his Affiliates (other than the
Subsidiaries) to LVSI or Venetian or used for the expansion or
improvement of the Project or to pay operating costs with respect
thereto and (z) any portion of the Net Proceeds of equity issuances not
required to be applied to prepay the Loans and/or to reduce the
Commitment shall, in any event, be used for the expansion or improvement
of the Project or to pay operating costs with respect thereto.
(iv) Calculations of Net Proceeds Amounts; Additional Prepayments
and Reductions Based on Subsequent Calculations. Concurrently with any
prepayment of the Loans and/or if applicable the reduction of
Commitments pursuant to subsections 2.4B(i)-(iii), Borrowers shall
deliver to Lender an Officers' Certificate demonstrating
the calculation of the amount (the "Net Proceeds Amount") of the
applicable Net Asset Sale Proceeds or Loss Proceeds or Liquidated
Damages, Net Proceeds (as such terms are defined in subsections
2.4B(iii)), or the amount of the subsidiary distribution or other
amounts, as the case may be, that gave rise to such prepayment and/or
reduction. In the event that Borrowers shall subsequently determine that
the actual Net Proceeds Amount was greater than the amount set forth in
such Officers' Certificate, Borrowers shall promptly make an additional
prepayment of the Loans (and/or, if applicable, the Commitment shall be
permanently reduced) in an amount equal to the amount of such excess,
and Borrowers shall concurrently therewith deliver to Lender an
Officers' Certificate demonstrating the derivation of the additional Net
Proceeds Amount resulting in such excess.
C. Application of Prepayments and Unscheduled Reductions of
Commitment.
Any voluntary prepayments and any amount required to be applied
as a mandatory prepayment of the Loans and/or a reduction of the
Commitment pursuant to subsections 2.4B(i)-(iv) pursuant to subsection
2.4A shall be applied first to repay the outstanding Tranche A Loan to
the full extent thereof, then to repay the outstanding Tranche B Loan.
47
D. General Provisions Regarding Payments.
(i) Manner and Time of Payment. All payments by Borrowers 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 Lender not later than 12:00 Noon (Chicago time) on the date
due at the Funding and Payment Office for the account of Lender; funds
received by Lender after that time on such due date shall be deemed to
have been paid by Borrowers on the next succeeding Business Day.
Borrowers hereby authorize Lender to charge the Loans in order to cause
timely payment to be made to Lender 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 and in accordance with
subsection 2.4A.
(iii) 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.
(iv) Notation of Payment. Lender agrees that before disposing of
any Note held by it, or any part thereof (other than by granting
participations therein), that Lender will make a notation thereon of all
Loans evidenced by that Note and all principal payments previously made
thereon and of the date 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 Borrowers 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. Use of Loans for Project. The proceeds of the Loans shall be applied
by Borrowers to fund the development and construction of the Project and costs
and expenses
48
incurred by Borrowers in connection with the transactions contemplated hereby,
all pursuant to the Disbursement Agreement.
B. Margin Regulations. No portion of the proceeds of any borrowing under
this Agreement shall be used by Borrowers or any of their Subsidiaries in any
manner that might cause the borrowing or the application of such proceeds to
violate Regulation G, 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 Breakage Fees. Notwithstanding any other provision of this Agreement to the
contrary, Borrowers shall compensate Lender, upon written request by Lender
(which request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including any interest paid by
Lender to lenders of funds borrowed by it to make or carry its Loans and any
loss, expense or liability sustained by Lender in connection with the
liquidation or re-employment of such funds) which Lender may sustain: (i) if for
any reason (other than a default by Lender) a borrowing of any Loan does not
occur on a date specified therefor in an Advance Request and/or Notice of
Funding Request, (ii) if any prepayment (including any prepayment pursuant to
subsection 2.4C(i)) or other principal payment occurs on a date prior to the
Rate Adjustment Date, (iii) if any prepayment of any of its Loans is not made on
any date specified in a notice of prepayment given by Borrowers, or (iv) as a
consequence of any other default by Borrowers in the repayment of its Loans when
required by the terms of this Agreement. Calculation of all amounts payable to
Lender under this subsection 2.6 and under subsection 2.7A shall be made as
though Lender had actually funded each of its relevant Loans through the
purchase of a deposit bearing interest at the Index rate and having a thirty
(30) day maturity and through the transfer of such deposit from an offshore
office of Lender to a domestic office of Lender in the United States of America;
provided, however, Lender may fund each of its 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.
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 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
49
effective after the date hereof, or compliance by 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 Lender (or its applicable lending office) to any
additional Tax (other than any Tax on the overall net income of Lender)
with respect to this Agreement or any of its obligations hereunder or
any payments to 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 or similar requirement against assets
held by 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 Lender; or
(iii) imposes any other condition (other than with respect to a
Tax matter) on or affecting Lender (or its applicable lending office) or
its obligations hereunder or the interbank market;
and the result of any of the foregoing is to increase the cost to Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by Lender (or its applicable lending office) with respect
thereto; then, in any such case, Borrowers shall promptly pay to 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 Lender in its sole discretion shall
determine) as may be necessary to compensate Lender for any such increased cost
or reduction in amounts received or receivable hereunder. Lender shall deliver
to Borrowers a written statement, setting forth in reasonable detail the basis
for calculating the additional amounts owed to 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 Borrowers
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 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
50
which a payment is made by or on behalf of Borrowers 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 Borrowers 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 Borrowers to Lender
under any of the Loan Documents:
(a) Borrowers shall notify Lender of any such requirement
or any change in any such requirement as soon as Borrowers become
aware of it;
(b) Borrowers 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 Borrowers) for its own
account or (if that liability is imposed on Lender) on behalf of
and in the name of Lender;
(c) the sum payable by Borrowers 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, Lender 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, Borrowers shall
deliver to Lender satisfactory evidence 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
Lender under clause (c) above except to the extent that any change after
the date hereof (in the case of Lender) or after the date of the
Assignment Agreement pursuant to which 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, as the case may be, in respect of payments to
Lender.
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(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 Borrowers, or on
or prior to the date of the Assignment Agreement pursuant to
which it becomes a Lender, and at such other times as may be
necessary in the determination of Borrowers (in the reasonable
exercise of their discretion), (1) two original copies of
Internal Revenue Service Form 1001 or 4224 (or any successor
forms), properly completed and duly executed by such Lender,
together with any other certificate or statement of exemption
required under the Internal Revenue 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 Internal Revenue 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-8 (or any
successor form), properly completed and duly executed by such
Lender, together with any other certificate or statement of
exemption required under the Internal Revenue 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 such Lender shall
promptly (1) deliver to Borrowers 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-8, 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
52
(2) notify Borrowers of its inability to deliver any such forms,
certificates or other evidence.
(c) Borrowers 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 date of the
Assignment Agreement pursuant to which it became a Lender,
nothing in this subsection 2.7B(iii)(c) shall relieve Borrowers
of their 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 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 by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by 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 Lender or any
corporation controlling Lender as a consequence of, or with reference to,
Lender's Loans or Commitments or participations therein or other obligations
hereunder with respect to the Loans to a level below that which 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 Lender or such controlling corporation with regard
to capital adequacy), then from time to time, within five Business Days after
receipt by Borrowers from Lender of the statement referred to in the next
sentence, Borrowers shall pay to Lender such additional amount or amounts as
will compensate Lender or such controlling corporation on an after-tax basis for
such reduction. Lender shall deliver to Borrowers 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.
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2.8 Obligation of Lender to Mitigate.
Lender agrees that, as promptly as practicable after the officer of
Lender responsible for administering the Loans becomes aware of the occurrence
of an event or the existence of a condition that would entitle Lender to receive
payments under subsection 2.7, it will, to the extent not inconsistent with the
internal policies of Lender and any applicable legal or regulatory restrictions,
use reasonable efforts (i) to make, issue, fund or maintain the Commitment
through another lending office of Lender or (ii) take such other measures as
Lender may deem reasonable, if as a result thereof the circumstances which would
entitle Lender to receive payments under subsection 2.7 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
Lender in its sole discretion, the making, issuing, funding or maintaining of
such Commitment or Loan through such other lending office or in accordance with
such other measures, as the case may be, would not otherwise materially
adversely affect such Commitment or Loan or the interests of Lender provided
that Lender will not be obligated to utilize such other lending office pursuant
to this subsection 2.8 if 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 Borrowers pursuant
to this subsection 2.8 (setting forth in reasonable detail the basis for
requesting such amount) submitted by Lender to Borrowers (with a copy to
Disbursement Agent) shall be conclusive absent manifest error. Lender agrees
that it will not request compensation under subsection 2.7 unless Lender
requests compensation from borrowers under other lending arrangements with
Lender who are similarly situated.
2.9 Obligations Joint and Several.
Anything herein to the contrary notwithstanding, each Borrower hereby
agrees and acknowledges that the obligation of each Borrower for payment of the
Obligations shall be joint and several with the obligations of the other
Borrower hereunder regardless of which Borrower actually receives the proceeds
or benefits of any borrowing hereunder. Each Borrower hereby agrees and
acknowledges that it will receive substantial benefits from the Loans and credit
facilities made available under this Agreement.
Each Borrower agrees that its joint and several obligation to pay all
Obligations hereunder is irrevocable, absolute, independent and unconditional
and shall not be affected by any circumstance which constitutes a legal or
equitable discharge of a guarantor or surety other than the indefeasible payment
in full of the Obligations, and the liability of each Borrower with respect to
the Obligations shall not be affected, reduced or impaired by (i) consideration
of the amount of proceeds of the Loans received by any Borrower relative to the
aggregate amount of the Loans, (ii) the dissolution or termination of or any
increase, decrease or change in personnel
54
of, Borrower, (iii) the insolvency or business failure of, or any assignment for
the benefit of creditors by, or the commencement of any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceedings by or
against the other Borrower or (iv) the appointment of a receiver for, or the
attachment, restraint of or making or levying of any order of court or legal
process affecting, the property of the other Borrower. Each Borrower agrees that
a separate action or actions may be brought and prosecuted against such Borrower
whether or not action is brought against the other Borrower and whether or not
the other Borrower is joined in any such action or actions. Either Borrower's
payment of a portion, but not all, of the Obligations shall in no way limit,
affect, modify or abridge such Borrower's liability for that portion of the
Obligations which is not paid.
Each Borrower hereby waives any right to require Lender, as a condition
of payment or performance of the Obligations by such Borrower, to proceed
against the other Borrower or any other Person, to exhaust any security held
from any Borrower, or pursue any other remedy in the power of Lender. Each
Borrower hereby waives any defense arising by reason of incapacity, lack of
authority or any disability or other defense that may be available to the other
Borrower and any defenses or benefits that may be derived or afforded by law
which would limit the liability of or exonerate any guarantor or surety with
respect to the obligations, or which may conflict with the terms and provisions
of this Agreement, other than the indefeasible payment in full of the
Obligations.
Any indebtedness of a Borrower now or hereafter held by the other
Borrower is hereby subordinated in right of payment to the Obligations, and any
such indebtedness of a Borrower to the other Borrower collected or received by
such other Borrower after an Event of Default has occurred and is continuing
shall be held in trust for Lender and shall forthwith be paid over to Lender to
be credited and applied against the Obligations but without affecting, impairing
or limiting in any manner the liability of such other Borrower under any other
provision of this Agreement.
Section 3. CONDITIONS TO LOANS
The obligation of Lender to make Loans hereunder is subject to
the satisfaction of the following conditions.
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3.1 Conditions to Initial Loans.
The obligation of Lender to make the initial Loan, in addition to each
of the conditions precedent specified in Section 3.1 of the Disbursement
Agreement and subsection 3.2 herein, is subject to prior or concurrent
satisfaction of the following conditions:
A. Mall Lease; Deeds of Trust; Mortgage Policy; Etc. Lender shall have
received from Borrowers:
(i) Evidence that Venetian and Mall Construction Subsidiary shall
have entered into the Mall Lease and that the Mall Lease, or a
memorandum thereof, has been duly recorded in the appropriate filing or
recording office in the jurisdiction in which the Mortgaged Property is
located or that the Mall Lease or a memorandum thereof has been
irrevocably delivered to Title Company for such recordation.
(ii) Deeds of Trust. A fully executed and notarized Deed of Trust
and a fully executed and notarized Leasehold Deed of Trust, each duly
recorded in the appropriate filing or recording office in Xxxxx County,
Nevada or evidence that such Deed of Trust and Leasehold Deed of Trust
have been irrevocably delivered to the Title Company for such
recordation.
(iii) Title Insurance. (a) A 1970 (amended October 17, 1970) ALTA
mortgagee title insurance policy or policies or unconditional commitment
therefor (the "Mortgage Policy") in the form of Exhibit P hereto issued
by the Title Company with respect to the Mortgaged Property in an amount
not less than the maximum aggregate amount of the Commitment, insuring a
valid leasehold interest in the Mall Lease vested in Mall Construction
Subsidiary and insuring, Lenders interest in the fee space of the Mall
for the benefit of Lender, that the Deed of Trust creates valid and
enforceable First Priority deed of trust Lien on the Mortgaged Property,
subject only to Permitted Liens and that the Leasehold Deed of Trust
creates a valid and enforceable deed of trust lien on or in the Mall
Construction Subsidiary's leasehold interest under the Mall Lease
subject only to Permitted Liens, which Mortgage Policy (1) shall include
an endorse ment for mechanics' liens, for future advances under this
Agreement and for any other matters reasonably requested by, (2) shall
provide for affirmative insurance and such reinsurance as Lender may
reasonably request, all of the foregoing in form and substance
satisfactory to Lender and (3) shall not have a creditor's rights
exception; and (b) evidence reasonably satisfactory to Lender that
Borrowers have or have caused to be (i) delivered to the Title Company
all certificates and affidavits required by the Title Company in
connection with
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the issuance of the Mortgage Policy and (ii) 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 and the Leasehold Deed of Trust in the appropriate real estate
records;
(iv) Copies of Documents Relating to Title Exceptions. Copies of
all recorded documents listed as exceptions to title or otherwise
referred to in the Mortgage Policy;
(v) Matters Relating to Flood Hazards. (a) 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 Venetian and
Mall Construction Subsidiary of receipt of written notification from
Lender (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 Borrowers 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; and
(vi) Environmental Indemnity. An environmental indemnity
agreement, in the form of Exhibit Q hereto, with respect to the
indemnification of Lender for any liabilities that may be imposed on or
incurred by it as a result of any Hazardous Materials Activity.
B. Security Interests in Personal and Mixed Property. Lender shall have
received evidence reasonably satisfactory to it that Borrowers shall have taken
or caused to be taken all such 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 (other than the filing or
recording of items described in clauses (iii) and (iv) below) that may be
necessary or, in the reasonable opinion of Lender, desirable in order to create
in favor of Lender, a valid and (upon such filing and recording) perfected First
Priority security interest in the entire personal and mixed property Collateral.
Such actions shall include the following:
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(i) Schedules to Collateral Documents. Delivery to Lender of
accurate and complete schedules to all of the applicable Collateral
Documents.
(ii) Lien Searches and UCC Termination Statements. Delivery to
Lender of (a) the results of a recent search, by a Person reasonably
satisfactory to Lender, of 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
(iii) UCC Financing Statements and Fixture Filings. Delivery to
Lender of 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 reasonable opinion of
Lender, desirable to perfect the security interests created in such
Collateral pursuant to the Collateral Documents.
