LOAN AGREEMENT
Dated as of July 1, 1996
among
MGM GRAND, INC.,
as Borrower
The Banks and Co-Agents herein named
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
as Administrative Agent
TABLE OF CONTENTS
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Page
Article 1 DEFINITIONS AND ACCOUNTING TERMS ...................... 1
1.1 Defined Terms ......................................... 1
1.2 Use of Defined Terms .................................. 34
1.3 Accounting Terms - Fiscal Periods ..................... 34
1.4 Rounding .............................................. 35
1.5 Exhibits and Schedules ................................ 35
1.6 Miscellaneous Terms ................................... 35
Article 2 LOANS AND LETTERS OF CREDIT ........................... 36
2.1 Loans-General ......................................... 36
2.2 Base Rate Loans ....................................... 37
2.3 Eurodollar Rate Loans ................................. 37
2.4 Letters of Credit ..................................... 38
2.5 Swing Line ............................................ 42
2.6 Increase to the Commitment ............................ 44
2.7 Voluntary Reduction of Commitment ..................... 46
2.8 Scheduled Reduction of Commitment ..................... 46
2.9 Extension of the Reduction Date and the
Maturity Date ......................................... 46
2.10 Optional Termination of Commitment .................... 47
2.11 Administrative Agent's Right to Assume Funds
Available for Advances ................................ 48
2.12 Collateral and Guaranty ............................... 48
2.13 Senior Indebtedness ................................... 48
Article 3 PAYMENTS AND FEES ..................................... 49
3.1 Principal and Interest ................................ 49
3.2 Underwriting Fees ..................................... 50
3.3 Upfront Fees .......................................... 50
3.4 Commitment Fees ....................................... 51
3.5 Letter of Credit Fees ................................. 51
3.6 Agency Fees ........................................... 52
3.7 Increased Commitment Costs ............................ 52
3.8 Eurodollar Costs and Related Matters .................. 53
3.9 Late Payments ......................................... 57
3.10 Computation of Interest and Fees ...................... 57
3.11 Non-Banking Days ...................................... 58
3.12 Manner and Treatment of Payments ...................... 58
3.13 Funding Sources ....................................... 60
3.14 Failure to Charge Not Subsequent Waiver ............... 60
3.15 Administrative Agent's Right to Assume
Payments Will be Made by Borrower ..................... 60
3.16 Fee Determination Detail .............................. 61
3.17 Survivability ......................................... 61
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Article 4 REPRESENTATIONS AND WARRANTIES ........................ 62
4.1 Existence and Qualification; Power; Compliance
With Laws ............................................. 62
4.2 Authority; Compliance With Other Agreements
and Instruments and Government Regulations ............ 62
4.3 No Governmental Approvals Required .................... 63
4.4 Subsidiaries........................................... 63
4.5 Financial Statements .................................. 64
4.6 No Other Liabilities; No Material Adverse
Changes ............................................... 65
4.7 Title to Property...................................... 65
4.8 Intangible Assets ..................................... 65
4.9 Public Utility Holding Company Act .................... 65
4.10 Litigation ............................................ 65
4.11 Binding Obligations ................................... 66
4.12 No Default ............................................ 66
4.13 ERISA ................................................. 66
4.14 Regulations G, T, U and X; Investment Company
Act ................................................... 67
4.15 Disclosure ............................................ 67
4.16 Tax Liability ......................................... 67
4.17 Projections ........................................... 67
4.18 Hazardous Materials.................................... 67
4.19 Security Interests .................................... 68
Article 5 AFFIRMATIVE COVENANTS (OTHER THAN INFORMATION
AND REPORTING REQUIREMENTS) ........................... 70
5.1 Payment of Taxes and Other Potential Liens ............ 70
5.2 Preservation of Existence ............................. 70
5.3 Maintenance of Properties ............................. 70
5.4 Maintenance of Insurance .............................. 71
5.5 Compliance With Laws .................................. 71
5.6 Inspection Rights ..................................... 71
5.7 Keeping of Records and Books of Account ............... 71
5.8 Compliance With Agreements ............................ 71
5.9 Use of Proceeds ....................................... 72
5.10 New Restricted Subsidiaries ........................... 72
5.11 Hazardous Materials Laws .............................. 72
5.12 Change of Name ........................................ 72
5.13 MGM Grand - Atlantic City ............................. 73
5.14 Completion Certificates................................ 74
Article 6 NEGATIVE COVENANTS .................................... 76
6.1 Payment of Subordinated Obligations ................... 76
6.2 Disposition of Property ............................... 76
6.3 Mergers ............................................... 77
6.4 Hostile Acquisitions .................................. 77
6.5 Distributions ......................................... 77
6.6 ERISA ................................................. 77
6.7 Change in Nature of Business .......................... 78
6.8 Liens and Negative Pledges ............................ 78
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6.9 Indebtedness and Guaranty Obligations ................. 79
6.10 Transactions with Affiliates .......................... 80
6.11 Leverage Ratio ........................................ 81
6.12 Interest Charge Coverage Ratio ........................ 81
6.13 Capital Expenditures .................................. 81
6.14 Tangible Net Worth .................................... 82
6.15 Investments ........................................... 82
6.16 Restricted Subsidiary Indebtedness and
Guaranty Obligations .................................. 83
Article 7 INFORMATION AND REPORTING REQUIREMENTS ................ 85
7.1 Financial and Business Information .................... 85
7.2 Compliance Certificates ............................... 89
Article 8 CONDITIONS ............................................ 90
8.1 Initial Advances on the Closing Date .................. 90
8.2 Advances in Excess of $150,000,000 .................... 92
8.3 Any Advance ........................................... 96
Article 9 EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF
DEFAULT ............................................... 97
9.1 Events of Default ..................................... 97
9.2 Remedies Upon Event of Default ........................ 99
Article 10 THE ADMINISTRATIVE AGENT .............................. 103
10.1 Appointment and Authorization ......................... 103
10.2 Administrative Agent and Affiliates ................... 103
10.3 Proportionate Interest in any Collateral .............. 103
10.4 Banks' Credit Decisions ............................... 104
10.5 Action by Administrative Agent ........................ 104
10.6 Liability of Administrative Agent ..................... 105
10.7 Indemnification ....................................... 106
10.8 Successor Administrative Agent ........................ 107
10.9 Foreclosure on Collateral ............................. 108
10.10 No Obligations of Borrower ............................ 108
Article 11 MISCELLANEOUS ......................................... 109
11.1 Cumulative Remedies; No Waiver ........................ 109
11.2 Amendments; Consents .................................. 109
11.3 Costs, Expenses and Taxes ............................. 110
11.4 Nature of Banks' Obligations .......................... 111
11.5 Survival of Representations and Warranties ............ 112
11.6 Notices ............................................... 112
11.7 Execution of Loan Documents ........................... 112
11.8 Binding Effect; Assignment ............................ 113
11.9 Right of Setoff ....................................... 116
11.10 Sharing of Setoffs .................................... 116
11.11 Indemnity by Borrower ................................. 117
11.12 Nonliability of the Banks ............................. 118
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11.13 No Third Parties Benefited ............................ 119
11.14 Confidentiality ....................................... 120
11.15 Further Assurances .................................... 120
11.16 Integration ........................................... 120
11.17 Governing Law ......................................... 121
11.18 Severability of Provisions ............................ 121
11.19 Headings .............................................. 121
11.20 Time of the Essence ................................... 121
11.21 Foreign Banks and Participants ........................ 121
11.22 Hazardous Material Indemnity........................... 122
11.23 Gaming Boards ......................................... 123
11.24 Lien Releases ......................................... 123
11.25 Termination; Release of Liens ......................... 124
11.26 Removal of a Bank ..................................... 124
11.27 Waiver of Right to Trial by Jury ...................... 125
11.28 Purported Oral Amendments ............................. 125
Exhibits
--------
A - Borrower Security Agreement
B - Commitment Assignment and Acceptance
C - Compliance Certificate
D - Copyright Assignment
E - Irrevocable Security Agreement - Defeasance
F - Joinder Agreement
G - Nevada Deed of Trust
H - Nevada Pledge Escrow Agreement
I - Note
J-1 Opinion of CWMFJG&S (Closing Date)
J-2 Opinion of Xxxxxx Xxxxxx & Xxxxxxx (Closing Date)
J-3 Opinion of CWMFJG&S (Second Closing Date)
J-4 Opinion of Xxxxxx Xxxxxx & Xxxxxxx (Second Closing Date)
J-5 Opinion of New Jersey counsel (Second Closing Date)
K - Pledge Agreement
L - Pricing Certificate
M - Request for Letter of Credit
N - Request for Loan
O - Solvency Certificate
P - Subsidiary Guaranty
Q - Subsidiary Pledge Agreement
R - Subsidiary Security Agreement
S - Trademark Security Interest Assignment
Schedules
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1.1 Bank Commitments
4.3 Governmental Approvals
4.4 Subsidiaries
4.7 Existing Liens, Negative Pledges and Rights of Others
4.8 Trademarks and Trade Names
4.10 Material Litigation
4.17 Projections
4.18 Environmental Matters
6.9 Existing Indebtedness and Guaranty Obligations
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6.13 Required Investments in New York for Capital Expenditures
6.15 Existing Investments
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LOAN AGREEMENT
--------------
Dated as of July 1, 1996
This Loan Agreement ("Agreement") is entered into by and among MGM
Grand, Inc., a Delaware corporation ("Borrower"), each bank whose name is set
forth on the signature pages of this Agreement and each lender which may
hereafter become a party to this Agreement pursuant to Section 11.8
----
(collectively, the "Banks" and individually, a "Bank"), Bank of Scotland, CIBC
Inc., Societe Generale, The Long-Term Credit Bank of Japan, Ltd., and Xxxxx
Fargo Bank, N.A., as Co-Agents, and Bank of America National Trust and Savings
Association, as Administrative Agent.
In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
Article 1
DEFINITIONS AND ACCOUNTING TERMS
--------------------------------
1.1 Defined Terms. As used in this Agreement, the following terms
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shall have the meanings set forth below:
"Acquisition" means any transaction, or any series of related
-----------
transactions, by which Borrower or its Restricted Subsidiaries directly or
indirectly (i) acquire any going business or all or substantially all of
the assets of any Person, or any division thereof, whether through purchase
of assets, merger or otherwise, or (ii) acquire (in one transaction or as
the most recent transaction in a series of transactions) control of at
least a majority in ordinary voting power of the securities of a
corporation which have ordinary voting power for the election of directors,
or (iii) acquire control of a 50% or more ownership interest in any
partnership, joint venture or any other Person.
"Administrative Agent" means Bank of America, when acting in its
--------------------
capacity as the Administrative Agent under any of the Loan Documents, or
any successor Administrative Agent.
"Administrative Agent's Office" means the Administrative Agent's
-----------------------------
address as set forth on the signature pages of this Agreement, or such
other address as the Administrative Agent hereafter may designate by
written notice to Borrower and the Banks.
"Advance" means any advance made or to be made by any Bank to
-------
Borrower as provided in Article 2, and includes each Base Rate Advance and
--------- --------
Eurodollar Rate Advance.
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"Affiliate" means, as to any Person, any other Person which directly
---------
or indirectly controls, or is under common control with, or is controlled
by, such Person. As used in this definition, "control" (and the correlative
terms, "controlled by" and "under common control with") shall mean
possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise); provided that, in any event, any Person that owns, directly or
--------
indirectly, 10% or more of the securities having ordinary voting power for
the election of directors or other governing body of a corporation that has
more than 100 record holders of such securities, or 10% or more of the
partnership or other ownership interests of any other Person that has more
than 100 record holders of such interests, will be presumed (subject to
rebuttal by a preponderance of the evidence) to control such corporation,
partnership or other Person.
"Aggregate Effective Amount" means, as of any date of determination
--------------------------
and with respect to all Letters of Credit then outstanding, the sum of (a)
---
the aggregate effective face amounts of all such Letters of Credit not then
paid by the Issuing Bank plus (b) the aggregate amounts paid by the Issuing
----
Bank under such Letters of Credit not then reimbursed to the Issuing Bank
by Borrower pursuant to Section 2.4(d) and not the subject of Advances made
------
pursuant to Section 2.4(e).
------
"Agreement" means this Loan Agreement, either as originally executed
---------
or as it may from time to time be supplemented, modified, amended, restated
or extended.
"Annualized Cash Flow" means, as of the last day of any Fiscal Quarter
--------------------
and without duplication, (a) Borrower Group EBITDA for the four Fiscal
Quarters ended on that date, plus (b) Pre-Opening Expenses for the same
----
period, plus (c) EBITDA of the Australia Companies for the same period,
----
plus (d) New York Income Received for the same period, in each case,
----
determined in accordance with Generally Accepted Accounting Principles.
"Arranger" means BA Securities, Inc.
--------
"Atlantic City" means MGM Grand Atlantic City, Inc., a New Jersey
-------------
corporation which will be the owner of the proposed MGM Grand - Atlantic
City, its successors and permitted assigns.
"Atlantic City Completion Date" means the date upon which MGM Grand
-----------------------------
- Atlantic City is licensed to conduct gaming and open for business to the
general public with (a) at least 95% of the hotel rooms provided for in the
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construction plans ready for occupancy, (b) at least 95% of the square
footage of casino space provided for in the construction plans ready for
gaming and (c) substantially all other amenities of the MGM Grand -
Atlantic City substantially complete.
"Australia Companies" means, collectively, (a) MGM Grand Diamond,
-------------------
Inc., a Nevada corporation, (b) its wholly owned Subsidiary, MGM Grand
Australia Pty., Ltd., a corporation organized under the laws of the
Northern Territory of Australia, and (c) each Subsidiary of MGM Grand
Australia Pty., Ltd., their successors and permitted assigns.
"Australia Option Agreement" means that certain Option Deed dated June
--------------------------
30, 1995, as amended, among Borrower, certain of the Australia Companies,
and the other parties named therein, as in effect on the Closing Date, a
copy of which has been delivered to the Administrative Agent and the Banks.
"Average Quarterly Funded Debt" means, as of the last day of each
-----------------------------
Fiscal Quarter, the average of the principal amount of Funded Debt
outstanding on the last day of each of the three calendar months comprising
such Fiscal Quarter.
"Bank" means each bank whose name is set forth in the signature pages
----
of this Agreement and each lender which may hereafter become a party to
this Agreement pursuant to Section 11.8 (and to the extent a party to a
----
Secured Swap Agreement, any Affiliate of a Bank).
"Bank of America" means Bank of America National Trust and Savings
---------------
Association, its successors and assigns.
"Bank Disqualification" means, with respect to any Bank:
---------------------
(a) the failure of that Bank timely to file pursuant to
applicable Gaming Laws (i) any application requested of the Bank by
any Gaming Board in connection with any licensing required of that
Bank as a lender to Borrower or (ii) any required application or other
papers in connection with determination of the suitability of the Bank
as a lender to Borrower;
(b) the withdrawal by that Bank (except where requested or
permitted by the Gaming Board) of any such application or other
required papers; or
(c) any final determination by a Gaming Board pursuant to
applicable Gaming Laws (i) that the Bank
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is "unsuitable" as a lender to Borrower, (ii) that the Bank shall be
"disqualified" as a lender to Borrower or (iii) denying the issuance
to the Bank of any license required under applicable Gaming Laws to be
held by all lenders to Borrower.
"Banking Day" means any Monday, Tuesday, Wednesday, Thursday or
-----------
Friday, other than a day on which banks are authorized or required to be
----------
closed in California, Nevada or New York.
"Base Rate" means, as of any date of determination, the rate per annum
---------
(rounded upwards, if necessary, to the next 1/100 of 1%) equal to the
higher of (a) the Reference Rate in effect on such date and (b) the
---------
Federal Funds Rate in effect on such date plus 1/2 of 1% (50 basis points).
"Base Rate Advance" means an Advance made hereunder and specified to
-----------------
be a Base Rate Advance in accordance with Article 2.
---------
"Base Rate Loan" means a Loan made hereunder and specified to be a
--------------
Base Rate Loan in accordance with Article 2.
---------
"Base Rate Margin" means, for each Pricing Period, the interest rate
----------------
margin set forth below (expressed in basis points per annum) opposite the
Pricing Level for that Pricing Period:
Pricing Level Margin
------------- -------
I 0
II 0
III 25.00
IV 50.00
V 75.00
VI 100.00
"Borrower" means MGM Grand, Inc., a Delawarecorporation, its
--------
successors and permitted assigns.
"Borrower Group EBITDA" means, for any fiscal period,the EBITDA of
---------------------
Borrower and its Restricted Subsidiaries for that fiscal period.
"Borrower Security Agreement" means the Borrower Security Agreement to
---------------------------
be executed by Borrower on the Second Closing Date, substantially in the
form of Exhibit A, either as originally executed or as the same may from
---------
time to time be supplemented, modified, amended, renewed, extended or
supplanted.
-4-
"Capital Expenditure" means any expenditure for or related to fixed
-------------------
assets or purchased intangibles that is treated as a capital expenditure
under Generally Accepted Accounting Principles, including any amount which
---------
is required to be treated as an asset subject to a Capital Lease
Obligation.
"Capital Lease Obligations" means all monetary obligations of a Person
-------------------------
under any leasing or similar arrangement which, in accordance with
Generally Accepted Accounting Principles, is classified as a capital lease.
"Cash" means, when used in connection with any Person, all monetary
----
and non-monetary items owned by that Person that are treated as cash in
accordance with Generally Accepted Accounting Principles, consistently
applied.
"Cash Equivalents" means, when used in connection with any Person,
----------------
that Person's Investments in:
(a) Government Securities due within one year after the date of
the making of the Investment;
(b) readily marketable direct obligations of any State of the
United States of America or any political subdivision of any such
State or any public agency or instrumentality thereof given on the
date of such Investment a credit rating of at least Aa by Xxxxx'x
Investors Service, Inc. or AA by Standard & Poor's Rating Group (a
division of XxXxxx-Xxxx, Inc.) in each case due within one year from
the making of the Investment;
(c) certificates of deposit issued by, bank deposits in,
eurodollar deposits through, bankers' acceptances of, and repurchase
agreements covering Government Securities executed by any Bank or by
any bank incorporated under the Laws of the United States of America,
any State thereof or the District of Columbia and having on the date
of such Investment combined capital, surplus and undivided profits of
at least $250,000,000, or total assets of at least $5,000,000,000, in
each case due within one year after the date of the making of the
Investment;
(d) certificates of deposit issued by, bank deposits in,
eurodollar deposits through, bankers' acceptances of, and repurchase
agreements covering Government Securities executed by any branch or
office located in the United States of America of a bank incorporated
under the Laws of any jurisdiction outside the United States of
America having on the date of such Investment combined capital,
surplus and undivided profits of at least $500,000,000, or total
-5-
assets of at least $15,000,000,000, in each case due within one year
after the date of the making of the Investment;
(e) repurchase agreements covering Government Securities
executed by a broker or dealer registered under Section 15(b) of the
Securities Exchange Act of 1934, as amended, having on the date of the
Investment capital of at least $50,000,000, due within 90 days after
the date of the making of the Investment; provided that the maker of
--------
the Investment receives written confirmation of the transfer to it of
record ownership of the Government Securities on the books of a
"primary dealer" in such Government Securities or on the books of such
registered broker or dealer, as soon as practicable after the making
of the Investment;
(f) readily marketable commercial paper or other debt securities
issued by corporations doing business in and incorporated under the
Laws of the United States of America or any State thereof or of any
corporation that is the holding company for a bank described in clause
(c) or (d) above given on the date of such Investment a credit rating
- -
of at least P-1 by Xxxxx'x Investors Service, Inc. or A-1 by Standard
& Poor's Rating Group (a division of XxXxxx-Xxxx, Inc.), in each case
due within one year after the date of the making of the Investment;
(g) "money market preferred stock" issued by a corporation
incorporated under the Laws of the United States of America or any
State thereof (i) given on the date of such Investment a credit rating
of at least Aa by Xxxxx'x Investors Service, Inc. and AA by Standard &
Poor's Rating Group (a division of XxXxxx-Xxxx, Inc.), in each case
having an investment period not exceeding 50 days or (ii) to the
extent that investors therein have the benefit of a standby letter of
credit issued by a Bank or a bank described in clauses (c) or (d)
- -
above;
(h) a readily redeemable "money market mutual fund" sponsored by
a bank described in clause (c) or (d) hereof, or a registered broker
- -
or dealer described in clause (e) hereof, that has and maintains an
-
investment policy limiting its investments primarily to instruments of
the types described in clauses (a) through (g) hereof and given on the
- -
date of such Investment a credit rating of at least Aa by Xxxxx'x
Investors Service, Inc. and AA by Standard & Poor's Rating Group (a
division of XxXxxx-Xxxx, Inc.); and
-6-
(i) corporate notes or bonds having an original term to maturity
of not more than one year issued by a corporation incorporated under
the Laws of the United States of America or any State thereof, or a
participation interest therein; provided that any commercial paper
--------
issued by such corporation is given on the date of such Investment a
credit rating of at least Aa by Xxxxx'x Investors Service, Inc. and AA
by Standard & Poor's Rating Group (a division of XxXxxx-Xxxx, Inc.).
"Cash Interest Charges" means, for any Person and for any period, that
---------------------
portion of Interest Charges of that Person which are paid or currently
payable in Cash during that period excluding intercompany accounts.
"Certificate of a Responsible Official" means a certificate signed by
-------------------------------------
a Responsible Official of the Person providing the certificate.
"Change in Control" means (a) any transaction or series of related
-----------------
transactions in which any Unrelated Person or two or more Unrelated Persons
acting in concert acquire beneficial ownership (within the meaning of Rule
13d-3(a)(1) under the Securities Exchange Act of 1934, as amended),
directly or indirectly, of 25% or more of the outstanding common stock of
Borrower or (b) during any period of 24 consecutive months, individuals who
at the beginning of such period constituted the board of directors of
Borrower (together with any new or replacement directors whose election by
the board of directors, or whose nomination for election, was approved by a
vote of at least a majority of the directors then still in office who were
either directors at the beginning of such period or whose election or
nomination for reelection was previously so approved) cease for any reason
to constitute a majority of the directors then in office, provided,
--------
however, that no Change in Control shall exist for so long as Tracinda
Corporation, a Nevada corporation, and its Affiliates continue to be the
beneficial owner of 30% or more of the common stock of Borrower and no
other Person is the owner of more of the common stock of Borrower than
Tracinda Corporation and its Affiliates.
"Closing Date" means the time and Banking Day on which the conditions
------------
set forth in Section 8.1 are satisfied or waived. The Administrative Agent
---
shall notify Borrower and the Banks of the date that is the Closing Date.
"Co-Agents" means, collectively, Bank of Scotland, Societe Generale,
---------
The Long-Term Credit Bank of Japan, Ltd., Xxxxx Fargo Bank, N.A., and CIBC
Inc. The capacity
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of each Co-Agent is titular in nature only and the Co-Agents shall have no
rights, duties or responsibilities under the Loan Documents beyond those of
a Bank.
"Code" means the Internal Revenue Code of 1986, as amended or replaced
----
and as in effect from time to time.
"Collateral" means all of the collateral covered by the Collateral
----------
Documents.
"Collateral Documents" means, collectively, the Irrevocable Security
--------------------
Agreement - Defeasance, the Borrower Security Agreement, the Pledge
Agreement, each Subsidiary Pledge Agreement, the Trademark Security
Interest Assignment, the Copyright Assignment, the Subsidiary Security
Agreements, the Deeds of Trust and any other security agreement, pledge
agreement, deed of trust, mortgage or other collateral security agreement
hereafter executed and delivered by Borrower or any of its Restricted
Subsidiaries to secure the Obligations.
"Commercial Letter of Credit" means each Letter of Credit issued to
---------------------------
support the purchase of goods by Borrower which is determined to be a
commercial letter of credit by the Issuing Bank.
"Commitment" means, subject to Sections 2.6, 2.7, 2.8 and 2.10,
---------- --- --- --- ----
$500,000,000. As of the Closing Date, the respective Pro Rata Shares of the
Banks with respect to the Commitment are set forth in Schedule 1.1.
------------
"Commitment Assignment and Acceptance" means a commitment assignment
------------------------------------
and acceptance substantially in the form of Exhibit B.
---------
"Commitment Fee Rate" means, for each Pricing Period, the rate set
-------------------
forth below (expressed in basis points per annum) opposite the Pricing
Level for that Pricing Period:
Pricing Level Commitment Fee Rate
------------- -------------------
I 25.00
II 31.25
III 37.50
IV 37.50
V 43.75
VI 50.00
"Commitment Increase Date" has the meaning set forth for that term in
------------------------
Section 2.6(a).
------
"Compliance Certificate" means a certificate substantially in the form
----------------------
of Exhibit C, properly completed and signed by a Senior Officer of
---------
Borrower.
-8-
"Contractual Obligation" means, as to any Person, any provision of any
----------------------
outstanding security issued by that Person or of any material agreement,
instrument or undertaking to which that Person is a party or by which it
or any of its Property is bound.
"Copyright Assignment" means the Copyright Assignment to be executed
--------------------
and delivered by Borrower and its Restricted Subsidiaries on the Second
Closing Date substantially in the form of Exhibit D, either as originally
---------
executed or as it may from time to time be supplemented, modified, amended,
extended or supplanted.
"Creditors" means, collectively, the Administrative Agent, the Issuing
---------
Bank, the Swing Line Bank, each Bank and, where the context requires, any
one or more of them.
"CSG" means Bank of America Construction Services Group.
---
"Debtor Relief Laws" means the Bankruptcy Code of the United States of
------------------
America, as amended from time to time, and all other applicable
liquidation, conservatorship, bankruptcy, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief Laws
from time to time in effect affecting the rights of creditors generally.
"Deeds of Trust" means the Nevada Deed of Trust and, when executed,
--------------
the deed of trust or mortgage covering the MGM Grand - Atlantic City
referred to in Section 5.13.
----
"Default" means any event that, with the giving of any applicable
-------
notice or passage of time specified in Section 9.1, or both, would be an
---
Event of Default.
"Default Rate" means the interest rate prescribed in Section 3.9.
------------ ---
"Designated Deposit Account" means a deposit account to be maintained
--------------------------
by Borrower with Bank of America, as from time to time designated by
Borrower by written notification to the Administrative Agent.
"Designated Eurodollar Market" means, with respect to any Eurodollar
----------------------------
Rate Loan, (a) the London Eurodollar Market, (b) if prime banks in the
London Eurodollar Market are at the relevant time not accepting deposits of
Dollars or if the Administrative Agent determines in good faith that the
London Eurodollar Market does not represent at the relevant time the
effective pricing to the Banks for deposits of Dollars in the London
Eurodollar Market, the Cayman Islands Eurodollar Market or (c) if prime
banks in the Cayman Islands Eurodollar Market are at the relevant
-9-
time not accepting deposits of Dollars or if the Administrative Agent
determines in good faith that the Cayman Islands Eurodollar Market does not
represent at the relevant time the effective pricing to the Banks for
deposits of Dollars in the Cayman Islands Eurodollar Market, such other
Eurodollar Market as may from time to time be selected by the
Administrative Agent with the approval of Borrower and the Requisite Banks.
The Administrative Agent will endeavor to provide prompt notice to Borrower
of any change in the location of the Designated Eurodollar Market.
"Disposition" means the voluntary sale, transfer or other disposition
-----------
of any asset of Borrower or any of its Restricted Subsidiaries other than
----- ----
the voluntary sale, transfer or other disposition of (a) Cash, Cash
Equivalents, Investments (other than Investments in a Restricted
----- ----
Subsidiary, New York, Monorail or the Australia Companies), inventory or
other assets sold, leased or otherwise disposed of in the ordinary course
of business of Borrower or any of its Restricted Subsidiaries, (b)
equipment sold or otherwise disposed of where substantially similar
equipment in replacement thereof has theretofore been acquired, or
thereafter within 90 days is acquired, by Borrower or any of its Restricted
Subsidiaries, or where Borrower or the Restricted Subsidiary determine in
good faith that the failure to replace such equipment will not be
detrimental in any material respect to the business of Borrower or any of
its Restricted Subsidiaries or (c) of Property to Borrower or any of its
Restricted Subsidiaries.
"Distribution" means, with respect to any shares of capital stock or
------------
any warrant or option to purchase an equity security or other equity
security issued by a Person, (a) the retirement, redemption, purchase or
other acquisition for Cash or for Property (other than capital stock, or
any warrants or options to purchase an equity security or other security of
such Person) by such Person of any such security, (b) the declaration or
(without duplication) payment by such Person of any dividend in Cash or in
Property (other than capital stock, or any warrants or options to purchase
an equity security or other security of such Person) on or with respect to
any such security, (c) any Investment by such Person in the holder of 5% or
more of any such security if a purpose of such Investment is to avoid
characterization of the transaction as a Distribution and (d) any other
payment in Cash or Property (other than capital stock, or any warrants or
options to purchase an equity security or other security of such Person) by
such Person constituting a distribution under applicable Laws with respect
to such security.
-10-
"Dollars" or "$" means United States dollars.
------- -
"EBITDA" means, with respect to any fiscal period and with respect to
------
any Person, the sum of (a) Net Income of such Person for that period, plus
--- -- ----
(b) any extraordinary loss reflected in such Net Income, minus (c) any
-----
extraordinary gain reflected in such Net Income, plus (d) Interest Charges
----
of such Person for that period, plus (e) the aggregate amount of federal
----
and state taxes on or measured by income of such Person for that period
(whether or not payable during that period) plus (f) depreciation,
----
amortization and all other non-cash expenses for that period, in each case
as determined in accordance with Generally Accepted Accounting Principles.
"Eligible Assignee" means (a) another Bank, (b) with respect to any
-----------------
Bank, any Affiliate of that Bank having combined capital and surplus of
$100,000,000 or more, (c) any commercial bank having a combined capital and
surplus of $100,000,000 or more, (d) any insurance company engaged in the
business of writing insurance which (i) has a net worth of $200,000,000 or
more, (ii) is engaged in the business of lending money and extending credit
under credit facilities substantially similar to those extended under this
Agreement and (iii) is operationally and procedurally able to meet the
obligations of a Bank hereunder to the same degree as a commercial bank and
(e) any other financial institution (including a mutual fund or other fund)
---------
having total assets of $250,000,000 or more which meets the requirements
set forth in subclauses (ii) and (iii) of clause (d) above; provided that
--------
(I) each Eligible Assignee must either (a) be organized under the Laws of
the United States of America, any State thereof or the District of Columbia
or (b) be organized under the Laws of the Cayman Islands or any country
which is a member of the Organization for Economic Cooperation and
Development, or a political subdivision of such a country, and (i) act
hereunder through a branch, agency or funding office located in the United
States of America and (ii) be exempt from withholding of tax on interest
and deliver the documents related thereto pursuant to Section 11.21 and
-----
(II) to the extent required under applicable Gaming Laws, each Eligible
Assignee must not be the subject of a Bank Disqualification.
"Enhanced Eurodollar Margin" means, for any period, the sum of (i) the
-------------------------- ---
Eurodollar Margin then in effect plus (ii) such interest rate margin as the
----
Requisite Banks specify is necessary to adjust the Eurodollar Rate to a
rate which represents the effective pricing to such Banks for deposits of
Dollars in the Designated Eurodollar Market in the relevant amount for the
applicable Eurodollar Period and which adequately and fairly reflects
-11-
the cost to such Banks of making the applicable Eurodollar Rate Advances.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
-----
any regulations issued pursuant thereto, as amended or replaced and as in
effect from time to time.
"ERISA Affiliate" means, with respect to any Person, any other Person
---------------
(or any trade or business, whether or not incorporated) that is under
common control with that Person within the meaning of Section 414 of the
Code.
"Eurodollar Banking Day" means any Banking Day on which dealings in
----------------------
Dollar deposits are conducted by and among banks in the Designated
Eurodollar Market.
"Eurodollar Lending Office" means, as to each Bank, its office or
-------------------------
branch so designated by written notice to Borrower and the Administrative
Agent as its Eurodollar Lending Office. If no Eurodollar Lending Office is
designated by a Bank, its Eurodollar Lending Office shall be its office at
its address for purposes of notices hereunder.
"Eurodollar Margin" means, for each Pricing Period, the interest rate
-----------------
margin set forth below (expressed in basis points per annum) opposite the
Pricing Level for that Pricing Period:
Pricing Level Margin
------------- ------
I 75.00
II 100.00
III 125.00
IV 150.00
V 175.00
VI 200.00
"Eurodollar Market" means a regular established market located outside
-----------------
the United States of America by and among banks for the solicitation, offer
and acceptance of Dollar deposits in such banks.
"Eurodollar Obligations" means eurocurrency liabilities, as defined in
----------------------
Regulation D or any comparable regulation of any Governmental Agency having
jurisdiction over any Bank.
"Eurodollar Period" means, as to each Eurodollar Rate Loan, the period
-----------------
commencing on the date specified by Borrower pursuant to Section 2.1(b) and
------
ending 1, 2, 3 or 6 months (or, with the written consent of all of the
Banks, any other period) thereafter, as specified by
-12-
Borrower in the applicable Request for Loan; provided that:
--------
(a) The first day of any Eurodollar Period shall be a Eurodollar
Banking Day;
(b) Any Eurodollar Period that would otherwise end on a day that
is not a Eurodollar Banking Day shall be extended to the next
succeeding Eurodollar Banking Day unless such Eurodollar Banking Day
falls in another calendar month, in which case such Eurodollar Period
shall end on the next preceding Eurodollar Banking Day;
(c) Borrower may not specify a Eurodollar Period that extends
beyond any Reduction Date unless the sum of (i) the aggregate
---
principal amount of the Eurodollar Loans having a Eurodollar Period
ending after such Reduction Date plus (ii) the aggregate maximum
----
amount available for drawing under Letters of Credit for which the
expiry date is after such Reduction Date, does not exceed the
Commitment (after giving effect to any reduction thereto scheduled to
be made on such Reduction Date pursuant to Section 2.7); and
---
(d) No Eurodollar Period shall extend beyond the Maturity Date.
