Document:

PHILADELPHIA-6746451-v1-SJG_September_2012_MTN_Note_Purchase_Agreement_--_Exhbit_to_Form_8-KDOC

SOUTH JERSEY GAS COMPANY

$50,000,000 Medium Term Notes, Series D, 2012-2, Tranche A,  
due September 20, 2024

$35,000,000 Medium Term Notes, Series D, 2012-2, Tranche B,  
due November 30, 2024

_____________
NOTE PURCHASE AGREEMENT
_____________
Dated as of September 20, 2012

TABLE OF CONTENTS
	
				
	SECTION
	HEADING
	PAGE
	

	SECTION 1.
	AUTHORIZATION OF NOTES
	1
	

	Section 1.1.
	Authorization of Notes
	1
	

	Section 1.2.
	Pledged Mortgage Bond
	2
	

	SECTION 2.
	SALE AND PURCHASE OF NOTES
	2
	

	SECTION 3.
	CLOSING
	2
	

	SECTION 4.
	CONDITIONS TO EACH CLOSING
	3
	

	Section 4.1.
	Representations and Warranties of the Company
	3
	

	Section 4.2.
	Performance; No Default
	3
	

	Section 4.3.
	Compliance Certificates
	3
	

	Section 4.4.
	Opinions of Counsel
	4
	

	Section 4.5.
	Purchase Permitted by Applicable Law, Etc
	4
	

	Section 4.6.
	Sale of Notes
	4
	

	Section 4.7.
	Payment of Special Counsel Fees
	4
	

	Section 4.8.
	Private Placement Number
	4
	

	Section 4.9.
	Changes in Corporate Structure
	4
	

	Section 4.10.
	Funding Instructions
	4
	

	Section 4.11.
	UCC Financing Statements and the Supplement
	5
	

	Section 4.12.
	Pledged Mortgage Bond
	5
	

	Section 4.13.
	Proceedings and Documents
	5
	

	SECTION 5
	REPRESENTATIONS AND WARRANTIES OF THE COMPANY
	5
	

	Section 5.1.
	Organizing; Power and Authority
	5
	

	Section 5.2.
	Authorization, Etc
	6
	

	Section 5.3.
	Disclosure
	6
	

	Section 5.4.
	Subsidiaries
	6
	

	Section 5.5.
	Financial Statements; Material Liabilities
	6
	

	Section 5.6.
	Compliance with Laws, Other Instruments, Etc
	6
	

	Section 5.7.
	Governmental Authorizations, Etc
	7
	

	Section 5.8.
	Litigation; Observance of Statutes and Orders
	7
	

	Section 5.9.
	Taxes
	7
	

	Section 5.10.
	Title to Property; Leases
	8
	

	Section 5.11.
	Licenses, Permits, Etc
	8
	

	Section 5.12.
	Compliance with ERISA
	8
	

	Section 5.13.
	Private Offering by the Company
	9
	

	Section 5.14.
	Use of Proceeds; Margin Regulations
	9
	

	Section 5.15.
	Existing Indebtedness
	9
	

	Section 5.16.
	Foreign Assets Control Regulations, Etc
	10
	

	Section 5.17.
	Status under Certain Statutes
	11
	

	Section 5.18.
	Environmental Matters
	11
	

	Section 5.19.
	Lien of Mortgage
	11
	

	Section 5.20.
	Filings under Indenture
	12
	

	Section 5.21.
	Status of Certain Material Agreements
	12
	

	SECTION 6.
	REPRESENTATIONS OF THE PURCHASERS
	12
	

	Section 6.1.
	Purchase for Investment
	12
	

	
				
	Section 6.2.
	Source of Funds
	12
	

	Section 6.3.
	Purchaser Status; Experience
	14
	

	SECTION 7.
	INFORMATION AS TO COMPANY
	14
	

	Section 7.1.
	Financial and Business Information
	14
	

	Section 7.2.
	Officer's Certificate
	17
	

	Section 7.3.
	Visitation
	17
	

	SECTION 8.
	PAYMENT OF THE NOTES
	18
	

	Section 8.1.
	Required Prepayments
	18
	

	Section 8.2.
	Optional Prepayments with Make-Whole Amount
	18
	

	Section 8.3.
	Allocation of Partial Prepayments
	19
	

	Section 8.4.
	Maturity; Surrender, Etc
	19
	

	Section 8.5.
	Purchase of Notes
	19
	

	Section 8.6.
	Make-Whole Amount for the Notes
	19
	

	Section 8.7.
	Change in Control
	21
	

	SECTION 9.
	AFFIRMATIVE COVENANTS
	22
	

	Section 9.1.
	Compliance with Law
	22
	

	Section 9.2.
	Insurance
	22
	

	Section 9.3.
	Maintenance of Properties
	23
	

	Section 9.4.
	Payment of Taxes
	23
	

	Section 9.5.
	Corporate Existence, Etc
	23
	

	Section 9.6.
	Books and Records
	23
	

	Section 9.7.
	Compliance with Material Agreements
	23
	

	SECTION 10.
	NEGATIVE COVENANTS
	23
	

	Section 10.1.
	Transactions with Affiliates
	24
	

	Section 10.2.
	Line of Business
	24
	

	Section 10.3.
	Terrorism Sanctions Regulations
	24
	

	Section 10.4.
	Release of Lien of Indenture or Mortgage
	24
	

	SECTION 11.
	EVENTS OF DEFAULT
	24
	

	SECTION 12.
	REMEDIES ON DEFAULT, ETC.
	26
	

	Section 12.1.
	Acceleration
	26
	

	Section 12.2.
	Other Remedies
	27
	

	Section 12.3.
	Rescission
	27
	

	Section 12.4.
	No Waivers or Election of Remedies, Expenses, Etc
	27
	

	SECTION 13.
	PAYMENTS ON NOTES
	28
	

	Section 13.1.
	Home Office Payment
	28
	

	SECTION 14.
	REGISTRATION; EXCHANGE; EXPENSES, ETC
	28
	

	Section 14.1.
	Registration of Notes
	28
	

	Section 14.2.
	Transaction Expenses
	28
	

	Section 14.3.
	Survival
	29
	

	SECTION 15.
	SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT
	29
	

	SECTION 16.
	AMENDMENT AND WAIVER
	29
	

	Section 16.1.
	Requirements
	29
	

	Section 16.2.
	Solicitation of Holders of Notes
	30
	

	Section 16.3.
	Binding Effect, Etc
	30
	

	Section 16.4.
	Notes Held by Company, Etc
	31
	

	
				
	SECTION 17.
	NOTICES
	31
	

	SECTION 18.
	INDEMNIFICATION
	31
	

	SECTION 19.
	REPRODUCTION OF DOCUMENTS
	32
	

	SECTION 20.
	CONFIDENTIAL INFORMATION
	32
	

	SECTION 21.
	MISCELLANEOUS
	33
	

	Section 21.1.
	Successors and Assigns
	33
	

	Section 21.2.
	Accounting Terms
	33
	

	Section 21.3.
	Severability
	34
	

	Section 21.4.
	Construction, Etc
	34
	

	Section 21.5.
	Counterparts
	34
	

	Section 21.6.
	Governing Law
	34
	

	Section 21.7.
	Jurisdiction and Process; Waiver of Jury Trial
	34
	

	Section 21.8.
	Payments Due on Non-Business Days
	35
	

	Schedule A
	Information Relating to Purchasers
	 

	Schedule B
	Defined Terms
	 

	Schedule 4.11
	Collateral Filings
	 

	Schedule 5.5
	Financial Statements
	 

	Schedule 5.15(a)
	Existing Indebtedness
	 

	Schedule 5.15(b)
	Liens not permitted by Mortgage
	 

	Schedule 5.15(c)
	Debt Instruments
	 

	Exhibit 4.4(a)(i)
	Form of Opinion of Special Counsel for the Company
	 

	Exhibit 4.4(a)(ii)
	Form of Opinion of General Counsel for the Company
	 

SOUTH JERSEY GAS COMPANY
Number One South Jersey Plaza, Route 54
Folsom, New Jersey 08037
$50,000,000 Medium Term Notes, Series D, 2012-2, Tranche A,  
due September 20, 2024

$35,000,000 Medium Term Notes, Series D, 2012-2, Tranche B,  
due November 30, 2024

September 20, 2012
To Each of The Purchasers Listed in
Schedule A Hereto:
Ladies and Gentlemen:
South Jersey Gas Company, a corporation organized under the laws of the State of New Jersey (the “Company”), agrees with each of the purchasers whose names appear at the end hereof (each, a “Purchaser” and, collectively, the “Purchasers”) as follows:
		
	SECTION 1.
	AUTHORIZATION OF NOTES.

Section 1.1.    Authorization of Notes.  The Company has authorized and will create an issue of (a) $50,000,000 aggregate principal amount of its Medium Term Notes, Series D, 2012-2, Tranche A, due September 20, 2024 (the “Tranche A Notes”) and (b) $35,000,000 aggregate principal amount of its Medium Term Notes, Series D, 2012-2, Tranche B, due November 30, 2024 (the “Tranche B Notes” and together with the Tranche A Notes, the “Notes”).  The Notes will be issued under an Indenture of Trust dated as of October 1, 1998 (the “Original Indenture”), between the Company and The Bank of New York Mellon, as Trustee (the “Trustee”), as heretofore supplemented by four Supplemental Indentures.  The Original Indenture as so amended and supplemented is herein called the “Indenture.”  Copies of the Original Indenture and all the supplemental indentures requested by you have been delivered to you.  The Notes shall be issuable in fully registered form only.  The Tranche A Notes shall mature on September 20, 2024, shall bear interest at the rate of 3.00% per annum payable semiannually, on March 20 and September 20 of each year and at maturity, commencing on March 20, 2013, shall be subject to redemption as provided in the Indenture, and shall be in the form established pursuant to the Indenture.  

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The Tranche B Notes shall mature on November 30, 2024, shall bear interest at the rate of 3.03% per annum payable semiannually, on May 20 and November 20 of each year and at maturity, commencing on May 20, 2013, shall be subject to redemption as provided in the Indenture, and shall be in the form established pursuant to the Indenture.  As permitted by the Indenture, the Notes originally issued to you thereunder shall be dated, and bear interest from, the date of their original issue on the applicable Closing Date. 
Certain capitalized and other terms used in this Agreement are defined in Schedule B; and references to a “Schedule” or an “Exhibit” are, unless otherwise specified, to a Schedule or an Exhibit attached to this Agreement.  Terms used herein but not defined herein shall have the meanings set forth in the Indenture.  
Section 1.2.    Pledged Mortgage Bond.  The Notes will be secured by that certain South Jersey Gas Company First Mortgage Bond, 10% Medium Term Notes Series D dated March 29, 2012 (the “Pledged Mortgage Bond”) issued to the Trustee to secure up to an aggregate of $125,000,000 principal amount of medium term notes issued under the Indenture.  The Pledged Mortgage Bond was issued under the Twenty-Fifth Supplemental Indenture dated as of March 29, 2012 between the Company and The Bank of New York Mellon, as trustee (the “Twenty-Fifth Supplemental Mortgage Indenture”), which supplements the First Mortgage dated October 1, 1947 from the Company to The Bank of New York Mellon, as trustee (the “Mortgage Trustee”), as successor trustee to Guarantee Bank and Trust Company, as supplemented to date and from time to time hereafter (the “Mortgage”).  Excluding the Notes, the Pledged Mortgage Bond currently secures $35,000,000 in aggregate principal amount of medium term notes of the Company issued under the Indenture.
SECTION 2.      SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the Company will issue and sell to each Purchaser and each Purchaser will purchase from the Company, at the applicable Closing, Notes in the principal amount and of the tranche specified opposite such Purchaser’s name in Schedule A at the purchase price of 100% of the principal amount thereof.  The Purchasers’ obligations hereunder are several and not joint obligations, and no Purchaser shall have any liability to any Person for the performance or non‐performance of any obligation by any other Purchaser hereunder.

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	SECTION 3.
	CLOSING.

The sale and purchase of the Tranche A Notes to be purchased by each Purchaser thereof shall occur at a closing on September 20, 2012 or on such other Business Day thereafter on or prior to September 28, 2012 as may be agreed upon by the Company and the Purchasers of the Tranche A Notes (the “First Closing”), and the sale and purchase of the Tranche B Notes to be purchased by each Purchaser thereof shall occur at a closing on November 30, 2012 or on such other Business Day thereafter on or prior to December 7, 2012 as may be agreed upon by the Company and the Purchasers of the Tranche B Notes (the “Second Closing”), in each case, at the offices of Chapman and Cutler LLP, 111 West Monroe Street, Chicago, Illinois 60603 at 9:00 a.m. Central time, at the applicable Closing.  The First Closing and the Second Closing are each referred to herein as a “Closing.”  On the applicable Closing Date, the Company will deliver to each Purchaser the Notes of the applicable tranche to be purchased by such Purchaser in the form of a single Note (or such greater number of Notes in denominations of at least $100,000 as such Purchaser may request) dated the applicable Closing Date and registered in such Purchaser’s name (or in the name of such Purchaser’s nominee), against delivery by such Purchaser to the Company or its order of immediately available funds in the amount of the purchase price therefor by wire transfer of immediately available funds for the account of the Company to an account specified pursuant to Section 4.10 hereof.  If, on the applicable Closing Date, the Company shall fail to tender such Notes to any Purchaser as provided above in this Section 3, or any of the conditions specified in Section 4 with respect to such Closing shall not have been fulfilled to any Purchaser’s reasonable satisfaction, such Purchaser shall, at such Purchaser’s election, be relieved of all further obligations under this Agreement, without thereby waiving any rights such Purchaser may have by reason of such failure or such nonfulfillment.
		
	SECTION 4.
	CONDITIONS TO EACH CLOSING.

Each Purchaser’s obligation to purchase and pay for the Notes to be sold to such Purchaser at the applicable Closing is subject to the fulfillment to such Purchaser’s reasonable satisfaction, prior to or at the applicable Closing, of the following conditions:
Section 4.1.    Representations and Warranties of the Company.  The representations and warranties of the Company in this Agreement shall be correct when made and at the time of the Closing.
Section 4.2.    Performance; No Default.  The Company shall have performed and complied with all agreements and conditions contained in each Financing Agreement required to be performed or complied with by the Company and prior to or at such Closing, and after giving effect to the 

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issue and sale of the applicable Notes (and the application of the proceeds thereof as contemplated by Section 5.14), no Default or Event of Default shall have occurred and be continuing.  
Section 4.3.    Compliance Certificates.  The Company shall have performed and complied with all agreements and conditions contained in the Indenture and the Mortgage which are required to be performed or complied with by the Company for the issuance of the applicable Notes and the Pledged Mortgage Bond.  In addition, on the date of such Closing the Company shall have delivered the following certificates:
(a)    Officer’s Certificates.  The Company shall have delivered to such Purchaser (i) an Officer’s Certificate, dated the date of such Closing, certifying that the conditions specified in Section 4 of this Agreement with respect to such Closing have been fulfilled, (ii) copies of all certificates and opinions required to be delivered to the Trustee under the Indenture in connection with the issuance of the applicable Notes under the Indenture, in each case, dated the date of such Closing, and (iii) only with respect to the First Closing, copies of all certificates and opinions delivered to the Mortgage Trustee under the Mortgage in connection with the issuance of the Pledged Mortgage Bond; and
(b)    Secretary’s Certificate.  The Company shall have delivered to such Purchaser a certificate of its Secretary or Assistant Secretary, dated the date of such Closing, certifying as to the resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery of this Agreement, the applicable Notes and the Pledged Mortgage Bond.
Section 4.4.    Opinions of Counsel.  Such Purchaser shall have received opinions in form and substance reasonably satisfactory to such Purchaser, dated the date of the applicable Closing (a) from (i) Cozen O'Connor, counsel for the Company, and (ii) Gina Merritt-Epps, General Counsel to the Company, covering the matters set forth in Exhibits 4.4(a)(i) and 4.4(a)(ii) and covering such other matters incident to the transactions contemplated hereby as such Purchaser or its counsel may reasonably request and (b) from Chapman and Cutler LLP, the Purchasers’ special counsel in connection with such transactions, covering such matters incident to such transactions as such Purchaser may reasonably request.  The Company hereby directs its counsel to deliver such opinions and understands and agrees that each Purchaser will and hereby is authorized to rely on such opinions to the extent set forth therein.  
Section 4.5.    Purchase Permitted by Applicable Law, Etc.  On the applicable Closing Date, such Purchaser’s purchase of the applicable Notes shall (a) be permitted by the laws and regulations of each jurisdiction to which such Purchaser is subject, without recourse to provisions (such as Section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance 

4

companies without restriction as to the character of the particular investment, (b) not violate any applicable law or regulation (including, without limitation, Regulation T, U or X of the Board of Governors of the Federal Reserve System) and (c) not subject such Purchaser to any tax, penalty or liability under or pursuant to any applicable law or regulation, which law or regulation was not in effect on the date hereof.  If requested by such Purchaser, such Purchaser shall have received an Officer’s Certificate certifying as to such matters of fact as such Purchaser may reasonably specify to enable such Purchaser to determine whether such purchase is so permitted.
Section 4.6.    Sale of Notes.  Contemporaneously with such Closing, the Company shall sell to each Purchaser and each Purchaser shall purchase the applicable Notes to be purchased by it at such Closing as specified in Schedule A.
Section 4.7.    Payment of Special Counsel Fees.  Without limiting the provisions of Section 14.2, the Company shall have paid on or before such Closing the reasonable fees, charges and disbursements of the Purchasers’ special counsel referred to in Section 4.4(b) to the extent reflected in a statement of such counsel rendered to the Company at least one Business Day prior to such Closing.
Section 4.8.    Private Placement Number.  A Private Placement Number issued by Standard & Poor’s CUSIP Service Bureau (in cooperation with the SVO) shall have been obtained for the applicable tranche of Notes.
Section 4.9.    Changes in Corporate Structure.  The Company shall not have changed its jurisdiction of organization, or been a party to any merger or consolidation or succeeded to all or any substantial part of the liabilities of any other entity, at any time following the date of the most recent financial statements referred to in Schedule 5.5.
Section 4.10.    Funding Instructions.  At least three Business Days prior to the date of such Closing, each Purchaser with respect to such Closing shall have received written instructions signed by a Responsible Officer on letterhead of the Company setting forth wire instructions for payment of the purchase price of the applicable Notes, including (a) the name and address of the transferee bank, (b) such transferee bank’s ABA number and (c) the account name and number into which the purchase price for the applicable Notes is to be deposited.
Section 4.11.    UCC Financing Statements and the Supplement.  All UCC Financing Statements, the Original Mortgage, the Twenty-Fifth Supplemental Mortgage Indenture or other instruments with respect thereto as may be necessary shall have been duly filed or recorded in such manner and in such places as is reasonably satisfactory to the Purchasers (and their special counsel) and the Company and as described in Schedule 4.11 (collectively, the “Collateral Filings”) (and 

5

no other instruments shall be required to be filed) to establish and perfect the security interests and liens of the Trustee in the Mortgaged Property created by the Mortgage and which can be perfected by filing the Mortgage or a UCC Financing Statement under the UCC.
Section 4.12.    Possession of Pledged Mortgage Bond.  Each Purchaser with respect to such Closing shall have received written confirmation from the Trustee that it has possession of the Pledged Mortgage Bond in an aggregate outstanding principal amount of $125,000,000 and that prior to the issuance of any of the Notes, the aggregate outstanding principal amount of all medium term notes of the Company issued under the Indenture that are secured by the Pledged Mortgage Bond is $35,000,000.
Section 4.13.    Proceedings and Documents.  All corporate and other proceedings in connection with the transactions contemplated by this Agreement and all documents and instruments incident to such transactions shall be reasonably satisfactory to each Purchaser with respect to such Closing and its special counsel, and each Purchaser with respect to such Closing and its special counsel shall have received all such counterpart originals or certified or other copies of such documents as such Purchaser or such special counsel may reasonably request.  Each Purchaser with respect to such Closing that so requests shall have received a copy of the Indenture and the Mortgage (together with all amendments and supplements thereto), certified by the Company as of the date of such Closing, exclusive of property exhibits, recording information and the like.  
		
	SECTION 5.
	  REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to each Purchaser that:
Section 5.1.    Organization; Power and Authority.  The Company is a corporation duly organized and validly existing under the State of New Jersey and is in good standing under the laws of the State of New Jersey, and is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  The Company has the corporate power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver each Financing Agreement and to perform the provisions hereof and thereof.
Section 5.2.    Authorization, Etc.  Each Financing Agreement has been duly authorized by all necessary corporate action on the part of the Company, and each Financing Agreement constitutes, and upon execution and delivery thereof each Note will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its respective terms, 

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except as such enforceability may be limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
Section 5.3.    Disclosure.  The Company, through its agents, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Securities, LLC and PNC Capital Markets, LLC, has delivered to you and each other Purchaser a copy of an Information Memorandum, dated August 20, 2012 (such memorandum and the documents incorporated by reference therein, including without limitation the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011, the “Memorandum”), relating to the Company.  The Memorandum fairly describes, in all material respects, the general nature of the business and principal properties of the Company.  This Agreement, the Memorandum, the documents, certificates or other writings delivered to the Purchasers by or on behalf of the Company in connection with the transactions contemplated hereby and the financial statements listed in Schedule 5.5, in each case, delivered to the Purchasers prior to the date of this Agreement (this Agreement, the Memorandum and such documents, certificates or other writings and such financial statements being referred to, collectively, as the “Disclosure Documents”), taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made.  Except as disclosed in the Disclosure Documents, since December 31, 2011, there has been no change in the financial condition, operations, business or properties of the Company except changes that individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect.  There is no fact known to the Company that would reasonably be expected to have a Material Adverse Effect that has not been set forth herein or in the Disclosure Documents.
Section 5.4    Subsidiaries.  The Company has no Subsidiaries.
Section 5.5.    Financial Statements; Material Liabilities.  The Company has delivered to each Purchaser copies of the financial statements of the Company listed in Schedule 5.5.  All of said financial statements (including in each case the related schedules and notes) fairly present in all material respects the financial position of the Company as of the respective dates specified in such Schedule and the consolidated results of its operations and cash flows for the respective periods so specified and have been prepared in accordance with GAAP consistently applied throughout the periods involved except as set forth in the notes thereto (subject, in the case of any interim financial statements, to normal year‐end adjustments).  The Company does not have any Material liabilities that are not disclosed on such financial statements or in Schedule 5.15.

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Section 5.6.    Compliance with Laws, Other Instruments, Etc.  The execution, delivery and performance by the Company of each Financing Agreement will not (a) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien, other than the Lien created under the Mortgage, in respect of any property of the Company, under, any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate charter or by‐laws, or any other Material agreement or instrument to which the Company is bound or by which the Company or any of its properties may be bound or affected, (b) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator or Governmental Authority applicable to the Company, including, without limitation, the Public Order, or (c) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Company.
Section 5.7.    Governmental Authorizations, Etc.  No consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the execution, delivery or performance by the Company of any Financing Agreement, except for any filing that has already been made or any approval that has already been obtained, including without limitation the Public Order, or for certain post-Closing filing requirements with the Board of Public Utilities, State of New Jersey, as required by the Public Order.  The period of time for filing an appeal as of right to the Superior Court of New Jersey, Appellate Division with respect to the Public Order has expired.  
Section 5.8.    Litigation; Observance of Statutes and Orders.  
(a) There are no actions, suits, investigations or proceedings pending or, to the knowledge of the Company, threatened against or affecting the Company or any property of the Company in any court or before any arbitrator of any kind or before or by any Governmental Authority that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect. 
(b)    The Company is not (i) in default under any term of any agreement or instrument to which it is a party or by which it is bound, (ii) in violation of any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority or (iii) in violation of any applicable law, ordinance, rule or regulation of any Governmental Authority (including without limitation Environmental Laws, the USA Patriot Act or any of the other laws and regulations that are referred to in Section 5.16), which default or violation, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.
Section 5.9.    Taxes.  The Company has filed all tax returns that are required to have been filed in any jurisdiction, and has paid all taxes shown to be due and payable on such returns and all other taxes and assessments levied upon it or its properties, assets, income or franchises, to the 

8

extent such taxes and assessments have become due and payable and before they have become delinquent, except for any taxes and assessments (a) the amount of which is not individually or in the aggregate Material or (b) the amount, applicability or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which the Company has established adequate reserves in accordance with GAAP.  The Company knows of no basis for any other tax or assessment that would reasonably be expected to have a Material Adverse Effect.  The charges, accruals and reserves on the books of the Company in respect of federal, state or other taxes for all fiscal periods are adequate.  The federal income tax liabilities of the Company have been finally determined (whether by reason of completed audits or the statute of limitations having run) for all fiscal years up to and including the fiscal year ended December 31, 2008.
Section 5.10.    Title to Property; Leases.  The Company has good and sufficient title to its properties that individually or in the aggregate are Material, including all such properties reflected in the most recent audited balance sheet referred to in Section 5.5 or purported to have been acquired by the Company after said date (except as sold or otherwise disposed of in the ordinary course of business), in each case free and clear of Liens (other than the Lien created under the Mortgage) prohibited by this Agreement, the Indenture or the Mortgage.  To the Company’s knowledge, all Material leases are valid and subsisting and are in full force and effect in all material respects.  
Section 5.11.    Licenses, Permits, Etc.  The Company owns or possesses all licenses, permits, franchises, authorizations, patents, copyrights, proprietary software, service marks, trademarks and trade names, or rights thereto, that, individually or in the aggregate, are Material to its business as now being conducted, without known conflict with the rights of others, except for those conflicts that would not be reasonably expected to have a Material Adverse Effect.
Section 5.12.    Compliance with ERISA.  (a) Each Plan operated and administered by the Company or any ERISA Affiliate and each Plan with which the Company or any ERISA Affiliate has a relationship has been operated and administered in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and would not reasonably be expected to result in a Material Adverse Effect.  Neither the Company nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to “employee benefit plans” (as defined in Section 3(3) of ERISA), which liability has resulted or would reasonably be expected to result in a Material Adverse Effect, and no event, transaction or condition has occurred or exists that could reasonably be expected to result in the incurrence of any such liability by the Company or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to section 430(k) of the Code or to any such penalty or excise tax provisions under the Code or federal law or Section 4068 of ERISA or by the granting of a 

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security interest in connection with the amendment of a Plan, other than such liabilities or Liens as would not be individually or in the aggregate Material.
(b)    The present value of the aggregate benefit liabilities under each of the Plans (other than Multiemployer Plans), determined as of the end of such Plan’s most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plan’s most recent actuarial valuation report, did not exceed the aggregate current value of the assets of such Plan allocable to such benefit liabilities.  The term “benefit liabilities” has the meaning specified in Section 4001 of ERISA and the terms “current value” and “present value” have the meanings specified in Section 3 of ERISA.
(c)    The Company and its ERISA Affiliates have not incurred withdrawal liabilities (and are not subject to contingent withdrawal liabilities) under Section 4201 or 4204 of ERISA in respect of Multiemployer Plans that individually or in the aggregate are Material.
(d)    The expected postretirement benefit obligation (determined as of the last day of the Company’s most recently ended fiscal year in accordance with Financial Accounting Standards Board Statement No. 106, without regard to liabilities attributable to continuation coverage mandated by Section 4980B of the Code) of the Company is not Material.
(e)    The execution and delivery of this Agreement and the issuance and sale of the Notes hereunder will not involve any transaction that is subject to the prohibitions of Section 406 of ERISA or in connection with which a tax could be imposed pursuant to Section 4975(c)(1)(A)‐(D) of the Code.  The representation by the Company to each Purchaser in the first sentence of this Section 5.12(e) is made in reliance upon and subject to the accuracy of such Purchaser’s representation in Section 6.2 as to the sources of the funds used to pay the purchase price of the Notes to be purchased by such Purchaser.
Section 5.13.    Private Offering by the Company.  Neither the Company nor anyone acting on the Company’s behalf has offered the Notes or any similar securities for sale to, or solicited any offer to buy any of the same from, or otherwise approached or negotiated in respect thereof with, any Person other than the Purchasers and not more than fifteen (15) other Institutional Investors, each of which has been offered the Notes in connection with a private sale for investment.  Neither the Company nor anyone acting on its behalf has taken, or will take, any action that would subject the issuance or sale of the Notes to the registration requirements of Section 5 of the Securities Act or to the registration requirements of any securities or blue sky laws of any applicable jurisdiction.
Section 5.14.    Use of Proceeds; Margin Regulations.  The Company will use the proceeds of the sale of the Notes to repay short-term debt and for general corporate purposes, and in compliance 

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with all laws referenced in Section 5.16.  No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for the purpose of buying or carrying any margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or trading in any securities under such circumstances as to involve the Company in a violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220).  Margin stock does not constitute more than 1% of the value of the assets of the Company and the Company does not have any present intention that margin stock will constitute more than 1% of the value of such assets.  As used in this Section, the terms “margin stock” and “purpose of buying or carrying” shall have the meanings assigned to them in said Regulation U.  
Section 5.15.    Existing Indebtedness.  
(a)        Except as described therein, Schedule 5.15(a) sets forth a complete and correct list of all outstanding Indebtedness of the Company as of June 30, 2012 (including a description of the obligors and obliges, principal amount outstanding and collateral therefor, if any, and guaranty thereof, if any), since which date there has been no Material change in the amounts, interest rates, sinking funds, installment payments or maturities of the Indebtedness of the Company.  The Company is not in default and no waiver of default is currently in effect, in the payment of any principal or interest on any Indebtedness of the Company, and no event or condition exists with respect to any Indebtedness of the Company, that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Indebtedness to become due and payable before its stated maturity or before its regularly scheduled dates of payment.
(b)    Except as disclosed in Schedule 5.15(b), the Company has not agreed or consented to cause or permit in the future (upon the happening of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien not permitted by the Mortgage or, after the Substitution Date (as defined in the Indenture), the mortgage contemplated by Section 10.4 hereof.
(c)    The Company is not a party to, or otherwise subject to any provision contained in, any instrument evidencing Indebtedness of the Company, any agreement relating thereto or any other agreement (including, but not limited to, its charter or other organizational document) which limits the amount of, or otherwise imposes restrictions on the incurring of, Indebtedness of the Company, except as specifically indicated in Schedule 5.15(c).
    

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Section 5.16.    Foreign Assets Control Regulations, Etc.  
(a)    Neither the Company nor any Controlled Entity is (i) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons published by the Office of Foreign Assets Control, U.S. Department of Treasury (“OFAC”) or a Person that is otherwise subject to an OFAC Sanctions Program (an “OFAC Listed Person”) or (ii) a department, agency or instrumentality of, or is otherwise controlled by or acting on behalf of, directly or indirectly, (x) any OFAC Listed Person or (y) any Person, entity, organization, foreign country or regime that is subject to any OFAC Sanctions Program (each OFAC Listed Person and each other Person, entity, organization and government of a country described in clause (ii), a “Blocked Person”)
(b)    No part of the proceeds from the sale of the Notes hereunder constitutes or will constitute funds obtained on behalf of any Blocked Person or will otherwise be used, directly by the Company or indirectly through any Controlled Entity, in connection with any investment in, or any transactions or dealings with, any Blocked Person or for investment in the Iranian energy sector (as defined in Section 201(1) of CISADA).
(c)    To the Company’s knowledge after making due inquiry, neither the Company nor any Controlled Entity (i) is under investigation by any Governmental Authority for, or has been charged with, or convicted of, money laundering, drug trafficking, terrorist‐related activities or other money laundering predicate crimes under any applicable law (collectively, “Anti‐Money Laundering Laws”), (ii) has been assessed civil penalties under any Anti‐Money Laundering Laws or (iii) has had any of its funds seized or forfeited in an action under any Anti‐Money Laundering Laws.  The Company has taken reasonable measures appropriate to the circumstances (in any event as required by applicable law) to ensure that the Company and each Controlled Entity is and will continue to be in compliance with all applicable current and future Anti‐Money Laundering Laws.
(d)    No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for any improper payments to any governmental official or employee, political party, official of a political party, candidate for political office, official of any public international organization or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage.  The Company has taken reasonable measures appropriate to the circumstances (in any event as required by applicable law) to ensure that the Company and each Controlled Entity is and will continue to be in compliance with all applicable current and future anti‐corruption laws and regulations.    
Section 5.17.    Status under Certain Statutes.  The Company is not subject to regulation under the Investment Company Act of 1940, as amended, the Public Utility Holding Company Act of 

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2005, as amended, the ICC Termination Act of 1995, as amended, nor is the Company subject to rate regulation under the Federal Power Act, as amended.
Section 5.18.    Environmental Matters.  
(a)    The Company has no knowledge of any liability or has received any notice of any liability, and no proceeding has been instituted raising any liability against the Company or any of its real properties now or formerly owned, leased or operated by the Company, or other assets, alleging any damage to the environment or violation of any Environmental Laws, except, in each case, such as would not reasonably be expected to result in a Material Adverse Effect.
(b)    The Company has no knowledge of any facts which would give rise to any liability, public or private, of violation of Environmental Laws or damage to the environment emanating from, occurring on or in any way related to real properties now or formerly owned, leased or operated by the Company or to other assets or their use, except, in each case, such as would not reasonably be expected to result in a Material Adverse Effect.
(c)    The Company has not stored any Hazardous Materials on real properties now or formerly owned, leased or operated by it nor has it disposed of any Hazardous Materials in each case in a manner contrary to any Environmental Laws in any manner that would reasonably be expected to result in a Material Adverse Effect.
(d)    All buildings on all real properties now owned, leased or operated by the Company are in compliance with applicable Environmental Laws, except where failure to comply would not reasonably be expected to result in a Material Adverse Effect.
Section 5.19.    Lien of Mortgage.  The Mortgage constitutes a direct and valid lien upon all of the properties and assets of the Company specifically or generally described or referred to in the Mortgage as being subject to the lien thereof, subject only to Permitted Encumbrances, and will create a similar lien upon all properties and assets acquired by the Company after the date hereof which are required to be subjected to the lien of the Mortgage, when acquired by the Company, subject only to the exceptions referred to in the Mortgage and Permitted Encumbrances, and subject, further to the recordation of a supplement to the Mortgage describing such after-acquired property; the descriptions of all such properties and assets contained in the granting clauses of the Mortgage are correct and adequate for the purposes of the Mortgage; and the Mortgage (including the Twenty-Fifth Supplemental Mortgage Indenture) has been duly recorded as a mortgage and deed of trust of real estate, and any required filings with respect to personal property and fixtures subject to the lien of the Mortgage have been duly made in each place in which such recording or filing is required to protect, preserve and perfect the lien of the Mortgage; and all taxes and recording and filing fees 

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required to be paid with respect to the execution, recording or filing of the Mortgage (including the Twenty-Fifth Supplemental Mortgage Indenture), the filing of financing statements related thereto and similar documents and the issuance of the Notes have been paid.
Section 5.20.    Filings under Indenture.  No action, including any filing, registration, notice or approval, is necessary or advisable in New Jersey, New York or any other jurisdiction to establish or protect for the benefit of the Trustee and the holders of Notes, that the Notes are secured by the Pledged Mortgage Bond.
Section 5.21.    Status of Certain Material Agreements.  No amendment, modification, supplement or other change has been made to the Mortgage since the Twenty-Fifth Supplemental Indenture.
		
	SECTION 6.
	  REPRESENTATIONS OF THE PURCHASERS    .

Section 6.1.    Purchase for Investment.  Each Purchaser severally represents that it is purchasing the Notes for its own account or for one or more separate accounts maintained by such Purchaser or for the account of one or more pension or trust funds and not with a view to the distribution thereof, provided that the disposition of such Purchaser’s or their property shall at all times be within such Purchaser’s or their control.  Each Purchaser understands that the Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Company is not required to register the Notes.  Each Purchaser understands that the Notes are being offered and sold in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgements and understandings set forth herein in order to determine the applicability of such exemptions and the suitability of such Purchaser to acquire the Notes.  
Section 6.2.    Source of Funds.  Each Purchaser severally represents that at least one of the following statements is an accurate representation as to each source of funds (a “Source”) to be used by such Purchaser to pay the purchase price of the Notes to be purchased by such Purchaser hereunder:
(a)    the Source is an “insurance company general account” (as the term is defined in the United States Department of Labor’s Prohibited Transaction Exemption (“PTE”) 95‐60) in respect of which the reserves and liabilities (as defined by the annual statement for life insurance companies approved by the National Association of Insurance Commissioners (the “NAIC Annual Statement”)) 

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for the general account contract(s) held by or on behalf of any employee benefit plan together with the amount of the reserves and liabilities for the general account contract(s) held by or on behalf of any other employee benefit plans maintained by the same employer (or affiliate thereof as defined in PTE 95‐60) or by the same employee organization in the general account do not exceed 10% of the total reserves and liabilities of the general account (exclusive of separate account liabilities) plus surplus as set forth in the NAIC Annual Statement filed with such Purchaser’s state of domicile; or
(b)    the Source is a separate account that is maintained solely in connection with such Purchaser’s fixed contractual obligations under which the amounts payable, or credited, to any employee benefit plan (or its related trust) that has any interest in such separate account (or to any participant or beneficiary of such plan (including any annuitant)) are not affected in any manner by the investment performance of the separate account; or
(c)    the Source is either (i) an “insurance company pooled separate account,” (within the meaning of PTE 90‐1) or (ii) a “bank collective investment fund” (within the meaning of the PTE 91‐38) and, except as disclosed by such Purchaser to the Company in writing pursuant to this clause (c), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or
(d)    the Source constitutes assets of an “investment fund” (within the meaning of Part VI of PTE 84‐14 (the “QPAM Exemption”)) managed by a “qualified professional asset manager” or “QPAM” (within the meaning of Part VI of the QPAM Exemption); no employee benefit plan’s assets that are managed by the QPAM in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an “affiliate” (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, represent more than 20% of the total client assets managed by such QPAM; the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied; neither the QPAM nor a Person controlling or controlled by the QPAM maintains an ownership interest in the Company that would cause the QPAM and the Company to be “related” within the meaning of Part (VI)(h) of the QPAM Exemption and (i) the identity of such QPAM and (ii) the names of any employee benefit plans whose assets in the investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization, represent 10% or more of the assets of such investment fund, have been disclosed to the Company in writing pursuant to this clause (d); or

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(e)    the Source constitutes assets of a “plan(s)” (within the meaning of section IV(h) of PTE 96‐23 (the “INHAM Exemption”)) managed by an “in‐house asset manager” or “INHAM” (within the meaning of Part IV(a) of the INHAM Exemption); the conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied; neither the INHAM nor a Person controlling or controlled by the INHAM (applying the definition of “control” in Section IV(d) of the INHAM Exemption) owns a 5% or more interest in the Company and (i) the identity of such INHAM and (ii) the name(s) of the employee benefit plan(s) whose assets constitute the Source have been disclosed to the Company in writing pursuant to this clause (e); or
(f)    the Source is a governmental plan; or
(g)    the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Company in writing pursuant to this clause (g); or
(h)    the Source does not include “plan assets” of any employee benefit plan, other than a plan exempt from the coverage of Title I of ERISA.
As used in this Section 6.2, the terms “employee benefit plan,” “governmental plan,” and “separate account” shall have the respective meanings assigned to such terms in Section 3 of ERISA.
Section 6.3.    Purchaser Status; Experience. Each Purchaser separately represents that such Purchaser is, and on the applicable Closing Date will be, an “accredited investor” as defined in Rule 501(a) under the Securities Act.  Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Notes, and has so evaluated the merits and risks of such investment.  Such Purchaser is able to bear the economic risk of an investment in the Notes and is able to afford a complete loss of such investment.
Section 6.4.    Access to Information.  Each Purchaser separately acknowledges that such Purchaser has reviewed the Disclosure Documents and has been afforded (a) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Notes and the risks of investing in the Notes; (b) access to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (c) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment.

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	SECTION 7.
	 INFORMATION AS TO COMPANY.