C. Solvency Assurances. On the Closing Date, Lender shall have received
a Financial Condition Certificate from Borrowers dated the Closing Date,
substantially in the form of Exhibit R 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, Borrowers will be Solvent.
D. Opinions of Counsel to Borrowers. Lender and its counsel shall have
received (i) originally executed copies of one or more favorable written
opinions of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, counsel for Borrowers and
their Subsidiaries, and (ii) originally executed copies of one or more favorable
written opinions of Xxxxxx Xxxxxx & Xxxxxxx, Nevada counsel for Borrowers and
their Subsidiaries, each in form and substance reasonably satisfactory to Lender
and its counsel, dated as of the Closing Date and setting forth substantially
the matters in the opinions designated in Exhibits S and T hereto, respectively,
and as to such other matters as Lender may reasonably request. Borrowers hereby
acknowledge and confirm that they have requested such counsel to deliver such
opinions to Lender.
E. Fees. Borrowers shall have paid to Lender, the fees payable on the
Closing Date referred to in subsection 2.3.
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F. 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
Lender and its counsel shall be reasonably satisfactory in form and substance to
Lender and such counsel, and Lender and such counsel shall have received all
such counterpart originals or certified copies of such documents as Lender may
reasonably request.
G. Conditions to Initial Advances Under Disbursement Agreement. Each of
the conditions set forth in Article 3.1 of the Disbursement Agreement shall have
been satisfied in form and substance reasonably satisfactory to Lender.
H. Take Out Agreements. Lender shall be satisfied in its sole discretion
that: (a) the Tranche A Take Out Commitment shall have been executed and
delivered and is in full force and effect; and (b) the Tranche B Take Out
Commitment has been executed and delivered and is in full force and effect; and
(c) the Tranche B Guaranty and Security Documents have been executed and
delivered and are in full force and effect and Xxxxxxx has deposited all amounts
required pursuant thereto.
3.2 Conditions to Subsequent Advances.
The obligation of Lender to make any subsequent Loans is subject
to Lender having received before the Funding Date, an Advance Confirmation
Notice in accordance with the provisions of the Disbursement Agreement.
Section 4. BORROWERS' REPRESENTATIONS AND WARRANTIES
In order to induce Lender to enter into this Agreement and to
make the Loans, Borrowers represent and warrant to Lender that, on the Closing
Date, the following statements are true, correct and complete:
4.1 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 4.1A
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
59
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 Borrowers. The equity interests in each of Borrowers is
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 4.1C correctly sets forth the ownership of each Borrower.
D. Subsidiaries. All of the Subsidiaries of Borrowers are identified in
Schedule 4.1D hereto. The equity interests of each of the Subsidiaries of
Borrowers identified in Schedule 4.1D hereto is duly authorized, validly issued
and (if applicable), fully paid and nonassessable and none of such equity
interests constitutes Margin Stock. Each of the Sub sidiaries of Borrowers
identified in Schedule 4.1D hereto is a corporation or limited liability company
duly organized, validly existing and in good standing under the laws of its
respective jurisdiction of organization set forth therein, has all requisite
corporate or limited liability company power and authority to own and operate
its properties and to carry on its business as now conducted and as proposed to
be conducted, and 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, in each case except where failure to be so
qualified or in good standing or a lack of such corporate power and authority
has not had and will not have a Material Adverse Effect. Schedule 4.1D hereto
correctly sets forth the ownership interest of Borrowers and each of its
Subsidiaries in each of the Subsidiaries of Borrowers identified therein.
E. Rights to Acquire Equity. There are no options, warrants, convertible
securities or other rights to acquire any equity interests in any Borrower or
any of their Subsidiaries (other than Phase II Subsidiary) except as set forth
as Schedule 4.1E.
F. Conduct of Business. Borrowers and their Subsidiaries (other than the
Mall Subsidiary and Phase II Subsidiary) are engaged only in the businesses
permitted to be engaged in pursuant to subsections 6.11.
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4.2 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 the 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 any of their Subsidiaries,
Borrowers or any of their Subsidiaries, (b) the Certificate or Articles of
Incorporation, Bylaws or operating agreements of Borrowers or any of their
Subsidiaries or (c) any order, judgment or decree of any court or other agency
of government binding on Borrowers or any of their Subsidiaries, (ii) conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default under any Con tractual Obligation of Borrowers or any of their
Subsidiaries (iii) result in or require the creation or imposition of any Lien
upon any of the properties or assets of Borrowers or any of their Subsidiaries
(other than any Liens created under any of the Loan Documents in favor of
Lender), or (iv) require any approval of stockholders or any approval or consent
of any Person under any Contractual Obligation of Borrowers or any of their
Subsidiaries except for such approvals or consents which will be obtained on or
before the Closing Date and disclosed in writing to Lender, 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 bank ruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting credi tors' rights generally
or by equitable principles relating to enforceability, whether brought in a
proceeding in equity or at law.
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E. Valid Issuance of Bank Notes, Mortgage Notes and Subordinated Notes.
Borrowers have the corporate or limited liability company power and authority to
issue the Bank Notes, Mortgage Notes and the Subordinated Notes. The Bank Notes,
Mortgage Notes and the Subordinated Notes, when issued and paid for, will be the
legally valid and binding obligations of Borrowers, enforceable against
Borrowers in accordance with their 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. The issuance and sale of Bank Notes, Mortgage Notes and the
Subordinated Notes, either (a) have been registered or qualified under
applicable federal and state securities laws or (b) are exempt therefrom. The
Loans and all other monetary Obligations hereunder are and will be within the
definition of Senior Debt included in such provisions.
4.3 Financial Condition.
Borrowers have heretofore delivered to Lender, at Lender's request, the
following financial statements and information: (i) the audited consolidated and
consolidating balance sheets of LVSI and its Subsidiaries as at December 31,
1996 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, 1997 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, Borrowers do 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
Borrowers and their Subsidiaries taken as a whole.
4.4 No Material Adverse Change; No Restricted Junior Payments.
Since June 30, 1997, 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
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in Schedule 4.4, neither of Borrowers nor any of their 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 6.5 and the repayment of the Interim Construction Loan
on the Closing Date.
4.5 Title to Properties; Liens; Real Property.
A. Title to Properties; Liens. Borrowers and their 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 4.3 or in the most recent financial statements delivered pursuant to
subsection 5.1, 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 6.6. Except as permitted by this Agreement, all such
properties and assets are held free and clear of Liens.
B. Real Property. As of the Closing Date, Schedule 4.5 hereto
contains a true, accurate and complete list of (i) all material properties owned
by Borrowers or any of their 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 Borrowers or any of their 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 4.5 hereto, each agreement listed in clause (ii)
of the immediately preceding sentence is in full force and effect and Borrowers
do 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.
4.6 Litigation; Adverse Facts.
Except as set forth in Schedule 4.6 hereto, there are no actions,
suits, proceedings, arbitrations or governmental investigations (whether or not
purportedly on behalf of Borrowers or any of their 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
63
or foreign (including any Environmental Claims) that are pending or, to the
knowledge of Borrowers, threatened against or affecting Borrowers or any of
their Subsidiaries or any property of Borrowers or any of their Subsidiaries and
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect. Neither Borrowers nor any of their 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.
4.7 Payment of Taxes.
Except to the extent permitted by subsection 5.3, all tax returns and
reports of Borrowers 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 Borrowers and upon their
respective properties, assets, income, businesses and franchises which are due
and payable have been paid when due and payable. Borrowers know of no proposed
tax assessment against Borrowers or any of their Subsidiaries which is not being
actively contested by Borrowers 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.
4.8 Performance of Agreements; Materially Adverse Agreements; Material
Contracts.
A. Neither Borrowers nor any of their Subsidiaries is in default in the
performance, observance or fulfillment of any of the Contractual 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 4.8 contains a true, correct and complete list of all the
Material Contracts in effect on the Closing Date. Except as described on
Schedule 4.8, all such Material Contracts are, to the knowledge of Borrowers, in
full force and effect and no material defaults currently exist thereunder.
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4.9 Governmental Regulation.
Neither Borrowers nor any of their 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.
4.10 Securities Activities.
Neither Borrowers nor any of their 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.
4.11 Employee Benefit Plans.
A. Borrowers, each of their 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 Internal Revenue 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
Internal Revenue Code or except as set forth in Schedule 4.11 hereto, no
Employee Benefit Plan provides health or welfare benefits (through the purchase
of insurance or otherwise) for any retired or former employee of Borrowers, any
of their 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.
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E. As of the most recent valuation date for each Multiemployer
Plan for which the actuarial report is available, the potential liability of
Borrowers, their 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.
4.12 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 except
as set forth on Schedule 4.12 (other than fees payable to Lender under
subsection 2.3 and fees payable to the Permanent Mall Lender), and each Borrower
hereby indemnifies Lender against, and agrees that it will hold Lender 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.
4.13 Environmental Protection.
Except as set forth in Schedule 4.13 hereto:
(i) neither Borrowers nor any of their Subsidiaries nor any of
their respective Facilities or operations relating to the Site or the
Project 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 Borrowers nor any of their Subsidiaries has received
any letter or request for information under Section 104 of the
Comprehensive Environmental Response, Compensation, and Liability Act
(42 U.S.C. ss. 9604) or any comparable state law;
(iii) there are and, to Borrowers' knowledge, have been no
conditions, occurrences, or Hazardous Materials Activities on the Site
or any other Facility relating to the Project which could reasonably be
expected to form the basis of an Environmental Claim against Borrowers
or any of their Subsidiaries;
66
(iv) neither Borrowers nor any of their Subsidiaries nor, to
Borrowers' knowledge, any predecessor of Borrowers or any of their
Subsidiaries has filed any notice under any Environmental Law indicating
past or present treatment of Hazardous Materials at any Facility, and
none of Borrowers' or any of their 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 4.13 to the contrary,
no event or condition has occurred or is occurring with respect to Borrowers or
any of their Subsidiaries relating to any Environmental Law, any Release of
Hazardous Materials, or any Hazardous Materials Activity, including any matter
disclosed on Schedule 4.13 hereto, which individually or in the aggregate has
had or could reasonably be expected to have a Material Adverse Effect.
4.14 Employee Matters.
There is no strike or work stoppage in existence or threatened
involving Borrowers that could reasonably be expected to have a Material Adverse
Effect.
4.15 Solvency.
Each Borrower is Solvent.
4.16 Matters Relating to Collateral.
A. Creation, Perfection and Priority of Liens. The execution and
delivery of the Collateral Documents by Borrowers, their Related Parties and
their Affiliates, together with the actions taken on or prior to the date hereof
pursuant to subsections 3.1B and 3.1C are effective to create in favor of
Lender, as security for the respective Secured Obligations (as defined in the
applicable Collateral Document in respect of any Collateral), a valid and
perfected First Priority 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
Lender 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 Lender.
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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 Borrowers of the Liens purported to be created
in favor of Lender pursuant to any of the Collateral Documents or (ii) the
exercise by Lender 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 4.16A or as set forth in Schedule 4.16B.
C. Absence of Third-Party Filings. Except such as may have been filed in
favor of Lender as contemplated by subsection 4.16A or filed to perfect a Lien
permitted under clauses (iii) through (viii) inclusive of subsection 6.2, 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. The Collateral comprises all of the
real estate, personal properties, contract rights and other assets related to
construction and operation of the Mall, as contemplated by the Project. All
information supplied to Lender by or on behalf of Borrowers 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.
Section 5. BORROWERS' AFFIRMATIVE COVENANTS
Borrowers covenant and agree that, so long as the Commitment
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations, unless Lender shall otherwise give its prior written
consent, Borrowers shall perform, and shall cause each of their Subsidiaries to
perform (x) prior to Completion Date, all covenants set forth in Article V of
the Disbursement Agreement and the covenants set forth in subsections 5.3, 5.5,
5.9, 5.11 and 5.12, inclusive, below and (y) on and after Completion Date all
covenants set forth in this Section 5.
5.1 Financial Statements and Other Reports.
Borrowers will maintain a system of accounting established and
administered in accordance with sound business practices to permit preparation
of financial statements in conformity with GAAP. Borrowers will deliver to
Lender:
(i) Monthly Financials: as soon as available and in any event
within 30 days after the end of each month, the consolidated and
consolidating balance sheets of LVSI
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and its Subsidiaries as at the end of such month and the related
consolidated and consolidating statements of income, stockholders'
equity and cash flows of LVSI and its Subsidiaries for such month and
for the period from the beginning of the then current Fiscal Year to the
end of such month, setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous
Fiscal Year and the corresponding figures from the Financial Plan for
the current Fiscal Year, to the extent prepared on a monthly basis, all
in reasonable detail and certified by the chief financial officer of
LVSI, on behalf of LVSI that they fairly present, in all material
respects, the financial condition of LVSI 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.