"Eurodollar Rate" means, with respect to any Eurodollar Rate Loan, the
---------------
interest rate per annum (rounded upward, if necessary, to the next 1/100 of
1%) at which deposits in Dollars are offered by Bank of America to prime
banks in the Designated Eurodollar Market at or about 11:00 a.m. local time
in the Designated Eurodollar Market, two (2) Eurodollar Banking Days before
the first day of the applicable Eurodollar Period in an aggregate amount
approximately equal to the amount of the Advance made by Bank of America
with respect to such Eurodollar Rate Loan and for a period of time
comparable to the number of days in the applicable Eurodollar Period.
"Eurodollar Rate Advance" means an Advance made hereunder and
-----------------------
specified to be a Eurodollar Rate Advance in accordance with Article 2.
---------
"Eurodollar Rate Loan" means a Loan made hereunder and specified to
--------------------
be a Eurodollar Rate Loan in accordance with Article 2.
---------
"Event of Default" shall have the meaning provided in Section 9.1.
---------------- ---
-13-
"Existing Credit Facility" means the aggregate $60,000,000 credit
------------------------
facilities provided to Finance under that certain Credit Agreement dated as
of May 13, 1992 among Finance, Las Vegas, the lenders therein named, and
Bank of America, as Agent, as amended.
"Federal Funds Rate" means, as of any date of determination, the rate
------------------
set forth in the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Board (including
any such successor, "H.15(519)") for such date opposite the caption
"Federal Funds (Effective)". If for any relevant date such rate is not yet
published in H.15 (519), the rate for such date will be the rate set forth
in the daily statistical release designated as the Composite 3:30 p.m.
Quotations for U.S. Government Securities, or any successor publication,
published by the Federal Reserve Bank of New York (including any such
successor, the "Composite 3:30 p.m. Quotation") for such date under the
caption "Federal Funds Effective Rate". If on any relevant date the
appropriate rate for such date is not yet published in either H.15(519) or
the Composite 3:30 p.m. Quotations, the rate for such date will be the
arithmetic mean of the rates for the last transaction in overnight Federal
funds arranged prior to 9:00 a.m. (New York City time) on that date by each
of three leading brokers of Federal funds transactions in New York City
selected by the Administrative Agent. For purposes of this Agreement, any
change in the Base Rate due to a change in the Federal Funds Rate shall be
effective as of the opening of business on the effective date of such
change.
"Finance" means MGM Grand Hotel Finance Corp., a Nevada corporation,
-------
its successors and permitted assigns.
"FIRREA" means the Financial Institutions Reform, Recovery and
------
Enforcement Act of 1989, as it may be amended from time to time.
"First Mortgage Notes" means the aggregate $220,000,000 11 3/4% First
--------------------
Mortgage Notes due May 1, 1999 and the $253,000,000 aggregate 12% First
Mortgage Notes due May 1, 2002 issued by Finance pursuant to the First
Mortgage Note Indenture.
"First Mortgage Note Indenture" means the Indenture dated as of May 1,
-----------------------------
1992, among Finance, as borrower, Borrower, as guarantor, Las Vegas, as
obligor under the covenants, and U.S. Trust Company of California, N.A., as
trustee, as amended as of the date hereof.
"Fiscal Quarter" means the fiscal quarter of Borrower consisting,
--------------
subject to Section 1.3, of the three calendar
-14-
month periods ending on each March 31, June 30, September 30 and December
31.
"Fiscal Year" means the fiscal year of Borrower consisting, subject to
-----------
Section 1.3, of the twelve month period ending on each December 31.
---
"Funded Debt" means, as of any date of determination, the sum (without
----------- ---
duplication) of (a) all principal Indebtedness of Borrower, its Restricted
Subsidiaries and the Australia Companies for borrowed money (including debt
---------
securities issued by Borrower, any of its Restricted Subsidiaries or the
Australia Companies) on that date (other than any such Indebtedness to the
----- ----
extent it has been legally or contractually defeased or is the subject of a
deposit in Cash or Cash Equivalents for the purpose of defeasing the same
in accordance with its terms), plus (b) the aggregate amount of all Capital
----
Lease Obligations of Borrower, its Restricted Subsidiaries and the
Australia Companies on that date, plus (c) obligations in respect of
----
letters of credit or other similar instruments which support Indebtedness
of the type described in clause (a) and Capital Lease Obligations, to the
extent of the amount drawable under such letters of credit or similar
instruments.
"Gaming Board" means, collectively, (a) the Nevada Gaming Commission,
------------
(b) the Nevada State Gaming Control Board, (c) the New Jersey Casino
Control Commission, (d) the New Jersey Division of Gaming Enforcement and
(e) any other Governmental Agency that holds regulatory, licensing or
permit authority over gambling, gaming or casino activities conducted by
Borrower and its Restricted Subsidiaries within its jurisdiction.
"Gaming Laws" means all Laws pursuant to which any Gaming Board
-----------
possesses regulatory, licensing or permit authority over gambling, gaming
or casino activities conducted by Borrower and its Restricted Subsidiaries
within its jurisdiction.
"Generally Accepted Accounting Principles" means, as of any date of
----------------------------------------
determination, accounting principles (a) set forth as generally accepted in
then currently effective Opinions of the Accounting Principles Board of the
American Institute of Certified Public Accountants, (b) set forth as
generally accepted in then currently effective Statements of the Financial
Accounting Standards Board or (c) that are then approved by such other
entity as may be approved by a significant segment of the accounting
profession in the United States of America. The term "consistently
------------
applied," as used in connection therewith, means that the accounting
-------
principles applied
-15-
are consistent in all material respects with those applied at prior dates
or for prior periods.
"Government Securities" means readily marketable (a) direct full faith
---------------------
and credit obligations of the United States of America or obligations
guaranteed by the full faith and credit of the United States of America and
(b) obligations of an agency or instrumentality of, or corporation owned,
controlled or sponsored by, the United States of America that are generally
considered in the securities industry to be implicit obligations of the
United States of America.
"Governmental Agency" means (a) any international, foreign, federal,
-------------------
state, county or municipal government, or political subdivision thereof,
(b) any governmental or quasi-governmental agency, authority, board,
bureau, commission, department, instrumentality or public body or (c) any
court or administrative tribunal of competent jurisdiction.
"Guarantors" means, collectively, Las Vegas, Atlantic City, MGM Grand
----------
Monorail, Inc., each other Restricted Subsidiary of Borrower which exists
as of the Second Closing Date, and each other Restricted Subsidiary of
Borrower which hereafter becomes a Guarantor pursuant to Section 5.10.
----
"Guaranty Obligation" means, as to any Person (without duplication),
-------------------
any (a) guarantee by that Person of Indebtedness of, or other obligation
performable by, any other Person or (b) assurance given by that Person to
an obligee of any other Person with respect to the performance of an
obligation by, or the financial condition of, such other Person, whether
direct, indirect or contingent, including any purchase or repurchase
---------
agreement covering such obligation or any collateral security therefor, any
agreement to provide funds (by means of loans, capital contributions or
otherwise) to such other Person, any agreement to support the solvency or
level of any balance sheet or income statement item of such other Person or
any "keep-well" or other arrangement of whatever nature given for the
purpose of assuring or holding harmless such obligee against loss with
respect to any obligation of such other Person; provided, however, that the
-------- -------
term Guaranty Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Guaranty Obligation in respect of Indebtedness shall be deemed to be an
amount equal to the stated or determinable amount of the related
Indebtedness (unless the Guaranty Obligation is limited by its terms to a
lesser amount, in which case to the extent of such amount) or, if not
stated or determinable, the maximum reasonably anticipated
-16-
liability in respect thereof as determined by the Person in good faith. The
amount of any other Guaranty Obligation shall be deemed to be zero unless
and until the amount thereof has been (or in accordance with Financial
Accounting Standards Board Statement No. 5 should be) quantified and
reflected or disclosed in the consolidated financial statements (or notes
thereto) of Borrower and its Subsidiaries.
"Hazardous Materials" means substances defined as "hazardous
-------------------
substances" pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Section 9601 et seq., or
as "hazardous", "toxic" or "pollutant" substances or as "solid waste"
pursuant to the Hazardous Materials Transportation Act, 49 U.S.C. Section
1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et seq., or as "friable asbestos" pursuant to the Toxic
Substances Control Act, 15 U.S.C. Section 2601 et seq., in each case as
such Laws are amended from time to time.
"Hazardous Materials Laws" means all Laws governing the treatment,
------------------------
transportation or disposal of Hazardous Materials applicable to any of the
Real Property.
"Indebtedness" means, as to any Person (without duplication), (a)
------------
indebtedness of such Person for borrowed money or for the deferred purchase
price of Property (excluding trade and other accounts payable in the
ordinary course of business in accordance with ordinary trade terms),
including any Guaranty Obligation for any such indebtedness, (b)
---------
indebtedness of such Person of the nature described in clause (a) that is
non-recourse to the credit of such Person but is secured by assets of such
Person, to the extent of the value of such assets, (c) Capital Lease
Obligations of such Person, (d) indebtedness of such Person arising under
bankers' acceptance facilities or under facilities for the discount of
accounts receivable of such Person, (e) any direct or contingent
obligations of such Person under letters of credit issued for the account
of such Person and (f) any net obligations of such Person under Swap
Agreements.
"Intangible Assets" means assets that are considered intangible assets
-----------------
under Generally Accepted Accounting Principles, including customer lists,
---------
goodwill, computer software, copyrights, trade names, trademarks and
patents.
"Intercompany Loan Documents" means the Loan Agreement dated as of May
---------------------------
13, 1992 among Las Vegas, as borrower, and Finance, as lender, and the
instruments, documents and agreements executed in connection therewith, in
each case as amended as of the Closing Date.
-17-
"Interest Charge Coverage Ratio" means, as of the last day of each
------------------------------
Fiscal Quarter, the ratio for the four Fiscal Quarter period ending on such
date of (a) Annualized Cash Flow minus Maintenance Capital Expenditures
-----
minus the aggregate amount of federal and state taxes on or measured by
-----
income of Borrower and its Restricted Subsidiaries (whether or not payable
during the period described below) minus Distributions made by Borrower
-----
(other than Distributions consisting of capital stock of Borrower) to (b)
Cash Interest Charges of Borrower, its Restricted Subsidiaries and the
Australia Companies plus payments required to be made by Borrower with
----
respect to the New York Keep-Well.
"Interest Charges" means, for any Person, as of the last day of any
----------------
fiscal period, the sum of (a) all interest, fees, charges and related
------
expenses paid or payable (without duplication) for that fiscal period by
that Person to a lender in connection with borrowed money (including any
---------
obligations for fees, charges and related expenses payable to the issuer of
any letter of credit) or the deferred purchase price of assets that are
considered "interest expense" under Generally Accepted Accounting
Principles, plus (b) the portion of rent paid or payable (without
----
duplication) for that fiscal period by that Person under Capital Lease
Obligations that should be treated as interest in accordance with Financial
Accounting Standards Board Statement No. 13.
"Interest Differential" means, with respect to any prepayment of a
---------------------
Eurodollar Rate Loan on a day other than the last day of the applicable
Eurodollar Period and with respect to any failure to borrow a Eurodollar
Rate Loan on the date or in the amount specified in any Request for Loan,
(a) the Eurodollar Rate payable (or, with respect to a failure to borrow,
the Eurodollar Rate which would have been payable) with respect to the
Eurodollar Rate Loan minus (b) the Eurodollar Rate on, or as near as
-----
practicable to, the date of the prepayment or failure to borrow for a
Eurodollar Rate Loan with an Eurodollar Period commencing on such date and
ending on the last day of the Eurodollar Period of the Eurodollar Rate Loan
so prepaid or which would have been borrowed on such date.
"Investment" means, when used in connection with any Person, any
----------
investment by or of that Person, whether by means of purchase or other
acquisition of stock or other securities of any other Person or by means of
a loan, advance creating a debt, capital contribution, guaranty or other
debt or equity participation or interest in any other Person, including any
---------
partnership and joint venture interests of such Person. The amount of any
Investment shall be the amount actually invested (minus any return of
-----
capital with respect to such Investment which has actually
-18-
been received in Cash or Cash Equivalents or has been converted into Cash
or Cash Equivalents), without adjustment for subsequent increases or
decreases in the value of such Investment.
"Irrevocable Security Agreement - Defeasance" means that certain
-------------------------------------------
Irrevocable Security Agreement of MGM Grand, Inc. regarding Defeasance and
Redemption dated as of the Closing Date among Borrower, Finance, the
Administrative Agent, Bank of America (as agent for the lenders under the
Existing Credit Facility), First Trust of Illinois, as Secured Lenders'
Agent and U.S. Trust Company of California, as Trustee for the holders of
the First Mortgage Notes, substantially in the form of Exhibit E, either as
---------
originally executed or as it may from time to time be supplemented,
modified, amended, extended or supplanted.
"Issuing Bank" means Bank of America.
------------
"Joinder Agreement" means each of the Joinder Agreements which may be
-----------------
executed by additional Banks pursuant to Section 2.6, substantially in the
---
form of Exhibit F.
---------
"Las Vegas" means MGM Grand Hotel, Inc., a Nevada corporation which is
---------
the owner of the MGM Grand Hotel and Casino in Las Vegas, Nevada, its
successors and permitted assigns.
"Laws" means, collectively, all international, foreign, federal, state
----
and local statutes, treaties, rules, regulations, ordinances, codes and
administrative or judicial precedents.
"Letters of Credit" means any of the Standby Letters of Credit or
-----------------
Commercial Letters of Credit issued by the Issuing Bank under the
Commitment pursuant to Section 2.4, either as originally issued or as the
---
same may be supplemented, modified, amended, renewed, extended or
supplanted.
"Leverage Ratio" means, as of the last day of each Fiscal Quarter, the
--------------
ratio of (a) Total Debt as of that date to (b) Annualized Cash Flow as of
--------
that date.
"License Revocation" means the revocation, failure to renew or
------------------
suspension of, or the appointment of a receiver, supervisor or similar
official with respect to, any casino, gambling or gaming license issued by
any Gaming Board covering any casino or gaming facility of Las Vegas, or,
after the Atlantic City Completion Date, Atlantic City.
-19-
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
----
assignment for security, security interest, encumbrance, lien or charge of
any kind, whether voluntarily incurred or arising by operation of Law or
otherwise, affecting any Property, including any agreement to grant any of
---------
the foregoing, any conditional sale or other title retention agreement, any
lease in the nature of a security interest, and/or the filing of or
agreement to give any financing statement (other than a precautionary
----- ----
financing statement with respect to a lease that is not in the nature of a
security interest) under the Uniform Commercial Code or comparable Law of
any jurisdiction with respect to any Property.
"Loan" means the aggregate of the Advances made at any one time by the
----
Banks pursuant to Article 2.
---------
"Loan Documents" means, collectively, this Agreement, the Notes, the
--------------
Swing Line Documents, the Collateral Documents, the Subsidiary Guaranties,
the Solvency Certificates, each Request for Loan, each Request for Letter
of Credit, each Pricing Certificate, each Compliance Certificate, any
Secured Swap Agreement and any other agreements of any type or nature
hereafter executed and delivered by Borrower or any of its Restricted
Subsidiaries to the Administrative Agent or to any Bank in any way relating
to or in furtherance of this Agreement, in each case either as originally
executed or as the same may from time to time be supplemented, modified,
amended, restated, extended or supplanted.
"Maintenance Capital Expenditure" means a Capital Expenditure for the
-------------------------------
maintenance, repair, restoration or refurbishment of the MGM Grand - Las
Vegas, (or after the Atlantic City Completion Date, the MGM Grand -
Atlantic City) but excluding any Capital Expenditure which adds to or
---------
further improves such Property.
"Margin Stock" means "margin stock" as such term is defined in
------------
Regulation G or U.
"Material Adverse Effect" means any set of circumstances or events
-----------------------
which (a) has or could reasonably be expected to have any material adverse
effect whatsoever upon the validity or enforceability of any Loan Document,
(b) is or could reasonably be expected to be material and adverse to the
business or condition (financial or otherwise) of Borrower and its
Subsidiaries, taken as a whole and with a view to the totality of
circumstances then existing with respect to Borrower and its Subsidiaries,
provided that it is understood that this clause (b) shall not be deemed to
--------
expand the obligations of Borrower under any express covenants set forth
herein, but is rather understood to describe a set of
-20-
circumstances or events which, although not the subject of a specific
covenant, are material and adverse in the manner described above, or (c)
materially impairs or could reasonably be expected to materially impair the
ability of Borrower or Guarantors (taken as a whole) to perform the
Obligations.
"Maturity Date" means December 31, 2001, or such later anniversary
-------------
thereof to which the Maturity Date may be extended pursuant to Section 2.9.
---
"Memorandum of Understanding" means an agreement among the
---------------------------
Administrative Agent, the Arranger, each of the Co-Agents and Borrower,
restricting inter alia the ability of the Co-Agents to sell, assign or
----- ----
grant participations in their Pro Rata Shares prior to September 30, 1996
in the manner set forth therein.
"MGM Grand - Atlantic City" means the proposed MGM Grand Hotel and
-------------------------
Casino in Atlantic City, New Jersey. The MGM Grand - Atlantic City project
may be the result of new construction or of the redevelopment of existing
hotel/casino properties. However it is anticipated that the MGM Grand -
Atlantic City will be a destination resort hotel/casino that will be larger
and more elaborate than any other facility currently in existence in the
Atlantic City, New Jersey market.
"MGM Grand - Las Vegas" means the MGM Grand Hotel and Casino in Las
---------------------
Vegas, Nevada.
"MGM Grand Monorail, Inc." means MGM Grand Monorail, Inc., a Nevada
-----------------------
corporation, its successors and permitted assigns.
"Monorail" means The MGM Grand - Bally's Monorail Limited Liability
--------
Company, a Nevada limited liability company, its successors and assigns.
"Multiemployer Plan" means any employee benefit plan of the type
------------------
described in Section 4001(a)(3) of ERISA to which Borrower or any of its
ERISA Affiliates contribute or are obligated to contribute.
"Negative Pledge" means a Contractual Obligation that contains a
---------------
covenant binding on Borrower that prohibits Liens on any of its or their
Property, other than (a) any such covenant contained in a Contractual
----- ----
Obligation granting a Lien permitted under Section 6.8 which affects only
---
the Property that is the subject of such permitted Lien and (b) any such
covenant that does not apply to Liens securing the Obligations or any
indebtedness which is used, directly or indirectly, to refinance the
Obligations.
-21-
"Net Income" means, with respect to any fiscal period and with respect
----------
to any Person, the consolidated net income of that Person for that period,
determined in accordance with Generally Accepted Accounting Principles,
consistently applied.
"Net Proceeds" means, with respect to any Disposition, the gross sales
------------
proceeds received by Borrower and its Restricted Subsidiaries from such
Disposition (including Cash, Property and the assumption by the purchaser
---------
of any liability of Borrower or its Restricted Subsidiaries) net of
------
brokerage commissions, legal expenses and other transactional costs
(excluding any tax on or measured by income with respect to such
---------
Disposition) payable by Borrower and its Restricted Subsidiaries with
respect to such Disposition.
"Nevada Deed of Trust" means the Deed of Trust, Assignment of Rents
--------------------
and Fixture Filing to be executed by Las Vegas on the Second Closing Date
with respect to the MGM Grand - Las Vegas and the other real property and
improvements described therein, substantially in the form of Exhibit G,
---------
either as originally executed or as it may from time to time be
supplemented, modified, amended, extended or supplanted.
"Nevada Pledge Escrow Agreement" means the Escrow Agreement to be
------------------------------
executed on the Second Closing Date by the Administrative Agent and Bank of
America Nevada, as escrowholder, substantially in the form of Exhibit H,
---------
pursuant to which securities of Nevada gaming licensees pledged under the
Pledge Agreement are to be held in the State of Nevada to assure compliance
with Gaming Laws, either as originally executed or as the same may from
time to time be supplemented, modified, amended, renewed, extended or
supplanted.
"New York" means New York-New York Hotel, LLC, a Nevada limited
--------
liability company, the members of which are Borrower and PRMA Las Vegas,
Inc. (a subsidiary of Primadonna Resorts, Inc.), its successors and
permitted assigns.
"New York Completion Date" means the date upon which the New
------------------------
York-New York Hotel and Casino is licensed to conduct gaming and open for
business to the general public with (a) at least 95% of the hotel rooms
provided for in the construction plans ready for occupancy, (b) at least
95% of the square footage of casino space provided for in the construction
plans ready for gaming and (c) substantially all other amenities
substantially complete.
"New York Debt" means, as of each date of determination, the
-------------
principal amount of the obligations of
-22-
New York for borrowed money on that date, including Capital Lease
---------
Obligations.
"New York EBITDA" means, for any fiscal period, EBITDA of New York
---------------
plus expenses classified as "pre-opening expenses" on the applicable
financial statements of New York for that fiscal period, in each case
determined in accordance with Generally Accepted ccounting Principles,
consistently applied.
"New York Imputed Debt" means 50% of New York Debt as of the last day
---------------------
of each Fiscal Quarter, which either (i) ends prior to the New York
Completion Date, or (ii) for which New York EBITDA is less than $20,000,000
and as of which date the New York Keep-Well is in effect. As of the last
day of each Fiscal Quarter for which neither (i) nor (ii) above is
applicable, New York Imputed Debt shall be $0.
"New York Income Received" means, for each Fiscal Quarter, the amount
------------------------
of Cash received by Borrower as Distributions from New York, other than any
----- ----
amount which, in accordance with Generally Accepted Accounting Principles,
constitutes a return of capital.
"New York Keep-Well" means the Keep-Well Agreement dated September 15,
------------------
1995, executed by the Borrower and Primadonna Resorts, Inc., as in effect
on the date of this Agreement.
"Note" means the promissory note made by Borrower to a Bank evidencing
----
the Advances made by that Bank under the Commitment, substantially in the
form of Exhibit I, either as originally executed or as the same may from
---------
time to time be supplemented, modified, amended, renewed, extended or
supplanted.
"Obligations" means all present and future obligations of every kind
-----------
or nature of Borrower or the Guarantors at any time and from time to time
owed to the Administrative Agent, the Issuing Bank, the Swing Line Bank or
the Banks or any one or more of them, under any one or more of the Loan
Documents, whether due or to become due, matured or unmatured, liquidated
or unliquidated, or contingent or noncontingent, including obligations of
---------
performance as well as obligations of payment, and including interest that
---------
accrues after the commencement of any proceeding under any Debtor Relief
Law by or against Borrower or Affiliate of Borrower, whether or not allowed
as a claim in such proceeding.
"Opinions of Counsel" means the favorable written legal opinions of
-------------------
(a) Christensen, White, Miller, Fink, Xxxxxx, Xxxxxx and Xxxxxxx, LLP
counsel to Borrower, and
-23-
(b) Xxxxxx Xxxxxx & Xxxxxxx, Nevada counsel to Borrower, and (c) Xxxxxx &
Xxxxxxxx, New Jersey counsel to Borrower, substantially in the form of
Exhibits J-1 through J-5, respectively, together with copies of all factual
------------ ---
certificates and legal opinions upon which such counsel has relied.
"Party" means any Person other than the Administrative Agent, the
-----
Issuing Bank, the Swing Line Bank, the Co-Agents and the Banks, which now
or hereafter is a party to any of the Loan Documents.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
----
thereof established under ERISA.
"Pension Plan" means any "employee pension benefit plan" (as such term
------------
is defined in Section 3(2) of ERISA), other than a Multiemployer
----------
Plan, which is subject to Title IV of ERISA and is maintained by Borrower
or any of its Subsidiaries or to which Borrower or any of its Subsidiaries
contributes or has an obligation to contribute.
"Permitted Encumbrances" means:
----------------------
(a) inchoate Liens incident to construction on or maintenance of
Property; or Liens incident to construction on or maintenance of
Property now or hereafter filed of record for which adequate reserves
have been set aside (or deposits made pursuant to applicable Law) and
which are being contested in good faith by appropriate proceedings and
have not proceeded to judgment, provided that, by reason of nonpayment
--------
of the obligations secured by such Liens, no such Property is subject
to a material risk of loss or forfeiture;
(b) Liens for taxes and assessments on Property which are not
yet past due; or Liens for taxes and assessments on Property for which
adequate reserves have been set aside and are being contested in good
faith by appropriate proceedings and have not proceeded to judgment,
provided that, by reason of nonpayment of the obligations secured by
--------
such Liens, no such Property is subject to a material risk of loss or
forfeiture;
(c) minor defects and irregularities in title to any Property
which in the aggregate do not materially impair the fair market value
or use of the Property for the purposes for which it is or may
reasonably be expected to be held;
-24-
(d) easements, exceptions, reservations, or other agreements for
the purpose of pipelines, conduits, cables, wire communication lines,
power lines and substations, streets, trails, walkways, drainage,
irrigation, water, and sewerage purposes, dikes, canals, ditches, the
removal of oil, gas, coal, or other minerals, and other like purposes
affecting Property, facilities, or equipment which in the aggregate do
not materially burden or impair the fair market value or use of such
Property for the purposes for which it is or may reasonably be
expected to be held;
(e) easements, exceptions, reservations, or other agreements for
the purpose of facilitating the joint or common use of Property in or
adjacent to a shopping center or similar project affecting Property
which in the aggregate do not materially burden or impair the fair
market value or use of such Property for the purposes for which it is
or may reasonably be expected to be held;
(f) rights reserved to or vested in any Governmental Agency to
control or regulate, or obligations or duties to any Governmental
Agency with respect to, the use of any Property;
(g) rights reserved to or vested in any Governmental Agency to
control or regulate, or obligations or duties to any Governmental
Agency with respect to, any right, power, franchise, grant, license,
or permit;
(h) present or future zoning laws and ordinances or other laws
and ordinances restricting the occupancy, use, or enjoyment of
Property;
(i) statutory Liens, other than those described in clauses (a)
-
or (b) above, arising in the ordinary course of business with respect
-
to obligations which are not delinquent or are being contested in good
faith, provided that, if delinquent, adequate reserves have been set
--------
aside with respect thereto and, by reason of nonpayment, no Property
is subject to a material risk of loss or forfeiture;
(j) covenants, conditions, and restrictions affecting the use of
Property which in the aggregate do not materially impair the fair
market value or use of the Property for the purposes for which it is
or may reasonably be expected to be held;
(k) rights of tenants under leases and rental agreements
covering Property entered into in the
-25-
ordinary course of business of the Person owning such Property;
provided that if such Property is covered by either of the Deeds of
--------
Trust, such lease or rental agreement is junior and subordinate to the
Deeds of Trust by operation of law or contract;
(l) Liens consisting of pledges or deposits to secure
obligations under workers' compensation laws or similar legislation,
including Liens of judgments thereunder which are not currently
dischargeable;
(m) Liens consisting of pledges or deposits of Property to
secure performance in connection with operating leases made in the
ordinary course of business to which Borrower or a Restricted
Subsidiary of Borrower is a party as lessee, provided the aggregate
--------
value of all such pledges and deposits in connection with any such
lease does not at any time exceed 20% of the annual fixed rentals
payable under such lease;
(n) Liens consisting of deposits of Property to secure bids made
with respect to, or performance of, contracts (other than contracts
----- ----
creating or evidencing an extension of credit to the depositor);
(o) Liens consisting of any right of offset, or statutory
bankers' lien, on bank deposit accounts maintained in the ordinary
course of business so long as such bank deposit accounts are not
established or maintained for the purpose of providing such right of
offset or bankers' lien;
(p) Liens consisting of deposits of Property to secure statutory
obligations of Borrower or a Restricted Subsidiary of Borrower;
(q) Liens consisting of deposits of Property to secure (or in
lieu of) surety, appeal or customs bonds in proceedings to which
Borrower or a Restricted Subsidiary of Borrower is a party;
(r) Liens created by or resulting from any litigation or legal
proceeding involving Borrower or a Restricted Subsidiary of Borrower
in the ordinary course of its business which is currently being
contested in good faith by appropriate proceedings, provided that such
--------
Lien is junior to the Lien of the Collateral Documents, adequate
reserves have been set aside and no material Property is subject to a
material risk of loss or forfeiture; and
(s) other non-consensual Liens incurred in the ordinary course
of business but not in connection
-26-
with an extension of credit, which do not in the aggregate, when taken
together with all other Liens, materially impair the value or use of
the Property of the Borrower and the Restricted Subsidiaries of
Borrower, taken as a whole.
"Permitted Right of Others" means a Right of Others consisting of (a)
-------------------------
an interest (other than a legal or equitable co-ownership interest, an
option or right to acquire a legal or equitable co-ownership interest and
any interest of a ground lessor under a ground lease), that does not
materially impair the value or use of Property for the purposes for which
it is or may reasonably be expected to be held, (b) an option or right to
acquire a Lien that would be a Permitted Encumbrance, (c) the subordination
of a lease or sublease in favor of a financing entity, (d) a lease, rental
or similar agreement covering Property entered into in the ordinary course
of business and (e) a license, or similar right, of or to Intangible Assets
granted in the ordinary course of business.
"Person" means any individual or entity, including a trustee,
------ ---------
corporation, limited liability company, general partnership, limited
partnership, joint stock company, trust, estate, unincorporated
organization, business association, firm, joint venture, Governmental
Agency, or other entity.
"Pledge Agreement" means the pledge agreement to be executed and
----------------
delivered by Borrower on the Second Closing Date, substantially in the form
of Exhibit K, either as originally executed or as it may from time to time
---------
be supplemented, modified, amended, extended or supplanted.
"Pre-Opening Expenses" means, with respect to any fiscal period, the
--------------------
amount of expenses (other than Interest Charges) classified as "pre-opening
----- ----
expenses" on the applicable financial statements of Borrower and its
Restricted Subsidiaries for such period, prepared in accordance with
Generally Accepted Accounting Principles consistently applied.
"Pricing Certificate" means a certificate substantially in the form of
-------------------
Exhibit L, properly completed and signed by a Senior Officer of Borrower.
---------
"Pricing Level" means, for each Pricing Period, the Pricing
-------------
Level set forth below opposite the Leverage Ratio for the Fiscal Quarter
ending approximately 45 days prior to the first day of that Pricing Period:
Leverage Ratio Pricing Level
-------------- -------------
-27-
Less than 1.25:1.00 I
Equal to or greater than
1.25:1.00 but less than
1.75:1.00 II
Equal to or greater than
1.75:1.00 but less than
2.25:1.00 III
Equal to or greater than
2.25:1.00 but less than
2.75:1.00 IV
Equal to or greater than
2.75:1.00 but less than
3.25:1.00 V
Equal to or greater than
3.25:1.00 VI
provided that (a) from the Closing Date through the last day of the
--------
initial Pricing Period, the Pricing Level shall be Level I, and (b) in the
event that Borrower does not deliver a Pricing Certificate pursuant to
Section 7.1(b) with respect to any Pricing Period prior to the
------
commencement of such Pricing Period, then until (but only until) such
Pricing Certificate is so delivered the Pricing Level for that Pricing
Period shall be Pricing Level VI.
"Pricing Period" means (a) the period commencing on the Closing
--------------
Date and ending on the day prior to the Second Closing Date, (b) the period
commencing on the Second Closing Date and ending on November 15, 1996, and
(c) the subsequent concurrent quarterly periods of approximately 90 days
each commencing on each November 16, February 16, May 16 and August 16.
"Projections" means the financial projections for Borrower and
-----------
its Subsidiaries attached hereto as Schedule 4.17 prepared on behalf of
-------------
Borrower and heretofore distributed to the Banks.
"Property" means any interest in any kind of property or asset,
--------
whether real, personal or mixed, or tangible or intangible.
"Pro Rata Share" means, with respect to each Bank, the percentage of
--------------
the Commitment, the Loans, the Letters of Credit and the Swing Line
Advances held by that Bank. As of the Closing Date, the Pro Rata Share of
each Bank is set forth opposite the name of that Bank on Schedule 1.1.
-------------
Following the Closing Date, such percentage may be
-28-
increased or decreased pursuant to Joinder Agreements executed in
accordance with Section 2.6 or pursuant to any Commitment Assignment and
---
Acceptance executed in accordance with Section 11.8.
----
"Quarterly Payment Date" means each September 30, December 31, March
----------------------
31 and June 30.
"Real Property" means, as of any date of determination, all real
-------------
Property then or theretofore owned, leased or occupied by Borrower or any
of its Restricted Subsidiaries.
"Reduction Amount" means, subject to Section 2.7(b), an amount equal
---------------- ------
to the greater of (a) $25,000,000, and (b) 5% of the principal amount of
-------
the Commitment in effect on the Second Closing Date (after giving effect to
any increase in the Commitment on that date pursuant to Section 2.6.
----
"Reduction Date" means December 31, 1999 and each Quarterly Payment
--------------
Date thereafter.
"Reference Rate" means the rate of interest publicly announced from
--------------
time to time by Bank of America in San Francisco, California, as its
"reference rate." It is a rate set by Bank of America based upon various
factors including Bank of America's costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced
rate. Any change in the Reference Rate announced by Bank of America shall
take effect at the opening of business on the day specified in the public
announcement of such change.
"Regulations D, G, T, U and X" means Regulations D, G, T, U and X, as
----------------------------
at any time amended, of the Board of Governors of the Federal Reserve
System, or any other regulations in substance substituted therefor.
"Request for Letter of Credit" means a written request for a Letter of
----------------------------
Credit substantially in the form of Exhibit M, signed by a Responsible
---------
Official of Borrower, on behalf of Borrower, and properly completed to
provide all information required to be included therein.
"Request for Loan" means a written request for a Loan substantially in
----------------
the form of Exhibit N, signed by a Responsible Official of Borrower, on
---------
behalf of Borrower, and properly completed to provide all information
required to be included therein.
"Requirement of Law" means, as to any Person, the articles or
------------------
certificate of incorporation and by-laws or
-29-
other organizational or governing documents of such Person, and any Law, or
judgment, award, decree, writ or determination of a Governmental Agency, in
each case applicable to or binding upon such Person or any of its Property
or to which such Person or any of its Property is subject.