Section 7.1.    Financial and Business Information.  The Company shall deliver to each Institutional Investor:
(a)    Quarterly Statements — within 60 days after the end of each quarterly fiscal period in each fiscal year of the Company (other than the last quarterly fiscal period of each such fiscal year), duplicate copies of:
(i)    a consolidated balance sheet of the Company and its Subsidiaries as at the end of such quarter, and
(ii)    consolidated statements of income and changes in cash flows of the Company and its Subsidiaries, for such quarter and (in the case of the second and third quarters) for the portion of the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the corresponding periods in the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP applicable to quarterly financial statements generally, and certified by a Senior Financial Officer as fairly presenting, in all material respects, the financial position of the companies being reported on and their results of operations and cash flows, subject to changes resulting from year‐end adjustments;  provided that delivery within the time period specified above of copies of the Company’s Form 10-Q prepared in compliance with the requirements therefor and filed with the SEC shall be deemed to satisfy the requirements of this Section 7.1(a), and provided, further, that the Company shall be deemed to have made such delivery of such Form 10‐Q if it shall have timely made such Form 10‐Q available on “EDGAR” or on, or through a link on, the website of the Company or its parent, South Jersey Industries, Inc., and shall have given each Institutional Investor prior notice of such availability on EDGAR or on or through the website of the Company or its parent in connection with each delivery (such availability and notice thereof being referred to as “Electronic Delivery”);
(b)    Annual Statements — within 120 days after the end of each fiscal year of the Company, duplicate copies of:
(i)    a consolidated balance sheet of the Company and its Subsidiaries, as at the end of such year, and

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(ii)    consolidated statements of income and changes in cash flows and of the Company and its Subsidiaries for such year,
setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP, and accompanied by an opinion thereon of independent public accountants of recognized national standing, which opinion shall state that such financial statements present fairly, in all material respects, the financial position of the companies being reported upon and their results of operations and cash flows and have been prepared in conformity with GAAP, and that the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards, and that such audit provides a reasonable basis for such opinion in the circumstances, provided that the delivery within the time period specified above of the Company’s Annual Report on Form 10-K for such fiscal year (together with the Company’s annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under the Exchange Act) prepared in accordance with the requirements therefor and filed with the SEC shall be deemed to satisfy the requirements of this Section 7.1(b), and provided, further, that the Company shall be deemed to have made such delivery of such Form 10‐K if it shall have timely made Electronic Delivery thereof;
(c)    SEC and Other Reports — except for filings referred to in Section 7.1(a) and (b) above, promptly upon their becoming available and, to the extent applicable, one copy of (i) each financial statement, report, notice or proxy statement sent by the Company or any Subsidiary to public securities holders generally, and (ii) each regular or periodic report, each registration statement (without exhibits except as expressly requested by such Institutional Investor), and each prospectus and all amendments thereto filed by the Company or any Subsidiary with the Securities and Exchange Commission and of all press releases and other statements made available generally by the Company or any Subsidiary to the public concerning developments that are Material, provided that the Company shall be deemed to have made such delivery of such information if it shall have timely made Electronic Delivery thereof;
(d)    Notice of Default or Event of Default — promptly, and in any event within five Business Days after a Responsible Officer becomes aware of the existence of any Default or Event of Default or that any Person has given any notice or taken any action with respect to a claimed default hereunder or that any Person has given any notice or taken any action with respect to a claimed default of the type referred to in Section 11(f) hereof, a written notice specifying the nature and period of existence thereof and what action the Company is taking or proposes to take with respect thereto;

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(e)    ERISA Matters — promptly, and in any event within ten Business Days after a Responsible Officer becomes aware of any of the following, a written notice setting forth the nature thereof and the action, if any, that the Company or an ERISA Affiliate proposes to take with respect thereto:
(i)    with respect to any Plan (other than any Multiemployer Plan) that is subject to Title IV of ERISA, any reportable event, as defined in Section 4043(c) of ERISA and the regulations thereunder, for which notice thereof has not been waived pursuant to such regulations as in effect on the date hereof and on the date of the applicable Closing; or
(ii)    the taking by the PBGC of steps to institute, or the threatening by the PBGC of the institution of, proceedings under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any such Plan, or the receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer Plan that such action has been taken by the PBGC with respect to such Multiemployer Plan; or
(iii)    any event, transaction or condition that could result in the incurrence of any liability by the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or such penalty or excise tax provisions, if such liability or Lien, taken together with any other such liabilities or Liens then existing, would reasonably be expected to have a Material Adverse Effect;
(f)    Supplemental Indentures — promptly, and in any event within five days after the execution and delivery thereof, a copy of any supplement to the Indenture or the Mortgage that the Company from time to time may hereafter execute and deliver which amends the Indenture or the Mortgage in any material respect; and
(g)    Requested Information — with reasonable promptness, such other data and information relating to the business, operations, affairs, financial condition, assets or properties of the Company or any of its Subsidiaries or relating to the ability of the Company to perform its obligations hereunder and under the Notes as from time to time may be reasonably requested by any such Institutional Investor or such information regarding the Company required to satisfy the requirements of 17 CFR §230.144A, as amended from time to time, in connection with any contemplated transfer of the Notes.

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Section 7.2    Officer’s Certificate.  Each set of financial statements delivered to an Institutional Investor pursuant to Section 7.1(a) or Section 7.1(b) shall be accompanied by a certificate of a Senior Financial Officer setting forth:
(a)    Covenant Compliance — (i) the information (including detailed calculations) required in order to establish whether the Company was in compliance with the requirements of the Indenture and the Mortgage during the quarterly or annual period covered by the statements then being furnished to the extent required to be provided under the Indenture or the Mortgage; (ii) to the extent the Company issued Additional Obligations under the Indenture or the Mortgage during the period covered by the statements being furnished, any calculations that the Company provided to the Trustee or the Mortgage Trustee to show compliance with the Indenture or the Mortgage in connection with the issuance of the Additional Obligations (including with respect to each such Section, where applicable, the calculations of the maximum or minimum amount, ratio or percentage, as the case may be, permissible under the terms of such Sections, and the calculation of the amount, ratio or percentage then in existence).
(b)    Event of Default – a statement that such Senior Financial Officer has reviewed the relevant terms hereof and of the Indenture and the Mortgage and has made, or caused to be made, under his or her supervision, a review of the transactions and conditions of the Company and its Subsidiaries from the beginning of the quarterly or annual period covered by the statements then being furnished to the date of the certificate and that such review shall not have disclosed the existence during such period of any condition or event that constitutes a Default or an Event of Default under either the Indenture or the Mortgage or, if any such condition or event existed or exists, specifying the nature and period of existence thereof and what action the Company shall have taken or proposes to take with respect thereto.
Section 7.3.    Visitation.  The Company shall permit the representatives of each Institutional Investor:
(a)    No Default – if no Default or Event of Default then exists, at the expense of such Institutional Investor and upon reasonable prior notice to the Company, to visit the principal executive office of the Company, to discuss the affairs, finances and accounts of the Company and its Subsidiaries with the Company’s officers to the extent they are reasonably available, and, with the consent of the Company (which consent will not be unreasonably withheld), to visit the other offices and properties of the Company and each Subsidiary, all at such reasonable times and as often as may be reasonably requested in writing; and

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(b)    Default – if a Default or Event of Default then exists and is continuing, at the expense of the Company to visit and inspect any of the offices or properties of the Company or any Subsidiary, to examine all their respective books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss their respective affairs, finances and accounts with their respective officers and independent public accountants (and by this provision the Company authorizes said accountants to discuss the affairs, finances and accounts of the Company and its Subsidiaries), all at such times and as often as may be reasonably requested.
		
	SECTION 8.
	PAYMENT OF THE NOTES.

Section 8.1.    Required Prepayments.  (a)  Tranche A Notes.  On September 20, 2020 and on each September 20 thereafter to and including September 20, 2023, the Company will prepay $10,000,000 principal amount (or such lesser principal amount as shall then be outstanding) of the Tranche A Notes at par and without payment of the Make-Whole Amount or any premium.  The entire unpaid principal amount of the Tranche A Notes shall become due and payable on September 20, 2024.  Upon any partial prepayment or purchase of the Tranche A Notes pursuant to Section 8.2, Section 8.5 or Section 8.7, the principal amount of each required prepayment of the Tranche A Notes becoming due under this Section 8.1(a) on and after the date of such prepayment or purchase shall be reduced in the same proportion as the aggregate unpaid principal amount of the Tranche A Notes is reduced as a result of such prepayment or purchase.
(b)  Tranche B Notes.  On November 30, 2020 and on each November 30 thereafter to and including November 30, 2023, the Company will prepay $7,000,000 principal amount (or such lesser principal amount as shall then be outstanding) of the Tranche B Notes at par and without payment of the Make-Whole Amount or any premium.  The entire unpaid principal amount of the Tranche B Notes shall become due and payable on November 30, 2024.  Upon any partial prepayment or purchase of the Tranche B Notes pursuant to Section 8.2, Section 8.5 or Section 8.7, the principal amount of each required prepayment of the Tranche B Notes becoming due under this Section 8.1(b) on and after the date of such prepayment or purchase shall be reduced in the same proportion as the aggregate unpaid principal amount of the Tranche B Notes is reduced as a result of such prepayment or purchase.
Section 8.2.    Optional Prepayments with Make-Whole Amount.  The Company may, at its option, upon notice as provided below, prepay at any time all, or from time to time any part of, the Notes, in an amount not less than 5% of the aggregate principal amount of the Notes then outstanding in the case of a partial prepayment, at 100% of the principal amount so prepaid, together with interest accrued thereon to the date of such prepayment, plus the Make-Whole Amount determined for the prepayment date with respect to such principal amount of each Note that is then being so prepaid.  

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The Company will give each holder of Notes written notice of each optional prepayment under this Section 8.2 not less than 30 days and not more than 60 days prior to the date fixed for such prepayment.  Each such notice shall specify such date (which shall be a Business Day), the aggregate principal amount of the Notes to be prepaid on such date, the principal amount of each Note held by such holder to be prepaid (determined in accordance with Section 8.3), and any other information required to be delivered under the terms of the Indenture or the Mortgage, and the interest to be paid on the prepayment date with respect to such principal amount being prepaid, and shall be accompanied by a certificate of a Senior Financial Officer as to the estimated Make-Whole Amount due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation.  Two Business Days prior to such prepayment, the Company shall deliver to each holder of Notes a certificate of a Senior Financial Officer specifying the calculation of such Make-Whole Amount as of the specified prepayment date.
Section 8.3.    Allocation of Partial Prepayments.  In the case of each partial prepayment of the Tranche A Notes or the Tranche B Notes, as applicable, pursuant to the provisions of Section 8.1(a) or Section 8.1(b), the principal amount of the Notes to be prepaid shall be allocated among all of the Notes of the applicable tranche at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof.  In the case of each partial prepayment of the Notes pursuant to the provisions of Section 8.2, the principal amount of the Notes to be prepaid shall be allocated among all of the Notes, at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof. 
Section 8.4.    Maturity; Surrender, Etc.  In the case of each prepayment of Notes pursuant to this Section 8, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment (which shall be a Business Day), together with interest on such principal amount accrued to such date and the applicable Make-Whole Amount, if any.  From and after such date, unless the Company shall fail to pay such principal amount when so due and payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue.  Any Note paid or prepaid in full shall be surrendered to the Company and cancelled and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note.
Section 8.5.    Purchase of Notes.  The Company will not and will not permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes except (a) upon the payment or prepayment of the Notes in accordance with the terms of this Agreement and the Notes or (b) pursuant to a written offer to purchase any outstanding Notes made by the Company or an Affiliate pro rata to the holders of the Notes upon the same terms and conditions.  The Company will promptly cancel all Notes acquired by it or any Affiliate pursuant 

22

to any payment, prepayment or purchase of Notes pursuant to any provision of this Agreement and no Notes may be issued in substitution or exchange for any such Notes.
Section 8.6.    Make‐Whole Amount for the Notes‐.  The term “Make‐Whole Amount” means with respect to any Note an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note, minus the amount of such Called Principal, provided that the Make‐Whole Amount may in no event be less than zero.  For the purposes of determining the Make‐Whole Amount, the following terms have the following meanings with respect to the Called Principal of such Note:
“Called Principal” means, the principal of the Note that is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1 or any other Financing Agreement, as the context requires.
“Discounted Value” means, the amount obtained by discounting all Remaining Scheduled Payments from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on such Note is payable) equal to the Reinvestment Yield.
“Reinvestment Yield” means, 0.50% plus the yield to maturity calculated by using (a) the yields reported, as of 10:00 A.M. (New York City time) on the second Business Day preceding the Settlement Date on screen “PX‐1” on the Bloomberg Financial Market Service (or such other display as may replace Page PX-1) on Bloomberg for the most recently issued actively traded on the run U.S. Treasury securities having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date, or (b) if such yields are not reported as of such time or the yields reported as of such time are not ascertainable (including by way of interpolation), the Treasury Constant Maturity Series Yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date, in Federal Reserve Statistical Release H.15 (519) (or any comparable successor publication) for actively traded U.S. Treasury securities having a constant maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date.
In the case of each determination under clause (a) or clause (b), as the case may be, of the preceding paragraph, such implied yield will be determined, if necessary, by (i) converting U.S. Treasury bill quotations to Note‐equivalent yields in accordance with accepted financial practice and (ii) interpolating linearly between (1) the applicable U.S. Treasury security actively traded on the run with the maturity closest to and greater than 

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such Remaining Average Life and (2) the applicable U.S. Treasury security actively traded on the run with the maturity closest to and less than such Remaining Average Life.  The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Note. 
“Remaining Average Life” means the number of years (calculated to the nearest one‐twelfth year) obtained by dividing (a) such Called Principal into (b) the sum of the products obtained by multiplying (i) the principal component of each Remaining Scheduled Payment by (ii) the number of years (calculated to the nearest one‐twelfth year) that will elapse between the Settlement Date and the scheduled due date of such Remaining Scheduled Payment.
“Remaining Scheduled Payments” means, all payments of such Called Principal and interest thereon that would be due after the Settlement Date if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the terms of such Notes, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 8.2 or 12.1.
“Settlement Date” means, the date on which such Called Principal is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1 hereof or any other Financing Agreement, as the context requires.
Section 8.7.    Change in Control.   
(a)  Notice of Change in Control.  The Company will, within 15 Business Days after any Responsible Officer has knowledge of the occurrence of any Change in Control, give written notice of such Change in Control to each holder of Notes.  If a Change in Control has occurred, such notice shall contain and constitute an offer to prepay the Notes as described in subparagraph (b) of this Section 8.7 and shall be accompanied by the certificate described in subparagraph (e) of this Section 8.7.  
(b)  Offer to Prepay Notes.  The offer to prepay Notes contemplated by subparagraph (a) of this Section 8.7 shall be an offer to prepay, in accordance with and subject to this Section 8.7, all, but not less than all, of the Notes held by each holder (in this case only, “holder” in respect of any Note registered in the name of a nominee for a disclosed beneficial owner shall mean such beneficial owner) on a date specified in such offer (the “Proposed Prepayment Date”).  If such Proposed Prepayment Date is in connection with an offer contemplated by subparagraph (a) of this Section 8.7, 

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such date shall be not less than 20 days and not more than 45 days after the date of such offer (if the Proposed Prepayment Date shall not be specified in such offer, the Proposed Prepayment Date shall be the 30th day after the date of such offer).
(c)    Acceptance; Rejection.  A holder of Notes may accept the offer to prepay made pursuant to this Section 8.7 by causing a notice of such acceptance or rejection to be delivered to the Company at least five Business Days prior to the Proposed Prepayment Date.  A failure by a holder of Notes to respond to an offer to prepay made pursuant to this Section 8.7 shall be deemed to constitute a rejection of such offer by such holder.
(d)    Prepayment.  Prepayment of the Notes to be prepaid pursuant to this Section 8.7 shall be at 100% of the principal amount of such Notes, together with interest on such Notes accrued to the date of prepayment.  The prepayment shall be made on the Proposed Prepayment Date.
(e)    Officer’s Certificate.  Each offer to prepay the Notes pursuant to this Section 8.7 shall be accompanied by a certificate, executed by a Senior Financial Officer of the Company and dated the date of such offer, specifying: (i) the Proposed Prepayment Date; (ii) that such offer is made pursuant to this Section 8.7; (iii) the principal amount of each Note offered to be prepaid; (iv) the interest that would be due on each Note offered to be prepaid, accrued to the Proposed Prepayment Date; (v) that the conditions of this Section 8.7 have been fulfilled; and (vi) in reasonable detail, the nature and date or proposed date of the Change in Control.
(f)    Effect on Required Payments.  The amount of each payment of the principal of either tranche of the Notes made pursuant to this Section 8.7 shall be applied against and reduce each of the then remaining principal payments due on such tranche of Notes pursuant to Section 8.1 by a percentage equal to the aggregate principal amount of such tranche of Notes so paid divided by the aggregate principal amount of such tranche of Notes outstanding immediately prior to such payment.
           (g)    “Change in Control” Defined.  “Change in Control” means the occurrence of one or more of the following events: 
     (i)     any sale, lease, exchange or other transfer (in a single transaction or a series of related transactions) of all or substantially all of the assets of the Company to any Person or “group” (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder in effect on the First Closing Date), or 
(ii)     the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or “group” (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the First Closing Date) of 50% or more of the outstanding ownership interests of the Company.

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	SECTION 9.
	AFFIRMATIVE COVENANTS.

The Company covenants that so long as any of the Notes are outstanding:
Section 9.1.    Compliance with Law.  Without limiting Section 10.3, the Company will, and will cause each of its Subsidiaries to, comply with all laws, ordinances or governmental rules or regulations to which each of them is subject, including, without limitation, ERISA, Environmental Laws, the USA Patriot Act and the other laws and regulations that are referred to in Section 5.16, and will obtain and maintain in effect all licenses, certificates, permits, franchises and other governmental authorizations necessary to the ownership of their respective properties or to the conduct of their respective businesses, in each case to the extent necessary to ensure that non‐compliance with such laws, ordinances or governmental rules or regulations or failures to obtain or maintain in effect such licenses, certificates, permits, franchises and other governmental authorizations would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
Section 9.2.    Insurance.  The Company will cause each of its Subsidiaries to maintain, with financially sound and reputable insurers, insurance with respect to their respective properties and businesses against such casualties and contingencies, of such types, on such terms and in such amounts (including deductibles, co-insurance and self-insurance, if adequate reserves are maintained with respect thereto) as is customary in the case of entities of established reputations engaged in the same or a similar business and similarly situated.
Section 9.3.    Maintenance of Properties.  The Company will cause each of its Subsidiaries to maintain and keep, or cause to be maintained and kept, their respective properties in good repair, working order and condition (other than ordinary wear and tear), so that the business carried on in connection therewith may be properly conducted at all times, provided that this Section shall not prevent any Subsidiary from discontinuing the operation and the maintenance of any of its properties if such discontinuance is desirable in the conduct of its business and the Company and such Subsidiary has concluded that such discontinuance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 9.4.    Payment of Taxes.  The Company will cause each of its Subsidiaries to file all income tax or similar tax returns required to be filed in any jurisdiction and to pay and discharge all taxes shown to be due and payable on such returns and all other taxes, assessments, governmental charges, or levies payable by any of them, to the extent the same have become due and payable and before they have become delinquent, provided that any Subsidiary does not need to pay any such tax, assessment, charge or levy if (a) the amount, applicability or validity thereof is contested by the Company or such Subsidiary on a timely basis in good faith and in appropriate proceedings, 

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and the Subsidiary has established adequate reserves therefor in accordance with GAAP on the books of such Subsidiary or (b) the nonpayment of all such taxes, assessments, charges and levies in the aggregate would not reasonably be expected to have a Material Adverse Effect.
Section 9.5.    Corporate Existence, Etc.  The Company will at all times preserve and keep in full force and effect the corporate existence of each of its Subsidiaries (unless merged into the Company or a wholly‐owned Subsidiary) and all rights and franchises of its Subsidiaries unless, in the good faith judgment of the Company or such Subsidiary, the termination of or failure to preserve and keep in full force and effect such corporate existence, right or franchise would not, individually or in the aggregate, have a Material Adverse Effect.
Section 9.6.    Books and Records.  The Company will, and will cause each of its Subsidiaries to, maintain proper books of record and account in conformity with GAAP and all applicable requirements of any Governmental Authority having legal or regulatory jurisdiction over such Subsidiary, except where any such nonconformity would not reasonably be expected to have a Material Adverse Effect.
Section 9.7.    Compliance with Material Agreements.  The Company will comply in all material respects with the material terms, conditions and provisions of the all Material agreements, except where such noncompliance would not reasonably be expected to have a Material Adverse Effect.
		
	SECTION 10.
	  NEGATIVE COVENANTS.

The Company covenants that so long as any of the Notes are outstanding:
Section 10.1.    Transactions with Affiliates.  The Company will not and will not permit any Subsidiary to enter into directly or indirectly any Material transaction or Material group of related transactions (including without limitation the purchase, lease, sale or exchange of properties of any kind or the rendering of any service) with any Affiliate (other than the Company or another Subsidiary), except pursuant to the reasonable requirements of the Company’s or such Subsidiary’s business and upon fair and reasonable terms no less favorable to the Company or such Subsidiary than would be obtainable in a comparable arm’s‐length transaction with a Person not an Affiliate.
Section 10.2.    Line of Business    .  The Company will not engage in any business if, as a result, the general nature of the business in which the Company and its Subsidiaries, taken as a whole, would then be engaged would be substantially changed from the general nature of the business in which the Company and its Subsidiaries, taken as whole, is engaged on the date of this Agreement.

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Section 10.3.    Terrorism Sanctions Regulations.  The Company will not and will not permit any Controlled Entity to (a) become a Blocked Person or (b) have any investments in or engage in any dealings or transactions with any Blocked Person except in accordance with applicable law and in a manner where such investments, transactions or dealings would not cause the purchase, holding or receipt of any payment or exercise of any rights in respect of any Note by the holder thereof to be in violation of any laws or regulations administered by OFAC.
Section 10.4.    Release of Lien of the Mortgage.  The Company will not cause or permit the lien of the Mortgage that secures any collateral thereunder to be released without the prior written consent of each holder of a Note, other than as permitted under Sections 3.04(D)(3), 3.08, 5.16, 5.20, 6.03, 6.04, 6.07, 6.08, 6.09, 6.10 (to the extent related to a release of liens permitted under Section 6.11), 6.11, 6.12, 7.02 and 12.01 of the Mortgage.  Notwithstanding the foregoing, the Trustee may release the Pledged Mortgage Bond and the Mortgage Trustee may release the lien of the Mortgage, provided that, on the same date that such liens are released, the Trustee receives a substituted pledged bond or bonds that are secured by the same collateral that secured the Pledged Mortgage Bond immediately prior to its release and the release of the Mortgage pursuant to a mortgage that is acceptable in scope, form and substance to the Required Holders, such acceptance not to be unreasonably withheld or delayed, and the holders of Notes shall have received such opinions of counsel, certificates, uniform commercial code searches and title searches that provide evidence that the substituted pledged bonds are secured by a first priority lien on the collateral purported to be pledged as collateral to secure the substituted pledged bond or bonds as the Required Holders shall reasonably request. 
		
	SECTION 11.
	EVENTS OF DEFAULT.

An “Event of Default” shall exist if any of the following conditions or events shall occur and be continuing:
(a)    the Company defaults in the payment of any principal or Make-Whole Amount, if any, on any Note when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise; or; 
(b)    the Company defaults in the payment of any interest on any Note for more than five Business Days after the same becomes due and payable; or
(c)    the occurrence of any “Event of Default” under Section 8.1(a) of the Indenture (other than defaults described in Sections 8.1(a)(1) or 8.1(a)(2)) or the occurrence of any “Event of Default” under Section 9.02 of the Mortgage (other than defaults described in Section 9.02(1) or 9.02(2)); or

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(d)    any representation or warranty made in writing by or on behalf of the Company or by any officer of the Company in this Agreement, the Indenture, the Mortgage or in any writing furnished in connection with the transactions contemplated hereby, proves to have been false, incorrect or misleading in any material respect on the date as of which made; or
(e)    the Company defaults in the performance of or compliance with any term contained herein (other than those referred to in paragraphs (a), (b) and (c) of this Section 11) or in the Indenture or the Mortgage and such default is not remedied, in the case of defaults hereunder, within 30 days after the earlier of (i) a Responsible Officer obtaining actual knowledge of such default and (ii) the Company receiving written notice of such default from any holder of a Note (any such written notice to be identified as a “notice of default” and to refer specifically to this paragraph (e) of Section 11), and in the case of defaults under either the Indenture or the Mortgage, within the grace period specified for such defaults respectively in the Indenture and the Mortgage; or
(f)    (i) the Company or any Subsidiary is in default (as principal or as guarantor or other surety) in the payment of any principal of or premium or make-whole amount or interest on any Indebtedness (other than the Notes and any other notes or other debt instruments authenticated under the Indenture) that is outstanding in an aggregate principal amount of at least $50,000,000 beyond any period of grace provided with respect thereto, or (ii) the Company or any Subsidiary is in default in the performance of or compliance with any term of any instrument, mortgage, indenture or other agreement relating to any Indebtedness (other than the Notes and any other notes or debt instruments authenticated under the Indenture) in an aggregate principal amount of at least $50,000,000 or any other condition exists, and as a consequence of such default or condition such Indebtedness has become, or has been declared, due and payable, or (iii) as a consequence of the occurrence or continuation of any event or condition (other than the passage of time or the right of the holder of Indebtedness to convert such Indebtedness into equity interests), the Company or any Subsidiary has become obligated to purchase or repay Indebtedness (other than the Notes and any other notes authenticated under the Indenture) before its regular maturity or before its regularly scheduled dates of payment in an aggregate outstanding principal amount of at least $50,000,000; or
(g)    a final judgment or judgments at any one time outstanding for the payment of money aggregating in excess of $50,000,000 (except to the extent covered by independent third-party insurance as to which the insurer acknowledges in writing that such judgment or judgments are covered by such insurance) are rendered against one or more of the Company or any Subsidiary and which judgments are not, within 30 days after entry thereof, 

29

bonded, discharged or stayed pending appeal, or are not discharged within 30 days after the expiration of such stay; or
(h)    if (i) any Plan shall fail to satisfy the minimum funding standards of ERISA or the Code for any plan year or part thereof or a waiver of such standards or extension of any amortization period is sought or granted under Section 412 of the Code, (ii) a notice of intent to terminate any Plan shall have been or is reasonably expected to be filed with the PBGC or the PBGC shall have instituted proceedings under Section 4042 of ERISA to terminate or appoint a trustee to administer any Plan or the PBGC shall have notified the Company or any ERISA Affiliate that a Plan may become a subject of any such proceedings, (iii) the aggregate “amount of unfunded benefit liabilities” (within the meaning of Section 4001(a)(18) of ERISA) for which the Company or any ERISA Affiliate is obligated under all Plans, determined in accordance with Title IV of ERISA, shall exceed $50,000,000, (iv) the Company or any ERISA Affiliate shall have incurred or is reasonably expected to incur any liability (other than for premium payments due to the PBGC) pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, (v) the Company or any ERISA Affiliate withdraws from any Multiemployer Plan, or (vi) the Company or any Subsidiary establishes or amends any employee welfare benefit plan that provides post-employment welfare benefits in a manner that could increase the liability of the Company or any Subsidiary thereunder; provided that any such event or events described in clauses (i) through (vi) above, either individually or together with any other such event or events, would reasonably be expected to have a Material Adverse Effect.
As used in Section 11(h), the terms “employee benefit plan” and “employee welfare benefit plan” shall have the respective meanings assigned to such terms in Section 3 of ERISA.
SECTION 12.    REMEDIES ON DEFAULT, ETC.
Section 12.1.    Acceleration.  (a) If an Event of Default has occurred with respect to the Company in connection with an “Event of Default” under Sections 8.1(a)(6) or 8.1(a)(7) of the Indenture or an “Event of Default” under Sections 9.02(5) or 9.02(6) of the Mortgage, all of the Notes then outstanding shall automatically become immediately due and payable.
(b)    If any other Event of Default has occurred and is continuing, any holder or holders of more than 50% in aggregate principal amount of the Notes at the time outstanding may at any time during the continuation of such Event of Default, at its or their option, by notice or notices to the Company, declare all of the Notes then outstanding to be immediately due and payable.

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(c)    If any Event of Default described in paragraph (a) or (b) of Section 11 has occurred and is continuing with respect to any Notes, any holder or holders of Notes at the time outstanding affected by such Event of Default may at any time during the continuation of such Event of Default, at its or their option, by notice or notices to the Company, declare all of the Notes held by such holder or holders to be immediately due and payable.
Upon any Note’s becoming due and payable under this Section 12.1, whether automatically or by declaration, such Note will forthwith mature and the entire unpaid principal amount of such Note, plus (i) all accrued and unpaid interest thereon (including, but not limited to, interest accrued thereon at the Default Rate) and (ii) the Make-Whole Amount determined in respect of such principal amount (to the full extent permitted by applicable law), shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived.  The Company acknowledges, and the parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Company (except as herein specifically provided for) and that the provision for payment of a Make-Whole Amount by the Company in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances.
Section 12.2.    Other Remedies.  If any Default or Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in any Note, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise.
Section 12.3.    Rescission.  At any time after the Notes have been declared due and payable pursuant to clause (b) or (c) of Section 12.1, the holders of more than 50% in aggregate principal amount of the Notes then outstanding, by written notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Company has paid all overdue interest on the Notes, all principal of and Make-Whole Amount on any Notes that are due and payable and are unpaid other than by reason of such declaration, and all interest on such overdue principal and Make-Whole Amount and (to the extent permitted by applicable law) any overdue interest in respect of the Notes, at the Default Rate, (b) neither the Company nor any other Person shall have paid any amounts which have become due solely by reason of such declaration, (c) all Events of Default and Defaults, other than non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 17, and (d) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to any Notes.  No 

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rescission and annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon.
Section 12.4.    No Waivers or Election of Remedies, Expenses, Etc.  No course of dealing and no delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies.  No right, power or remedy conferred by this Agreement or by any Note upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise.  Without limiting the obligations of the Company under Section 15, the Company will pay to the holder of each Note on demand such further amount as shall be sufficient to cover all reasonable costs and expenses of such holder incurred in any enforcement or collection under this Section 12, including, without limitation, reasonable attorneys’ fees, expenses and disbursements.
		
	SECTION 13.
	PAYMENTS ON NOTES.

Section 13.1.    Home Office Payment.  So long as any Purchaser or its nominee shall be the holder of any Note, and notwithstanding anything contained in the Indenture or in such Note to the contrary, the Company will pay all sums becoming due on such Note for principal, Make‐Whole Amount or premium, if any, and interest by the method and at the address specified for such purpose below such Purchaser’s name in Schedule A, or by such other method or at such other address as such Purchaser shall have from time to time specified to the Company in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of any Note, such Purchaser shall surrender such Note for cancellation, reasonably promptly after any such request, to the Trustee at its principal executive office or at the place of payment most recently designated by the Trustee pursuant to the Indenture.  Prior to any sale or other disposition of any Note held by a Purchaser or its nominee, such Purchaser will, at its election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Company in exchange for a new Note or Notes pursuant to Section 2.6 of the Indenture.  The Company will afford the benefits of this Section 13.1 to any Institutional Investor that is the direct or indirect transferee of any Note purchased by a Purchaser under this Agreement and that has made the same agreement relating to such Note as the Purchasers have made in this Section 13.1.  

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	SECTION 14.
	 REGISTRATION; EXCHANGE; EXPENSES, ETC.

Section 14.1.    Registration of Notes.  The Company shall cause the Trustee to keep a register for the registration and registration of transfers of Notes in accordance with Section 2.6 of the Indenture.  
Section  14.2.    Transaction Expenses.  Whether or not the transactions contemplated hereby are consummated, the Company will pay all reasonable costs and expenses (including reasonable attorneys’ fees of a one special counsel and, if reasonably required by the Required Holders, one local or other counsel) incurred (a) by the Purchasers in connection with such transactions, and (b) by the holders of the Notes in connection with any amendments, waivers or consents under or in respect of any Financing Agreement (whether or not such amendment, waiver or consent becomes effective), including, without limitation:  (i) the reasonable costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under any Financing Agreement or in responding to any subpoena or other legal process or informal investigative demand issued in connection with any Financing Agreement, or by reason of being a holder of Notes, (ii) the reasonable costs and expenses, including financial advisors’ fees, incurred in connection with the insolvency or bankruptcy of the Company or any Subsidiary or in connection with any work‐out or restructuring of the transactions contemplated  by any Financing Agreement and (iii) the reasonable costs and expenses incurred in connection with the initial filing of any Financing Agreement and all related documents and financial information with the SVO, provided that such costs and expenses under this clause (iii) shall not exceed $5,000 for the Notes.  The Company will pay, and will save each Purchaser and each other holder of a Note harmless from, all claims in respect of any fees, costs or expenses if any, of brokers and finders (other than those, if any, retained by a Purchaser or other holder in connection with its purchase of the Notes).
Section 14.2.    Survival.  The obligations of the Company under this Section 14 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of any Financing Agreement, and the termination of any Financing Agreement.
SECTION 15.    SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive the execution and delivery of the Financing Agreements, the purchase or transfer by any Purchaser of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent holder of a Note, regardless of any investigation made at any time by or on behalf of such Purchaser or any other holder of a Note.  All statements contained in any certificate or other instrument delivered by or on behalf of the Company pursuant to this Agreement shall be deemed representations and 

33

warranties of the Company under this Agreement.  Subject to the preceding sentence, the Financing Agreements embody the entire agreement and understanding between each Purchaser and the Company and supersede all prior agreements and understandings relating to the subject matter hereof.
		
	SECTION 16.
	AMENDMENT AND WAIVER.

Section 16.1.    Requirements.  The Company will not cause or permit the Indenture to change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of interest or of the Make-Whole Amount on the Notes as set forth in the Indenture and the Notes, without the written consent of the holder of each Note at the time outstanding affected thereby.  The Company will not cause or permit the Mortgage or the Pledged Mortgage Bond to be amended to change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of interest or of the Make-Whole Amount on the Pledged Mortgage Bond as set forth in the Mortgage and the Pledged Mortgage Bond, without the written consent of the holder of each Note.  This Agreement and the Notes may be amended, and the observance of any term hereof or of the Notes may be waived (either retroactively or prospectively), with (and only with) the written consent of the Company and the Required Holders, except that (i) no amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term, will be effective as to any holder of Notes unless consented to by such holder of Notes in writing, and (ii) no such amendment or waiver may, without the written consent of all of the holders of Notes at the time outstanding affected thereby, (A) subject to the provisions of Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of interest (if such change results in a decrease in the interest rate) or of the Make-Whole Amount on, the Notes, (B) change the percentage of the principal amount of the Notes the holders of which are required to consent to any such amendment or waiver, or (C) amend any of Sections 8, 10.4, 11(a), 11(b), 12, 16 or 20.
Notwithstanding anything contained in this Section 16 to the contrary, if for any reason whatsoever it becomes necessary or appropriate to enter into any amendment of this Agreement or the Notes or any waiver with respect to compliance therewith by the Company prior to the occurrence of the Second Closing (other than a waiver of any condition precedent to the First Closing), all Notes will be deemed to be outstanding for purposes of (i) any determination of the percentage of holders of the Notes required to grant or deny such requested amendment or waiver and (ii) for purposes of any determination of any payment or remuneration, whether by way of supplemental or additional interest, fee or otherwise pursuant to Section 16.2, notwithstanding that the issuance, sale and delivery of the Tranche B Notes  has not been consummated at the time such amendment or waiver is requested or such payment of remuneration is determined pursuant to Section 16.2.   

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Section 16.2.    Solicitation of Holders of Notes.
(a)    Solicitation.  The Company will provide each holder of the Notes (irrespective of the amount of Notes then owned by it) with sufficient information, sufficiently far in advance of the date a decision is required, to enable such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or of the Notes.  The Company will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to the provisions of this Section 16 to each holder of outstanding Notes promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite holders of Notes.
(b)    Payment.  The Company will not directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise (other than legal fees or other related expenses), or grant any security or provide other credit support, to any holder of Notes as consideration for or as an inducement to the entering into by any holder of Notes or any waiver or amendment of any of the terms and provisions hereof unless such remuneration is concurrently paid, or security is concurrently granted or other credit support concurrently provided, on the same terms, ratably to each holder of Notes then outstanding even if such holder did not consent to such waiver or amendment.
(c)    Consent in Contemplation of Transfer.  Any consent made pursuant to this Section 16.2 by the holder of any Note that has transferred or has agreed to transfer such Note to the Company, any Subsidiary or any Affiliate of the Company and has provided or has agreed to provide such written consent as a condition to such transfer shall be void and of no force or effect except solely as to such holder, and any amendments effected or waivers granted or to be effected or granted that would not have been or would not be so effected or granted but for such consent (and the consents of all other holders of Notes that were acquired under the same or similar conditions) shall be void and of no force or effect except solely as to such transferring holder.
Section 16.3.    Binding Effect, Etc.  Any amendment or waiver consented to as provided in this Section 16 applies equally to all holders of Notes and is binding upon them and upon each future holder of any Note and upon the Company without regard to whether such Note has been marked to indicate such amendment or waiver.  No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon.  No course of dealing between the Company and the holder of any Note nor any delay in exercising any rights hereunder or under any Note shall operate as a waiver of any rights of any holder of such Note.  As used herein, the term “this Agreement” and references thereto shall mean this Note Purchase Agreement as it may from time to time be amended or supplemented.

35

Section 16.4.    Notes Held by Company, Etc.  Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement or the Notes, or have directed the taking of any action provided herein or in the Notes to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by the Company or any of its Affiliates shall be deemed not to be outstanding.
		
	SECTION 17.
	NOTICES.

All notices and communications provided for hereunder shall be in writing and sent (a) by telecopy if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), or (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (with charges prepaid).  Any such notice must be sent:
(i)    if to any Purchaser or its nominee, to such Purchaser or nominee at the address specified for such communications in Schedule A, or at such other address as such Purchaser or nominee shall have specified to the Company in writing;
(ii)    if to any other holder of any Note, to such holder at such address as such other holder shall have specified to the Company in writing;
(iii)    if to the Company, to the Company at its address set forth at the beginning hereof to the attention of Senior Vice President and Chief Financial Officer, or at such other address as the Company shall have specified to the holder of each Note in writing; or
(iv)    if to the Trustee, to The Bank of New York Mellon, as Trustee, Attention, Global Trust – Corporate Finance, 525 William Penn Place, 38th Floor, Pittsburgh, PA 15259, or at such other address as the Trustee shall have specified to the Company and each other party hereto in writing.
Notices under this Section 17 will be deemed given only when actually received.
		
	SECTION 18.
	INDEMNIFICATION.

The Company hereby agrees to indemnify and hold the Purchasers harmless from, against and in respect of any and all loss, liability and reasonable expense (including reasonable attorneys’ fees) arising from any misrepresentation or nonfulfillment of any undertaking on the part of the Company under this Agreement.  The indemnification obligations of the Company under this 

36

Section 18 shall survive the execution and delivery of this Agreement, the delivery of the Notes to the Purchasers and the consummation of the transactions contemplated herein.
		
	SECTION 19.
	REPRODUCTION OF DOCUMENTS.

This Agreement and all documents relating thereto, including, without limitation, (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by any Purchaser at any Closing (except the Notes themselves), and (c) financial statements, certificates and other information previously or hereafter furnished to any Purchaser, may be reproduced by such Purchaser by any photographic, photostatic, electronic, digital, or other similar process and such Purchaser may destroy any original document so reproduced.  The Company agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by such Purchaser in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.  This Section 19 shall not prohibit the Company or any other holder of Notes from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction.
		
	SECTION 20.
	CONFIDENTIAL INFORMATION.