(ii) Quarterly Financials: as soon as available and in any event
within 60 days after the end of each Fiscal Quarter,
(a) the consolidated and consolidating balance sheets of
LVSI and its Subsidiaries as at the end of such Fiscal Quarter
and the related consolidated and consolidating statements of
income, stockholders' equity and cash flows of LVSI 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 Borrowers that they fairly
present, in all material respects, the financial condition of
LVSI 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,
(b) the consolidated balance sheets of LVSI and its
Subsidiaries as at the end of such Fiscal Quarter and the
related consolidated statements of income, stockholders' equity
and cash flows of LVSI 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 and
the corresponding figures from the Financial Plan for the
current Fiscal Year, all in reasonable detail and certified by
the chief financial officer of LVSI that they fairly present, in
all material respects, the financial condition of LVSI and its
Subsidiaries as at the dates indicated and the results of their
operations and their
69
cash flows for the periods indicated, subject to changes
resulting from audit and normal year-end adjustments;
(c) the consolidated balance sheets of Mall Subsidiary
and its subsidiaries as at the end of such Fiscal Quarter and
the related consolidated statements of income, stockholders'
equity and cash flows of Mall Subsidiary 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 Mall Subsidiary that they fairly present,
in all material respects, the financial condition of Mall
Subsidiary 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
(d) a narrative report describing the operations of LVSI
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) Year-End Financials: as soon as available and in any event
within 90 days after the end of each Fiscal Year,
(a) the consolidated and consolidating balance sheets of
LVSI and its Subsidiaries as at the end of such Fiscal Year and
the related consolidated and consolidating statements of income,
stockholders' equity and cash flows of LVSI and its subsidiaries
for such Fiscal Year, setting forth in each case in compara tive
form the corresponding figures for the previous Fiscal Year, all
in reasonable detail and certified by the chief financial
officer of LVSI that they fairly present, in all material
respects, the financial condition of LVSI and its subsidiaries
as at the dates indicated and the results of their operations
and their cash flows for the periods indicated;
(b) the consolidated balance sheets of LVSI and its
Subsidiaries as at the end of such Fiscal Year and the related
consolidated and consolidating statements of income,
stockholders' equity and cash flows of LVSI and its Subsidiaries
for such Fiscal Year, setting forth in each case in comparative
form the corresponding
70
figures for the previous Fiscal Year and the corresponding
figures from the Financial Plan for the Fiscal Year covered by
such financial statements, all in reasonable detail and
certified by the chief financial officer of LVSI that they
fairly present, in all material respects, the financial
condition of LVSI and its Subsidiaries as at the dates indicated
and the results of their operations and their cash flows for the
periods indicated;
(c) the consolidated balance sheets of Mall Subsidiary
and its subsidiaries as at the end of such Fiscal Year and the
related consolidated statements of income, stockholders' equity
and cash flows of Mall Subsidiary and its subsidiaries for such
Fiscal Year, setting forth in each case in compara tive form the
corresponding figures for the previous Fiscal Year, all in
reasonable detail and certified by the chief financial officer
of Mall Subsidiary that they fairly present, in all material
respects, the financial condition of Mall Subsidiary and its
subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated;
(d) a narrative report describing the operations of LVSI
and its Subsidiaries in the form prepared for presentation to
senior management for such Fiscal Year; and
(e) in the case of such consolidated financial
statements specified in subdivisions (a) to (c) above, a report
thereon of Price Waterhouse LLP or other independent certified
public accountants of recognized national standing selected by
Borrowers and reasonably satisfactory to Lender, 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 LVSI
and its Subsidiaries (including LVSI and its Subsidiaries and
Mall Subsidiary 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' Certificates: together with each delivery of
financial statements of LVSI and its Subsidiaries pursuant to
subdivisions (i), (ii) and (iii) above, an Officers' Certificate of
LVSI stating that the signers have reviewed the terms of this Agreement
71
and have made, or caused to be made under their supervision, a review in
reasonable detail of the transactions and condition of LVSI and its
Subsidiaries (including, to the extent applicable, Mall Subsidiary, Mall
Manager, Mall Direct Holdings, and their respective 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
Borrowers have taken, is taking and proposes to take with respect
thereto;
(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 referred to in subsection 4.3, the
consolidated financial statements of LVSI and its Subsidiaries delivered
pursuant to subdivisions (i), (ii), (iii) or (xiii) of this subsection
5.1 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
(a) together with the first delivery of financial statements pursuant to
subdivision (i), (ii), (iii) or (xiii) of this subsection 5.1 following
such change, consolidated financial statements of LVSI 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;
and (b) together with each delivery of financial statements for LVSI and
its Subsidiaries pursuant to subdivision (i), (ii), (iii) or (xiii) of
this subsection 5.1 following such change, a written statement of the
chief accounting officer or chief financial officer of LVSI setting
forth the differences which would have resulted if such financial
statements had been prepared without giving effect to such change;
(vi) Accountants' Certification: together with each delivery of
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
72
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 that the information contained in the
certificate delivered therewith pursuant to subdivision (iv) above is
not correct;
(vii) Accountants' Reports: promptly upon receipt thereof
(unless restricted by applicable professional standards), copies of all
reports submitted to Borrowers by independent certified public
accountants in connection with each annual, interim or special audit of
the financial statements of LVSI and its subsidiaries made by such
accountants, including any comment letter submitted by such accountants
to management in connection with their annual audit;
(viii) SEC Filings, Press Releases and Other Financial Reports:
promptly upon their becoming available, copies of (a) all financial
statements, reports, notices and proxy statements sent or made available
generally by Borrowers or any of their Subsidiaries to their security
holders, (b) all regular and periodic reports and all registration
statements (other than on Form S-8 or a similar form) and prospectuses,
if any, filed by Borrowers or any of their Subsidiaries with any
securities exchange or with the Securities and Exchange Commission or
any governmental or private regulatory authority, (c) all press releases
and other statements made available generally by Borrowers or any of
their Subsidiaries to the public concerning material develop ments in
the business of Borrowers and their Subsidiaries and (d) any financial
statements and reports concerning any Subsidiaries of Borrowers prepared
for or delivered to any third party lender;
(ix) Events of Default, etc.: promptly upon any officer of
Borrowers obtain ing 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 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 Borrowers and their
Subsidiaries or taken any other action with respect to a claimed default
or event or condition of the type referred to in subsection 7.2, (c) of
any condition or event that would be required to be disclosed in a
current report filed by Borrowers 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 date hereof) if Borrowers 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,
73
default, event or condition, and what action Borrowers have taken, are
taking and propose to take with respect thereto;
(x) Litigation or Other Proceedings: (a) promptly upon any
officer of Borrowers 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 Borrowers and their Subsidiaries, or
any property of Borrowers and their Subsidiaries (collectively,
"Proceedings") not previously disclosed in writing by Borrowers to
Lender 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 Borrowers to enable Lender and its 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, Borrowers or any of their
Subsidiaries equal to or greater than $1,000,000, and promptly after
request by Lender such other information as may be reasonably requested
by Lender to enable Lender 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 Borrowers or any of their
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 Borrowers, any of their Subsidiaries or any of their
respective ERISA Affiliates with the Internal Revenue Service with
respect to each Pension Plan; (b) all notices received by Borrowers or
any of their respective ERISA Affiliates from a Multiemployer Plan
sponsor concerning an
74
ERISA Event; and (c) copies of such other documents or governmental
reports or filings relating to any Employee Benefit Plan as Lender shall
reasonably request;
(xiii) Financial Plans: as soon as practicable and in any event
no later than Completion Date and 30 days prior to the beginning of each
Fiscal Year thereafter, a consolidated and consolidating plan and
financial forecast for such Fiscal Year (or portion thereof from
Completion Date through the end of such Fiscal Year) and each succeeding
Fiscal Year through Maturity Date (the "Financial Plan" for such Fiscal
Years), including (a) forecasted consolidated and consolidating balance
sheets and forecasted consolidated and consolidating statements of
income and cash flows of LVSI and its Subsidiaries for each such Fiscal
Year, together with an explanation of the assumptions on which such
forecasts are based, (b) forecasted consolidated and consolidating
statements of income and cash flows of LVSI and its Subsidiaries for
each month of each such Fiscal Year, together with an explanation of the
assumptions on which such forecasts are based, (c) such other
information and projections as any Lender may reasonably request;
(xiv) 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 Lender outlining all material insurance coverage
maintained as of the date of such report by Borrowers and their
Subsidiaries and all material insurance coverage planned to be
maintained by Borrowers and their Subsidiaries in the immediately
succeeding Fiscal Year;
(xv) Board of Directors: with reasonable promptness, written
notice of any change in the members of the Board of Directors of
Borrowers;
(xvi) New Subsidiaries: promptly upon any Person becoming a
Subsidiary of either of Borrowers, a written notice setting forth with
respect to such Person (a) the date on which such Person became a
Subsidiary of either of Borrowers and (b) all of the data required to be
set forth in Schedule 4.1 hereto with respect to all Subsidiaries of
either of Borrowers (it being understood that such written notice shall
be deemed to supplement Schedule 4.1 hereto for all purposes of this
Agreement);
(xvii) Material Contracts: promptly, and in any event within ten
Business Days after any Material Contract of Borrowers or any of their
Subsidiaries is terminated or amended in a manner that is materially
adverse to Borrowers or any of their 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
75
with copies of such material amendments or new contracts, and an
explanation of any actions being taken with respect thereto;
(xviii) 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 5.12, 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 Lender
by or on behalf of such Loan Party;
(xix) Notices under Operative Documents: promptly upon receipt,
copies of all notices provided to Borrowers or their 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
(xx) Other Information: with reasonable promptness, such other
information and data with respect to Borrowers or any of their
Subsidiaries as from time to time may be reasonably requested by any
Lender.
5.2 Corporate Existence, etc.
Borrowers will, and will cause each of their 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, however that Borrowers and their Subsidiaries may merge or
consolidate as permitted pursuant to subsection 6.6 of this Agreement and
provided, further, that no Borrower nor any such Subsidiary shall be required to
preserve any such right or franchise if the Board of Directors of the applicable
Borrower or Subsidiary (or the managing member thereof, if applicable) shall
determine (and shall so notify Lender) that the preservation thereof is no
longer desirable in the conduct of the business of such Borrower or Subsidiary,
as the case may be, and that the loss thereof is not disadvantageous in any
material respect to Borrowers and their Subsidiaries or Lender.
5.3 Payment of Taxes and Claims; Tax Consolidation.
A. Borrowers will, and will cause each of their 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
76
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. Borrowers will not, nor will they permit any of their
Subsidiaries to, file or consent to the filing of any consolidated income tax
return with any Person (other than Borrowers or any of their Subsidiaries)
unless Borrower and its Subsidiaries shall have entered into, a tax sharing
agreement with such Person, in form and substance satisfactory to Lender.
5.4 Maintenance of Properties; Insurance; Application of Net Loss Proceeds.
A. Maintenance of Properties. Borrowers will, and will cause each
of their 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 Borrowers and their 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 Borrowers determine
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 Borrowers and their
Subsidiaries or Lender.
B. Insurance. Borrowers 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 Borrowers, and their 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, Borrowers will maintain or cause to be
maintained the insurance coverage required to be maintained under the
Disbursement Agreement and the Cooperation Agreement, such insurance coverage to
be provided by such insurance provider, in such amounts with such deductibles
and covering such risks as are all times required under the Disbursement
Agreement and the Cooperation Agreement and to include, if the Mortgaged
Property is located in an area designated by the Federal Emergency
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Management Agency as having special flood or mud slide hazards, flood insurance
in compliance with any applicable regulations of the Board of Governors of the
Federal Reserve System. Within thirty (30) days after the Closing Date,
Borrowers shall deliver the insurance certificates required pursuant to the
Disbursement Agreement.
C. Application of Net Loss Proceeds.
Borrowers shall (i) apply Loss Proceeds and Liquidated Damages to
restore, replace or rebuild the Project in accordance with the Cooperation
Agreement, (ii) apply Liquidated Damages, to repay any Completion Guaranty Loan
in accordance with the Cooperation Agreement but subject to Section 6.5 hereof
and the Xxxxxxx Intercreditor Agreement, and (iii) apply any Loss Proceeds and
Liquidated Damages not applied as provided in clauses (i) and (ii) to prepay the
Loans in accordance with the Cooperation Agreement and subsection 2.4B hereof.
Lender shall, and Borrowers hereby authorize Lender to, apply such Loss Proceeds
and Liquidated Damages to prepay the Loans as provided in subsection 2.4B.
5.5 Inspection; Lender Meeting.
Inspection Rights. Borrowers shall, and shall cause each of their
Subsidiaries to, permit any authorized representatives designated by Lender to
visit and inspect any of the properties of Borrowers and their 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 Lender
(provided that any 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.
5.6 Compliance with Laws, etc.; Permits
A. Borrowers shall and shall cause each of their Subsidiaries and
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. Borrowers shall, and shall cause each of their 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
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necessary under applicable laws except any thereof the noncompliance with which
could not reasonably be expected to have a Material Adverse Effect.
5.7 Environmental Review and Investigation, Disclosure, Etc.; Borrowers'
Actions Regarding Hazardous Materials Activities, Environmental Claims
and Violations of Environmental Laws.
A. Environmental Review and Investigation. Borrowers agree that
Lender may, from time to time and in its reasonable discretion, (i) retain, at
Borrowers' expense, an independent professional consultant to review any
environmental audits, investigations, analyses and reports relating to Hazardous
Materials in respect of the Site or the Project prepared by or for Borrowers 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 Borrowers or any of
their Subsidiaries, Borrowers shall only be obligated to use their best efforts
to obtain permission for Lender's professional consultant to conduct an
investigation of such Facility. For purposes of conducting such a review and/or
investigation, Borrowers hereby grant to Lender and its agents, employees,
consultants and contractors the right to enter into or onto any Facilities
currently owned, leased, operated or used by Borrowers or any of their
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 Borrowers and Lender,
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. Borrowers and
Lender hereby acknowledge and agree that any report of any investigation
conducted at the request of Lender pursuant to this subsection 5.7A will be
obtained and shall be used by Lender for the purposes of Lender's internal
credit decisions, to monitor and police the Loans and to protect Lender's
security interests, if any, created by the Loan Documents. Lender agrees to
deliver a copy of any such report to Borrowers with the understanding that
Borrowers acknowledge and agree that (x) they will indemnify and hold harmless
Lender from any costs, losses or liabilities relating to Borrowers' use of or
reliance on such report, (y) Lender makes no representation or warranty with
respect to such report, and (z) by delivering such report to Borrowers, Lender
is not requiring or recommending the implementation of any suggestions or
recommendations contained in such report.
B. Environmental Disclosure. Borrowers will deliver to Lender:
(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 Borrowers or any of their
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Subsidiaries 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 Borrowers 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 Borrowers or any of their Subsidiaries, 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 Borrowers or any of
their 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 Borrowers or any
of their Subsidiaries that could reasonably be expected to (1) expose
Borrowers or any of their 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
Borrowers or any of their 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
Borrowers or any of their Subsidiaries to modify current operations in a
manner that could reasonably be expected to subject Borrowers or any of
their 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.
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(v) Other Information. With reasonable promptness, such other
documents and information as from time to time may be reasonably
requested by Lender in relation to any matters disclosed pursuant to
this subsection 5.7.
C. Borrowers' Actions Regarding Hazardous Materials Activities,
Environmental Claims and Violations of Environmental Laws.
(i) Remedial Actions Relating to Hazardous Materials Activities.
Borrowers shall promptly undertake, and shall cause each of their
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 Borrowers or any of
their Subsidiaries undertake any such action with respect to any
Hazardous Materials, Borrowers or such Subsidiary shall conduct and
complete such action in compliance 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, Borrowers' or such Subsidiary's liability with
respect to such Hazardous Materials Activity is being contested in good
faith by Borrowers or such Subsidiary.
(ii) Actions with Respect to Environmental Claims and Violations
of Environmental Laws. Borrowers shall promptly take, and shall cause
each of their Subsidiaries promptly to take, any and all actions
necessary to (i) cure any material violation of applicable Environmental
Laws by Borrowers or their Subsidiaries and (ii) make an appropriate
response to any Environmental Claim against Borrowers or any of their
Subsidiaries and discharge any obligations it may have to any Person
thereunder.
5.8 Compliance with Material Contracts.
Borrowers shall, and shall cause each of their 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.
5.9 Certain Post Closing Obligations.
A. Mall Transfer. On the Mall Release Date, Borrowers shall, and
shall cause Mall Construction Subsidiary, Mall Subsidiary and Mall Intermediate
Holdings to, take all
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actions as may be necessary to transfer the Mall Collateral to Mall Subsidiary
and Lender shall release Borrowers from their Obligations other than as set
forth in this subsection 5.9A. Borrowers further covenant and agree that, if all
Obligations of Borrowers to Lender have not been paid in full as of the Mall
Release Date Borrowers will take all actions necessary to and will cause Mall
Subsidiary to: (i) be bound by all terms and provisions of the Loan Documents as
though they had originally been executed and delivered by the Mall Subsidiary,
(ii) deliver to Lender, at Borrowers' expense, title policy date-downs insuring
Lender's interests under the Leasehold Deed of Trust and the Deed of Trust in
form and substance satisfactory to Lender, (iii) execute and deliver any
documents, including, without limitation, bills of sale and assignment
agreements, required to vest in Lender a security interest in and, if requested
by Lender, Mall Subsidiary, all right, title and interest of Borrowers in and to
all warranties and guaranties by the Construction Manager, Contractors and
Subcontractors with respect to the Mall, (iv) to execute, deliver and file all
UCC financing statements and assignment statements necessary to vest in Lender a
first priority perfected security interest in all property, rights and other
assets transferred by Mall Construction Subsidiary to Mall Subsidiary,
including, without limitation, the Interim Mall Proceeds Account, the Mall
Leasing Commissions Reserve Account, the Mall Tenant Improvements Reserve
Account and the Mall Retainage/Punch List Escrow (as defined in the Disbursement
Agreement) (the "Mall Assets"), and (v) to take all other actions necessary in
Lender's sole discretion in order to effectuate such assumption of Obligations
and other actions by or on behalf of the Mall Subsidiary. On the Mall Release
Date, Lender shall release VCR, LVSI and all of their related Affiliates (other
than Mall Subsidiary) from any further obligations with respect to the
Obligations.