"Requisite Banks" means (a) as of any date of determination if the
---------------
Commitment is then in effect, Banks having in the aggregate 66-2/3% or more
of the Commitment then in effect and (b) as of any date of determination if
the Commitment has then been terminated and there is then any Indebtedness
evidenced by the Notes, Banks holding Notes evidencing in the aggregate 66-
2/3% or more of the aggregate Indebtedness then evidenced by the Notes.
"Responsible Official" means (a) when used with reference to a Person
--------------------
other than an individual, any officer or manager of such Person, general
partner of such Person, officer of a corporate or limited liability company
general partner of such Person, officer of a corporate or limited liability
company general partner of a partnership that is a general partner of such
Person, or any other responsible official thereof duly acting on behalf
thereof, and (b) when used with reference to a Person who is an individual,
such Person. The Banks shall be entitled to conclusively rely upon any
document or certificate that is signed or executed by a Responsible
Official of Borrower or any of its Restricted Subsidiaries as having been
authorized by all necessary corporate, limited liability company,
partnership and/or other action on the part of Borrower or such Restricted
Subsidiary.
"Restricted Subsidiary" means each Subsidiary of Borrower other than
--------------------- -----
New York, Monorail and the Australia Companies.
"Right of Others" means, as to any Property in which a Person has an
---------------
interest, any legal or equitable right, title or interest (other than a
Lien) held by any other Person in that Property, and any option or right
held by any other Person to acquire any such right, title or interest in
that Property, including any option or right to acquire a Lien; provided,
--------- --------
however, that (a) any covenant restricting the use or disposition of
Property of such Person contained in any Contractual Obligation of such
Person and (b) any provision contained in a contract creating a right of
payment or performance in favor of a Person that conditions, limits,
restricts, diminishes, transfers or terminates such right, shall not be
deemed to constitute a Right of Others.
"Second Closing Date" means the time and Banking Day on which the
-------------------
conditions set forth in Section 8.2 are
---
-30-
satisfied or waived. As of the date of this Agreement, it is contemplated
that the Second Closing Date will occur on September 25, 1996. The
Administrative Agent shall notify Borrower and the Banks of the date that
is the Second Closing Date.
"Secured Swap Agreement" means a Swap Agreement between Borrower and a
----------------------
Bank or an Affiliate of a Bank (but, in the case of any such Affiliate,
only to the extent that the same expressly relates to the Obligations).
"Senior Officer" means the (a) chief executive officer or manager, (b)
--------------
president, (c) executive vice president, (d) senior vice president, (e)
chief financial officer, (f) treasurer or (g) assistant treasurer of
Borrower.
"Special Eurodollar Circumstance" means the application or adoption
-------------------------------
after the Closing Date of any Law or interpretation, or any change therein
or thereof, or any change in the interpretation or administration thereof
by any Governmental Agency, central bank or comparable authority charged
with the interpretation or administration thereof, or compliance by any
Bank or its Eurodollar Lending Office with any request or directive
(whether or not having the force of Law) of any such Governmental Agency,
central bank or comparable authority, or the existence or occurrence of
circumstances affecting the Designated Eurodollar Market generally that are
beyond the reasonable control of the Banks.
"Solvency Certificate" means a Solvency Certificate executed by the
--------------------
chief financial officer of Las Vegas and each other Guarantor having assets
in excess of $50,000,000 as of the Second Closing Date (other than
Finance), on behalf of such Guarantor on the Second Closing Date,
substantially in the form of Exhibit O.
---------
"Standby Letter of Credit" means each Letter of Credit that is not a
------------------------
Commercial Letter of Credit.
"Standby Letter of Credit Fee" means, for each Pricing Period, the per
----------------------------
annum rate set forth as the interest rate margin in the definition of
"Eurodollar Margin" opposite the Pricing Level for that Pricing Period.
"Stockholders' Equity" means, as of any date of determination
--------------------
and with respect to any Person, the consolidated stockholders', partners'
or members' equity of that Person as of that date determined in accordance
with Generally Accepted Accounting Principles; provided that there shall be
--------
excluded from Stockholders' Equity any
-00-
xxxxxxx xxxxx, xxxxxxxx, options or other rights to acquire capital stock
(but excluding any debt security which is convertible, or exchangeable, for
capital stock), which, by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or is redeemable at the option of the
holder thereof, in whole or in part, on or prior to the Maturity Date.
"Subordinated Obligations" means Indebtedness of Borrower (but not
------------------------
Indebtedness of any Subsidiary of Borrower) the terms of which, including
the tenor, pricing and covenants, are reasonably acceptable to the
Requisite Banks and which is subordinated in right of payment to the
Obligations pursuant to subordination provisions which are acceptable to
the Requisite Banks in the exercise of their sole discretion. Prior to the
Second Closing Date, the Administrative Agent shall provide subordination
provisions to Borrower which have been pre-approved by the Requisite Banks
for inclusion in Subordinated Obligations which may hereafter be issued by
Borrower (provided that the other terms of any Subordinated Obligations
--------
hereafter issued by Borrower shall remain subject to the reasonable
approval of the Requisite Banks).
"Subsidiary" means, as of any date of determination and with respect
----------
to any Person, any corporation, limited liability company or partnership
(whether or not, in either case, characterized as such or as a "joint
venture"), whether now existing or hereafter organized or acquired: (a) in
the case of a corporation or limited liability company, of which a majority
of the securities having ordinary voting power for the election of
directors or other governing body (other than securities having such power
only by reason of the happening of a contingency) are at the time
beneficially owned by such Person and/or one or more Subsidiaries of such
Person, or (b) in the case of a partnership, of which a majority of the
partnership or other ownership interests are at the time beneficially owned
by such Person and/or one or more of its Subsidiaries.
"Subsidiary Guaranty" means each of the continuing guaranties
-------------------
of the Obligations to be executed and delivered by the Guarantors,
substantially in the form of Exhibit P, either as originally executed or as
---------
it may from time to time be supplemented, modified, amended, extended or
supplanted.
"Subsidiary Pledge Agreement" means each Subsidiary Pledge Agreement
---------------------------
to be executed and delivered on the Second Closing Date and each other
pledge agreement which
-32-
is thereafter executed by a Subsidiary of Borrower with respect to its own
Subsidiaries under Section 5.10, in each case, substantially in the form
----
of Exhibit Q, either as originally executed or as it may from time to time
---------
be supplemented, modified, amended, extended or supplanted.
"Subsidiary Security Agreement" means each of the security agreements
-----------------------------
to be executed and delivered by each of the Guarantors (whether on the
Second Closing Date or thereafter in accordance with Section 5.10),
----
substantially in the form of Exhibit R, either as originally executed or as
---------
they may from time to time be supplemented, modified, amended, extended or
supplanted.
"Swap Agreement" means a written agreement between Borrower and one or
--------------
more financial institutions providing for "swap", "cap", "collar" or other
interest rate protection with respect to any Indebtedness.
"Swing Line" means the revolving line of credit established by the
----------
Swing Line Bank in favor of Borrower pursuant to Section 2.5.
---
"Swing Line Bank" means, from and after the Commitment Increase Date,
---------------
Bank of America Nevada.
"Swing Line Documents" means the promissory note and any other
--------------------
documents executed by Borrower in favor of the Swing Line Bank in
connection with the Swing Line.
"Swing Line Loans" means loans made by the Swing Line Bank to Borrower
----------------
pursuant to Section 2.5.
---
"Swing Line Outstandings" means, as of any date of determination, the
-----------------------
aggregate principal Indebtedness of Borrower on all Swing Line Loans then
outstanding.
"Tangible Net Worth" means, as of any date of determination, the
------------------
Stockholders' Equity of Borrower and its Restricted Subsidiaries on that
date minus the aggregate Intangible Assets of Borrower and its Restricted
-----
Subsidiaries on that date.
"to the best knowledge of" means, when modifying a representation,
------------------------
warranty or other statement of any Person, that the fact or situation
described therein is known by the Person (or, in the case of a Person other
than a natural Person, known by a Responsible Official of that Person)
making the representation, warranty or other statement, or with the
exercise of reasonable due diligence under the circumstances (in accordance
with the standard of what a reasonable Person in similar circumstances
would have done) would have been known by the Person (or, in the case of a
Person other than a
-33-
natural Person, would have been known by a Responsible Official of that
Person).
"Total Assets" means, as of any date of determination, the
------------
consolidated total assets of Borrower and its Restricted Subsidiaries on
that date, determined in accordance with Generally Accepted Accounting
Principles.
"Total Debt" means, as of each date of determination, the sum, as of
---------- ---
such date, of (a) Average Quarterly Funded Debt as of that date plus (b)
----
New York Imputed Debt as of that date.
"Trademark Security Interest Assignment" means the Trademark Security
--------------------------------------
Interest Assignment to be executed and delivered by Borrower and each
Guarantor on the Second Closing Date substantially in the form of Exhibit
-------
S, either as originally executed or as it may from time to time be
-
supplemented, modified, amended, extended or supplanted.
"type", when used with respect to any Loan or Advance, means the
----
designation of whether such Loan or Advance is a Base Rate Loan or Advance,
or a Eurodollar Rate Loan or Advance.
"Unrelated Person" means any Person other than (i) an employee stock
---------------- ----- ----
ownership plan or other employee benefit plan covering the employees of
Borrower and its Subsidiaries or (ii) an Affiliate of any Person or group
of related Persons which as of the date of this Agreement is the beneficial
owner of 30% or more (in the aggregate) of the outstanding common stock of
Borrower.
1.2 Use of Defined Terms. Any defined term used in the plural shall
--------------------
refer to all members of the relevant class, and any defined term used in the
singular shall refer to any one or more of the members of the relevant class.
1.3 Accounting Terms - Fiscal Periods. All accounting terms not
---------------------------------
specifically defined in this Agreement shall be construed in conformity with,
and all financial data required to be submitted by this Agreement shall be
prepared in conformity with, Generally Accepted Accounting Principles applied on
a consistent basis, except as otherwise specifically prescribed herein. In the
------
event that Generally Accepted Accounting Principles or Borrower's Fiscal Year or
Fiscal Quarters change during the term of this Agreement such that the covenants
contained in Sections 6.11 through 6.14 would then be calculated for different
---- ----
periods, in a different manner or with different components, (a) Borrower and
the Banks agree to amend this Agreement in such respects as are necessary to
conform those covenants as criteria for evaluating Borrower's financial
condition to substantially the same criteria as were effective
-34-
prior to such change in Fiscal Year, Fiscal Quarters or in Generally Accepted
Accounting Principles and (b) Borrower shall be deemed to be in compliance with
the covenants contained in the aforesaid Sections if and to the extent that
Borrower would have been in compliance therewith for the pre-existing fiscal
periods and under Generally Accepted Accounting Principles as in effect
immediately prior to such change, but shall have the obligation to deliver each
of the materials described in Article 7 to the Creditors, on the dates therein
---------
specified, with financial data presented for its pre-existing fiscal periods and
in a manner which conforms with Generally Accepted Accounting Principles as in
effect immediately prior to such change.
1.4 Rounding. Any financial ratios required to be maintained by
--------
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed in this
Agreement and rounding the result up or down to the nearest number (with a
round-up if there is no nearest number) to the number of places by which such
ratio is expressed in this Agreement.
1.5 Exhibits and Schedules. All Exhibits and Schedules to this
----------------------
this Agreement, either as originally existing or as the same may from time to
time be supplemented, modified or amended, are incorporated herein by this
reference. A matter disclosed on any Schedule shall be deemed disclosed on all
Schedules.
1.6 Miscellaneous Terms. In the Loan Documents, the term "or" is
-------------------
disjunctive; the term "and" is conjunctive. The term "shall" is mandatory; the
term "may" is permissive. Masculine terms also apply to females; feminine terms
also apply to males. The term "including" is by way of example and no
limitation.
-35-
Article 2
LOANS AND LETTERS OF CREDIT
---------------------------
2.1 Loans-General.
(a) Subject to the terms and conditions set forth in this
Agreement, at any time and from time to time from the Closing Date
through the Banking Day immediately prior to the Maturity Date, each
Bank shall, pro rata according to that Bank's Pro Rata Share of the then
applicable Commitment, make Advances to Borrower under the Commitment in
such amounts as Borrower may request that do not result in the sum of
------
(i) the aggregate principal amount outstanding under the Notes, plus
----
(ii) the Aggregate Effective Amount of all outstanding Letters of Credit
plus (iii) the Swing Line Outstandings exceeding the then applicable
----
Commitment. Subject to the limitations set forth herein, Borrower may
borrow, repay and reborrow under the Commitment without premium or
penalty.
(b) Subject to the next sentence, each Loan shall be made
pursuant to a Request for Loan which shall specify the requested (i)
date of such Loan, (ii) type of Loan, (iii) amount of such Loan, and
(iv) in the case of a Eurodollar Rate Loan, the Eurodollar Period for
such Loan, provided that no Request for Loan will be required for the
--------
Eurodollar Rate Loan to be made on Wednesday, July 3, 1996. Unless the
Administrative Agent has notified, in its sole and absolute discretion,
Borrower to the contrary, a Loan may be requested by telephone by a
Responsible Official of Borrower, in which case Borrower shall confirm
such request by promptly delivering a Request for Loan in person or by
telecopier conforming to the preceding sentence to the Administrative
Agent. The Administrative Agent shall incur no liability whatsoever
hereunder in acting upon any telephonic request for Loan purportedly
made by a Responsible Official of Borrower, and Borrower hereby agrees
to indemnify each Creditor from any loss, cost, expense or liability as
a result of so acting.
(c) Promptly following receipt of a Request for Loan, the
Administrative Agent shall notify each Bank by telephone or telecopier
(and if by telephone, promptly confirmed by telecopier) of the date and
type of the Loan, any applicable Eurodollar Period, and that Bank's Pro
Rata Share of the Loan. Not later than 11:00 a.m., California time, on
the date specified for any Loan (which must be a Banking Day), each Bank
shall make its Pro Rata Share of the Loan in immediately available funds
available to the
-36-
Administrative Agent at the Administrative Agent's Office. Upon
satisfaction or waiver of the applicable conditions set forth in Article
-------
8, all Advances shall be credited on that date in immediately available
-
funds to the Designated Deposit Account.
(d) Unless the Requisite Banks otherwise consent, each Loan
shall be in an integral multiple of $1,000,000 which is not less than
$5,000,000.
(e) The Advances made by each Bank shall be evidenced by that
Bank's Note.
(f) A Request for Loan shall be irrevocable upon the
Administrative Agent's first notification thereof.
(g) If no Request for Loan (or telephonic request for Loan
referred to in the second sentence of Section 2.1(b), if applicable) has
------
been made within the requisite notice periods set forth in Section 2.2
---
or 2.3 prior to the end of the Eurodollar Period for any Eurodollar Rate
---
Loan, then on the last day of such Eurodollar Period, such Eurodollar
Rate Loan shall be automatically converted into a Base Rate Loan in the
same amount.
(h) If a Loan is to be made on the same date that another Loan
is due and payable, Borrower or the Banks, as the case may be, shall
make available to the Administrative Agent the net amount of funds
giving effect to both such Loans and the effect for purposes of this
Agreement shall be the same as if separate transfers of funds had been
made with respect to each such Loan.
2.2 Base Rate Loans. Each request by Borrower for a Base Rate
---------------
Loan shall be made pursuant to a Request for Loan (or telephonic or other
request for loan referred to in the second sentence of Section 2.1(b), if
------
applicable) received by the Administrative Agent, at the Administrative Agent's
Office, not later than 9:00 a.m. California time, on the date (which must be a
Banking Day) of the requested Base Rate Loan. All Loans shall constitute Base
Rate Loans unless properly designated as a Eurodollar Rate Loan pursuant to
Section 2.3.
---
2.3 Eurodollar Rate Loans.
---------------------
(a) Each request by Borrower for a Eurodollar Rate Loan shall be
made pursuant to a Request for Loan (or telephonic or other request for
Loan referred to in the second sentence of Section 2.1(b), if
------
applicable) received by the Administrative Agent, at the Administrative
Agent's
-37-
Office, not later than 9:00 a.m., California time, at least three (3)
Eurodollar Banking Days before the first day of the applicable
Eurodollar Period.
(b) On the date which is two (2) Eurodollar Banking Days before
the first day of the applicable Eurodollar Period, the Administrative
Agent shall confirm its determination of the applicable Eurodollar Rate
(which determination shall be conclusive in the absence of manifest
error) and promptly shall give notice of the same to Borrower and the
Banks by telephone or telecopier (and if by telephone, promptly
confirmed by telecopier).
(c) Unless the Administrative Agent and the Requisite Banks
otherwise consent, no more than fifteen (15) Eurodollar Rate Loans shall
be outstanding at any one time.
(d) No Eurodollar Rate Loan may be requested during the
continuation of a Default or Event of Default.
(e) Nothing contained herein shall require any Bank to fund any
Eurodollar Rate Advance in the Designated Eurodollar Market.
2.4 Letters of Credit.
(a) Subject to the terms and conditions hereof, at any time and
from time to time from the Second Closing Date through the Banking Day
immediately prior to the Maturity Date, the Issuing Bank shall issue
such Letters of Credit under the Commitment as Borrower may request by a
Request for Letter of Credit; provided that (i) giving effect to all
--------
such Letters of Credit, the sum of (A) the aggregate principal amount
---
outstanding under the Notes, plus (B) the Aggregate Effective Amount of
----
all outstanding Letters of Credit plus (C) the Swing Line Outstandings
----
do not exceed the then applicable Commitment and (ii) the Aggregate
Effective Amount under all outstanding Letters of Credit shall not
exceed $20,000,000. Each Letter of Credit shall be in a form reasonably
acceptable to the Issuing Bank. Unless all the Banks otherwise consent
in a writing delivered to the Administrative Agent, the term of any
Letter of Credit shall not exceed one (1) year or extend beyond the
Maturity Date.
(b) Each Request for Letter of Credit shall be submitted to the
Issuing Bank, with a copy to the Administrative Agent, at least five (5)
Banking Days prior to the date upon which the related Letter of Credit
is proposed to be issued. The Administrative Agent shall promptly notify
the Issuing Bank whether such Request for
-38-
Letter of Credit, and the issuance of a Letter of Credit pursuant
thereto, conforms to the requirements of this Agreement. Upon issuance
of a Letter of Credit, the Issuing Bank shall promptly notify the
Administrative Agent, and the Administrative Agent shall promptly notify
the Banks, of the amount and terms thereof.
(c) Upon the issuance of a Letter of Credit, each Bank shall be
deemed to have purchased at par a pro rata participation in such Letter
of Credit from the Issuing Bank in an amount equal to that Bank's Pro
Rata Share. Without limiting the scope and nature of each Bank's
participation in any Letter of Credit, to the extent that the Issuing
Bank has not been reimbursed by Borrower for any payment required to be
made by the Issuing Bank under any Letter of Credit, each Bank shall,
pro rata according to its Pro Rata Share, pay the purchase price for
such participation to the Issuing Bank through the Administrative Agent
promptly upon demand therefor. The obligation of each Bank to so pay the
participation purchase price to the Issuing Bank shall be absolute and
unconditional and shall not be affected by the occurrence of an Event of
Default or any other occurrence or event. Any such payment of the
purchase price shall not relieve or otherwise impair the obligation of
Borrower to reimburse the Issuing Bank for the amount of any payment
made by the Issuing Bank under any Letter of Credit together with
interest as hereinafter provided.
(d) Borrower agrees to pay to the Issuing Bank through the
Administrative Agent an amount equal to any payment made by the Issuing
Bank with respect to each Letter of Credit within one (1) Banking Day
after written demand made by the Issuing Bank therefor, together with
interest on such amount from the date of any payment made by the Issuing
Bank at the rate applicable to Base Rate Loans for three Banking Days
and thereafter at the Default Rate. The principal amount of any such
payment shall be used to reimburse the Issuing Bank for the payment made
by it under the Letter of Credit and, to the extent that the Banks have
not reimbursed the Issuing Bank pursuant to Section 2.4(c), the interest
------
amount of any such payment shall be for the account of the Issuing Bank.
Each Bank that has paid the participation purchase price to the Issuing
Bank pursuant to Section 2.4(c) shall thereupon acquire a pro rata
------
participation, to the extent of such payment, in the claim of the
Issuing Bank against Borrower for reimbursement of principal and
interest under this Section 2.4(d) and shall share, in accordance with
------
that pro rata participation, in any principal payment made by Borrower
with respect to such claim and in any interest payment made by Borrower
(but only with respect to periods
-39-
subsequent to the date such Bank paid the participation purchase price
to the Issuing Bank) with respect to such claim.
(e) Borrower may, pursuant to a Request for Loan, request that
Advances be made pursuant to Section 2.1(a) to provide funds for the
------
payment required by Section 2.4(d) and, for this purpose, the conditions
------
precedent set forth in Article 8 shall not apply. The proceeds of such
---------
Advances shall be paid directly to the Issuing Bank to reimburse it for
the payment made by it under the Letter of Credit.
(f) If Borrower fails to make the payment required by Section
2.4(d) on a timely basis then, in lieu of the payment of the
------
participation purchase price to the Issuing Bank under Section 2.4(c),
------
the Issuing Bank may (but is not required to), without notice to or the
consent of Borrower, instruct the Administrative Agent to cause Advances
to be made by the Banks under the Commitment in an aggregate amount
equal to the amount paid by the Issuing Bank with respect to that Letter
of Credit and, for this purpose, the conditions precedent set forth in
Article 8 shall not apply. The proceeds of such Advances shall be paid
---------
directly to the Issuing Bank to reimburse it for the payment made by it
under the Letter of Credit.
(g) The issuance of any supplement, modification, amendment,
renewal, or extension to or of any Letter of Credit shall be treated in
all respects the same as the issuance of a new Letter of Credit, except
that the Issuing Bank's issuance fees shall be payable as set forth
in the letter agreement referred to in Section 3.5.
---
(h) The obligation of Borrower to pay to the Issuing Bank the
amount of any payment made by the Issuing Bank under any Letter of
Credit shall be absolute, unconditional, and irrevocable, subject only
to performance by the Issuing Bank of its obligations to Borrower under
Uniform Commercial Code Section 5109. Without limiting the foregoing,
Borrower's obligations to the Issuing Bank shall not be affected by any
of the following circumstances:
(i) any lack of validity or enforceability of the Letter of
Credit, this Agreement, or any other agreement or instrument
relating thereto;
(ii) any amendment or waiver of or any consent to departure
from the Letter of Credit, this
-40-
Agreement, or any other agreement or instrument relating
thereto, with the consent of Borrower;
(iii) the existence of any claim, setoff, defense, or
other rights which Borrower may have at any time against the
Issuing Bank, the Administrative Agent or any Bank, any
beneficiary of the Letter of Credit (or any persons or entities
for whom any such beneficiary may be acting) or any other
Person, whether in connection with the Letter of Credit, this
Agreement, or any other agreement or instrument relating
thereto, or any unrelated transactions;
(iv) any demand, statement, or any other document
presented under the Letter of Credit proving to be forged,
fraudulent, invalid, or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect
whatsoever so long as any such document appeared to comply with
the terms of the Letter of Credit;
(v) payment by the Issuing Bank in good faith under the
Letter of Credit against presentation of a draft or any
accompanying document which does not strictly comply with the
terms of the Letter of Credit;
(vi) the existence, character, quality, quantity,
condition, packing, value or delivery of any Property purported
to be represented by documents presented in connection with any
Letter of Credit or any difference between any such Property and
the character, quality, quantity, condition, or value of such
Property as described in such documents;
(vii) the time, place, manner, order or contents of
shipments or deliveries of Property as described in documents
presented in connection with any Letter of Credit or the
existence, nature and extent of any insurance relative thereto;
(viii) the solvency or financial responsibility of any
party issuing any documents in connection with a Letter of
Credit;
(ix) any failure or delay in notice of shipments or
arrival of any Property;
(x) any error in the transmission of any message
relating to a Letter of Credit not caused
-41-
by the Issuing Bank, or any delay or interruption in any such
message;
(xi) any error, neglect or default of any correspondent of
the Issuing Bank in connection with a Letter of Credit (but
without prejudice to any claim by Borrower against such
correspondent);
(xii) any consequence arising from acts of God, war,
insurrection, civil unrest, disturbances, labor disputes,
emergency conditions or other causes beyond the control of the
Issuing Bank;
(xiii) so long as the Issuing Bank in good faith determines
that the contract or document appears to comply with the terms
of the Letter of Credit, the form, accuracy, genuineness or
legal effect of any contract or document referred to in any
document submitted to the Issuing Bank in connection with a
Letter of Credit; and
(xiv) where the Issuing Bank has acted in good faith and
observed general banking usage, any other circumstances
whatsoever.
(i) The Issuing Bank shall be entitled to the protection
accorded to the Administrative Agent pursuant to Article 10, mutatis
mutandis. ---------- -------
--------
(j) The Uniform Customs and Practice for Documentary Credits, as
published in its most current version by the International Chamber of
Commerce, shall be deemed a part of this Section and shall apply to all
Letters of Credit to the extent not inconsistent with applicable Law.
2.5 Swing Line. (a) Subject to the terms and conditions set forth
----------
herein, from the Commitment Increase Date through the day prior to the Maturity
Date the Swing Line Bank shall make Swing Line Loans to Borrower in such amounts
as Borrower may request, provided that (i) after giving effect to each such
--------
Swing Line Loan, the Swing Line Outstandings shall not exceed $15,000,000, (ii)
without the consent of all of the Banks, no Swing Line Loan may be made during
the continuation of an Event of Default and (iii) the Swing Line Bank has not
given at least twenty-four (24) hours prior notice to Borrower that availability
under the Swing Line is suspended or terminated. Borrower may borrow, repay and
reborrow under this Section. Unless notified to the contrary by the Swing Line
Bank, borrowings under the Swing Line may be made in amounts which are integral
multiples of $100,000 upon telephonic request by a Responsible Official of
Borrower made to the
-42-
Administrative Agent not later than 1:00 p.m., California time, on the Banking
Day of the requested borrowing (which telephonic request shall be promptly
confirmed in writing by telecopier). Promptly after receipt of such a request
for borrowing, the Administrative Agent shall provide telephonic verification to
the Swing Line Bank that, after giving effect to such request, availability for
Loans will exist under Section 2.1(a) (and such verification shall be promptly
------
confirmed in writing by telecopier). Unless notified t Swing Line Bank, each
repayment of a Swing Line Loan shall be in an amount which is an integral
multiple of $100,000. If Borrower instructs the Swing Line Bank to debit its
demand deposit account at the Swing Line Bank in the amount of any payment with
respect to a Swing Line Loan, or the Swing Line Bank otherwise receives
repayment, after 3:00 p.m., California time, on a Banking Day, such payment
shall be deemed received on the next Banking Day. The Swing Line Bank shall
promptly notify the Administrative Agent of the Swing Loan Outstandings each
time there is a change therein and promptly notify the Creditors if it suspends
or terminates availability under the Swing Line.
(b) Swing Line Loans shall bear interest at a fluctuating rate
per annum equal to the Base Rate plus the applicable Base Rate Margin. Interest
----
shall be payable on such dates, not more frequent than monthly, as may be
specified by the Swing Line Bank and in any event on the Maturity Date. The
Swing Line Bank shall be responsible for invoicing Borrower for such interest.
Interest payable on Swing Line Loans is solely for the account of the Swing Line
Bank (subject to clause (d) below).
(c) The Swing Line Loans shall be payable within five (5)
Banking Days after demand made by the Swing Line Bank and in any event on the
Maturity Date.
(d) Upon the making of a Swing Line Loan in accordance with
Section 2.5(a), each Bank shall be deemed to have purchased from the Swing Line
------
Bank a participation therein in an amount equal to that Bank's Pro Rata Share
times the amount of the Swing Line Loan. Upon demand made by the Swing Line
-----
Bank, each Bank shall, according to its Pro Rata Share, promptly provide to the
Swing Line Bank its purchase price therefor in an amount equal to its
participation therein. The obligation of each Bank to so provide its purchase
price to the Swing Line Bank shall be absolute and unconditional (subject only
to the making of a demand upon that Bank by the Swing Line Bank) and shall not
be affected by the occurrence of a Default or Event of Default; provided that no
--------
Bank shall be obligated to purchase its Pro Rata Share of (i) Swing Line Loans
to the extent that Swing Line Outstandings are in excess of $15,000,000 or to
the extent that the sum of the Indebtedness
---
-43-
evidenced by the Notes plus the Aggregate Effective Amount of all outstanding
----
Letters of Credit plus the Swing Line Outstandings exceeds the Commitment (as in
----
effect on the date of the making of the related Swing Line Loan) and (ii) any
Swing Line Loan made (absent the consent of all of the Banks) during the
continuation of an Event of Default. Each Bank that has provided to the Swing
Line Bank the purchase price due for its participation in Swing Line Loans shall
thereupon acquire a pro rata participation, to the extent of such payment, in
the claim of the Swing Line Bank against Borrower for principal and interest and
shall share, in accordance with that pro rata participation, in any principal
payment made by Borrower with respect to such claim and in any interest payment
made by Borrower (but only with respect to periods subsequent to the date such
Bank paid the Swing Line Bank its purchase price) with respect to such claim.
(e) In the event that the Swing Line Outstandings are (a)
outstanding ten consecutive Banking Days, or (b) the Swing Line Outstandings are
in excess of $5,000,000 for three Banking Days, then, (unless Borrower has made
other arrangements acceptable to the Swing Line Bank to pay the Swing Line
Outstandings in full), on the next Banking Day Borrower shall request a Loan
pursuant to Section 2.1(a) sufficient to pay the Swing Line Outstandings in
------
full. In addition, upon any demand for payment of the Swing Line Outstandings by
the Swing Line Bank (unless Borrower has made other arrangements acceptable to
the Swing Line Bank to reduce the Swing Line Outstandings to $0), Borrower shall
request a Loan pursuant to Section 2.1(a) sufficient to repay all Swing Line
------
Outstandings (and, for this purpose, Section 2.1(d) shall not apply). In each
------
case, the Administrative Agent shall automatically provide the respective
Advances made by each Bank to the Swing Line Bank (which the Swing Line Bank
shall then apply to the Swing Line Outstandings). In the event that Borrower
fails to request a Loan within the time specified by Section 2.2 on any such
---
date, the Administrative Agent may, but is not required to, without notice to or
the consent of Borrower, cause Advances to be made by the Banks under the
Commitment in amounts which are sufficient to reduce the Swing Line Outstandings
as required above. The conditions precedent set forth in Article 8 shall not
---------
apply to Advances to be made by the Banks pursuant to the three preceding
sentences but the Banks shall not be obligated to make such Advances to the
extent that the conditions set forth in Section 2.5(a)(i), (ii) and (iii) were
--------- ---- -----
not satisfied as to any Swing Line Loan which is part of such Swing Line
Outstandings. The proceeds of such Advances shall be paid directly to the Swing
Line Bank for application to the Swing Line Outstandings.
2.6 Increase to the Commitment.
--------------------------
-44-
(a) Subject to the Memorandum of Understanding,
Borrower may by written notice to the Administrative Agent, accept
proposed increases to the amount of the Commitment to be effective on a
date within ten days following the Second Closing Date to be specified
by the Administrative Agent (the "Commitment Increase Date"), provided
--------
that (i) as of the Commitment Increase Date, no Default or Event of
Default shall have occurred, (ii) each such request shall be for an
increase in the Commitment which is an integral multiple of $5,000,000,
(iii) without the prior written consent of all of the Banks, no such
increase shall result in the aggregate principal amount of the
Commitment being in excess of $600,000,000. Nothing contained in this
Section 2.6 shall be construed as a commitment on behalf of the
---
Administrative Agent or any Bank to assume any increase in the
Commitment.
(b) Each Person which assumes any portion of an increase to
the Commitment shall be a willing financial institution which qualifies
as an Eligible Assignee and which is designated by the Administrative
Agent and the Arranger.
(c) Borrower, each such Eligible Assignee and the
Administrative Agent shall execute and deliver a Joinder Agreement, and
Borrower shall deliver a Note to each such Eligible Assignee in the
amount of its Pro Rata Share. Upon the Commitment Increase Date, the
Eligible Assignee named therein shall become a Bank for all purposes of
the Loan Documents, with the Pro Rata Share of the Commitment therein
set forth.
(d) By executing and delivering a Joinder Agreement, the
Eligible Assignee named therein acknowledges and agrees as of the
Commitment Increase Date that (i) it has received a copy of this
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 7.1 and such other documents and
---
information as it has deemed appropriate to make its own credit analysis
and decision to enter into such Joinder Agreement, (ii) it will,
independently and without reliance upon the Administrative Agent or any
Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (iii) it appoints and
authorizes the Administrative Agent to take such action and to exercise
such powers under this Agreement as are delegated to the Administrative
Agent by this Agreement; and (iv) it will perform in accordance with
their terms all of the obligations which by the terms of this Agreement
are required to be performed by it as a Bank.
-45-
(e) The Administrative Agent shall maintain at a copy of
each Joinder Agreement and shall record the name and Pro Rata Share of
each Bank which signs such an agreement in the Register described in
Section 11.8. The Administrative Agent shall promptly inform the Banks
----
of the identity of each Bank which executes a Joinder Agreement and
provide each Bank and Borrower with a revised Schedule 1.1 to this
------------
Agreement.
2.7 Voluntary Reduction of Commitment.
---------------------------------
(a) Borrower shall have the right, at any time and from
time to time, without penalty or charge, upon at least three (3) Banking
Days' prior written notice by a Responsible Official of Borrower to the
Administrative Agent, voluntarily to reduce, permanently and
irrevocably, in aggregate principal amounts in an integral multiple of
$1,000,000 but not less than $5,000,000, or to terminate, all or a
portion of the then undisbursed portion of the Commitment; provided that
--------
the Commitment may not be so reduced below an amount equal to the sum of
--- --
(i) the aggregate principal amount outstanding under the Notes, plus
----
(ii) the Aggregate Effective Amount of all outstanding Letters of Credit
plus (c) the Swing Line Outstandings. The Administrative Agent shall
----
promptly notify the Banks of any reduction or termination of the
Commitment under this Section.