For the purposes of this Section 20, “Confidential Information” means information delivered to any Purchaser or holder of a Note by or on behalf of the Company or any Subsidiary in connection with the transactions contemplated by or otherwise pursuant to this Agreement or the Notes that is proprietary in nature and that was clearly marked or labeled or otherwise adequately identified when received by such Purchaser or holder as being confidential information of the Company or such Subsidiary, provided that such term does not include information that (a) was publicly known or otherwise known to such Purchaser or holder prior to the time of such disclosure without an obligation of confidentiality, (b) subsequently becomes publicly known through no act or omission by such Purchaser or holder or any person acting on such Purchaser’s or holder’s behalf, (c) otherwise becomes known to such Purchaser or holder other than through disclosure by the Company or any Subsidiary or (d) constitutes financial statements delivered to such Purchaser or holder under Section 7.1 of this Agreement that are otherwise publicly available.  Each Purchaser and holder  will maintain the confidentiality of such Confidential Information in accordance with procedures adopted by such Purchaser or holder in good faith to protect confidential information of third parties delivered to such Purchaser or holder and shall use such information only for purposes of monitoring its investment in the Notes, provided that such Purchaser or holder may deliver or disclose Confidential Information to (i) its directors, trustees, officers, employees, agents, attorneys 

37

and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by the Notes and who agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 20), (ii) its financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 20, (iii) any other holder of any Note, (iv) any Institutional Investor to which it sells or offers to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20), (v) any Person from which it offers to purchase any security of the Company (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20), (vi) any federal or state or provincial regulatory authority having jurisdiction over such Purchaser or holder, (vii) the NAIC or the SVO or, in each case, any similar organization, or any nationally recognized rating agency that requires access to information about such Purchaser’s or holder’s investment portfolio, or (viii) any other Person to which such delivery or disclosure may be necessary or appropriate (w) to effect compliance with any law, rule, regulation or order applicable to such Purchaser or holder, (x) in response to any subpoena or other legal process, (y) in connection with any litigation to which such Purchaser or holder is a party or (z) if an Event of Default has occurred and is continuing, to the extent such Purchaser or holder may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under such Purchaser’s or holder’s Notes and this Agreement.  Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 20 as though it were a party to this Agreement.  On reasonable request by the Company in connection with the delivery to any holder of a Note of information required to be delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the Company embodying the provisions of this Section 20.
		
	SECTION 21.
	  MISCELLANEOUS.

Section 21.1.    Successors and Assigns.  All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns (including, without limitation, any subsequent holder of a Note) whether so expressed or not; provided, however, the provisions of Section 7 hereof shall only apply to Institutional Investors.
Section 21.2.    Accounting Terms.  All accounting terms used herein which are not expressly defined in this Agreement have the meanings respectively given to them in accordance with GAAP.  Except as otherwise specifically provided herein, (a) all computations made pursuant to this Agreement shall be made in accordance with GAAP, and (b) all financial statements shall be 

38

prepared in accordance with GAAP.  For purposes of determining compliance with the covenants set out in any Financing Agreement, any election by the Company to measure an item of Indebtedness using fair value (as permitted by Accounting Standard Codification Topic No. 825-10-25 – Recognition, subsection Fair Value Option or any similar accounting standard) shall be disregarded and such determination shall be made by valuing indebtedness at 100% of the outstanding principal thereof, unless otherwise provided in such Financing Agreement.
Section 21.3.    Severability.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction.
Section 21.4.    Construction, Etc.  Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant.  Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person.
For the avoidance of doubt, all Schedules and Exhibits attached to this Agreement shall be deemed to be a part hereof.
Section 21.5.    Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument.  Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto.
Section 21.6.    Governing Law. This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice‐of‐law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.
Section 21.7.    Jurisdiction and Process; Waiver of Jury Trial.  (a) The Company irrevocably submits to the non-exclusive jurisdiction of any New York State or federal court sitting in the Borough of Manhattan, The City of New York, over any suit, action or proceeding arising out of or relating to this Agreement or the Notes.  To the fullest extent permitted by applicable law, the Company irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction of any such court, any objection that it may now 

39

or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.
(b)    The Company consents to process being served by or on behalf of any holder of Notes in any suit, action or proceeding of the nature referred to in Section 21.7(a) by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, return receipt requested, to it at its address specified in Section 17 or at such other address of which such holder shall then have been notified pursuant to said Section.  The Company agrees that such service upon receipt (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall, to the fullest extent permitted by applicable law, be taken and held to be valid personal service upon and personal delivery to it.  Notices hereunder shall be conclusively presumed to be received as evidenced by a delivery receipt furnished by the United States Postal Service or any reputable commercial delivery service.
(c)    Nothing in this Section 21.7 shall affect the right of any holder of a Note to serve process in any manner permitted by law, or limit any right that the holders of any of the Notes may have to bring proceedings against the Company in the courts of any appropriate jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.
(d)    The parties hereto hereby waive trial by jury in any action brought on or with respect to this Agreement, the Notes or any other document executed in connection herewith or therewith.
Section 21.8.    Payments Due on Non-Business Days    .  Anything in this Agreement or the Notes to the contrary notwithstanding (but without limiting the requirement in Section 8.4 that the notice of any optional prepayment specify a Business Day as the date fixed for such prepayment), any payment of principal of or Make-Whole Amount or interest on any Note that is due on a date other than a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day; provided that if the maturity date of any Note is a date other than a Business Day, the payment otherwise due on such maturity date shall be made on the next succeeding Business Day and shall include the additional days elapsed in the computation of interest payable on such next succeeding Business Day.
*   *   *   *   *

40

If you are in agreement with the foregoing, please sign the form of agreement on a counterpart of this Agreement and return it to the Company, whereupon this Agreement shall become a binding agreement between you and the Company.

Very truly yours,

SOUTH JERSEY GAS COMPANY

By     /s/ Stephen H. Clark                
 Name:  Stephen H. Clark
 Its:  Treasurer

[Corporate Seal]

Attest

		
	By:
	/s/ Gina Merritt-Epps

Name:  Gina Merritt-Epps
 Its:  General Counsel and Corporate Secretary

South Jersey Gas Company - Note Purchase Agreement

This Agreement is hereby accepted and agreed to as of the date thereof.

THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY

By:  /s/ David A.Barras_______________
Name:  David A. Barras
Title:  Its Authorized Representative

NORTHWESTERN LONG TERM CARE INSURANCE COMPANY

By:  /s/ David A. Barras_______________
Name:  David A. Barras
Title:  Its Authorized Representative

South Jersey Gas Company - Note Purchase Agreement

This Agreement is hereby accepted and agreed to as of the date thereof.

   AMERICAN UNITED LIFE INSURANCE COMPANY

By:  /s/ David M. Weisenburger___________
Name:  David M. Weisenburger
Title:  V.P., Fixed Income Securities

South Jersey Gas Company - Note Purchase Agreement

This Agreement is hereby accepted and agreed to as of the date thereof.

MODERN WOODMEN OF AMERICA

By:  /s/ Michael E. Dau            
Name:  Michael E. Dau
Title:  Treasurer & Investment Manager

South Jersey Gas Company - Note Purchase Agreement

This Agreement is hereby accepted and agreed to as of the date thereof.

   UNITED OF OMAHA LIFE INSURANCE COMPANY

By: /s/ Curtis R. Caldwell            
Name:  Curtis R. Caldwell
Title:  Senior Vice President

MUTUAL OF OMAHA INSURANCE COMPANY

By: /s/ Curtis R. Caldwell            
Name:  Curtis R. Caldwell
Title:  Senior Vice President

OMAHA REINSURANCE COMPANY

By:  /s/ Curtis R. Caldwell            
Name:  Curtis R. Caldwell
Title:  Authorized Signer

South Jersey Gas Company - Note Purchase Agreement

DEFINED TERMS
As used herein, the following terms have the respective meanings set forth below or set forth in the Section hereof following such term:
 “Additional Obligations” means notes issued under the Indenture (other than the Notes) after the date of the First Closing or mortgage bonds issued under the Mortgage (other than the Pledged Mortgage Bond) after the date of the First Closing. 
“Affiliate” means, at any time, and with respect to any Person, (a) any other Person that at such time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such first Person, and (b) any Person beneficially owning or holding, directly or indirectly, 10% or more of any class of voting or equity interests of the Company or any Subsidiary or any Person of which the Company and its Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly, 10% or more of any class of voting or equity interests.  As used in this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.  Unless the context otherwise clearly requires, any reference to an “Affiliate” is a reference to an Affiliate of the Company.
“Agreement” is defined in Section 16.3.
“Anti‐Money Laundering Laws” is defined in Section 5.16(c).
“Anti‐Terrorism Order” means Executive Order No. 13224 of September 24, 2001, Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support Terrorism, 66 U.S. Fed. Reg. 49, 079 (2001), as amended.
“Blocked Person” is defined in Section 5.16(a).
“Business Day” means for the purposes of any provision of this Agreement, any day other than a Saturday, a Sunday or a day on which commercial banks in New York, New York or Folsom, New Jersey are required or authorized to be closed.
“Called Principal” is defined in Section 8.6.
“Capital Lease” means, at any time, a lease with respect to which the lessee is required concurrently to recognize the acquisition of an asset and the incurrence of a liability in accordance with GAAP. 

EXHIBIT 4.4(a)(ii) 
(to Note Purchase Agreement)

“Change in Control” is defined in Section 8.7(g).
“CISADA” means the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010, United States Public Law 111195, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.
“Closing” is defined in Section 3.
“Closing Date” is the date of the applicable Closing.  
“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder from time to time.
“Collateral Filings” is defined in Section 4.11.
“Company” is defined in the first paragraph of this Agreement.
“Confidential Information” is defined in Section 20.
“Controlled Entity” means any of the Subsidiaries of the Company and any of their or the Company’s respective Controlled Affiliates.  As used in this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
“Default” means an event or condition the occurrence or existence of which would, with the lapse of time or the giving of notice or both, become an Event of Default.
“Default Rate” means that rate of interest that is the greater of (i) 2% per annum above the rate of interest stated in clause (a) of the first paragraph of the Notes or (ii) 2% over the rate of interest publicly announced by Bank of America, N.A. in New York, New York as its “base” or “prime” rate.
“Discounted Value” is defined in Section 8.6.
“Disclosure Documents” is defined in Section 5.3.  
“Electronic Delivery” is defined in Section 7.1(a).
“Environmental Laws” means any and all federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, 

EXHIBIT 4.4(a)(ii) 
(to Note Purchase Agreement)

licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including but not limited to those related to Hazardous Materials.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.
“ERISA Affiliate” means any trade or business  (whether or not incorporated) that is treated as a single employer together with the Company under Section 414 of the Code.
“Event of Default” is defined in Section 11.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Financing Agreements” means this Agreement, the Indenture, the Notes, the Pledged Mortgage Bond, and the Mortgage (including without limitation the Twenty-Fifth Supplemental Mortgage Indenture).
“First Closing” is defined in Section 3.
“GAAP” means generally accepted accounting principles as in effect from time to time in the United States of America.
“Governmental Authority” means:
(a)    the government of
(i)    the United States of America or any State or other political subdivision thereof, or
(ii)    any other jurisdiction in which the Company or any Subsidiary conducts all or any part of its business, or which asserts jurisdiction over any properties of the Company or any Subsidiary, or
(b)    any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government.
“Hazardous Material” means any and all pollutants, toxic or hazardous wastes that might pose a hazard to health and safety, the removal of which may be required or the generation, manufacture, refining, production, processing, treatment, storage, handling, transportation, transfer, use, disposal, release, discharge, spillage, seepage or filtration of which is or shall be restricted, 

EXHIBIT 4.4(a)(ii) 
(to Note Purchase Agreement)

prohibited or penalized by any applicable Environmental Law including, but not limited to, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum, petroleum products, lead based paint, radon gas or similar restricted, prohibited or penalized substances.  
“Holder” is defined in the Indenture.  
“Indebtedness” with respect to any Person means, at any time, without duplication,
(a)    its liabilities for borrowed money and its redemption obligations in respect of mandatorily redeemable Preferred Stock;
(b)    its liabilities for the deferred purchase price of property acquired by such Person (excluding accounts payable arising in the ordinary course of business but including all liabilities created or arising under any conditional sale or other title retention agreement with respect to any such property);
(c)    (i) all liabilities appearing on its balance sheet in accordance with GAAP in respect of capital leases and (ii) all liabilities which would appear on its balance sheet in accordance with GAAP in respect of synthetic leases assuming such synthetic leases were accounted for as capital leases;
(d)    all liabilities for borrowed money secured by any Lien with respect to any property owned by such Person (whether or not it has assumed or otherwise become liable for such liabilities);
(e)    all liabilities in respect of letters of credit or instruments serving a similar function issued or accepted for such Person’s account by banks and other financial institutions (whether or not representing obligations for borrowed money);
(f)    the aggregate swap termination value of all swap contracts of such Person, and
(g)    any guaranty of such Person with respect to liabilities of a type described in any of clauses (a) through (f) hereof.  
Indebtedness of any Person shall include all obligations of such Person of the character described in clauses (a) through (g) to the extent such Person remains legally liable in respect thereof notwithstanding that any such obligation is deemed to be extinguished under GAAP.
“Indenture” is defined in Section 1.1.

EXHIBIT 4.4(a)(ii) 
(to Note Purchase Agreement)

“INHAM Exemption” is defined in Section 6.2(e).
“Institutional Investor” means (a) any Purchaser of a Note, (b) any holder of a Note holding (together with one or more of its affiliates) more than 5% of the aggregate principal amount of the Notes then outstanding, (c) any holder of a Note that is a bank, trust company, savings and loan association or other financial institution, a pension plan, an investment company, an insurance company, a broker or dealer, or another similar financial institution or entity, regardless of legal form, and (d) any Related Fund of any holder of any Note.  
“Lien” means, with respect to any Person, any mortgage, lien, pledge, charge, security interest or other encumbrance, or any interest or title of any vendor, lessor, lender or other secured party to or of such Person under any conditional sale or other title retention agreement or Capital Lease, upon or with respect to any property or asset of such Person (including in the case of stock, stockholder agreements, voting trust agreements and all similar arrangements).
“Make-Whole Amount” is defined in Section 8.6.
“Material” means material in relation to the business, operations, affairs, financial condition, assets or properties of the Company and its Subsidiaries taken as a whole.
“Material Adverse Effect” means a material adverse effect on (a) the business, operations, affairs, financial condition, assets or properties of the Company and its Subsidiaries taken as a whole, (b) the ability of the Company to perform its obligations under this Agreement, the Notes or the Indenture or (c) the validity or enforceability of any Financing Agreement.
“Memorandum” is defined in Section 5.3.
“Mortgage” is defined in Section 1.2.  
“Mortgaged Property” shall have the meaning of “mortgaged property” as defined in the Mortgage. 
“Mortgage Trustee” is defined in Section 1.2.  
“Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such term is defined in Section 4001(a)(3) of ERISA).
“NAIC” means the National Association of Insurance Commissioners or any successor thereto.

EXHIBIT 4.4(a)(ii) 
(to Note Purchase Agreement)

“NAIC Annual Statement” is defined in Section 6.2(a).
“Notes” is defined in Section 1.1.
“OFAC” is defined in Section 5.16(a).
“OFAC Listed Person” is defined in Section 5.16(a).
“OFAC Sanctions Program” means all laws, regulations, Executive Orders and any economic or trade sanction that OFAC is responsible for administering and enforcing, including, without limitation 31 CFR Subtitle B, Chapter V, as amended, along with any enabling legislation; the Bank Secrecy Act; Trading with the Enemy Act; and any similar laws, regulations or orders adopted by any State within the United States.  A list of economic and trade sanctions administered by OFAC may be found at http://www.ustreas.gov/offices/enforcement/ofac/programs/.
“Officer’s Certificate” means a certificate of a Senior Financial Officer or of any other officer of the Company whose responsibilities extend to the subject matter of such certificate.
“Original Indenture” is defined in Section 1.1.
“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any successor thereto.
“Permitted Encumbrances” is defined in the Indenture.  
“Person” means an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization, business entity or Governmental Authority.
“Plan” means an “employee benefit plan” (as defined in Section 3(3) of ERISA) subject to Title I of ERISA that is or, within the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have been made or required to be made, by the Company or any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate may have any liability.
“Pledged Mortgage Bond” is defined in Section 1.2.
“Preferred Stock” means any class of capital stock of a Person that is preferred over any other class of capital stock (or similar equity interests) of such Person as to the payment of dividends or the payment of any amount upon liquidation or dissolution of such Person.

EXHIBIT 4.4(a)(ii) 
(to Note Purchase Agreement)

“property” or “properties” means, unless otherwise specifically limited, real or personal property of any kind, tangible or intangible, choate or inchoate.
“Proposed Prepayment Date” is defined in Section 8.7(b).
“PTE” is defined in Section 6.2(a).
“Public Order” means order of the Board of Public Utilities, State of New Jersey,  Docket No. GF11090573, dated December 15, 2011.  
“Purchaser” is defined in the first paragraph of this Agreement.
“QPAM Exemption” is defined in Section 6.2(d).
“Reinvestment Yield” is defined in Section 8.6.
“Related Fund” means, with respect to any holder of any Note, any fund or entity that (a) invests in Securities or bank loans, and (b) is advised or managed by such holder, the same investment advisor as such holder or by an Affiliate of such holder or such investment advisor.
“Remaining Average Life” is defined in Section 8.6.
“Remaining Scheduled Payments” is defined in Section 8.6.
“Required Holders” means, at any time, the holders of more than 50% in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its Affiliates), provided that, prior to the occurrence of the Second Closing, all Notes contemplated to be issued hereunder will be deemed to be outstanding for purposes of this definition or any matters requiring the vote of the holders of the Notes (other than the waiver of any condition precedent to the First Closing).
“Responsible Officer” means any Senior Financial Officer and any other officer of the Company with responsibility for the administration of the relevant portion of this Agreement.
“SEC” means the Securities and Exchange Commission of the United States, or any successor thereto.
 “Second Closing” is defined in Section 3.
“Securities” or “Security” shall have the meaning specified in Section 2(1) of the Securities Act.

EXHIBIT 4.4(a)(ii) 
(to Note Purchase Agreement)

“Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.
“Senior Financial Officer” means the chief financial officer or the treasurer of the Company.
“Settlement Date” is defined in Section 8.6.
“Source” is defined in Section 6.2. 
“Subsidiary” means, as to any Person, any other Person in which such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such second Person, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries).  Unless the context otherwise clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the Company.
“SVO” means the Securities Valuation Office of the NAIC or any successor to such Office.
“Tranche A Notes” is defined in Section 1.1.
“Tranche B Notes” is defined in Section 1.1.
“Trustee” is defined in Section 1.1.  
“Twenty-Fifth Supplemental Mortgage Indenture” is defined in Section 1.2.
 “UCC” means, the Uniform Commercial Code as enacted and in effect from time to time in the state whose laws are treated as applying to the Mortgaged Property.
“UCC Financing Statements” shall mean any financing statements required or permitted to be filed in accordance with the UCC.  
“USA Patriot Act” means United States Public Law 107‐56, Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.

EXHIBIT 4.4(a)(ii) 
(to Note Purchase Agreement)Exhibit 10.1

 

 

 

CUSIP Number: # 17875LAA7

 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

Dated as of March 29, 2012

 

among

 

CITYCENTER HOLDINGS, LLC, a Delaware limited liability company
 as Borrower,

 

the Lenders described herein,

 

and

 

BANK OF AMERICA, N.A.,

as Administrative Agent and L/C Issuer,

 

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, UBS SECURITIES LLC, BNP PARIBAS SECURITIES CORP., SMBC NIKKO CAPITAL MARKETS LTD.

and

BARCLAYS BANK PLC,

as Joint Lead Arrangers and Joint Book Managers

 

 

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I  DEFINITIONS AND   ACCOUNTING TERMS
    	
1
    
	
1.01
    	
Defined   Terms
    	
1
    
	
1.02
    	
Other   Interpretive Provisions
    	
33
    
	
1.03
    	
Accounting   Terms
    	
34
    
	
1.04
    	
Rounding
    	
34
    
	
1.05
    	
Times   of Day
    	
34
    
	
1.06
    	
Letter   of Credit Amounts
    	
34
    
	
ARTICLE II  THE COMMITMENTS AND   CREDIT EXTENSIONS
    	
35
    
	
2.01
    	
Loans
    	
35
    
	
2.02
    	
Borrowings,   Conversions and Continuations of Loans
    	
35
    
	
2.03
    	
Prepayments;   Termination and Reduction of Commitments
    	
36
    
	
2.04
    	
Letters   of Credit
    	
39
    
	
2.05
    	
Interest
    	
48
    
	
2.06
    	
Fees
    	
49
    
	
2.07
    	
Computation   of Interest and Fees
    	
49
    
	
2.08
    	
Evidence   of Debt
    	
49
    
	
2.09
    	
Payments   Generally; Administrative Agent’s Clawback
    	
50
    
	
2.10
    	
Sharing   of Payments by Lenders
    	
52
    
	
2.11
    	
Unrestricted   Subsidiaries
    	
53
    
	
2.12
    	
Defaulting   Lenders
    	
53
    
	
2.13
    	
Cash   Collateral
    	
56
    
	
ARTICLE III  TAXES, YIELD   PROTECTION AND ILLEGALITY
    	
57
    
	
3.01
    	
Taxes
    	
57
    
	
3.02
    	
Illegality
    	
61
    
	
3.03
    	
Inability   to Determine Rates
    	
61
    
	
3.04
    	
Increased   Costs; Reserves on Eurodollar Rate Loans
    	
62
    
	
3.05
    	
Compensation   for Losses
    	
63
    
	
3.06
    	
Mitigation   Obligations; Replacement of Lenders and L/C Issuers
    	
64
    
	
3.07
    	
Special   Provisions regarding Compensation for Rate Inadequacies
    	
64
    
	
3.08
    	
Survival
    	
65
    
	
ARTICLE IV  CONDITIONS PRECEDENT
    	
65
    
	
4.01
    	
Conditions   Precedent to Closing Date
    	
65
    
	
4.02
    	
Conditions   Precedent to All Credit Extensions
    	
66
    

 

i

 

	
ARTICLE V  REPRESENTATIONS AND   WARRANTIES
    	
67
    
	
5.01
    	
Existence,   Qualification and Power
    	
67
    
	
5.02
    	
Authorization;   No Contravention
    	
67
    
	
5.03
    	
Governmental   Authorization; Other Consents
    	
68
    
	
5.04
    	
Binding   Effect
    	
68
    
	
5.05
    	
Financial   Statements; No Material Adverse Effect
    	
68
    
	
5.06
    	
Litigation
    	
68
    
	
5.07
    	
No   Default
    	
69
    
	
5.08
    	
Environmental   Compliance
    	
69
    
	
5.09
    	
Insurance
    	
69
    
	
5.10
    	
Taxes
    	
70
    
	
5.11
    	
ERISA
    	
70
    
	
5.12
    	
Subsidiaries;   Equity Interests; Loan Parties
    	
70
    
	
5.13
    	
Intellectual   Property
    	
70
    
	
5.14
    	
Margin   Regulations; Investment Company Act
    	
70
    
	
5.15
    	
Disclosure
    	
70
    
	
5.16
    	
Projections
    	
71
    
	
5.17
    	
Compliance   with Laws
    	
71
    
	
5.18
    	
Collateral   Documents
    	
71
    
	
5.19
    	
Deposit   and Brokerage Accounts
    	
71
    
	
ARTICLE VI  AFFIRMATIVE COVENANTS
    	
71
    
	
6.01
    	
Financial   Statements
    	
71
    
	
6.02
    	
Certificates;   Other Information
    	
73
    
	
6.03
    	
Notices
    	
74
    
	
6.04
    	
Payment   of Obligations
    	
75
    
	
6.05
    	
Preservation   of Existence, Etc.
    	
75
    
	
6.06
    	
Maintenance   of Properties
    	
75
    
	
6.07
    	
Insurance
    	
76
    
	
6.08
    	
Compliance   with Laws
    	
76
    
	
6.09
    	
Books   and Records
    	
76
    
	
6.10
    	
Inspection   Rights
    	
76
    
	
6.11
    	
Covenant   to Guarantee Obligations and Give Security
    	
77
    
	
6.12
    	
Compliance   with Environmental Laws
    	
77
    
	
6.13
    	
Further   Assurances
    	
78
    
	
6.14
    	
MGM   Resorts Operations Management Agreements and MGM Resorts Affiliate Agreements
    	
78
    
	
6.15
    	
Harmon
    	
78
    

 

ii

 

	
ARTICLE VII  NEGATIVE COVENANTS
    	
78
    
	
7.01
    	
Liens
    	
78
    
	
7.02
    	
Indebtedness
    	
80
    
	
7.03
    	
Investments
    	
82
    
	
7.04
    	
Fundamental   Changes
    	
84
    
	
7.05
    	
Dispositions
    	
84
    
	
7.06
    	
Restricted   Payments
    	
85
    
	
7.07
    	
Change   in Nature of Business
    	
86
    
	
7.08
    	
Transactions   with Sponsor Entities
    	
86
    
	
7.09
    	
Burdensome   Agreements
    	
87
    
	
7.10
    	
Use   of Proceeds
    	
88
    
	
7.11
    	
Accounting   Changes
    	
88
    
	
7.12
    	
Prepayments   of Junior Capital
    	
88
    
	
7.13
    	
Minimum   EBITDA
    	
89
    
	
7.14
    	
Capital   Expenditures
    	
89
    
	
7.15
    	
Seller   Financing
    	
90
    
	
ARTICLE VIII  EVENTS OF DEFAULT AND   REMEDIES
    	
90
    
	
8.01
    	
Events   of Default
    	
90
    
	
8.02
    	
Remedies   upon Event of Default
    	
93
    
	
8.03
    	
Application   of Funds
    	
94
    
	
ARTICLE IX  ADMINISTRATIVE AGENT
    	
95
    
	
9.01
    	
Appointment   and Authority
    	
95
    
	
9.02
    	
Rights   as a Lender
    	
96
    
	
9.03
    	
Exculpatory   Provisions
    	
96
    
	
9.04
    	
Reliance
    	
97
    
	
9.05
    	
Delegation   of Duties
    	
97
    
	
9.06
    	
Resignation   of Administrative Agent and Collateral Agent
    	
98
    
	
9.07
    	
Non-Reliance   on Administrative Agent and Other Lenders
    	
99
    
	
9.08
    	
No   Other Duties, Etc.
    	
99
    
	
9.09
    	
Administrative   Agent May File Proofs of Claim
    	
99
    
	
9.10
    	
Collateral   and Guaranty Matters
    	
100
    
	
9.11
    	
Secured   Hedge Agreements and Secured Cash Management Agreements
    	
101
    
	
ARTICLE X  MISCELLANEOUS
    	
102
    
	
10.01
    	
Amendments, Etc.
    	
102
    
	
10.02
    	
Notices;   Effectiveness; Electronic Communications
    	
103
    
	
10.03
    	
No   Waiver; Cumulative Remedies; Enforcement
    	
106
    
	
10.04
    	
Expenses;   Indemnity; Damage Waiver
    	
106
    
	
10.05
    	
Payments   Set Aside
    	
108
    

 

iii

 

	
10.06
    	
Successors   and Assigns
    	
109
    
	
10.07
    	
Treatment   of Certain Information; Confidentiality
    	
113
    
	
10.08
    	
Right   of Setoff
    	
114
    
	
10.09
    	
Interest   Rate Limitation
    	
114
    
	
10.10
    	
Counterparts;   Integration; Effectiveness
    	
115
    
	
10.11
    	
Survival   of Representations and Warranties
    	
115
    
	
10.12
    	
Severability
    	
115
    
	
10.13
    	
Replacement   of Lenders
    	
115
    
	
10.14
    	
Governing   Law; Jurisdiction; Etc.
    	
116
    
	
10.15
    	
Waiver   of Jury Trial
    	
117
    
	
10.16
    	
No   Advisory or Fiduciary Responsibility
    	
117
    
	
10.17
    	
Electronic   Execution of Assignments and Certain Other Documents
    	
118
    
	
10.18
    	
USA   PATRIOT ACT
    	
118
    
	
10.19
    	
Time   of the Essence
    	
118
    
	
10.20
    	
ENTIRE   AGREEMENT
    	
118
    
	
10.21
    	
Conflict   with Loan Documents
    	
118
    

 

iv

 

	
SCHEDULES
    	
 
    
	
 
    	
 
    
	
1.01
    	
Terms   of Approved Seller Financing
    
	
2.01
    	
Commitments   and Applicable Percentages
    
	
5.03
    	
Required   Approvals
    
	
5.09
    	
Insurance
    
	
5.12
    	
Subsidiaries;   Other Equity Investments
    
	
5.13
    	
Intellectual   Property
    
	
5.19
    	
Deposit   and Other Accounts
    
	
7.01(b)
    	
Mechanics   Liens
    
	
7.01(r)
    	
Existing   Liens
    
	
7.02
    	
Existing   Indebtedness
    
	
7.03
    	
Existing   Investments
    
	
7.08
    	
MGM   Resorts Affiliate Agreements
    
	
10.02
    	
Administrative   Agent’s Office; Certain Addresses for Notices
    
	
 
    	
 
    
	
EXHIBITS
    	
 
    
	
 
    	
 
    
	
Form of
    	
 
    
	
 
    	
 
    
	
A
    	
Administrative   Questionnaire
    
	
B
    	
Assignment   and Assumption
    
	
C
    	
Compliance   Certificate
    
	
D
    	
Condo   Deposit — Sales Report
    
	
E
    	
Loan   Notice
    
	
F
    	
Omnibus   Reaffirmation
    
	
AA
    	
Consolidated   Financial Statements
    

 

v

 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

This Second Amended and Restated Credit Agreement is entered into as of March 29, 2012, among CITYCENTER HOLDINGS, LLC, a Delaware limited liability company (the “Borrower”), the Persons listed on Schedule 2.01 hereto as the initial Lenders, and BANK OF AMERICA, N.A., as Administrative Agent and as L/C Issuer. Merrill Lynch, Pierce Fenner & Smith Incorporated, UBS Securities LLC, BNP Paribas Securities Corp., SMBC Nikko Capital Markets Ltd. and Barclays Bank PLC, have served as Joint Lead Arrangers and Joint Book Managers for this Agreement.

 

The parties hereto hereby agree with reference to the following facts:

 

A.            Borrower, the Administrative Agent, the Lenders party to this Agreement and various other lenders are party to the Amended and Restated Credit Agreement, dated as of January 10, 2011, hereof (the “Existing Credit Agreement”).  As of the Closing Date, the aggregate principal amount of the Loans outstanding under the Existing Credit Agreement is $75,000,000 (the “Existing Loans”).

 

B.            On the Closing Date, the lenders under the Existing Credit Agreement which are not signatory hereto will be repaid in full, and their commitments under the Existing Credit Agreement shall be terminated, and the Lenders party hereto will continue as Lenders to Borrower with the Commitments hereinafter set forth, and all accrued interest and fees with respect thereto shall be paid.

 

C.            In furtherance of the foregoing transactions, the parties hereto have agreed that as of the Closing Date, the Existing Credit Agreement shall be amended and restated in its entirety by this Agreement.

 

NOW, THEREFORE, the parties hereto hereby agree that the Existing Credit Agreement is amended and restated as follows:

 

ARTICLE I
 DEFINITIONS AND ACCOUNTING TERMS

 

1.01        Defined Terms.  As used in this Agreement, the following terms shall have the meanings set forth below:

 

“Acceptable Land Use Arrangements” means the provisions of any condominium declarations, reciprocal easement agreements, street dedications and vacations, public and/or private utility easements, licenses, declarations of covenants, conditions and restrictions, and other similar provisions granted by Borrower and its Subsidiaries in furtherance of CityCenter which now exist or which are approved as to their form and substance by the Collateral Agent in writing in the exercise of its reasonable discretion.

 

 

“Administrative Agent” means Bank of America in its capacity as administrative agent under this Agreement, or any successor administrative agent hereunder.

 

“Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.02, or such other address or account as the Administrative Agent may from time to time notify to Borrower and the Lenders.

 

“Administrative Questionnaire” means an Administrative Questionnaire in substantially the form of Exhibit A or any other form approved by the Administrative Agent.

 

“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, 25% 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 25% 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 Commitments” means the Commitments of all the Lenders.

 

“Agreement” means this Second Amended and Restated Credit Agreement, as at any time amended.

 

“Applicable Margin” means an applicable rate per annum equal to (a) 5.00%, in the case of Eurodollar Rate Loans and Letters of Credit, (b) 4.00%, in the case of Base Rate Loans and (c) 0.50%, in the case of commitment fees payable pursuant to Section 2.06(a).

 

“Applicable Percentage” means with respect to any Lender at any time, the percentage (carried out to the ninth decimal place) of the Aggregate Commitments represented by such Lender’s Commitment at such time, subject to adjustment as provided in Section 2.12.  If the commitment of each Lender to make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have been terminated pursuant to Section 8.02 or if the Aggregate Commitments have expired, then the Applicable Percentage of each Lender shall be determined based on the Applicable Percentage of such Lender most recently in effect, giving effect to any subsequent assignments.  The initial Applicable Percentage of each Lender is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.

 

“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) a Person that administers or manages a Lender or an Affiliate of such a Person.

 

“Aria Hotel” means the 4,004 room hotel and the related casino, which is a component of CityCenter.

 

2

 

“Arrangers” means MLPFS and the other Persons identified on the cover page of this Agreement as “Lead Arrangers” in their capacities as joint lead arrangers and joint book managers for the credit facility described herein.

 

“Assignee Group” means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.

 

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 10.06(b)), and accepted by the Administrative Agent, substantially in the form of Exhibit B or any other form approved by the Administrative Agent.

 

“Attributable Indebtedness” means, on any date, (a) in respect of any Capitalized Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease or similar payments under the relevant lease or other applicable agreement or instrument that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease or other agreement or instrument were accounted for as a Capitalized Lease and (c) all Synthetic Debt of such Person.

 

“Audited Financial Statements” means the audited consolidated balance sheet of Borrower and its Subsidiaries as of December 31, 2011 and the related consolidated statements of operations, members’ equity and cash flows of Borrower and its Subsidiaries for fiscal year of Borrower ended December 31, 2011, including the notes thereto.

 

“Auto-Extension Letter of Credit” has the meaning specified in Section 2.04(b)(iii).

 

“Availability Period” means the period from and including the Closing Date to the earliest of (a) the Maturity Date, (b) the date of termination of the Aggregate Commitments pursuant to Section 2.03, and (c) the date of termination of the commitment of each Lender to make Loans and of the obligation of the L/C Issuer to make L/C Credit Extensions pursuant to Section 8.02.

 

“Bank Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan, Letter of Credit, Secured Cash Management Agreement or Secured Hedge Agreement, in each case whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding, and in any event includes without limitation the obligations of Borrower pursuant to this Agreement and the obligations of the Restricted Subsidiaries in respect of their guarantees of the obligations of Borrower under this Agreement, the Secured Cash Management Agreements and the Secured Hedge Agreements.

 

“Bank of America” means Bank of America, N.A. and its successors.

 

3

 

“Base Rate” means for any day a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 1⁄2 of 1%, (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate,” and (c) the Eurodollar Rate plus 1.00%.  The “prime rate” 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 such prime 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.

 

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

 

“Borrower” has the meaning specified in the first paragraph of this Agreement.

 

“Borrower Materials” has the meaning specified in Section 6.02.

 

“Borrower Related Persons” means officers, directors and employees of Borrower and its Restricted Subsidiaries (and their respective spouses, parents, siblings (and their spouses), children (and their spouses), grandchildren (and their spouses), and other immediate family members) and officers, directors and employees of the Sponsors and their respective Affiliates (and their respective spouses, parents, siblings (and their spouses), children (and their spouses), grandchildren (and their spouses), and other immediate family members).

 

“Borrower Security Agreement” means the Amended and Restated Security Agreement, dated as of January 10, 2011, made by Borrower in favor of the Collateral Agent for the benefit of the Lender Secured Parties, as amended from time to time.

 

“Borrowing” means a borrowing consisting of simultaneous Loans of the same type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by the Lenders.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office is located and, if such day relates to any Eurodollar Rate Loan, means any such day that is also a London Banking Date.

 

“Capital Expenditures” means, with respect to any Person for any period, any expenditure in respect of the purchase or other acquisition of any fixed or capital asset (excluding (a) normal replacements and maintenance which are properly charged to current operations and (b) replacements and maintenance of assets damaged as the result of any casualty or other emergency).

 

“Capitalized Leases” means all leases that are properly recorded as capitalized leases in accordance with GAAP.

 

“Cash Collateralize” means to pledge and deposit with or deliver to the Collateral Agent, for the benefit of one or more of the L/C Issuer or the Lenders, as collateral for L/C Obligations or obligations of the Lenders to fund participations in respect of L/C Obligations and, with respect to collateral pledged by Borrower, as collateral for the other Secured Obligations (subject

 

4

 

to (i) the ratable security interest of the holders of First Lien Notes pursuant to the  First Lien Notes Security Agreement and the First Lien Intercreditor Agreement and (ii) the security interest of the holders of the Second Lien Notes pursuant to the Second Lien Security Agreement  and the General Intercreditor Agreement),  cash or deposit account balances or, if the Administrative Agent and the L/C Issuer shall agree in their reasonable discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to the Administrative Agent and the L/C Issuer and consistent with the Intercreditor Agreements. “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

 

“Cash Equivalents” means (a) United States dollars; (b) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality of the United States government (as long as the full faith and credit of the United States is pledged in support of those securities) having maturities of not more than one year from the date of acquisition; (c) interest-bearing demand or time deposits (which may be represented by certificates of deposit) issued by banks having general obligations rated (on the date of acquisition thereof) at least “A” or the equivalent by S&P or Moody’s or, if not so rated, secured at all times, in the manner and to the extent provided by law, by collateral security consisting of property of the type specified in clause (a) or (b) of this definition, with a market value of no less than the amount of monies so invested; (d) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (b) and (c) above entered into with any financial institution meeting the qualifications specified in clause (c) above; (e) commercial paper having the highest rating obtainable from Moody’s or S&P and in each case maturing within six months after the date of acquisition; and (f) money market funds or mutual funds the assets of which constitute Cash Equivalents of the kinds described in clauses (a) through (e) of this definition.

 

“Cash Management Agreement” means any agreement to provide or relating to cash management services, including treasury, depository, overdraft, credit or debit card, electronic funds transfer and other cash management arrangements.

 

“Cash Management Bank” means any Person that, at the time it enters into a Cash Management Agreement, is a Lender or an Affiliate of a Lender, in its capacity as a party to such Cash Management Agreement.

 

“Casualty Bridge Capital” means (a) any Indebtedness of Borrower expressly subordinated in right of payment to the Loans at least to the same extent as the Sponsor Subordinated Debt (except with respect to any prepayments thereof permitted hereunder) and (b) any contributions by the Members to the equity capital of Borrower, in each case which are made following any casualty to CityCenter, provided that, within ten Business Days following the receipt by Borrower thereof, the Sponsors identify the amount thereof to the Administrative Agent, and agree in writing that such amounts are in addition to, and do not constitute utilization of, the MGM Resorts Completion Guarantee.

 

“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980.

 

5

 

“CERCLIS” means the Comprehensive Environmental Response, Compensation and Liability Information System maintained by the United States Environmental Protection Agency.

 

“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

 

“Change of Control” means an event or series of events by which:

 

(a)           The Sponsors cease to collectively own and control (legally and beneficially and either directly or indirectly) Equity Interests in Borrower representing at least 50% of the combined voting power of all of Equity Interests entitled to vote for members of the board of directors or equivalent governing body of Borrower on a fully-diluted basis, or

 

(b)           Either Sponsor ceases to own and control (legally and beneficially and either directly or indirectly), one half of the aggregate Equity Interests in Borrower, except by reason of the exercise of their respective rights provided for in the Operating Agreement; provided, however, such event or series of events shall not be a “Change of Control” so long as MGM Resorts (i) directly or indirectly owns at least a 50% Equity Interest in Borrower and (ii) otherwise directly or indirectly (including through the MGM Resorts Operational Entities) remains in control of and responsible for the development and management of CityCenter; or

 

(c)           MGM Resorts ceases to own and control (legally and beneficially and either directly or indirectly) all of the Equity Interests in the Managing Member and in each of the MGM Resorts Operational Entities, except to the extent that the Managing Member or any MGM Resorts Operational Entity is replaced with another Person acceptable to the Required Lenders.

 

“Circus Deeds of Trust” means, collectively, (i)  the Amended and Restated Deed of Trust, Security Agreement, Assignment of Rents and Leases and Fixture Filing made by Circus Circus Casinos, Inc., dated as of January 21, 2011 and at any time thereafter amended in favor of Nevada Title Company, as trustee, for the benefit of the Secured Parties to secure the MGM Resorts Completion Guarantee, as at any time amended, (ii) the Amended and Restated Deed of Trust, Security Agreement, Assignment of Rents and Leases and Fixture Filing made by Mandalay Resort Group, dated as of January 21, 2011 and at any time thereafter amended in favor of Nevada Title Company, as trustee, for the benefit of the Secured Parties to secure the

 

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MGM Resorts Completion Guarantee, as at any time amended, and (iii) the Amended and Restated Deed of Trust, Security Agreement, Assignment of Rents and Leases and Fixture Filing made by Vintage Land Holdings, LLC, dated as of January 21, 2011 and at any time thereafter amended, in favor of Nevada Title Company, as trustee, for the benefit of the Secured Parties to secure the MGM Resorts Completion Guarantee.