B. Mall Commercial Subdivision. Borrowers shall use their best efforts
to (i) cause the commercial subdivision map for the Mall Space to be approved by
all applicable Governmental Authorities as soon as practicable following the
Closing Date and (ii) if such commercial subdivision map is not approved by
Governmental Authorities to have the Mall Space approved as a separate legal tax
parcel by all applicable Governmental Authorities and (iii) deliver a legal
opinion to Lender confirming that after giving effect to the transactions
described in either of clauses (i) or (ii) the Mall Space will be a separate
legal parcel within the meaning and in accordance with Nevada Revised Statute.
5.10 Payment of Liens.
A. Removal by Borrowers. In the event that, notwithstanding the
covenants contained in subsection 6.2, a Lien not otherwise permitted under
subsection 6.2 may encumber the Mortgaged Property or other item of Collateral
or any portion thereof, Borrowers shall promptly discharge or cause to be
discharged by payment to the lienor or lien claimant or promptly secure removal
by bonding or deposit with the county clerk or otherwise or, at Lender's
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option, and if obtainable promptly obtain title insurance against, any such Lien
or mechanics' or materialmen's claims of lien filed or otherwise asserted
against the Mortgaged Property or any other item of Collateral or any portion
thereof within 60 days after the date of notice thereof; provided that,
compliance with the provisions of this subsection 5.11 shall not be deemed to
constitute a waiver of the provisions of subsection 6.2. Borrowers shall exhibit
to Lender upon request all receipts or other satisfactory evidence of payment,
bonding, deposit of taxes, assessments, Liens or any other item which may cause
any such Lien to be filed against the Mortgaged Property or other item of
Collateral of any Borrower or any of its Subsidiaries. Each Borrower and each of
its Subsidiaries shall fully preserve the Lien and the priority of each of the
Deed of Trust and the other Collateral Documents without cost or expense to
Lender.
B. Removal by Lender. If any Borrower or any of its Subsidiaries fails
to promptly discharge, remove or bond off any such Lien or mechanics' or
materialmen's claim of lien as described above, which is not being contested by
either Borrower or any of its Subsidiaries in good faith by appropriate
proceedings promptly instituted and diligently conducted, within 30 days after
the receipt of notice thereof, then Lender may, but shall not be required to,
procure the release and discharge of such Lien, mechanics' or materialmen's
claim of lien and any judgment or decree thereon, and in furtherance thereof
may, in its sole discretion, effect any settlement or compromise with the lienor
or lien claimant or post any bond or furnish any security or indemnity as
Lender, in its sole discretion, may elect. In settling, compromising or
arranging for the discharge of any Liens under this subsection, Lender shall not
be required to establish or confirm the validity or amount of the Lien.
Borrowers agree that all costs and expenses expended or otherwise incurred
pursuant to this subsection 5.11 (including reasonable attorneys' fees and
disbursements) by Lender shall be paid by Borrowers in accordance with the terms
hereof.
5.11 Rights of First Offer. Borrowers and their Affiliates shall not enter into
any Future Financing unless Borrowers or such Affiliates shall have first
delivered to Lender at least ninety (90) days prior to the closing of such
Future Financing, written notice (the "Offer Notice") describing the principal
business terms and conditions of the proposed Future Financing. During the sixty
(60) day period following delivery of such notice (the "Option Period") Lender
shall have an option to provide to Borrowers the full amount of such Future
Financing on terms and conditions substantially similar to those set forth in
the written notice; provided that Lender will inform Borrowers reasonably
promptly if it has decided not to provide the Future Financing to Borrowers and
provide further that Borrowers may discuss such Future Financing with other
potential lenders during the Option Period if Borrowers afford Lender
information and access reasonably comparable to that provided such other
potential lenders. In the event that Lender fails to provide Borrowers with a
commitment letter or engagement letter containing terms and conditions
substantially similar to those set forth in the Offer Notice within the Option
Period,
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Borrowers and their Affiliates may enter into such Future Financing with
a Person other than Lender, with such changes to the terms set forth in the
Offer Notice as are reasonably necessary to obtain such Future Financing. For
purposes hereof, a "Future Financing" shall be: (i) a financing of the mall
component of Phase II if such financing is structured in a manner substantially
similar to the financing provided pursuant to this Agreement; and (ii) the
permanent financing of the Mall in the event the Permanent Mall Lender does not
provide such financing.
5.12 Further Assurances.
A. Assurances. Without expense or cost to Lender, each 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 Lender 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 Lender the property and rights hereby conveyed and
assigned or intended to now or hereafter be conveyed or assigned or which any
Borrower or any such Subsidiary may be or may hereafter become bound to convey
or to assign to Lender 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 each Borrower shall, and shall cause each of
its Subsidiaries to, execute and deliver, and hereby authorizes Lender to
execute and file in the name of such Borrower or Subsidiary, to the extent
Lender 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. Borrowers 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, the Leasehold Deed of
Trust or any other Loan Document, including any instrument of further assurance
described in subsection 5.11A, 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 the Deed of Trust, the
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Leasehold Deed of Trust or any other Loan Document or the Mall Lease or a
memorandum thereof, including any instrument of further assurance described in
subsection 5.11A, or by reason of its interest in, or measured by amounts
payable under, the Notes, the Deed of Trust, the Leasehold Deed of Trust or any
other Loan Document, including any instrument of further assurance described in
subsection 5.11A, 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
Lender, 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 any 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
Lender (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 Lender, in its sole discretion) accompanied by documentation
verifying the nature and amount of such payments, Lender may (but shall not be
obligated to) pay the amount due and such Borrower shall reimburse all amounts
in accordance with the terms hereof.
C. Costs of Defending and Upholding the Lien. Lender 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 Lender in which Lender is named or
which Lender in its sole discretion determines is reasonably likely to
materially adversely affect the Mortgaged Property, any other Collateral, the
Deed of Trust, the Leasehold Deed of Trust, the Lien thereof or any other Loan
Document and (ii) institute any action or proceeding which Lender reasonably
determines should be instituted to protect the interest or rights of Lender in
the Mortgaged Property or other Collateral or under this Agreement or any other
Loan Document. Borrowers agree that all reasonable costs and expenses expended
or otherwise incurred pursuant to this subsection (including reasonable
attorneys' fees and disbursements) by Lender shall be paid by Borrowers or
reimbursed to Lender, as the case may be, promptly after demand.
D. Costs of Enforcement. Borrowers agree to bear and shall pay or
reimburse Lender in accordance with the terms of subsection 8.3 for all
reasonable sums, costs and expenses incurred by Lender (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, the Deed of Trust, the
Leasehold Deed of Trust 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.
E. Advertising and Signage. Upon Lender's reasonable request, Borrowers
shall place appropriate signage at the Project indicating that Lender provided
financing for the Mall portion (but not other portions) of the Project, and such
other information as is reasonably requested by Lender. Lender shall be allowed
to advertise its involvement in financing the Project in an appropriate manner.
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F. Amendment and Recordation of Deed of Trust. Promptly following
completion of construction of the Mall, Borrower will execute and record an
amendment to the Deed of Trust and Leasehold Deed of Trust to reflect any
changes to the legal description of the Mall Parcel to reflect changes therein
as provided in the Cooperation Agreement.
5.13 Maintenance of Take Out Agreements and Lease Terms. Borrowers shall
maintain in full force and effect and shall take all actions necessary to comply
with and prevent the occurrence of any default under the Tranche A Take Out
Commitment, the Tranche B Take Out Commitment and the Tri-Party Agreement and
shall take all actions necessary to cause the satisfaction of the conditions to
the Tranche A Take Out Commitment. Borrowers shall not enter into any leases
with respect to the Mall other than leases permitted under the Tranche A Take
Out Commitment.
Section 6. BORROWERS' NEGATIVE COVENANTS
Borrowers covenant and agree that, so long as the Commitment
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations, unless Lender shall otherwise give its prior written
consent, Borrowers shall perform, and shall cause each of their Subsidiaries to
perform, (x) prior to Completion Date, all of the covenants set forth in Article
6 of the Disbursement Agreement and the covenants set forth in subsections 6.1,
6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.10, 6.11, 6.12B and 6.16 below and (y)
on and after Completion Date all of the covenants set forth in this Section 6.
6.1 Indebtedness.
Borrowers shall not, and shall not permit any of their
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) Borrowers and their Subsidiaries may become and remain
liable with respect to the Obligations;
(ii) Borrowers and their Subsidiaries may become and remain
liable with respect to Contingent Obligations permitted by subsection
6.4 and, (other than with respect to clause (v) and (vi) of subsection
6.4) upon any matured obligations actually arising pursuant thereto, the
Indebtedness corresponding to the Contingent Obligations so
extinguished;
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(iii) Borrowers may become and remain liable for Indebtedness
represented by the Mortgage Notes in an aggregate principal amount not
to exceed at any time $425,000,000, reduced by any principal payments
required to be made thereon;
(iv) Borrowers may become and remain liable for Indebtedness
represented by the Bank Credit Agreement in an aggregate principal
amount not to exceed at any time $170,000,000 reduced by any principal
payments required to be made thereon;
(v) Borrowers may become and remain liable for Indebtedness
represented by the Subordinated Notes in an aggregate principal amount
not to exceed at any time $97,500,000 reduced by any principal payments
required to be made thereon;
(vi) Borrowers may become and remain liable for Indebtedness
under the FF&E Facility Agreement in an aggregate principal amount not
to exceed at any time $98,000,000 (plus any accrued and unpaid interest
thereon added to principal) reduced by any principal payments required
to be made thereon;
(vii) Borrowers may become and remain liable for Indebtedness in
respect of any Completion Guaranty Loan in an aggregate amount not to
exceed $25,000,000 (plus any accrued and unpaid interest thereon added
to principal);
(viii) Borrowers and their Subsidiaries may become and remain
liable for additional Indebtedness to the extent permitted under and on
the terms described in the Intercreditor Agreement;
(ix) Borrowers may become and remain liable for Indebtedness to
employees of Borrowers ("Employee Repurchase Notes") incurred in
connection with any repurchase of employee options or stock upon death,
disability or termination of such employee in accordance with employment
agreements or option plans or agreements as in effect on the Closing
Date ("Permitted Employee Repurchases") provided that such Indebtedness
shall be unsecured and subordinated on terms not less favorable to
Borrowers and Lender than the terms of the Subordinated Notes and shall
expressly provide that payments thereon shall be required only to the
extent not restricted by any Financing Agreement;
(x) Borrowers may become and remain liable for Indebtedness
incurred for the purpose of financing all or any part of the purchase or
lease of gaming equipment to be used in connection with the casino
located at the casino resort to be owned by Phase II Subsidiary or any
casino to be operated within Phase II in the aggregate amount at any
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time outstanding not to exceed $10,000,000; provided, that upon default
under such Indebtedness, the lender under such Indebtedness may seek
recourse or payment against the Borrowers and their Subsidiaries only
through the return or sale of the property or equipment so purchased or
leased and may not otherwise assert a valid claim for payment on such
Indebtedness against the Borrowers and their Subsidiaries or any other
property of the Borrowers and their Subsidiaries;
(xi) Borrowers may become and remain liable with respect to other
Indebted ness in an aggregate principal amount not to exceed $10,000,000
at any time outstanding; and
(xii) Borrowers may become and remain liable for an aggregate of
$20,000,000 of additional Indebtedness under a working capital line;
provided that (x) no such Indebtedness may be incurred until after
Completion Date and (y) such Indebtedness shall be incurred with either
Lender or with other Persons who are Eligible Assignees on substantially
same terms (including security interests) hereunder and otherwise on
terms (including voting and intercreditor arrangements) reasonably
satisfactory to Lender.
6.2 Liens and Related Matters.
A. Prohibition on Liens. Borrowers shall not, and shall not permit any
of their 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;
(ii) Liens granted pursuant to the Collateral Documents;
(iii) Liens securing Indebtedness permitted under clause (iii)
of subsection 6.1, provided that, after the Mall Parcel Creation Date,
any such Liens covering the Mall Collateral are junior in priority to
the Liens securing the Obligations other than in respect of the Mortgage
Notes Proceeds Account;
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(iv) Liens securing Indebtedness permitted under clause (iv) of
subsection 6.1, provided that any such Liens covering the Mall
Collateral are junior in priority to the Liens securing the Obligations;
(v) Liens securing Indebtedness permitted under clause (vi) of
subsection 6.1, provided that such Liens attach only to the Specified
FF&E and to any proceeds of such assets or indebtedness and related
collateral accounts in which such proceeds are held;
(vi) Liens in favor of the Mortgage Note Holders securing
Indebtedness advanced by such Person and permitted under (iii) of
subsection 6.1 to the extent that such Liens are permitted under the
Intercreditor Agreement provided that such Liens in favor of the
Mortgage Note Holders are junior to the Liens securing the Obligations;
(vii) Liens securing Indebtedness permitted under clause (x) of
subsection 6.1 provided that such Liens attach only to the casino
equipment purchased or leased with the proceeds of such Indebtedness and
such assets are acquired or leased within 180 days of the incurrence of
such Indebtedness;
(viii) Liens securing Indebtedness permitted under clause (xii)
of subsection 6.1; provided that such Liens are pari passu with the
Liens securing the Obligations;
(ix) Liens described in Schedule 6.2 hereto;
(x) Liens incurred in connection with Interest Rate Agreements
required or permitted under the Bank Credit Agreement, provided that (a)
to the extent that such Interest Rate Agreement is intended to hedge
interest rate risk in respect of the Bank Credit Facility such Liens
attach only to the collateral subject to Bank Lender's security interest
and (b) to the extent such Interest Rate Agreement relates to the FF&E
Facility such Liens attach only to Specified FF&E; and
(xi) Other Liens securing Indebtedness in an aggregate amount
not to exceed $5,000,000 at any time outstanding.
B. Equitable Lien in Favor of Lender. If Borrowers or any of their
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 6.2A, they 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
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shall not be construed as a consent by Lender to the creation or assumption of
any such Lien not permitted by the provisions of subsection 6.2A.
C. No Further Negative Pledges. Except with respect to specific property
encum bered to secure payment of particular Indebtedness or leases or to be sold
pursuant to an executed agreement with respect to an Asset Sale, none of
Borrowers nor any of their 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, (y) as set forth in the documents
evidencing Other Indebtedness as in effect on the Closing Date including any
refinancing thereof permitted hereunder provided that the provisions regarding
the creation or assumption of Liens is not less favorable to Borrowers, such
Subsidiary or Lenders than those set forth in the documents evidencing the
Indebtedness being refinanced or (z) as required by applicable law or any
applicable rule or order of any Gaming Authority.