(b) Any voluntary reduction of the Commitment under this
Section shall be applied to reduce the Reduction Amount on such
Reduction Dates as may be specified by Borrower or, if no such
specification is made, to reduce the Reduction Amount for the most
remote Reduction Date (to the extent of such reduction) and thereafter
to earlier Reduction Dates (to the extent not previously applied) in the
inverse order of their occurrence.
2.8 Scheduled Reduction of Commitment. Subject to Section
---------------------------------
2.9, on each Reduction Date, the Commitment shall automatically be permanently
---
reduced by the then applicable Reduction Amount.
2.9 Extension of the Reduction Date and the Maturity Date. At
-----------------------------------------------------
any time following the one year anniversary of the Closing Date, the then
remaining Reduction Dates and the Maturity Date may each be extended for one
year at Borrower's election with the written consent of all of the Banks (which
may be withheld in the sole and absolute discretion of each Bank). Not earlier
than June 1 nor later than August 1 of 1997 and of each subsequent year, and
provided that Borrower is then
--------
-46-
in compliance with Section 7.1, Borrower may deliver to the Administrative Agent
---
who will deliver to each of the Banks a written request for a one year extension
of the then remaining Reduction Dates and the Maturity Date together with a
Certificate of a Responsible Official signed by a Senior Officer on behalf of
Borrower stating that the representations and warranties contained in Article 4
---------
(other than representations and warranties which expressly speak as of a
----- ----
particular date or are no longer true and correct as a result of a change which
is not a violation of this Agreement) are true and correct on and as of the date
of such Certificate. Within 60 days following the delivery of such Certificate,
each Bank shall notify the Administrative Agent whether (in its sole and
absolute discretion) it consents to such request. Each Bank which fails to
respond to any such request for extension shall be deemed to have refused to
consent thereto. After receiving the notifications from all of the Banks or the
expiration of such period, whichever is earlier, the Administrative Agent shall
notify Borrower and the Banks of the results thereof.
If all of the Banks have consented to the extension then the
remaining Reduction Dates and the Maturity Date shall each be extended for one
year.
If Banks holding at least 85% of the Commitment consent to the
request for extension, but other Banks (each a "Non-Consenting Bank") notify the
Administrative Agent that they will not consent to the request for extension (or
fail to notify the Administrative Agent in writing of their consent to the
extension), Borrower may cause all of the Non-Consenting Banks to be removed as
Banks under this Agreement pursuant to Section 11.25, provided that such removal
----- --------
shall be accomplished by assignment to one or more Eligible Assignees which are
willing to consent to the request for extension and not by reduction of the
amount of Commitment. In the event that sufficient Eligible Assignees can be
identified to assume the Pro Rata Shares of the Non-Consenting Banks, then the
request for extension shall be granted with the effect as set forth above.
2.10 Optional Termination of Commitment. Following the
----------------------------------
occurrence of a Change in Control, the Requisite Banks may in their sole and
absolute discretion elect, during the thirty (30) day period immediately
subsequent to the later of (a) such occurrence or (b) the earlier of (i) receipt
-------- -------
of Borrower's written notice to the Administrative Agent of the Change in
Control, or (ii) if no such notice has been received by the Administrative
Agent, the date upon which the Administrative Agent has actual knowledge
thereof, to terminate the Commitment, in which case the Commitment shall be
terminated effective on the date which is thirty (30) days
-47-
subsequent to written notice from the Administrative Agent to Borrower thereof.
2.11 Administrative Agent's Right to Assume Funds Available
-------------------------------------------------------
for Advances. Unless the Administrative Agent shall have been notified by any
------------
Bank no later than 10:00 a.m. on the Banking Day of the proposed funding by the
Administrative Agent of any Loan that such Bank does not intend to make
available to the Administrative Agent such Bank's portion of the total amount of
such Loan, the Administrative Agent may assume that such Bank has made such
amount available to the Administrative Agent on the date of the Loan and the
Administrative Agent may, in reliance upon such assumption, make available to
Borrower a corresponding amount. If the Administrative Agent has made funds
available to Borrower based on such assumption and such corresponding amount is
not in fact made available to the Administrative Agent by such Bank, the
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Bank. If such Bank does not pay such corresponding amount
forthwith upon the Administrative Agent's demand therefor, the Administrative
Agent promptly shall notify Borrower and Borrower shall pay such corresponding
amount to the Administrative Agent. The Administrative Agent also shall be
entitled to recover from such Bank interest on such corresponding amount in
respect of each day from the date such corresponding amount was made available
by the Administrative Agent to Borrower to the date such corresponding amount is
recovered by the Administrative Agent, at a rate per annum equal to the daily
Federal Funds Rate. Nothing herein shall be deemed to relieve any Bank from its
obligation to fulfill its share of the Commitment or to prejudice any rights
which the Administrative Agent or Borrower may have against any Bank as a result
of any default by such Bank hereunder.
2.12 Collateral and Guaranty. The Obligations shall be
-----------------------
guaranteed by the Guarantors and secured by the Collateral pursuant to the
Collateral Documents.
2.13 Senior Indebtedness. The Obligations shall be and
-------------------
hereby are designated as "Senior Indebtedness" with respect to all Subordinated
Obligations and all payments with respect to any Subordinated Obligations shall
be subject to Section 6.1.
---
-48-
Article 3
PAYMENTS AND FEES
-----------------
3.1 Principal and Interest.
----------------------
(a) Interest shall be payable on the outstanding
daily unpaid principal amount of each Advance from the date thereof
until payment in full is made and shall accrue and be payable at the
rates set forth or provided for herein before and after Default, before
and after maturity, before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law, with
interest on overdue interest at the Default Rate to the fullest extent
permitted by applicable Laws.
(b) Interest accrued on each Base Rate Loan on the
first Banking Day of each calendar month shall be due and payable on
that day. Except as otherwise provided in Section 3.9, the unpaid
------ ---
principal amount of any Base Rate Loan shall bear interest at a
fluctuating rate per annum equal to the Base Rate plus the applicable
----
Base Rate Margin. Each change in the interest rate under this Section
3.1(b) due to a change in the Base Rate shall take effect simultaneously
------
with the corresponding change in the Base Rate.
(c) Interest accrued on each Eurodollar Rate Loan
which is for a term of three months or less shall be due and payable on
the last day of the related Eurodollar Period. Interest accrued on each
other Eurodollar Rate Loan shall be due and payable on the date which is
three months after the date such Eurodollar Rate Loan was made (and, in
the event that all of the Banks have approved a Eurodollar Period of
longer than six months, every three months thereafter through the last
day of the Eurodollar Period) and on the last day of the related
Eurodollar Period. Except as otherwise provided in Section 3.9, the
------ ---
unpaid principal amount of any Eurodollar Rate Loan shall bear interest
at a rate per annum equal to the Eurodollar Rate for that Eurodollar
Rate Loan plus the applicable Eurodollar Margin.
----
(d) If not sooner paid, the principal Indebtedness
evidenced by the Notes shall be payable as follows:
(i) the amount, if any, by which the sum of (A) the principal outstanding
---
Indebtedness evidenced by the Notes, plus (B) the Aggregate
----
Effective Amount of all outstanding Letters of Credit plus (C)
----
the Swing Line Outstandings at any
49
time exceeds the then applicable Commitment, shall be payable
immediately; and
(ii) the principal Indebtedness evidenced by the Notes shall in any event be
payable on the Maturity Date.
(e) The Notes may, at any time and from time to time,
voluntarily be paid or prepaid in whole or in part without premium
or penalty, except that with respect to any voluntary prepayment
------
under this Section (i) any partial prepayment shall be not less
than $5,000,000, or in integral multiples of $1,000,000 which are
in excess of $5,000,000, (ii) the Administrative Agent shall have
received written notice of any prepayment by 9:00 a.m. California
time on the Banking Day prior to the date of prepayment (which
must be a Banking Day) in the case of a Base Rate Loan, and, in
the case of a Eurodollar Rate Loan, three (3) Banking Days before
the date of prepayment, which notice shall identify the date and
amount of the prepayment and the Loan(s) being prepaid, (iii) each
prepayment of principal on any Eurodollar Rate Loan shall be
accompanied by payment of interest accrued to the date of payment
on the amount of principal paid and (iv) any payment or prepayment
of all or any part of any Eurodollar Rate Loan on a day other than
the last day of the applicable Eurodollar Period shall be subject
to Section 3.8(e). Promptly following receipt of a notice of
------
prepayment under clause (ii) above, the Administrative Agent shall
notify each Bank by telephone or telecopier (and if by telephone,
promptly confirmed by telecopier) of the date and amount thereof.
3.2 Underwriting Fees. On the Closing Date and on the
-----------------
Commitment Increase Date, Borrower shall pay to the Administrative Agent
underwriting fees in the amount heretofore agreed upon by letter agreement
between Borrower and the Arranger. The underwriting fees are for the services
of the Arranger in arranging the credit facilities under this Agreement and are
fully earned when paid. The underwriting fees paid to the Arranger are solely
for its own account and are nonrefundable.
3.3 Upfront Fees. On the Closing Date, Borrower shall pay
------------
to the Arranger, for the accounts of each Co-Agent, upfront fees in the amounts
heretofore agreed upon by letter agreement among Borrower, the Co-Agents, the
Administrative Agent and the Arranger. On the Commitment Increase Date,
Borrower shall further pay to the Administrative Agent, upfront fees in an
amount previously agreed upon between the Administrative Agent, the Arranger and
Borrower. The Administrative Agent shall pay each Bank upfront fees in an
amount agreed to by the Arranger and that Bank in a writing
50
between that Bank and the Arranger. Such upfront fees are for the credit
facilities committed by each Bank under this Agreement and are fully earned when
paid. The upfront fees paid to each Bank are solely for its own account and are
nonrefundable.
3.4 Commitment Fees. From the Closing Date, Borrower shall
---------------
pay to the Administrative Agent, for the ratable accounts of the Banks pro rata
according to their Pro Rata Share, a commitment fee equal to the Commitment Fee
Rate in effect from time to time times the average daily amount by which the
-----
Commitment exceeds the sum of (a) the aggregate principal amount outstanding
------
under the Notes (but not the Swing Line Outstandings) plus (b) the Aggregate
------- ----
Effective Amount under all outstanding Standby Letters of Credit. The
commitment fee shall be payable quarterly in arrears on each Quarterly Payment
Date, on the Maturity Date and upon the date of any partial reduction or
termination of the Commitment pursuant to Sections 2.7, 2.8 and 2.10.
--- --- ----
3.5 Letter of Credit Fees. With respect to each Letter of
---------------------
Credit, Borrower shall pay the following fees:
(a) concurrently with the issuance of each Standby
Letter of Credit, a letter of credit issuance fee to the Issuing
Bank for the sole account of the Issuing Bank, in an amount set
forth in a letter agreement between Borrower and the Issuing
Bank;
(b) concurrently with the issuance of each Standby
Letter of Credit, to the Administrative Agent for the ratable
account of the Banks in accordance with their Pro Rata Share, a
standby letter of credit fee in an amount equal to the
applicable Standby Letter of Credit Fee per annum as of the date
of such issuance times the face amount of such Standby Letter of
-----
Credit through the termination or expiration of such Standby
Letter of Credit, which the Administrative Agent shall promptly
pay to the Banks; and
(c) concurrently with each issuance, negotiation,
drawing or amendment of each Commercial Letter of Credit, to the
Issuing Bank for the sole account of the Issuing Bank, issuance,
negotiation, drawing and amendment fees in the amounts set forth
from time to time as the Issuing Bank's published scheduled fees
for such services.
Each of the fees payable with respect to Letters of Credit under this Section
is earned when due and is nonrefundable.
51
3.6 Agency Fees. On the Closing Date (for the period
-----------
through the Second Closing Date), on the Second Closing Date, and annually
thereafter, Borrower shall pay to the Administrative Agent an agency fee in such
amounts as heretofore agreed upon by letter agreement between Borrower and Bank
of America and the Arranger. The agency fee is for the services to be performed
by the Administrative Agent in acting as Administrative Agent and is fully
earned on the date paid. The agency fee paid to the Administrative Agent is
solely for its own account and is nonrefundable.
3.7 Increased Commitment Costs. If any Bank shall determine
--------------------------
in good faith that the introduction after the Closing Date of any applicable
law, rule, regulation or guideline regarding capital adequacy, or any change
therein or any change in the interpretation or administration thereof by any
central bank or other Governmental Agency charged with the interpretation or
administration thereof, or compliance by such Bank (or its Eurodollar Lending
Office) or any corporation controlling the Bank, with any request, guideline or
directive regarding capital adequacy (whether or not having the force of Law)
of any such central bank or other authority, affects or would affect the amount
of capital required or expected to be maintained by such Bank or any corporation
controlling such Bank and (taking into consideration such Bank's or such
corporation's policies with respect to capital adequacy and such Bank's desired
return on capital) determines in good faith that the amount of such capital is
increased, or the rate of return on capital is reduced, as a consequence of its
obligations under this Agreement, then, within ten (10) Banking Days after
demand of such Bank, Borrower shall pay to such Bank, from time to time as
specified in good faith by such Bank, additional amounts sufficient to
compensate such Bank in light of such circumstances, to the extent reasonably
allocable to such obligations under this Agreement, provided that Borrower shall
--------
not be obligated to pay any such amount which arose prior to the date which is
ninety (90) days preceding the date of such demand or is attributable to periods
prior to the date which is ninety (90) days preceding the date of such demand.
Any request for compensation by a Bank under this Section shall set forth the
basis upon which it has been determined that such an amount is due from
Borrower, a calculation of the amount due, and a certification that the
corresponding costs or diminished rate of return on capital have been incurred
or sustained by the Bank. If Borrower becomes obligated to pay a material
amount under this Section to any Bank, that Bank will be subject to removal in
accordance with Section 11.26; provided that Borrower shall have paid such
----- --------
amount to that Bank and that Borrower, within the thirty (30) day period
following the date of such payment, shall have notified that Bank in writing of
its intent to so remove the Bank. Each Bank's determination of
52
such amounts shall be conclusive in the absence of manifest error.
3.8 Eurodollar Costs and Related Matters.
------------------------------------
(a) In the event that any Governmental Agency imposes
on any Bank any reserve or comparable requirement (including any
---------
emergency, supplemental or other reserve) with respect to the
Eurodollar Obligations of that Bank, Borrower shall pay that Bank
within five (5) Banking Days after demand all amounts necessary to
compensate such Bank (determined as though such Bank's Eurodollar
Lending Office had funded 100% of its Eurodollar Rate Advance in the
Designated Eurodollar Market) in respect of the imposition of such
reserve requirements. The Bank's determination of such amount shall
be conclusive in the absence of manifest error.
(b) If, after the date hereof, the existence or
occurrence of any Special Eurodollar Circumstance:
(1) shall subject any Bank or its Eurodollar Lending
Office to any tax, duty or other charge or cost with respect to
any Eurodollar Rate Advance, any of its Notes evidencing
Eurodollar Rate Loans or its obligation to make Eurodollar Rate
Advances, or shall change the basis of taxation of payments to
any Bank attributable to the principal of or interest on any
Eurodollar Rate Advance or any other amounts due under this
Agreement in respect of any Eurodollar Rate Advance, any of its
Notes evidencing Eurodollar Rate Loans or its obligation to
make Eurodollar Rate Advances, excluding (i) taxes imposed on
---------
or measured in whole or in part by its overall net income,
gross income or gross receipts, (ii) franchise taxes imposed by
(A) any jurisdiction (or political subdivision thereof) in
which it is organized or maintains its principal office or
Eurodollar Lending Office or (B) any jurisdiction (or political
subdivision thereof) in which it is "doing business," and (iii)
any withholding taxes or other taxes based on gross income
imposed by the United States of America for any period with
respect to which it has failed to provide Borrower with the
appropriate form or forms required by Section 11.21, to the
-----
extent such forms are then available under applicable Laws;
(2) shall impose, modify or deem applicable any
reserve not applicable or deemed applicable on the date hereof
(including any reserve imposed by the Board of Governors of the
---------
Federal Reserve System, special deposit, capital or similar
requirements
53
against assets of, deposits with or for the account of, or
credit extended by, any Bank or its Eurodollar Lending Office);
or
(3) shall impose on any Bank or its Eurodollar
Lending Office or the Designated Eurodollar Market any other
condition affecting any Eurodollar Rate Advance, any of its
Notes evidencing Eurodollar Rate Loans, its obligation to make
Eurodollar Rate Advances or this Agreement, or shall otherwise
affect any of the same;
and the result of any of the foregoing, as determined in good faith by
such Bank, increases the cost to such Bank or its Eurodollar Lending
Office of making or maintaining any Eurodollar Rate Advance or in
respect of any Eurodollar Rate Advance, any of its Notes evidencing
Eurodollar Rate Loans or its obligation to make Eurodollar Rate Advances
or reduces the amount of any sum received or receivable by such Bank or
its Eurodollar Lending Office with respect to any Eurodollar Rate
Advance, any of its Notes evidencing Eurodollar Rate Loans or its
obligation to make Eurodollar Rate Advances (assuming such Bank's
Eurodollar Lending Office had funded 100% of its Eurodollar Rate Advance
in the Designated Eurodollar Market), then, within five (5) Banking Days
after demand by such Bank (with a copy to the Administrative Agent),
Borrower shall pay to such Bank such additional amount or amounts as
will compensate such Bank for such increased cost or reduction
(determined as though such Bank's Eurodollar Lending Office had funded
100% of its Eurodollar Rate Advance in the Designated Eurodollar
Market). A statement of any Bank claiming compensation under this
subsection and setting forth in reasonable detail the additional amount
or amounts to be paid to it hereunder shall be conclusive in the absence
of manifest error.
(c) If, after the date hereof, the existence or occurrence
of any Special Eurodollar Circumstance shall, in the good faith opinion
of any Bank, make it unlawful or impossible for such Bank or its
Eurodollar Lending Office to make, maintain or fund its portion of any
Eurodollar Rate Loan, or materially restrict the authority of such Bank
to purchase or sell, or to take deposits of, Dollars in the Designated
Eurodollar Market, or to determine or charge interest rates based upon
the Eurodollar Rate, and such Bank shall so notify the Administrative
Agent, then such Bank's obligation to make Eurodollar Rate Advances
shall be suspended for the duration of such illegality or impossibility
and the Administrative Agent forthwith shall give notice thereof to the
other Banks and Borrower. Upon
54
receipt of such notice, the outstanding principal amount of such Bank's
Eurodollar Rate Advances, together with accrued interest thereon,
automatically shall be converted to Base Rate Advances on either (1) the
last day of the Eurodollar Period(s) applicable to such Eurodollar Rate
Advances if such Bank may lawfully continue to maintain and fund such
Eurodollar Rate Advances to such day(s) or (2) immediately if such Bank
may not lawfully continue to fund and maintain such Eurodollar Rate
Advances to such day(s), provided that in such event the conversion
--------
shall not be subject to payment of a prepayment fee under clause (e) of
this Section. Each Bank agrees to endeavor promptly to notify Borrower
of any event of which it has actual knowledge, occurring after the
Closing Date, which will cause that Bank to notify the Administrative
Agent under this Section, and agrees to designate a different Eurodollar
Lending Office if such designation will avoid the need for such notice
and will not, in the good faith judgment of such Bank, otherwise be
materially disadvantageous to such Bank. In the event that any Bank is
unable, for the reasons set forth above, to make, maintain or fund its
portion of any Eurodollar Rate Loan, such Bank shall fund such amount as
a Base Rate Advance for the same period of time, and such amount shall
be treated in all respects as a Base Rate Advance. Any Bank whose
obligation to make Eurodollar Rate Advances has been suspended under
this Section shall promptly notify the Administrative Agent and Borrower
of the cessation of the Special Eurodollar Circumstance which gave rise
to such suspension.
(d) If, with respect to any proposed Eurodollar Rate Loan:
(1) the Administrative Agent reasonably determines that,
by reason of circumstances affecting the Designated Eurodollar
Market generally that are beyond the reasonable control of the
Banks, deposits in Dollars (in the applicable amounts) are not
being offered to any Bank in the Designated Eurodollar Market
for the applicable Eurodollar Period; or
(2) the Requisite Banks advise the Administrative Agent
that the Eurodollar Rate as determined by the Administrative
Agent (i) does not represent the effective pricing to such Banks
for deposits in Dollars in the Designated Eurodollar Market in
the relevant amount for the applicable Eurodollar Period, or
(ii) will not adequately and fairly reflect the cost to such
Banks of making the applicable Euro-dollar Rate Advances;
-55-
then the Administrative Agent forthwith shall give notice thereof to
Borrower and the Banks, whereupon until the Administrative Agent
notifies Borrower that the circumstances giving rise to such suspension
no longer exist, the obligation of the Banks to make any future
Eurodollar Rate Advances shall be suspended unless (but only if clause
------
(2) above is the basis for such suspension) Borrower notifies the
---
Administrative Agent in writing that it elects to pay the Enhanced
Eurodollar Margin with respect to all Eurodollar Rate Loans made during
such period.
(e) Upon payment or prepayment of any Eurodollar Rate
Advance (other than as the result of a conversion required under clause
----- ----
(c) of this Section) on a day other than the last day in the applicable
Eurodollar Period (whether voluntarily, involuntarily, by reason of
acceleration, or otherwise), or upon the failure of Borrower (for a
reason other than the failure of a Bank to make an Advance) to borrow on
the date or in the amount specified for a Eurodollar Rate Loan in any
Request for Loan, or upon the failure of Borrower to prepay a Eurodollar
Rate Loan on the date specified in a notice of prepayment delivered to
the Administrative Agent pursuant to Section 3.1(e), Borrower shall pay
------
to the appropriate Bank within ten (10) Banking Days after demand a
prepayment fee, failure to borrow fee or failure to prepay fee, as the
case may be (determined as though 100% of the Eurodollar Rate Advance
had been funded in the Designated Eurodollar Market), equal to the sum
---
of:
--
(1) the principal amount of the Eurodollar Rate Advance
prepaid or not borrowed or prepaid, as the case may be, times the
-----
number of days from and including the date of prepayment or failure
to borrow or prepay, as applicable, to but excluding the last day
in the applicable Eurodollar Period], divided by 360, times the
---------- -----
applicable Interest Differential (provided that the product of the
--------
foregoing formula must be a positive number); plus
----
(2) all out-of-pocket expenses incurred by the Bank
reasonably attributable to such payment, prepayment or failure to
borrow.
Each Bank's determination of the amount of any prepayment fee, failure
to borrow fee or failure to prepay fee payable under this Section shall
be conclusive in the absence of manifest error.
(f) Each Bank agrees to endeavor promptly to notify
Borrower of any event of which it has actual
-56-
knowledge, occurring after the Closing Date, which will entitle such
Bank to compensation pursuant to clause (a) or clause (b) of this
- -
Section, and agrees to designate a different Eurodollar Lending Office
if such designation will avoid the need for or reduce the amount of such
compensation and will not, in the good faith judgment of such Bank,
otherwise be materially disadvantageous to such Bank. Any request for
compensation by a Bank under this Section shall set forth the basis upon
which it has been determined that such an amount is due from Borrower, a
calculation of the amount due, and a certification that the
corresponding costs have been incurred by the Bank.
(g) If any Bank claims compensation or is excused from
making or continuing Eurodollar Rate Loans under this Section:
(i) Borrower may at any time, upon at least four
(4) Eurodollar Banking Days' prior notice to the Administrative
Agent and such Bank and upon payment in full of the amounts
provided for in this Section through the date of such payment
plus any prepayment fee (subject to clause (c) of this Section)
---- ---
required by clause (e) of this Section, pay in full the affected
---
Eurodollar Rate Advances of such Bank or request that such
Eurodollar Rate Advances be converted to Base Rate Advances; and
(ii) In the case where Borrower becomes obligated
to pay a material amount under this Section to any Bank, that
Bank will be subject to removal in accordance with Section
11.26; provided that Borrower shall have paid such amount to
----- --------
that Bank and that Borrower, within the thirty (30) day period
following the date of such payment, shall have notified that
Bank in writing of its intent to so remove the Bank.
3.9 Late Payments. If any installment of principal or interest
-------------
or any fee or cost or other amount payable under any Loan Document to the
Administrative Agent or any Bank is not paid when due, it shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to the sum
---
of the Base Rate plus the applicable Base Rate Margin plus 2%, to the fullest
---- ----
extent permitted by applicable Laws. Accrued and unpaid interest on past due
amounts (including interest on past due interest) shall be compounded monthly,
---------
on the last day of each calendar month, to the fullest extent permitted by
applicable Laws.
3.10 Computation of Interest and Fees. Computation of interest
--------------------------------
on Base Rate Loans shall be calculated on the basis
-57-
of a year of 365 or 366 days, as the case may be, and the actual number of days
elapsed; computation of interest on Eurodollar Rate Loans and all fees under
this Agreement shall be calculated on the basis of a year of 360 days and the
actual number of days elapsed. Borrower acknowledges that such latter
calculation method will result in a higher yield to the Banks than a method
based on a year of 365 or 366 days. Interest shall accrue on each Loan for the
day on which the Loan is made; interest shall not accrue on a Loan, or any
portion thereof, for the day on which the Loan or such portion is paid. Any Loan
that is repaid on the same day on which it is made shall bear interest for one
day. Notwithstanding anything in this Agreement to the contrary, interest in
excess of the maximum amount permitted by applicable Laws shall not accrue or be
payable hereunder or under the Notes, and any amount paid as interest hereunder
or under the Notes which would otherwise be in excess of such maximum permitted
amount shall instead be treated as a payment of principal.
3.11 Non-Banking Days. If any payment to be made by Borrower
----------------
or any other Party under any Loan Document shall come due on a day other than a
Banking Day, payment shall instead be considered due on the next succeeding
Banking Day and the extension of time shall be reflected in computing interest
and fees.
3 .12 Manner and Treatment of Payments.
--------------------------------
(a) Each payment hereunder (except payments pursuant to
------
Sections 3.7, 3.8, 11.3, 11.11 and 11.22) or on the Notes or under any
--- --- ---- ----- -----
other Loan Document shall be made to the Administrative Agent, at the
Administrative Agent's Office, for the account of each of the Banks or
the Administrative Agent, as the case may be, in immediately available
funds not later than 11:00 a.m. (other than payments with respect to
-----
Swing Line Loans, which must be paid directly to the Swing Line Bank and
received by 3:00 p.m.), California time, on the day of payment (which
must be a Banking Day). All payments received after such time, on any
Banking Day, shall be deemed received on the next succeeding Banking
Day. The amount of all payments received by the Administrative Agent for
the account of each Bank shall be immediately paid by the Administrative
Agent to the applicable Bank in immediately available funds and, if such
payment was received by the Administrative Agent by 11:00 a.m.,
California time, on a Banking Day and not so made available to the
account of a Bank on that Banking Day, the Administrative Agent shall
reimburse that Bank for the cost to such Bank of funding the amount of
such payment at the Federal Funds Rate. All payments shall be made in
lawful money of the United States of America.
-58-
(b) Each payment or prepayment on account of any Loan
shall be applied pro rata according to the outstanding Advances made by
each Bank comprising such Loan.
(c) Each Bank shall use its best efforts to keep a
record (which may be in tangible or electronic or other intangible form)
of Advances made by it and payments received by it with respect to each
of its Notes and, subject to Section 10.6(g), such record shall, as
-------
against Borrower, be presumptive evidence of the amounts owing.
Notwithstanding the foregoing sentence, the failure by any Bank to keep
such a record shall not affect Borrower's obligation to pay the
Obligations.
(d) Each payment of any amount payable by Borrower or
any other Party under this Agreement or any other Loan Document shall be
made free and clear of, and without reduction by reason of, any taxes,
assessments or other charges imposed by any Governmental Agency, central
bank or comparable authority, excluding (i) taxes imposed on or measured
---------
in whole or in part by overall net income, gross income or gross
receipts, (ii) franchise taxes imposed on any Bank by (A) any
jurisdiction (or political subdivision thereof) in which it is organized
or maintains its principal office or Eurodollar Lending Office or (B)
any jurisdiction (or political subdivision thereof) in which it is
"doing business", (iii) any withholding taxes or other taxes based on
gross income imposed by the United States of America that are not
attributable to any change in any Law or the interpretation or
administration of any Law by any Governmental Agency and (iv) any
withholding tax or other taxes based on gross income imposed by the
United States of America for any period with respect to which it has
failed to provide Borrower with the appropriate form or forms required
by Section 11.21, to the extent such forms are then available under
-----
applicable Laws (all such non-excluded taxes, assessments or other
charges being hereinafter referred to as "Taxes"). To the extent that
Borrower is obligated by applicable Laws to make any deduction or
withholding on account of Taxes from any amount payable to any Bank
under this Agreement, Borrower shall (i) make such deduction or
withholding and pay the same to the relevant Governmental Agency and
(ii) pay such additional amount to that Bank as is necessary to result
in that Bank's receiving a net after-Tax amount equal to the amount to
which that Bank would have been entitled under this Agreement absent
such deduction or withholding. If and when receipt of such payment
results in an excess payment or credit to that Bank on account of such
Taxes, that Bank shall promptly refund such excess to Borrower. If
Borrower becomes
-59-
obligated to pay a material amount under this Section to any Bank, that
Bank will be subject to removal in accordance with Section 11.26;
-----
provided that Borrower shall have paid such amount to that Bank and that
--------
Borrower, within the thirty (30) day period following the date of such
payment, shall have notified that Bank in writing of its intent to so
remove the Bank.
3.13 Funding Sources. Nothing in this Agreement shall be
---------------
deemed to obligate any Bank to obtain the funds for any Loan or Advance in any
particular place or manner or to constitute a representation by any Bank that
it has obtained or will obtain the funds for any Loan or Advance in any
particular place or manner, provided that each Bank severally represents and
--------
warrants that it has obtained the funds for its Advances in compliance with
applicable Laws and that the making of its Advances will not constitute
"prohibited transactions" as such term is defined in ERISA.
3.14 Failure to Charge Not Subsequent Waiver. Any decision by
---------------------------------------
the Administrative Agent or any Bank not to require payment of any interest
(including interest at the Default Rate), fee, cost or other amount payable
---------
under any Loan Document, or to calculate any amount payable by a particular
method, on any occasion shall in no way limit or be deemed a waiver of the
Administrative Agent's or such Bank's right to require full payment of any
interest (including interest at the Default Rate), fee, cost or other amount
---------
payable under any Loan Document, or to calculate an amount payable by another
method that is not inconsistent with this Agreement, on any other or subsequent
occasion.
3.15 Administrative Agent's Right to Assume Payments Will be
-------------------------------------------------------
Made by Borrower. Unless the Administrative Agent shall have been notified by
----------------
Borrower prior to the date on which any payment to be made by Borrower hereunder
is due that Borrower does not intend to remit such payment, the Administrative
Agent may, in its discretion, assume that Borrower has remitted such payment
when so due and the Administrative Agent may, in its discretion and in reliance
upon such assumption, make available to each Bank on such payment date an amount
equal to such Bank's share of such assumed payment. If Borrower has not in fact
remitted such payment to the Administrative Agent, each Bank shall forthwith on
demand repay to the Administrative Agent the amount of such assumed payment made
available to such Bank, together with interest thereon in respect of each day
from and including the date such amount was made available by the Administrative
Agent to such Bank to the date such amount is repaid to the Administrative Agent
at the Federal Funds Rate.
-60-
3.16 Fee Determination Detail. The Administrative Agent, and
------------------------
any Bank, shall provide reasonable detail to Borrower regarding the manner in
which the amount of any payment to the Creditors, or that Bank, under Article 3
---------
has been determined, concurrently with demand for such payment.
3.17 Survivability. All of Borrower's obligations under
-------------
Sections 3.7 and 3.8 shall survive for ninety (90) days following the date on
--- ---
which the Commitment is terminated, all Obligations hereunder are fully paid and
all Letters of Credit have expired.
-61-
Article 4
REPRESENTATIONS AND WARRANTIES
------------------------------
Borrower represents and warrants to the Banks that:
4.1 Existence and Qualification; Power; Compliance With
---------------------------------------------------
Laws. Borrower is a corporation duly formed, validly existing and in
----
good standing under the Laws of Delaware. Each of the Guarantors is a
corporation duly formed, validly existing and in good standing under the
Laws of its state of formation. Borrower and each of the Guarantors are
duly qualified or registered to transact business and are in good
standing in each other jurisdiction in which the conduct of their
business or the ownership or leasing of their Properties makes such
qualification or registration necessary, except where the failure so to
------
qualify or register and to be in good standing would not constitute a
Material Adverse Effect. Borrower and each Guarantor have all
requisite corporate or other organizational power and authority to
conduct their business, to own and lease their Properties and to execute
and deliver each Loan Document to which each is a Party and to perform
the Obligations. All outstanding shares of the capital stock of
Borrower are duly authorized, validly issued, fully paid and
non-assessable, and no holder thereof has any enforceable right of
rescission under any applicable state or federal securities
Laws. Borrower is in compliance with all Requirements of Law applicable
to its business as at present conducted, has obtained all
authorizations, consents, approvals, orders, licenses and permits from,
and has accomplished all filings, registrations and qualifications with,
or obtained exemptions from any of the foregoing from, any Governmental
Agency that are necessary for the transaction of its business as at
present conducted, except where the failure so to comply, file,
------
register, qualify or obtain exemptions does not constitute a Material
Adverse Effect. The Banks acknowledge that Atlantic City is not
required to hold any licenses under applicable Gaming Laws until the
Atlantic City Completion Date.
4.2 Authority; Compliance With Other Agreements and
-----------------------------------------------
Instruments and Government Regulations. The execution, delivery and
--------------------------------------
performance by Borrower and each Guarantor of the Loan Documents to
which it is a Party have been duly authorized by all necessary corporate
or other organizational action, and do not and will not:
(a) Require any consent or approval not heretofore
obtained of any member, partner, director, stockholder, security
holder or creditor of such Party;
-62-
(b) Violate or conflict with any provision of such
Party's charter, articles of incorporation, operating agreement
or bylaws, as applicable;
(c) Result in or require the creation or imposition of
any Lien or Right of Others upon or with respect to any Property
now owned or leased or hereafter acquired by such Party;
(d) Violate any Requirement of Law applicable to such
Party, subject to obtaining the authorizations from, or filings
with, the Governmental Agencies described in Schedule 4.3;
------------
(e) Result in a breach of or constitute a default under,
or cause or permit the acceleration of any obligation owed
under, any indenture or loan or credit agreement or any other
Contractual Obligation to which such Party is a party or by
which such Party or any of its Property is bound or affected;
and none of Borrower or any Guarantor is in violation of, or default
under, any Requirement of Law or Contractual Obligation, or any
indenture, loan or credit agreement described in Section 4.2(e), in any
espect that constitutes a Material Adverse Effect.