 

“CityCenter” means the 67 acre mixed use urban community in Las Vegas Nevada commonly known as CityCenter on the property described in the Deed of Trust.

 

“CityCenter Mortgagors” means, collectively, CityCenter Boutique Hotel Holdings, LLC, CityCenter Boutique Residential Development, LLC, CityCenter Harmon Hotel Holdings, LLC, Aria Resort & Casino Holdings, LLC, CityCenter Vdara Development, LLC, CityCenter Vdara Condo Hotel Holdings, LLC, CityCenter Veer Towers Development, LLC, The Crystals at CityCenter, LLC and Landco.

 

“Closing Date” means the first date all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 10.01.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Collateral” means all of the Property which is described in the Collateral Documents as being subject to the Liens granted therein.

 

“Collateral Agent” means Bank of America, when acting in its capacity as Collateral Agent under the Collateral Agent Agreement, and any successor to Bank of America in that capacity.

 

“Collateral Agent Agreement” means the Amended and Restated Collateral Agent Agreement dated as of January 10, 2011 among Borrower, the Administrative Agent and the Collateral Agent, as at any time amended.

 

“Collateral Documents” means, collectively, the Deed of Trust, the Circus Deed of Trust, the Security Agreements, the Control Agreements and any other agreements delivered to the Collateral Agent pursuant to Section 6.11.

 

“Commitment” means, as to each Lender, its obligation to (a) make Loans to Borrower pursuant to Section 2.01 and (b) purchase participations in L/C Obligations in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.

 

“Compliance Certificate” means a certificate substantially in the form of Exhibit C.

 

“Condo Deposit - Sales Report” means a report substantially in the form of Exhibit D.

 

“Condo Deposits” means deposits received from time to time by the Loan Parties from retail purchasers of Condo Units.

 

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“Condo Proceeds” means the sum of (i) Net Cash Proceeds realized from the sales of Condo Units (including cash proceeds in the form of downpayments and/or net cash proceeds received on account of the Seller Notes, either by virtue of payments by obligors thereon or by virtue of the Warehouse Financing Program or a Permitted Securitization Program and (ii) amounts realized by Borrower from putative purchasers’ forfeiture of any deposits made with respect to proposed purchases of Condo Units less (x) the amounts of deposits required by contract or applicable law or otherwise agreed (with the consent of the Sponsors) to be refunded by Borrower or any surety to the extent that any such amounts have not otherwise been actually refunded by Borrower or such surety, whether or not such refunds occur prior or subsequent to the Closing Date, (y) all costs associated with the return or refunding of deposits and the expenses of the Seller Financing Program, any Warehouse Financing Program (including any interest payable in respect of any Warehouse Financing Program) and any Permitted Securitization Program, and (z) all income taxes attributable to any payments made in respect of the Seller Notes.

 

“Condo Proceeds Account” means a control account of Borrower established at Bank of America and subject to a Control Agreement into which the Net Cash Proceeds of the sales of Condo Units (including any bulk sales thereof) or of Seller Notes in an aggregate amount not to exceed the Condo Proceeds Amount may be deposited as cash collateral for the obligations under the MGM Resorts Completion Guarantee.

 

“Condo Proceeds Amount” means $107,105,538, as such amount may be adjusted in accordance with the past practices of Borrower to reflect the return by Borrower of any Condo Deposits previously received.

 

“Condo Unit” means a residential condominium or residential condominium-hotel unit in CityCenter (and related common area elements).

 

“Construction Contracts” means the Agreement between Owner and Contractor dated March 9, 2005 between Perini Building Company and MGM MIRAGE Design Group, as assigned to Borrower and as otherwise amended, and any other agreements between Borrower or any of its Subsidiaries and the Contractor Defendants relating to the design, development or construction of CityCenter or its components.

 

“Construction Liens” means mechanics liens asserted by contractors, subcontractors, materialmen, vendors or other similar claimants permitted to assert a mechanics lien under applicable Laws in respect of, or relating back to, construction activities at CityCenter occurring prior to January 1, 2011, including without limitation those associated with the claims of the plaintiffs in the Perini Lawsuit.

 

“Construction Resolution Date” means the date upon which all disputes underlying the Perini Lawsuit between the Company and its Affiliates, on the one hand, and Perini Building Company and its Affiliates, on the other hand, have been resolved by settlement or a judgment or other determination which is final and binding upon the parties, all material Construction Liens have been discharged, all obligations pursuant to such settlement, judgment or other determination have been paid in full and all remaining obligations of MGM Resorts under the MGM Resorts Completion Guarantee have been either (i) satisfied or (ii) collateralized by the

 

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deposit of cash or a letter of credit acceptable to the Administrative Agent, in each case in an amount not less than the aggregate amount of such obligations (as certified by a Responsible Officer of Borrower and as reasonably determined by the Administrative Agent) in the Condo Proceeds Account or in a deposit account owned by MGM Resorts and held with and subject to the control of the applicable Person pursuant to Section 4.2 of the MGM Resorts Completion Guarantee.

 

“Contractor Defendants” means Perini Building Company, its direct and indirect subcontractors, materialmen and vendors, each other direct and indirect contractor, materialman and vendor in respect of CityCenter which at any time is a party to the Perini Lawsuit or which has filed any mechanics lien or similar process against Borrower, all guarantors and other sureties and insurance providers for any of the foregoing.

 

“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its Property is bound.

 

“Control Agreement” means control agreements in favor of the Collateral Agent for the benefit of the Secured Parties in respect of each deposit, brokerage or other similar account maintained by the Loan Parties in a form reasonably acceptable to the Collateral Agent.

 

“Credit Exposure” means, as to any Lender at any time, the aggregate principal amount at such time of its outstanding Loans and such Lender’s participation in L/C Obligations at such time.

 

“Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C Credit Extension.

 

“Crystals” means the approximately 457,000 square foot retail and entertainment complex which is a component of CityCenter.

 

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

 

“Deed of Trust” means the Amended and Restated Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing made by the CityCenter Mortgagors on January 10, 2011 in favor of the Collateral Agent for the benefit of the Lender Secured Parties, as at any time amended.

 

“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

 

“Default Rate” means (a) when used with respect to Obligations other than Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the Applicable Margin, if any, applicable to Base Rate Loans plus (iii) 2% per annum; provided, however, that with respect to a

 

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Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Margin) otherwise applicable to such Loan plus 2% per annum, and (b) when used with respect to Letter of Credit Fees, a rate equal to the Applicable Margin plus 2% per annum.

 

“Defaulting Lender” means, subject to Section 2.12, any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, the L/C Issuer or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit) within two Business Days of the date when due, (b) has notified Borrower, the Administrative Agent or the L/C Issuer in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Administrative Agent or Borrower, to confirm in writing to the Administrative Agent and Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.  Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above, and of the effective date of such status, shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.12) as of the date established therefor by the Administrative Agent in a written notice of such determination, which shall be delivered by the Administrative Agent to Borrower, the L/C Issuer and each other Lender promptly following such determination.

 

“Demolition Work” has the meaning specified in Section 6.06.

 

“Disposition” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any Property by any of the Loan Parties.

 

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“Disqualification” means with respect to any Lender:

 

(a)           the failure of that Lender timely to file pursuant to applicable Gaming Laws (i) any application requested of that Lender by any Gaming Board in connection with any licensing required of that Lender as a lender to Borrower or (ii) any required application or other papers in connection with determination of the suitability of that Lender as a lender to Borrower;

 

(b)           the withdrawal by that Lender (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 such Lender is “unsuitable” as a lender to Borrower or a Co-Borrower, (ii) that such Person shall be “disqualified” as a lender to Borrower or (iii) denying the issuance to that Lender of any license required under applicable Gaming Laws to be held by all lenders to Borrower.

 

“Dollar” and “$” mean lawful money of the United States.

 

“Dubai World” means Dubai World, a Dubai, United Arab Emirates government decree entity, and its successors.

 

“EBITDA” means, for any period, Net Income for the twelve months period ending on that date plus (a) to the extent deducted in calculating such Net Income (but without duplication) (i) Interest Charges, (ii) the provision for United States federal, state, local and foreign income taxes payable by Borrower (or the ultimate tax paying direct or indirect owners of Borrower’s Equity Interests), (iii) depreciation and amortization expense, (iv) other expenses reducing such Net Income which do not represent a cash item in such period or any future period, (v) Pre-Opening and Start-Up Expenses and (vi) any fees, expenses or charges related to any Indebtedness permitted under this Agreement and minus (b) to the extent included in calculating such Net Income (but without duplication) (i) United States federal, state, local and foreign income tax credits or benefits and (ii) all non-cash items increasing Net Income.

 

“Eligible Assignee” means any Person that meets the requirements to be an assignee under Section 10.06(b)(iii), (v) and (vi), in each case subject to such consents, if any, as may be required under Section 10.06(b)(iii), which Person (to the extent required under applicable Gaming Laws) is not the subject of a Disqualification.

 

“Environmental Laws” means all United States federal, state, and local statutes, laws, regulations, ordinances, rules and other governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.

 

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of any of the Loan Parties directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or

 

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disposal of any Hazardous Materials in violation of any Environmental Law, (c) exposure to any Hazardous Materials in violation of any Environmental Law, (d) the release or threatened release of any Hazardous Materials into the environment in violation of any Environmental Law or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

 

“Environmental Permit” means any permit, approval, identification number, license or other authorization required under any Environmental Law.

 

“Environmental Report” means the Phase I Environmental Site Assessment for City Center, 3708-3750 South Las Vegas Boulevard, APN’s 162-20-501-005(portion), 162-20-603-010 & 012, 162-20-701-004, 005, 006, 017, 019, 021, and 024 Las Vegas, Nevada, prepared for Bank of America, N.A., Banc of America Securities, LLC, CityCenter Holdings, LLC and Christensen, Glaser, Fink, Jacobs, Weil & Shapiro, LLP by Dudek, dated March, 2008.

 

“Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

 

“ERISA” means the Employee Retirement Income Security Act of 1974.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

 

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon Borrower or any ERISA Affiliate.

 

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“Eurodollar Rate” means:

 

(a)           for any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two London Banking Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period.  If such rate is not available at such time for any reason, then the “Eurodollar Rate” for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America’s London Branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two London Banking Days prior to the commencement of such Interest Period; and

 

(b)           for any interest calculation with respect to a Base Rate Loan on any date, the rate per annum equal to BBA LIBOR, at approximately 11:00 a.m., London time determined two London Banking Days prior to such date for Dollar deposits being delivered in the London interbank market for a term of one month commencing that day. If such rate is not available at such time for any reason, the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the date of determination in same day funds in the approximate amount of the Base Rate Loan being made or maintained and with a term equal to one month would be offered by Bank of America’s London Branch to major banks in the London interbank Eurodollar market at their request at the date and time of determination.

 

“Eurodollar Rate Loan” means a Loan that bears interest at a rate based on clause (a) the Eurodollar Rate.

 

“Event of Default” has the meaning specified in Section 8.01.

 

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of Borrower hereunder, (a) Taxes imposed on or measured by its overall net income (however denominated), and franchise Taxes imposed on it (in lieu of net income Taxes), in each case (i) imposed by the jurisdiction (or any political subdivision thereof) under the Laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable Lending Office is located or (ii) as a result of a present or former connection between such recipient and the jurisdiction imposing such Tax (other than connections arising from such recipient having executed, delivered, become a party to, performed its obligations under or received or perfected a security interest under any Loan Document), (b) any branch profits Taxes imposed by the United States or any similar Tax imposed by any other jurisdiction in which Borrower is located, (c) any backup withholding tax that is required by the Code to be withheld from amounts payable to a Lender that has failed to comply with clause (A) of Section 3.01(e)(ii), and (d) in the case of a Foreign Lender (other than an assignee pursuant to a request by Borrower under Section 10.13), any United States withholding Tax that (i) is required to be

 

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imposed on amounts payable to such Foreign Lender pursuant to the Laws in force at the time such Foreign Lender becomes a party hereto (or designates a new Lending Office) or (ii) is attributable to such Foreign Lender’s failure or inability (other than as a result of a Change in Law) to comply with Section 3.01(e), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new Lending Office (or assignment), to receive additional amounts from Borrower with respect to such withholding Tax pursuant to Section 3.01(a)(i) or (ii), and (e) any U.S. federal withholding Taxes imposed under FATCA.

 

“Exempted Dispositions” means (i) Dispositions permitted by Section 7.05(b) and Dispositions of leasehold interests, (ii) Dispositions of obsolete or worn out property, whether now owned or hereafter acquired, (iii) Dispositions of inventory, (iv) Dispositions of equipment, (v) Dispositions of real property to the extent that (x) such real property is exchanged for credit against the purchase price of similar replacement property or (y) the proceeds of such Disposition are reasonably promptly applied to the purchase price of such replacement real property, (vi) Dispositions in which the aggregate fair market value does not exceed $10,000,000 in any single transaction or series of related transactions and (vii) Dispositions that are operating leases.

 

“Existing Credit Agreement” has the meaning specified in the recitals to this Agreement.

 

“Existing Loans” has the meaning specified in the recitals to this Agreement.

 

“Extraordinary Receipts” means any cash or other property received by the Loan Parties by way of condemnation awards or similar awards in connection with any taking (and payments in lieu thereof), or similar amounts of other insurance or casualty proceeds (other than proceeds in respect of business interruption insurance in an amount not to exceed $10,000,000 in any calendar year), and any cash or other proceeds received by the Loan Parties of settlements of or judgments rendered in respect of the Perini Lawsuit.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof.

 

“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent.

 

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“Fee Letter” means the confidential fee letter of even date herewith among Borrower, MLPFS and the Administrative Agent.

 

“First Lien Indenture” means the Indenture, dated as of January 21, 2011, among Borrower, CityCenter Finance Corp., the guarantors party thereto, the First Lien Notes Trustee and the First Lien Notes Collateral Agent, as amended or supplemented at any time.

 

“First Lien Intercreditor Agreement” means the First Lien Intercreditor Agreement, dated as of January 21, 2011, among the Collateral Agent, the Administrative Agent, the First Lien Notes Collateral Agent and the First Lien Trustee, as amended at any time.  The parties confirm that this Agreement is subject to and has the continuing benefits of the First Lien Intercreditor Agreement.

 

“First Lien Notes” means Senior Secured Notes issued by Borrower pursuant to the First Lien Indenture (including those issued pursuant to the First Supplemental Indenture, dated as of February 17, 2012 to the First Lien Indenture).

 

“First Lien Notes Collateral Agent” means U.S. Bank, National Association, as trustee for the holders of the First Lien Notes, and any successor.

 

“First Lien Notes Percentage” means, at any time, the aggregate outstanding principal amount of the First Lien Notes at such time divided by the aggregate outstanding amount of the First Lien Obligations at such time.

 

“First Lien Notes Security Agreement” means the “Security Agreement” as defined in the First Lien Indenture.

 

“First Lien Noteholders” means the holders of the First Lien Notes.

 

“First Lien Obligations” means the Bank Obligations, the Indebtedness of Borrower and CityCenter Finance Corp. under the First Lien Indenture, the Guarantee obligations of the Restricted Subsidiaries under the First Lien Indenture, and any refinancing thereof permitted pursuant to Section 7.12(b).

 

“First Lien Secured Parties” means the holders of First Lien Obligations from time to time.

 

“First Lien Trustee” means U.S. Bank, National Association and any successor trustee under the First Lien Indenture.

 

“Foreign Lender” means any Lender that is organized under the Laws of a jurisdiction other than that in which Borrower is resident for tax purposes.  For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

 

“FRB” means the Board of Governors of the Federal Reserve System of the United States.

 

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“Fronting Exposure” means, at any time there is a Defaulting Lender, with respect to the L/C Issuer, such Defaulting Lender’s Applicable Percentage of the outstanding L/C Obligations other than L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof.

 

“Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.

 

“GAAP” means generally accepted accounting principles in the United States set forth in the Financial Accounting Standards Board (FASB) Accounting Standards CodificationTM as amended from time to time. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants.

 

“Gaming Approvals” means with respect to any action by a particular Person, any consent, approval or other authorization required for such action by such Person from a Gaming Board under Gaming Laws.

 

“Gaming Boards” means, collectively, the Nevada Gaming Commission, the Nevada State Gaming Control Board, the Clark County Liquor and Gaming Licensing Board, and any other federal, state or local agency having jurisdiction over the gaming operations of the Loan Parties.

 

“Gaming Laws” means, collectively, the Nevada Gaming Control Act, as codified in NRS Chapter 463, as amended from time to time, and the regulations of the Nevada Gaming Authorities promulgated thereunder, as amended from time to time, the various Clark County ordinances and regulations applicable to gaming activities, and all other laws pursuant to which any Gaming Board holds regulatory, licensing or permit authority over gambling, gaming or casino activities conducted by any Loan Party within its jurisdiction.

 

“General Intercreditor Agreement” means the General Intercreditor Agreement, dated as of January 21, 2011, among the Collateral Agent, the Administrative Agent, the First Lien Notes Collateral Agent, the First Lien Trustee, the Second Lien Notes Collateral Agent and the Second Lien Trustee, as amended at any time.  The parties confirm that this Agreement is subject to and has the continuing benefits of the General Intercreditor Agreement.

 

“Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

 

“Guarantee” means, as to any Person:

 

(a)           any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable

 

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or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease Property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part); or

 

(b)           any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien).

 

The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith.  The term “Guarantee” as a verb has a corresponding meaning.

 

“Guaranty” means the Landco Guaranty and the Subsidiary Guaranty.

 

“Harmon” means the partially constructed tower of that name and related Improvements.

 

“Harmon Equity” means Equity Interests of Borrower issued to either or both of the Sponsors or their wholly-owned Subsidiaries which, prior to the issuance thereof, are designated by Borrower as having been made to fund the demolition of the Harmon or any repair of the Harmon required by applicable Law.

 

“Harmon-Related Net Extraordinary Receipts” means any Extraordinary Receipts (i) which are used for the demolition of the Harmon or any repair of the Harmon required by applicable Law, (ii) which are reserved to be used for the demolition of the Harmon or any repair of the Harmon by applicable Law by notice to the Administrative Agent concurrently with the notice thereof (it being understood that no Extraordinary Receipts may be so designated unless, within 120 days of the receipt thereof, Borrower has become legally mandated to demolish or repair the Harmon, and that, to the extent such funds are not utilized to effectuate such demolition or repair, such funds shall cease to be Harmon-Related Net Extraordinary Receipts and shall be applied to the prepayment of the Bank Obligations in the manner required by Section 2.03(b)(2) upon the making of the final payments required in respect of such demolition or repair to the related contractors) or (iii) which are used to reimburse either or both Sponsors or their wholly owned Subsidiaries for Harmon Equity in the manner contemplated by Section 7.06(d).

 

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“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

 

“Hedge Bank” means any Person that, at the time it enters into a Swap Contract permitted under Article VI or VII, is a Lender or an Affiliate of a Lender, in its capacity as a party to such Swap Contract.

 

“Honor Date” has the meaning specified in Section 2.04(c)(i).

 

“Improvements” means the buildings, fixtures and other improvements situated at CityCenter.

 

“Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

 

(a)           all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

 

(b)           the maximum amount of all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments;

 

(c)           net obligations of such Person under Swap Contracts;

 

(d)           all obligations of such Person to pay the deferred purchase price of Property or services (other than trade and other accounts payable in the ordinary course of business);

 

(e)           indebtedness (excluding prepaid interest thereon) secured by a Lien on Property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), to the extent of the value of such Property;

 

(f)            all Attributable Indebtedness in respect of Capitalized Leases and Synthetic Lease Obligations of such Person and all Synthetic Debt of such Person;

 

(g)           all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interest in such Person or any other Person or any warrant, right or option to acquire such Equity Interest, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; and

 

(h)           all Guarantees of such Person in respect of any of the foregoing.

 

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Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person.  The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date.

 

“Indemnified Taxes” means Taxes other than Excluded Taxes.

 

“Indemnitees” has the meaning specified in Section 10.04(b).

 

“Infinity World” means Infinity World Development Corp, a Nevada corporation and a wholly-owned Subsidiary of Dubai World, and its successors and permitted assigns.

 

“Information” means all information received from any Loan Party or any Subsidiary thereof relating to any Loan Party or any Subsidiary thereof or their respective businesses, other than any such information that is available to the Administrative Agent or any Lender on a non-confidential basis prior to disclosure by any Loan Party or any Subsidiary thereof, provided that, in the case of information received from a Loan Party or any such Subsidiary after the date hereof, such information is clearly identified at the time of delivery as confidential.

 

“Intercreditor Agreements” means, collectively, the First Lien Intercreditor Agreement and the General Intercreditor Agreement.

 

“Interest Charges” means, without duplication (a) all interest, premium payments, debt discount, fees, charges and related expenses in connection with borrowed money or in connection with the deferred purchase price of assets, in each case to the extent treated as interest expense in accordance with GAAP, (b) all capitalized interest, (c) all interest expense with respect to discontinued operations and (d) the portion of rent expense under Capitalized Leases that is treated as interest in accordance with GAAP, in each case for the Loan Parties on a consolidated basis.

 

“Interest Payment Date” means, (a) as to any Eurodollar Rate Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date; provided, however, that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate Loan, the last Business Day of each March, June, September and December and the Maturity Date.

 

“Interest Period” means, as to each Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan and ending on the date one week or one, two, three, four or six months thereafter, as selected by Borrower in its Loan Notice; provided that:

 

(a)           any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the immediately preceding Business Day;

 

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(b)           any Interest Period longer than one week that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and

 

(c)           no Interest Period shall extend beyond the Maturity Date.

 

“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of Equity Interests of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or interest in, another Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit or all or a substantial part of the business of, such Person.  For the avoidance of doubt, the granting of tenant allowances to retail tenants for shops, restaurants, night clubs and other venues at arm’s length will not be deemed to constitute the making of an Investment in such retail tenant except to the extent of any purchase of the securities of the retail tenant.

 

“Issuer Documents” means with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by the L/C Issuer and any Loan Party or in favor of the L/C Issuer and relating to such Letter of Credit.

 

“L/C Advance” means, with respect to each Lender, such Lender’s funding of its participation in any L/C Borrowing in accordance with its Applicable Percentage.

 

“L/C Borrowing” means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Borrowing.

 

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the increase of the amount thereof.

 

“L/C Issuer” means Bank of America in its capacity as issuer of Letters of Credit hereunder, or any successor issuer of Letters of Credit hereunder.

 

“L/C Obligations” means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings.  For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06.  For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

 

“Landco” means CityCenter Land, LLC, a Nevada limited liability company, and its successors and permitted assigns.

 

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“Landco Guaranty” means the Amended and Restated Guaranty, dated as of January 10, 2011, made by Landco in favor of the Administrative Agent for the benefit of the Lender Secured Parties, as at any time amended.

 

“Landco Security Agreement” means the Amended and Restated Security Agreement, dated as of January 10, 2011, made by Landco in favor of the Collateral Agent for the benefit of the Lender Secured Parties to secure the Landco Guaranty, as at any time amended.

 

“Laws” means, collectively, all international, foreign, United States federal and state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

 

“Lender” means, collectively, each Person which is an original signatory to this Credit Agreement as a Lender and each Person which accepts an assignment pursuant to Section 10.06.

 

“Lender Secured Parties” means the holders of Bank Obligations from time to time (including without limitation the L/C Issuer).

 

“Lending Office” means, as to any Lender, the office or offices of that Lender described as such in that Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify Borrower and the Administrative Agent.

 

“Letter of Credit” means any letter of credit issued hereunder providing for the payment of cash upon the honoring of a presentation thereunder.  A Letter of Credit may be a commercial letter of credit or a standby letter of credit.

 

“Letter of Credit Application” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the L/C Issuer.

 

“Letter of Credit Expiration Date” means the day that is seven days prior to the Maturity Date then in effect (or, if such day is not a Business Day, the next preceding Business Day).

 

“Letter of Credit Fee” has the meaning specified in Section 2.04(h).

 

“Letter of Credit Sublimit” means an amount equal to $10,000,000.  The Letter of Credit Sublimit is part of, and not in addition to, the Aggregate Commitments.

 

“License Revocation” means the revocation, failure to renew or suspension of, or the appointment of a receiver or similar official with respect to, any casino, gambling or gaming license of a Loan Party covering any portion of CityCenter.

 

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever 

 

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(including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real Property, and any financing lease having substantially the same economic effect as any of the foregoing).

 

“Loan” means an extension of credit by a Lender to Borrower under Article II in the form of a Loan.

 

“Loan Documents” means, collectively, the Credit Agreement, each Issuer Document, each Secured Hedge Agreement, each Secured Cash Management Agreement, the Landco Guaranty, the Subsidiary Guaranty, the Collateral Documents, the First Lien Intercreditor Agreement, the General Intercreditor Agreement, and each other instrument, document or agreement now or hereafter executed by the Loan Parties in favor of the Administrative Agent, the Collateral Agent or the Lenders in connection with the Agreement.

 

“Loan Notice” means a notice of (a) a conversion of Loans from one Type to the other, or (b) a continuation of Eurodollar Rate Loans, pursuant to Section 2.02(a), which, if in writing, shall be substantially in the form of Exhibit E.

 

“Loan Parties” means, collectively, Borrower and each of its Restricted Subsidiaries.

 

“London Banking Day” means any day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.

 

“Managing Member” means Project CC, LLC, a Nevada limited liability company, and any successor managing member for Borrower appointed pursuant to the Operating Agreement.

 

“Mandarin” means the Mandarin Oriental luxury hotel which is a component of CityCenter.

 

“Material Adverse Effect” means except to the extent resulting from or relating to general local or national economic conditions:

 

(a)           a material adverse change in, or a material adverse effect on, the operations, business, assets, properties, liabilities (actual or contingent), condition (financial or otherwise) or prospects of the Loan Parties, taken as a whole;

 

(b)           a material adverse effect upon the ability of the Loan Parties, taken as a whole, to perform their respective obligations under the Transaction Documents;

 

(c)           a material impairment of the rights and remedies of the Collateral Agent, the Administrative Agent or any Lender under the Transaction Documents or of the ability of the Loan Parties to perform their respective obligations under the Transaction Documents; or

 

(d)           a material adverse effect upon the legality, validity, binding effect or enforceability against the Loan Parties of the Transaction Documents to which they are parties;

 

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provided, that any such change, effect or impairment pertaining to the Perini Lawsuit shall not be deemed to have a Material Adverse Effect.

 

“Maturity Date” means January 21, 2015.

 

“Members” means the Managing Member, and Infinity World Development Corp., a Nevada corporation.

 

“MERS” means Mortgage Electronic Registration Systems, Inc. (or any other person maintaining a similar mortgage registry system that has received all required approvals to act as such a registry from Fannie Mae, Freddie Mac and HUD and that has been selected by Borrower) or any successor or assign thereto.

 

“MERS® System” means the electronic system of recording transfers of mortgages maintained by MERS.

 

“MGM Completion Guarantee Reimbursement Amount” means an amount paid to MGM Resorts to reimburse MGM Resorts for amounts paid by it in respect of the construction of CityCenter pursuant to the MGM Resorts Completion Guarantee and its predecessor agreements which is equal to the sum of the following, provided that in no event shall the payment of any such amount to MGM Resorts result in the aggregate amount of the costs of design, development and construction of CityCenter being less than $8,485,638,000:

 

(a)           all attorneys fees, consultants fees, expert witness fees, filing fees and other costs associated with the conduct or settlement of the Perini Lawsuit;

 

(b)           all expenses associated with investigation of suspected or actual construction defects at CityCenter;

 

(c)           all expenses of work conducted to repair, correct or remediate any construction defects at CityCenter;

 

(d)           all amounts included in any settlement, or determined in any final judgment to be payable by the Contractor Defendants, with respect to any overpayments in respect of any element of the Construction Contracts, including the application of any limit in the maximum price payable by CityCenter Holdings, LLC and its Subsidiaries for work under any guaranteed maximum price contract; and

 

(e)           to the extent determined in any final judgment or pursuant to any settlement to be payable by the Contractor Defendants, interest on the amounts described in clauses (a) through (d) above.

 

“MGM Resorts” means MGM Resorts International, a Delaware corporation, and its successors.

 

“MGM Resorts Affiliate Agreements” means, collectively, the agreements described on Schedule 7.08.

 

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“MGM Resorts Completion Guarantee” means the Second Amended and Restated Completion Guarantee, dated as of January 21, 2011, executed by MGM Resorts in favor of Borrower, the Collateral Agent, the First Lien Notes Collateral Agent and the Second Lien Notes Collateral Agent, as at any time amended.

 

“MGM Resorts Operational Entities” means, collectively, MGM Resorts and each present and future Subsidiary thereof which is at any time party to any of the MGM Resorts Operations Management Agreements, any of the MGM Resorts Affiliate Agreements and the MGM Resorts Operational Entities Subordination Agreement.

 

“MGM Resorts Operational Entities Subordination Agreement” means the Amended and Restated Subordination Agreement, dated as of January 10, 2011, among MGM Resorts, Borrower, the Managing Member and each of its Subsidiaries in respect of the MGM Resorts Operations Management Agreements and the MGM Resorts Affiliate Agreements listed on Part A of Schedule 7.08, in favor of the Administrative Agent and the Collateral Agent, as at any time amended.

 

 “MGM Resorts Operations Management Agreements” means, collectively, (a) the Hotel and Casino Operations and Hotel Assets Management Agreement among the Managing Member, CityCenter Hotel & Casino, LLC, a Nevada limited liability company, MGM Resorts, and Landco, dated as of November 15, 2007, (b) the Condo-Hotel Operations Management Agreement among Vdara Condo Hotel, LLC and CityCenter Vdara Development, LLC, dated as of November 15, 2007, (c) the Retail Management Agreement among the Managing Member, The Crystals at CityCenter Management, LLC, MGM Resorts and Borrower, dated as of November 15, 2007, (d) the Development Management Agreement for CityCenter among the Managing Member, MGM Resorts and Borrower, dated as of November 15, 2007, and (e) any additional agreements entered into with MGM Resorts Operational Entities in a manner which complies with Section 7.08(e), in each case as at any time amended.

 

“Minimum Collateral Amount” means, at any time, (i) with respect to Cash Collateral consisting of cash or deposit account balances provided to reduce or eliminate Fronting Exposure during the existence of a Defaulting Lender, an amount equal to 105% of the Fronting Exposure of the L/C Issuer with respect to Letters of Credit issued and outstanding at such time and (ii) with respect to Cash Collateral consisting of cash or deposit account balances provided in accordance with the provisions of Section 2.13(a)(i), (a)(ii) or (a)(iii), an amount equal to 105% of the Outstanding Amount of all LC Obligations.

 

“MLPFS” means Merrill Lynch, Pierce, Fenner & Smith Incorporated.

 

“Moody’s” means Moody’s Investors Service, Inc., or any successor thereof.

 

“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.

 

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“Net Cash Proceeds” means:

 

(a)           with respect to any sale of any Condo Units (including by way of bulk sale thereof) or Seller Notes, the net cash proceeds received by the Loan Parties upon the consummation of such sale (including without limitation any purchase deposits not previously bonded and applied to the construction of CityCenter), after deduction of (A) any commissions or other sales expenses payable in connection with the sale and (B) other reasonable and customary out-of-pocket costs and expenses incurred by the Loan Parties in connection therewith; provided that no sale of Condo Units in exchange for Seller Notes shall be deemed to result in Net Cash Proceeds except to the extent of cash down payments and/or cash received by Borrower and its Restricted Subsidiaries from the collection on or financing with respect to the Seller Notes; and

 

(b)           with respect to any other Disposition by Borrower or the receipt by Borrower or any of its Subsidiaries of any Extraordinary Receipt, the excess, if any, of (i) the sum of cash and cash equivalents received in connection with such Disposition or Extraordinary Receipt (including any cash or cash equivalents received by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so received) over (ii) the sum of (A) the out-of-pocket expenses incurred by Borrower or such Subsidiary in connection with such transaction, (B) income and other applicable taxes reasonably estimated to be actually payable by Borrower (or the ultimate tax paying direct or indirect owners of Borrower’s Equity Interests), within two years of the date of the relevant transaction as a result of any gain recognized in connection therewith, and (C) in the case of any Disposition of or Extraordinary Receipts received in relation to the Perini Lawsuit, so long as the Construction Resolution Date shall have occurred, any MGM Completion Guarantee Reimbursement Amount.

 

“Net Income” means, at any date of determination, the net income (or loss) of Borrower and its Subsidiaries on a consolidated basis for the twelve months period ending on that date determined in accordance with GAAP; provided that Net Income shall exclude:

 

(a)           extraordinary gains and extraordinary losses;

 

(b)           any income (or loss) attributable to Persons which are not Subsidiaries, except that Borrower’s equity in the net income of any such Person shall be included in Net Income up to the aggregate amount of cash actually distributed by such Person during such period to the Loan Parties; and

 

(c)           any income (or loss) attributable to any sales or other dispositions of assets (other than food, beverage, retail and other personal property inventories), including (i) any associated selling costs and commissions, (including salaries for Condo Unit sales personnel and allocated overhead related to the residential sales activities of the Loan Parties), (ii) holding costs related to the Condo Units (including property taxes and association dues) and (iii) any other expenses directly or indirectly relating to the rental of Condo Units; and

 

(d)           any expenses incurred by the Borrower and its Subsidiaries that are repaid or subject to repayment pursuant to the MGM Completion Guarantee.

 

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Notwithstanding the foregoing provisions of this definition, Net Income shall not include any income, gain or loss resulting from the Disposition of real Property or Improvements (whether characterized as ordinary, extraordinary, recurring or non-recurring), including Dispositions of Condo Units, Crystals, the Mandarin, the Veer, the Vdara or the Harmon.

 

“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.

 

“Non-Extension Notice Date” has the meaning specified in Section 2.04(b)(iii).

 

“NPL” means the National Priorities List under CERCLA.

 

“Operating Agreement” means the Amended and Restated Limited Liability Company Agreement of Borrower dated as of April 29, 2009, as amended from time to time.

 

“Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-United States jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

 

“Other Taxes” means all present or future stamp or documentary taxes or any other excise or Property taxes, charges or similar levies arising from any payment made hereunder or under any other Transaction Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Transaction Document.

 

“Outstanding Amount” means (i) with respect to Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Loans occurring on such date; and (ii) with respect to any L/C Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements by Borrower of Unreimbursed Amounts.

 

“Participant” has the meaning specified in Section 10.06(d).

 

“Participant Register” has the meaning specified in Section 10.06(f).

 

“PBGC” means the Pension Benefit Guaranty Corporation.

 

“Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by Borrower or any ERISA Affiliate or to which Borrower or any 

 

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ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five plan years.

 

“Perini Lawsuit” means the lawsuit involving Perini Building Company, Borrower and certain of its Affiliates, among others, initiated by the filing of the Complaint in the Eighth Judicial District Court for Clark County, State of Nevada on March 25, 2010 as Case # A-10-612676-B, including all proceedings therein, including relating to any amended complaint, answer, counterclaim, or otherwise.

 

“Permitted Affiliate Cost Reimbursements” means payments to Sponsor Entities for services rendered or costs advanced to or on behalf of Borrower and its Subsidiaries pursuant to the MGM Resorts Operations Management Agreements and MGM Resorts Affiliate Agreements in the manner described therein.

 

“Permitted Liens” means the Liens permitted by Section 7.01.

 

“Permitted Securitization Program” means a securitization facility entered into between Borrower and its Restricted Subsidiaries on the one hand and an Unrestricted Subsidiary and/or one or more financial institutions on the other hand, pursuant to which Seller Notes are sold or securitized.

 

“Permitted Tax Distributions” means cash distributions to or for the account of the ultimate tax-paying Persons which are the direct or indirect holders of Equity Interests in Borrower, made not more frequently than once each fiscal quarter, in an amount equal to the Federal and state income tax liability attributable to such Persons by reason of the tax attributes of the Loan Parties (after taking into account all available credits and deductions) for the immediately preceding fiscal quarter, at the highest combined United States federal and state income tax rate payable by any such Person.

 

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

 

“Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established by Borrower or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.

 

“Platform” has the meaning specified in Section 6.02.

 

“Pre-Opening and Start-Up Expenses” means, for any period, the amount classified as “preopening and start-up expenses” by Borrower in its consolidated statements of operations, inclusive of marketing, promotional, hiring and other similar expenses of the Loan Parties incurred in connection with the introduction of a new product or service, in all cases in accordance with Borrower’s accounting policies and GAAP, consistently applied.

 

“Projections” means the financial projections and three-year plan for Borrower and its Subsidiaries distributed to the Lenders dated                   , 2012.

 

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“Property” means all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

 

“Public Lender” has the meaning specified in Section 6.02.

 

“Purchase Money Mortgage” means a first mortgage Lien on the applicable Condo Unit securing the applicable Seller Note.

 

“Register” has the meaning specified in Section 10.06(c).

 

“Reinvestment Period” means in respect of any receipt of Extraordinary Receipts which gives rise to the requirement of a prepayment pursuant to Section 2.03, the period commencing on the date of such event or circumstance and ending 120 days thereafter, provided that to the extent that the required application of the related Net Cash Proceeds or Extraordinary Receipts to the contemplated reinvestment thereof commences within such 120 day period, and is thereafter diligently pursued pursuant to a reinvestment plan reasonably approved by the Administrative Agent, such period may be extended in a manner reasonably approved by the Administrative Agent to up to a total of 365 days.

 

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees and advisors of such Person and of such Person’s Affiliates.

 

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived.

 

“Request for Credit Extension” means (a) with respect to a Borrowing, conversion or continuation of Loans, a Loan Notice, and (b) with respect to an L/C Credit Extension, a Letter of Credit Application.

 

“Required Lenders” means, at any time, Lenders having Total Credit Exposures representing more than 50% of the Total Credit Exposures of all Lenders.  The Total Credit Exposure of any Defaulting Lender shall be disregarded in determining Required Lenders at any time; provided that, the amount of any participation in any Unreimbursed Amounts that such Defaulting Lender has failed to fund that have not been reallocated to and funded by another Lender shall be deemed to be held by the Lender that is the L/C Issuer in making such determination.

 

“Responsible Officer” means the chief executive officer, chairman, president, chief financial officer, treasurer, assistant treasurer, secretary, assistant secretary, controller, or general counsel or other chief legal officer of the relevant Loan Party or of the ultimate managing member of the relevant Loan Party.  Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

 

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“Restricted Payment” means:

 

(a)           any dividend or other distribution (whether in cash, securities or other Property) with respect to any capital stock or other Equity Interest of any Person or any of its Subsidiaries, or any payment (whether in cash, securities or other Property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation or termination of any such capital stock or other Equity Interest, or on account of any return of capital to any Person’s stockholders, partners or members (or the equivalent of any thereof), or any option, warrant or other right to acquire any such dividend or other distribution or payment; and

 

(b)           any payment of principal, interest or other amounts in respect of the Sponsor Subordinated Debt in cash, but excluding the payment of interest in kind with respect to the Sponsor Subordinated Debt.

 

For the avoidance of doubt, Permitted Affiliate Cost Reimbursements are not Restricted Payments.

 

“Restricted Subsidiary” means each Subsidiary of Borrower other than any Subsidiary which is hereafter designated as an “Unrestricted Subsidiary” in accordance with Section 2.11.

 

“S&P” means Standard & Poor’s Ratings Group, or any successor thereof.

 

“Second Lien Indenture” the Indenture, dated as of January 21, 2011, among Borrower, CityCenter Finance Corp., the guarantors party thereto, the Second Lien Notes Trustee and the Second Lien Notes Collateral Agent, as amended or supplemented at any time.

 

“Second Lien Notes” means the notes issued by Borrower pursuant to the Second Lien Indenture (including any increases in the principal amount thereof as a result of payments-in-kind pursuant to the terms of the Second Lien Indenture).

 

“Second Lien Notes Collateral Agent” means U.S. Bank, National Association, as trustee under the Second Lien Indenture.

 

“Second Lien Obligations” means the Indebtedness of Borrower and CityCenter Finance Corp. under the Second Lien Indenture, the Guarantee obligations of the Restricted Subsidiaries under the Second Lien Indenture and any refinancing thereof permitted pursuant to Section 7.12(c).

 

“Second Lien Security Agreement” means the “Security Agreement” as defined in the Second Lien Indenture.

 

“Second Lien Trustee” means U.S. Bank National Association and any successor trustee under the Second Lien Indenture.