D. No Restrictions on Subsidiary Distributions to Borrowers or Other
Subsidiaries. Except as provided herein, Borrowers will not, and will not permit
any of their 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 their Subsidiaries to (i) pay dividends or make any other
distributions on any of such Subsidiary's capital stock owned by Borrowers or
any other Subsidiary of Borrowers, (ii) repay or prepay any Indebtedness owed by
any such Subsidiaries to Borrowers, (iii) make loans or advances to Borrowers,
or (iv) transfer any of its property or assets to Borrowers other than (x) as
provided herein or in the other Loan Documents, (y) as set forth in the
documents evidencing Other Indebtedness as in effect on the Closing Date
including any refinancing thereof permitted hereunder provided that the
provisions regarding dividends, distributions, repayments of Indebtedness, loans
and advances and transfers of assets are not less favorable to Borrowers, such
Subsidiary or Lender than those set forth in the documents evidencing the
Indebtedness being refinanced or (z) as required by applicable law or any
applicable rule or order of any Gaming Authority.
6.3 Investments; Joint Ventures; Formation of Subsidiaries.
Borrowers shall not, and shall not permit any of their 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) Borrowers and their Subsidiaries may make and own
Investments in Cash Equivalents;
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(ii) Borrowers may continue to own their existing Investments in
the Mall Intermediate Holdings, Mall Subsidiary, Phase II Subsidiary,
Phase II Manager, Phase II Direct Holding Company, Mall Manager, Mall
Direct Holdings and Mall Construction Subsidiary described in Schedule
6.3 hereto, provided that Borrowers and their Subsidiaries may not make
any additional Investments in such Persons except as permitted by
clauses (iii), (v) and (vi) below;
(iii) Borrowers may cause the transfer of the Mall Collateral to
Mall Subsidiary to the extent permitted by subsection 6.6(iv) and
immediately therewith transfer a 1% managing membership interest in each
of Mall Subsidiary and Mall Direct Holdings to Mall Manager;
(iv) Borrowers may transfer the Phase II Land to Phase II
Subsidiary to the extent permitted by subsection 6.6(v) and immediately
thereafter transfer a 1% managing membership interest in each of Mall
Subsidiary and Mall Direct Holdings to Mall Manager;
(v) Borrower and their Subsidiaries may invest in Mall Subsidiary
or Phase II Subsidiary any cash or other property contributed to
Borrowers by Xxxxxxx or any of his Affiliates after Completion Date for
such purpose;
(vi) So long as no Event of Default or Potential Event of Default
shall have occurred and be continuing or would result therefrom,
Borrowers may form and make Investments in new Subsidiaries and in
Supplier Joint Ventures; provided that the aggregate amount of all such
Investments shall not at any time exceed $10,000,000, (b) no such
Subsidiary or Supplier Joint Venture shall own or operate or posses any
material license, franchise or right used in connection with the
ownership or operation of the Project or any material Project assets,
(c) in the case of any Investment in a Supplier Joint Venture, LVSI
shall have delivered an Officers' Certificate which certifies that in
the reasonable judgment of such officer the Investment in such Supplier
Joint Venture will result in an economic benefit to Borrowers (taking
into account such Investment) as a result of a reduction in the cost of
the goods or services being acquired from the Supplier Joint Venture
over the life of the Investment and (d) none of Borrowers, nor any other
Subsidiary of the Borrower shall incur any liabilities or contingent
obligations in respect of the obligations of such Subsidiary or Joint
Venture;
(vii) Borrowers may make loans or advances to their employees (i)
to fund the exercise price of options granted under Borrowers' stock
option plans or agreements or
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employment agreements as in effect on the Closing Date and (ii) for
other purposes in an amount not to exceed $1,000,000 in the aggregate
outstanding at any time;
(viii) Borrowers and their Subsidiaries may hold investments
consisting of securities received in settlement of debt created in the
ordinary course of business and owing to Borrowers or any Subsidiary or
in satisfaction of judgments; and
(ix) Borrowers may make and own other Investments in an aggregate
amount not to exceed at any time $5,000,000.
6.4 Contingent Obligations.
Borrowers shall not, and shall not permit any of their
Subsidiaries to, directly or indirectly, create or become or remain liable with
respect to any Contingent Obligation, except:
(i) Borrowers may become and remain liable with respect to
Contingent Obligations under Interest Rate Agreements which are entered
into to hedge against interest rate fluctuations in respect of up to 50%
of the principal amount of the Indebtedness outstanding under clauses
(iv) and (vi) of subsection 6.1 so long as all obligations thereunder
are secured solely by Liens included in Permitted Liens under clause
(xx) of the definition thereof;
(ii) Borrowers and their Subsidiaries may become and remain
liable with respect to Contingent Obligations under the Loan Documents;
(iii) Borrowers may become and remain liable with respect to
Contingent Obligations for the Indebtedness permitted under clauses
(iii), (iv), (v), (vi), (vii), (viii), (ix) and (x) of subsection 6.1;
(iv) Subsidiaries of Borrowers may become and remain liable with
respect to the Contingent Obligations for the Indebtedness permitted
under clause (iii), (iv), (v), (vii) and (x) of subsection 6.1, provided
that such Contingent Obligations are expressly subordinate to the
Obligations;
(v) to the extent such incurrence does not result in the
incurrence by Borrowers or any of their Subsidiaries of any obligation
for the payment of borrowed money, Borrowers 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
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incurred in the ordinary course of business and do not at any time
exceed $10,000,000 in the aggregate;
(vi) Borrowers and their Subsidiaries may become and remain
liable for customary indemnities under Project Documents as in effect on
the Closing Date; and
(vii) Borrowers may become and remain liable with respect to
other Contingent Obligations, provided that the maximum aggregate
liability, contingent or otherwise, of Borrowers in respect of all such
Contingent Obligations shall at no time exceed $5,000,000.
6.5 Restricted Junior Payments.
Borrowers shall not, and shall not permit any of their
Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart
any sum for any Restricted Junior Payment, except:
(i) Borrowers may make regularly scheduled payments of principal
and interest in respect of any Other Indebtedness of Borrowers in
accordance with the terms of, and only to the extent required by the
agreement pursuant to which such Other Indebtedness was issued provided
that (a) any such payments shall be subject to the terms of the
Intercreditor Agreement, the Xxxxxxx Intercreditor Agreement, the
Xxxxxxx Completion Guaranty and the FF&E Intercreditor Agreement, as
applicable, (b) any such payments in respect of the Subordinated Notes
and any Completion Guaranty Note may be made only to the extent no Event
of Default or Potential Event of Default shall then exist and be
continuing or would result therefrom and (c) any such payments in
respect of the Substitute Tranche B Note may be made only to the extent
permitted pursuant to the terms of the Substitute Tranche B Note and
pursuant to the terms of the Xxxxxxx Intercreditor Agreement;
(ii) Borrowers and their Subsidiaries may redeem or purchase any
equity interests in Borrowers or their 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, Borrowers 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;
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(iii) for so long as LVSI is a corporation under Subchapter S of
the Code or a substantially similarly treated pass-through entity or
Venetian is a limited liability company that is treated as a partnership
or a substantially similarly treated pass-through entity for Federal
income tax purposes (as evidenced by an opinion of counsel at least
annually), Borrowers may each make cash distributions to shareholders or
members, during each Quarterly Payment Period, in an aggregate amount
not to exceed the Permitted Quarterly Tax Distribution in respect of the
related Estimation Period, and if any portion of the Permitted Quarterly
Tax Distribution is not distributed during such Quarterly Payment
Period, the Permitted Quarterly Tax Distribution payable during the
immediately following four quarter period shall be increased by such
undistributed portion; provided that Borrowers may not make any such
distribution to pay taxes attributable to income of Mall Subsidiary or
Phase II Subsidiary or any of their Subsidiaries unless Borrowers have
received a cash distribution from Mall Subsidiary or Phase II
Subsidiary, as applicable, for such purpose in respect of the applicable
Estimation Period in an equal amount;
(iv) LVSI may make repurchases of capital stock of LVSI deemed
to occur upon exercise of stock options to the extent such capital stock
represents a portion of the exercise price of such options;
(v) Borrowers may make payments on any Completion Guaranty Loan
prior to Completion Date, from amounts permitted to be deposited in the
Guaranty Deposit Account subject to the terms of the Xxxxxxx Completion
Guaranty and the Disbursement Agreement;
(vi) Borrowers and their wholly-owned Subsidiaries may make
intercompany payments between such entities and intercompany payments to
or from any Borrower; and
(vii) Subject to subsection 6.6(iii), Borrowers may repay loans
advanced pursuant to the FF&E Facility Agreement with Loss Proceeds and
proceeds from the sale of assets purchased with funds advanced pursuant
thereto.
(viii) Borrowers may make payments on any Completion Guaranty
Loan (a) prior to Final Completion Date, from amounts permitted to be
deposited in the Guaranty Deposit Account subject to the terms of the
Xxxxxxx Completion Guaranty and the Disbursement Agreement, (b) on Final
Completion Date from amounts which are advanced to the Company pursuant
to Section 2.12 of the Disbursement Agreement for the purpose of making
such payments, (c) after Final Completion Date from Liquidated
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Damages and (d) on Final Completion Date, from funds in the Mall
Retainage/Punchlist Account in accordance with the Mall Escrow
Agreement, up to the aggregate amount previously deposited into the Mall
Retainage/Punchlist Account from the Guaranty Deposit Account, provided
in each case that such payments shall be permitted only to the extent
allowed under the Xxxxxxx Intercreditor Agreement and only so long as no
Event of Default or Potential Event of Default shall then exist and be
continuing or would result therefrom.
6.6 Restriction on Fundamental Changes; Asset Sales and Acquisitions.
Borrowers shall not, and shall not permit any of their
Subsidiaries to, alter the corporate, capital or legal structure (except with
respect to changes in capital structure to the extent a Change of Control does
not occur as a result thereof) of any 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 transac tions, 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) Borrowers and their Subsidiaries may dispose of obsolete,
worn out or surplus assets or assets no longer used or useful in the
business of Borrowers and the Subsidiaries in each case to the extent
made in the ordinary course of business; provided that either (i) such
disposal does not materially adversely affect the Mortgaged Property 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 security of any other Person
subject only to Permitted Liens and by such removal and replacement
Borrowers and their Subsidiaries shall be deemed to have subjected such
replacement to the lien of the Deed of Trust or the Leasehold Deed of
Trust, as applicable;
(ii) Borrowers and their Subsidiaries may sell or otherwise
dispose of assets in transactions that do not constitute Asset Sales,
provided that the consideration received for such assets shall be in an
amount at least equal to the fair market value thereof except under (iv)
- (x) below;
(iii) subject to subsection 6.10, Borrowers and their
Subsidiaries may make Asset Sales of assets having a fair market value
not in excess of (i) $4,000,000 in respect
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of sale or other disposition of construction equipment prior to or
during the first year following Completion Date and (ii) $2,000,000 with
respect to any other Asset Sales; provided in each case that (x) the
consideration received for such assets shall be in an amount at least
equal to the fair market value thereof; (y) the sole consideration
received shall be cash; and (z) the proceeds of such Asset Sales shall
be applied as required by subsection 2.4B(i);
(iv) Borrowers and Mall Construction Subsidiary may transfer
their respective interests in the Mall Collateral to Mall Subsidiary in
accordance with Section 5.16(c) of the Disbursement Agreement provided
that Borrowers and their Subsidiaries have complied in all material
respects with their obligations thereunder and all other conditions
thereunder have been satisfied in all material respects;
(v) Borrowers may transfer the Phase II Land to the Phase II
Subsidiary, in accordance with Section 5.16(d) of the Disbursement
Agreement, provided that Borrowers and their Subsidiaries have complied
in all material respects with their obligations thereunder and all other
conditions thereunder have been satisfied in all material respects;
(vi) Borrowers and their Subsidiaries may enter into any leases
with respect to any space on or within the Project where the interest
created is a Permitted Lien, provided that (a) no Event of Default or
Potential Event of Default shall exist and be continuing at the time of
such lease or would occur after entering into such lease (or immediately
after any renewal or extension thereof at the option of Borrowers or one
of their Subsidiaries), (b) such lease will not interfere with, impair
or detract from the operation of the business of Borrowers and their
Subsidiaries, (c) such lease is at a fair market rent (in light of other
similar or comparable prevailing commercial transactions) and contains
such other terms such that the lease, taken as a whole, is commercially
reasonable and fair to Borrowers and their Subsidiaries in light of
prevailing or comparable transactions in other casinos, hotels, hotel
attractions or shopping venues, (d) no gaming or casino operations
(other than the operation of arcades and games for children) may be
conducted on any space that is subject to the such lease other than by
Borrowers, (e) no lease may provide that Borrowers or any of their
Subsidiaries may subordinate its fee, commercial subdivision or
leasehold interest to any lessee or any party financing any lessee,
provided that, if such lease is permitted under the Tranche A Take Out
Commitment and if the Permanent Mall Lender shall be obligated to
provide the tenant under such lease with a Subordination,
Non-Disturbance and Attornment Agreement under the Tranche A Take Out
Commitment, Lender shall provide the tenant under any such lease with a
Subordination,
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Non-Disturbance and Attornment Agreement in Lender's customary form and
(f) if consent of the Permanent Mall Lender is required, such consent
has been obtained;
(vii) Borrowers may enter into the HVAC Ground Lease;
(viii) LVSI may lease the casino from Venetian pursuant to the
Casino Lease;
(ix) Mall Construction Subsidiary (and, if applicable, Mall
Subsidiary) may lease the Mall Collateral from Venetian pursuant to the
Mall Lease and, further, upon the occurrence of the Mall Parcel Creation
Date, Venetian and Mall Construction Subsidiary (or, if applicable, Mall
Subsidiary) may terminate the Mall Lease;
(x) Either Borrower may be merged with the other Borrower;
(xi) Either Borrower may sell, lease or otherwise transfer
assets to another Borrower or to a wholly-owned Subsidiary of such
Borrower to the extent permitted by subsection 6.3 and any wholly-owned
Subsidiary of a Borrower may sell, lease or otherwise transfer assets to
any other wholly-owned Subsidiary of such Borrower or to the other
Borrower;
(xii) 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 structure to facilitate pedestrians or traffic and (iii) a right
turn lane or other roadway dedicated at or near the Project; provided in
each case that such dedication does not materially impair the use or
operations of the Project;
(xiii) Borrowers may license trademarks and tradenames in the
ordinary course of business;
(xiv) Mall Construction Subsidiary may enter into or take by
assignment the Mall Management Agreement;
(xv) Borrowers may make the transfers permitted under subsection
6.3(iii) and (iv);
(xvi) Venetian and Mall Construction Subsidiary may enter into
the Billboard Master Lease;
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(xvii) Borrowers may sell receivables for fair market value in
the ordinary course of business; and
(xviii) incurrence of Liens permitted under Section 6.2.
6.7 Sales and Lease-Backs.
Borrowers shall not, and shall not permit any of their
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 Borrowers or any of their
Subsidiaries has sold or transferred or is to sell or transfer to any other
Person or (ii) which Borrowers or any of their Subsidiaries intends to use for
substantially the same purpose as any other property which has been or is to be
sold or transferred by Borrowers or any of their Subsidiaries to any Person in
connection with such lease, except that Borrowers and their Subsidiaries may
enter into sale-leaseback transactions in connection with financings permitted
under clause (ix) of subsection 6.1 to the extent that the assets subject to
such sale-leaseback are acquired contemporaneously with, or within 180 days
prior to, such financing and with the proceeds thereof and neither Borrower nor
any of its Subsidiaries theretofore held any interest in such assets.
6.8 Sale or Discount of Receivables.
Borrowers shall not, and shall not permit any of their
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.