4.3 No Governmental Approvals Required. Except as set forth
---------------------------------- ------
in Schedule 4.3 or previously obtained or made, no authorization,
------------
consent, in approval, order, license or permit from, or filing,
registration or qualification with, any Governmental Agency is or will
be required to authorize or permit under applicable Laws the execution,
delivery and performance by Borrower and its Restricted Subsidiaries of
the Loan Documents to which it is a Party. Except as set forth in
------
Schedule 4.3, all authorizations from, or filings with, any Governmental
------------
Agency described in Schedule 4.3 will be accomplished as of the Second
------------
Closing Date.
4.4 Subsidiaries.
------------
(a) Schedule 4.4 hereto correctly sets forth the names,
------------
form of legal entity, number of shares of capital stock issued
and outstanding, number of shares owned by Borrower or a
Subsidiary of Borrower (specifying such owner) and jurisdictions
of organization of all Subsidiaries of Borrower. Except as
described in Schedule 4.4, Borrower does not own any capital
------------
stock, equity interest or debt security which is convertible, or
exchangeable, for capital stock or equity interests in any
Person. Unless otherwise indicated in Schedule 4.4, all of the
------------
outstanding shares of capital stock, or all of the
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units of equity interest, as the case may be, of each Subsidiary
are owned of record and beneficially by Borrower, there are no
outstanding options, warrants or other rights to purchase
capital stock of any such Subsidiary, and all such shares or
equity interests so owned are duly authorized, validly issued,
fully paid and non-assessable, and were issued in compliance
with all applicable state and federal securities and other
Laws, and are free and clear of all Liens and Rights of Others,
except for Permitted Encumbrances and Permitted Rights of
------
Others.
(b) Each Restricted Subsidiary of Borrower is a business
entity duly formed, validly existing and in good standing under
the Laws of its jurisdiction of organization, is duly qualified
to do business as a foreign organization and is in good standing
as such in each jurisdiction in which the conduct of its
business or the ownership or leasing of its Properties makes
such qualification necessary (except Where the failure to be so
------
duly qualified and in good standing does not constitute a
Material Adverse Effect), and has all requisite power and
authority to conduct its business and to own and lease its
Properties.
(c) Each Restricted Subsidiary of Borrower is in
compliance with all Requirements of Law applicable to its
business and has obtained all authorizations, consents,
approvals, orders, licenses, and permits from, and each such
Restricted Subsidiary has accomplished all filings,
registrations, and qualifications with, or obtained exemptions
from any of the foregoing from, any Governmental Agency that are
necessary for the transaction of its business, except where the
------
failure to be in such compliance, obtain such authorizations,
consents, approvals, orders, licenses, and permits, accomplish
such filings, registrations, and qualifications, or obtain such
exemptions, does not constitute a Material Adverse Effect.
4.5 Financial Statements. Borrower has furnished to the Banks
--------------------
(a) the audited consolidated and consolidating financial statements of
Borrower and its Subsidiaries for the Fiscal Year ended December 31,
1995, (b) the unaudited consolidated and consolidating financial
statements of each of Borrower and its Subsidiaries for the Fiscal
Quarter ended March 31, 1996, and (c) the unaudited pro forma balance
sheet of Las Vegas dated as of the Second Closing Date based upon the
then most recent unaudited financial statements of Las Vegas but giving
pro forma effect to the transactions which will occur on the Second
Closing Date. The financial statements described in clauses (a) and (b)
- -
fairly present in all material respects the financial condition,
results of operations and
-64-
changes in financial position of Borrower and its Subsidiaries, and the
balance sheet described in clause (c), fairly presents the financial
-
condition of Las Vegas, in each case as of such dates and for such
periods in conformity with Generally Accepted Accounting Principles,
consistently applied.
4.6 No Other Liabilities; No Material Adverse
-----------------------------------------
Changes. Borrower and its Subsidiaries do not have any material
-------
liability or material contingent liability required under Generally
Accepted Accounting Principles to be reflected or disclosed and not
reflected or disclosed in the financial statements described in Section
4.5(b), other than liabilities and contingent liabilities arising in
------
the ordinary course of business since the date of such financial
statements. As of the Closing Date, no circumstance or event has
occurred that constitutes a Material Adverse Effect since December 31,
1995. As of any date subsequent to the Closing Date, no circumstance
or event has occurred that constitutes a Material Adverse Effect since
the Closing Date.
4.7 Title to Property. Borrower and its Subsidiaries have
-----------------
valid title to the Property reflected in the financial statements
described in Section 4.5(b), other than immaterial items of Property and
------
Property subsequently sold or disposed of in the ordinary course of
business, free and clear of all Liens and Rights of Others, other than
----------
Permitted Encumbrances, Permitted Rights of Others and Liens or Rights
of Others described in Schedule 4.7 or permitted by Section 6.8.
------------ ---
4.8 Intangible Assets. Borrower and its Subsidiaries own, or
-----------------
possess the right to use to the extent necessary in their businesses,
all material trademarks, trade names, copyrights, patents, patent
rights, computer software, licenses and other Intangible Assets that are
used in the conduct of their businesses, and no such Intangible Asset,
to the best knowledge of Borrower, conflicts with the valid trademark,
trade name, copyright, patent, patent right or Intangible Asset of any
other Person to the extent that such conflict constitutes a Material
Adverse Effect. Schedule 4.8 sets forth all material patents,
------------
trademarks, trade names, trade styles and copyrights owned by Borrower.
4.9 Public Utility Holding Company Act. Neither Borrower nor
----------------------------------
any of its Subsidiaries is a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
4.10 Litigation. Except for (a) any matter fully covered as
---------- ------
to subject matter and amount (subject to applicable deductibles and
retentions) by insurance as to which the
-65-
insurance carrier has been notified and has not asserted lack of subject
matter coverage or reserved its right to do so, (b) any matter, or
series of related matters, involving a claim against Borrower or any of
its Subsidiaries of less than $5,000,000, (c) matters of an
administrative nature not involving a claim or charge against Borrower
or any of its Subsidiaries and (d) matters set forth in Schedule 4.10,
-------------
there are no actions, suits, proceedings or investigations pending as to
which Borrower or any of its Subsidiaries have been served or have
received notice or, to the best knowledge of Borrower, threatened
against or affecting Borrower or any of its Subsidiaries or any Property
of any of them before any Governmental Agency.
4.11 Binding Obligations. Each of the Loan Documents to which
-------------------
Borrower any of its Restricted Subsidiaries is a Party will, when
executed and delivered by such Party, constitute the legal, valid and
binding obligation of such Party, enforceable against such Party in
accordance with its terms, except as enforcement may be limited by
Debtor Relief Laws, Gaming Laws or equitable principles relating to the
granting of specific performance and other equitable remedies as a
matter of judicial discretion. Each of the certifications contained in
the Solvency Certificates is accurate.
4.12 No Default. No event has occurred and is continuing that
----------
is a Default or Event of Default.
4.13 ERISA.
-----
(a) With respect to each Pension Plan:
(i) such Pension Plan complies in all material
respects with ERISA and any other applicable Laws to the extent
that noncompliance could reasonably be expected to have a
Material Adverse Effect;
(ii) such Pension Plan has not incurred any
"accumulated funding deficiency" (as defined in Section 302 of
ERISA) that could reasonably be expected to have a Material
Adverse Effect;
(iii) no "reportable event" (as defined in Section
4043 of ERISA) has occurred that could reasonably be expected to
have a Material Adverse Effect; and
(iv) neither Borrower nor any of its Subsidiaries
has engaged in any non-exempt "prohibited transaction" (as
defined in Section 4975
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of the Code) that could reasonably be expected to have a
Material Adverse Effect.
(b) Neither Borrower nor any of its Subsidiaries has
incurred or expects to incur any withdrawal liability to any
Multiemployer Plan that could reasonably be expected to have a
Material Adverse Effect.
4.14 Regulations G, T, U and X; Investment Company Act. No
-------------------------------------------------
part of the proceeds of any Loan hereunder will be used to purchase or
carry, or to extend credit to others for the purpose of purchasing or
carrying, any Margin Stock in violation of Regulations G, T, U and X.
Neither Borrower nor any of its Subsidiaries is or is required to be
registered as an "investment company" under the Investment Company Act
of 1940.
4.15 Disclosure. No written statement made by a Senior
----------
Officer of Borrower or any Guarantor to the Administrative Agent or any
Bank in connection with this Agreement, or in connection with any Loan,
as of the date thereof contained any untrue statement of a material fact
or omitted a material fact necessary to make the statement made not
misleading in light of all the circumstances existing at the date the
statement was made.
4.16 Tax Liability. Borrower and its Subsidiaries have filed
-------------
all tax returns which are required to be filed, and have paid, or made
provision for the payment of, all taxes with respect to the periods,
Property or transactions covered by said returns, or pursuant to any
assessment received by Borrower or its Subsidiaries, except (a) such
------
taxes, if any, as are being contested in good faith by appropriate
proceedings and as to which adequate reserves have been established and
maintained and (b) immaterial taxes so long as no material Property of
Borrower or any of its Subsidiaries is in jeopardy of being seized,
levied upon or forfeited.
4.17 Projections. As of the Closing Date, to the best
-----------
knowledge of Borrower, the assumptions set forth in the Projections are
reasonable and consistent with each other and with all facts known to
Borrower and its Subsidiaries, and the Projections are reasonably based
on such assumptions. Nothing in this Section shall be construed as a
representation or covenant that the Projections in fact will be
achieved. The Creditors acknowledge that the Projections are forward-
looking statements and that actual financial results for Borrower and
its Subsidiaries could differ materially from those set forth in the
Projections.
4.18 Hazardous Materials. Except as described in Schedule
------------------- --------
4.18, (a) neither Borrower nor any of its Subsidiaries
----
-67-
at any time has disposed of, discharged, released or threatened the
release of any Hazardous Materials on, from or under the Real Property
in violation of any Hazardous Materials Law that would individually or
in the aggregate constitute a Material Adverse Effect, (b) to the best
knowledge of Borrower, no condition exists that violates any Hazardous
Material Law affecting any Real Property except for such violations that
would not individually or in the aggregate have a Material Adverse
Effect, (c) no Real Property or any portion thereof is or has been
utilized by Borrower or any of its Subsidiaries as a site for the
manufacture of any Hazardous Materials and (d) to the extent that any
Hazardous Materials are used, generated or stored by Borrower or any of
its Subsidiaries on any Real Property, or transported to or from such
Real Property by Borrower or any of its Subsidiaries, such use,
generation, storage and transportation are in compliance in all material
respects with all Hazardous Materials Laws.
4.19 Security Interests. On the Closing Date, substantially
------------------
concurrently with the execution and delivery of the Irrevocable Security
Agreement - Defeasance, such agreement will create a valid and perfected
Lien in favor of First Trust of Illinois, as agent for the ratable
benefit of the Administrative Agent and the Creditors in Cash
Equivalents having a value of not less than $157,500,500, and such Lien
will be of first priority. Upon the execution and delivery of the
Borrower Security Agreement and the Subsidiary Security Agreement, such
agreements will create valid and perfected first priority security
interests in the Collateral described therein securing the Obligations
(subject only to Permitted Encumbrances, Permitted Rights of Others,
purchase money liens permitted under Section 6.8(g) and matters
------
disclosed in Schedule 4.7 and to such qualifications and exceptions as
------------
are contained in the Uniform Commercial Code with respect to the
priority of security interests perfected by means other than the filing
of a financing statement or with respect to the creation of security
interests in Property to which Article 9 of the Uniform Commercial Code
does not apply) and all action necessary to perfect the security
interest so created, other than filing of the UCC-1 financing statements
----- ----
delivered to the Administrative Agent pursuant to Section 8.1 with the
appropriate Governmental Agency, have been taken and completed. Upon the
execution and delivery of the Trademark Security Interest Assignment and
the Copyright Assignment, such agreements will create a valid first
priority collateral assignment of the Collateral described therein
securing the Obligations and all action necessary to perfect the
collateral assignment so created, other than the filing thereof with the
----- ----
United States Patent and Trademark Office, and the United States
Copyright Office will have been taken and completed. Upon the execution
and delivery of the Pledge Agreement and the Subsidiary Pledge
Agreement, and the delivery to the
-68-
Administrative Agent of the Pledged Collateral described therein (or, in
the case of the stock of Las Vegas, the delivery of such stock to Bank
of America Nevada under the Nevada Pledge Escrow Agreement), such
agreements will create a valid and perfected first priority security
interest in such Pledged Collateral described therein. Upon the
execution and delivery of the Deeds of Trust, the Deeds of Trust will
create a valid Lien in the Collateral described therein securing the
Obligations, other than those arising under Sections 4.18, 5.11 and
----- ---- ---- ----
11.22, (subject only to Permitted Encumbrances, Permitted Rights of
-----
Others and matters described in Schedule 4.7), and all action necessary
------------
to perfect the Lien so created, other than recordation or filing thereof
----- ----
with the appropriate Governmental Agencies, will have been taken and
completed.
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Article 5
AFFIRMATIVE COVENANTS
---------------------
(OTHER THAN INFORMATION AND
--------------------------
REPORTING REQUIREMENTS)
----------------------
So long as any Advance remains unpaid, or any Letter of Credit
remains outstanding or any other Obligation remains unpaid, or any portion of
the Commitment remains in force, Borrower shall, and shall cause each of its
Restricted Subsidiaries to, unless the Administrative Agent (with the written
approval of the Requisite Banks) otherwise consents:
5.1 Payment of Taxes and Other Potential Liens. Pay and
------------------------------------------
discharge promptly all taxes, assessments and governmental charges or levies
imposed upon any of them, upon their respective Property or any part thereof and
upon their respective income or profits or any part thereof, except that
Borrower and its Restricted Subsidiaries shall not be required to pay or cause
to be paid (a) any tax, assessment, charge or levy that is not yet past due, or
is being contested in good faith by appropriate proceedings so long as the
relevant entity has established and maintains adequate reserves for the payment
of the same or (b) any immaterial tax so long as no material Property of
Borrower or any of its Restricted Subsidiaries is in jeopardy of being seized,
levied upon or forfeited.
5.2 Preservation of Existence. Preserve and maintain their
-------------------------
respective existences in the jurisdiction of their formation and all material
authorizations, rights, franchises, privileges, consents, approvals, orders,
licenses, permits, or registrations from any Governmental Agency that are
necessary for the transaction of their respective business except (a) where the
failure to so preserve and maintain the existence of any Restricted Subsidiary
of Borrower and such authorizations, rights, franchises, privileges, consents,
approvals, orders, licenses, permits, or registrations would not constitute a
Material Adverse Effect and (b) that a merger permitted by Section 6.3 shall not
---
constitute a violation of this covenant; and qualify and remain qualified to
transact business in each jurisdiction in which such qualification is necessary
in view of their respective business or the ownership or leasing of their
respective Properties except where the failure to so qualify or remain qualified
------
would not constitute a Material Adverse Effect.
5.3 Maintenance of Properties. Maintain, preserve and
-------------------------
protect all of their respective Properties in good order and condition, subject
to wear and tear in the ordinary course of business, and not permit any waste of
their respective Properties, except that the failure to maintain, preserve and
------
protect a particular item of Property that is not of
-70-
significant value, either intrinsically or to the operations of Borrower and its
Restricted Subsidiaries, taken as a whole, shall not constitute a violation of
this covenant.
5.4 Maintenance of Insurance. Maintain liability, casualty
------------------------
and other insurance (subject to customary deductibles and retentions) with
responsible insurance companies in such amounts and against such risks as is
carried by responsible companies engaged in similar businesses and owning
similar assets in the general areas in which Borrower and its Restricted
Subsidiaries operate and, in any event, such insurance as is required under the
Deeds of Trust.
5.5 Compliance With Laws. Comply, within the time period,
--------------------
if any, given for such compliance by the relevant Governmental Agency with
enforcement authority, with all Requirements of Law noncompliance with which
constitutes a Material Adverse Effect, except that Borrower and its Restricted
------
Subsidiaries need not comply with a Requirement of Law then being contested by
any of them in good faith by appropriate proceedings.
5.6 Inspection Rights. Upon reasonable notice, at any time
-----------------
during regular business hours and as often as reasonably requested (but not so
as to materially interfere with the business of Borrower or any of its
Subsidiaries) permit the Administrative Agent or any Bank, or any authorized
employee, agent or representative thereof, to examine, audit and make copies and
abstracts from the records and books of account of, and to visit and inspect the
Properties of, Borrower and its Subsidiaries and to discuss the affairs,
finances and accounts of Borrower and its Subsidiaries with any of their
officers, managers, key employees or accountants and, upon request, furnish
promptly to the Administrative Agent or any Bank true copies of all financial
information made available to the board of directors or audit committee of the
board of directors of Borrower.
5.7 Keeping of Records and Books of Account. Keep adequate
---------------------------------------
records and books of account reflecting all financial transactions in conformity
with Generally Accepted Accounting Principles, consistently applied, and in
material conformity with all applicable requirements of any Governmental Agency
having regulatory jurisdiction over Borrower or any of its Subsidiaries.
5.8 Compliance With Agreements. Promptly and fully comply
--------------------------
with all Contractual Obligations under all material agreements, indentures,
leases and/or instruments to which any one or more of them is a party, whether
such material agreements, indentures, leases or instruments are with a Bank or
another Person, except for any such Contractual Obligations
------
-71-
(a) the performance of which would cause a Default or (b) then being contested
by any of them in good faith by appropriate proceedings or if the failure to
comply with such agreements, indentures, leases or instruments does not
constitute a Material Adverse Effect.
5.9 Use of Proceeds. Use the proceeds of Loans (a) on the
---------------
Closing Date, to finance up to a $150,000,000 portion of the deposit necessary
to defease the First Mortgage Notes, (b) on the Second Closing Date, to
refinance the Existing Credit Facility, (c) to finance expenses associated with
the transactions contemplated herein, and (d) to finance Capital Expenditures at
the MGM Grand - Las Vegas, design, development and construction expenses
associated with the MGM Grand Atlantic City, and for other general corporate
purposes.
5.10 New Restricted Subsidiaries. Cause any Person which
---------------------------
hereafter becomes a Restricted Subsidiary of Borrower to execute and deliver to
the Administrative Agent a Subsidiary Guaranty, a Subsidiary Security Agreement
and a joinder to the Trademark Security Interest Assignment and the Copyright
Assignment, and (subject to compliance with applicable Gaming Laws) deliver the
certificates evidencing all equity interests in such Restricted Subsidiary to
the Administrative Agent in pledge pursuant to the Pledge Agreement or, if
appropriate, pursuant to a Subsidiary Pledge Agreement.
5.11 Hazardous Materials Laws. Keep and maintain all Real
------------------------
Property and each portion thereof in compliance in all material respects with
all applicable Hazardous Materials Laws and promptly notify the Administrative
Agent in writing (attaching a copy of any pertinent written material) of (a) any
and all material enforcement, cleanup, removal or other governmental or
regulatory actions instituted, completed or threatened in writing by a
Governmental Agency pursuant to any applicable Hazardous Materials Laws, (b) any
and all material claims made or threatened in writing by any Person against
Borrower relating to damage, contribution, cost recovery, compensation, loss or
injury resulting from any Hazardous Materials and (c) discovery by any Senior
Officer of Borrower of any material occurrence or condition on Property
adjoining or in the vicinity of such Real Property that could reasonably be
expected to cause such Real Property or any part thereof to be subject to any
restrictions on the ownership, occupancy, transferability or use of such Real
Property under any applicable Hazardous Materials Laws.
5.12 Change of Name. Notify the Administrative Agent in
--------------
writing of any change of the name of Borrower or any of its Restricted
Subsidiaries within five Banking Days of such change, and promptly (and in any
event within ten Banking Days of request) execute such amendments to any of the
Collateral
-72-
Documents and take such other actions as may be requested by the Administrative
Agent to reflect such change of its name.
5.13 MGM Grand - Atlantic City.
-------------------------
(a) Concurrently with the acquisition by Borrower or Atlantic City
of any fee or leasehold interest in Real Property, execute and deliver to the
Administrative Agent, a first mortgage with respect thereto (in a form
reasonably acceptable to the Administrative Agent and in any event providing
substantive remedies no less favorable to the Creditors than the Nevada Deed of
Trust), together with the following, in each case at Borrower's sole expense:
(i) assurances from a title insurance company
acceptable to the Administrative Agent that it is prepared to
issue its "LP-10" ALTA construction lenders title policy (or
such other lenders title policy determined by the Administrative
Agent to be the equivalent thereof) insuring the Lien of such
first mortgage in an amount not less than the amount of the
Commitment, subject only to such exceptions as are reasonably
acceptable to the Administrative Agent, with such title policy
endorsements as the Administrative Agent may reasonably
require and with such assurances as the Administrative Agent may
reasonably require from title re-insurers acceptable to the
Administrative Agent, together with the written commitment of
-------------
such title insurance company to issue on or before the Atlantic
City Completion Date its replacement ALTA title policy in the
same form with such title policy endorsements as the
Administrative Agent may reasonably require;
(ii) a "Phase I" environmental report with respect to
the underlying Real Property prepared by a qualified independent
environmental expert acceptable to the Administrative Agent;
(iii) a Certificate of a Senior Officer of Borrower
setting forth all permits which it holds from Governmental
Agencies with respect to construction of the MGM Grand -
Atlantic City; and
(iv) such other assurances, insurance certificates
opinions and the like as the Administrative Agent may reasonably
request.
(b) Until the Atlantic City Completion Date:
(i) Proceed diligently and without interruption
(except as may be caused by events outside the
------
-73-
control of Borrower) to onstruct and furnish the MGM Grand -
Atlantic City (or to redevelop the component existing
hotel\casino properties) and comply in all material respects
with all existing Laws and requirements of all Governmental
Agencies having jurisdiction over the MGM Grand - Atlantic City
and with all future Laws and requirements that become applicable
to the MGM Grand - Atlantic City prior to the Atlantic City
Completion Date;
(ii) Permit CSG to monitor the construction of the
MGM Grand - Atlantic City and provide CSG with such information
and access to the MGM Grand - Atlantic City and individuals
employed by Borrower, and the architect and contractor for the
MGM Grand-Atlantic City as it may reasonably request for that
purpose;
(iii) Permit the Administrative Agent, or any Bank, at
any reasonable time to enter and visit the MGM Grand - Atlantic
City for the purposes of performing an appraisal, observing the
work of construction and examining all materials, plans,
specifications, working drawings and other matters relating to
the construction and\or redevelopment of the MGM Grand -
Atlantic City; and
(iv) Promptly pay when due (subject to applicable
retentions) or otherwise discharge all claims and Liens for
labor done and materials and services furnished in connection
with the construction or redevelopment of the MGM Grand -
Atlantic City, except for claims contested in good faith by
------
appropriate proceedings, provided that any such claims are
--------
covered by such payment bonds or title insurance policy
endorsements as may be requested by the Administrative Agent.
5.14 Completion Certificates. As promptly as practicable
-----------------------
following the Atlantic City Completion Date, provide the Administrative Agent
with:
(a) a written certificate executed by the primary architect,
engineer and contractor and reasonably acceptable to the Administrative
Agent certifying that the MGM Grand - Atlantic City has been completed
in all material respects in accordance with the plans therefor and
complies in all material respects with all applicable zoning, building
and land use Laws and that the MGM Grand - Atlantic City is ready to be
opened for business;
-74-
(b) an ALTA survey of the Atlantic City Property that (i)
demonstrates compliance of the MGM Grand - Atlantic City in all material
respects with all applicable Laws and requirements of Governmental
Agencies, (ii) sets forth all easements and licenses burdening the
Atlantic City Property, (iii) reflects no encroachments onto the
Atlantic City Property and no encroachments by the MGM Grand - Atlantic
City onto adjoining real property and (iv) certifies the legal
description of the Atlantic City Property to be the same as that set
forth in the title insurance policy referred to in Section 5.13(a)(i);
----------
and
(c) any endorsements to the title insurance policy referred to
in Section 5.13(a)(i) as are requested by the Administrative Agent, at
----------
the sole expense of Borrower.
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Article 6
NEGATIVE COVENANTS
------------------
So long as any Advance remains unpaid, or any Letter of
Credit remains outstanding or any other Obligation remains unpaid, or any
portion of the Commitment remains in force, Borrower shall not, and shall not
permit any of its Restricted Subsidiaries to, unless the Administrative Agent
(with the written approval of the Requisite Banks or, if required by Section
11.2, of all of the Banks) otherwise consents:
----
6.1 Payment of Subordinated Obligations. Pay any principal
-----------------------------------
(including sinking fund payments) or any other amount (other than scheduled
--------- ----- ----
interest payments) with respect to any Subordinated Obligation, or purchase
or redeem (or offer to purchase or redeem) any Subordinated Obligation, or
deposit any monies, securities or other Property with any trustee or other
Person to provide assurance that the principal or any portion thereof of any
Subordinated Obligation will be paid when due or otherwise to provide for the
defeasance of any Subordinated Obligation except, so long as no Default or
------
Event of Default then exists or would result therefrom Borrower may
make payments of scheduled interest on any Subordinated Obligation.
6.2 Disposition of Property. Make any Disposition of its
-----------------------
Property, whether now owned or hereafter acquired, other than Dispositions of
----- ----
the types described below made when no Default or Event of Default exists or
would result therefrom:
(a) the Disposition of MGM Grand Monorail or the
Disposition by MGM Grand Monorail, Inc. of its interests Monorail, in
each case to a Governmental Agency in connection with the similar
disposition of all other interests of members in Monorail, and provided
--------
that Borrower retains the right to reasonable access to, and the common
use of, the monorail owned by Monorail;
(b) Dispositions of tangible personal Property made in
connection with and in furtherance of the implementation of Master
Plan improvements to the MGM Grand - Las Vegas;
(c) a Disposition of New York to Primadonna Resorts, Inc.
or its Affiliates in accordance with Borrower's existing buy/sell
agreements with Primadonna Resorts, Inc. as in effect as of the
Closing Date; and
(d) other Dispositions made in any Fiscal Year which do not
result in the aggregate Net Proceeds from all Dispositions made during
that Fiscal Year being in excess
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of 7% of Total Assets as of the last day of the preceding Fiscal Year;
provided that this Section shall not be effective to prohibit the Disposition
--------
of Las Vegas prior to the Second Closing Date to the extent that appropriate
approvals of this covenant have not been obtained under applicable Nevada
Gaming Laws.
6.3 Mergers. Merge or consolidate with or into any Person,
-------
except (a) mergers and consolidations of a Restricted Subsidiary of Borrower
------
into Borrower or another Restricted Subsidiary of Borrower, and (b) mergers
and consolidations with a Person to effect a mere change in the State or form
of organization of Borrower, provided that the financial condition of
--------
Borrower and its Subsidiaries are not adversely affected thereby and Borrower
and its Subsidiaries execute such amendments to the Loan Documents as may be
requested by the Administrative Agent to reflect such change.
6.4 Hostile Acquisitions. Directly or indirectly use the
--------------------
proceeds of any Loan in connection with the acquisition of part or all of a
voting interest of five percent (5%) or more in any corporation or other
business entity if such acquisition is opposed by the board of directors or
management of such corporation or business entity.
6.5 Distributions. Make any Distribution, whether
-------------
from capital, income or otherwise, and whether in Cash or other Property,
except:
------
(a) Distributions by a Subsidiary of Borrower to Borrower
or Restricted Subsidiary of Borrower; and
(b) Distributions of Cash, Cash Equivalents or other
securities paid to shareholders of Borrower, provided that (i) no
-------- ----
Default or Event of Default then exists or would result therefrom,
(ii) after giving effect to the making of such Distribution,
(A) Borrower is in pro forma compliance with the covenants set forth
in Sections 6.12 and 6.14, and (B) the Leverage Ratio as of the last
---- ----
day of the then most recent Fiscal Quarter is not greater than 2.00
to 1.00, and (iii) the amount of the Distributions otherwise
permitted by this clause (b) to be made during any Fiscal Quarter
shall be reduced by the amount of any outstanding Investments of the
type described in Section 6.15(l).
-------
6.6 ERISA. (a) At any time, permit any Pension Plan to (i)
-----
engage in any non-exempt "prohibited transaction" (as defined in Section 4975
of the Code), (ii) fail to comply with ERISA or any other applicable Laws,
(iii) incur any material "accumulated funding deficiency" (as defined in
Section 302 of
-77-
ERISA), or (iv) terminate in any manner, which, with respect to each event
listed above, could reasonably be expected to result in a Material Adverse
Effect, or (b) withdraw, completely or partially, from any Multiemployer Plan if
to do so could reasonably be expected to result in a Material Adverse Effect.
6.7 Change in Nature of Business. Make any material change
----------------------------
in the nature of the business of Borrower and its Subsidiaries, taken as a
whole.
6.8 Liens and Negative Pledges. Create, incur, assume or
--------------------------
suffer to exist any Lien or Negative Pledge of any nature upon or with respect
to any of its Properties, or engage in any sale and leaseback transaction with
respect to any of its Properties, whether now owned or hereafter acquired,
except:
------
(a) Until the Second Closing Date, the Liens and Negative
Pledges established by the First Mortgage Note Indenture, the Existing
Credit Facility and the Intercompany Loan Documents;
(b) The Lien in favor of the holders of the First Mortgage
Notes upon funds deposited to defease the First Mortgage Notes
pursuant to the Irrevocable Security Agreement - Defeasance but not
any extensions or renewals thereof;
(c) Permitted Encumbrances;
(d) Liens and Negative Pledges under the Loan Documents;
(e) Liens and Negative Pledges existing on the Closing
Date and disclosed in Schedule 4.7 and any renewals/extensions or
------------
amendments thereof, provided that the obligations secured or benefited
--------
thereby are not increased;
(f) Liens on Property acquired by Borrower or any of its
Restricted Subsidiaries after the Closing Date that are in existence
at the time of such acquisition and are not created in contemplation
of such acquisition;
(g) Liens securing Indebtedness permitted by Section 6.9(e)
------
on and limited to the capital assets acquired, constructed or financed
with the proceeds of such Indebtedness or with the proceeds of any
Indebtedness directly or indirectly refinanced by such Indebtedness,
provided that the obligations secured or benefitted thereby are not
--------
increased; and
-78-
(h) any Lien or Negative Pledge created by an agreement or
instrument entered into by Borrower or a Restricted Subsidiary of
Borrower in the ordinary course of its business which consists of a
restriction on the assignability, transfer or hypothecation of such
agreement or instrument;
provided that this Section shall not be effective to prohibit the Liens or
--------
Negative Pledges with respect to securities issued by Las Vegas prior to the
Second Closing Date to the extent that appropriate approvals of this covenant
have not been obtained under applicable Nevada Gaming Laws.
6.9 Indebtedness and Guaranty Obligations. Create, incur
-------------------------------------
or assume any Indebtedness or Guaranty Obligation except:
------
(a) Guaranty Obligations in favor of the holders of
creditors under the First Mortgage Notes and, until the Second Closing
Date occurs, Guaranty Obligations in favor of the creditors under the
Existing Credit Facility and the Intercompany Loan Documents, but not in
any such case any extensions or renewals thereof;
(b) Indebtedness and Guaranty Obligations existing on the
Closing Date and disclosed in Schedule 6.9 (and other Indebtedness and
------------
Guaranty Obligations existing on the Closing Date but unintentionally
omitted from that Schedule, but only to the extent that the aggregate
amount of such Indebtedness and the amount so guaranteed does not exceed
$5,000,000), and refinancings, renewals, extensions or amendments
thereto by the same obligors that do not increase the amount thereof;
(c) Indebtedness and Guaranty Obligations under the Loan
Documents;
(d) Indebtedness and Guaranty Obligations owed to Borrower
or a Restricted Subsidiary by Borrower or a Restricted Subsidiary of
Borrower;
(e) Indebtedness consisting of Capital Lease Obligations, or
otherwise incurred to finance the purchase or construction of capital
assets (which shall be deemed to exist if the Indebtedness is incurred
at or within 90 days before or after the purchase or construction of the
capital asset), or to refinance any such Indebtedness, provided that the
--------
aggregate principal amount of such Indebtedness outstanding at any time
does not exceed $50,000,000;
(f) Indebtedness consisting of one or more Swap Agreements;
provided, that the aggregate notional amount
--------
-79-
of Indebtedness covered by all Secured Swap Agreements shall not exceed
$250,000,000;
(g) Subordinated Obligations incurred when no Default or
Event or Default exists;
(h) Guaranty Obligations in support of the obligations of
Borrower or a Restricted Subsidiary of Borrower;
(i) the New York Keep-Well and the Completion Guaranty dated
as of September 15, 1995 in favor of the lenders to New York referred to
in the New York Keep-Well;
(j) additional Guaranty Obligations issued to creditors of
the Australia Companies which, when aggregated with Investments
outstanding under Section 6.15(l), do not exceed $10,000,000 at any
-------
time;
(k) additional involuntary Investments in the Australia
Companies (i) in an amount not to exceed 72,000,000 Australian dollars,
made in accordance with the Australia Option Agreement concurrently with
the exercise of options to purchase a 22.5% interest in the Australia
Companies, and (ii) in the amount of any such demand, concurrently with
the making of any demand for payment under Borrower's guaranty of the
obligations of the Australia Companies described on Schedule 6.9 as in
------------
effect on the Closing Date; and
(l) Guaranty Obligations in support of contracts reasonably
related to the business of Borrower and its Restricted Subsidiaries
issued to creditors of contractors, vendors and tenants of Borrower and
its Restricted Subsidiaries, to the extent issued the ordinary course of
business and in an aggregate amount which does not exceed $10,000,000 at
any time.