 

“Secured Cash Management Agreement” means any Cash Management Agreement between any of the Loan Parties and any Cash Management Bank

 

“Secured Hedge Agreement” means any Swap Contract permitted under Article VI or VII that is entered into by and between Borrower and its Subsidiaries and any Hedge Bank.

 

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“Secured Obligations” means, collectively, the First Lien Obligations and the Second Lien Obligations.

 

“Secured Parties” means the holders, from time to time, of the Bank Obligations, the First Lien Note Obligations and the Second Lien Note Obligations.

 

“Security Agreements” means the Borrower Security Agreement, the Landco Security Agreement, the Subsidiary Security Agreement and each other agreement granting Liens in favor of the Collateral Agent delivered pursuant to Section 6.11.

 

“Seller Financing Program” means the terms upon which Borrower and its Restricted Subsidiaries provide seller financing for the Disposition of Condo Units set forth on Schedule 1.01 as modified from time to time.

 

“Seller Loan” means a loan made by Borrower to the purchaser of a Condo Unit which is evidenced by a Seller Note and secured by a Purchase Money Mortgage in such Condo Unit; the term includes with respect to each such loan, the Seller Note, the Purchase Money Mortgage and all other loan documents executed by the Condo Unit purchaser in connection with such loan and any and all rights, benefits, collateral, payments, recoveries, proceeds and obligations arising therefrom or in connection therewith.

 

“Seller Note” means a promissory note in favor of Borrower or a Restricted Subsidiary executed by a Person which is not a Loan Party secured by a Purchase Money Mortgage in connection with the Disposition of such Condo Unit in accordance with the Seller Financing Program.

 

“SPE” has the meaning specified in Section 7.03(i).

 

“Specified Equity Contribution” has the meaning specified in Section 7.13.

 

“Sponsor Capital Calls” means any contribution of capital by the Sponsors or the Sponsor Entities.

 

“Sponsor Documents” means, collectively, the MGM Resorts Completion Guarantee and any future letters of credit or collateral documents given in support of the MGM Resorts Completion Guarantee.

 

“Sponsor Entities” means (a) in relation to MGM Resorts, MGM Resorts itself, its Subsidiaries, and the Loan Parties, and (b) in relation to Dubai World, Dubai World itself, the Government of Dubai, Persons which are Subsidiaries of the Government of Dubai or Dubai World, and the Loan Parties, and (c) in each case includes any Person in which Persons which qualify as Sponsor Entities own 50% or more of the aggregate Equity Interests of such Person.

 

“Sponsor Equity Report” means a report substantially in the form of Exhibit K, setting forth the amount of the Sponsor Subordinated Debt and equity contributions made by the Sponsor Entities as of the date thereof,

 

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“Sponsor Subordinated Debt” means Indebtedness of Borrower to the Sponsors or their wholly-owned Subsidiaries evidenced by the Sponsor Subordinated Notes and any other Indebtedness owing to Sponsor Entities and on terms no less favorable to the Lenders than those in the Sponsor Subordinated Notes.

 

“Sponsor Subordinated Notes” means, collectively, (a) the Amended and Restated Sponsor Subordinated Note dated as of January 1, 2011 made by Borrower in favor of the Managing Member in the principal amount of $547,401,721.23 and (b) the Amended and Restated Sponsor Subordinated Note dated as of January 1, 2011 made by Borrower in favor of Infinity World in the principal amount of $547,386,856.39, in each case as amended from time to time.

 

“Sponsors” means, collectively, MGM Resorts and Dubai World, and their respective successors.

 

“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned directly or indirectly through one or more intermediaries, or both, by such Person.  Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of Borrower.

 

“Subsidiary Guaranty” means the Amended and Restated Guaranty, dated as of January 10, 2011, made by each Restricted Subsidiary of Borrower, other than Landco, in favor of the Administrative Agent, as at any time amended.

 

“Subsidiary Security Agreement” means an Amended and Restated Security Agreement, dated as of January 10, 2011, made by each Restricted Subsidiary of Borrower, other than Landco, in favor of the Collateral Agent for the benefit of the Lender Secured Parties, as at any time amended.

 

“Swap Contract” means (a) all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

 

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“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination values, and (b) for any date prior to the date referenced in clause (a), the amount determined as the mark-to-market value for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).

 

“Synthetic Debt” means, with respect to any Person as of any date of determination thereof, all obligations of such Person in respect of transactions entered into by such Person that are intended to function primarily as a borrowing of funds (including any minority interest transactions that function primarily as a borrowing) but are not otherwise included in the definition of “Indebtedness” or as a liability on the consolidated balance sheet of such Person and its Subsidiaries in accordance with GAAP.

 

“Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of Property (including sale and leaseback transactions), in each case, creating obligations that do not appear on the balance sheet of such Person but which, upon the application of any Debtor Relief Laws to such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

 

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

 

“Total Credit Exposure” means, as to any Lender at any time, the unused Commitments and Credit Exposure of such Lender at such time.

 

“Total Outstandings” means the aggregate Outstanding Amount of all Loans and all L/C Obligations.

 

“to the best knowledge of” (or words of similar import) 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 Officer 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 natural Person, would have been known by a Responsible Officer of that Person).

 

“Transaction Documents” means, collectively, the Loan Documents, the Collateral Documents, the Collateral Agent Agreement, the MGM Operational Entities Subordination Agreement, the Sponsor Documents and each other instrument, document or agreement now or hereafter executed in connection with the foregoing.

 

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“Type” means, with respect to a Loan, its character as a Base Rate Loan or a Eurodollar Rate Loan.

 

“United States” means the United States of America.

 

“Unreimbursed Amount” has the meaning specified in Section 2.04(c)(i).

 

“Unrestricted Subsidiary” means each Subsidiary of Borrower which is so designated in accordance with Section 2.11.  As of the Closing Date there are no Unrestricted Subsidiaries.

 

“Vdara” means the 57-story all-suite hotel and spa which is a component of CityCenter.

 

“Veer” means the two 37-story glass towers which have a combined 669 residences and which are a component of CityCenter.

 

“Warehouse Financing Program” means a facility entered into between Borrower and its Restricted Subsidiaries and one or more lenders, pursuant to which such lenders provide Borrower and its Restricted Subsidiaries warehouse financing in accordance with the terms and conditions of Section 7.02(c).

 

1.02                        Other Interpretive Provisions.  With reference to this Agreement and each other Transaction Document, unless otherwise specified herein or in such other Transaction Document:

 

(a)                                 The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”  The word “will” shall be construed to have the same meaning and effect as the word “shall.”  Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Transaction Document), (ii) the words “herein,” “hereof” and “hereunder,” and words of similar import when used in any Transaction Document, shall be construed to refer to such Transaction Document in its entirety and not to any particular provision thereof, (iii) all references in a Transaction Document to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Transaction Document in which such references appear, and (iv) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time.  This Agreement and the other Loan Documents are the result of negotiations among and have been reviewed by counsel to each of the parties hereto and are the product of all parties.  Accordingly, such documents shall not be construed against (or in favor of) any party merely because of the extent of such party’s involvement (or non-involvement, as the case may be) in their preparation.

 

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(b)                                 In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” and the word “through” means “to and including.”

 

(c)                                  Section headings herein and in the other Transaction Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Transaction Document.

 

1.03                        Accounting Terms.  (a) Generally.  All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein.

 

(b)                                 Changes in GAAP.  If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.  Without limiting the foregoing, leases (including without limitation any leases entered into after December 31, 2011) shall continue to be classified and accounted for on a basis consistent with that reflected in the Audited Financial Statements for all purposes of this Agreement, notwithstanding any change in GAAP relating thereto, unless the parties hereto shall enter into a mutually acceptable amendment addressing such changes, as provided for above.

 

1.04                        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 herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

 

1.05                        Times of Day.  Unless otherwise specified, all references herein to times of day shall be references to the prevailing local Las Vegas time (daylight or standard, as applicable).

 

1.06                        Letter of Credit Amounts.  Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

 

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ARTICLE II
  THE COMMITMENTS AND CREDIT EXTENSIONS

 

2.01                        Loans.  Subject to the terms and conditions set forth herein, each Lender severally agrees to make revolving loans to Borrower from time to time, on any Business Day during the Availability Period, in an aggregate amount not to exceed at any time outstanding the amount of such Lender’s Commitment; provided, however, that after giving effect to any Borrowing, (i) the Total Outstandings shall not exceed the Aggregate Commitments, and (ii) the Credit Exposure of any Lender shall not exceed such Lender’s Commitment; provided, further, that any amounts repaid pursuant to Section 2.12(a)(v) may only be reborrowed as set forth in Section 2.13(d).  Within the limits of each Lender’s Commitment, and subject to the other terms and conditions hereof, Borrower may borrow under this Section 2.01, prepay under Section 2.03, and reborrow under this Section 2.01.  Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.

 

2.02                        Borrowings, Conversions and Continuations of Loans.  (a) Each Borrowing, each conversion of Loans from one Type to the other and each continuation of Eurodollar Rate Loans shall be made upon Borrower’s irrevocable notice to the Administrative Agent, which may be given by telephone.  Each such notice must be received by the Administrative Agent not later than 11:00 a.m. (i) three Business Days prior to the requested date of any other Borrowing of, conversion to or continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate Loans, and (ii) on the Business Day prior to the requested date of any conversion to Base Rate Loans.  Each telephonic notice by Borrower pursuant to this Section 2.02(a) must be confirmed promptly by delivery to the Administrative Agent of a written Loan Notice, appropriately completed and signed by a Responsible Officer of Borrower.  Each Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be in a minimum principal amount of $5,000,000.  Except as provided in Section 2.04(c), each Borrowing of or conversion to Base Rate Loans shall be in a minimum principal amount of $1,000,000.  Each Loan Notice (whether telephonic or written) shall specify (i) whether Borrower is requesting a Borrowing, a conversion of Loans from one Type to the other or a continuation of Eurodollar Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to which existing Loans are to be converted, and (v) if applicable, the duration of the Interest Period with respect thereto.  If Borrower fails to specify a Type of Loan in a Loan Notice or if Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Loans shall be made as, or converted to, Base Rate Loans.  Each automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Loans.  If Borrower requests a Borrowing of, conversion to or continuation of Eurodollar Rate Loans in any such Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month.

 

(b)                                 Following receipt of a Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount of its Applicable Percentage of the applicable Loans, and if no timely notice of a conversion or continuation is provided by Borrower, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Loans described in Section 2.02(a).  In the case of a Borrowing, the applicable Lenders

 

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shall make the amount of their Loans available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than 1:00 p.m. on the Business Day specified in the applicable Loan Notice.  Upon satisfaction of the applicable conditions set forth in Section 4.02 (and, in the case of the initial Credit Extension on the Closing Date, Section 4.01) the Administrative Agent shall make all funds so received available to Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of Borrower on the books of Bank of America with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by Borrower; provided, however, that if, on the date the Loan Notice with respect to such Borrowing is given by Borrower, there are L/C Borrowings outstanding, then the proceeds of such Borrowing, first, shall be applied to the payment in full of any such L/C Borrowings, and second, shall be made available to Borrower as provided above.

 

(c)                                  Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted only on the last day of an Interest Period for such Eurodollar Rate Loan.  During the existence of an Event of Default, the Administrative Agent or the Required Lenders may suspend the availability of Eurodollar Rate Loans by notice to Borrower.

 

(d)                                 The Administrative Agent shall promptly notify Borrower and the Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate Loans upon determination of such interest rate.  At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify Borrower and the Lenders of any change in Bank of America’s prime rate used in determining the Base Rate promptly following the public announcement of such change.

 

(e)                                  After giving effect to all Borrowings, all conversions of Loans from one Type to the other, and all continuations of Loans as the same Type, there shall not be more than five Interest Periods in effect under the Loans.

 

2.03                        Prepayments; Termination and Reduction of Commitments.  (a) Optional Prepayments.  Borrower may, upon notice to the Administrative Agent, at any time or from time to time voluntarily prepay Loans in whole or in part without premium or penalty; provided that (A) such notice must be received by the Administrative Agent not later than 11:00 a.m. (1) three Business Days prior to any date of prepayment of Eurodollar Rate Loans and (2) on the date of prepayment of Base Rate Loans; (B) any prepayment of Eurodollar Rate Loans shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof; and (C) any prepayment of Base Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $100,000 in excess thereof or, in each case, the entire principal amount thereof then outstanding.  Each such notice shall specify the date and amount of such prepayment and the Type(s) of Loans to be prepaid, the Loans to be prepaid and, if Eurodollar Rate Loans are to be prepaid, the Interest Period(s) of such Loans.  The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of that Lender’s Applicable Percentage of such prepayment.  If such notice is given by Borrower, Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.  Subject to Section 2.12, each prepayment under this Section 2.03(a) shall be paid to the Lenders in accordance with the Lenders’ Applicable Percentages.

 

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(b)                                 Mandatory Prepayments.  Subject in all respects to the proviso at the end of this Section 2.03(b), Borrower shall prepay the principal amount of the Bank Obligations in the principal amounts set forth below upon the occurrence of any of the following events:

 

(1)                                 within five Business Days following the receipt by any Loan Party of the Net Cash Proceeds of any Disposition (other than any Exempted Dispositions), in an amount which is equal to 100% of such Net Cash Proceeds minus any amounts as may be required to be offered to the First Lien Noteholders for repurchases of First Lien Notes pursuant to the terms of the First Lien Intercreditor Agreement; provided that so long as no Default or Event of Default has then occurred and remains continuing, by notice to the Administrative Agent within five Business Days following the receipt thereof, the Loan Parties may use Net Cash Proceeds from the Disposition of Condo Units or Seller Notes (without any requirement of prepayment) in an aggregate amount not to exceed the Condo Proceeds Amount following the Closing Date to:

 

(x)                                 retire Construction Liens;

 

(y)                                 fund the Condo Proceeds Account (it being agreed that any funds deposited therein shall be applied exclusively to retire Construction Liens or to make Distributions pursuant to Section 7.06(c)); or

 

(z) if the Construction Resolution Date has occurred, make Distributions pursuant to Section 7.06(c);

 

(2)                                 within five Business Days following the receipt by any of the Loan Parties of the Net Cash Proceeds of any Extraordinary Receipts other than Harmon-Related Net Extraordinary Receipts, in an amount which is equal to 100% of such Net Cash Proceeds (less any amounts required to be offered to the First Lien Noteholders for repurchases of First Lien Notes pursuant to the terms of the First Lien Indenture in an aggregate amount not to exceed the First Lien Notes Percentage of such Net Cash Proceeds); provided, however, that, if no Default or Event of Default has then occurred and remains continuing, Borrower may reinvest such Extraordinary Receipts (other than Harmon-Related Net Extraordinary Receipts) for the replacement of the capital assets giving rise to such Extraordinary Receipts as follows:

 

(x)                                 within 60 days provide to the Administrative Agent a plan for the reconstruction or replacement of the property which resulted in such Extraordinary Receipts during the Reinvestment Period which is reasonably acceptable to the Administrative Agent;

 

(y)                                 where such Extraordinary Receipts are in excess of $100,000,000, Borrower shall have received approval of its reinvestment plan by the Required Lenders within 90 days following the receipt of such Extraordinary Receipts (it being acknowledged that the approval of the Required Lenders shall not be unreasonably withheld unless the amount of Extraordinary Receipts are greater than $250,000,000, in which case the Required Lenders may withhold approval in their reasonable discretion); and

 

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(z)                                  thereafter diligently pursue its reinvestment plan to completion and provide monthly updates in respect of the status thereof to the Administrative Agent and the Lenders (either in writing and/or by conference call as the Administrative Agent may specify);

 

it being understood that any such Extraordinary Receipts not reinvested within the Reinvestment Period shall be applied to the prepayment of the Bank Obligations (less any amounts required to be offered to the First Lien Noteholders for repurchases of First Lien Notes pursuant to the terms of the First Lien Indenture in an aggregate amount not to exceed the First Lien Notes Percentage of such Net Cash Proceeds) in the manner required by this Section;

 

(3)                                 concurrently with the making of any payments to the First Lien Trustee or the First Lien Noteholders in respect of repurchases of First Lien Notes as contemplated in clauses (1) or (2) above, in an amount equal to the First Lien Notes Percentage of the Net Cash Proceeds of the applicable Disposition or Extraordinary Receipt less the amount of such payment to the First Lien Trustee or the First Lien Noteholders; and

 

(4)                                 if for any reason the Total Outstandings at any time exceed the Aggregate Commitments then in effect, Borrower shall immediately prepay Loans in an aggregate amount equal to such excess; provided, however, that if after the prepayment in full of the Loans the Total Outstandings exceed the Aggregate Commitments then in effect, then Borrower shall Cash Collateralize the L/C Obligations and the other Secured Obligations in an aggregate amount equal to such excess.

 

provided that, any prepayment of Bank Obligations pursuant to Sections 2.03(b)(1), (2) or (3) shall only be required to the extent that after giving effect to such prepayment, the outstanding amount of Revolving Loans would exceed $25,000,000.

 

(c)                                  Repayment of Loans.  Borrower shall repay the remaining unpaid principal balance of the Loans on the Maturity Date.

 

(d)                                 Application of Mandatory Prepayments to Bank Obligations.  Each mandatory prepayment of the Bank Obligations made pursuant to Section 2.03(b)(1), (2) and (3)  shall be applied, first, ratably to the prepayment of the Loans until paid in full, and then ratably to any other Bank Obligations.

 

(e)                                  Eurodollar Breakage. Any prepayment of a Eurodollar Rate Loan pursuant to Sections 2.03(a) or (b) shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to Section 3.05.

 

(f)                                   Termination or Reduction of Commitments.

 

(i)                                     Mandatory.  In connection with any mandatory prepayment of the Bank Obligations made pursuant to Section 2.03(b)(1), (2) and (3) (subject in all respects to the proviso at the end of Section 2.03(b)), the Aggregate Commitments shall be permanently reduced in an amount equal to the amount required to be prepaid; provided, that the

 

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Aggregate Commitments shall not be reduced to below $25,000,000 pursuant to this clause (i).

 

(ii)                                  Borrower may, upon notice to the Administrative Agent, terminate the Aggregate Commitments, or from time to time permanently reduce the Aggregate Commitments; provided that (i) any such notice shall be received by the Administrative Agent not later than 11:00 a.m. five Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $5,000,000 or any whole multiple of $1,000,000 in excess thereof, (iii) Borrower shall not terminate or reduce the Aggregate Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, the Total Outstandings would exceed the Aggregate Commitments, and (iv) if, after giving effect to any reduction of the Aggregate Commitments, the Letter of Credit Sublimit exceeds the amount of the Aggregate Commitments, the Letter of Credit Sublimit shall be automatically reduced by the amount of such excess.  The Administrative Agent will promptly notify the Lenders of any such notice of termination or reduction of the Aggregate Commitments.  Any reduction of the Aggregate Commitments shall be applied to the Commitment of each Lender according to its Applicable Percentage.  All fees accrued until the effective date of any termination of the Aggregate Commitments shall be paid on the effective date of such termination.

 

2.04                        Letters of Credit.

 

(a)                                 The Letter of Credit Commitment.

 

(i)                                     Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.04, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of Borrower or another Loan Party, and to amend or extend Letters of Credit previously issued by it, in accordance with clause (b) below, and (2) to honor drawings under the Letters of Credit; and (B) the Lenders severally agree to participate in Letters of Credit issued for the account of Borrower of another Loan Party and any drawings thereunder; provided that after giving effect to any L/C Credit Extension with respect to any Letter of Credit, (x) the Total Outstandings shall not exceed the Aggregate Commitments less any amounts repaid pursuant to Section 2.12(a)(v) and not permitted to be reborrowed as set forth in Section 2.13(d) at such time, (y) the Credit Exposure of any Lender shall not exceed such Lender’s Commitment, and (z) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit less any amounts repaid pursuant to Section 2.12(a)(v) and not permitted to be reborrowed as set forth in Section 2.13(d) at such time.  Each request by Borrower for the issuance or amendment of a Letter of Credit shall be deemed to be a representation by Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence.  Within the foregoing limits, and subject to the terms and conditions hereof, Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.

 

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(ii)                                  The L/C Issuer shall not issue any Letter of Credit, if:

 

(A)                               subject to Section 2.04(b)(iii), the expiry date of the requested Letter of Credit would occur more than twelve months after the date of issuance or last extension, unless the Required Lenders have approved such expiry date; or

 

(B)                               the expiry date of the requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the Lenders have approved such expiry date.

 

(iii)                               The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:

 

(A)                               any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing the Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or the Letter of Credit in particular or shall impose upon the L/C Issuer with respect to the Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good faith deems material to it;

 

(B)                               the issuance of the Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;

 

(C)                               except as otherwise agreed by the Administrative Agent and the L/C Issuer, the Letter of Credit is in an initial stated amount less than $50,000;

 

(D)                               the Letter of Credit is to be denominated in a currency other than Dollars;

 

(E)                                any Lender is at that time a Defaulting Lender, unless the L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, satisfactory to the L/C Issuer (in its reasonable discretion) with Borrower or such Lender to eliminate the L/C Issuer’s actual or potential Fronting Exposure (after giving effect to Section 2.12(a)(iv)) with respect to the Defaulting Lender arising from either the Letter of Credit then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which the L/C Issuer has actual or potential Fronting Exposure, as it may elect in its reasonable discretion; or

 

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(F)                                 the Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder.

 

(iv)                              [Reserved]

 

(v)                                 The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue the Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of the Letter of Credit does not accept the proposed amendment to the Letter of Credit.

 

(vi)                              The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer.

 

(b)                                 Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of Credit.

 

(i)                                     Each Letter of Credit shall be issued or amended, as the case may be, upon the request of Borrower delivered to the L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of Borrower.  Such Letter of Credit Application may be sent by facsimile, by United States mail, by overnight courier, by electronic transmission using the system provided by the L/C Issuer, by personal delivery or by any other means acceptable to the L/C Issuer.  Such Letter of Credit Application must be received by the L/C Issuer and the Administrative Agent not later than 12:00 p.m. at least two Business Days (or such later date and time as the Administrative Agent and the L/C Issuer may agree in a particular instance in their reasonable discretion) prior to the proposed issuance date or date of amendment, as the case may be.  In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; (G) the purpose and nature of the requested Letter of Credit; and (H) such other matters as the L/C Issuer may require.  In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D) such other matters as the L/C Issuer may require.  Additionally, Borrower shall furnish to the L/C Issuer and the Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or

 

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amendment, including any Issuer Documents, as the L/C Issuer or the Administrative Agent may require.

 

(ii)                                  Promptly after receipt of any Letter of Credit Application, the L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from Borrower and, if not, the L/C Issuer will provide the Administrative Agent with a copy thereof.  Unless the L/C Issuer has received written notice from any Lender, the Administrative Agent or any Loan Party, at least one Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in Article IV shall not then be satisfied, then, subject to the terms and conditions hereof, the L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of Borrower or other Loan Party or enter into the applicable amendment, as the case may be, in each case in accordance with the L/C Issuer’s usual and customary business practices.  Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the L/C Issuer a risk participation in such Letter of Credit in an amount equal to the product of such Lender’s Applicable Percentage times the amount of such Letter of Credit.

 

(iii)                               If Borrower so requests in any applicable Letter of Credit Application, the L/C Issuer may, in its reasonable discretion, agree to issue a Letter of Credit that has automatic extension provisions (each, an “Auto-Extension Letter of Credit”); provided that any such Auto-Extension Letter of Credit must permit the L/C Issuer to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “Non-Extension Notice Date”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued.  Unless otherwise directed by the L/C Issuer, Borrower shall not be required to make a specific request to the L/C Issuer for any such extension.  Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) the L/C Issuer to permit the extension of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided, however, that the L/C Issuer shall not permit any such extension if (A) the L/C Issuer has determined that it would not be permitted, or would have no obligation, at such time to issue such Letter of Credit in its revised form (as extended) under the terms hereof (by reason of the provisions of clause (ii) or (iii) of Section 2.04(a) or otherwise), or (B) it has received notice (which may be by telephone or in writing) on or before the day that is seven Business Days before the Non-Extension Notice Date (1) from the Administrative Agent that the Required Lenders have elected not to permit such extension or (2) from the Administrative Agent, any Lender or Borrower that one or more of the applicable conditions specified in Section 4.02 is not then satisfied, and in each such case directing the L/C Issuer not to permit such extension.

 

(iv)                              Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the

 

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L/C Issuer will also deliver to Borrower and the Administrative Agent a true and complete copy of such Letter of Credit or amendment.

 

(c)                                  Drawings and Reimbursements; Funding of Participations.

 

(i)                                     Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the L/C Issuer shall notify Borrower and the Administrative Agent thereof.  Not later than 1:00 p.m. on the date of any payment by the L/C Issuer under a Letter of Credit (each such date, an “Honor Date”), Borrower shall reimburse the L/C Issuer through the Administrative Agent in an amount equal to the amount of such drawing; provided, that if the L/C Issuer or the Administrative Agent shall not have notified Borrower by not later than 10:00 a.m. on such date of such payment (or of the L/C Issuer’s intention to make such payment), Borrower shall reimburse the L/C Issuer through the Administrative Agent in such amount by not later than 10:00 a.m. on the following Business Day.  If Borrower fails to so reimburse the L/C Issuer by such time, the Administrative Agent shall promptly notify each Lender of the Honor Date, the amount of the unreimbursed drawing (the “Unreimbursed Amount”), and the amount of such Lender’s Applicable Percentage thereof.  In such event, Borrower shall be deemed to have requested a Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.02 for the principal amount of Base Rate Loans, but subject to the amount of the unutilized portion of the Aggregate Commitments and the conditions set forth in Section 4.02 (other than the delivery of a Loan Notice).  Any notice given by the L/C Issuer or the Administrative Agent pursuant to this Section 2.04(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

 

(ii)                                  Each Lender shall upon any notice pursuant to Section 2.04(c)(i) make funds available (and, subject to the terms of the Intercreditor Agreements, the Administrative Agent may apply Cash Collateral provided for this purpose) for the account of the L/C Issuer at the Administrative Agent’s Office in an amount equal to its Applicable Percentage of the Unreimbursed Amount not later than 10:00 a.m. on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.04(c)(iii), each Lender that so makes funds available shall be deemed to have made a Base Rate Loan to Borrower in such amount.  The Administrative Agent shall remit the funds so received to the L/C Issuer.

 

(iii)                               With respect to any Unreimbursed Amount that is not fully refinanced by a Borrowing of Base Rate Loans because the conditions set forth in Section 4.02 cannot be satisfied or for any other reason, Borrower shall be deemed to have incurred from the L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate.  In such event, each Lender’s payment to the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.04(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing

 

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and shall constitute an L/C Advance from such Lender in satisfaction of its participation obligation under this Section 2.04.

 

(iv)                              Until each Lender funds its Loan or L/C Advance pursuant to this Section 2.04(c) to reimburse the L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender’s Applicable Percentage of such amount shall be solely for the account of the L/C Issuer.

 

(v)                                 Each Lender’s obligation to make Loans or L/C Advances to reimburse the L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this Section 2.03(c), shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the L/C Issuer, Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default; or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Lender’s obligation to make Loans pursuant to this Section 2.04(c) is subject to the conditions set forth in Section 4.02 (other than delivery by Borrower of a Loan Notice).  No such making of an L/C Advance shall relieve or otherwise impair the obligation of Borrower to reimburse the L/C Issuer for the amount of any payment made by the L/C Issuer under any Letter of Credit, together with interest as provided herein.

 

(vi)                              If any Lender fails to make available to the Administrative Agent for the account of the L/C Issuer any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.04(c) by the time specified in Section 2.04(c)(ii), then, without limiting the other provisions of this Agreement, the L/C Issuer shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the L/C Issuer at a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by the L/C Issuer in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the L/C Issuer in connection with the foregoing.  If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender’s Loan included in the relevant Borrowing or L/C Advance in respect of the relevant L/C Borrowing, as the case may be.  A certificate of the L/C Issuer submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (vi) shall be conclusive absent manifest error.

 

(d)                                 Repayment of Participations.

 

(i)                                     At any time after the L/C Issuer has made a payment under any Letter of Credit and has received from any Lender such Lender’s L/C Advance in respect of such payment in accordance with Section 2.04(c), if the Administrative Agent receives for the account of the L/C Issuer any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from Borrower or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative Agent subject to the terms of the Intercreditor Agreements), the Administrative Agent will distribute to such Lender its

 

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Applicable Percentage thereof in the same funds as those received by the Administrative Agent.

 

(ii)                                  If any payment received by the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.04(c)(i) is required to be returned under any of the circumstances described in Section 10.05 (including pursuant to any settlement entered into by the L/C Issuer in its discretion), each Lender shall pay to the Administrative Agent for the account of the L/C Issuer its Applicable Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the Federal Funds Rate from time to time in effect.  The obligations of the Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.

 

(e)                                  Obligations Absolute.  The obligation of Borrower to reimburse the L/C Issuer for each drawing under each Letter of Credit and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following (it being understood that any such payment by the Borrower shall be without prejudice to, and shall not constitute a waiver of, any rights the Borrower might have or might acquire as a result of the payment by an Issuing Bank of any draft or the reimbursement by the Borrower):

 

(i)                                     any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other Loan Document;

 

(ii)                                  the existence of any claim, counterclaim, setoff, defense or other right that Borrower or any Subsidiary may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the L/C Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;

 

(iii)                               any draft, demand, certificate or other document presented under such 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; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;

 

(iv)                              waiver by the L/C Issuer of any requirement that exists for the L/C Issuer’s protection and not the protection of Borrower or any waiver by the L/C Issuer which does not in fact materially prejudice Borrower;

 

(v)                                 honor of a demand for payment presented electronically even if such Letter of Credit requires that demand be in the form of a draft;

 

(vi)                              any payment made by the L/C Issuer in respect of an otherwise complying item presented after the date specified as the expiration date of, or the date by which documents must be received under such Letter of Credit if presentation after such date is authorized by the UCC, the ISP or the UCP, as applicable;

 

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(vii)                           any payment by the L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law; or

 

(viii)                        any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, Borrower or any Subsidiary.

 

Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with Borrower’s instructions or other irregularity, Borrower will immediately notify the L/C Issuer.  Borrower shall be conclusively deemed to have waived any such claim against the L/C Issuer and its correspondents unless such notice is given as aforesaid.

 

(f)                                   Role of L/C Issuer.  Each Lender and Borrower agree that, in paying any drawing under a Letter of Credit, the L/C Issuer shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document.  None of the L/C Issuer, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of the L/C Issuer shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Issuer Document.  Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude Borrower’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement.  None of the L/C Issuer, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of the L/C Issuer shall be liable or responsible for any of the matters described in clauses (i) through (viii) of Section 2.04(e); provided, however, that anything in such clauses to the contrary notwithstanding, Borrower may have a claim against the L/C Issuer, and the L/C Issuer may be liable to Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by Borrower which Borrower proves were caused by the L/C Issuer’s willful misconduct or gross negligence or the L/C Issuer’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit.   In furtherance and not in limitation of the foregoing, the L/C Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and the L/C Issuer shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in

 

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part, which may prove to be invalid or ineffective for any reason.  The L/C Issuer may send a Letter of Credit or conduct any communication to or from the beneficiary via the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) message or overnight courier, or any other commercially reasonable means of communicating with a beneficiary.

 

(g)                                  Applicability of ISP and UCP; Limitation of Liability.  Unless otherwise expressly agreed by the L/C Issuer and Borrower when a Letter of Credit is issued, (i) the rules of the ISP shall apply to each standby Letter of Credit, and (ii) the rules of the UCP shall apply to each commercial Letter of Credit.  Notwithstanding the foregoing, the L/C Issuer shall not be responsible to Borrower for, and the L/C Issuer’s rights and remedies against Borrower shall not be impaired by, any action or inaction of the L/C Issuer required or permitted under any law, order, or practice that is required or permitted to be applied to any Letter of Credit or this Agreement, including the Law or any order of a jurisdiction where the L/C Issuer or the beneficiary is located, the practice stated in the ISP or UCP, as applicable, or in the decisions, opinions, practice statements, or official commentary of the ICC Banking Commission, the Bankers Association for Finance and Trade - International Financial Services Association (BAFT-IFSA), or the Institute of International Banking Law & Practice, whether or not any Letter of Credit chooses such law or practice.

 

(h)                                 Letter of Credit Fees.  Borrower shall pay to the Administrative Agent for the account of each Lender in accordance, subject to Section 2.12, with its Applicable Percentage a Letter of Credit fee (the “Letter of Credit Fee”)  for each Letter of Credit equal to the Applicable Margin times the daily amount available to be drawn under such Letter of Credit.  For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06.  Letter of Credit Fees shall be (i) due and payable on the first Business Day after the end of each March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand and (ii) computed on a quarterly basis in arrears.  If there is any change in the Applicable Margin during any quarter, the daily amount available to be drawn under each Letter of Credit shall be computed and multiplied by the Applicable Margin separately for each period during such quarter that such Applicable Margin was in effect.  Notwithstanding anything to the contrary contained herein, upon the request of the Required Lenders, while any Event of Default exists, all Letter of Credit Fees shall accrue at the Default Rate.

 

(i)                                     Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer.  Borrower shall pay directly to the L/C Issuer for its own account a fronting fee (i) with respect to each commercial Letter of Credit, at the rate specified in the Fee Letter, computed on the amount of such Letter of Credit, and payable upon the issuance thereof, (ii) with respect to any amendment of a commercial Letter of Credit increasing the amount of such Letter of Credit, at a rate separately agreed between Borrower and the L/C Issuer, computed on the amount of such increase, and payable upon the effectiveness of such amendment, and (iii) with respect to each standby Letter of Credit, at the rate per annum specified in the Fee Letter, computed on the daily amount available to be drawn under such Letter of Credit on a quarterly basis in arrears Such fronting fee shall be due and payable on the tenth Business Day after the end of each March, June, September and December in respect of the most recently-ended quarterly period (or portion thereof, in the case of the first payment), commencing with the first such date to occur

 

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after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand.  For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06.  In addition, Borrower shall pay directly to the L/C Issuer for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of the L/C Issuer relating to letters of credit as from time to time in effect.  Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable.

 

(j)                                    Conflict with Issuer Documents.  In the event of any conflict between the terms hereof and the terms of any Issuer Document, the terms hereof shall control.

 

(k)                                 Letters of Credit Issued for Loan Parties other than the Borrower.  Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the account of, a Loan Party other than the Borrower, the Borrower shall be obligated to reimburse the L/C Issuer hereunder for any and all drawings under such Letter of Credit. The Borrower hereby acknowledges that the issuance of Letters of Credit for the account of Loan Parties other than the Borrower inures to the benefit of the Borrower, and that the Borrower’s business derives substantial benefits from the businesses of such Loan Parties other than the Borrower.

 

2.05                        Interest.  (a) Subject to the provisions of Section 2.05(b), (i) each Eurodollar Rate Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Eurodollar Rate for such Interest Period plus the Applicable Margin;  and (ii) each Base Rate Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Margin.

 

(b)                                 (i)                                     If any amount of principal of any Loan is not paid when due, whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

 

(ii)                                  If any amount (other than principal of any Loan) payable by Borrower under any Loan Document is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, then upon the request of the Required Lenders such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

 

(iii)                               Upon the request of the Required Lenders, while any Event of Default exists, Borrower shall pay interest on the principal amount of all outstanding Bank Obligations hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

 

(iv)                              Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

 

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(c)                                  Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein; provided however, that on any day which any interest on any Loans shall be due and payable, the Administrative Agent shall withdraw funds from the Funded Interest Account (not to exceed the then credit balance of the Funded Interest Account) in an amount equal to the amount of interest then due and payable and apply such funds to pay such interest.  To the extent permitted by law, interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

 

2.06                        Fees.

 

(a)                                 Commitment Fee.  Borrower shall pay to the Administrative Agent for the account of each Lender in accordance with its Applicable Percentage, a commitment fee equal to the Applicable Margin times the actual daily amount by which the Aggregate Commitments exceed the sum of (i) the Outstanding Amount of Loans and (ii) the Outstanding Amount of L/C Obligations, subject to adjustment as provided in Section 2.12. The commitment fee shall accrue at all times during the Availability Period, including at any time during which one or more of the conditions in Article IV is not met, and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first such date to occur after the Closing Date, and on the last day of the Availability Period.  The commitment fee shall be calculated quarterly in arrears, and if there is any change in the Applicable Margin during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Margin separately for each period during such quarter that such Applicable Margin was in effect.

 

(b)                                 Other Fees.  Borrower shall pay to the Arrangers, the Lenders and the Administrative Agent for their own respective accounts such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified.  Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

 

2.07                        Computation of Interest and Fees.  All computations of interest for Base Rate Loans (including Base Rate Loans determined by reference to the Eurodollar Rate) shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed.  All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year).  Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid.  Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

 

2.08                        Evidence of Debt.  (a)  The Loans of each Lender shall be evidenced by one or more accounts or records maintained by that Lender and by the Administrative Agent in the ordinary course of business.  The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Loans and the interest and payments thereon.  Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of Borrower hereunder to pay any amount

 

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owing with respect to the Bank Obligations.  In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.  Upon the request of any Lender made through the Administrative Agent, Borrower shall execute and deliver to that Lender (through the Administrative Agent) a promissory note, which shall evidence that Lender’s Loans in addition to such accounts or records.  Each Lender may attach schedules to its promissory note and endorse thereon the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto.

 

(b)                                 In addition to the accounts and records referred to in clause (a) above, each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Letters of Credit.  In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.

 

2.09                        Payments Generally; Administrative Agent’s Clawback.  (a) General.  All payments to be made by Borrower or on account of the Bank Obligations shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff.  Except as otherwise expressly provided herein, all payments by Borrower hereunder shall be made solely to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office in Dollars and in immediately available funds not later than 12:00 noon on the date specified herein.  The Administrative Agent will promptly distribute to each Lender its Applicable Percentage (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to that Lender’s Lending Office.  All payments received by the Administrative Agent after 12:00 noon shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue.  If any payment to be made by Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.

 

(b)                                 (i)  Funding by Lenders; Presumption by Administrative Agent.  Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing of Eurodollar Rate Loans (or, in the case of any Borrowing of Base Rate Loans, prior to 10:30 a.m. on the date of such Borrowing) that that Lender will not make available to the Administrative Agent that Lender’s share of such Borrowing, the Administrative Agent may assume that that Lender has made such share available on such date in accordance with Section 2.02 (or, in the case of a Borrowing of Base Rate Loans, that that Lender has made such share available in accordance with and at the time required by Section 2.02) and may, in reliance upon such assumption, make available to Borrower a corresponding amount.  In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in immediately available funds with interest thereon, for each day from and including the date such amount is made available to Borrower to but excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be made by that Lender, the greater of the Federal Funds Rate and a rate

 

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determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Administrative Agent in connection with the foregoing, and (B) in the case of a payment to be made by Borrower, the interest rate applicable to the Borrowing.  If Borrower and that Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to Borrower the amount of such interest paid by Borrower for such period.  If that Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute that Lender’s Loan included in such Borrowing.  Any payment by Borrower shall be without prejudice to any claim Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

 

(ii)           Payments by Borrower; Presumptions by Administrative Agent.  Unless the Administrative Agent shall have received notice from Borrower prior to the time at which any payment is due to the Administrative Agent for the account of the Lenders or the L/C Issuer hereunder that Borrower will not make such payment, the Administrative Agent may assume that Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the L/C Issuer, as the case may be, the amount due.  In such event, if Borrower has not in fact made such payment, then each of the appropriate Lenders or the L/C Issuer, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to that Lender or the L/C Issuer, in immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

 

A notice of the Administrative Agent to any Lender or Borrower with respect to any amount owing under this clause (b) shall be conclusive, absent manifest error.

 

(c)           Obligations of Lenders Several.  The obligations of the Lenders hereunder to make Loans, to fund participations in Letters of Credit and to make payments pursuant to Section 10.04(c) are several and not joint.  The failure of any Lender to make any Loan, to fund any such participation or to make any payment under Section 10.04(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan, to purchase its participation or to make its payment under Section 10.04(c).

 

(d)           Funding Source.  Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.

 

(e)           Insufficient Funds.  If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, interest and fees then due hereunder, such funds shall be applied (i) first, toward payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest

 

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and fees then due to such parties, and (ii) second, toward payment of principal then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties.

 

(f)            Failure to Satisfy Conditions Precedent.  If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article II, and such funds are not made available to Borrower by the Administrative Agent because the conditions to the applicable Credit Extension set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.