6.9 Transactions with Shareholders and Affiliates.
Borrowers shall not, and shall not permit any of their
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 any Borrower or with any Affiliate of a Borrower or of any
such holder, except, that Borrowers may enter into and permit to exist:
(i) transactions that are on terms that are not less favorable to
that Borrower or 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) Borrowers have delivered to Lender
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(1) with respect to any such transaction involving aggregate payments in
excess of $500,000, an Officers Certificate certifying that such
transaction complies with this subsection 6.9, (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 complies
with this subsection 6.9, at the time such transaction is entered into,
and (b) 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, Borrowers have
delivered to Lender 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) the Services Agreement;
(iii) purchases of materials or services from a Joint Venture
Supplier by Borrowers or any of their Subsidiaries in the ordinary
course of business on arm's length terms;
(iv) any employment, indemnification, noncompetition or
confidentiality agreement entered into by Borrowers or any of their
Subsidiaries with their employees or directors in the ordinary course of
business;
(v) loans or advances to employees of Borrowers or their
Subsidiaries permitted under subsection 6.3(vii);
(vi) the payment of reasonable fees to directors of Borrowers
and their Subsidiaries who are not employees of Borrowers or their
Subsidiaries;
(vii) the grant of stock options or similar rights to employees
and directors of Borrowers pursuant to plans approved by the Board of
Directors of LVSI and any repurchases of stock or options of Borrowers
from such employees to the extent permitted by subsection 6.5;
(viii) transactions between or among Borrowers and any of their
wholly-owned Subsidiaries;
(ix) the transactions contemplated by the Xxxxxxx Completion
Guaranty;
(x) the transactions contemplated by the Cooperation Agreement;
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(xi) the transactions contemplated by the HVAC Services
Agreement;
(xii) the use of the Congress Center by the owner of the Sands
Expo and Convention Center; provided that Venetian receives fair market
value for the use of such property;
(xiii) any transactions relating to the guaranty of the Tranche
B Take Out Commitment by Xxxxxxx, including the Substitute Tranche B
Loan;
(xiv) transactions relating to the commercial subdivision of the
Mall;
(xv) the transfer of the Phase II Land to the Phase II
Subsidiary and the transfer of the Mall Collateral to Mall Subsidiary;
(xvi) any repayment or deemed repayment of the Substitute
Tranche B Loan in connection with the transfer of the Mall Collateral to
Mall Subsidiary; and
(xvii) Borrowers may enter into and perform their obligations
under a gaming operations lease agreement with Phase II Subsidiary
relating to the casino to be in the casino resort owned by the Phase II
Subsidiary on terms substantially similar to those of the Casino Lease
except that (a) the rent payable under such lease shall be equal to all
revenues derived from such casino minus the sum of (1) the operating
costs related to such casino (including an allocated portion (based on
gaming revenue) of the Borrower's administrative costs related to its
gaming operations) and (2) the lesser of $250,000 or 1% of such casino's
operating income (or zero (0) if there is an operating loss) (determined
in accordance with GAAP), (b) Borrowers may agree that they shall
operate the casino in Phase II and the casino in the Project in
substantially similar manners and (c) Borrowers may agree to have common
gaming and surveillance operations in such casinos (based on equal
allocations of revenues and operating costs).
(xviii) employees of Interface may participate in the Las Vegas
Sands Inc. 401(k) Retirement Plan if Interface reimburses Borrowers for
a pro rata portion of the administrative expenses of such plan based on
the number of employees of each of Interface and LVSI participating in
such plan;
(xix) transactions contemplated by the Interface Lease;
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(xx) Borrowers may reimburse Yona Aviation Services, Inc., or
its successors for its operating and lease costs related to the use of
its aircraft by the Borrower's employees (based on the actual allocated
costs and time of usage);
(xxi) transaction contemplated by the Puck JV Letter of Intent;
and
(xxii) transactions contemplated by the Billboard Master Lease.
6.10 Disposal of Subsidiary Stock.
Borrowers shall not, and shall not permit any of their Subsidiaries to,
directly or indirectly sell, assign, pledge or otherwise encumber or dispose of
any shares of capital stock or other equity Securities of Borrowers or any of
their 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.
6.11 Conduct of Business.
Borrowers shall not, and shall not permit any of their Subsidiaries to,
engage in any business other than (i) in the case of LVSI, the casino gaming,
hotel, retail and entertainment mall and resort business (including operating
the conference center and meeting facilities) and any activity or business
incidental, directly related or similar thereto, or any business or activity
that is a reasonable extension, development or expansion thereof or ancillary
thereto, including any hotel, entertainment, recreation, convention, trade show,
meeting, retail sales or other activity or business designated to promote,
market, support, develop, construct or enhance the casino gaming, hotel, retail
and entertainment mall and resort business operated by Borrower and their
Subsidiaries, including, without limitation, participating in the Supplier Joint
Ventures and ownership of Mall Manager, Phase II Manager and Venetian, (ii) in
the case of Venetian and its Subsidiaries (other than those listed in clauses
(iii) below), (a) development, construction and the operation of the Project,
(b) the casino gaming, hotel, retail and entertainment mall and resort business
(including operating a conference center and meeting facilities at the Project
and any activity or business incidental, directly related or a similar thereto,
or any business or activity that is a reasonable extension, development or
expansion thereof or ancillary thereto, including any hotel, entertainment,
recreation, convention, trade show, meeting, retail sales, or other activity or
business designated to promote, market, support, develop, construct or enhance
the casino gaming, hotel, retail and entertainment mall and resort business
operated at the Project by Borrowers and their Subsidiaries, including, without
limitation, participating in the Supplier Joint Venturers, and (c) and ownership
of equity interests in Subsidiaries including the Mall Intermediate Holdings and
other matters reasonably incidental thereto, (iii) in the case of
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Intermediate Holdings Companies, the ownership of equity interests in Mall
Subsidiary, Mall II Holdings, Phase II Direct Holding Company and Phase II
Subsidiary and the delivery of guarantees in favor of Lender and the Mortgage
Noteholders and the holders of Subordinated Notes, (iv) in the case of Mall
Manager and Phase II Manager of 1% managing member interests in Mall Subsidiary,
Mall II Holdings, Phase II Direct Holding Company and Phase II Subsidiary,
respectively and (v) in the case of Mall Construction Subsidiary, ownership of
the Mall Collateral and other matters reasonably incidental thereto; and (vi) in
the case of Mall Direct Holdings and Phase II Direct Holdings ownership of
equity interests in Mall Subsidiary and Phase II Subsidiary respectively.
6.12 Certain Restrictions on Changes to Operative Documents, Permits, Project
Budget or Project Schedule
A. Modifications of Certain Operative Documents and Permits; New
Material Contracts or Permits. Borrowers shall not, and shall not permit any of
their Subsidiaries to, agree to any material amendment to, or waive any of its
material rights under, any Permit or Operative Document or enter into new
Material Contract or Permits it being understood that any Material Contracts
which are covered by clause B. or C. below shall also be subject to the
restrictions set forth therein) without in each case obtaining the prior written
consent of Lender 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 Lender in any material respect.
B. Amendments of Documents Relating to Other Indebtedness. Borrowers
shall not, and shall not permit any of their Subsidiaries to, amend or otherwise
change the terms of any Financing Agreements (other than the Loan Documents) or
permit the termination thereof (other than in accordance with the terms
thereof), or enter into any new Financing Agreements or make any payment
consistent with an amendment thereof or change thereto, if the effect of such
amendment or change is to increase the interest rate or fees on such Other
Indebtedness, change (to earlier dates) any dates upon which payments of
principal or interest are due thereon, change any event of default or condition
to an event of default with respect thereto (other than to eliminate any such
event of default or increase any grace period related thereto or otherwise
change such event of default in a manner less favorable to the Borrower or such
Subsidiary than the existing event of default), change the commitment
thereunder, change the redemption, prepayment or defeasance provisions thereof,
change the subordination provisions thereof (or of any guaranty thereof), or
change any collateral therefor (other than to release such collateral), or if
the effect of such amendment or change, together with all other amendments or
changes made, is to increase materially the obligations of the obligor
thereunder, to confer any additional rights on the holders of such Other
Indebtedness (or a trustee
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or other representative on their behalf) which would be materially adverse to
Borrowers, such Subsidiary or Lender, provided, that Borrowers may (i) enter
into new Approved Equipment Funding Commitments to the extent permitted by the
definition of such term and may amend, supplement or terminate an existing
Approved Equipment Funding Commitment for the purpose of replacing all or a
portion of it with such new Approved Funding Commitment and (ii) modify the
terms of any Financing Agreement or agreement relating thereto to the extent
expressly permitted by the Intercreditor Agreement.
C. Certain Other Restrictions on Amendments. Borrowers shall not,
and shall not permit any of their Subsidiaries to, agree to any material
amendment to, or waive any of its material right under the Cooperation
Agreement, without obtaining prior written consent of Lender, which consent
shall not be unreasonably withheld or delayed.
6.13 Fiscal Year.
Neither Borrower shall change its Fiscal Year-end from December
31.
6.14 Zoning and Contract Changes and Compliance.
Without the prior written approval of Lender, Borrowers shall not, and
shall not permit any of their 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. Borrowers shall not, and shall not permit any of their
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 Lender.
6.15 No Joint Assessment; Separate Lots.
Without the prior written approval of Lender, which approval may be
granted, withheld, conditioned or delayed in its sole discretion, Borrowers
shall not suffer, permit or initiate, and shall not permit any of their
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
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personal property shall be assessed or levied or charged to the Mortgaged
Property as a single lien. The Mortgaged Property is comprised of one or more
parcels, each of which, to the knowledge of Borrowers, constitutes a separate
tax lot and none of which constitutes a portion of any other tax lot.
6.16 Certain Covenants Applicable to Mall Subsidiary.
A. Line of Business. Borrowers shall not permit Mall Subsidiary to
engage in any business other than (i) acquisition, development, construction,
ownership, holding, management, marketing and operation of the Mall, (ii) any
activity and business incidental, directly related to or similar thereto, and
(iii) engaging in any business or activity that is a reasonable extension,
development or expansion thereof or ancillary thereto including any retail,
restaurant, entertainment or other activity or business designed to promote,
market, support, develop, construct or enhance the retail, restaurant and
entertainment business of the Mall (including, owning and operating joint
ventures to supply materials or services for the construction or operation of
the Mall).
B. Restrictions on Investment. Borrowers shall not permit Mall
Subsidiary to purchase or acquire any Securities, loan, advance, capital
contribution or other investment of any kind except (i) advances to employees
for moving, entertainment and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business, (ii) any such investments in
Cash Equivalents and similar liquid Investments permitted under the Financing
Agreements to which it is a party; (iii) any investments in Joint Ventures with
third parties to develop and operate restaurants in the Mall in an aggregate
amount not to exceed $5,000,000 at any time; (iv) other such investments
reasonably necessary for the operation, maintenance and improvement of the Mall
in an aggregate amount not to exceed $2,500,000 at any time; (v) loans or
advances to employees made in the ordinary course of business of the Mall
Subsidiary in an aggregate amount not to exceed $500,000 at any time; and (vi)
stock, obligations or securities received in settlement of debts created in the
ordinary course of business and owing to Mall Subsidiary or in satisfaction of
judgments.
C. Affiliate Transactions. Borrowers shall not permit Mall Subsidiary
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 any Borrower or Mall Subsidiary or with any Affiliate of a
Borrower or Mall Subsidiary or any such holder, provided that Mall Subsidiary
may enter into or permit to exist (i) transactions that are not less favorable
to Mall Subsidiary than those that might be obtained at the time from Persons
who are not such a holder of Affiliate if Borrowers have delivered to Lender (a)
with respect to any transaction involving an amount in excess of
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$500,000, an Officers Certificate certifying that such transaction complies with
this clause (i), (b) 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 Borrowers approving such transaction and an Officers
Certificate certifying that such transaction complies with this clause (i) 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 Mall Subsidiary from
a financial point of view issued by an Independent Financial Advisor at the time
such transaction is entered into, (ii) transactions contemplated by the Sale and
Contribution Agreement, the Mall Lease, the Tranche A Take Out Commitment, the
Tranche B Take Out Commitment, the Substitute Tranche B Loan, the HVAC Services
Agreement, the Services Agreement, the Billboard Master Lease and the
Cooperation Agreement, (v) any guarantees by Xxxxxxx of Indebtedness of Mall
Subsidiary, (vi) purchases of materials or services from a Joint Venture
Supplier by the Mall Subsidiary in the ordinary course of business on arm's
length terms; (vii) any employment, indemnification, noncompetition or
confidentiality agreement entered into by Mall Subsidiary with its employees or
directors in the ordinary course of business, (viii) loans or advances to
employees of Mall Subsidiary, but in any event not to exceed $500,000 in the
aggregate outstanding at any one time and (ix) the payment of reasonable fees to
directors of Mall Subsidiary or its managing member who are not employees of
Mall Subsidiary.
D. Restricted Junior Payments. Borrowers shall not permit Mall
Subsidiary to make any Restricted Junior Payments described in clauses (i)
through (iii) inclusive of the definition of Restricted Junior Payments unless
such Restricted Junior Payments are made pro rata on all equity interests of
Mall Subsidiary (so that Borrowers receive a portion of such Restricted Junior
Payment equal to the direct or indirect ownership interest of Borrowers in Mall
Subsidiary).
6.17 Compliance with Take Out Agreements. Borrowers shall not take any
action which would cause a default beyond any applicable notice or grace period
under, terminate or prevent (as of the required time) the satisfaction of a
condition to the obligations of the Permanent Mall Lender or Xxxxxxx, under the
Tranche A Take Out Commitment or the Tranche B Take Out Commitment as the case
may be. Without limiting the generality of the foregoing, Borrowers shall comply
with the terms of the Tranche A Take Out Commitment with respect to entering
into any "XXXXX" "OEA" or "Permitted Leases" (as such terms are defined in the
Tranche A Take Out Commitment) required thereunder.
6.18 Limitation on Phase II Construction. Borrowers shall not, and shall
not permit any of their Subsidiaries, at any time prior to receipt by Borrowers
or any such Subsidiary of a temporary certificate of occupancy from Xxxxx
County, Nevada with respect to the Project (as
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currently defined) (a) to construct, develop or improve the Phase II Land or any
building on the Phase II Land (including any excavation or site work and
including the proposed Phase II parking garage), (b) enter into any contract or
agreement for such construction, development or improvement, or for any
materials, supplies or labor necessary in connection with such construction
development or improvement (other than a contract of agreement that is
conditional upon satisfaction of the above condition), or (c) incur any
Indebtedness the proceeds of which are expected to be used for the construction,
development or improvement of the Phase II Land or any building on the Phase II
Land, except (i) any construction, development or improvement on the Phase II
Land or any temporary building on the Phase II Land in connection with the
Project in accordance with the Plans and Specifications and included in the
Project Budget; and (ii) any design, architectural, engineering or development
work not involving actual construction on the Phase II Land.
Section 7. EVENTS OF DEFAULT
If any of the following conditions or events set forth in subsections
7.1, 7.2, 7.3, 7.4, 7.5, 7.6, 7.7, 7.8, 7.9, 7.11, 7.12 or 7.15 below or any
Disbursement Agreement Event of Default shall occur prior to the Mall Release
Date or if any of the conditions or events set forth in subsections 7.1 through
7.19 inclusive below shall occur on or after the Mall Release Date (any such
conditions or events, before or after the Mall Release Date, collectively,
"Events of Default").