6.10 Transactions with Affiliates. Enter into any
----------------------------
transaction of any kind with any Affiliate of Borrower other than (a) salary,
---- ----
bonus, employee stock option and other compensation arrangements with
directors, officers or managers in the ordinary course of business, (b)
transactions that are fully disclosed to the board of directors of Borrower
and expressly authorized by a resolution of the board of directors of
Borrower which is approved by a majority of the directors not having an
interest in the transaction, (c) transactions between or among Borrower and
its Restricted Subsidiaries, (d) transactions entered into when no Default or
Event of Default has occurred and remains continuing and which are disclosed
to the Administrative Agent in writing and in advance in an aggregate amount
not to exceed $5,000,000 in any Fiscal Year,
-80-
and (e) transactions on overall terms at least as favorable to Borrower or its
Restricted Subsidiaries as would be the case in an arm's-length transaction
between unrelated parties of equal bargaining power.
6.11 Leverage Ratio. Beginning with the Fiscal Quarter
--------------
ending September 30, 1996, permit the Leverage Ratio, as of the last day of
any Fiscal Quarter ending during a period set forth below, to be greater than
the ratio set forth below opposite that period:
Period Ratio
------ -----
Closing Date through December
31, 1997 3.00 to 1.00
January 31, 1998 through
December 31, 1998 3.80 to 1.00
Each Fiscal Quarter
thereafter 3.00 to 1.00.
6.12 Interest Charge Coverage Ratio. Beginning with the
------------------------------
Fiscal Quarter ending September 30, 1996, permit the Interest Charge Coverage
Ratio, as of the last day of any Fiscal Quarter ending during a period set
forth below to be less than the ratio set forth opposite that period:
Period Ratio
------ -----
Closing Date through December
31, 1997 3.00 to 1.00
January 31, 1998 through
December 31, 1998 2.25 to 1.00
Each Fiscal Quarter
thereafter 3.00 to 1.00;
6.13 Capital Expenditures. Make, or become legally
--------------------
obligated to make, any Capital Expenditure except:
(a) Maintenance Capital Expenditures;
(b) Capital Expenditures associated with Masterplan
improvements of the MGM Grand - Las Vegas in an aggregate amount not
to exceed $250,000,000;
(c) Capital Expenditures to design, develop and construct
the MGM Grand - Atlantic City in an aggregate amount not to exceed
$750,000,000;
-81-
(d) Capital Expenditures at New York required by
Borrower's existing commitments therefor described on Schedule 6.13;
-------------
and
(e) Other Capital Expenditures in an amount which does not
exceed $200,000,000 plus the amount of the net cash proceeds received
----
by Borrower from the issuance of equity securities by Borrower after
December 31, 1996.
6.14 Tangible Net Worth. Beginning with the Fiscal Quarter
------------------
ending September 30, 1996, permit Tangible Net Worth, as of the last day of any
Fiscal Quarter, to be less than the sum of (a) 85% of Tangible Net Worth as of
---
the Closing Date (after giving effect to all costs associated with the
defeasance of the First Mortgage Notes), plus (b) 50% of cumulative Net Income
----
of Borrower and its Subsidiaries for each Fiscal Quarter having then occurred
since the Closing Date (without reduction for any net loss during any such
Fiscal Quarter), plus (c) 75% of the net cash proceeds received by Borrower of
----
the issuance of equity securities by Borrower afterthe Closing Date, minus
-----
(d) the amount of any extraordinary losses arising out of the defeasance of
the First Mortgage Notes or Masterplan improvements to the MGM Grand - Las
Vegas permitted by Section 6.13(b).
-------
6.15 Investments. Make any Acquisition or enter into any
-----------
agreement to make any Acquisition, or suffer to exist any Investment, other
-----
than:
----
(a) Investments in existence on the Closing Date and
disclosed on Schedule 6.15;
-------------
(b) Investments consisting of Cash Equivalents;
(c) Investments consisting of advances to officers,
managers, directors and employees of Borrower and the Restricted
Subsidiaries for travel, entertainment, relocation and analogous
ordinary business purposes;
(d) Investments in wholly-owned Restricted Subsidiaries;
(e) Investments consisting of or evidencing the extension of
credit to customers or suppliers of Borrower and its Restricted
Subsidiariesin the ordinary course of business and any Investments
received in satisfaction or partial satisfaction thereof;
(f) Investments received in connection with the settlement
of a bona fide dispute with another Person;
-82-
(g) Investments representing all or a portion of the sales
price of Property sold or services provided to another Person in the
ordinary course of business;
(h) Investments consisting of Guaranty Obligations permitted
by Section 6.9, and to the extent that no Default or Event of Default
---
has occurred and remains continuing, payments thereunder;
(i) Investments in New York required to be made to permit
the making of Capital Expenditures described on Schedule 6.13;
-------------
(j) Investments consisting of 100 shares or less of publicly
traded equity securities of Persons engaged in any business in which
Borrower is engaged, which Investments do not exceed $100,000 in the
aggregate at any time;
(k) Investments made to satisfy the alternative investment
tax obligations of Borrower or any of its Subsidiaries under the New
Jersey Casino Control Act, or as may be required by any Gaming Board
under applicable Gaming Laws;
(l) Investments in the Australia Companies which, when
aggregated with the outstanding Guaranty Obligations described in
Section 6.9(k), do not exceed $10,000,000 at any time; and
------
(m) other Investments, made when no Default or Event of
Default exists or would result therefrom, in an amount which does
exceed, during any Fiscal Quarter, the amount of Distributions which the
Borrower would be entitled to make during that Fiscal Quarter under
Section 6.5(b).
------
6.16 Restricted Subsidiary Indebtedness and Guaranty
-----------------------------------------------
Obligations. Permit any Restricted Subsidiary to create, incur, assume or
-----------
suffer to exist any Indebtedness or Guaranty Obligation (even if Borrower
would be permitted to incur the same under Section 6.9), except:
--- ------
(a) the Indebtedness and Guaranty Obligations described
in Section 6.9(a) and 6.9(b);
------ ------
(b) the Subsidiary Guaranties;
(c) Indebtedness owed to Borrower or another Restricted
Subsidiary of Borrower;
-83-
(d) Capital Leases and purchase money obligations
permitted by Section 6.9 in respect of Property owned and used by that
---
Restricted Subsidiary;
(e) Guaranty Obligations permitted by Section 6.9(l); and
------
(f) other unsecured Indebtedness incurred in the
ordinary course of business in an aggregate principal amount not in
excess of $5,000,000.
-84-
Article 7
INFORMATION AND REPORTING REQUIREMENTS
--------------------------------------
7.1 Financial and Business Information. So long as any Advance
----------------------------------
remains unpaid, or any Letter of Credit remains outstanding or any other
Obligation remains unpaid, or any portion of the Commitment remains in force,
Borrower shall, unless the Administrative Agent (with the written approval of
the Requisite Banks) otherwise consents, at Borrower's sole expense, deliver to
the Administrative Agent for distribution by it to the Banks, a sufficient
number of copies for all of the Banks of the following:
(a) As soon as practicable, and in any event within 60 days
after the end of each Fiscal Quarter (other than the fourth Fiscal
Quarter in any Fiscal Year), the consolidated and consolidating balance
sheet of Borrower and its Subsidiaries as at the end of such Fiscal
Quarter and the consolidated and consolidating statement of operations
for such Fiscal Quarter, and its statement of cash flows for the portion
of the Fiscal Year ended with such Fiscal Quarter, all in reasonable
detail. Such financial statements shall be certified by a Senior Officer
of Borrower as fairly presenting the financial condition, results of
operations and cash flows of Borrower and its Subsidiaries in accordance
with Generally Accepted Accounting Principles (other than footnote
----- ----
disclosures), consistently applied, as at such date and for such
periods, subject only to normal year-end accruals and audit adjustments;
(b) As soon as practicable, and in any event within 45 days
after the end of each Fiscal Quarter, a Pricing Certificate setting
forth a preliminary calculation of the Leverage Ratio as of the last day
of such Fiscal Quarter, and providing reasonable detail as to the
calculation thereof, which calculations shall be based on the
preliminary unaudited financial statements of Borrower for such Fiscal
Quarter, and as soon as practicable thereafter, in the event of any
material variance in the actual calculation of the Leverage Ratio from
such preliminary calculation, a revised Pricing Certificate setting
forth the actual calculation thereof;
(c) As soon as practicable, and in any event within 105
days after the end of each Fiscal Year, (i) the consolidated and
consolidating balance sheet of Borrower and its Subsidiaries as at the
end of such Fiscal Year and the consolidated and consolidating
statements of operations, shareholders' equity and cash flows, in each
case of Borrower and its Subsidiaries for such Fiscal
-85-
Year, in each case as at the end of and for the Fiscal Year, all in
reasonable detail. Such financial statements shall be prepared in
accordance with Generally Accepted Accounting Principles, consistently
applied, and such consolidated balance sheet and consolidated statements
shall be accompanied by a report of one of the six largest public
accounting firms in the United States of America or other independent
public accountants of recognized standing selected by Borrower and
reasonably satisfactory to the Requisite Banks, which report shall be
prepared in accordance with generally accepted auditing standards as at
such date, and shall not be subject to any qualifications or exceptions
as to the scope of the audit nor to any other qualification or exception
determined by the Requisite Banks in their good faith business judgment
to be adverse to the interests of the Banks. Such accountants' report
shall be accompanied by a certificate stating that, in making the
examination pursuant to generally accepted auditing standards necessary
for the certification of such financial statements and such report, such
accountants have obtained no knowledge of any Default or, if, in the
opinion of such accountants, any such Default shall exist, stating the
nature and status of such Default, and stating that such accountants
have reviewed Borrower's financial calculations as at the end of such
Fiscal Year (which shall accompany such certificate) under Sections 6.11
----
through 6.14, have read such Sections (including the definitions of all
----
defined terms used therein) and that nothing has come to the attention
of such accountants in the course of such examination that would cause
them to believe that the same were not calculated by Borrower in the
manner prescribed by this Agreement;
(d) As soon as practicable, and in any event within 45 days
after the commencement of each Fiscal Year, a budget and projection by
Fiscal Quarter for that Fiscal Year and by Fiscal Year for the next two
succeeding Fiscal Years, including for the first such Fiscal Year,
---------
projected consolidated balance sheets, statements of operations and
statements of cash flow and, for the second and third such Fiscal Years,
projected consolidated condensed balance sheets and statements of
operations and cash flows, of Borrower and its Subsidiaries, all in
reasonable detail;
(e) Promptly after request by the Administrative Agent or
any Bank, copies of any detailed audit reports, management letters or
recommendations submitted to the board of directors (or the audit
committee of the board of directors) of Borrower by independent
accountants in connection with the accounts or
-86-
books of Borrower or any of its Subsidiaries, or any audit of any of
them;
(f) Promptly after the same are available, copies of each
annual report, proxy or financial statement or other report or
communication sent to the stockholders of Borrower, and copies of all
annual, regular, periodic and special reports and registration
statements which Borrower may file or be required to file with the
Securities and Exchange Commission under Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, and not otherwise required
to be delivered to the Banks pursuant to other provisions of this
Section;
(g) Promptly after request by the Administrative Agent or
any Bank, copies of the Nevada "Regulation 6.090 Report" and "6-A
Report";
(h) Promptly after request by the Administrative Agent or
any Bank, copies of any other report or other document that was filed by
Borrower or any of its Subsidiaries with any Governmental Agency (other
-----
than any report regarding Tracinda Corporation or individuals associated
with Tracinda Corporation, Borrower and its Subsidiaries and their
confidential business or financial information);
(i) As soon as practicable, and in any event within ten
(10) Banking Days after a Senior Officer of Borrower becomes aware of
the occurrence of any (i) "reportable event" (as such term is defined in
Section 4043 of ERISA) or (ii) "prohibited transaction" (as such term is
defined in Section 406 of ERISA or Section 4975 of the Code) in
connection with any Pension Plan or any trust created thereunder,
telephonic notice specifying the nature thereof, and, no more than five
(5) Banking Days after such telephonic notice, written notice again
specifying the nature thereof and specifying what action Borrower or any
of its Subsidiaries is taking or proposes to take with respect thereto,
and, when known, any action taken by the Internal Revenue Service with
respect thereto;
(j) As soon as practicable, and in any event within two (2)
Banking Days after a Senior Officer of Borrower becomes aware of the
existence of any condition or event which constitutes a Default or Event
of Default, telephonic notice specifying the nature and period of
existence thereof, and, no more than two (2) Banking Days after such
telephonic notice, written notice again specifying the nature and period
of existence thereof and
-87-
specifying what action Borrower or its Subsidiaries are taking or
propose to take with respect thereto;
(k) Promptly upon a Senior Officer of Borrower becoming
aware that (i) any Person has commenced a legal proceeding with respect
to a claim against Borrower or any of its Subsidiaries that is
$5,000,000 or more in excess of the amount thereof that is fully covered
by insurance, (ii) any creditor or lessor under a written credit
agreement or material lease has asserted a default thereunder on the
part of Borrower or any of its Subsidiaries, (iii) any Person has
commenced a legal proceeding with respect to a claim against Borrower or
any of its Subsidiaries under a contract that is not a credit agreement
or material lease in excess of $5,000,000 or which otherwise may
reasonably be expected to result in a Material Adverse Effect, (iv) any
labor union has notified Borrower of its intent to strike Borrower or
any of its Subsidiaries on a date certain and such strike would involve
more than 100 employees of Borrower or its Subsidiaries, or (v) any
Gaming Board has indicated its intent to consider or act upon a License
Revocation or a fine or penalty of $1,000,000 or more with respect to
Borrower or any of its Subsidiaries, a written notice describing the
pertinent facts relating thereto and what action Borrower or its
Subsidiaries are taking or propose to take with respect thereto;
(l) As soon as practicable, and in any event by the
thirtieth day in the next following month, a construction progress
report with respect to the MGM Grand - Atlantic City as of the last day
of the preceding calendar month in a form reasonably acceptable to the
Administrative Agent, which report shall compare the status of
construction and amounts expended to the construction timetable and
budget;
(m) As soon as practicable, and in any event by the
thirtieth day in the next following month, an operating revenue report
for the preceding calendar month with respect to each operating casino
property of Borrower and its Subsidiaries (including New York and the
Australia Companies), segmented for each such casino property and
otherwise in a form reasonably acceptable to the Administrative Agent,
together with a written narrative statement discussing any significant
trends reflected therein signed by a Senior Officer of Borrower;
(n) Promptly following receipt thereof, copies of all
changes to the construction plans, budget, timetable and the related
architectural, construction and engineering contracts for the MGM Grand
- Atlantic City,
-88-
and with an advance draft copy of any proposed such change that involves
more than $10,000,000; and
(o) Such other data and information as from time to time
may be reasonably requested by the Administrative Agent, any Bank
(through the Administrative Agent) or the Requisite Banks.
7.2 Compliance Certificates. So long as any Advance remains
-----------------------
unpaid, or any Letter of Credit remains outstanding or any other
Obligation remains unpaid or unperformed, or any portion of the
Commitment remains outstanding, Borrower shall, at Borrower's sole
expense, deliver to the Administrative Agent for distribution by it to
the Banks concurrently with the financial statements required pursuant
to Sections 7.1(a) and 7.1(c), Compliance Certificates signed by a
------ ------
Senior Officer of Borrower.
-89-
Article 8
CONDITIONS
----------
8.1 Initial Advances on the Closing Date. The obligation of
------------------------------------
each Bank to make the initial Advance to be made by it on the Closing
Date, is subject to the following conditions precedent, each of which
shall be satisfied prior to the making of the initial Advances (unless
all of the Banks, in their sole and absolute discretion, shall agree
otherwise):
(a) The Administrative Agent shall have received all of the
following, each of which shall be originals unless otherwise specified,
each properly executed by a Responsible Official of each party thereto,
each dated as of the Closing Date and each in form and substance
satisfactory to the Administrative Agent and its legal counsel (unless
otherwise specified or, in the case of the date of any of the following,
unless the Administrative Agent otherwise agrees or directs):
(1) at least one (1) executed counterpart of this
Agreement, together with arrangements satisfactory to the
Administrative Agent for additional executed counterparts,
sufficient in number for distribution to the Banks and Borrower;
(2) Notes executed by Borrower in favor of each Bank, each
in a principal amount equal to that Bank's Pro Rata Share;
(3) the Irrevocable Security Agreement - Defeasance
executed by Borrower and each other party thereto;
(4) such documentation with respect to Borrower as the
Administrative Agent may require to establish Borrower's due
organization, valid existence and good standing, its
qualification to engage in business in each material
jurisdiction in which it is engaged in business or required to
be so qualified, its authority to execute, deliver and perform
any Loan Documents to which it is a Party, the identity,
authority and capacity of each Responsible Official thereof
authorized to act on its behalf, including certified copies of
---------
articles of incorporation or organization and amendments
thereto, bylaws or operating agreements and amendments thereto,
certificates of good standing and/or qualification to engage in
business, tax clearance certificates, certificates of corporate
or other organizational resolutions, incumbency certificates,
Certificates of Responsible Officials, and the like;
-90-
(5) the Opinions of Christensen, White, Miller, Fink,
Xxxxxx, Xxxxxx and Xxxxxxx, LLP, and Xxxxxx Xxxxxx & Xxxxxxx,
substantially in the form of Exhibit J-1 and J-2, together with
----------- ---
an opinion as to matters of Illinois law from Xxxxxx & Whitney
which is in form and substance acceptable to the Administrative
Agent;
(6) a Request for Loan in compliance with Article 2
---------
executed by Borrower;
(7) the Memorandum of Understanding and the fee letter
described in Sections 3.2, 3.3 and 3.5;
--- --- ---
(8) such assurances as the Administrative Agent deems
appropriate that the relevant Gaming Boards have approved the
transactions contemplated by the Loan Documents to the extent
the such approval is required by applicable Gaming Laws;
(9) a Certificate signed by a Senior Officer of Borrower
certifying that the conditions specified in Sections 8.1(b),
------
8.1(c), 8.1(i) and 8.1(j) have been satisfied; and
------ ------ ------
(10) such other assurances, certificates, documents,
consents or opinions as the Administrative Agent reasonably may
require.
(b) Borrower shall have received, or shall concurrently
receive, net cash proceeds of not less than $300,000,000 from the
issuance and sale of its common stock.
(c) Borrower and its Subsidiaries shall substantially
concurrently deposit approximately $523,000,000 of Cash Equivalents with
or for the account of the trustee for the First Mortgage Notes for the
purpose of defeasing the First Mortgage Notes.
(d) Borrower shall have granted or shall concurrently grant
a first lien in not less than $157,500,000 of United States Treasury
obligations or similar Cash Equivalents acceptable to the Administrative
Agent pursuant to the Irrevocable Security Agreement - Defeasance.
(e) The underwriting fee payable on the Closing Date
pursuant to Section 3.2 shall have been paid.
---
(f) The upfront fees payable on the Closing Date pursuant
to Section 3.3 shall have been paid.
---
-91-
(g) The agency fees payable on the Closing Date pursuant
to Section 3.6 shall have been paid.
---
(h) The reasonable costs and expenses of the
Administrative Agent in connection with the preparation of the Loan
Documents payable pursuant to Section 11.3, and invoiced to Borrower
----
prior to the Closing Date, shall have been paid.
(i) The representations and warranties of Borrower
contained in Article 4 shall be true and correct.
---------
(j) Borrower and any other Parties shall be in compliance
with all the terms and provisions of the Loan Documents, and giving
effect to the initial Advance, no Default or Event of Default shall have
occurred and be continuing.
(k) All legal matters relating to the Loan Documents shall
be satisfactory to Sheppard, Mullin, Xxxxxxx & Xxxxxxx, LLP, special
counsel to the Administrative Agent.
8.2 Advances in Excess of $150,000,000. The obligation of the
----------------------------------
Issuing Bank to issue the initial Letter of Credit, the obligation of the Swing
Line Bank to make the Initial Swing Line Loan, and the obligation of the Banks
to make Advances after the Closing Date which result in the aggregate principal
amount outstanding under the Notes being in excess of $150,000,000, are each
subject to the following conditions precedent, each of which shall be satisfied
prior to the making of the initial Advances (unless all of the Banks, in their
sole and absolute discretion, shall agree otherwise):
(a) The Administrative Agent shall have received all of
the following, each of which shall be originals unless otherwise
specified, each properly executed by a Responsible Official of each
party thereto, each dated as of the Second Closing Date and each in form
and substance satisfactory to the Administrative Agent and its legal
counsel (unless otherwise specified or, in the case of the date of any
of the following, unless the Administrative Agent otherwise agrees or
directs):
(1) the Swing Line Documents;
(2) the Borrower Security Agreement executed by Borrower;
(3) such financing statements on Form UCC-1 executed by
Borrower with respect to the Security Agreement as the
Administrative Agent may request;
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(4) the Nevada Deed of Trust executed by Las Vegas, and
the same shall have been recorded;
(5) assurances from Nevada Title Insurance Company that it
is prepared to issue its ALTA lenders title policy insuring the
Lien of the Nevada Deed of Trust in an amount not less than the
Commitment, subject only to such exceptions as are reasonably
acceptable to the Administrative Agent, with such title policy
endorsements as the Administrative Agent may reasonably require
and with such assurances as the Administrative Agent may
reasonably require from title re-insurers acceptable to the
Administrative Agent;
(6) a written appraisal by a qualified independent
appraiser acceptable to the Administrative Agent and complying
in all respects with FIRREA of the MGM Grand - Las Vegas that
reflects a fair market value thereof of not less than 80% of the
amount of the Commitment as of the Second Closing Date;
(7) a "Phase I" environmental report with respect to the
MGM Grand - Las Vegas prepared by a qualified independent
environmental expert acceptable to the Administrative Agent,
together with a Certificate of a Senior Officer of Borrower to
the effect that no event or circumstance has occurred since the
date thereof that would cause such report to be inaccurate in
any respect that is materially adverse to the interests of the
Banks, together with an update to the existing ALTA survey of
the MGM Grand - Las Vegas which is reasonably acceptable to the
Administrative Agent;
(8) the Pledge Agreement executed by Borrower, together
with the related Pledged Collateral accompanied by appropriate
stock powers endorsed in blank;
(9) the Nevada Pledge Escrow Agreement executed by the
Administrative Agent and Bank of America Nevada;
(10) a Subsidiary Guaranty executed by each Guarantor;
(11) the Solvency Certificate executed by the chief
financial officer of each relevant Guarantor on behalf of that
Guarantor;
(12) a Subsidiary Security Agreement executed by each
Guarantor;
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(13) a Subsidiary Pledge Agreement executed by Las Vegas
and each other Guarantor which has Subsidiaries which are
Restricted Subsidiaries and by MGM Grand Monorail, Inc. with
respect to its interests in Monorail, together with the related
Pledged Collateral accompanied by appropriate stock powers
executed in blank (or, in the case of the pledge by MGM Grand
Monorail, Inc. of its membership interests in Monorail,
appropriate UCC-1 financing statements describing such
interests);
(14) the Trademark Security Interest Assignment executed by
Borrower and each Guarantor;
(15) the Copyright Assignment executed by Borrower and each
Guarantor;
(16) such financing statements on Form UCC-1 executed by
Borrower and each Restricted Subsidiary of Borrower (if any are
in existence on the Closing Date) with respect to the Security
Agreement, and Trademark Security Interest Assignment as the
Administrative Agent may request;
(17) a certificate of insurance issued by Borrower's
insurance carrier or agent with respect to the insurance
required to be maintained pursuant to the Nevada Deed of Trust,
together with lenders' loss payable endorsements thereof on Form
438BFU or other form acceptable to the Administrative Agent;
(18) with respect to Borrower and each Guarantor, such
documentation as the Administrative Agent may require to
establish the due organization, valid existence and good
standing of Borrower and the Guarantors, its qualification to
engage in business in each material jurisdiction in which it is
engaged in business or required to be so qualified, its
authority to execute, deliver and perform any Loan Documents to
which it is a Party, the identity, authority and capacity of
each Responsible Official thereof authorized to act on its
behalf, including (if applicable) certified copies of articles
of incorporation or organization and amendments thereto, bylaws
or operating agreements and amendments thereto, certificates of
good standing and/or qualification to engage in business, tax
clearance certificates, certificates of corporate or other
organizational resolutions, incumbency certificates,Certificates
of Responsible Officials, and the like;
(19) the Opinions of (a) Christensen, White, Miller, Fink,
Xxxxxx, Xxxxxx and Xxxxxxx, LLP, (b) Xxxxxx Xxxxxx & Xxxxxxx,
and (c) Xxxxxx & Xxxxxxxx
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substantially in the forms of Exhibits J-3 through J-5;
------------ ---
(20) such assurances as the Administrative Agent deems
appropriate that the relevant Gaming Boards have approved the
transactions contemplated by the Loan Documents to the extent
that such approval is required by applicable Gaming Laws;
(21) a Certificate signed by a Senior Officer of Borrower
certifying that the conditions specified in Sections 8.2(b),
------
8.2(c), 8.2(f) and 8.2(g) have been satisfied;
------ ------ ------
(22) a Pricing Certificate dated as of the Second Closing
Date; and
(23) such other assurances, certificates, documents,
consents or opinions as the Administrative Agent reasonably may
require.
(b) The First Mortgage Notes shall have been successfully
defeased pursuant to transactions acceptable to the Banks for an all-in
cost (including transactional expenses) not in excess of $525,000,000,
and all Liens securing the First Mortgage Notes shall have been or be
concurrently terminated.
(c) All obligations and indebtedness evidenced by the
Existing Credit Facility shall be concurrently paid in full and all
Liens securing the same and the Intercompany Loan Documents referred to
in the Existing Credit Facility shall have been or be concurrently
terminated.
(d) The underwriting fee payable on the Second Closing
Date pursuant to Section 3.2 shall have been paid.
---
(e) The upfront fees payable on the Second Closing Date
pursuant to Section 3.3 shall have been paid.
---
(f) The representations and warranties of Borrower
contained in Article 4 shall be true and correct.
---------
(g) Borrower and any other Parties shall be in compliance
with all the terms and provisions of the Loan Documents, and no Default
or Event of Default shall have occurred and be continuing.
(h) All legal matters relating to the Loan Documents shall
be satisfactory to Sheppard, Mullin, Xxxxxxx & Hampton, LLP, special
counsel to the Administrative Agent.
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8.3 Any Advance. The obligation of each Bank to make any
-----------
Advance, and the obligation of the Issuing Bank to issue a Letter of Credit, is
subject to the following conditions precedent (unless the Requisite Banks, in
their sole and absolute discretion, shall agree otherwise):
(a) except (i) for representations and warranties which
------
expressly speak as of a particular date or are no longer true and
correct as a result of a change which is permitted by this Agreement or
(ii) as disclosed by Borrower and approved in writing by the Requisite
Banks, the representations and warranties contained in Article 4 (other
--------- -----
than Sections 4.4(a), 4.6 (first sentence), 4.10, 4.17 and 4.18 (but
---- ------ --- ---- ---- ----
only if Borrower is diligently engaged in measures that will result in
compliance with all Hazardous Materials Laws)) shall be true and correct
on and as of the date of the Advance as though made on that date;
(b) other than matters described in Schedule 4.10 or not
-------------
required as of the Closing Date to be therein described, there shall not
be then pending or threatened any action, suit, proceeding or
investigation against or affecting Borrower or any of its Restricted
Subsidiaries or any Property of any of them before any Governmental
Agency that constitutes a Material Adverse Effect;
(c) the Administrative Agent shall have timely received a
Request for Loan in compliance with Article 2 (or telephonic or other
---------
request for Loan referred to in the second sentence of Section 2.1(b),
------
if applicable) or the Issuing Bank shall have received a Request for
Letter of Credit, as the case may be, in compliance with Article 2; and
---------
(d) the Administrative Agent shall have received, in form
and substance satisfactory to the Administrative Agent, such other
assurances, certificates, documents or consents related to the foregoing
as the Administrative Agent or Requisite Banks reasonably may require.
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Article 9
EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT
----------------------------------------------------
9.1 Events of Default. The existence or occurrence of any one
-----------------
or more of the following events, whatever the reason therefor and under any
circumstances whatsoever, shall constitute an Event of Default so long as such
event is continuous and has not been waived in accordance with Section 11.2:
----
(a) Borrower fails to pay any principal on any of the
Notes, or any portion thereof, on the date when due; or
(b) Borrower fails to pay any interest on any of the Notes,
or any fees under Sections 3.4, 3.5 or 3.6, or any portion thereof,
--- --- ---
within five (5) Banking Days after the date when due; or fails to pay
any other fee or amount payable to the Banks under any Loan Document, or
any portion thereof, within five (5) Banking Days after demand therefor;
or
(c) Borrower fails to comply with any of the covenants
contained in Article 6, other than the covenants contained in Sections
--------- ----- ----
6.6, 6.7, 6.10, or 6.15; or
--- --- ---- ----
(d) Borrower fails to comply with Section 7.1(j) in any
------
respect that is materially adverse to the interests of the Banks; or
(e) Borrower, any of its Restricted Subsidiaries or any
other Party fails to perform or observe any other covenant or agreement
(not specified in clause (a), (b), (c), or (d) above) contained in any
- - - -
Loan Document on its part to be performed or observed within (i) ten
(10) Banking Days after the giving of notice by the Administrative Agent
on behalf of the Requisite Banks of such Default or (ii) if the nature
of the covenant or agreement is such that the violation can be cured,
thirty (30) Banking Days after the giving of such notice so long as
Borrower diligently pursues in good faith the cure or correction of such
violation continuously during such period; or
(f) Any representation or warranty of Borrower or any of
its Restricted Subsidiaries or any other Party made in any Loan
Document, or in any certificate or other writing delivered by Borrower
or such Restricted Subsidiary or Party pursuant to any Loan Document,
proves to have been incorrect when made or reaffirmed in any respect
that is materially adverse to the interests of the Banks; or
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(g) Borrower or any of its Subsidiaries (i) fails to pay
the principal, or any principal installment, of any present or future
Indebtedness of $15,000,000 or more, or any guaranty of present or
future Indebtedness of $15,000,000 or more, on its part to be paid, when
due (or within any stated grace period), whether at the stated maturity,
upon acceleration, by reason of required pre-payment or otherwise or
(ii) fails to perform or observe any other term, covenant or agreement
on its part to be performed or observed, or suffers any event of default
to occur, in connection with any present or future Indebtedness of
$15,000,000 or more, or of any guaranty of present or future
Indebtedness of $15,000,000 or more, if as a result of such failure or
sufferance any holder or holders thereof (or an agent or trustee on its
or their behalf) has the right to declare such Indebtedness due before
the date on which it otherwise would become due or the right to require
Borrower or any of its Subsidiaries to redeem or purchase, or offer to
redeem or purchase, all or any portion of such Indebtedness; or
(h) Any event occurs which gives the holder or holders of
any Subordinated Obligation (or an agent or trustee on its or their
behalf) the right to declare such Subordinated Obligation due before the
date on which it otherwise would become due, or the right to require the
issuer thereof to redeem or purchase, or offer to redeem or purchase,
all or any portion of any Subordinated Obligation; or
(i) Any Loan Document, at any time after its execution and
delivery and for any reason other than the agreement or action (or
----------
omission to act) of the Administrative Agent or any of the Banks or
satisfaction in full of all the Obligations ceases to be in full force
and effect or is declared by a court of competent jurisdiction to be
null and void, invalid or unenforceable in any respect which, in any
such event in the reasonable opinion of the Requisite Banks, is
materially adverse to the interests of the Banks; or any Party thereto
denies in writing that it has any or further liability or obligation
under any Loan Document, or purports to revoke, terminate or rescind
same; or
(j) A final judgment against Borrower or any of its
Subsidiaries is entered for the payment of money in excess of $1,000,000
and, absent procurement of a stay of execution, such judgment remains
unsatisfied for thirty (30) calendar days after the date of entry of
judgment, or in any event later than five (5) days prior to the date of
any proposed sale thereunder; or any writ or warrant of
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attachment or execution or similar process is issued or levied against
all or any material part of the Property of any such Person and is not
released, vacated or fully bonded within thirty (30) calendar days after
its issue or levy; or
(k) Borrower or any of its Subsidiaries institutes or
consents to the institution of any proceeding under a Debtor Relief Law
relating to it or to all or any material part of its Property, or is
unable or admits in writing its inability to pay its debts as they
mature, or makes an assignment for the benefit of creditors; or applies
for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for
all or any material part of its Property; or any receiver, trustee,
custodian, conservator, liquidator, rehabilitator or similar officer is
appointed without the application or consent of that Person and the
appointment continues undischarged or unstayed for ninety (90) calendar
days; or any proceeding under a Debtor Relief Law relating to any such
Person or to all or any part of its Property is instituted without the
consent of that Person and continues undismissed or unstayed for ninety
(90) calendar days; or
(l) The occurrence of an Event of Default (as such term is
or may hereafter be specifically defined in any other Loan Document)
under any other Loan Document; or
(m) A final unstayed judgment is entered by a court of
competent jurisdiction that any Subordinated Obligation is not
subordinated in accordance with its terms to the Obligations; or
(n) Any Pension Plan maintained by Borrower or any of its
Restricted Subsidiaries is determined to have a material "accumulated
funding deficiency" as that term is defined in Section 302 of ERISA and
the result is a Material Adverse Effect or Borrower or any its ERISA
Affiliates incurs any withdrawal liability in respect of any
Multiemployer Plan which is in an amount in excess of $15,000,000 which
withdrawl liability is not paid or otherwise satisfied within thirty
(30) days; or
(o) The occurrence of a License Revocation that continues
for seven (7) consecutive calendar days.