 

2.10        Sharing of Payments by Lenders.  If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of (a) Bank Obligations due and payable to that Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Bank Obligations due and payable to that Lender at such time to (ii) the aggregate amount of the Bank Obligations due and payable to all Lenders hereunder and under the other Loan Documents at such time) of payments on account of the Bank Obligations due and payable to all Lenders hereunder and under the other Loan Documents at such time obtained by all the Lenders at such time or (b) Bank Obligations owing (but not due and payable) to that Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Bank Obligations owing (but not due and payable) to that Lender at such time to (ii) the aggregate amount of the Bank Obligations owing (but not due and payable) to all Lenders hereunder and under the other Loan Documents at such time) of payment on account of the Bank Obligations owing (but not due and payable) to all Lenders hereunder and under the other Loan Documents at such time obtained by all of the Lenders at such time, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans and subparticipations in the Letters of Credit of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of Bank Obligations then due and payable to the Lenders or owing (but not due and payable) to the Lenders, as the case may be, provided that:

 

(i)            if any such participations or subparticipations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations or subparticipations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

 

(ii)           the provisions of this Section shall not be construed to apply to (A) any payment made by or on behalf of Borrower pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), (B) the application of Cash Collateral provided in Section 2.13 or (C) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or subparticipations in Letters of Credit to any assignee or participant, other than to Borrower or any Subsidiary thereof (as to which the provisions of this Section shall apply).

 

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Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against Borrower rights of setoff and counterclaim with respect to such participation as fully as if that Lender were a direct creditor of Borrower in the amount of such participation.

 

2.11        Unrestricted Subsidiaries.  From time to time following the Closing Date and when no Default exists, Borrower may designate one or more of its Subsidiaries as Unrestricted Subsidiaries upon written notice to the Administrative Agent, provided that:

 

(a)           Landco shall not be designated as an Unrestricted Subsidiary;

 

(b)           No Person owning any interest in CityCenter shall be designated as an Unrestricted Subsidiary, provided that in connection with any permitted Disposition of Crystals, the Harmon, the Vdara, the Veer or the Mandarin, any Restricted Subsidiary other than Landco or ARIA Resort & Casino Holdings, LLC which owns no other portion of CityCenter or the revenues attendant thereto may be designated as an Unrestricted Subsidiary (and may be released from its obligations under the Loan Documents) concurrently with the receipt by the Administrative Agent and the Lenders of any related prepayment of the Loans required by Section 2.03(b);

 

(c)           no Unrestricted Subsidiary shall own Indebtedness or any equity securities issued by Borrower or any of the Restricted Subsidiaries; and

 

(d)           no Unrestricted Subsidiary shall be obligated with respect to any Indebtedness of Borrower or any of the Restricted Subsidiaries, or subject to any material covenants associated with any such Indebtedness.

 

2.12        Defaulting Lenders.  (a) Adjustments.  Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable Law:

 

(i)            Waivers and Amendments.  That Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in Section 10.01.

 

(ii)           Defaulting Lender Waterfall.  Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of that Defaulting Lender under this Agreement (whether voluntary or mandatory, at maturity, pursuant to Article VIII or otherwise, and including any amounts made available to the Administrative Agent by that Defaulting Lender pursuant to Section 10.08), shall be applied at such time or times as may be determined by the Administrative Agent as follows:  first, to the payment of any amounts owing by that Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to the L/C Issuer hereunder; third, to Cash Collateralize the L/C Issuer’s Fronting Exposure with respect to such Defaulting Lender in accordance with Section 2.13; fourth, as Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such

 

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Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and Borrower, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (y) Cash Collateralize the L/C Issuer’s future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with Section 2.13; sixth, to the payment of any amounts owing to the Lenders or the L/C Issuer as a result of any judgment of a court of competent jurisdiction obtained by any Lender or the L/C Issuer against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to Borrower as a result of any judgment of a court of competent jurisdiction obtained by Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or L/C Borrowings in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 4.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Obligations owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Obligations owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in L/C Obligations are held by the Lenders pro rata in accordance with the Commitments hereunder without giving effect to Section 2.12(a)(iv). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.12(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

 

(iii)          Certain Fees.

 

(A)          No Defaulting Lender shall be entitled to receive any fee payable under Section 2.06(a) for any period during which that Lender is a Defaulting Lender (and Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).

 

(B)          Each Defaulting Lender shall be entitled to receive Letter of Credit Fees for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Applicable Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 2.13.

 

(C)          With respect to any Letter of Credit Fee not required to be paid to any Defaulting Lender pursuant to clause (A) or (B) above, Borrower shall (x) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in L/C Obligations that has been reallocated to such Non-Defaulting

 

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Lender pursuant to clause (iv) below, (y) pay to the L/C Issuer the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to such L/C Issuer’s Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the remaining amount of any such fee.

 

(iv)          Reallocation of Applicable Percentages to Reduce Fronting Exposure.  All or any part of such Defaulting Lender’s participation in L/C Obligations shall be ratably reallocated among the Non-Defaulting Lenders in accordance with their respective Applicable Percentages (calculated without regard to such Defaulting Lender’s Commitment) but only to the extent that (x) the conditions set forth in Section 4.02 are satisfied at the time of such reallocation (and, unless Borrower shall have otherwise notified the Administrative Agent at such time, Borrower shall be deemed to have represented and warranted that such conditions are satisfied at such time), and (y) such reallocation does not cause the aggregate Credit Exposure of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Commitment.  No reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

 

(v)           Cash Collateral.  If the reallocation described in clause (a)(iv) above cannot, or can only partially, be effected, Borrower shall, without prejudice to any right or remedy available to it hereunder or under applicable Law, first, prepay the Loans in an amount sufficient to allow the reallocation described in clause (a)(iv) above to be fully effected, and second, after the repayment in full of the Loans, Cash Collateralize the L/C Issuers’ remaining Fronting Exposure and the other Secured Obligations in accordance with the procedures set forth in Section 2.13.

 

(b)           Defaulting Lender Cure.  If Borrower, the Administrative Agent and the L/C Issuer agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit to be held on a pro rata basis by the Lenders in accordance with their Applicable Percentages (without giving effect to Section 2.12(a)(iv)), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

 

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2.13        Cash Collateral.

 

(a)           Certain Credit Support Events.  Upon the request of the Administrative Agent or the L/C Issuer if (i) the L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, (ii) as of the Letter of Credit Expiration Date, any L/C Obligation for any reason remains outstanding, (iii) Borrower shall be required to provide Cash Collateral pursuant to Section 8.02(d), or (iv) there shall exist a Defaulting Lender, Borrower shall immediately (in the case of clause (iii) above) or within one Business Day (in all other cases) following any request by the Administrative Agent or the L/C Issuer, provide Cash Collateral in an amount not less than the applicable Minimum Collateral Amount (determined in the case of Cash Collateral provided pursuant to clause (iv) above, after giving effect to Section 2.12(a)(iv) and any Cash Collateral provided by the Defaulting Lender).

 

(b)           Grant of Security Interest.  To the extent provided by any Defaulting Lender, such Defaulting Lender hereby grants to (and subjects to the control of) the Administrative Agent, for the benefit of the Administrative Agent, the L/C Issuer and the Lenders, and agrees to maintain, a first priority security interest in all such cash, deposit accounts and all balances therein, and all other property so provided as collateral pursuant hereto, and in all proceeds of the foregoing, all as security for the obligations to which such Cash Collateral may be applied pursuant to Section 2.13(c).  Subject to the terms of the Intercreditor Agreements, if at any time the total amount of Cash Collateral is less than the Minimum Collateral Amount, Borrower will, promptly upon demand by the Administrative Agent, pay or provide to the Collateral Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency. Subject to the terms of the Intercreditor Agreements, all Cash Collateral (other than credit support not constituting funds subject to deposit) shall be maintained in blocked, non-interest bearing deposit accounts at Bank of America. Borrower shall pay on demand therefor from time to time all customary account opening, activity and other administrative fees and charges in connection with the maintenance and disbursement of Cash Collateral.

 

(c)           Application.  Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided (i) by the Borrower under any of this Section 2.13 or Sections 2.03, 2.04, 2.12 or 8.02 in respect of Letters of Credit shall, subject to the Intercreditor Agreements, be held and applied to the Secured Obligations, or (ii) by any other Person under this Section 2.13 or otherwise in respect of Letters of Credit shall be held and applied to the satisfaction of the specific L/C Obligations, obligations to fund participations therein (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) and other obligations for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.

 

(d)           Release.  Cash Collateral (or the appropriate portion thereof) provided to reduce Fronting Exposure or to secure other obligations shall be released, and any Loans repaid by Borrower shall be available for reborrowing by the Borrower, in each case promptly following (i) the elimination of the applicable Fronting Exposure or other obligations giving rise thereto (including by the termination of Defaulting Lender status of the applicable Lender (or, as appropriate, its assignee following compliance with Section 10.06(b)(vi))) or (ii) the determination by the Administrative Agent and the L/C Issuer that (x) the sum of the Cash Collateral at such time plus the amount of Loans prepaid pursuant to Section 2.12(a)(v) and not permitted to be reborrowed at such time exceeds (y) the aggregate amount of all Defaulting Lenders’ Applicable Percentages of the outstanding L/C Obligations less the aggregate amount

 

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of L/C Obligations reallocated pursuant to Section 2.12(a)(iv) at such time, and in the case of clause (ii), only to the extent of such excess; provided, however, (x) any such release shall be without prejudice to, and any disbursement or other transfer of Cash Collateral shall be and remain subject to, any other Lien conferred under the Loan Documents and the other applicable provisions of the Loan Documents, and (y) the Person providing Cash Collateral and the L/C Issuer may agree that Cash Collateral shall not be released but instead held to support future anticipated Fronting Exposure or other Secured Obligations.

 

ARTICLE III
  TAXES, YIELD PROTECTION AND ILLEGALITY

 

3.01        Taxes.  (a) Payments Free of Taxes; Obligation to Withhold; Payments on Account of Taxes.

 

(i)            All payments by or on account of any obligation of Borrower hereunder or under any other Transaction Document shall to the extent permitted by applicable Laws be made free and clear of and without reduction or withholding for any Taxes.  If, however, applicable Laws require Borrower or the Administrative Agent to withhold or deduct any Tax, such Tax shall be withheld or deducted in accordance with such Laws as determined by Borrower or the Administrative Agent, as the case may be, upon the basis of the information and documentation to be delivered pursuant to clause (e) below.

 

(ii)           If Borrower or the Administrative Agent shall be required by applicable Law to withhold or deduct any Taxes, including both United States Federal backup withholding and withholding taxes, from any payment, then (A) Borrower or the Administrative Agent shall withhold or make such deductions as are determined by Borrower or the Administrative Agent, as the case may be, to be required based upon the information and documentation it has received pursuant to clause (e) below, (B) Borrower or the Administrative Agent shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with applicable Law, and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes or Other Taxes, the sum payable by Borrower shall be increased as necessary so that after any such required withholding or the making of all such required deductions (including deductions applicable to additional sums payable under this Section) the applicable recipient of such payment receives an amount equal to the sum it would have received had no such withholding or deduction been made.

 

(b)           Payment of Other Taxes by Borrower.  Without limiting the provisions of clause (a) above, Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable Law.

 

(c)           Tax Indemnifications.

 

(i)            Without limiting the provisions of clause (a) or (b) above, Borrower shall, and does hereby, indemnify the Administrative Agent and each Lender and shall make payment in respect thereof within 10 days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes

 

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imposed or asserted on or attributable to amounts payable under this Section) withheld or deducted by Borrower or the Administrative Agent or paid by the Administrative Agent or that Lender, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  Borrower shall also, and does hereby, indemnify the Administrative Agent, and shall make payment in respect thereof within 10 days after demand therefor, for any amount which a Lender or the L/C Issuer for any reason fails to pay indefeasibly to the Administrative Agent as required by clause (ii) of this clause.  A certificate as to the amount of any such payment or liability delivered to Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

 

(ii)           Without limiting the provisions of clause (a) or (b) above, each Lender shall, and does hereby, indemnify Borrower and the Administrative Agent, and shall make payment in respect thereof within 10 days after demand therefor, against all Taxes and all related losses, claims, liabilities, penalties, interest and expenses (including the fees, charges and disbursements of any counsel for Borrower or the Administrative Agent) incurred by or asserted against Borrower or the Administrative Agent by any Governmental Authority as a result of the failure by that Lender to deliver, or as a result of the inaccuracy, inadequacy or deficiency of, any documentation required to be delivered by that Lender to Borrower or the Administrative Agent pursuant to clause (e).  Each Lender hereby authorizes the Administrative Agent to set off and apply all amounts at any time owing to that Lender under this Agreement or any other Transaction Document against any amount due to the Administrative Agent under this clause (ii).  The agreements in this clause (ii) shall survive the resignation and/or replacement of the Administrative Agent, any assignment of rights by, or the replacement of, a Lender and the repayment, satisfaction or discharge of all Bank Obligations.

 

(d)           Evidence of Payments.  Upon request by Borrower or the Administrative Agent, as the case may be, after any payment of Taxes by Borrower or the Administrative Agent to a Governmental Authority as provided in this Section 3.01, Borrower shall deliver to the Administrative Agent or the Administrative Agent shall deliver to Borrower, as the case may be, the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of any return required by Laws to report such payment or other evidence of such payment reasonably satisfactory to Borrower or the Administrative Agent, as the case may be.

 

(e)           Status of Lenders; Tax Documentation.

 

(i)            Each Lender shall deliver to Borrower and to the Administrative Agent, at the time or times prescribed by applicable Laws or when reasonably requested by Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable Laws or by the taxing authorities of any jurisdiction and such other reasonably requested information as will permit Borrower or the Administrative Agent, as the case may be, to determine (A) whether or not payments made hereunder or under any other Transaction Document are subject to Taxes, (B) if

 

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applicable, the required rate of withholding or deduction, and (C) that Lender’s entitlement to any available exemption from, or reduction of, applicable Taxes in respect of all payments to be made to that Lender by Borrower pursuant to this Agreement or otherwise to establish that Lender’s status for withholding tax purposes in the applicable jurisdiction.

 

(ii)           Without limiting the generality of the foregoing, if Borrower is resident for tax purposes in the United States,

 

(A)          any Lender that is a “United States person” within the meaning of Section 7701(a)(30) of the Code shall deliver to Borrower and the Administrative Agent executed originals of Internal Revenue Service Form W-9 or such other documentation or information prescribed by applicable Laws or reasonably requested by Borrower or the Administrative Agent as will enable Borrower or the Administrative Agent, as the case may be, to determine whether or not that Lender is subject to backup withholding or information reporting requirements; and

 

(B)          each Foreign Lender that is entitled under the Code or any applicable treaty to an exemption from or reduction of withholding tax with respect to payments hereunder or under any other Transaction Document shall deliver to Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the request of Borrower or the Administrative Agent, but only if such Foreign Lender is legally entitled to do so), whichever of the following is applicable:

 

(1)           executed originals of Internal Revenue Service Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United States is a party,

 

(2)           executed originals of Internal Revenue Service Form W-8ECI,

 

(3)           executed originals of Internal Revenue Service Form W-8IMY and all required supporting documentation,

 

(4)           in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under section 881(c) of the Code, (x) a certificate to the effect that such Foreign Lender is not (A) a “bank” within the meaning of section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of Borrower within the meaning of section 881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in section 881(c)(3)(C) of the Code and (y) executed originals of Internal Revenue Service Form W-8BEN, or

 

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(5)           executed originals of any other form prescribed by applicable Laws as a basis for claiming exemption from or a reduction in United States Federal withholding tax together with such supplementary documentation as may be prescribed by applicable Laws to permit Borrower or the Administrative Agent to determine the withholding or deduction required to be made.

 

(iii)                               Each Lender shall promptly (A) notify Borrower and the Administrative Agent of any change in circumstances which would modify or render invalid any claimed exemption or reduction, and (B) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of that Lender, and as may be reasonably necessary (including the re-designation of its Lending Office) to avoid any requirement of applicable Laws of any jurisdiction that Borrower or the Administrative Agent make any withholding or deduction for taxes from amounts payable to that Lender.

 

(iv)                              Each Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of any other form prescribed by applicable Law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable Law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made.

 

(v)                                 If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this Section 3.01(e)(iv), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

(f)                                   Treatment of Certain Refunds.  Unless required by applicable Laws, at no time shall the Administrative Agent have any obligation to file for or otherwise pursue on behalf of a Lender, or have any obligation to pay to any Lender, any refund of Taxes withheld or deducted from funds paid for the account of that Lender.  If the Administrative Agent or any Lender determines, in its reasonable discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by Borrower or with respect to which Borrower

 

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has paid additional amounts pursuant to this Section, it shall pay to Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by Borrower under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses incurred by the Administrative Agent or that Lender, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that Borrower, upon the request of the Administrative Agent or that Lender, agrees to repay the amount paid over to Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or that Lender in the event the Administrative Agent or that Lender is required to repay such refund to such Governmental Authority.  This clause shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes that it deems confidential) to Borrower or any other Person.

 

(g)           L/C Issuer.  For purposes of this Section 3.01, the term “Lender” includes any L/C Issuer.

 

3.02        Illegality.  If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or to determine or charge interest rates based upon the Eurodollar Rate, or any Governmental Authority has imposed material restrictions on the authority of that Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by that Lender to Borrower through the Administrative Agent, any obligation of that Lender to make or continue Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans shall be suspended until that Lender notifies the Administrative Agent and Borrower that the circumstances giving rise to such determination no longer exist.  Subject to the obligations of that Lender pursuant to Section 3.06, upon receipt of such notice, Borrower shall, upon demand from that Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of that Lender to Base Rate Loans, either on the last day of the Interest Period therefor, if that Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if that Lender may not lawfully continue to maintain such Eurodollar Rate Loans.  Upon any such prepayment or conversion, Borrower shall also pay accrued interest on the amount so prepaid or converted.

 

3.03        Inability to Determine Rates.  If the Required Lenders determine that for any reason in connection with any request for a Eurodollar Rate Loan or a conversion to or continuation thereof that (a) Dollar deposits are not being offered to banks in the London interbank eurodollar market for the applicable amount and Interest Period of such Eurodollar Rate Loan, (b) adequate and reasonable means do not exist for determining the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan, or (c) the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to that Lenders of funding such Loan, the Administrative Agent will promptly so notify Borrower and each Lender.  Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be suspended until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice.  Upon receipt of such notice, Borrower may revoke any pending request for a Borrowing of, conversion

 

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to or continuation of Eurodollar Rate Loans or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Loans in the amount specified therein.

 

3.04        Increased Costs; Reserves on Eurodollar Rate Loans.  (a) Increased Costs Generally.  If any Change in Law shall:

 

(i)            impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement contemplated by Section 3.04(e)) or the L/C Issuer;

 

(ii)           subject any Lender or the L/C Issuer to any tax of any kind whatsoever with respect to this Agreement or any Eurodollar Rate Loan made by it, or change the basis of taxation of payments to that Lender in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 3.01 and the imposition of, or any change in the rate of, any Excluded Tax payable by that Lender or the L/C Issuer); or

 

(iii)          impose on any Lender, the L/C Issuer or the London interbank market any other condition, cost or expense affecting this Agreement or Eurodollar Rate Loans made by that Lender or the L/C Issuer;

 

and the result of any of the foregoing shall be to increase the cost to that Lender of making or maintaining any Eurodollar Rate Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or the L/C Issuer of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by that Lender or the L/C Issuer hereunder (whether of principal, interest or any other amount) then, upon request of that Lender or the L/C Issuer, Borrower will pay to that Lender or the L/C Issuer, as the case may be, such additional amount or amounts as will compensate that Lender for such additional costs incurred or reduction suffered.

 

(b)           Capital Requirements.  If any Lender or the L/C Issuer determines that any Change in Law affecting that Lender or the L/C Issuer or any Lending Office of that Lender or the L/C Issuer or that Lender’s or the L/C Issuer’s holding company, if any, regarding capital requirements has or would have the effect of reducing the rate of return on that Lender’s or the L/C Issuer’s capital or on the capital of that Lender’s or the L/C Issuer’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the L/C Issuer, to a level below that which that Lender or the L/C Issuer or that Lender’s or the L/C Issuer’s holding company could have achieved but for such Change in Law (taking into consideration that Lender’s policies and the policies of that Lender’s or the L/C Issuer’s holding company with respect to capital adequacy), then from time to time Borrower will pay to that Lender or the L/C Issuer such additional amount or amounts as will compensate that Lender or the L/C Issuer or that Lender’s or the L/C Issuer’s holding company for any such reduction suffered.

 

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(c)           Certificates for Reimbursement.  A certificate of a Lender setting forth the amount or amounts necessary to compensate that Lender or its holding company, as the case may be, as specified in clause (a) or (b) of this Section and delivered to Borrower shall be conclusive absent manifest error.  Borrower shall pay that Lender the amount shown as due on any such certificate within 10 Business Days after receipt thereof.

 

(d)           Delay in Requests.  Failure or delay on the part of any Lender or the L/C Issuer to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of that Lender’s right to demand such compensation, provided that Borrower shall not be required to compensate a Lender or the L/C Issuer pursuant to the foregoing provisions of this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that that Lender or the L/C Issuer notifies Borrower of the Change in Law giving rise to such increased costs or reductions and of that Lender’s or the L/C Issuer’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).

 

(e)           Reserves on Eurodollar Rate Loans.  Borrower shall pay to each Lender, as long as that Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits (currently known as “Eurocurrency liabilities”), additional interest on the unpaid principal amount of each Eurodollar Rate Loan equal to the actual costs of such reserves allocated to such Loan by that Lender (as determined by that Lender in good faith, which determination shall be conclusive absent manifest error), which shall be due and payable on each date on which interest is payable on such Loan, provided Borrower shall have received at least 10 Business Days’ prior notice (with a copy to the Administrative Agent) of such additional interest from that Lender.  If a Lender fails to give notice 10 Business Days prior to the relevant Interest Payment Date, such additional interest shall be due and payable 10 Business Days from receipt of such notice.

 

3.05        Compensation for Losses.  Upon written demand of any Lender (with a copy to the Administrative Agent) from time to time, Borrower shall promptly compensate that Lender for and hold that Lender harmless from any loss, cost or expense incurred by it as a result of:

 

(a)           any continuation, conversion, payment or prepayment of any Loan other than a Base Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);

 

(b)           any failure by Borrower (for a reason other than the failure of that Lender to make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on the date or in the amount notified by Borrower; or

 

(c)           any assignment of a Eurodollar Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by Borrower pursuant to Section 10.13;

 

including any loss of anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate

 

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the deposits from which such funds were obtained.  Borrower shall also pay any customary administrative fees charged by that Lender in connection with the foregoing.

 

For purposes of calculating amounts payable by Borrower to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan was in fact so funded.

 

3.06        Mitigation Obligations; Replacement of Lenders and L/C Issuers.  (a) Designation of a Different Lending Office.  If any Lender or the L/C Issuer requests compensation under Section 3.04, or Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, or if any Lender gives a notice pursuant to Section 3.02, then at the request of Borrower that Lender or the L/C Issuer shall, as applicable, use commercially reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or Affiliates, if, in the judgment of that Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in the future, or eliminate the need for the notice pursuant to Section 3.02, as applicable, and (ii) in each case, would not subject that Lender or the L/C Issuer to any unreimbursed cost or expense and would not otherwise be disadvantageous to that Lender or the L/C Issuer, as the case may be.  Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender or the L/C Issuer in connection with any such designation or assignment.

 

(b)           Replacement of Lenders and L/C Issuers.  If any Lender or L/C Issuer requests compensation under Section 3.04, or if Borrower is required to pay any additional amount to any Lender or L/C Issuer, or any Governmental Authority for the account of any Lender or L/C Issuer pursuant to Section 3.01, or if any Lender determines that any Law or action of any Governmental Authority adversely affects that Lender’s or its applicable Lending Office’s ability to make, maintain or fund Eurodollar Rate Loans as set forth in Section 3.02, Borrower may replace that Lender or L/C Issuer in accordance with Section 10.13.

 

3.07        Special Provisions regarding Compensation for Rate Inadequacies.  Borrower agrees that each Loan under this Agreement will be a Eurodollar Rate Loan (and that Borrower shall not designate any such Loan as a Base Rate Loan) unless the Administrative Agent or the Required Lenders determine that (i) Dollar deposits are not being offered to banks in the London interbank eurodollar market for the applicable amount and Interest Period of such Eurodollar Rate Loan, (ii) adequate and reasonable means do not exist for determining the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan, or (iii) the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to that Lenders of funding such Loan.  In the event of any such determination, the Administrative Agent will promptly notify Borrower and each Lender thereof, and the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be suspended until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice, and each Loan will be treated as a Base Rate Loan.  Notwithstanding the proceeding sentence, the Administrative Agent may require during any

 

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Default or Event of Default that the availability of Eurodollar Rate Loans be suspended, and that all Loans be Base Rate Loans.

 

3.08        Survival.  All of Borrower’s obligations under this Article III shall survive repayment of all Bank Obligations hereunder and resignation of the Administrative Agent.

 

ARTICLE IV
  CONDITIONS PRECEDENT

 

4.01        Conditions Precedent to Closing Date.  The occurrence of the Closing Date and the obligation of the Lenders and the L/C Issuer to make the initial Credit Extensions hereunder are subject to satisfaction of the following conditions precedent:

 

(a)           The Administrative Agent’s receipt of the following unless otherwise specified, each properly executed by the relevant parties, and each in form and substance satisfactory to the Administrative Agent and each of the Lenders:

 

(i)            executed counterparts of this Agreement;

 

(ii)           an omnibus reaffirmation by MGM Resorts and each Loan Party of each Transaction Document to which it is a party (and including a reaffirmation by MGM Resorts of its obligations under the MGM Resorts Completion Guarantee) in substantially the form of Exhibit F;

 

(iii)          such additional certificates of resolutions or other action, incumbency certificates and other certificates of Responsible Officers of each Loan Party as the Administrative Agent may reasonably require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Transaction Documents to which such Loan Party is a party;

 

(iv)          such documents and certifications as the Administrative Agent may reasonably require to evidence that each Loan Party is duly organized or formed, validly existing, in good standing and qualified to engage in business in each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification;

 

(v)           evidence that all insurance required to be maintained pursuant to the Transaction Documents has been obtained and is in effect, together with the certificates of insurance, naming the Collateral Agent, on behalf of the Lender Secured Parties, as an additional insured or loss payee, as the case may be, under all insurance policies maintained with respect to the assets and properties of the Loan Parties that constitutes Collateral;

 

(vi)          opinions of Gibson, Dunn & Crutcher LLP, special counsel to Borrower and its Subsidiaries, and Lionel, Sawyer and Collins, Nevada counsel to Borrower and its

 

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Subsidiaries, covering such matters as the Administrative Agent may request and addressed to the Administrative Agent, the Collateral Agent and each Lender;

 

(vii)         a certificate signed by a Responsible Officer of Borrower certifying (A) that the conditions specified in Section 4.02(a) and (b) have been satisfied, and (B) that there has been no event or circumstance since December 31, 2011 that has had or could be reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect;

 

(viii)        modifications to the Deed of Trust and to the Circus Deeds of Trust, together with title instructions in form and substance satisfactory to the Administrative Agent shall have been executed by Nevada Title Company, as agent for Commonwealth Title Insurance Company irrevocably authorizing the recordation of such modifications on the Closing Date, with irrevocable commitments to issue title insurance endorsements that are requested by the Administrative Agent in its reasonable discretion (including, without limitation, a date down and modification endorsement) to the policies issued in respect of the Deed of Trust and the Circus Deeds of Trust, comparable in form and substance to existing coverage or otherwise acceptable to the Administrative Agent in its reasonable discretion and, (a) as to the endorsement to the policy issued in respect of the Deed of Trust, providing mechanics’ lien coverage substantially similar to such policy’s existing mechanics’ lien coverage and (b) as to the endorsements to the policies issued in respect of the Circus Deeds of Trust containing no exceptions for mechanics’ liens; and

 

(ix)          promissory notes executed by Borrower in favor of each Lender requesting a promissory note pursuant to Section 2.08(a);

 

(b)           the Administrative Agent shall have received evidence that Borrower shall have paid all interest and fees outstanding under the Existing Credit Agreement; and

 

(c)           all fees and expenses required to be paid pursuant to the Fee Letter to the Administrative Agent, the Arrangers and the Lenders on or before the Closing Date shall have been paid or otherwise arranged for to the satisfaction of the Administrative Agent.

 

Without limiting the generality of the provisions of Section 9.03(e), for purposes of determining compliance with the conditions specified in this Article IV, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from that Lender prior to the proposed Closing Date specifying its objection thereto.

 

Upon the satisfaction of the foregoing conditions, this Agreement shall concurrently become effective to amend and restate the Existing Credit Agreement in its entirety.

 

4.02        Conditions Precedent to All Credit Extensions.  The obligation of each Lender to honor any Request for Credit Extension (other than a Loan Notice requesting only a conversion of Loans to the other Type, or a continuation of Eurodollar Rate Loans), including the initial continuation of the Existing Loans as Loans hereunder on the Closing Date, is subject to the following conditions precedent:

 

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(a)           the representations and warranties of Borrower contained in Article V and in each other Loan Document to which it is party, shall be true and correct in all material respects on and as of the date of the applicable Credit Extension, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date;

 

(b)           no Default shall exist, or would result from such proposed Credit Extension or from the application of the proceeds thereof;

 

(c)           the Administrative Agent and, if applicable, the L/C Issuer, shall have received a Request for Credit Extension in accordance with the requirements hereof.

 

Each Request for Credit Extension (other than a Loan Notice requesting only a conversion of Loans to the other Type or a continuation of Eurodollar Rate Loans) submitted by Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections 4.02(a) and (b) have been satisfied on and as of the date of the applicable Credit Extension.

 

ARTICLE V
  REPRESENTATIONS AND WARRANTIES

 

Borrower represents and warrants to the Administrative Agent and the Lenders that:

 

5.01        Existence, Qualification and Power.  Each Loan Party:

 

(a)           is duly incorporated, organized or formed, as the case may be, validly existing and, as applicable, in good standing under the Laws of its jurisdiction of organization;

 

(b)           has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (A) own or lease its assets and carry on its business as it is presently conducted and (B) execute, deliver and perform its obligations under the Transaction Documents to which it is a party; and

 

(c)           is duly qualified and is licensed and, as applicable, in good standing under the Laws of Nevada and each other jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license or where the failure to be so qualified or licensed would not constitute a Material Adverse Effect.

 

5.02        Authorization; No Contravention.  The execution, delivery and performance by each Loan Party of each Transaction Document to which such Person is or is to be a party have been duly authorized by all necessary corporate or other organizational action, and do not and will not:

 

(a)           contravene the terms of any of such Person’s Organization Documents;

 

(b)           conflict with or result in any breach or contravention of, or the creation of any Lien under, or require any payment to be made under (i) any material Contractual Obligation to which such Person is a party or affecting such Person or the properties of such Person or any

 

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of its Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its Property is subject; or

 

(c)           violate any Law applicable to such Person.

 

5.03        Governmental Authorization; Other Consents.  Except as set forth on Schedule 5.03, no approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with:

 

(a)           the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Transaction Document;

 

(b)           the grant by the Loan Parties of the Liens granted pursuant to the Collateral Documents;

 

(c)           the perfection or maintenance of the Liens created under the Collateral Documents (including the first priority nature thereof);

 

(d)           the exercise by the Collateral Agent, the Administrative Agent or any Lender of their respective rights under the Transaction Documents or the remedies in respect of the Collateral pursuant to the Collateral Documents; or

 

(e)           the enforcement of the Transaction Documents or the right of the Collateral Agent, the Administrative Agent and the Lenders to receive payments thereunder.

 

5.04        Binding Effect.  This Agreement has been, and each other Transaction Document, when delivered hereunder, will have been, duly executed and delivered by each Loan Party that is a party thereto.  This Agreement constitutes, and each other Transaction Document when so delivered will constitute, a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto in accordance with its terms, except as enforceability may be limited by Debtor Relief Laws, or equitable principles or as a matter of judicial discretion.

 

5.05        Financial Statements; No Material Adverse Effect.  (a) The Audited Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby; (ii) fairly present the financial condition of Borrower and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby; and (iii) show all material indebtedness and other liabilities, direct or contingent, of Borrower and its Subsidiaries as of the date thereof, including liabilities for taxes, material commitments and Indebtedness.

 

(b)           Since December 31, 2011, there has been no event or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect.

 

5.06        Litigation.  There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of Borrower, threatened or contemplated, at law, in equity, in arbitration or

 

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before any Governmental Authority, by or against any of the Loan Parties or against any of their properties or revenues that (a) purport to affect or pertain to this Agreement or any other Transaction Document, (b)  purport to restrain the operation of CityCenter, or (c) could reasonably be expected to have a Material Adverse Effect.

 

5.07        No Default.  Neither Borrower nor any Restricted Subsidiary thereof is in default under or with respect to, or a party to, any Contractual Obligation that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  No Default has occurred and is continuing.

 

5.08        Environmental Compliance.  (a) There is no fact known to Borrower regarding the compliance of CityCenter with Environmental Laws which is not reflected in the Environmental Report or subsequently disclosed to the Administrative Agent and that could reasonably be expected to result in a Material Adverse Effect.

 

(b)           None of the Property subject to the Deed of Trust is listed or proposed for listing on the NPL or on the CERCLIS or any analogous list, except to the extent that such listing or proposal for listing could not reasonably be expected to result in a Material Adverse Effect.

 

(c)           Neither the Loan Parties, the Managing Member nor any of the MGM Resorts Sponsor Entities has received any written notice from any Governmental Authority to the effect that CityCenter is not in compliance with Environmental Laws, except to the extent that such noncompliance could not reasonably be expected to result in a Material Adverse Effect.  Neither the Loan Parties nor the Managing Member has received any written notice from any Governmental Authority to the effect that CityCenter are not in material compliance with Environmental Laws which has not been delivered to the Administrative Agent.

 

(d)           All use, storage, discharge and disposal of Hazardous Materials on CityCenter have been conducted in a manner which is in material compliance with all applicable Laws, except for any such use, discharge or disposal which, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

 

(e)           None of the Loan Parties have undertaken or completed, and none of the Loan Parties as of any date is undertaking or has completed, either individually or together with other potentially responsible parties, any investigation or assessment or remedial or response action relating to any actual or threatened release, discharge or disposal of Hazardous Materials at CityCenter, either voluntarily or pursuant to the order of any Governmental Authority or the requirements of any Environmental Law, except as may be disclosed in writing to the Administrative Agent; and all Hazardous Materials generated, used, treated, handled or stored at, or transported to or from, CityCenter have been disposed of in a manner not reasonably expected to result in a Material Adverse Effect.

 

5.09        Insurance.  The Loan Parties maintain the casualty, liability, builder’s all-risk and other insurance coverages in respect of CityCenter described on Schedule 5.09.  Each such policy is (except as set forth on Schedule 5.09) maintained through financially sound and reputable insurance companies (which, except as noted on such Schedule, are not Sponsor Entities).

 

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5.10        Taxes.  The Loan Parties have filed all Federal, state and other material tax returns and reports required to be filed, and have paid all Federal, state and other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their Properties or income otherwise due and payable, except those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been established.  As of the Closing Date, there is no proposed tax assessment against any of the Loan Parties that would, if made, have a Material Adverse Effect.

 

5.11        ERISA.  Neither Borrower or any of its Restricted Subsidiaries maintains or is obligated to contribute to any Pension Plan.

 

5.12        Subsidiaries; Equity Interests; Loan Parties.  As of the Closing Date, Borrower has no Subsidiaries or other equity investments other than those disclosed on Schedule 5.12, and Schedule 5.12 shows, as of the Closing Date, with respect to each such Subsidiary or equity investment as of the Closing Date, the jurisdiction of its formation, the address of its principal place of business and its United States taxpayer identification number.

 

5.13        Intellectual Property.  Except as could not reasonably be expected to result in a Material Adverse Effect, the Loan Parties own or have the right to use all patents, trademarks, permits, service marks, trade names, copyrights, franchises, licenses and other rights with respect thereto, that are necessary for the operation of their business as contemplated in the Transaction Documents, which rights do not infringe any similar rights owned by any other Person in any respect.

 

5.14        Margin Regulations; Investment Company Act.  (a) Borrower is not engaged and will not engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin stock.

 

(b)           Neither Borrower nor any of Borrower’s Restricted Subsidiaries is or is required to be registered as an “investment company” under the Investment Company Act of 1940.  There is no restriction at law upon the ability of the Loan Parties to enter into the Transaction Documents and perform their respective obligations thereunder by reason of the Investment Company Act of 1940.

 

5.15        Disclosure.  No written statement made by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or under any other Transaction Document (in each case as modified or supplemented by other information so furnished) as of the date thereof contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (and, as of the Closing Date, all such statements continue, to the best knowledge of Borrower, to be accurate in all material respects); provided that, with respect to projected financial information, Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.

 

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5.16        Projections.  As of the date of the preparation of Projections, to the best knowledge of Borrower, the assumptions set forth in Projections were reasonable and consistent with each other and with all relevant facts known to Borrower and its Subsidiaries as of that date, and Projections were reasonably based on such assumptions.  As of the Closing Date, no fact or circumstance has come to the attention of Borrower since the preparation of Projections which is in material conflict with the assumptions set forth in Projections.  Nothing in this Section shall be construed as a representation or covenant that Projections in fact will be achieved.  The Administrative Agent and the Lender acknowledge that Projections are forward-looking statements and that actual financial results for Borrower and its Subsidiaries could differ materially from those set forth in Projections.

 

5.17        Compliance with Laws.  Each of the Loan Parties is in compliance in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply therewith, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

5.18        Collateral Documents.  The provisions of the Collateral Documents are effective to create in favor of the Collateral Agent for the benefit of the Lender Secured Parties a legal, valid and enforceable first priority Lien (subject to Permitted Liens) on all right, title and interest of the respective Loan Parties in the Collateral described therein securing the Bank Obligations in the manner contemplated by the Collateral Agent Agreement.  Except for those filings and recordations that have already been made or as permitted by the Collateral Documents, no filing or other action will be necessary to perfect or protect such Liens.

 

5.19        Deposit and Brokerage Accounts.  (a) As of the Closing Date, each deposit, brokerage, or other similar account maintained by the Loan Parties is described on Schedule 5.19.

 

(b)           Each deposit, brokerage, or other similar account maintained by the Loan Parties is pledged to the Collateral Agent for the benefit of the Lender Secured Parties to secure the Bank Obligations and (except in the case of “cage cash,” international marketing, payroll and zero balance accounts) is the subject of a Control Agreement.

 

ARTICLE VI
  AFFIRMATIVE COVENANTS

 

So long as any Lender shall have any Commitment, any Loan or other Bank Obligation hereunder shall remain unpaid or unsatisfied (other than contingent indemnity obligations), or any Letter of Credit shall remain outstanding, Borrower shall, and shall (except in the case of the covenants set forth in Sections 6.01, 6.02, and 6.03) cause each Restricted Subsidiary to:

 

6.01        Financial Statements.  Make available to the Administrative Agent and each Lender, in form and detail satisfactory to the Administrative Agent:

 

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(a)           as soon as available, but in any event within 90 days after the end of each fiscal year of Borrower, a consolidated balance sheet of Borrower and its Subsidiaries as at the end of that fiscal year, and the related consolidated statements of operations, changes in members’ equity, and cash flows for that fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, audited and accompanied by a report and opinion of an independent certified public accountant of nationally recognized standing reasonably acceptable to the Required Lenders, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit; provided that it shall not be a violation of this clause if the opinion accompanying the financial statements for the applicable fiscal year is subject to a “going concern” or like qualification solely as a result of the fact that the Maturity Date is within 365 days of the date of such report and opinion;

 

(b)           as soon as practicable, and in any event within 45 days after the end of each of the first three fiscal quarters of each fiscal year of Borrower, (i) a consolidated balance sheet of Borrower and its Subsidiaries as of the end of such fiscal quarter substantially in the form of Exhibit AA, (ii) the related consolidated statements of operations for such fiscal quarter and for the portion of Borrower’s fiscal year then ended for CityCenter (including allocations by CityCenter component) substantially in the form of Exhibit AA, (iii) consolidated statements of cash flows for the portion of Borrower’s fiscal year then ended substantially in the form of Exhibit AA, and (iv) any other quarterly financial data reasonably requested by the Administrative Agent, each subject only to normal year-end audit adjustments, the absence of statements of members’ equity, and the absence of footnotes, all in reasonable detail and duly certified by the chief executive officer, chief financial officer, treasurer or controller of Borrower or the Managing Member certifying that each such financial statement delivered pursuant to this Section has been prepared in accordance with GAAP (subject only to normal year-end audit adjustments, the absence of statements of members’ equity, and the absence of footnotes), consistently applied throughout the periods covered thereby, except as otherwise expressly noted therein, fairly presents the financial condition, results of operations and (where required) cash flows of Borrower and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby subject to the absence of footnotes and to normal year-end audit adjustments, and each schedule delivered in connection therewith setting forth the financial condition and results of operations of any Unrestricted Subsidiaries is accurate in all material respects;

 

(c)           within 45 days after the end of each fiscal year of Borrower (but no earlier than 60 days before the end of each fiscal year), projections for the upcoming fiscal year substantially in the format of the Projections (or as approved by the Administrative Agent in its discretion), which projections shall be accompanied by a certificate of the chief executive officer, chief financial officer, treasurer or controller of Borrower or the Managing Member stating that, at the time made, such projections are based on reasonable estimates, information and assumptions; and

 

(d)           not later than ten Business Days following the last day of each fiscal year of Borrower, a Condo Deposit — Sales Report and a Sponsor Equity Report.