7.1 Failure to Make Payments When Due.
Failure by Borrowers 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; or failure by
Borrowers 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
7.2 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
of one or more items of Indebtedness (other than Indebtedness referred to in
subsection 7.1) or Contingent Obligations in an individual principal amount of
$2,500,000 or more or with an aggregate principal amount of $5,000,000 or more,
in each case beyond the end of any grace period provided therefor; or (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
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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
7.3 Breach of Certain Covenants.
Failure of Loan Parties to perform or comply with any term or
condition contained in subsection 2.5 or 5.2 or Section 6 (to the extent
applicable at such time) of this Agreement provided that the failure to perform
or comply with any such provision incorporated by reference from the
Disbursement Agreement shall constitute an Event of Default hereunder only to
the extent such failure to perform or comply constitutes a Disbursement
Agreement Event of Default; or
7.4 Breach of Warranty.
Any representation, warranty, certification or other statement
made by Borrowers or any of their Subsidiaries in any Loan Document or in any
statement or certificate at any time given by Borrowers or any of their
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
provided that the failure to perform or comply with any such provision
incorporated by reference from the Disbursement Agreement shall constitute an
Event of Default hereunder only to the extent such failure to perform or to
comply constitutes a Disbursement Agreement Event of Default; or
7.5 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 7,
and such default shall not have been remedied or waived within 30 days after the
earlier of (i) an officer of Borrowers or such Loan Party becoming aware of such
default or (ii) receipt by Borrowers and such Loan Party of notice from Lender
of such default provided that the failure to perform or comply with any such
provision incorporated by reference from the Disbursement Agreement shall
constitute an Event of Default hereunder only to the extent such failure to
perform or comply constitutes a Disbursement Agreement Event of Default; or
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7.6 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 a Borrower or any of its 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 a Borrower or any of its 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 a Borrower or any of its
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 a Borrower or any of its 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 a Borrower or any of its Subsidiaries, and any such event
described in this clause (ii) shall continue for 60 days unless dismissed,
bonded or discharged; or
7.7 Voluntary Bankruptcy; Appointment of Receiver, etc.
(i) A Borrower or any of its 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 a Borrower or any of its Subsidiaries shall
make any assignment for the benefit of creditors; or (ii) a Borrower or any of
its Subsidiaries shall be unable, or shall fail generally, or shall admit in
writing its inability, to 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 a
Borrower or any of its Subsidiaries (or any committee thereof) 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
7.8 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 $2,500,000
or (ii) in the aggregate at any time an amount in excess of $5,000,000 (in
either case not adequately covered by insurance as to which a solvent and
unaffiliated insurance company has acknowledged coverage) shall be
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entered or filed against a Borrower or any of its Subsidiaries or any of their
respective assets and shall remain unpaid, 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
7.9 Dissolution.
Any order, judgment or decree shall be entered against a Borrower
or any of its 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
7.10 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 a 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
7.11 Change in Control.
As a result of any sale, pledge or other transfer, either (a)
Xxxxxxx and the Related Parties shall cease to beneficially own and control
directly or indirectly at least 70% of the issued and outstanding shares of
capital stock of LVSI, entitled (without regard to the occurrence of any
contingency) to vote for the election of members of the Board of Directors of
LVSI; (b) Xxxxxxx or any Related Party (as applicable but excluding any of the
Persons specified in clause (ii) of the definition of Related Parties) shall not
have invested the proceeds of any sale or transfer of shares of LVSI by Xxxxxxx
or any Related Party (as applicable) in the business of Borrowers or (c) LVSI
shall cease to own 100% of the equity Securities of Venetian other than any
preferred equity of Venetian owned by Interface or another Affiliate of Xxxxxxx
or (d) Borrowers shall cease to own 100% of the equity securities of each of
their Subsidiaries, Mall Manager and Phase II Manager, (e) the Intermediate
Holding Companies shall cease to own 100% of Mall Direct Holdings and Phase II
Direct Holding Company, (f) Mall Direct Holdings shall cease to own not less
than 80% of the equity securities in Mall Subsidiary or (g) Phase II Direct
Holding Company shall cease to own at least 51% of the equity securities in
Phase II Subsidiary or (h) the sole managing member of Mall Direct Holdings,
Phase II Direct Holding Company, Intermediate Holding Companies, Mall Subsidiary
and Phase II Subsidiary shall cease to be LVSI, Venetian or
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a wholly owned Subsidiary of LVSI or Venetian or (i) any "Change of Control" (as
defined in either of the Indentures) shall occur; or
7.12 Failure of Guaranty; Repudiation of Obligations.
At any time after the execution and delivery thereof, (i) Xxxxxxx
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 Lender shall not have
or shall cease to have a valid and perfected First Priority Lien in any
Collateral purported to be covered thereby, in each case for any reason other
than the failure of 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 and the termination of all
Commitments, including with respect to future advances by Lender, under any Loan
Document to which it is a party, or (iv) the subordination provisions in the
Subordinated Notes, the Employee Repurchase Notes, any Completion Guaranty Note
or any Substitute Tranche B Note or in any other instrument required under any
provision of this Agreement to be subordinated to the Obligations shall cease to
be enforceable against the holder thereof; or
7.13 Default Under or Termination of Operative Documents or FF&E Facility
Agreement.
Any of the Operative Documents shall terminate or be terminated
or canceled, prior to its stated expiration date or either Borrower shall be in
default (after the giving of any applicable notice and the expiration of any
applicable grace period) or any Affiliate of Borrowers 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 shall constitute an Event of Default
hereunder only if such default or termination may reasonably be expected to
cause a Material Adverse Effect;
7.14 Default Under or Termination of Permits.
A 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
material terms, provisions, agreements,
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covenants or conditions attaching to or under the issuance to such Person of any
material Permit, including the gaming license held by LVSI 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
7.15 Default Under or Termination of Cooperation Agreement.
Any default by Interface shall occur under Article III, Section 3
of the Cooperation Agreement beyond any applicable notice or cure periods; or
7.16 Bankruptcy or Dissolution of Mall Subsidiary.
Any event or circumstance described under subsections 7.6 or 7.7
hereof shall occur with respect to Mall Subsidiary, Mall Manager or Mall Direct
Holdings which would constitute an Event of Default if Mall Subsidiary, Mall
Manager or Mall Direct Holdings were a Subsidiary of Borrowers for purposes of
those subsections; or
7.17 Acceleration of Obligations of Mall Subsidiary.
Mall Subsidiary shall be in breach or default with respect to any
term of one or more items of Indebtedness or Contingent Obligation(s) in an
individual principal amount of $2,500,000 or more or an aggregate principal
amount of $5,000,000 or more, if as result thereof the holders of such
Indebtedness or Contingent Obligations) (or an agent or trustee acting on their
behalf) have caused that Indebtedness or Contingent Obligation(s) to become due
and payable prior to its stated maturity or the stated maturity of any
underlying obligation, as the case may be; or
7.18 Certain Investments in Mall Subsidiary or Phase II Subsidiary.
Xxxxxxx or any of his Affiliates (other than Borrowers and their
wholly owned Subsidiaries) shall acquire or hold any Investment in Mall
Subsidiary or Phase II Subsidiary or any Person which either Mall Subsidiary or
Phase II Subsidiary controls or holds an Investment other than (a) in the case
of Mall Subsidiary, through transactions expressly permitted under subsection
6.16 and (b) in the case of Phase II Subsidiary, investments arising through
loans, completion guaranties or other guaranties substantially similar to those
provided in connection with the development of the Project and permitted under
clause (a) of this subsection 7.18.
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7.19 Default Under or Termination of Take Out Commitments.
Any of the Tranche A Take Out Commitment or Tranche B Take Out
Commitment shall terminate or be terminated or canceled, prior to its stated
expiration date or any Borrower shall be in default (after the giving of any
applicable notice and the expiration of any applicable grace period) or any
Affiliate of Borrowers shall be in default (after the giving of any applicable
notice and the expiration of any applicable grace period) under any of such
agreements or, if the Tranche A Take Out Commitment or the Tranche B Take Out
Commitment shall not have funded on or before the Mall Release Date.
THEN (i) upon the occurrence of any Event of Default described in subsection 7.6
or 7.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans, and (b) 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 Borrowers, and the obligation
of Lender to make any Loan shall thereupon terminate, and (ii) upon the
occurrence and during the continuation of any other Event of Default, Lender
may, by written notice to Borrowers, declare all or any portion of the amounts
described above to be, and the same shall forthwith become, immediately due and
payable, and the obligation of Lender to make any Loan hereunder shall thereupon
terminate. Upon the occurrence of any Event of Default, Lender shall have the
right to remove the existing manager of the Mall and/or the leasing broker of
the Mall and to appoint new managers and/or leasing brokers and shall have the
further right to terminate, modify or amend any contracts pursuant to which
management or leasing broker services are provided to the Mall.
Section 8. MISCELLANEOUS
8.1 Assignments and Participations in Loans.
A. General. 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 Borrowers in, all or
any part of its Commitment or any Loan or Loans made by it 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 Borrowers, require Borrowers 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.
Except as otherwise provided in this subsection 8.1, Lender shall not, as
between Borrowers and Lender, be relieved of any of its obligations hereunder as
a result
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of any sale, assignment or transfer of, or any granting of
participations in, all or any part of its Commitments or the Loans, or the other
Obligations owed to Lender.
B. Assignments.
(i) Amounts and Terms of Assignments. Each Commitment, Loan, or
participation therein, or other Obligation may (a) be assigned in any
amount to another Lender, or to an Affiliate of Lender, with the giving
of notice to Borrowers or (b) be assigned in an aggregate amount of not
less than $5,000,000 (or such lesser amount as shall constitute the
aggregate amount of the Commitments, Loans, and participations therein,
and other Obligations of the assigning Lender) to any other Eligible
Assignee with the consent of Borrowers (which consent shall not be
unreasonably withheld or delayed). 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 or participations therein, or other Obligations or the portion
thereof so assigned. The assignor or assignee to each such assignment
shall execute and deliver an Assignment Agreement, and, 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 by their terms survive the termination of this
Agreement) 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. 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
Lender for cancellation, and thereupon new Notes shall be issued to the
assignee and to the assigning Lender, substantially in the form of
Exhibit M-1 and/or Exhibit M-2, as the case may be, hereto, with
appropriate insertions, to reflect the new Commitments and/or
outstanding Loans, as the case may be, of the assignee and the assigning
Lender.
C. Participations. The holder of any participation, other than an
Affiliate of 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
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date of any Loan allocated to such participation or (ii) a reduction of the
principal amount of or the rate of interest payable on any Loan allocated to
such participation, and all amounts payable by Borrowers hereunder (including
amounts payable to such Lender pursuant to subsections 2.6 and 2.7) shall be
determined as if such Lender had not sold such participation. Borrowers and each
Lender hereby acknowledge and agree that, solely for purposes of subsections 8.5
and 8.6, (a) any participation will give rise to a direct obligation of
Borrowers to the participant and (b) the participant shall be considered to be a
"Lender".
D. Information. Lender may furnish any information concerning Borrowers
and their Subsidiaries in the possession of Lender from time to time to
assignees and participants (including prospective assignees and participants),
subject to subsection 8.19.
E. Representations of Lenders. Lender hereby represents and warrants (i)
that it is an Eligible Assignee described in clause (A) of the definition
thereof; (ii) that it has experience and expertise in the making of loans such
as the Loans; and (iii) that it will make its Loans for its own account in the
ordinary course of its business and without a view to distribution of such Loans
within the meaning of the Securities Act or the Exchange Act or other federal
securities laws (it being understood that, subject to the provisions of this
subsection 8.1, the disposition of such Loans or any interests therein shall at
all times remain within its exclusive control). 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.
8.2 Performance of Borrowers' Obligations.
Borrowers agree that Lender may, but shall have no obligation to,
(i) make any other payment or perform any act required of Borrowers under any
Financing Agreement or (ii) take any other action which Lender in its discretion
deems necessary or desirable to protect or preserve the Collateral. Borrowers
agree to pay Lender, upon demand, the principal amount of all funds advanced by
Lender under this subsection 8.2, together with interest thereon at the rate
from time to time applicable to Loans from the date of such advance until the
outstanding principal balance thereof is paid in full; provided, however, that
Lender shall not make a demand for payment of such advance made in connection
with the Tranche A Take Out Commitment until after the Completion Date.
8.3 Expenses.
Whether or not the transactions contemplated hereby shall be
consummated, Borrowers agree to pay promptly (i) all the actual and reasonable
costs and expenses as well as
114
travel costs and expenses incurred by Lender and its agents in investigating and
negotiating the transaction, 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 Borrowers (including any opinions
requested by Lender as to any legal matters arising hereunder) and of Borrowers'
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 Lender 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
Borrowers; (iv) all the actual costs and reasonable expenses of creating and
perfecting Liens in favor of Lender 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 Lender and of counsel
providing any opinions that Lender 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 Lender or its counsel)
of obtaining and reviewing any appraisals provided for under any Loan Documents
or the Disbursement Agreement, any environmental audits or reports provided for
under subsection 5.7B or under the Disbursement Agreement; and (vi) the custody
or preservation of any of the Collateral; (vii) all other actual and reasonable
costs and expenses incurred by Lender 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 (viii) 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 Lender 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 the Intermediate Holding Company 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.
8.4 Indemnity.
In addition to the payment of expenses pursuant to subsection
8.3, whether or not the transactions contemplated hereby shall be consummated,
Borrowers agree to defend (subject to Borrowers' selection of counsel with the
consent of the Indemnitee, which shall not be
115
unreasonably withheld), indemnify, pay and hold harmless Lender, and the
officers, directors, employees, agents and affiliates of Lender (collectively
called the "Indemnitees"), from and against any and all Indemnified Liabilities
(as hereinafter defined); provided that Borrowers 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 the Intermediate Holding
Company Guaranty), (ii) the statements contained in the commitment letter
delivered by any Lender to Borrowers 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 Borrowers or any of their Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and
hold harmless set forth in this subsection 8.4 may be unenforceable in whole or
in part because they are violative of any law or public policy, Borrowers 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.
116
8.5 Set-Off.
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 Lender is hereby authorized by Borrowers at
any time or from time to time, without notice to Borrowers or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all Indebtedness at any time held or owing by
Lender to or for the credit or the account of Borrowers against and on account
of the obligations and liabilities of Borrowers to Lender under this Agreement
and participations therein and the other Loan Documents, including all claims of
any nature or description arising out of or connected with this Agreement and
participations therein or any other Loan Document, irrespective of whether or
not (i) Lender shall have made any demand hereunder or (ii) the principal of or
the interest on the Loans or any other amounts due hereunder shall have become
due and payable pursuant to Section 7 and although said obligations and
liabilities, or any of them, may be contingent or unmatured.
8.6 Amendments and Waivers.
This Agreement and the Notes and other Loan Documents may not be
modified, altered or amended, except by an agreement in writing signed by
Borrowers and Lender. No delay or omission of Lender to exercise any right or
remedy granted under this Agreement or the Notes or other Loan Documents shall
impair such right or remedy or be construed to be a waiver of any Default or the
acquiescence therein, and any single or partial exercise of any such right or
remedy shall not preclude other or further exercise thereof or the exercise of
any other right or remedy.