9.2 Remedies Upon Event of Default. Without limiting any other
------------------------------
rights or remedies of the Creditors provided for elsewhere in this Agreement, or
the other Loan Documents, or by applicable Law, or in equity, or otherwise:
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(a) Upon the occurrence, and during the continuance, of any
Event of Default other than an Event of Default described in Section
----------
9.1(k):
------
(1) the Commitment to make Advances, the obligation of
the Issuing Bank to issue Letters of Credit, the obligation of
the Swing Line Bank to make Swing Line Loans and all other
obligations of the Creditors and all rights of Borrower and any
other Parties under the Loan Documents shall be suspended
without notice to or demand upon Borrower, which are expressly
waived by Borrower, except that all of the Banks or the
------
Requisite Banks (as the case may be, in accordance with Section
11.2) may waive an Event of Default or, without waiving,
----
determine, upon terms and conditions satisfactory to the Banks
or Requisite Banks, as the case may be, to reinstate the
Commitment and such other obligations and rights and make
further Advances, and cause the Issuing Bank to issue further
Letters of Credit which waiver or determination shall apply
equally to, and shall be binding upon, all the Banks;
(2) the Issuing Bank may, with the approval of the
Administrative Agent on behalf of the Requisite Banks, demand
immediate payment by Borrower of an amount equal to the
aggregate amount of all outstnding Letters of Credit to be held
by the Issuing Bank in an interest-bearing cash collateral
account as collateral hereunder; and
(3) the Requisite Banks may request the Administrative
Agent to, and the Administrative Agent thereupon shall,
terminate the Commitment and/or declare all or any part of the
unpaid principal of all Notes, all interest accrued and unpaid
thereon and all other amounts payable under the Loan Documents
to be forthwith due and payable, whereupon the same shall become
and be forthwith due and payable, without protest, presentment,
notice of dishonor, demand or further notice of any kind, all of
which are expressly waived by Borrower.
(b) Upon the occurrence, and during the continuance, of any
Event of Default described in Section 9.1(k):
------
(1) the Commitment to make Advances, the obligation of
the Issuing Bank to issue Letters of Credit, the obligation of
the Swing Line Bank to make Swing Line Loans and all other
obligations of the Creditors and all rights of Borrower and any
other
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Parties under the Loan Documents shall terminate without notice
to or demand upon Borrower, which are expressly waived by
Borrower, except that all of the Banks may waive the Event of
------
Default or, without waiving, determine, upon terms and
conditions satisfactory to all the Banks, to reinstate the
Commitment and such other obligations and rights and make
further Advances and to cause the Issuing Bank to issue further
Letters of Credit, which determall apply equally to, and shall
be binding upon, all the Banks;
(2) an amount equal to the aggregate amount of all
outstanding Letters of Credit shall be immediately due and
payable to the Issuing Bank without notice to or demand upon
Borrower, which are expressly waived by Borrower, to be held by
the Issuing Bank in an interest-bearing cash collateral account
as collateral hereunder; and
(3) the unpaid principal of all Notes, all interest
accrued and unpaid thereon and all other amounts payable under
the Loan Documents shall be forthwith due and payable, without
protest, presentment, notice of dishonor, demand or further
notice of any kind, all of which are expressly waived by
Borrower.
(c) Upon the occurrence, and during the continuance, of any
Event of Default, the Creditors, or any of them, without notice to
(except as expressly provided for in any Loan Document) or demand upon
------
Borrower, which are expressly waived by Borrower (except as to notices
------
expressly provided for in any Loan Document), may proceed (but only with
the consent of the Requisite Banks) to protect, exercise and enforce
their rights and remedies under the Loan Documents against Borrower and
any other Party and such other rights and remedies as are provided by
Law or equity.
(d) In addition to any other rights and remedies, if an
Event of Default occurs prior to the Atlantic City Completion Date, the
Creditors shall have the right to take possession of the MGM Grand -
Atlantic City, whether in person or through a designee or receiver, and
take such steps as the Creditors reasonably deem necessary or
appropriate to complete construction of the MGM Grand - Atlantic City,
including making any changes to the construction plans, budget or
---------
timetable and/or terminating or amending any of the architects
contracts, engineering contracts, construction contracts or any other
contract or arrangement related to the MGM Grand -
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Atlantic City; provided, however, that the Administrative Agent shall be
--------
responsible for any breach of contract resulting from any such change,
termination or amendment. Any such action shall not be construed as an
assumption of responsibility by the Creditors to complete the MGM Grand
- Atlantic City, and such steps may be discontinued at any time. Any
such action shall not be construed to make any of the Creditors a
partner or joint venturer with Borrower. All amounts expended by the
Creditors for the completion of the MGM Grand - Atlantic City shall be
deemed additional Advances and shall be secured by the Collateral
Documents.
(e) The order and manner in which the Creditors' rights and
remedies are to be exercised shall be determined by the Requisite Banks
in their sole discretion, and all payments received by the Creditors, or
any of them, shall be applied first to the costs and expenses (including
reasonable attorneys' fees and disbursements and the reasonably
allocated costs of attorneys employed by any of the Creditors) of the
Creditors, and thereafter paid pro rata to the Banks in the same
proportions that the aggregate Obligations owed to each Bank under the
Loan Documents bear to the aggregate Obligations owed under the Loan
Documents to all the Banks, without priority or preference among the
Banks. Regardless of how each Bank may treat payments for the purpose of
its own accounting, for the purpose of computing Borrower's Obligations
hereunder and under the Notes, payments shall be applied first, to the
-----
costs and expenses of the Creditors, as set forth above, second, to the
------
payment of accrued and unpaid interest due under any Loan Documents to
and including the date of such application (ratably, and without
duplication, according to the accrued and unpaid interest due under each
of the Loan Documents), and third, to the payment of all other amounts
-----
(including principal and fees) then owing to the Creditors under the
Loan Documents. Amounts due to a Bank under a Secured Swap Agreement
shall be considered a principal amount for purposes of the preceding
sentence. No application of payments will cure any Event of Default, or
prevent acceleration, or continued acceleration, of amounts payable
under the Loan Documents, or prevent the exercise, or continued
exercise, of rights or remedies of the Banks hereunder or thereunder or
at Law or in equity.
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Article 10
THE ADMINISTRATIVE AGENT
------------------------
10 .1 Appointment and Authorization. Subject to Section 10.8,
----------------------------- ----
each Bank hereby irrevocably appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers under the
Loan Documents as are delegated to the Administrative Agent by the terms thereof
or are reasonably incidental, as determined by the Administrative Agent,
thereto. This appointment and authorization is intended solely for the purpose
of facilitating the servicing of the Loans and does not constitute appointment
of the Administrative Agent as trustee for any Bank or as representative of any
Bank for any other purpose and, except as specifically set forth in the Loan
------
Documents to the contrary, the Administrative Agent shall take such action and
exercise such powers only in an administrative and ministerial capacity.
10.2 Administrative Agent and Affiliates. Bank of America (and
-----------------------------------
each successor Administrative Agent) has the same rights and powers under the
Loan Documents as any other Bank and may exercise the same as though it were not
the Administrative Agent, and the term "Bank" or "Banks" includes Bank of
America in its individual capacity. Bank of America (and each successor
Administrative Agent) and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of banking, trust or other business with
Borrower, any Subsidiary thereof, or any Affiliate of Borrower or any Subsidiary
thereof, as if it were not the Administrative Agent and without any duty to
account therefor to the Banks. Bank of America (and each successor
Administrative Agent) need not account to any other Bank for any monies received
by it for reimbursement of its costs and expenses as Administrative Agent
hereunder, or for any monies received by it in its capacity as a Bank hereunder.
The Administrative Agent shall not be deemed to hold a fiduciary relationship
with any Bank and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or otherwise exist
against the Administrative Agent.
10.3 Proportionate Interest in any Collateral. The
----------------------------------------
Administrative Agent, on behalf of all the Banks, shall hold in accordance with
the Loan Documents all items of any collateral or interests therein received or
held by the Administrative Agent. Subject to the Administrative Agent's and the
Banks' rights to reimbursement for their costs and expenses hereunder (including
---------
reasonable attorneys' fees and disbursements and other professional services and
the reasonably allocated costs of attorneys employed by the Administrative Agent
or a Bank) and subject to the application of payments in accordance with Section
9.2(d), each Bank shall have an interest in the Banks'
------
-103-
interest in the Collateral or interests therein in the same proportions that the
aggregate Obligations owed such Bank under the Loan Documents bear to the
aggregate Obligations owed under the Loan Documents to all the Banks, without
priority or preference among the Banks, except that Obligations owed to any Bank
------
under a Secured Swap Agreement shall be secured on a pari passu basis with all
----------
other Obligations up to an amount equal to the Administrative Agent's then
customary credit risk factor for Swap Agreements times the notional amount of
Indebtedness covered by such Secured Swap Agreement and shall be secured on a
subordinate basis as to amounts in excess of such amount.
10.4 Banks' Credit Decisions. Each Bank agrees that it has,
-----------------------
independently and without reliance upon the Administrative Agent, any other
Creditor or the directors, officers, agents, employees or attorneys thereof, and
instead in reliance upon information supplied to it by or on behalf of Borrower
and upon such other information as it has deemed appropriate, made its own
independent credit analysis and decision to enter into this Agreement. Each Bank
also agrees that it shall, independently and without reliance upon the
Administrative Agent, any other Creditor or the directors, officers, agents,
employees or attorneys thereof, continue to make its own independent credit
analyses and decisions in acting or not acting under the Loan Documents.
10.5 Action by Administrative Agent.
------------------------------
(a) Absent actual knowledge of the Administrative Agent of
the existence of a Default, the Administrative Agent may assume that no
Default has occurred and is continuing, unless the Administrative Agent
has received notice from Borrower stating the nature of the Default or
has received notice from a Bank stating the nature of the Default and
that such Bank considers the Default to have occurred and to be
continuing.
(b) The Administrative Agent has only those obligations
under the Loan Documents as are expressly set forth therein.
(c) Except for any obligation expressly set forth in the
------
Loan Documents and as long as the Administrative Agent may assume that
no Event of Default has occurred and is continuing, the Administrative
Agent may, but shall not be required to, exercise its discretion to act
or not act, except that the Administrative Agent shall be required to
------
act or not act upon the instructions of the Requisite Banks (or of all
the Banks, to the extent required by Section 11.2) and those
----
instructions shall be binding upon the Administrative Agent and all the
Banks, provided that the Administrative Agent shall not be
-104-
required to act or not act if to do so would be contrary to any Loan
Document or to applicable Law or could result, in the judgment of the
Administrative Agent, in a material risk of liability to the
Administrative Agent.
(d) If the Administrative Agent has received a notice
specified in clause (a), the Administrative Agent shall immediately give
notice thereof to the Banks and shall act or not act upon the
instructions of the Requisite Banks (or of all the Banks, to the extent
required by Section 11.2), provided that the Administrative Agent shall
---- --------
not be required to act or not act if to do so would be contrary to any
Loan Document or to applicable Law or could result, in the judgment of
the Administrative Agent, in a material risk of liability to the
Administrative Agent, and except that if the Requisite Banks (or all the
------
Banks, if required under Section 11.2) fail, for five (5) Banking Days
----
after the receipt of notice from the Administrative Agent, to instruct
the Administrative Agent, then the Administrative Agent, in its sole
discretion, may act or not act as it deems advisable for the protection
of the interests of the Banks.
(e) The Administrative Agent shall have no liability to any
Bank for acting, or not acting, as instructed by the Requisite Banks (or
all the Banks, if required under Section 11.2), notwithstanding any
----
other provision hereof.
10.6 Liability of Administrative Agent. Neither the
---------------------------------
Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or not taken by them under or in connection
with the Loan Documents, except for their own gross negligence or willful
------
misconduct. Without limitation on the foregoing, the Administrative Agent and
its directors, officers, agents and employees:
(a) May treat the payee of any Note as the holder thereof
until the Administrative Agent receives notice of the assignment or
transfer thereof, in form satisfactory to the Administrative Agent,
signed by the payee, and may treat each Bank as the owner of that Bank's
interest in the Obligations for all purposes of this Agreement until the
Administrative Agent receives notice of the assignment or transfer
thereof, in form satisfactory to the Administrative Agent, signed by
that Bank;
(b) May consult with legal counsel (including in-house
---------
legal counsel), accountants (including in-house accountants) and other
---------
professionals or experts selected by it, or with legal counsel,
accountants or other professionals or experts for Borrower and/or their
Subsidiaries
-105-
or the Banks, and shall not be liable for any action taken
or not taken by it in good faith in accordance with any advice of such
legal counsel, accountants or other professionals or experts;
(c) Shall not be responsible to any Bank for any statement,
warranty or representation made in any of the Loan Documents or in any
notice, certificate, report, request or other statement (written or
oral) given or made in connection with any of the Loan Documents;
(d) Shall have no duty to ask or inquire as to the
performance or observance by Borrower or its Subsidiaries of any of the
terms, conditions or covenants of any of the Loan Documents or to
inspect any Collateral or the Property, books or records of Borrower or
their Subsidiaries;
(e) Will not be responsible to any Bank for the due
execution, legality, validity, enforceability, genuineness,
effectiveness, sufficiency or value of any Loan Document, any other
instrument or writing furnished pursuant thereto or in connection
therewith, or any Collateral;
(f) Will not incur any liability by acting or not acting in
reliance upon any Loan Document, notice, consent, certificate,
statement, request or other instrument or writing believed in good faith
by it to be genuine and signed or sent by the proper party or parties;
and
(g) Will not incur any liability for any arithmetical error
in computing any amount paid or payable by the Borrower or any
Subsidiary r Affiliate thereof or paid or payable to or received or
receivable from any Bank under any Loan Document, including, principal,
---------
interest, commitment fees, Advances and other amounts; provided that,
--------
promptly upon discovery of such an error in computation, the
Administrative Agent, the Banks and (to the extent applicable) Borrower
and/or its Subsidiaries or Affiliates shall make such adjustments as are
necessary to correct such error and to restore the parties to the
position that they would have occupied had the error not occurred.
10.7 Indemnification. Each Bank shall, ratably in accordance
---------------
with its Pro Rata Share (if the Commitment is then in effect) or in accordance
with its proportion of the aggregate Indebtedness then evidenced by the Notes
(if the Commitment has then been terminated), indemnify and hold the
Administrative Agent and its directors, officers, agents,
-106-
employees and attorneys harmless against any and all liabilibies, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever (including, without limitation,
---------
attorneys' fees and disbursements and allocated costs of attorneys employed by
the Administrative Agent) that may be imposed on, incurred by or asserted
against it or them in such capacity in any way relating to or arising out of the
Loan Documents (other than losses incurred by reason of the failure of Borrower
to pay the Indebtedness represented by the Notes) or any action taken or not
taken by it as Administrative Agent thereunder, except such as result from its
------
own gross negligence or willful misconduct. Without limitation on the foregoing,
each Bank shall reimburse the Administrative Agent upon demand for that Bank's
Pro Rata Share of any out-of-pocket cost or expense incurred by the
Administrative Agent in connection with the negotiation, preparation, execution,
delivery, amendment, waiver, restructuring, reorganization (including a
---------
bankruptcy reorganization), enforcement or attempted enforcement of the Loan
Documents, to the extent that Borrower or any other Party is required by Section
11.3 to pay that cost or expense but fails to do so upon demand. Nothing in this
----
Section shall entitle the Administrative Agent to recover any amount from the
Banks if and to the extent that such amount has theretofore been recovered from
Borrower or any other Party. To the extent that the Administrative Agent is
later reimbursed such cost or expense by Borrower or any other Party, it shall
return the amounts paid to it by the Banks in respect of such cost or expense.
10.8 Successor Administrative Agent. The Administrative Agent
------------------------------
may, and at the request of the Requisite Banks shall, resign as Administrative
Agent upon thirty (30) days' notice to the Banks and Borrower. If the
Administrative Agent shall resign as Administrative Agent under this Agreement,
the Requisite Banks shall appoint from among the Banks a successor
administrative Agent for the Banks, which successor Administrative Agent shall
be approved by Borrower (and such approval shall not be unreasonably withheld or
delayed), provided that, to the extent required by applicable Gaming Laws, the
--------
incumbent Administrative Agent shall remain the collateral agent for the
Creditors with respect to any Collateral for which a lienholder must be
qualified under such Gaming Laws until the new Administrative Agent can be so
qualified (but the incumbent Administrative Agent shall be entitled to the
indemnities and other protections provided to the Administrative Agent hereunder
in such capacity). If no successor Administrative Agent is appointed prior to
the effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after consulting with the Banks and the
Borrower, a successor Administrative Agent from among the Banks. Upon the
acceptance of its appointment as
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successor Administrative Agent hereunder, such successor Administrative Agent
shall succeed to all the rights, powers and duties of the retiring
Administrative Agent and the term "Administrative Agent" shall mean such
successor Administrative Agent and the retiring Administrative Agent's
appointment, powers and duties as Administrative Agent shall be terminated.
After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article 10, and Sections 11.3,
---------- ----
11.11 and 11.22, shall inure to its benefit as to any actions taken or omitted
----- -----
to be taken by it while it was Administrative Agent under this Agreement. If (a)
the Administrative Agent has not been paid its agency fees under Section 3.6 or
---
has not been reimbursed for any expense reimbursable to it under Section 11.3,
----
in either case for a period of at least one (1) year and (b) no successor
Administrative Agent has accepted appointment as Administrative Agent by the
date which is thirty (30) days following a retiring Administrative Agent's
notice of resignation, the retiring Administrative Agent's resignation shall
nevertheless thereupon become effective and the Banks shall perform all of the
duties of the Administrative Agent hereunder until such time, if any, as the
Requisite Banks appoint a successor Administrative Agent as provided for above.
10.9 Foreclosure on Collateral. In the event of foreclosure or
-------------------------
enforcement of the Lien created by any of the Collateral Documents, title to the
Collateral covered thereby shall be taken and held by the Administrative Agent
(or an Affiliate or designee thereof) pro rata for the benefit of the Banks in
accordance with the Obligations outstanding to each of them and shall be
administered in accordance with the standard form of collateral holding
participation agreement used by the Administrative Agent in comparable
syndicated credit facilities.
10.10 No Obligations of Borrower. Nothing contained in this
--------------------------
Article 10 shall be deemed to impose upon Borrower any obligation in respect of
----------
the due and punctual performance by the Administrative Agent of its obligations
to the Banks under any provision of this Agreement, and Borrower shall have no
liability to the Administrative Agent or any of the Banks in respect of any
failure by the Administrative Agent or any Bank to perform any of its
obligations to the Creditors under this Agreement. Without limiting the
generality of the foregoing, where any provision of this Agreement relating to
the payment of any amounts due and owing under the Loan Documents provides that
such payments shall be made by Borrower to the Administrative Agent for the
account of the Banks, Borrower's obligations to the Banks in respect of such
payments shall be deemed to be satisfied upon the making of such payments to the
Administrative Agent in the manner provided by this Agreement.
-108-
Article 11
MISCELLANEOUS
-------------
11.1 Cumulative Remedies; No Waiver. The rights, powers,
------------------------------
privileges and remedies of the Creditors provided herein or in any Note
or other Loan Document are cumulative and not exclusive of any right,
power, privilege or remedy provided by Law or equity. No failure or
delay on the part of the Administrative Agent or any Bank in exercising
any right, power, privilege or remedy may be, or may be deemed to be, a
waiver thereof; nor may any single or partial exercise of any right,
power, privilege or remedy preclude any other or further exercise of the
same or any other right, power, privilege or remedy. The terms and
conditions of Article 8 hereof are inserted for the sole benefit of the
---------
Creditors; the same may be waived in whole or in part, with or without
terms or conditions, in respect of any Loan or Letter of Credit without
prejudicing the Administrative Agent's or the Banks' rights to assert
them in whole or in part in respect of any other Loan.
11.2 Amendments; Consents. Each amendment, modification,
--------------------
supplement, extension, termination, waiver, approval and consent under
this Agreement and the other Loan Documents shall be subject to the
terms of all applicable Laws, including Gaming Laws. No amendment,
modification, supplement, extension, termination or waiver of any
provision of this Agreement or any other Loan Document, no approval or
consent thereunder, and no consent to any departure by the Borrower or
any other Party therefrom, may in any event be effective unless in
writing signed by the Administrative Agent with the approval of
Requisite Banks (and, in the case of any amendment, modification or
supplement of or to any Loan Document to which any of the Borrower or
any of its Subsidiaries is a Party, signed by each such Party, and, in
the case of any amendment, modification or supplement to Article 10,
----------
signed by the Administrative Agent), and then only in the specific
instance and for the specific purpose given; and, without the approval
in writing of all the Banks, no amendment, modification, supplement,
termination, waiver or consent may be effective:
(a) To amend or modify the principal of, or the amount of
principal, principal prepayments or the rate of interest payable
on, any Note, or (except as provided in Section 2.6) the amount
---
of the Commitment or the Pro Rata Share of any Bank or the
amount of any commitment fee payable to any Bank, or any other
fee or amount payable to any Bank under the Loan Documents or to
waive an Event of Default consisting of the failure of Borrower
to pay when due principal, interest or any commitment fee;
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(b) To postpone any date fixed for any payment of principal
of, prepayment of principal of or any installment of interest
on, any Note or any installment of any commitment fee, or to
extend the term of the Commitment;
(c) To permit the term of any Letter of Credit to exceed one
(1) year or extend beyond the Maturity Date;
(d) To release the Subsidiary Guaranties or any material
portion of the Collateral, provided that the Administrative
--------
Agent may release without the consent of any Bank, (i) its Lien
in the Investments subject to the Irrevocable Security Agreement
- Defeasance on the Second Closing Date, (ii) its Lien in any
personal property financed or leased by the Borrower or its
Subsidiaries in accordance with Section 6.9(e), (iii) any other
------
Collateral as otherwise may be expressly provided for in any
Loan Document, (iv) its Lien in the equity securities of, and
the Subsidiary Guaranty executed by, any Subsidiary which is the
subject of a Disposition permitted under Section 6.2, and (v)
---
its Lien with respect to any Property which is the subject of a
Distribution permitted under Section 6.5(b);
------
(e) To amend the provisions of the definitions of "Reduction
----------
Amount", "Reduction Date", "Requisite Banks" or "Maturity Date";
------- ---------------- ----------------- ---------------
(f) To amend or waive Article 8, Section 6.4 or this
--------- ---
Section; or
(g) To amend any provision of this Agreement that expressly
requires the consent or approval of all the Banks.
Any amendment, modification, supplement, termination, waiver or consent
pursuant to this Section shall apply equally to, and shall be binding
upon, all the Banks and the Administrative Agent.
11.3 Costs, Expenses and Taxes. Borrower shall pay within
-------------------------
five (5) Banking Days after demand, accompanied by an invoice therefor,
the reasonable costs and expenses of the Administrative Agent in
connection with the negotiation, preparation, syndication, execution and
delivery of the Loan Documents and any amendment thereto or waiver
thereof.
Borrower shall also pay on demand, accompanied by an invoice therefor,
the reasonable costs and expenses of the Creditors in connection with
the refinancing, restructuring, reorganization (including a bankruptcy
---------
reorganization) and enforcement or attempted enforcement of the Loan
Documents, and any matter
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related thereto. The foregoing costs and expenses shall include filing
fees, recording fees, title insurance fees, appraisal fees, search fees,
and other out-of-pocket expenses and the reasonable fees and out-of-
pocket expenses of any legal counsel (including reasonably allocated
---------
costs of legal counsel employed by the Administrative Agent or any
Bank), independent public accountants and other outside experts retained
by the Administrative Agent or any Bank, whether or not such costs and
expenses are incurred or suffered by the Administrative Agent or any
Bank in connection with or during the course of any bankruptcy or
insolvency proceedings of Borrower or any Subsidiary thereof. Such costs
and expenses shall also include, in the case of any amendment or waiver
of any Loan Document requested by Borrower, the administrative costs of
the Administrative Agent reasonably attributable thereto. Borrower shall
pay any and all documentary and other taxes, excluding (i) taxes imposed
---------
on or measured in whole or in part by overall net income, gross income
or gross receipts and franchise taxes imposed on any Bank by (A) any
jurisdiction (or political subdivision thereof) in which it is organized
or maintains its principal office or Eurodollar Lending Office or (B)
any jurisdiction (or political subdivision thereof) in which it is
"doing business", (ii) any withholding taxes or other taxes based on
gross income imposed by the United States of America that are not
attributable to any change in any Law or the interpretation or
administration of any Law by any Governmental Agency and (iii) any
withholding tax or other taxes based on gross income imposed by the
United States of America for any period with respect to which it has
failed to provide Borrower with the appropriate form or forms required
by Section 11.21, to the extent such forms are then required by
-----
applicable Laws, and all costs, expenses, fees and charges payable or
determined to be payable in connection with the filing or recording of
this Agreement, any other Loan Document or any other instrument or
writing to be delivered hereunder or thereunder, or in connection with
any transaction pursuant hereto or thereto, and shall reimburse, hold
harmless and indemnify on the terms set forth in 11.11 the Creditors
-----
from and against any and all loss, liability or legal or other
expense with respect to or resulting from any delay in paying or failure
to pay any such tax, cost, expense, fee or charge or that any of them
may suffer or incur by reason of the failure of any Party to perform any
of its Obligations. Any amount payable to the Administrative Agent or
any Bank under this Section shall bear interest from the second Banking
Day following the date of demand for payment at the Default Rate.
11.4 Nature of Banks' Obligations. The obligations of the
----------------------------
Banks hereunder are several and not joint or joint and several. Nothing
contained in this Agreement or any other Loan Document and no action
taken by the Creditors or any of them pursuant hereto or thereto may, or
may be deemed to, make the
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Banks a partnership, an association, a joint venture or other entity,
either among themselves or with the Borrower or any Affiliate of
Borrower. Each Bank's obligation to make any Advance pursuant hereto is
several and not joint or joint and several, and in the case of the
initial Advance only is conditioned upon the performance by all other
Banks of their obligations to make initial Advances. A default by any
Bank will not increase the Pro Rata Share of any other Bank. Any Bank
not in default may, if it desires, assume in such proportion as the
nondefaulting Banks agree the obligations of any Bank in default, but is
not obligated to do so. The Administrative Agent agrees that it will use
its best efforts either to induce the other Banks to assume the
obligations of a Bank in default or to obtain another Bank, reasonably
satisfactory to Borrower, to replace such a Bank in default.
11.5 Survival of Representations and Warranties. All
------------------------------------------
representations and warranties contained herein or in any other Loan
Document, or in any certificate or other writing delivered by or on
behalf of any one or more of the Parties to any Loan Document, will
survive the making of the Loans hereunder and the execution and delivery
of the Notes, and have been or will be relied upon by the Administrative
Agent and each Bank, notwithstanding any investigation made by the
Administrative Agent or any Bank or on their behalf.
11.6 Notices. Except as otherwise expressly provided in the
------- ------
Loan Documents, all notices, requests, demands, directions and other
communications provided for hereunder or under any other Loan Document
must be in writing and must be mailed, telegraphed, telecopied,
dispatched by commercial courier or delivered to the appropriate party
at the address set forth on the signature pages of this Agreement or
other applicable Loan Document or, as to any party to any Loan Document,
at any other address as may be designated by it in a written notice sent
to all other parties to such Loan Document in accordance with this
Section. Except as otherwise expressly provided in any Loan Document,
------
if any notice, request, demand, direction or other communication
required or permitted by any Loan Document is given by mail it will be
effective on the earlier of receipt or the fourth Banking Day after
deposit in the United States mail with first class or airmail postage
prepaid; if given by telegraph or cable, when delivered to the telegraph
company with charges prepaid; if given by telecopier, when sent; if
dispatched by commercial courier, on the scheduled delivery date; or if
given by personal delivery, when delivered.
11.7 Execution of Loan Documents. Unless the Administrative
---------------------------
Agent otherwise specifies with respect to any Loan Document, (a) this
Agreement and any other Loan Document may be executed in any number of
counterparts and any party
-112-
here hereto or thereto may execute any counterpart, each of which when
executed and delivered will be deemed to be an original and all of which
counterparts of this Agreement or any other Loan Document, as the case
may be, when taken together will be deemed to be but one and the same
instrument and (b) execution of any such counterpart may be evidenced by
a telecopier transmission of the signature of such party followed by
prompt transmission of an original signature. The execution of this
Agreement or any other Loan Document by any party hereto or thereto will
not become effective until counterparts hereof or thereof, as the case
may be, have been executed by all the parties hereto or thereto.
11.8 Binding Effect; Assignment.
--------------------------
(a) This Agreement and the other Loan Documents to which
Borrower is a Party will be binding upon and inure to the
benefit of Borrower, the Administrative Agent, each of the
Banks, and their respective successors and assigns, except that
------
Borrower may not assign its rights hereunder or thereunder or
any interest herein or therein without the prior written
consent of all the Banks. Each Bank represents that it is not
acquiring its Note with a view to the distribution thereof
within the meaning of the Securities Act of 1933, as amended
(subject to any requirement that disposition of such Note must
be within the control of such Bank). Any Bank may at any time
pledge its Note or any other instrument evidencing its rights as
a Bank under this Agreement to a Federal Reserve Bank, but no
such pledge shall release that Bank from its obligations
hereunder or grant to such Federal Reserve Bank the rights of a
Bank hereunder absent foreclosure of such pledge.
(b) From time to time, each Bank may assign to one or more
Eligible Assignees all or any portion of its Pro Rata Share,
provided that (i) such Eligible Assignee, if not then a Bank or
--------
an Affiliate of the assigning Bank, shall be approved by each of
the Administrative Agent and (if no Event of Default then
exists) Borrower (neither of which approvals shall be
unreasonably withheld or delayed), (ii) such assignment shall be
evidenced by a Commitment Assignment and Acceptance, a copy of
which shall be furnished to the Administrative Agent as
hereinbelow provided, (iii) except in the case of an assignment
------
to an Affiliate of the assigning Bank, to another Bank or of the
entire remaining Commitment of the assigning Bank, the
assignment shall not assign a Pro Rata Share that is less than
$10,000,000, (iv) the effective date of any such assignment
shall be as specified in the Commitment Assignment and
Acceptance, but not earlier than the date which is five (5)
Banking Days after the date the Administrative
-113-
Agent has received the Commitment Assignment and Acceptance, (v)
shall be of a constant and non-varying percentage of the Pro
Rata Share of the assigning Bank, and (vi) each such assignment
by any Bank which is a Co-Agent shall in any event be subject to
the Memorandum of Understanding. Upon the effective date of such
Commitment Assignment and Acceptance, the Eligible Assignee
named therein shall be a Bank for all purposes of this
Agreement, with the Pro Rata Share set forth therein and, to the
extent of such Pro Rata Share, the assigning Bank shall be
released from its further obligations under this Agreement.
Borrower agrees that it shall execute and deliver (against
delivery by the assigning Bank to Borrower of its Note) to such
assignee Bank, a Note evidencing that assignee Bank's Pro Rata
Share, and to the assigning Bank, a Note evidencing the
remaining balance Pro Rata Share retained by the assigning Bank.
(c) By executing and delivering a Commitment Assignment and
Acceptance, the Eligible Assignee thereunder acknowledges and
agrees that: (i) other than the representation and warranty that
it is the legal and beneficial owner of the Pro Rata Share being
assigned thereby free and clear of any adverse claim, the
assigning Bank has made no representation or warranty and
assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability,
genuineness or sufficiency of this Agreement or any other Loan
Document; (ii) the assigning Bank has made no representation or
warranty and assumes no responsibility with respect to the
financial condition of Borrower or the performance by Borrower
of the Obligations; (iii) it has received a copy of this
Agreement, together with copies of the most recent financial
statements delivered pursuant to Section 7.1 and such other
---
documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such
Commitment Assignment and Acceptance; (iv) it will,
independently and without reliance upon the Administrative Agent
or any Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this
Agreement; (v) it appoints and authorizes the Administrative
Agent to take such action and to exercise such powers under this
Agreement as are delegated to the Administrative Agent by this
Agreement; and (vi) it will perform in accordance with their
terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Bank.
-114-
(d) The Administrative Agent shall maintain at the
Administrative Agent's Office a copy of each Commitment
Assignment and Acceptance delivered to it and a register (the
"Register") of the names and address of each of the Banks and
the Pro Rata Share held by each Bank, giving effect to each
Commitment Assignment and Acceptance. The Register shall be
available during normal business hours for inspection by
Borrower or any Bank upon reasonable prior notice to the
Administrative Agent. After receipt of a completed Commitment
Assignment and Acceptance executed by any Bank and an Eligible
Assignee, and receipt of an assignment fee of $2,500 from such
Bank or Eligible Assignee, the Administrative Agent shall,
promptly following the effective date thereof, provide to
Borrower and the Banks a revised Schedule 1.1 giving effect
------------
thereto. Borrower and the Creditors shall deem and treat the
Persons listed as Banks in the Register as the holders and
owners of the Pro Rata Share listed therein for all purposes
hereof, and no assignment or transfer of any such Pro Rata
Share shall be effective, in each case unless and until a
Commitment Assignment and Acceptance effecting the assignment or
transfer thereof shall have been accepted by the Administrative
Agent and recorded in the Register as provided above. Prior to
such recordation, all amounts owed with respect to the
applicable Pro Rata Share shall be owed to the Bank listed in
the Register as the owner thereof, and any request, authority or
consent of any Person who, at the time of making such request or
giving such authority or consent, is listed in the Register as a
Bank shall be conclusive and binding on any subsequent holder,
assignee or transferee of the corresponding Pro Rata Share.