 

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As to any information contained in materials furnished pursuant to Section 6.02(f), Borrower shall not be separately required to furnish such information under subsection (a) or (b) above, but the foregoing shall not be in derogation of the obligation of Borrower to furnish the information and materials described in subsections (a) and (b)  above at the times specified therein.

 

6.02        Certificates; Other Information.  Deliver to the Administrative Agent and each Lender, in form and detail satisfactory to the Administrative Agent and the Required Lenders:

 

(a)           concurrently with the delivery of the financial statements referred to in Section 6.01(a), a certificate of Borrower’s independent certified public accountants certifying such financial statements;

 

(b)           concurrently with the delivery of the annual financial statements referred to in Section 6.01(a) and the quarterly financial statements referred to in Section 6.01(b), (i) a Compliance Certificate signed by the chief executive officer, chief financial officer, treasurer or controller of Borrower or the Managing Member, and (ii) a copy of management’s discussion and analysis with respect to such financial statements (provided that such management’s discussion and analysis shall not be required to be delivered in connection with the quarterly financial statements referred to in Section 6.01(b) until such time as Borrower becomes subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended);

 

(c)           promptly after any request by the Administrative Agent or any Lender, copies of any detailed audit reports, management letters or recommendations submitted to the managers or members of Borrower by its independent accountants in connection with the accounts or books of the Loan Parties, or any audit of any of them;

 

(d)           promptly following any request by the Administrative Agent, a schedule identifying each Condo Unit that has been sold;

 

(e)           promptly, such additional information regarding the business, financial, legal or corporate affairs of CityCenter, any Loan Party or any Restricted Subsidiary thereof, or compliance with the terms of the Transaction Documents, as the Administrative Agent or any Lender may from time to time reasonably request;

 

(f)            promptly after the same are available, copies of all annual, regular, periodic and special reports and registration statements which the Borrower may file or be required to file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934, and not otherwise required to be delivered to the Administrative Agent pursuant hereto; and

 

(g)           promptly after the same are available, copies of all annual and quarterly financial reports which the Borrower is required to deliver to the First Lien Noteholders and not otherwise required to be delivered to the Administrative Agent pursuant hereto.

 

Documents required to be delivered pursuant to Section 6.01(a) or (b) or Section 6.02(f) or (g) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which Borrower posts such documents, or provides a link thereto, on

 

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Borrower’s website on the Internet at the website address listed on Schedule 10.02; or (ii) on which such documents are posted on Borrower’s behalf on an Internet or intranet website, if any, to which each Lender, the L/C Issuer and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that: (A) Borrower shall deliver paper copies of such documents to the Administrative Agent or any Lender that requests Borrower to deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or that Lender and (B) Borrower shall notify the Administrative Agent, the L/C Issuer and each Lender (by telecopier or electronic mail) of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents.  The Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by Borrower with any such request for delivery, and each Lender and the L/C Issuer shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

 

The Administrative Agent and MLPFS will make available to Borrower, the Lenders and the L/C Issuer materials and/or information provided by or on behalf of the Loan Parties and the Sponsor Entities (collectively, “Borrower Materials”) by posting Borrower Materials on IntraLinks or another similar electronic system (the “Platform”).  Certain of the Lenders and the L/C Issuer (each, a “Public Lender”) may have personnel who do not wish to receive material non-public information with respect to the Loan Parties or the Sponsor Entities, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Persons’ securities.  Borrower will clearly identify any portion of Borrower Materials that may be distributed to the Public Lenders as being suitable for posting to the public section of the Platform, and shall be deemed to have authorized the Administrative Agent, MLPFS, the L/C Issuer and the Lenders to treat such Borrower Materials as not containing any material non-public information (although it may be sensitive and proprietary) with respect to Borrower or its securities for purposes of United States Federal and state securities laws (provided, however, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 10.07).  The Administrative Agent and MLPFS shall treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Side Information.”

 

6.03        Notices.  Promptly and in any event within five Business Days following the date upon which Borrower becomes aware thereof, notify the Administrative Agent of:

 

(a)           the occurrence of any Default, which notice shall describe with particularity all provisions of this Agreement and any other Transaction Document that have been breached;

 

(b)           any matter that has resulted or would reasonably be expected to result in a Material Adverse Effect;

 

(c)           any material change in accounting policies or financial reporting practices by the Loan Parties;

 

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(d)           the (i) occurrence of any Disposition of Property for which Borrower is required to make a mandatory prepayment pursuant to Section 2.03, and (ii) receipt by the Loan Parties of any Extraordinary Receipts for which Borrower is required to make a mandatory prepayment pursuant to Section 2.03;

 

(e)           any action or proceeding against or of any noncompliance by the Loan Parties with any Environmental Law or Environmental Permit that could (i) reasonably be expected to have a Material Adverse Effect or (ii) cause any portion of CityCenter to be subject to any restrictions on ownership, occupancy, use or transferability under any Environmental Law;

 

(f)            any casualty at CityCenter which results in damage or destruction which is reasonably estimated by Borrower to have a replacement cost in excess of $10,000,000, a report summarizing such casualty and, thereafter, written updates at such intervals as the Administrative Agent may reasonably request;

 

(g)           the occurrence of any ERISA Event; and

 

(h)           issuances of (i) Indebtedness in excess of $10,000,000 in a single transaction or a series of related transactions or (ii) Equity Interests by Borrower or any Restricted Subsidiary.

 

6.04        Payment of Obligations.  Pay and discharge as the same shall become due and payable, all its material obligations and liabilities, including all material tax liabilities, assessments and governmental charges or levies upon it or its Properties, unless the same are being contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by Borrower or such Restricted Subsidiary.

 

6.05        Preservation of Existence, Etc.  (a) Preserve, renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization; provided, however, that Borrower and its Restricted Subsidiaries may consummate any merger or consolidation permitted under Section 7.04; and

 

(b)           take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its business, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

 

6.06        Maintenance of Properties.  Maintain, preserve and protect their respective Properties, ordinary wear and tear excepted; provided, however, that notwithstanding the foregoing, Borrower may demolish the Harmon (the “Demolition Work”) so long as the following conditions are satisfied:

 

(a)           the Demolition Work shall not unreasonably interfere with the use and operation of the remainder of CityCenter;

 

(b)           the demolition contractor for the Harmon and any material subcontractors shall maintain, at all times during the Demolition Work,  casualty, liability, builder’s all-

 

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risk and other insurance coverages reasonably required by the Administrative Agent, through financially sound and reputable insurance companies with such deductibles and covering such risks as are customarily carried by demolition contractors of similar size, skill and expertise for projects such as the Harmon.  The insurance required hereunder shall include an endorsement naming the Administrative Agent, the Collateral Agent and their respective employees, officers, directors, trustees and agents as additional insureds on all policies providing required coverages; and

 

(c)           any Demolition Work shall be funded with any one or more of the following sources or any combination thereof: (i) the proceeds of Harmon Equity, (ii) the proceeds of Harmon-Related Net Extraordinary Receipts or (iii) cash or Cash Equivalents in the case of this clause (iii) in an aggregate amount not to exceed $30,000,000.

 

6.07        Insurance.  Maintain with financially sound and reputable insurance companies, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts (after giving effect to any self-insurance compatible with the following standards) as are customarily carried under similar circumstances by such other Persons and providing for not less than 30 days’ prior notice to the Administrative Agent of termination, lapse or cancellation of such insurance (or, in the case of non-payment of premiums, 10 days).  No such insurance shall be maintained with the Loan Parties or any Sponsor Entity except as set forth on Schedule 5.09.

 

6.08        Compliance with Laws.  Comply in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or Property, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted; or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.

 

6.09        Books and Records.  Maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of Borrower or such Restricted Subsidiary, as the case may be.

 

6.10        Inspection Rights.  Permit representatives and independent contractors of the Administrative Agent, the Collateral Agent and each Lender to visit and inspect CityCenter, to examine the corporate, financial and operating records of the Loan Parties, and make copies thereof or abstracts therefrom, and to discuss their affairs, finances and accounts with the Sponsors and the officers, and independent public accountants of the Loan Parties, all at the expense of Borrower and at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to Borrower; provided, however, that when an Event of Default exists the Administrative Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of Borrower at any time during normal business hours and without advance notice.

 

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6.11        Covenant to Guarantee Obligations and Give Security.  (a) Notify the Administrative Agent within five Business Days of the date that any Person becomes a Restricted Subsidiary of Borrower and promptly thereafter (and in any event within ten Business Days following such date, except for any delay occasioned by any required Gaming Approvals) cause such Person to:

 

(i)            execute and deliver to the Administrative Agent a joinder to the Subsidiary Guaranty; and

 

(ii)           deliver to the Collateral Agent any Collateral Documents and certificates of the types referred to in Section 4.01(a) and opinions of counsel to such Person (which shall cover, among other things, the legality, validity, binding effect and enforceability of the documentation referred to in this Section), all in form, content and scope reasonably satisfactory to the Administrative Agent, provided that Borrower or the applicable Restricted Subsidiary shall not be required to pledge its Equity Interests in any gaming licensee which is a Restricted Subsidiary, to deliver the certificates evidencing such Equity Interests, or to agree not to pledge such Equity Interests to others, in each case until they have obtained all Gaming Approvals thereto (which Borrower agrees to obtain, or cause the applicable Restricted Subsidiary to obtain, promptly).

 

(b)           Notify the Administrative Agent within five Business Days of the date that any Loan Party obtains any property which is not subject to a perfected Lien in favor of the Collateral Agent and promptly thereafter (and in any event within ten Business Days following such date) cause the Loan Party owning such property to:

 

(i)            deliver Collateral Documents granting Liens on such property to the Collateral Agent in form and substance acceptable to the Administrative Agent

 

(ii)           deliver to the Administrative Agent documents and certificates of the types referred to in Sections 4.01(a) and opinions of counsel to such Person (which shall cover, among other things, the legality, validity, binding effect and enforceability of the documentation referred to in this Section), all in form, content and scope reasonably satisfactory to the Administrative Agent.

 

(c)           Notify the Administrative Agent of each deposit, brokerage or other similar account opened by any of the Loan Parties, and refrain from depositing money or property therein unless (except in the case of “cage cash,” international marketing, payroll and zero balance accounts) such account is subject to a Control Agreement in favor of the Collateral Agent.

 

6.12        Compliance with Environmental Laws.  Comply, and use commercially reasonable efforts to cause all lessees and other Persons operating or occupying its properties to comply, in all material respects, with all applicable Environmental Laws and Environmental Permits; obtain and renew all Environmental Permits necessary for its operations and properties; and conduct any investigation, study, sampling and testing, and undertake any cleanup, removal, remedial or other action necessary to remove and clean up all Hazardous Materials from any of its properties, in accordance with the requirements of all Environmental Laws; provided,

 

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however, that none of the Loan Parties shall be required to undertake any such cleanup, removal, remedial or other action to the extent that its obligation to do so is being contested in good faith and by proper proceedings and appropriate reserves are being maintained with respect to such circumstances in accordance with GAAP.

 

6.13        Further Assurances.  Promptly upon request by the Administrative Agent, or any Lender through the Administrative Agent, (a) correct any material defect or error that may be discovered in any Transaction Document or in the execution, acknowledgment, filing or recordation thereof, and (b) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register all such further acts, deeds, certificates, assurances and other instruments as the Administrative Agent, or any Lender through the Administrative Agent, may reasonably require from time to time in order to (i) carry out more effectively the purposes of the Transaction Documents, (ii) to the fullest extent permitted by applicable law, subject any of the Loan Parties’ properties, assets, rights or interests to the Liens now or hereafter intended to be covered by any of the Collateral Documents, (iii) perfect and maintain the validity, effectiveness and priority of any of the Collateral Documents and any of the Liens intended to be created thereunder and (iv) assure, convey, grant, assign, transfer, preserve, protect and confirm more effectively unto the Lender Secured Parties the rights granted or now or hereafter intended to be granted to the Lender Secured Parties under any Transaction Document or under any other instrument executed in connection with any Transaction Document to which any Loan Party or any of its Subsidiaries is or is to be a party, and cause each of its Subsidiaries to do so.

 

6.14        MGM Resorts Operations Management Agreements and MGM Resorts Affiliate Agreements.  (a) Perform and observe the terms and provisions of each MGM Resorts Operations Management Agreement to be performed or observed by it in all material respects; and

 

(b)           Require each MGM Resorts Operational Entity to perform and observe each material covenant and condition contained in the MGM Resorts Operations Management Agreements and the MGM Resorts Affiliate Agreements to which it is a party.

 

6.15        Harmon.  Borrower hereby acknowledges and agrees that it shall not resume any work related to the Harmon, except for (i) Demolition Work expressly permitted pursuant to Section 6.06 and (ii) any repair of the Harmon that is legally mandated or is legally permitted and is, in the Borrower’s reasonable business judgment, in the best interest of the Loan Parties.

 

ARTICLE VII
  NEGATIVE COVENANTS

 

So long as any Lender shall have any Commitment, any Loan or other Bank Obligation shall remain unpaid or unsatisfied (other than contingent indemnity obligations) , or any Letter of Credit shall remain outstanding, Borrower shall not, nor shall it permit any Restricted Subsidiary to, directly or indirectly:

 

7.01        Liens.  Create, incur, assume or suffer to exist any Lien upon any of its Property, assets or revenues, whether now owned or hereafter acquired, or sign or file or suffer to exist

 

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under the Uniform Commercial Code of any jurisdiction a financing statement that names any of the Loan Parties as debtor, other than the following:

 

(a)           Liens securing obligations outstanding pursuant to Section 7.02(a) and (b);

 

(b)           (i) the mechanics liens described on Schedule 7.01(b); and (ii) any other mechanics liens representing claims against Borrower and its Subsidiaries in an aggregate amount not to exceed $50,000,000, provided that no claims filed by any Person on behalf of its subcontractors shall be included on a duplicative basis with any claims filed by such subcontractors;

 

(c)           Liens for taxes, assessments or governmental charges or claims the payment of which are not, at the time, due and payable or which are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, so long as adequate reserves have been made with respect thereto which are maintained on the books of the applicable Person in accordance with GAAP;

 

(d)           carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business which are not overdue for a period of more than 60 days or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person;

 

(e)           pledges or deposits in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other social security legislation, other than any Lien imposed by ERISA;

 

(f)            deposits to secure the performance of bids, trade contracts and leases (other than Indebtedness), statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

 

(g)           easements, rights-of-way, restrictions and other similar encumbrances affecting CityCenter or minor defects and irregularities of title which are disclosed in the policy of title insurance referred to in Article IV or which, in the aggregate, do not materially detract from the value of CityCenter or materially interfere with the operation of CityCenter;

 

(h)           Liens securing judgments for the payment of money not constituting an Event of Default under the Transaction Documents;

 

(i)            Liens securing Indebtedness permitted under Section 7.02(k); provided that (i) such Liens do not at any time encumber any Property other than the Property financed by such Indebtedness and proceeds thereof and (ii) the Indebtedness secured thereby does not exceed the cost or fair market value, whichever is lower, of the Property being acquired on the date of acquisition;

 

(j)            Acceptable Land Use Arrangements;

 

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(k)           Liens arising from filing UCC financing statements relating solely to operating leases;

 

(l)            Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

 

(m)          the effects of any zoning or similar law or right reserved to or vested in any Governmental Authority to control or regulate the use of any real property which is consistent with the intended uses of CityCenter;

 

(n)           Liens (other than mechanics liens) disclosed in the commitment for title insurance heretofore delivered to the Administrative Agent;

 

(o)           leases or subleases entered into in compliance with the terms of the Loan Documents and not interfering in any material respect with the ordinary conduct of the business of the Loan Parties;

 

(p)           licenses of patents, trademarks and other intellectual property rights granted by the Loan Parties in the ordinary course of business and not interfering in any material respect with the ordinary conduct of the business of the Loan Parties;

 

(q)           Liens on the Seller Notes securing any Indebtedness permitted pursuant to Section 7.02(c);

 

(r)            Liens in existence on the Closing Date, as set forth on Schedule 7.01(r);

 

(s)            consensual Liens or Liens arising by law consisting of bankers’ liens, rights of setoff or similar rights or remedies relating to the establishment of depository relations with banks not given in connection with the issuance of Indebtedness;

 

(t)            any Lien created by an agreement or instrument entered into by Borrower or a Restricted Subsidiary which consists of a restriction on the assignability, transfer or hypothecation of such agreement or instrument; and

 

(u)           Liens not specified in clauses (a) through (t) above so long as the aggregate outstanding principal amount of the obligations secured by all such Liens in the aggregate does not exceed $25,000,000 at any one time (collectively for all assets and property subject to such Liens).

 

7.02        Indebtedness.  Create, incur, assume or suffer to exist any Indebtedness, except:

 

(a)           (i) the First Lien Obligations and the Second Lien Obligations outstanding on the Closing Date and (ii) any incremental First Lien Notes and Second Lien Notes (provided that, except in the case of incremental Second Lien Notes resulting from the payment-in-kind of interest under any existing Second Lien Notes, the Aggregate Commitments are reduced in an amount equal to the principal amount of such incremental First Lien Notes and Second Lien Notes);

 

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(b)           refinancing Indebtedness permitted under Section 7.12(b) and (c);

 

(c)           Indebtedness of Borrower or a Restricted Subsidiary incurred in connection with the Warehouse Financing Program, secured solely by Seller Notes (and by any liquidity reserve maintained as permitted pursuant to subsection (d) of this Section 7.02) and subject to the following additional terms and conditions:

 

(1)           the aggregate principal amount of the Indebtedness under the Warehouse Financing Program shall not exceed $250,000,000;

 

(2)           the Warehouse Financing Program shall be nonrecourse to Borrower and its Subsidiaries (except to the extent of liability under customary representations and warranties provided by Borrower or such Restricted Subsidiary in connection with such Warehouse Financing Program and except to the extent that the liquidity reserve permitted pursuant to subsection (e) of this Section 7.02 constitutes any such recourse); and

 

(3)           no scheduled payments of principal shall be required under the Warehouse Financing Program prior to the Maturity Date;

 

(d)           Indebtedness of Borrower and its Restricted Subsidiaries consisting of unsecured obligations to support a liquidity reserve in connection with any Warehouse Financing Program, not to exceed the lesser of (i) three (3) months’ interest with respect to such Indebtedness and (ii) $5,000,000;

 

(e)           Indebtedness in an aggregate principal amount not to exceed $15,000,000 consisting of premium finance programs for casualty, liability and other insurance coverages at CityCenter;

 

(f)            obligations (contingent or otherwise) existing or arising under interest rate Swap Contracts in respect of Indebtedness having an aggregate notional principal amount not to exceed $500,000,000;

 

(g)           Sponsor Subordinated Debt and Casualty Bridge Capital, in each case owing to the Sponsors and Sponsor Entities or their Affiliates;

 

(h)           Indebtedness of a Restricted Subsidiary of Borrower owed to Borrower or another Restricted Subsidiary of Borrower;

 

(i)            other Indebtedness outstanding on the Closing Date and listed on Schedule 7.02 and any refinancings, refundings, renewals or extensions thereof; provided that the amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilized thereunder;

 

(j)            Guarantees of any of the Loan Parties in respect of Indebtedness otherwise permitted hereunder of Borrower or any other Restricted Subsidiary of Borrower;

 

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(k)           Indebtedness in respect of Capitalized Leases, Synthetic Lease Obligations and purchase money obligations for fixed or capital assets within the limitations set forth in Section 7.01(i); provided, however, that the aggregate amount of all such Indebtedness at any one time outstanding shall not exceed $25,000,000;

 

(l)            Indebtedness of Borrower or any Restricted Subsidiary arising in respect of letters of credit, bankers’ acceptances, worker’s compensation claims, payment obligations in connection with self-insurance or similar obligations and bid, appeal, performance and surety bonds, in each case in amounts and for the purposes customary in such Person’s industry and other letters of credit or guarantees constituting Investments permitted by Section 7.03(d), so long as the aggregate amount of Indebtedness outstanding under this clause (l) shall not exceed $25,000,000 at any time; and

 

(m)          other Indebtedness in an aggregate principal amount not to exceed $25,000,000 at any time.

 

7.03        Investments.  Make or hold any Investments in any Person other than:

 

(a)           Investments in Restricted Subsidiaries;

 

(b)           Investments existing as of the Closing Date and listed on Schedule 7.03;

 

(c)           Investments existing as of the date of any Disposition thereof in any Person which is designated as an Unrestricted Subsidiary in accordance with the terms hereof;

 

(d)           Investments in Persons which are the owners or operators of restaurants, retail, night club or other businesses located at CityCenter in an aggregate amount not to exceed $25,000,000 outstanding at any time;

 

(e)           Investments in Cash Equivalents.

 

(f)            Investments consisting of Seller Loans received in consideration of the seller financing of sales of Condo Units and in the proceeds thereof; provided  however,

 

(1)           each such Seller Loan shall constitute Collateral in which Collateral Agent has a perfected security interest (unless a Warehouse Financing Program is then in place with respect to such Seller Loan);

 

(2)           the aggregate principal amount of the Seller Loans shall not exceed $500,000,000;

 

(3)           the Seller Financing Program terms for Borrower Related Persons shall be identical to Seller Financing Program terms for Persons who are not Borrower Related Persons;

 

(4)           Borrower shall not (i) extend the Seller Financing Program to any purchaser in an amount which is in excess of 80% of the 

 

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purchase price of the relevant Condo Unit, (ii)  accept Seller Notes with interest rates which are lower than rates charged by third party mortgage lenders in the United States for similar residential mortgage products for single family residences;

 

(5)           with respect to each sale of a Condo Unit under the Seller Financing Program:

 

(i)            Borrower shall, at its sole cost and expense at the closing of the Disposition of the Condo Unit, cause the MERS® System to reflect that such Seller Loan has been assigned to Collateral Agent as the sole owner of the beneficial rights related to the Seller Loan.

 

(ii)           in the event that the Lien on the Seller Loans is required to be released by the Collateral Agent to facilitate the Warehouse Financing Program, the Investments, if any, received in consideration of the Warehouse Financing Program shall be pledged to the Collateral Agent for the benefit of the Lender Secured Parties.

 

(g)           Investments in one or more special purpose entities (which may be either Unrestricted Subsidiaries or non-Subsidiary Affiliates of Borrower (each, “SPE” and one or more, “SPEs”)) formed to facilitate the Warehouse Financing Program or a Permitted Securitization Program received in consideration of the sale of Seller Notes to such SPEs (including debt or equity securities issued by such SPEs in consideration of the purchase of Seller Notes by such SPEs so long as any equity interest in, and any indebtedness issued by, the SPE in exchange for such Seller Notes constitute Collateral in which Collateral Agent has a perfected security interest);

 

(h)           Investments received in connection with any Disposition permitted by Section 7.05;

 

(i)            Investments consisting of letters of credit or guarantees to support insurance premium financings for insurance coverages for CityCenter permitted under Section 7.02(e);

 

(j)            Investments in Swap Contracts permitted pursuant to Section 7.02(f);

 

(k)           Guarantees of Indebtedness of Borrower and any Restricted Subsidiary permitted under Section 7.02; and

 

(l)            other Investments in any Person having an aggregate fair market value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (l) that are at any time outstanding (after giving effect to any such Investments that are returned to Borrower or any Restricted Subsidiary that made such prior Investment, without restriction, in cash on or prior to the date of any such calculation) not in excess of $25,000,000.

 

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7.04        Fundamental Changes.  Merge, dissolve, liquidate, consolidate with or into another Person, provided that:

 

(a)           any Subsidiary of Borrower may merge or consolidate with Borrower, provided that Borrower shall be the continuing or surviving Person;

 

(b)           any other Restricted Subsidiary may merge or consolidated with any of the Loan Parties;

 

(c)           Borrower may dissolve or liquidate any Restricted Subsidiary which owns no portion of the real property or improvements at CityCenter; and

 

(d)           upon 30 days prior notice to the Administrative Agent, Borrower or any Restricted Subsidiary may engage in a transaction resulting in Borrower or such Restricted Subsidiary becoming a subchapter “C” corporation under the Code.

 

7.05        Dispositions.  Make any Disposition except:

 

(a)           Dispositions of (i) personal Property and (ii) fixtures, in each case not constituting an interest in CityCenter or the improvements associated with CityCenter except as permitted below in this Section;

 

(b)           Dispositions of any Property to Borrower or to any Restricted Subsidiary of Borrower, provided that Borrower shall not be the direct owner, lessor or lessee of all or any portion of CityCenter or the Improvements located thereon;

 

(c)           Dispositions permitted by Section 7.04;

 

(d)           Dispositions of assets associated with Crystals, the Vdara, the Veer, the Mandarin, or the Harmon or of Seller Notes (but not the Aria Hotel), provided that:

 

(1)           each such Disposition outside the ordinary course of business and where the consideration is in excess of $10,000,000 shall be for fair market value (as determined by the board of directors of Borrower) and, where the consideration is in excess of $25,000,000, shall (other than in the case of sales or securitizations of the Seller Notes) be supported by either (i) an appraisal or other independent valuation reasonably acceptable to the Administrative Agent or (ii) a fairness opinion by a nationally recognized investment banking firm;

 

(2)           after giving effect to each such Disposition, no Default or Event of Default shall exist;

 

(3)           the Administrative Agent and the Lenders concurrently receive the required mandatory prepayment of the Loans in accordance with Section 2.03(b)(1);

 

(4)           the Collateral Agent concurrently receives an endorsement to its ALTA policy of title insurance insuring the continued priority and 

 

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perfection of the Deed of Trust in respect of the portions of CityCenter not released; and

 

(5)           each of the other Loan Parties expressly approves of such Disposition in a writing addressed to the Administrative Agent and the Lenders in a manner reasonably acceptable to the Administrative Agent;

 

(e)           Dispositions consisting of the grant of Acceptable Land Use Arrangements;

 

(f)            Dispositions of common areas with the residential condominium areas of CityCenter to homeowners associations for the owners of Condo Units when no Default or Event of Default has occurred and remains continuing;

 

(g)           Dispositions of Condo Units, retail leaseholds, restaurant or entertainment venues and other similar spaces within CityCenter (but excluding hotel rooms or gaming spaces) to purchasers, lessees, managers, operators or franchisees; provided, with respect to Dispositions of Condo Units, (i) the Administrative Agent and the Lenders concurrently receive any required mandatory prepayment of the Loans in accordance with Section 2.03(b), to the extent applicable, and (ii) in the case of such Dispositions financed in exchange, in part, for Seller Notes on the related Condo Unit, such Seller notes are issued in compliance with the Seller Financing Program;

 

(h)           Dispositions of Seller Notes, but solely to an SPE for cash or interests in or securities of the SPE where in turn the SPE has engaged in the Warehouse Financing Program or a Permitted Securitization Program so long as the Administrative Agent shall receive the requirement mandatory prepayment of the Loans in accordance with Section 2.03(b)(1) (it being understood that any other Disposition of Seller Notes shall require the consent of the Required Lenders);

 

(i)            to the extent constituting Dispositions, any Liens permitted by Section 7.01, Investments permitted by Section 7.03 and Restricted Payments permitted by Section 7.06;

 

(j)            Dispositions consisting of the exchange (or surrender to Governmental Authorities) of minor strips and gores of land not material to the operation of CityCenter; and

 

(k)           Dispositions in which the aggregate fair market value does not exceed $10,000,000 in any single transaction or series of related transactions.

 

7.06        Restricted Payments.  Declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to make any Restricted Payment, other than:

 

(a)           so long as no Default or Event of Default has occurred and shall then be continuing or result therefrom, Permitted Tax Distributions;

 

(b)           Restricted Payments made to Borrower or to Restricted Subsidiaries of Borrower;

 

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(c)           the release of up to an aggregate amount equal to the Condo Proceeds Amount of Net Cash Proceeds from the Disposition of Condo Units or Seller Notes to MGM Resorts to the extent that the conditions in the proviso to Section 2.03(b)(1) have been satisfied;

 

(d)           so long as no Default or Event of Default has occurred and shall then be continuing or result therefrom, the reimbursement of the Sponsors or their wholly-owned Subsidiaries for (i) so long as the Construction Resolution Date shall have occurred, the MGM Completion Guarantee Reimbursement Amount and (ii) their Harmon Equity in an amount up to the lesser of (1) $50,000,000 and (2) the original amount of the Harmon Equity;

 

(e)           Restricted Payments made within 120 days following the receipt of any Extraordinary Receipts in the amount of Extraordinary Receipts to the extent applied to the retirement of any Casualty Bridge Capital, provided that giving effect to such Restricted Payment, no Default or Event of Default shall have occurred and be continuing; and

 

(f)            the payment, redemption, repurchase, retirement, defeasance or other acquisition of Sponsor Subordinated Debt complying with Section 7.12(d) and solely in exchange for common Equity Interests of Borrower.

 

7.07        Change in Nature of Business.  Engage in any material line of business different from those lines of business conducted by Borrower and its Subsidiaries on the Closing Date.

 

7.08        Transactions with Sponsor Entities.  Enter into any transaction of any kind with any Person which is a Sponsor Entity (other than a Loan Party), whether or not in the ordinary course of business, other than:

 

(a)           the transactions contemplated by the agreements described on Schedule 7.08 and in accordance with the MGM Resorts Operations Management Agreements referred to in clauses (a) through (d) of the definition thereof;

 

(b)           the transactions contemplated by the MGM Resorts Affiliate Agreements;

 

(c)           Permitted Affiliate Cost Reimbursements;

 

(d)           other transactions (including any amendments to the MGM Resorts Operations Management Agreements and the other agreements described on Schedule 7.08 or additional MGM Resorts Operations Management Agreements) the terms of which are disclosed in writing to the Administrative Agent and which are on terms which are fair and reasonable and substantially as favorable to Borrower or such Subsidiary as would be obtainable by Borrower or such Subsidiary at the time in a comparable arm’s length transaction with a Person other than a Sponsor Entity, provided that unless the Administrative Agent and the Collateral Agent have agreed to subordinate the Deed of Trust and the Circus Deeds of Trust to the agreements governing any such transactions, then such agreements shall be subject to the subordination of the MGM Resorts Operational Entities Subordination Agreement;

 

(e)           Borrower may make Sponsor Capital Calls and accept the funds therefrom as equity for the following purposes: (i) Specified Equity Contributions, (ii) issuances of Equity Interests to the Sponsors or their wholly-owned Subsidiaries to be used for working capital and 

 

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other ordinary course Capital Expenditures in an aggregate amount not to exceed $200,000,000. and (iii) issuances of Harmon Equity;

 

(f)            without duplication as to Section 7.06(c), the payment of up to an aggregate amount equal to the Condo Proceeds Amount of Condo Proceeds to MGM Resorts to the extent that the conditions in the proviso to Section 2.03(b)(1) have been satisfied;

 

(g)           without duplication as to Section 7.06(d)(i), the payment of the MGM Completion Guarantee Reimbursement Amount if the conditions in Section 7.06(d)(i) have been satisfied;

 

(h)           Sponsor Subordinated Debt and Casualty Bridge Capital;

 

(i)            any Restricted Payment, or obligation with respect thereto, permitted by Section 7.06; and

 

(j)            the sale of Seller Notes to a Sponsor Entity for a price approved by the board of directors of Borrower and which is fair and reasonable and substantially as favorable to Borrower as would be obtainable by Borrower or such Subsidiary at the time in a comparable arm’s length transaction with a Person other than a Sponsor Entity.

 

7.09        Burdensome Agreements.  Except as contemplated by the Collateral Agent Agreement, enter into or permit to exist any Contractual Obligation (other than this Agreement or any other Loan Document) of Borrower or any Restricted Subsidiary that:

 

(a)           limits the ability (i) of any Restricted Subsidiary to make Restricted Payments to any of the Loan Parties or to otherwise transfer Property to or invest in any of the Loan Parties, or (ii) of any Loan Party to create, incur, assume or suffer to exist Liens on its Property in favor of the Collateral Agent; provided, however, that this Section 7.09 shall not prohibit:

 

(1)           any Lien, negative pledge or restriction on the transfer of property incurred or provided in favor of any holder of Indebtedness permitted under Section 7.02(d) or Section 7.02(k) solely to the extent any such Lien, negative pledge or other restriction relates to the Property financed by or the subject of such Indebtedness (and any proceeds thereof);

 

(2)           the First Lien Notes and Second Lien Notes and, in each case, the financing agreements related thereto, and any refinancing thereof in accordance with the terms of this Agreement;

 

(3)           any Contractual Obligation with respect to the sale of assets or properties, including customary restrictions with respect to a Subsidiary of Borrower pursuant to any agreement that has been entered into for the sale or disposition of all or substantially all of the Equity Interests or assets and properties of such Subsidiary;

 

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(4)           customary non-assignment provisions in contracts, licenses or intellectual property; and

 

(5)           customary provisions contained in leases or licenses of intellectual property; or

 

(b)           requires the grant of a Lien to secure an obligation of such Person if a Lien is granted to secure another obligation of such Person.

 

7.10        Use of Proceeds.  Use the proceeds of any Loans, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U of the FRB) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose.

 

7.11        Accounting Changes.  Make any material change in their respective accounting policies or reporting practices, except as permitted under GAAP.

 

7.12        Prepayments of Junior Capital.  Prepay, redeem, purchase, defease or otherwise satisfy in any manner the First Lien Notes, the Second Lien Notes or the Sponsor Subordinated Debt (except, in the case of the First Lien Notes and the Second Lien Notes, for any mandatory prepayments, redemptions, purchases, defeasances or other satisfactions required by the terms of the First Lien Indenture or the Second Lien Indenture as in effect on the Closing Date), except for:

 

(a)           prepayments, redemptions, repurchases, defeasances or other satisfactions of the First Lien Notes pursuant to the terms of Section 2.03 or otherwise in accordance with the First Lien Intercreditor Agreement;

 

(b)           so long as no Default or Event of Default shall be continuing, prepayments, redemptions, repurchases, defeasances or other satisfactions of the First Lien Notes using Net Cash Proceeds of Indebtedness that has a stated maturity date after the specified maturity date for the First Lien Notes, no scheduled amortization prior to such scheduled maturity, a principal balance not in excess of the then outstanding principal amount of First Lien Notes, covenants no more restrictive, taken as a whole, than those in the First Lien Notes and that can be issued without any material amendment to the First Lien Intercreditor Agreement or the General Intercreditor Agreement;

 

(c)           so long as no Default or Event of Default shall be continuing, prepayments, redemptions, repurchases, defeasances or other satisfactions of the Second Lien Notes using Net Cash Proceeds of Indebtedness (other than First Lien Obligations) that has a stated maturity date after the specified maturity date for the Second Lien Notes, no scheduled amortization prior to such scheduled maturity, a principal balance not in excess of the then outstanding principal amount of Second Lien Notes, covenants no more restrictive, taken as a whole, than those in the Second Lien Notes and that can be issued without any material amendment to the General Intercreditor Agreement;

 

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(d)           so long as no Default or Event of Default shall be continuing and Total Outstandings are equal to zero, prepayments, redemptions, repurchases, defeasances or other satisfactions (i) of the Second Lien Notes in an aggregate principal amount not to exceed $50,000,000 and (ii) of the First Lien Notes; and

 

(e)           payments of the Sponsor Subordinated Debt made in a manner which is consistent with the terms thereof and in compliance with Section 7.06(f).

 

7.13        Minimum EBITDA.  Permit EBITDA of Borrower for the period of four consecutive fiscal quarters ending on the last date of a fiscal quarter set forth below to be less than the amount set forth below opposite such date:

 

	
Fiscal Quarters Ending
    	
 
    	
Minimum
   EBITDA (in
   millions)
    	
 
    
	
March 31, 2013 through September 30, 2013
    	
 
    	
$
    	
185
    	
 
    
	
December 31, 2013
    	
 
    	
$
    	
200
    	
 
    
	
March 31, 2014 through June 30, 2014
    	
 
    	
$
    	
225
    	
 
    
	
September 30, 2014 and subsequent fiscal quarters
    	
 
    	
$
    	
250
    	
 
    

 

For purposes of determining compliance with this Section 7.13, any common equity contribution made to Borrower after the end of any fiscal quarter and on or prior to the day that is the day on which financial statements are required to be delivered for such fiscal quarter will, at the request of Borrower, be included in the calculation of EBITDA for the purposes of determining compliance with this Section 7.13, at the end of such fiscal quarter and applicable subsequent periods (any such equity contribution so included in the calculation of EBITDA, a “Specified Equity Contribution”); provided, that (a) prior to the Maturity Date no more than four Specified Equity Contributions shall be made and (b) the amount of any Specified Equity Contribution shall be no greater than the amount required to cause Borrower to be in compliance with this Section 7.13.

 

7.14        Capital Expenditures.  Make any Capital Expenditures, other than:

 

(a)           Capital Expenditures consisting of Demolition Work permitted pursuant to Section 6.06;

 

(b)           Capital Expenditures mandated by Law for repair of the Harmon (it being agreed that such Capital Expenditures will only be permitted to the extent mandated by Law, and not as an alternative to the demolition of Harmon);

 

(c)           Capital Expenditures funded using amounts paid by MGM Resorts under the MGM Resorts Completion Guarantee;

 

(d)           other Capital Expenditures in an aggregate amount not to exceed $50,000,000 in any fiscal year, provided, however that any such Capital Expenditures not made 

 

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in any fiscal year may be made in the next fiscal year (but not any fiscal years thereafter); and provided, further, that the permissible amount of Capital Expenditures for the fiscal year ending December 31, 2012 shall be increased by the amount of Capital Expenditures for the fiscal year ending December 31, 2011 permitted under the Existing Credit Agreement as in effect on the Closing Date but not made during such fiscal year; and

 

(e)           Capital Expenditures made using the proceeds of the issuance of Equity Interests permitted under this Agreement.

 

7.15        Seller Financing.  Modify the terms of the Seller Financing Program to increase the aggregate size of the program to an amount which is in excess of $500,000,000, to extend financing which is in excess of 80% of the price of any Condo Unit, or to reduce the interest rates to rates which are less than the prevailing mortgage rates for single family homes in Clark County, Nevada.