8.7 Certain Matters Affecting Lenders.
(a) If (i) the Nevada Gaming Commission shall determine that
Lender does not meet suitability standards prescribed under the Nevada Gaming
Regulations or (ii) any other gaming authority with jurisdiction over the gaming
business of Borrowers shall determine that Lender does not meet its suitability
standards (in any such case, a "Former Lender"), the Former Lender shall have
the right (but not the duty) to designate any other Eligible Assignee. The
Substitute Lender shall assume the rights and obligations of the Former Lender
under this Agreement. Borrowers shall bear the costs and expenses of any Lender
required by the Nevada Gaming Commission, or any other gaming authority with
jurisdiction over the gaming business of Borrowers, to file an application for a
finding of suitability in connection with the investigation of an application by
Borrowers for a license to operate a gaming establishment, in connection with
such application for a finding of suitability.
117
(b) Notwithstanding the provisions of subsection (a) of this
subsection 8.7, if Lender becomes a Former Lender, and if the Former Lender
fails to find an Eligible Assignee pursuant to subsection (a) of this subsection
8.7 within any time period specified by the appropriate gaming authority for the
withdrawal of a Former Lender (the "Withdrawal Period"), Borrowers shall
immediately prepay in full the outstanding principal amount of Loans made by
such Former Lender, together with accrued interest thereon to the earlier of (x)
the date of payment or (y) the last day of any Withdrawal Period.
8.8 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.
8.9 Notices.
Unless otherwise specifically provided herein, any notice or
other communica tion 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 Lender 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 such other address as shall be designated by such Person in a
written notice delivered to the other parties hereto.
8.10 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 hereunder.
B. Notwithstanding anything in this Agreement or implied by law
to the contrary, the agreements of Borrowers set forth in subsections 2.6, 2.7,
8.2, 8.3, 8.4, 8.5 and 8.19 shall survive the payment of the Loans and the
reimbursement of any amounts drawn thereunder, and the termination of this
Agreement.
118
8.11 Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of 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.
8.12 Marshalling; Payments Set Aside.
Lender shall not be under any obligation to marshal any assets in
favor of Borrowers or any other party or against or in payment of any or all of
the Obligations. To the extent that Borrowers make a payment or payments to
Lender, or Lender enforces any security interests or exercise its 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 fraudu
lent 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.
8.13 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
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
8.14 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.
119
8.15 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 WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES.
8.16 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 Lender. Neither Borrowers' rights or
obligations hereunder nor any interest therein may be assigned or delegated by
Borrowers without the prior written consent of Lender.
8.17 Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST BORROWERS 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 THE COUNTY OF XXXX, STATE OF ILLINOIS OR NEW YORK. BY EXECUTING
AND DELIVERING THIS AGREEMENT, BORROWERS, FOR THEMSELVES AND IN CONNECTION WITH
THEIR PROPERTIES, IRREVOCABLY
(I) ACCEPT GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVE ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREE 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 BORROWERS AT THEIR ADDRESS PROVIDED IN ACCORDANCE
WITH SUBSECTION 8.9;
(IV) AGREE THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER BORROWERS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT;
120
(V) AGREE THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST BORROWERS
IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREE THAT THE PROVISIONS OF THIS SUBSECTION 8.19 RELATING
TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE
FULLEST EXTENT PERMISSIBLE UNDER LAW.
8.18 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
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
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 8.18 AND EXECUT ED BY EACH OF
THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICA TIONS 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.
8.19 Confidentiality.
Lender shall hold all non-public information obtained pursuant to
the requirements of this Agreement in accordance with Lender's customary
procedures for handling
121
confidential information of this nature and in accordance with safe and sound
banking practices, it being understood and agreed by Borrowers that in any event
Lender may make disclosures to Affiliates of Lender or disclosures reasonably
required by any bona fide assignee, transferee or participant in connection with
the contemplated assignment or transfer by Lender of any Loans or any
participations therein (provided that such assignee, transferee or participant
agree to also be bound by this subsection 8.19), 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, Lender shall notify Borrowers 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 Lender by such governmental
agency) for disclosure of any such non-public information prior to disclosure of
such information; and provided, further that in no event shall Lender be
obligated or required to return any materials furnished by Borrowers or any of
their Subsidiaries.
8.20 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 upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Borrowers and
Lender of written or telephonic notification of such execution and authorization
of delivery thereof.
8.21 Gaming Authorities.
Lender agrees to cooperate with the Nevada Gaming Authorities in
connection with the administration of their regulatory jurisdiction over
Borrowers and their Subsidiaries, including, without limitation, the provision
of such documents or other information as may be requested by any such Nevada
Gaming Authority relating to Lender, or Borrowers or any of their Subsidiaries,
or to the Loan Documents. Notwithstanding any other provision of the Agreement,
Borrowers expressly authorize Lender to cooperate with the Nevada Gaming
Authorities as described above.
[Remainder of page intentionally left blank]
122
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.
BORROWERS:
LAS VEGAS SANDS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
Notice Address:
3355 Las Vegas Sands, Inc.
Xxxx 0X
Xxx Xxxxx, Xxxxxx 00000
Attention: General Counsel
Telefax: (000) 000-0000
VENETIAN CASINO RESORT, LLC
By: Las Vegas Sands, Inc., as managing member
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
Notice Address:
3355 Las Vegas Sands, Inc.
Xxxx 0X
Xxx Xxxxx, Xxxxxx 00000
Attention: General Counsel
Telefax: (000) 000-0000
GRAND CANAL SHOPS MALL CONSTRUCTION,
LLC
By: Venetian Casino Resort, LLC, as sole member
By: Las Vegas Sands, Inc.,
as managing member
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
Notice Address:
0000 Xxx Xxxxx Xxxxx, Xxx.
Xxxx 0X
Xxx Xxxxx, Xxxxxx 00000
Attention: General Counsel
Telefax: (000) 000-0000
LENDER:
GMAC COMMERCIAL MORTGAGE
CORPORATION
By: /s/ Xxxxx Xxxxxxxxx
----------------------------------------
Authorized signatory
Notice Address:
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxxxx
Telefax: (000) 000-0000
================================================================================
CREDIT AGREEMENT
DATED AS OF NOVEMBER 14, 1997
AMONG
LAS VEGAS SANDS, INC.,
VENETIAN CASINO RESORT, LLC and
GRAND CANAL SHOPS MALL CONSTRUCTION, LLC
as Borrowers,
and
GMAC COMMERCIAL MORTGAGE CORPORATION,
as Lender
================================================================================
LAS VEGAS SANDS, INC.,
VENETIAN CASINO RESORT, LLC and
GRAND CANAL SHOPS MALL CONSTRUCTION, LLC
CREDIT AGREEMENT
TABLE OF CONTENTS
Page
Section 1. DEFINITIONS......................................................................2
1.1 Certain Defined Terms............................................................2
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations
Under Agreement.................................................................41
1.3 Other Definitional Provisions and Rules of Construction.........................42
Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS......................................43
2.1 Commitments; Making of Loans; Notes; Maturity...................................43
2.2 Interest on the Loans...........................................................45
2.3 Fees............................................................................46
2.4 Prepayments; General Provisions Regarding Payments; Application of
Proceeds of Collateral and Payments Under Intermediate Holding
Company Guaranty................................................................47
2.5 Use of Proceeds.................................................................50
2.6 Breakage Fees...................................................................50
2.7 Increased Costs; Taxes; Capital Adequacy........................................51
2.8 Obligation of Lender to Mitigate................................................55
2.9 Obligations Joint and Several...................................................56
Section 3. CONDITIONS TO LOANS.............................................................57
3.1 Conditions to Initial Loans.....................................................57
3.2 Conditions to Subsequent Advances...............................................61
Section 4. BORROWERS' REPRESENTATIONS AND WARRANTIES.......................................61
4.1 Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries....................................................................61
4.2 Authorization of Borrowing, etc.................................................63
4.3 Financial Condition.............................................................64
4.4 No Material Adverse Change; No Restricted Junior Payments.......................65
4.5 Title to Properties; Liens; Real Property.......................................65
4.6 Litigation; Adverse Facts.......................................................66
4.7 Payment of Taxes................................................................66
i
Page
4.8 Performance of Agreements; Materially Adverse Agreements; Material
Contracts.......................................................................66
4.9 Governmental Regulation.........................................................67
4.10 Securities Activities...........................................................67
4.11 Employee Benefit Plans..........................................................67
4.12 Certain Fees....................................................................68
4.13 Environmental Protection........................................................68
4.14 Employee Matters................................................................69
4.15 Solvency........................................................................69
4.16 Matters Relating to Collateral..................................................69
Section 5. BORROWERS' AFFIRMATIVE COVENANTS................................................70
5.1 Financial Statements and Other Reports..........................................70
5.2 Corporate Existence, etc........................................................79
5.3 Payment of Taxes and Claims; Tax Consolidation..................................79
5.4 Maintenance of Properties; Insurance; Application of Net Loss Proceeds..........79
5.5 Inspection; Lender Meeting......................................................81
5.6 Compliance with Laws, etc.; Permits.............................................81
5.7 Environmental Review and Investigation, Disclosure, Etc.; Borrowers'
Actions Regarding Hazardous Materials Activities, Environmental Claims
and Violations of Environmental Laws............................................81
5.8 Compliance with Material Contracts..............................................84
5.9 Certain Post Closing Obligations................................................84
5.10 Payment of Liens................................................................85
5.11 Rights of First Offer...........................................................86
5.12 Further Assurances..............................................................86
5.13 Maintenance of Take Out Agreements and Lease Terms..............................89
Section 6. BORROWERS' NEGATIVE COVENANTS...................................................89
6.1 Indebtedness....................................................................89
6.2 Liens and Related Matters.......................................................91
6.3 Investments; Joint Ventures; Formation of Subsidiaries..........................93
6.4 Contingent Obligations..........................................................95
6.5 Restricted Junior Payments......................................................96
6.6 Restriction on Fundamental Changes; Asset Sales and Acquisitions................98
6.7 Sales and Lease-Backs..........................................................101
6.8 Sale or Discount of Receivables................................................101
6.9 Transactions with Shareholders and Affiliates..................................102
6.10 Disposal of Subsidiary Stock...................................................104
6.11 Conduct of Business............................................................104
6.12 Certain Restrictions on Changes to Operative Documents, Permits, Project
Budget or Project Schedule.....................................................105
ii
Page
6.13 Fiscal Year....................................................................106
6.14 Zoning and Contract Changes and Compliance.....................................106
6.15 No Joint Assessment; Separate Lots.............................................107
6.16 Certain Covenants Applicable to Mall Subsidiary................................107
6.17 Compliance with Take Out Agreements............................................109
6.18 Limitation on Phase II Construction............................................109
Section 7. EVENTS OF DEFAULT..............................................................109
7.1 Failure to Make Payments When Due..............................................110
7.2 Default under Other Indebtedness or Contingent Obligations.....................110
7.3 Breach of Certain Covenants....................................................110
7.4 Breach of Warranty.............................................................111
7.5 Other Defaults Under Loan Documents............................................111
7.6 Involuntary Bankruptcy; Appointment of Receiver, etc...........................111
7.7 Voluntary Bankruptcy; Appointment of Receiver, etc.............................112
7.8 Judgments and Attachments......................................................112
7.9 Dissolution....................................................................112
7.10 Employee Benefit Plans.........................................................113
7.11 Change in Control..............................................................113
7.12 Failure of Guaranty; Repudiation of Obligations................................113
7.13 Default Under or Termination of Operative Documents or FF&E Facility
Agreement......................................................................114
7.14 Default Under or Termination of Permits........................................114
7.15 Default Under or Termination of Cooperation Agreement..........................115
7.16 Bankruptcy or Dissolution of Mall Subsidiary...................................115
7.17 Acceleration of Obligations of Mall Subsidiary.................................115
7.18 Certain Investments in Mall Subsidiary or Phase II Subsidiary..................115
7.19 Default Under or Termination of Take Out Commitments...........................115
Section 8. MISCELLANEOUS..................................................................116
8.1 Assignments and Participations in Loans........................................116
8.2 Performance of Borrowers' Obligations..........................................118
8.3 Expenses.......................................................................118
8.4 Indemnity......................................................................120
8.5 Set-Off........................................................................121
8.6 Amendments and Waivers.........................................................121
8.7 Certain Matters Affecting Lenders..............................................121
8.8 Independence of Covenants......................................................122
8.9 Notices........................................................................122
8.10 Survival of Representations, Warranties and Agreements.........................123
8.11 Failure or Indulgence Not Waiver; Remedies Cumulative..........................123
8.12 Marshalling; Payments Set Aside................................................123
iii
Page
8.13 Severability...................................................................123
8.14 Headings.......................................................................124
8.15 Applicable Law.................................................................124
8.16 Successors and Assigns.........................................................124
8.17 Consent to Jurisdiction and Service of Process.................................124
8.18 Waiver of Jury Trial...........................................................125
8.19 Confidentiality................................................................126
8.20 Counterparts; Effectiveness....................................................126
8.21 Gaming Authorities.............................................................127
Signature pages .............................................................. S-1
iv
EXHIBITS
Exhibit A FORM OF XXXXXXX GUARANTY
Exhibit B FORM OF XXXXXXX INTERCREDITOR AGREEMENT
Exhibit C FORM OF ASSIGNMENT AGREEMENT
Exhibit D FORM OF BORROWERS SECURITY AGREEMENT
Exhibit E FORM OF COLLATERAL ACCOUNT AGREEMENT
Exhibit F FORM OF COMPLETION GUARANTY NOTE
Exhibit G FORM OF DEED OF TRUST
Exhibit H FORM OF DISBURSEMENT AGREEMENT
Exhibit I FORM OF INTERCREDITOR AGREEMENT
Exhibit J FORM OF LEASEHOLD DEED OF TRUST
Exhibit K FORM OF MALL CONSTRUCTION SUBSIDIARY SECURITY
AGREEMENT
Exhibit L FORM OF INTERMEDIATE HOLDING GUARANTY
Exhibit M-1 FORM OF TRANCHE A NOTE
Exhibit X-0 XXXX XX XXXXXXX X NOTE
Exhibit N FORM OF SUBSTITUTE TRANCHE B NOTE
Exhibit O FORM OF THIRD-PARTY ACCOUNT AGREEMENT
Exhibit P FORM OF MORTGAGE POLICY
Exhibit Q FORM OF ENVIRONMENTAL INDEMNITY AGREEMENT
Exhibit R FORM OF FINANCIAL CONDITION CERTIFICATE
Exhibit S FORM OF OPINION OF XXXX, WEISS, RIFKIND, XXXXXXX &
XXXXXXXX
Exhibit T FORM OF OPINION OF XXXXXX XXXXXX & XXXXXXX
v
SCHEDULES
4.1A ORGANIZATION AND POWERS
4.1C OWNERSHIP OF BORROWERS
4.1D SUBSIDIARIES OF BORROWERS
4.1E OPTIONS, WARRANTS AND OTHER RIGHTS TO ACQUIRE EQUITY
4.4 TRANSACTIONS SINCE JUNE 30, 1997; RESTRICTED JUNIOR
PAYMENTS
4.5 REAL PROPERTY
4.6 LITIGATION
4.8 MATERIAL CONTRACTS
4.11 CERTAIN EMPLOYEE BENEFIT PLANS
4.12 BROKER'S OR FINDER'S FEES OR COMMISSIONS
4.13 ENVIRONMENTAL MATTERS
4.16B PERMITS
5.1 NEW SUBSIDIARIES
6.2 CERTAIN EXISTING LIENS
6.3 CERTAIN EXISTING INVESTMENTS