(e) Each Bank may from time to time grant participations to
one or more banks or other financial institutions (including
---------
another Bank) in a portion of its Pro Rata Share; provided,
--------
however, that (i) such Bank's obligations under this Agreement
-------
shall remain unchanged, (ii) such Bank shall remain solely
responsible to the other parties hereto for the performance of
such obligations, (iii) the participating banks or other
financial institutions shall not be a Bank hereunder for any
purpose except, if the participation agreement so provides, for
------
the purposes of Sections 3.7, 3.8, 11.11 and 11.22 but only to
--- --- ----- -----
the extent that the cost of such benefits to Borrower does not
exceed the cost which Borrower would have incurred in respect of
such Bank absent the participation, (iv) Borrower, the
Administrative Agent and the other Banks shall continue to deal
solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement, (v) the
participation interest shall be expressed as a percentage of the
grant-
-115-
ing Bank's Pro Rata Share as it then exists and shall not
restrict an increase in the Commitment, or in the granting
Bank's Pro Rata Share, so long as the amount of the
participation interest is not affected thereby, (vi) the consent
of the holder of such participation interest shall not be
required for amendments or waivers of provisions of the Loan
Documents other than those which (A) extend any Reduction Date,
----------
the Maturity Date or any other date upon which any payment of
money is due to the Banks, (B) reduce the rate of interest on
the Notes, any fee or any other monetary amount payable to the
Banks, (C) reduce the amount of any installment of principal due
under the Notes, (D) release the Subsidiary Guaranties or
collateral for the Obligations (except to the extent permitted
under Section 11.2(d), or (E) change the definition of
-------
"Requisite Banks", and (vii) each participation interest sold by
any Bank which is a Co-Agent shall in any event be subject to
the Memorandum of Understanding.
(f) Notwithstanding anything in this Section to the
contrary, the rights of the Banks to make assignments of, and
grant participations in, their Pro Rata Shares of the Commitment
shall be subject to the approval of any Gaming Board, to the
extent required by applicable Gaming Laws, and to compliance
with applicable securities laws, if any.
11.9 Right of Setoff. If an Event of Default has occurred
---------------
and is continuing, the Administrative Agent or any Bank (but in each
case only with the consent of the Requisite Banks) may exercise its
rights under Article 9 of the Uniform Commercial Code and other
applicable Laws and, to the extent permitted by applicable Laws, apply
any funds in any deposit account maintained with it by Borrower and/or
any Property of Borrower in its possession against the Obligations.
11.10 Sharing of Setoffs. Each Bank severally agrees that if
------------------
it, through the exercise of any right of setoff, banker's lien or
counterclaim against Borrower, or otherwise, receives payment of the
Obligations held by it that is ratably more than any other Bank, through
any means, receives in payment of the Obligations held by that Bank,
then, subject to applicable Laws: (a) the Bank exercising the right of
setoff, banker's lien or counterclaim or otherwise receiving such
payment shall purchase, and shall be deemed to have simultaneously
purchased, from the other Bank a participation in the Obligations held
by the other Bank and shall pay to the other Bank a purchase price in an
amount so that the share of the Obligations held by each Bank after the
exercise of the right of setoff, banker's lien or counterclaim
-116-
or receipt of payment shall be in the same proportion that existed prior
to the exercise of the right of setoff, banker's lien or counterclaim or
receipt of payment; and (b) such other adjustments and purchases of
participations shall be made from time to time as shall be equitable to
ensure that all of the Banks share any payment obtained in respect of
the Obligations ratably in accordance with each Bank's share of the
Obligations immediately prior to, and without taking into account, the
payment; provided that, if all or any portion of a disproportionate
--------
payment obtained as a result of the exercise of the right of setoff,
banker's lien, counterclaim or otherwise is thereafter recovered from
the purchasing Bank by Borrower or any Person claiming through or
succeeding to the rights of Borrower, the purchase of a participation
shall be rescinded and the purchase price thereof shall be restored to
the extent of the recovery, but without interest. Each Bank that
purchases a participation in the Obligations pursuant to this Section
shall from and after the purchase have the right to give all notices,
requests, demands, directions and other communications under this
Agreement with respect to the portion of the Obligations purchased to
the same extent as though the purchasing Bank were the original owner of
the Obligations purchased. Borrower expressly consents to the foregoing
arrangements and agrees that any Bank holding a participation in an
Obligation so purchased may exercise any and all rights of setoff,
banker's lien or counterclaim with respect to the participation as fully
as if the Bank were the original owner of the Obligation purchased.
11.11 Indemnity by Borrower. Borrower agrees to indemnify,
---------------------
save and hold harmless the Administrative Agent and each Bank and their
directors, officers, agents, attorneys and employees (collectively the
"Indemnitees") from and against: (a) any and all claims, demands,
-----------
actions or causes of action (except a claim, demand, action, or cause of
------
action for any amount excluded from the definition of "Taxes" in Section
3.12(d)) if the claim, demand, action or cause of action arises out
-------
of or relates to any act or omission (or alleged act or omission) of
Borrower, its Affiliates or any of their officers, directors or
stockholders relating to the Commitment, the use or contemplated use of
proceeds of any Loan, or the relationship of Borrower and the Banks
under this Agreement; (b) any administrative or investigative proceeding
by any Governmental Agency arising out of or related to a claim, demand,
action or cause of action described in clause (a) above; and (c) any and
-
all liabilities, losses, costs or expenses (including reasonable
---------
attorneys' fees and the reasonably allocated costs of attorneys employed
by any Indemnitee and disbursements of such attorneys and other
professional services) that any Indemnitee suffers or incurs as a result
of the assertion of any foregoing claim, demand, action or cause of
action; provided that no Indemnitee shall be entitled to
--------
indemnification under this Section for any loss caused by its own gross
negligence or willful misconduct or for
-117-
any loss asserted against it by another Indemnitee. If any claim,
demand, action or cause of action is asserted against any Indemnitee,
such Indemnitee shall promptly notify Borrower, but the failure to so
promptly notify Borrower shall not affect Borrower's obligations under
this Section unless such failure materially prejudices Borrower's right
to participate in the contest of such claim, demand, action or cause of
action, as hereinafter provided. Such Indemnitee may (and shall, if
requested by Borrower in writing) contest the validity, applicability
and amount of such claim, demand, action or cause of action and shall
permit Borrower to participate in such contest. Any Indemnitee that
proposes to settle or compromise any claim or proceeding for which
Borrower may be liable for payment of indemnity hereunder shall give
Borrower written notice of the terms of such proposed settlement or
compromise reasonably in advance of settling or compromising such claim
or proceeding and shall obtain Borrower's prior consent (which shall not
be unreasonably withheld or delayed). In connection with any claim,
demand, action or cause of action covered by this Section against more
than one Indemnitee, all such Indemnitees shall be represented by the
same legal counsel (which may be a law firm engaged by the Indemnitees
or attorneys employed by an Indemnitee or a combination of the
foregoing) selected by the Indemnitees and reasonably acceptable to
Borrower; provided, that if such legal counsel determines in good faith
--------
that representing all such Indemnitees would or could result in a
conflict of interest under Laws or ethical principles applicable to such
legal counsel or that a defense or counterclaim is available to an
Indemnitee that is not available to all such Indemnitees, then to the
extent reasonably necessary to avoid such a conflict of interest or to
permit unqualified assertion of such a defense or counterclaim, each
Indemnitee shall be entitled to separate representation by legal counsel
selected by that Indemnitee and reasonably acceptable to Borrower, with
all such legal counsel using reasonable efforts to avoid unnecessary
duplication of effort by counsel for all Indemnitees; and further
-------
provided that the Administrative Agent (as an Indemnitee) shall at all
--------
times be entitled to representation by separate legal counsel (which may
be a law firm or attorneys employed by the Administrative Agent or a
combination of the foregoing). Any obligation or liability of Borrower
to any Indemnitee under this Section shall survive the expiration or
termination of this Agreement, the repayment of all Loans, the
expiration or termination of all Letters of Credit and the payment and
performance of all other Obligations owed to the Banks.
11.12 Nonliability of the Banks. Borrower acknowledges and
-------------------------
agrees that:
(a) Any inspections of any Property of Borrower made by or
through the Creditors are for purposes of
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administration of the Loan only and Borrower is not entitled to
rely upon the same (whether or not such inspections are at the
expense of Borrower);
(b) By accepting or approving anything required to be
observed, performed, fulfilled or given to the Creditors
pursuant to the Loan Documents, neither the Administrative Agent
nor the Banks shall be deemed to have warranted or represented
the sufficiency, legality, effectiveness or legal effect of the
same, or of any term, provision or condition thereof, and such
acceptance or approval thereof shall not constitute a warranty
or representation to anyone with respect thereto by the
Creditors;
(c) The relationship between Borrower and the Creditors is,
and shall at all times remain, solely that of borrower and
lenders; neither the Administrative Agent nor the Banks shall
under any circumstance be construed to be partners or joint
venturers of Borrower or its Affiliates; neither the
Administrative Agent nor the Banks shall under any circumstance
be deemed to be in a relationship of confidence or trust or a
fiduciary or other "special" relationship with Borrower or its
Affiliates, or to owe any fiduciary duty to Borrower or its
Affiliates; neither the Administrative Agent nor the Banks
undertake or assume any responsibility or duty to Borrower or
its Affiliates to select, review, inspect, supervise, pass
judgment upon or inform Borrower or its Affiliates of any matter
in connection with their Property or the operations of Borrower
or its Affiliates; Borrower and its Affiliates shall rely
entirely upon their own judgment with respect to such matters;
and any review, inspection, supervision, exercise of judgment or
supply of information undertaken or assumed by the Creditors in
connection with such matters is solely for the protection of the
Creditors and neither Borrower nor any other Person is entitled
to rely thereon; and
(d) The Creditors shall not be responsible or liable to any
Person for any loss, damage, liability or claim of any kind relating to
injury or death to Persons or damage to Property caused by the actions,
inaction or negligence of Borrower and/or its Affiliates and Borrower
hereby indemnifies and hold the Creditors harmless on the terms set
forth in Section 11.11 from any such loss, damage, liability or claim.
-----
11.13 No Third Parties Benefited. This Agreement is made for
--------------------------
the purpose of defining and setting forth certain obligations, rights
and duties of Borrower, the Creditors in connection with the Loans, and
is made for the sole benefit of Borrower, the Creditors, and the
Creditors' successors and
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assigns. Except as provided in Sections 11.8 and 11.11, no other Person
------ ---- -----
shall have any rights of any nature hereunder or by reason hereof.
11.14 Confidentiality. Each Bank agrees to hold any
---------------
confidential information that it may receive from Borrower pursuant to
this Agreement in confidence, except for disclosure: (a) to other
------
Banks; (b) to legal counsel and accountants for Borrower or any Bank;
(c) to other professional advisors to Borrower or any Bank, provided
that the recipient has accepted such information subject to a
confidentiality agreement substantially similar to this Section; (d) to
regulatory officials having jurisdiction over that Bank; (e) to any
Gaming Board having regulatory jurisdiction over Borrower or its
Subsidiaries, provided that each Bank agrees to use its best efforts
to notify Borrower of any such disclosure unless prohibited by
applicable Laws; (f) as required by Law or legal process or in
connection with any legal proceeding to which that Bank and Borrower are
adverse parties; and (g) to another financial institution in connection
with a disposition or proposed disposition to that financial institution
of all or part of that Bank's interests hereunder or a participation
interest in its Note, provided that the recipient has accepted such
information subject to a confidentiality agreement substantially similar
to this Section. For purposes of the foregoing, "confidential
information" shall mean any information respecting Borrower or its
Subsidiaries reasonably considered by Borrower to be confidential, other
-----
than (i) information previously filed with any Governmental Agency and
----
available to the public, (ii) information previously published in any
public medium from a source other than, directly or indirectly, that
Bank, and (iii) information previously disclosed by Borrower to any
Person not associated with Borrower without a confidentiality agreement
or obligation substantially similar to this Section. Nothing in this
Section shall be construed to create or give rise to any fiduciary duty
on the part of the Creditors to Borrower.
11.15 Further Assurances. Borrower and its Subsidiaries
------------------
shall, at their expense and without expense to the Banks or the
Administrative Agent, do, execute and deliver such further acts and
documents as the Requisite Banks or the Administrative Agent from time
to time reasonably require for the assuring and confirming unto the
Banks or the Administrative Agent of the rights hereby created or
intended now or hereafter so to be, or for carrying out the intention
or facilitating the performance of the terms of any Loan Document.
11.16 Integration. This Agreement, together with the
-----------
Memorandum of Understanding, the other Loan Documents and the letter
agreements referred to in Sections 3.2, 3.3, 3.5 and 3.6, comprises the
--- --- --- ---
complete and integrated agreement of the parties on the subject matter
hereof and supersedes all prior
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agreements, written or oral, on the subject matter hereof. In the event
of any conflict between the provisions of this Agreement and those of
any other Loan Document, the provisions of this Agreement shall control
and govern; provided that the inclusion of supplemental rights or
--------
remedies in favor of the Creditors in any other Loan Document shall not
be deemed a conflict with this Agreement. Each Loan Document was drafted
with the joint participation of the respective parties thereto and shall
be construed neither against nor in favor of any party, but rather in
accordance with the fair meaning thereof.
11.17 Governing Law. Except to the extent otherwise provided
------------- ------
therein, each Loan Document shall be governed by, and construed and
enforced in accordance with, the local Laws of Nevada.
11.18 Severability of Provisions. Any provision in any Loan
--------------------------
Document that is held to be inoperative, unenforceable or invalid as to
any party or in any jurisdiction shall, as to that party or
jurisdiction, be inoperative, unenforceable or invalid without affecting
the remaining provisions or the operation, enforceability or validity of
that provision as to any other party or in any other jurisdiction, and
to this end the provisions of all Loan Documents are declared to be
severable.
11.19 Headings. Article and Section headings in this
--------
Agreement and the other Loan Documents are included for convenience of
reference only and are not part of this Agreement or the other Loan
Documents for any other purpose.
11.20 Time of the Essence. Time is of the essence of the Loan
-------------------
Documents.
11.21 Foreign Banks and Participants. Each Bank that is
------------------------------
incorporated or otherwise organized under the Laws of a jurisdiction
other than the United States of America or any State thereof or the
District of Columbia shall deliver to Borrower (with a copy to the
Administrative Agent), within twenty (20) days after the Closing Date
(or after accepting an assignment or receiving a participation interest
herein pursuant to Section 11.8, if applicable) two duly completed
----
copies, signed by a Responsible Official, of either Form 1001 (relating
to such Bank and entitling it to a complete exemption from withholding
on all payments to be made to such Bank by Borrower pursuant to this
Agreement) or Form 4224 (relating to all payments to be made to such
Bank by Borrower pursuant to this Agreement) of the United States
Internal Revenue Service or such other evidence (including, if
---------
reasonably necessary, Form W-9) satisfactory to Borrower and the
Administrative Agent that no withholding under the federal income tax
laws is required with respect to such Bank. Thereafter and from time
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to time, each such Bank shall upon request by Borrower (a) promptly
submit to Borrower (with a copy to the Administrative Agent), such
additional duly completed and signed copies of one of such forms (or
such successor forms as shall be adopted from time to time by the
relevant United States taxing authorities) as may then be available
under then current United States laws and regulations to avoid, or such
evidence as is satisfactory to Borrower and the Administrative Agent of
any available exemption from, United States withholding taxes in respect
of all payments to be made to such Bank by Borrower pursuant to this
Agreement and (b) take such steps as shall not be materially
disadvantageous to it, in the reasonable judgment of such Bank, and as
may be reasonably necessary (including the re-designation of its
Eurodollar Lending Office, if any) to avoid any requirement of
applicable Laws that Borrower make any deduction or withholding for
taxes from amounts payable to such Bank. In the event that Borrower or
the Administrative Agent become aware that a participation has been
granted pursuant to Section 11.8(e) to a financial institution that is
-------
incorporated or otherwise organized under the Laws of a jurisdiction
other than the United States of America, any State thereof or the
District of Columbia, then, upon request made by Borrower or the
Administrative Agent to the Bank which granted such participation, such
Bank shall cause such participant financial institution to deliver the
same documents and information to Borrower and the Administrative Agent
as would be required under this Section if such financial institution
were a Bank.
11.22 Hazardous Material Indemnity. Borrower hereby agrees to
----------------------------
indemnify, hold harmless and defend (by counsel reasonably satisfactory
to the Administrative Agent) the Administrative Agent and each of the
Banks (and any successor to a Bank) and their respective directors,
officers, employees and agents from and against any and all claims,
losses, damages, liabilities, fines, penalties, charges, administrative
and judicial proceedings and orders, judgments, remedial action
requirements, enforcement actions of any kind, and all costs and
expenses incurred in connection therewith (including reasonable
---------
attorneys' fees and the reasonably allocated costs of attorneys employed
by the Administrative Agent or any Bank, and expenses to the extent that
the defense of any such action has not been assumed by Borrower),
arising directly or indirectly out of (i) the presence on, in, under or
about any Real Property of any Hazardous Materials, or any releases or
discharges of any Hazardous Materials on, under or from any Real
Property and (ii) any activity carried on or undertaken on or off any
Real Property by Borrower or any of its predecessors in title, whether
prior to or during the term of this Agreement, and whether by Borrower
or any predecessor in title or any employees, agents, contractors or
subcontractors of Borrower or any predecessor in title, or any third
persons at any time occupy-
-122-
ing or present on any Real Property (other than a Bank or a represent-
----- ----
ative of a Bank), in connection with the handling, treatment, removal,
storage, decontamination, clean-up, transport or disposal of any
Hazardous Materials at any time located or present on, in, under or
about any Real Property. The foregoing indemnity shall further apply to
any residual contamination on, in, under or about any Real Property, or
affecting any natural resources, and to any contamination of any
Property or natural resources arising in connection with the generation,
use, handling, storage, transport or disposal of any such Hazardous
Materials, and irrespective of whether any of such activities were or
will be undertaken in accordance with applicable Laws, but the foregoing
indemnity shall not apply to Hazardous Materials on any Real Property,
the presence of which is caused by the Creditors. Borrower hereby
acknowledges and agrees that, notwithstanding any other provision of
this Agreement or any of the other Loan Documents to the contrary, the
obligations of Borrower under this Section (and under Sections 4.18 and
----
5.11) shall be unlimited corporate obligations of Borrower and shall not
---- ---
be secured by any deed of trust on any Real Property. Any obligation or
liability of Borrower to any Indemnitee under this Section shall survive
the expiration or termination of this Agreement, the repayment of all
Loans, the expiration or termination of all Letters of Credit and the
payment and performance of all other Obligations owed to the Banks.
11.23 Gaming Boards. The Administrative Agent and each of the
-------------
Banks agree to cooperate with all Gaming Boards in connection with the
administration of their regulatory jurisdiction over Borrower and its
Subsidiaries, including the provision of such documents or other
---------
information as may be requested by any such Gaming Board relating to
Borrower or any of its Subsidiaries or to the Loan Documents.
11.24 Lien Releases. The Administrative Agent shall release
-------------
any Lien granted to or held by the Administrative Agent on any
Collateral (i) sold, transferred or otherwise disposed of in connection
with any transaction not prohibited by the Loan Documents, (ii)
constituting Property leased to Borrower or its Subsidiaries under a
lease which has expired or been terminated in a transaction not
prohibited by the Loan Documents or which will concurrently expire and
which has not been, and is not intended by Borrower or the relevant
Subsidiary to be, renewed or extended, (iii) consisting of an
instrument, if the Indebtedness evidenced by such instrument has been
finally repaid in full, (iv) if approved or consented to by those of the
Banks required by Section 11.2, or (v) as otherwise expressly required
----
by the Loan Documents. If the Collateral so released consists of
capital stock of a Subsidiary, then the Administrative Agent shall
concurrently also release such Subsidiary from its obligations under its
-123-
Subsidiary Guaranty. Upon the request of the Administrative Agent, each
Bank shall promptly provide written confirmation of the authority of the
Administrative Agent to release such Liens upon any one or more items of
Collateral under this Section.
11.25 Termination; Release of Liens. Upon (a) the expiration
-----------------------------
or termination of the Commitment, (b) the full and final payment in Cash
of the Loans, all interest and fees with respect thereto, (c) the
reimbursement of all draws under Letters of Credit and the payment of
all fees with respect thereto, (d) the expiration of all Letters of
Credit or the deposit of Cash collateral with the Issuing Bank in the
effective face amount thereof, (e) the payment of all amounts then
demanded by any Bank or indemnitee under Sections 3.8, 3.9, 11.1 and
--- --- ----
11.22 and (f) the payment of all other amounts then due under the Loan
-----
Documents, the Administrative Agent is hereby authorized by the Banks
to, and the Administrative Agent shall, upon the request of Borrower,
execute and deliver to Borrower discharges from further compliance with
the covenants contained in Articles 5, 6, and 7 and releases of the
- - -
Liens created by the Collateral Documents, and shall return any
Property pledged to the Administrative Agent as Collateral for the
Obligations, notwithstanding the survival of any provisions of this
Agreement herein provided for.
11.26 Removal of a Bank. Borrower shall have the right to
-----------------
remove a Bank as a party to this Agreement in accordance with this
Section (a) under the circumstances set forth in Sections 2.6, 3.7,
--- ---
3.8(g) and 3.12(d) and (b) if such Bank is the subject of a Bank
----- ------
Disqualification. If Borrower is so entitled to remove a Bank pursuant
to this Section either:
------
(x) Upon notice from Borrower, the Bank being removed
shall execute and deliver a Commitment Assignment and Acceptance
covering that Bank's Pro Rata Share in favor of one or more
Eligible Assignees designated by Borrower (and acceptable to the
Administrative Agent, which acceptance shall not be unreasonably
delayed or withheld), subject to (i) payment of a purchase price
by such Eligible Assignee equal to all principal and accrued
interest, fees and other amounts payable to such Bank under this
Agreement through the date of assignment and (ii) the written
release of the Issuing Bank and the Swing Line Bank of such
Bank's obligations under Sections 2.4(c) and 2.5(d) or
------ ------
delivery by such Eligible Assignee of such appropriate
assurances and indemnities (which may include letters of credit)
as such Bank may reasonably require with respect to its
participation interest in any Letters of Credit then outstanding
or any Swing Line Outstandings; or
-124-
(y) Except in the case of the removal of a Bank pursuant to
Section 2.6, Borrower may reduce the Commitment pursuant to
---
Section 2.7 (and, for this purpose, the numerical requirements
---
of such Section shall not apply) by an amount equal to that
Bank's Pro Rata Share, pay and provide to such Bank the amounts,
assurances and indemnities described in subclauses (i) and (ii)
of clause (x) above and release such Bank from its Pro Rata
Share. In the event that the Commitment is reduced pursuant to
this clause (y), subsequent Reduction Amounts shall be reduced
by a proportional amount.
11.27 Waiver of Right to Trial by Jury. EACH PARTY TO THIS
--------------------------------
AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTY HERETO OR
ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED
THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.
11.28 Purported Oral Amendments. BORROWER EXPRESSLY
-------------------------
ACKNOWLEDGES THAT THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY ONLY BE
AMENDED OR MODIFIED, OR THE PROVISIONS HEREOF OR THEREOF WAIVED OR
SUPPLEMENTED, BY AN INSTRUMENT IN WRITING THAT COMPLIES WITH SECTION 11.2.
----
BORROWER AGREES THAT IT WILL NOT RELY ON ANY COURSE OF DEALING, COURSE OF
PERFORMANCE, OR ORAL OR WRITTEN STATEMENTS BY ANY REPRESENTATIVE OF THE
ADMINISTRATIVE AGENT OR ANY BANK THAT DOES NOT COMPLY WITH
-125-
SECTION 11.2 TO EFFECT AN AMENDMENT, MODIFICATION, WAIVER OR SUPPLEMENT TO THIS
----
AGREEMENT OR THE OTHER LOAN DOCUMENTS.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
MGM GRAND, INC., a Delaware corporation
By: /s/ Xxxxx Xxxxxxxx
-------------------------------
Xxxxx Xxxxxxxx
Secretary and Treasurer
Address:
MGM Grand, Inc.
0000 Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Attn: Xxxx Xxxxxxxxxxx, President
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
With a copies to:
Xxxxx Xxxxxxxx, Treasurer
MGM Grand, Inc.
0000 Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
Xxxx X. Xxxxxx, Esq.
Christensen, White, Miller, Fink, Xxxxxx
& Xxxxxxx, LLP
2121 Avenue of the Stars, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
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BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Administrative
Agent
By: /s/ Xxx Xxxxxxxxx, Xx.
------------------------------------
Xxx Xxxxxxxxx, Xx., Vice President
Address:
Bank of America National Trust and
Savings Association
Agency Management Services #5596
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxx Xxxxxxxxx, Vice President
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a Bank
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Xxxxxxx X. Xxxxx, Managing Director
By: /s/ Xxx Xxxxxxx
------------------------------------
Xxx Xxxxxxx, Managing Director
Address:
Bank of America National Trust and
Savings Association
000 Xxxxx Xxxxxx Xxxxxx, #0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxx Xxxxxxx, Managing Director
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
With a copy to:
Bank of America National Trust and
Savings Association
000 Xxxxx Xxxxxx Xxxxxx (XX-0000)
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Managing
Director
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
-127-
BANK OF SCOTLAND, as a Co-Agent and a
Bank
By: /s/ Xxxxxxxxx X. Xxxxxxxx
Xxxxxxxxx X. Xxxxxxxx, Vice President
Address:
Bank of Scotland
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxxx X. Xxxxxxxx
Vice President
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
SOCIETE GENERALE, as a Co-Agent and a
Bank
By: /s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
Vice President
Address:
Societe Generale
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx
Vice President
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
-128-
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.
LOS ANGELES AGENCY, as a Co-Agent and as
a Bank
By: /s/ Xxxxxxxx Xxxxxxx
Xxxxxxxx Xxxxxxx, Deputy General Manager
Address:
The Long-Term Credit Bank of Japan, Ltd.
Los Angeles Agency
000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxx, Vice President
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
XXXXX FARGO BANK, N.A., as a Co-Agent
and a Bank
By: /s/ Xxxx Xxxxxxxx
Xxxx Xxxxxxxx, Vice President
Address:
Xxxxx Fargo Bank, N.A.
0000 Xxxxxx Xxxxxx Xxxxxxx
Xxx Xxxxx, Xxxxxx 00000
Attn: Xxxx Xxxxxxxx, Vice President
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
CIBC INC., as a Co-Agent and a Bank
By: /s/ Xxxx Xxxxxx
Xxxx Xxxxxx, Associate Director
Address:
CIBC INC.
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxxx
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
-129-
Schedule 1.1
------------
[CAPTION]
Bank Pro Rata Share Amount
---- -------------- ------
Bank of America National Trust
and Savings Association 50% $250,000,000
Bank of Scotland 10% $ 50,000,000
Societe Generale 10% $ 50,000,000
The Long-Term Credit Bank of
Japan, Ltd., Los Angeles Agency 10% $ 50,000,000
Xxxxx Fargo Bank, N.A. 10% $ 50,000,000
CIBC Inc. 10% $ 50,000,000
____________________________________________________________________________
Total 100% $500,000,000
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AMENDMENT NO. 1 TO LOAN AGREEMENT
This Amendment No. 1 to Loan Agreement (this "Amendment")
dated as of September 30, 1996 is entered into with reference to the Loan
Agreement dated as of July 1, 1996 among MGM Grand, Inc., a Delaware corporation
("Borrower"), the Banks and Co-Agents referred to therein, and Bank of America
National Trust and Savings Association, as Administrative Agent. Capitalized
terms used but not defined herein are used with the meanings set forth for those
terms in the Loan Agreement.
RECITALS
A. Borrower's direct Subsidiary, MGM Grand Atlantic City, Inc.
("Atlantic City") has begun to acquire the real estate
required for the development of the MGM Grand Atlantic City, but
anticipates that additional parcels will be acquired.
B. Section 5.13 of the Loan Agreement currently requires Atlantic
City to grant a mortgage to the Administrative Agent encumbering
all of its fee and leasehold interests in real property, and to
cause the issuance of certain policies of title insurance with
respect thereto.
C. Borrower has requested that the Banks agree to defer the
requirement of title insurance with respect to real property
underlying the proposed MGM Grand Atlantic City until the entire
parcel has been assembled and construction is ready to begin.
D. In anticipation of the Second Closing Date, Borrower and the
Banks desire to make certain other technical corrections to
the Loan Documents as set forth herein.
NOW, THEREFORE, Borrower and the Administrative Agent, acting
with the consent of the Requisite Banks in accordance with Section 11.2 of the
----
Loan Agreement, hereby agree as follows:
1. Confirmation of Section 4.15. The text of Section
----------------------------
4.15 of the Loan Agreement is hereby confirmed to read in full as follows:
"Disclosure. No written statement made by a Senior Officer of
---------- -------
Borrower or any Guarantor to the Administrative Agent or any Bank
in connection with this Agreement, or in connection with any Loan,
as of the date thereof contained any untrue statement of a
material fact or omitted a material
-1-
fact necessary to make the statement made not misleading in light
of all the circumstances existing at the date the statement was made."
2. Amendment to Section 5.13(a). Section 5.13(a) of the
----------------------------
Loan Agreement is hereby amended to read in full as follows:
"5.13 MGM Grand - Atlantic City.
-------------------------
(a) On the Second Closing Date Atlantic City and its
Affiliates shall execute and deliver to the Administrative Agent, a first
mortgage and assignment of rents and leases with respect to all of the real
property then owned or leased by Atlantic City and its Affiliates in Atlantic
City New Jersey. Such mortgage and assignment of leases and rents shall be in a
form reasonably acceptable to the Administrative Agent and in any event
providing substantive remedies substantially similar to the Nevada Deed of
Trust. From time to time following the Second Closing Date, at such intervals
as may reasonably be requested by the Administrative Agent, Borrower and its
Subsidiaries (including Atlantic City) shall deliver amendments to such mortgage
and assignment of leases and rents, substantially in the forms attached thereto,
making each parcel of real property thereafter acquired by Borrower and its
Restricted Subsidiaries in Atlantic City, New Jersey subject to the
aforementioned mortgage and assignment of leases and rents.
Borrower and its Subsidiaries shall also, in each case at Borrower's
sole expense and at such intervals as the Administrative Agent may reasonably
specify, provide to the Administrative Agent:
(i) a "Phase I" environmental report with respect to the
underlying Real Property prepared by a qualified independent
environmental expert acceptable to the Administrative Agent;
(ii) a Certificate of a Senior Officer of Borrower setting
forth all permits which it holds from Governmental Agencies with respect
to construction of the MGM Grand - Atlantic City; and
(iii) such other assurances, insurance certificates, opinions
and the like as the Administrative Agent may reasonably request.
Prior to the earliest of (A) commencement of construction of the
MGM Grand Atlantic City, (B) the date upon which Borrower and its Affiliates
have expended $100,000,000 for the acquisition of interests in real property in
New Jersey, or (C) 60 days following a request therefor by the Administrative
-2-
Agent, Borrower and Atlantic City shall provide the Administrative Agent with
one or more "LP-10" ALTA construction lenders title insurance policies (or such
other lenders title insurance policies as are determined by the Administrative
Agent to be the equivalent thereof). Such title insurance policy shall be
issued by a title insurance company (and shall be subject to reinsurance) which
is acceptable to the Administrative Agent, shall insure the Lien of such first
mortgage in an amount not less than the amount of the Commitment, shall be
subject only to such exceptions as are reasonably acceptable to the
Administrative Agent, shall include such endorsements to coverage as the
Administrative Agent may reasonably require, and shall be supported by the
written commitment of such title insurance company to issue on or before the
Atlantic City Completion Date its replacement ALTA title insurance policy in the
same form with such title policy endorsements as the Administrative Agent may
reasonably require. Thereafter, upon request by the Administrative Agent,
Borrower shall cause the issuance of such endorsements to coverage to the
aforementioned policy of title insurance which shall cause any thereafter
acquired real property to be included in the coverage provided thereby, together
with any other endorsements to coverage which are reasonably requested by the
Administrative Agent for such after-acquired parcels."
3. Correction to Schedules. Borrower hereby makes (and
-----------------------
the Administrative Agent and the Banks by execution hereof accept) the
following additions to the Schedules:
Schedule 4.4 is hereby amended to add thereto references to MGM Grand Atlantic
------------
City, Inc., a New Jersey corporation which is a wholly owned direct Subsidiary
of MGM Grand, Inc. having 100 shares outstanding, to XXXXXX, INC., a New Jersey
corporation having 100 shares outstanding and to FCR BOARDWALK, INC., a New
Jersey corporation having 200 shares outstanding (each of the later two
corporations are direct Subsidiaries of MGM Grand Atlantic City, Inc.).
Schedule 4.7 is hereby amended to add thereto references to the following Liens
------------
existing as of the Closing Date:
Liens related to financing statements number 93-12831, 93-12832
and 95-03594 filed with the Nevada Secretary of State's Office in
favor of International Game Technology and number 96-04144 filed
with the same office in favor of The CIT Group\Equipment
Financing, Inc. These financing statements describe gaming
equipment only and are precautionary filings relating to leases of
such gaming equipment.
A $135,879.59 claim of a mechanics lien in favor of Dal-Tile Corp.
recorded in Book 951227 as document 01618.
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4. Condition Precedent. As a condition precedent to the
-------------------
effectiveness of this Amendment, the Administrative Agent shall have
received executed Consents to this Amendment from Banks comprising at least
the Requisite Banks.
5. Counterparts. This Amendment may be executed in
------------
counterparts in accordance with Section 11.7 of the Loan Agreement.
6. Confirmation. In all other respects, the Loan Agreement
------------
is confirmed.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
MGM GRAND, INC., a Delaware corporation
By: /s/ Xxxxx Xxxxxxxx
_________________________________
Xxxxx Xxxxxxxx
Secretary and Treasurer
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Administrative Agent
By: /s/ Xxxxxx Xxxxxxx
__________________________________
Xxxxxx Xxxxxxx, Vice President
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Exhibit A to Amendment
CONSENT OF BANK
---------------
This Consent of Bank is delivered with reference to the Loan Agreement
(the "Loan Agreement") dated as of July 1, 1996 among MGM Grand, Inc., a
Delaware corporation ("Borrower"), the Banks and Co-Agents referred to therein,
and Bank of America National Trust and Savings Association, as Administrative
Agent. Capitalized terms used but not defined herein are used with the meanings
set forth for those terms in the Loan Agreement.
The undersigned Bank hereby consents to the execution and delivery of
Amendment No. 1 to Loan Agreement (contemplating inter alia an amendment to
----------
Section 5.13 of the Loan Agreement) by the Administrative Agent on its behalf,
substantially in the form of a draft presented to the undersigned Bank.
Date: September ____, 1996
_____________________________________
[Name of Institution]
By __________________________________
_____________________________________
[Printed Name and Title]
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