 

ARTICLE VIII
  EVENTS OF DEFAULT AND REMEDIES

 

8.01        Events of Default.  Any of the following shall constitute an Event of Default:

 

(a)           Non-Payment.  Borrower or any other Loan Party fails to pay (i) when and as required to be paid herein, any amount of principal of any Loan or any L/C Obligation, (ii) within three Business Days after the same becomes due, any interest on any Loan or on any L/C Obligation, or any fee due hereunder, or (iii) within ten Business Days following demand therefore, any other amount payable hereunder or under any other Transaction Document; or

 

(b)           Specific Credit Agreement Covenants.  Borrower fails to perform or observe any term, covenant or agreement contained in any of Section 6.01, 6.02, 6.03, 6.05 or Article VII when required, Section 6.10, within two Business Days following request, or Sections 6.11 or 6.13 within ten Business Days of the date when required; or

 

(c)           Completion Guarantee.  MGM Resorts fails to make any payment required under the MGM Resorts Completion Guarantee within ten Business Days following the date which is specified in the MGM Resorts Completion Guarantee for the making of such payment (and, if not specified, then within ten Business Days following demand by the relevant entitled Person under the First Lien Intercreditor Agreement or the General Intercreditor Agreement); or

 

(d)           Other Defaults.  Any Loan Party fails to perform or observe any other covenant or agreement (not specified in Section 8.01(a) or (b)) contained in any Transaction Document on its part to be performed or observed within ten Business Days following the earlier or (i) the date upon which Borrower becomes aware of such failure or (ii) the giving of notice of such failure to Borrower (or, to the extent such failure can be cured, 30 calendar days); or

 

(e)           Representations and Warranties.  Any representation, warranty, certification or statement of fact made by or on behalf of any Loan Party in any Transaction Document is materially incorrect as of the date when made or reaffirmed; or

 

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(f)            Cross-Default as to Loan Parties.  Any Loan Party:

 

(1)           fails to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee (other than Indebtedness hereunder and Indebtedness under Swap Contracts); or

 

(2)           fails to observe or perform any other agreement or condition relating to any Indebtedness or Guarantee or contained in any instrument or agreement evidencing, securing or relating thereto; or

 

(3)           permits an Early Termination Date (as defined in any Swap Contract) resulting from (i) any event of default under such Swap Contract as to which a Loan Party is the Defaulting Party (as defined in such Swap Contract) or (ii) any Termination Event (as so defined) under such Swap Contract as to which a Loan Party is an Affected Party (as so defined);

 

in each case if the effect is to cause or permit the holders of any Indebtedness, the beneficiaries of any Guarantees, or the counterparties to such Swap Contract (or a trustee or agent on behalf of such Persons), to (A) demand the making of any payment in an amount which is more than $25,000,000 (including in respect of any Swap Termination Value owed by the Loan Parties in such an amount), (B) require an amount of Indebtedness which is more than $25,000,000 to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), (C) require an offer to repurchase, prepay, defease or redeem Indebtedness in an amount of more than $25,000,000 to be made, prior to its stated maturity, or (D) require that any Guarantee become payable or cash collateral in respect thereof to be demanded in an amount which is more than $25,000,000; or

 

(g)           Insolvency Proceedings, Etc. as to Loan Parties.  Any of the Loan Parties institutes or consents to the institution of any proceeding under any Debtor Relief Law, 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 such Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its Property is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order for relief is entered in any such proceeding; or

 

(h)           Inability to Pay Debts; Attachment.  (i) Any Loan Party becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is hereafter 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 30 days after its issue or levy; or

 

(i)            Judgments.  There is entered against any Loan Party (i) one or more final judgments or orders for the payment of money in an aggregate amount (as to all such judgments and orders) exceeding $25,000,000 (to the extent not covered by independent third-party 

 

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insurance as to which the insurer is rated at least “A” by A.M. Best Company, has been notified of the potential claim and does not dispute coverage) and absent a procurement of a stay of execution, such judgment remains unsatisfied for thirty days after entry thereof, or (ii) there is a period of 10 consecutive days during which a stay of enforcement of judgment which may be enforced against CityCenter, by reason of a pending appeal or otherwise, is not in effect, provided that a judgment in the Perini Lawsuit shall not be deemed to result in an Event of Default under this clause (i) to the extent satisfied pursuant to the MGM Resorts Completion Guarantee within the time periods described therein; or

 

(j)            MGM Judgments.  At any time prior to the Construction Resolution Date, there is entered against MGM Resorts one or more final judgments or orders for the payment of money in an aggregate amount (as to all such judgments and orders) exceeding $250,000,000 (to the extent not covered by independent third-party insurance as to which the insurer is rated at least “A” by A.M. Best Company, has been notified of the potential claim and does not dispute coverage) and, absent a procurement of a stay of execution, such judgment remains unsatisfied for thirty days after entry thereof provided that it is acknowledged that any Event of Default which occurs under this clause (j) may subsequently be cured at any time by the posting of cash or a letter of credit in a form and issued by a Person acceptable to the Administrative Agent and in the remaining amount of the obligations under the MGM Resorts Completion Guarantee (and without liability on the part of any of the Loan Parties), it being agreed that this proviso shall not be construed to provide a redemption right in respect of any foreclosure under any Collateral Document; or

 

(k)           ERISA.  (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which results in direct liability to any of the Loan Parties under Title IV of ERISA to a Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of $25,000,000, or (ii) Borrower and its Subsidiaries fail to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of $25,000,000; or

 

(l)            Invalidity of Transaction Documents.  Any material provision of any Transaction Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder or satisfaction in full of all the Bank Obligations, ceases to be in full force and effect; or any Loan Party or any other Person contests in any manner the validity or enforceability of any provision of any Transaction Document; or any Loan Party denies that it has any or further liability or obligation under any provision of any Transaction Document, or purports to revoke, terminate or rescind any provision of any Transaction Document; or any Person (including any Person acting or purporting to act on behalf of any Sponsor, including on behalf of any Sponsor’s bankruptcy or insolvency estate under any Debtor Relief Laws) attempts to avoid, rescind, or otherwise recover any payment or other transfer of property made pursuant to or in connection with any provision of any Transaction Document; provided that in the event of a default under the MGM Resorts Completion Guarantee where the underlying third party obligations are not yet delinquent (both as a matter of contract and under applicable law), Borrower shall have the benefit of any applicable cure period with respect to any such third party obligation before such default shall constitute an Event of Default hereunder; or

 

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(m)          Change of Control.  Any Change of Control occurs; or

 

(n)           Collateral Documents.  The Collateral Documents shall for any reason (other than pursuant to the terms thereof) cease to create a valid and perfected first priority Lien (subject to Liens permitted by Section 7.01) on CityCenter, the Improvements or any material personal property interests associated with CityCenter; or

 

(o)           Subordination.  (i)  The subordination provisions of any subordinated indebtedness of the Loan Parties to any other Persons (the “Subordination Provisions”) shall, in whole or in part, terminate, cease to be effective or cease to be legally valid, binding and enforceable against any holder of the applicable subordinated Indebtedness; or (ii) Borrower or any other Loan Party shall, directly or indirectly, disavow or contest in any manner (A) the effectiveness, validity or enforceability of any of the Subordination Provisions, (B) that the Subordination Provisions exist for the benefit of the Administrative Agent and the Lenders or (C) that all payments of principal of or premium and interest on the applicable subordinated Indebtedness, or realized from the liquidation of any Property of any Loan Party, shall be subject to any of the Subordination Provisions; or

 

(p)           License Revocation.  A License Revocation occurs and continues for three consecutive Business Days.

 

8.02        Remedies upon Event of Default.  If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the following actions:

 

(a)           declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by Borrower;

 

(b)           exercise on behalf of itself, the L/C Issuer and the Lenders all rights and remedies available to it and the Lenders and the L/C Issuer under the Loan Documents, direct the Collateral Agent to exercise its rights with respect to the Collateral Documents in a manner consistent with the Collateral Agent Agreement, including, without limitation, the rights of Collateral Agent with respect to the Control Agreements and any cash collateral account;

 

(c)           declare the commitment of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such commitments and obligation shall be terminated;

 

(d)           subject to the terms of the Intercreditor Agreements, require that Borrower Cash Collateralize the L/C Obligations and other Secured Obligations (in an amount equal to the Minimum Collateral Amount with respect thereto); and

 

(e)           exercise the rights described in the MGM Resorts Operational Entities Subordination Agreement.

 

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provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to Borrower under the Bankruptcy Code of the United States, the obligation of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions shall automatically terminate, and the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable and the obligation of Borrower to Cash Collateralize the L/C Obligations and other Secured Obligations as aforesaid shall automatically become effective, in each case without further act of the Administrative Agent or any Lender.

 

8.03        Application of Funds.  After the exercise of remedies provided for in Section 8.02 (or after the Loans have automatically become immediately due and payable and the L/C Obligations have automatically been required to be Cash Collateralized as set forth in the proviso to Section 8.02), any amounts received on account of the Bank Obligations (after giving effect to the provisions of the Intercreditor Agreements) shall, subject to the provisions of Section 2.12, be applied by the Administrative Agent in the following order:

 

First, to payment of that portion of the Bank Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under Article III) payable to the Administrative Agent in its capacity as such, it being acknowledged that the Administrative Agent shall be entitled to surcharge any payments received by it in respect of the Bank Obligations for such amounts;

 

Second, to payment of that portion of the Bank Obligations constituting fees, indemnities and other amounts (other than principal, interest and Letter of Credit Fees) payable to the Lenders and the L/C Issuer (including fees, charges and disbursements of counsel to the respective Lenders and the L/C Issuer (including fees and time charges for attorneys who may be employees of any Lender and the L/C Issuer) and amounts payable under Article III), ratably among them in proportion to the respective amounts described in this clause Second payable to them;

 

Third, to payment of that portion of the Bank Obligations constituting accrued and unpaid Letter of Credit Fees and interest on the Loans, L/C Borrowings and other Bank Obligations (except to the extent described in clause Fourth), ratably among the Lenders and the L/C Issuer in proportion to the respective amounts described in this clause Third payable to them;

 

Fourth, to payment of that portion of the Bank Obligations constituting unpaid principal of the Loans and L/C Borrowings and Bank Obligations then owing under Secured Hedge Agreements (including any Swap Termination Value in respect thereof) and Secured Cash Management Agreements, ratably among the Lenders, the Cash Management Banks, the Hedge Banks and the L/C Issuer in proportion to the respective amounts described in this clause Fourth held by them;

 

Fifth, to the Administrative Agent for the account of the L/C Issuer, to Cash Collateralize that portion of L/C Obligations comprised of the aggregate undrawn amount 

 

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of Letters of Credit to the extent not otherwise Cash Collateralized by Borrower pursuant to Sections 2.04 and 2.13; and

 

Last, the balance, if any, after all of the Bank Obligations have been indefeasibly paid in full, to Borrower or as otherwise required by Law.

 

Subject to Sections 2.04(c) and 2.13, amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above shall be applied to satisfy drawings under such Letters of Credit as they occur.  If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Obligations, if any, in the order set forth above.

 

Notwithstanding the foregoing provisions of this Section, Bank Obligations arising under Secured Hedge Agreements and Secured Cash Management Agreements shall be excluded from the application described above if the Administrative Agent has not received written notice thereof, together with such supporting documentation as the Administrative Agent may request, from the applicable Hedge Bank or Cash Management Bank, as the case may be (for the avoidance of doubt, an initial written notice is sufficient for purposes of a Master Agreement).  Each Hedge Bank and Cash Management Bank not a party to the Credit Agreement that has given the notice contemplated by the preceding sentence shall, by such notice, be deemed to have acknowledged and accepted the appointment of the Administrative Agent pursuant to the terms of Article IX hereof for itself and its Affiliates as if a “Lender” party hereto.

 

ARTICLE IX
  ADMINISTRATIVE AGENT

 

9.01        Appointment and Authority.  (a) Each of the Lenders and the L/C Issuer hereby irrevocably appoints Bank of America to act on its behalf as the Administrative Agent hereunder and under the other Transaction Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto.  Similarly, each of the Lenders and the L/C Issuer hereby irrevocably appoints Bank of America to act on its behalf as the Collateral Agent and authorizes Bank of America and its successors in such capacities to take such actions on its behalf and to exercise such powers as are delegated to the Collateral Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Collateral Agent, the Administrative Agent, the L/C Issuer and the Lenders, and Borrower shall not have rights as a third party beneficiary of any of such provisions.

 

(b)           Each of the Lenders (including in its capacity as a Hedge Bank or Cash Management Bank) and the L/C Issuer hereby irrevocably appoints and authorizes the Collateral Agent to act as the agent of that Lender and the L/C Issuer for purposes of acquiring, holding and enforcing all Liens on Collateral granted by any of the Loan Parties to secure any of the Bank Obligations, together with such powers and discretion as are reasonably incidental thereto.  In this connection, the Collateral Agent and any co-agents, sub-agents and attorneys-in-fact appointed by the Collateral Agent pursuant to Section 9.05 or the Collateral Agent Agreement 

 

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for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rights and remedies thereunder at the direction of the Administrative Agent, shall be entitled to the benefits of all provisions of this Article IX and Article X (including Section 10.04(c), as though such co-agents, sub-agents and attorneys-in-fact were the Collateral Agent) as if set forth in full herein with respect thereto.

 

9.02        Rights as a Lender.  The Person serving as the Administrative Agent and Collateral Agent shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not serving in those capacities and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, includes Bank of America in its individual capacity.  Bank of America and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Loan Parties and their Affiliates as if it were not the Administrative Agent and Collateral Agent and without any duty to account therefor to the Lenders.

 

9.03        Exculpatory Provisions.  The Administrative Agent and Collateral Agent shall not have any duties or obligations except those expressly set forth herein and in the other Transaction Documents.  Without limiting the generality of the foregoing, the Administrative Agent:

 

(a)           shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

 

(b)           shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Transaction Documents that the Administrative Agent or Collateral Agent are required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Transaction Documents), provided that the Administrative Agent and Collateral Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose them to liability or that is contrary to any Transaction Document or applicable law;

 

(c)           shall not, except as expressly set forth herein and in the other Transaction Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Loan Parties or the Sponsor Entities that is communicated to or obtained by the Person serving as the Administrative Agent or the Collateral Agent, or any of their Affiliates in any capacity;

 

(d)           The Administrative Agent and the Collateral Agent each shall not be liable for any action taken or not taken by them (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as they shall believe in good faith shall be necessary, under the circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment.  The Administrative Agent and Collateral Agent shall be deemed not to have knowledge of any 

 

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Default unless and until notice describing such Default is given to them by Borrower, the L/C Issuer or a Lender; and

 

(e)           The Administrative Agent and Collateral Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Transaction Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Transaction Document or any other agreement, instrument or document, or the creation, perfection or priority of any Lien purported to be created by the Collateral Documents, (v) the value or the sufficiency of any Collateral, or (vi) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to them.

 

9.04        Reliance.  The Administrative Agent and Collateral Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by them to be genuine and to have been signed, sent or otherwise authenticated by the proper Person.  The Administrative Agent and Collateral Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon.  In determining compliance with any condition hereunder to the making of a Loan or the issuance, extension, renewal or increase of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the L/C Issuer, the Administrative Agent and Collateral Agent may each presume that such condition is satisfactory to that Lender or the L/C Issuer unless the Administrative Agent shall have received notice to the contrary from that Lender or the L/C Issuer prior to the making of such Loan.  The Administrative Agent and Collateral Agent may consult with legal counsel (who may be counsel for Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

 

9.05        Delegation of Duties.  The Administrative Agent and Collateral Agent may perform all of its duties and exercise its rights and powers hereunder or under any other Transaction Document by or through any one or more sub-agents.  The Administrative Agent and Collateral Agent and any such sub-agent may perform all of its duties and exercise its rights and powers by or through their respective Related Parties.  The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent, Collateral Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facility provided for herein as well as activities as Administrative Agent and Collateral Agent.  The Administrative Agent and Collateral Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and non appealable judgment that the Administrative Agent or the Collateral Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.

 

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9.06        Resignation of Administrative Agent and Collateral Agent.  The Administrative Agent may (but shall not be obligated to) at any time give notice of its resignation to the Lenders, the L/C Issuer and Borrower.  At the same time, the Collateral Agent may also give notice of its resignation to the Lenders, the L/C Issuer and Borrower.  Upon receipt of any such notice of resignation, the Required Lenders shall appoint a successor (or successors), which successor (or successors) shall be subject to Borrower’s approval at all times other than during the existence of an Event of Default (which consent of Borrower shall not be unreasonably withheld or delayed) and which successor shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States.  If no such successor Administrative Agent shall have been so appointed by the Required Lenders and so approved by Borrower (or any appointed and approved successor shall have declined to accept such appointment) within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders and the L/C Issuer appoint, after consulting with the Lenders and Borrower, a successor Administrative Agent meeting the qualifications set forth above; provided that if the Administrative Agent shall notify Borrower, the L/C Issuer and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (a) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Transaction Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders and the L/C Issuer under any of the Transaction Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (b) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender or the L/C Issuer directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section.  Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Transaction Documents (if not already discharged therefrom as provided above in this Section).  The fees payable by Borrower to a successor Administrative Agent shall be in such amounts as may be agreed between Borrower and such successor.  After the retiring Administrative Agent’s resignation hereunder and under the other Transaction Documents, the provisions of this Article and Section 10.04 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.  If no such successor Collateral Agent shall have been so appointed by the Required Lenders and so approved by Borrower (or any appointed and approved successor shall have declined to accept such appointment) within 30 days after the retiring Collateral Agent gives notice of its resignation, then the retiring Collateral Agent shall continue in such capacity, and from and after such day shall be paid the fee that otherwise would have been payable to the retiring Administrative Agent (had it not resigned) until such time as the Collateral Agent shall have been replaced.  Upon the acceptance of a successor’s appointment as Collateral Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Collateral Agent, and the retiring Collateral Agent shall be discharged from all of its duties and obligations 

 

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hereunder or under the other Transaction Documents (if not already discharged therefrom as provided above in this Section).  After the retiring Collateral Agent’s resignation hereunder and under the other Transaction Documents, the provisions of this Article and Section 10.04 shall continue in effect for the benefit of such retiring Collateral Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Collateral Agent was acting as Collateral Agent.

 

Any resignation by Bank of America as Administrative Agent pursuant to this Section shall also constitute its resignation as L/C Issuer.  If Bank of America resigns as an L/C Issuer, it shall retain all the rights, powers, privileges and duties of the L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as L/C Issuer and all L/C Obligations with respect thereto, including the right to require the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.04(c).  Upon the appointment by Borrower of a successor L/C Issuer hereunder (which successor shall in all cases be a Lender other than a Defaulting Lender or another Eligible Assignee reasonably acceptable to Borrower), (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer, (b) the retiring L/C Issuer shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents, and (c) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to Bank of America to effectively assume the obligations of Bank of America with respect to such Letters of Credit.

 

9.07        Non-Reliance on Administrative Agent and Other Lenders.  Each Lender and the L/C Issuer acknowledges that it has, independently and without reliance upon the Administrative Agent, Collateral Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Lender and the L/C Issuer also acknowledges that it will, independently and without reliance upon the Administrative Agent, the Collateral Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Transaction Document or any related agreement or any document furnished hereunder or thereunder.

 

9.08        No Other Duties, Etc.  Anything herein to the contrary notwithstanding, none of the Arrangers shall have any powers, duties or responsibilities under this Agreement or any of the other Transaction Documents, except in its capacity, as applicable, as the Administrative Agent, the L/C Issuer or a Lender hereunder.  No Arranger shall have or be deemed to have any fiduciary relationship with any Lender.  Each Lender acknowledges that it has not relied, and will not rely, on the Arrangers in deciding to enter into this Agreement or any other loan document or in taking or not taking any action hereunder or thereunder.

 

9.09        Administrative Agent May File Proofs of Claim.  In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and 

 

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irrespective of whether the Administrative Agent shall have made any demand on Borrower) shall be exclusively entitled and empowered, by intervention in such proceeding or otherwise:

 

(a)           to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Bank Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the L/C Issuer and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the LC Issuer and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the L/C Issuer and the Administrative Agent under Sections 2.04(i) and (j), 2.06 and 10.04) allowed in such judicial proceeding; and

 

(b)           to collect and receive any monies or other Property payable or deliverable on any such claims and to distribute the same and may surcharge any such monies for any amount payable to the Administrative Agent in its capacity as such;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and the L/C Issuer to make such payments to the Administrative Agent and, if the Administrative Agent shall consent to the making of such payments directly to the Lenders and the L/C Issuer, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.06 and 10.04.

 

Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or the L/C Issuer any plan of reorganization, arrangement, adjustment or composition affecting the Bank Obligations or the rights of any Lender or the L/C Issuer to authorize the Administrative Agent to vote in respect of the claim of any Lender or the L/C Issuer or in any such proceeding.

 

9.10        Collateral and Guaranty Matters.  Each of the Lenders (and, by relying hereon, each Hedge Bank and Cash Management Bank) and the L/C Issuer irrevocably authorizes the Administrative Agent, in its discretion to, directly or through the Collateral Agent, take the following actions:

 

(a)           to release any Lien on any Property granted to or held by the Administrative Agent under any Transaction Document (i) upon payment in full of all Bank Obligations (other than (A) contingent indemnification obligations and (B) obligations and liabilities under Secured Hedge Agreements and Secured Cash Management Agreements which require continuing Liens as to which arrangements satisfactory to the applicable Hedge Bank or Cash Management Bank shall have been made prior to or concurrent with the release of any such Lien), (ii) provided that no Default or Event of Default has occurred and remains continuing, that is sold or to be sold as part of or in connection with any sale permitted hereunder or under any other Transaction Document, or (iii)  if approved, authorized or ratified in writing in accordance with Section 10.01;

 

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(b)           provided that no Default or Event of Default has occurred and remains continuing, to release any party to the Subsidiary Guaranty therefrom if such Person ceases to be a Restricted Subsidiary as a result of a transaction permitted hereunder;

 

(c)           provided that no Default or Event of Default has occurred and remains continuing, to subordinate any Lien on any Property granted to or held by the Administrative Agent or Collateral Agent under any Transaction Document to the holder of any Lien on such Property that is permitted by Section 7.01(j);

 

(d)           provided that no Default or Event of Default has occurred and remains continuing, to subordinate the Lien of the Deed of Trust to any Acceptable Land Use Arrangements;

 

(e)           to take any action required by the Collateral Agent Agreement;

 

(f)            to execute, and take any action required by, the First Lien Intercreditor Agreement and the General Intercreditor Agreement;

 

(g)           to release Condo Units and related interests in property intended as condominium common areas from the Deed of Trust upon the consummation of the sale thereof;

 

(h)           to execute, on commercial terms, subordination, non-disturbance, attornment and estoppel agreements with tenants in properties owned or leased by Borrower and the Restricted Subsidiaries, including retail and commercial tenants in respect of hotels, restaurants, night clubs, retail stores and other similar portions of CityCenter;

 

(i)            release Condo Units from the applicable Seller Loans, including Seller Loans contributed as security for the Warehouse Financing Program, upon a Condo Unit purchaser’s payment in full under its Seller Loan and the deposit of such payment into the Condo Proceeds Account; and

 

(j)            release SPE Equity Interests upon the payment in full under Seller Loans contributed as security for the Warehouse Financing Program and the deposit of such payment into the Condo Proceeds Account.

 

Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of Property, or to release any Subsidiary from its obligations under the Subsidiary Guaranty pursuant to this Section.  In each case as specified in this Section, the Administrative Agent will, at Borrower’s expense, execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted under the Collateral Documents or to subordinate its interest in such item, or to release such Subsidiary from its obligations under the Subsidiary Guaranty, in each case in accordance with the terms of the Transaction Documents and this Section.

 

9.11        Secured Hedge Agreements and Secured Cash Management Agreements.  No Hedge Bank or Cash Management Bank that obtains the benefits of Section 8.03, any Guaranty 

 

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or any Collateral by virtue of the provisions hereof or of any Guaranty or any Collateral Document shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Transaction Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Transaction Documents.  Notwithstanding any other provision of this Article IX to the contrary, the Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Bank Obligations arising under Secured Hedge Agreements or Secured Cash Management Agreements unless it has received written notice of such Bank Obligations, together with such supporting documentation as the Administrative Agent may request, from the applicable Hedge Bank or Cash Management Bank.

 

ARTICLE X
  MISCELLANEOUS

 

10.01      Amendments, Etc.  No amendment or waiver of any provision of this Agreement or any other Transaction Document (other than Secured Hedge Agreements and Secured Cash Management Agreements), and no consent to any departure by Borrower or any other Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders and Borrower or the applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall:

 

(a)           waive any condition set forth in Section 4.01 or Section 4.02 without the written consent of each Lender;

 

(b)           extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 8.02) without the written consent of such Lender;

 

(c)           postpone any date fixed by this Agreement or any other Transaction Document for any payment (including the date upon which any mandatory prepayment is required to be made) of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under such other Transaction Document without the written consent of each Lender entitled to such payment;

 

(d)           reduce the principal of, or the rate of interest specified herein on, any Loan or (subject to clause (ii) of the last proviso to this Section 10.01) any fees or other amounts payable hereunder or under any other Transaction Document, without the written consent of each Lender entitled to such amount; provided, however, that only the consent of the Required Lenders shall be necessary to amend the definition of “Default Rate” or to waive any obligation of Borrower to pay interest or Letter of Credit Fees at the Default Rate;

 

(e)           change Section 8.03 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender;

 

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(f)            change any provision of this Section 10.01 or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder without the written consent of each Lender;

 

(g)           consent to the release by the Collateral Agent of any material portion of the Collateral (in any transaction or series of related transactions), without the written consent of each Lender, provided that the Administrative Agent shall be entitled to direct the Collateral Agent to release any Collateral which is the subject of a permitted Disposition and, from time to time, any items of Collateral which the Administrative Agent determines have a value of less than $25,000,000;

 

(h)           release of any Guaranty or Sponsor Document, without the written consent of each Lender, except (i) for release of the MGM Resorts Completion Guarantee in the manner set forth therein or as approved by the Required Lenders, and (ii) to the extent the release of any Subsidiary from the Subsidiary Guaranty is permitted pursuant to Section 9.10 (in which cases such release may be made by the Administrative Agent acting alone);

 

(i)            impose any greater restriction on the ability of any Lender to assign any of its rights or obligations hereunder without the consent of any affected Lender; or

 

(j)            consent to any amendment to the First Lien Intercreditor Agreement or the General Intercreditor Agreement which would reduce the amounts payable in respect of the Bank Obligations without the written consent of each Lender;

 

provided, further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Transaction Document, (ii) no amendment, waiver or consent shall, unless in writing and signed by the L/C Issuer in addition to the Lenders required above, affect the rights or duties of the L/C Issuer under this Agreement or any Issuer Document relating to any Letter of Credit issued or to be issued by it, (iii) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto and (iv) no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that if any such amendment or waiver would increase or extend the term of the Commitment of such Defaulting Lender, extend the date fixed for the payment of principal or interest owing to such Defaulting Lender hereunder, reduce the principal amount of any obligation owing to such Defaulting Lender, reduce the amount of or the rate or amount of interest on any amount owing to such Defaulting Lender or of any fee payable to such Defaulting Lender and any amendment, waiver or consent requiring the consent of all Lenders or affected lenders which treats a Defaulting Lender differently shall require its consent.  Notwithstanding the foregoing provisions of this Section, any Secured Hedge Agreement may be amended in any respect by the parties thereto.

 

10.02      Notices; Effectiveness; Electronic Communications.  (a) Notices Generally.  Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in clause (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier 

 

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service, mailed by certified or registered mail or sent by telecopier as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

 

(i)            if to Borrower, the Administrative Agent or the L/C Issuer, to the address, telecopier number, electronic mail address or telephone number specified for such Person on Schedule 10.02; and

 

(ii)           if to any other Lender, to the address, telecopier number, electronic mail address or telephone number specified in its Administrative Questionnaire (including, as appropriate, notices delivered solely to the Person designated by a Lender on its Administrative Questionnaire then in effect for the delivery of notices that may contain material non-public information relating to Borrower).

 

Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices and other communications sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient).  Notices and other communications delivered through electronic communications to the extent provided in clause (b) below shall be effective as provided in such clause (b).

 

(b)           Electronic Communications.  Notices and other communications to the Lenders and the L/C Issuer hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or the L/C Issuer pursuant to Article II if that Lender or the L/C Issuer has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication.  The Administrative Agent, the L/C Issuer or Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.

 

Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

 

(c)           The Platform.  THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.”  THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF BORROWER MATERIALS OR THE ADEQUACY 

 

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OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM BORROWER MATERIALS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH BORROWER MATERIALS OR THE PLATFORM.  In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to Borrower, any Lender, the L/C Issuer or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of Borrower’s or the Administrative Agent’s transmission of Borrower Materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided, however, that in no event shall any Agent Party have any liability to Borrower, any Lender or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).

 

(d)           Change of Address, Etc.  Each of Borrower, the L/C Issuer and the Administrative Agent may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the other parties hereto.  Each other Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to Borrower, the L/C Issuer and the Administrative Agent.  In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, telecopier number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for that Lender.  Furthermore, each Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all times have selected the “Private Side Information” or similar designation on the content declaration screen of the Platform in order to enable such Public Lender or its delegate, in accordance with such Public Lender’s compliance procedures and applicable Law, including United States Federal and state securities Laws, to make reference to Borrower Materials that are not made available through the “Public Side Information” portion of the Platform and that may contain material non-public information with respect to Borrower or its securities for purposes of United States Federal or state securities laws.

 

(e)           Reliance by Administrative Agent, L/C Issuer and Lenders.  The Administrative Agent, the L/C Issuer and the Lenders shall be entitled to rely and act upon any notices (including telephonic Letter of Credit Applications and Loan Notices) purportedly given by or on behalf of Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof.  Borrower shall indemnify the Administrative Agent, the L/C Issuer, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of Borrower.  All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.

 

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10.03      No Waiver; Cumulative Remedies; Enforcement.  No failure by any Lender, the Administrative Agent, the L/C Issuer or the Collateral Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder or under any other Transaction Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges herein provided, and provided under each other Transaction Document, are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

Notwithstanding anything to the contrary contained herein or in any other Transaction Document, the authority to enforce rights and remedies hereunder and under the other Transaction Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 8.02 for the benefit of all the Lenders and the L/C Issuer; provided, however, that the foregoing shall not prohibit (a) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Transaction Documents, (b) the L/C Issuer from exercising the rights and remedies that inure to its benefit (solely in its capacity as L/C Issuer) hereunder and under the other Loan Documents, (c) any Lender from exercising setoff rights in accordance with Section 10.08 (subject to the terms of Section 2.08), or (d) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party under any Debtor Relief Law; and provided, further, that if at any time there is no Person acting as Administrative Agent hereunder and under the other Transaction Documents, then (i) the Required Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to Section 8.02 and (ii) in addition to the matters set forth in clauses (b), (c) and (d) of the preceding proviso and subject to Section 2.08, any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.

 

10.04      Expenses; Indemnity; Damage Waiver.  (a) Costs and Expenses.  Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent, the Collateral Agent and their respective Affiliates (including the reasonable fees, charges and disbursements of counsel therefor), in connection with the syndication of the credit facility provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Transaction Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the L/C Issuer in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all out of pocket expenses incurred by the Administrative Agent, the Collateral Agent or any Lender (including the fees, charges and disbursements of any counsel for the Administrative Agent, the Collateral Agent or any Lender and the reasonable costs of any advisor (including financial advisor) or consultant to the Administrative Agent), and shall pay all fees and time charges for attorneys who may be employees of the Administrative Agent or any Lender, in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Transaction Documents, including its rights under this Section, or (B) in connection with Loans made 

 

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hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans, provided that such expenses shall be non-duplicative of the expenses of the attorneys retained by the Administrative Agent.

 

(b)           Indemnification by Borrower.  Borrower shall indemnify the Administrative Agent (and any sub-agent thereof), the Collateral Agent, each Arranger, each Lender, the L/C Issuer and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, all losses, claims, damages, liabilities and related expenses (including the reasonable fees, charges and disbursements of any counsel for any Indemnitee), and shall indemnify and hold harmless each Indemnitee from all fees and time charges and disbursements for attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by any third party or by Borrower or any other Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Transaction Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Transaction Documents, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the L/C Issuer to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any Property owned or operated by Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by Borrower or any other Loan Party or any of Borrower’s or such Loan Party’s directors, shareholders or creditors, and regardless of whether any Indemnitee is a party thereto, IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OF THE INDEMNITEE; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by Borrower or any other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Transaction Document, if Borrower or such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.  No Indemnitee shall have any liability for any indirect, consequential, special or punitive damages relating to this Agreement or any other Transaction Document or arising out of its activities in connection herewith or therewith (whether before or after the Closing Date).  Without limiting the generality of the foregoing, and notwithstanding any other provision of this Agreement to the contrary, the indemnity set forth in the foregoing subsection shall extend in favor of each Indemnitee with respect to every aspect of any Disposition of any Condo Unit, including as to any Seller Note and/or as to any other aspect of the Seller Financing Program.  Without limiting the provisions of Section 3.01(c), this Section 10.4(b) shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

 

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(c)           Reimbursement by Lenders.  To the extent that Borrower for any reason fails to indefeasibly pay any amount required under clause (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof), the LC Issuer or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), the L/C Issuer or such Related Party, as the case may be, that Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought based on each Lender’s share of the Total Credit Exposure at such time) of such unpaid amount (including any such unpaid amount in respect of a claim asserted by such Lender), such payment to be made severally among them based on such Lenders’ Applicable Percentages (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought), provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) or the L/C Issuer in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) or the L/C Issuer in connection with such capacity.  The obligations of the Lenders under this clause (c) are subject to the provisions of Section 2.09(c).

 

(d)           Waiver of Consequential Damages, Etc.  To the fullest extent permitted by applicable law, Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Transaction Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof.  No Indemnitee referred to in clause (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed to such unintended recipients by such Indemnitee through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Transaction Documents or the transactions contemplated hereby or thereby other than for direct or actual damages resulting from the gross negligence or willful misconduct of such Indemnitee as determined by a final and nonappealable judgment of a court of competent jurisdiction.

 

(e)           Payments.  All amounts due under this Section shall be payable not later than ten Business Days after demand for payment.

 

(f)            Survival.  The agreements in this Section and the indemnity provisions of Section 10.04(b) shall survive the resignation of the Administrative Agent and the L/C Issuer, the replacement of any Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all the other Bank Obligations and the termination of this Agreement.

 

10.05      Payments Set Aside.  To the extent that any payment by or on behalf of Borrower is made to the Administrative Agent, the L/C Issuer or any Lender, or the Administrative Agent, the L/C Issuer or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent, the L/C Issuer or that Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally 

 

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intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender and the L/C Issuer severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect.  The obligations of the Lenders under clause (b) of the preceding sentence shall survive the payment in full of the Bank Obligations and the termination of this Agreement.

 

10.06      Successors and Assigns.  (a) Successors and Assigns Generally.  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of Section 10.06(b), (ii) by way of participation in accordance with the provisions of Section 10.06(d), or (iii) by way of pledge or assignment of a security interest subject to the restrictions of Section 10.06(f) (and any other attempted assignment or transfer by any party hereto shall be null and void).  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in clause (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

(b)           Assignments by Lenders.  No Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans (including for purposes of this clause (b) participations in L/C Obligations) at the time owing to it) except pursuant to Section 10.06(a) above, and any such assignment shall in any event be subject to the following conditions:

 

(i)            Minimum Amounts.

 

(A)          in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and/or the Loans at the time owing to it or contemporaneous assignments to related Approved Funds that equal at least the amount specified in clause (b)(i)(B) of this Section in the aggregate or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

 

(B)          in any case not described in clause (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes outstanding thereunder) or, if the Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade 

 

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Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $1,000,000, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, Borrower otherwise consents (each such consent not to be unreasonably withheld, conditioned or delayed); provided, however, that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such minimum amount has been met;

 

(ii)           Proportionate Amounts.  Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loans or the Commitment assigned.

 

(iii)          Required Consents.  No consent shall be required for any assignment except to the extent required by clause (b)(i)(B) of this Section and, in addition:

 

(A)          the consent of Borrower (such consent not to be unreasonably withheld, conditioned or delayed) shall be required unless (1) an Event of Default has occurred and is continuing at the time of such assignment or (2) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund;

 

(B)          the consent of the Administrative Agent (such consent not to be unreasonably withheld, conditioned or delayed) shall be required for assignments in respect of any Commitment and/or Loan to a Person that is not a Lender, an Affiliate of a Lender or an Approved Fund; and

 

(C)          the consent of the L/C Issuer shall be required for any assignment.

 

(iv)          Assignment and Assumption.  The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee in the amount of $3,500; provided, however, that the Administrative Agent may, in its reasonable discretion, elect to waive such processing and recordation fee in the case of any assignment.  The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

 

(v)           No Assignment to Borrower.  No such assignment shall be made to any of the Loan Parties or to any Sponsor Entity.

 

(vi)          No Assignment to Certain Persons.  No such assignment shall be made (A) to a natural person or (B) to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (B).

 

(vii)         Certain Additional Payments.  In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the

 

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parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent, the L/C Issuer or any Lender hereunder (and interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit in accordance with its Applicable Percentage.  Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

 

Subject to acceptance and recording thereof by the Administrative Agent pursuant to clause (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, that Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05 and 10.04 with respect to facts and circumstances occurring prior to the effective date of such assignment; provided, that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.  Upon request, Borrower (at its expense) shall execute and deliver a promissory note to the assignee Lender.  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this clause shall be treated for purposes of this Agreement as a sale by that Lender of a participation in such rights and obligations in accordance with Section 10.06(d).

 

(c)           Register.  The Administrative Agent, acting solely for this purpose as an agent of Borrower (and such agency being solely for tax purposes), shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it (or the equivalent thereof in electronic form) and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts (and stated interest) of the Loans and L/C Obligations owing to, each Lender and L/C Issuer pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive, and Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender or L/C Issuer hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be 

 

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available for inspection by Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

 

(d)           Participations.  Any Lender may at any time, without the consent of, or notice to, Borrower or the Administrative Agent, sell participations to any Person (other than a natural person or to an Loan Party or a Sponsor Entity) (each, a “Participant”) in all or a portion of that Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and the Loans (including such Lender’s participations in L/C Obligations) owing to it); provided that (i) that Lender’s obligations under this Agreement shall remain unchanged, (ii) that Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) Borrower, the Administrative Agent, the L/C Issuer and the Lenders shall continue to deal solely and directly with that Lender in connection with that Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that that Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that that Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 10.01 that affects such Participant.  Subject to clause (e) of this Section, Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 10.06(b).  Each Lender that sells a participation agrees, at Borrower’s request and expense, to use reasonable efforts to cooperate with Borrower to effectuate the provisions of Section 3.06 with respect to any Participant.  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.10 as though it were a Lender.

 

(e)           Limitations upon Participant Rights.  A Participant shall not be entitled to receive any greater payment under Section 3.01 or 3.04 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with Borrower’s prior written consent.  A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.01 unless Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of Borrower, to comply with Section 3.01(e) as though it were a Lender.

 

(f)            Participant Register.  Each Lender that sells a participation, acting as a non-fiduciary agent of Borrower solely for purposes of applicable United States federal income tax law and Treasury regulations promulgated thereunder, shall maintain a “book entry” register (as further described in the foregoing Treasury regulations) on which it records the name and address of the applicable Participant and the principal amounts of such Participant’s interest in the Loans (each such register, a “Participant Register”).  The entries in the Participant Register shall be conclusive absent manifest error, and the applicable Lender, Borrower and the Administrative Agent shall treat each Person whose name is recorded in the Participant Register pursuant to the terms hereof as having “ownership of an interest” (as such term is defined the applicable Treasury regulations) in such Loans for all purposes of this Agreement, notwithstanding any notice to the contrary.  Upon request by Borrower, such Lender shall make 

 

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the Participant Register available to Borrower.  For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

 

(g)           Certain Pledges.  Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its promissory note, if any) to secure obligations of that Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release that Lender from any of its obligations hereunder or substitute any such pledgee or assignee for that Lender as a party hereto.

 

10.07      Treatment of Certain Information; Confidentiality.  Each of the Administrative Agent, the L/C Issuer and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed:

 

(a)           to its Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees, agents, trustees, advisors and representatives (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential);

 

(b)           to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners);

 

(c)           to the extent required by applicable laws or regulations or by any subpoena or similar legal process;

 

(d)           to any other party hereto;

 

(e)           in connection with the exercise of any remedies hereunder or under any other Transaction Document or any action or proceeding relating to this Agreement or any other Transaction Document or the enforcement of rights hereunder or thereunder;

 

(f)            subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or any Eligible Assignee invited to be a Lender pursuant to Section 2.10(c) or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to Borrower and its obligations;

 

(g)           with the consent of Borrower; or

 

(h)           to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, the L/C Issuer any Lender or any of their respective Affiliates on a non-confidential basis from a source other than the Loan Parties or the Sponsor Entities.

 

Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has 

 

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exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information. Each of the Administrative Agent, the L/C Issuer and the Lenders acknowledges that (a) the Information may include material non-public information concerning Borrower or a Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public information in accordance with applicable Law, including United States Federal and state securities Laws.

 

10.08      Right of Setoff.  If an Event of Default shall have occurred and be continuing, each Lender, the L/C Issuer and each of their respective Affiliates is hereby authorized at any time and from time to time, after obtaining the prior written consent of the Administrative Agent, to the fullest extent permitted by applicable law, to set off and apply all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by that Lender, the L/C Issuer or any such Affiliate to or for the credit or the account of any of the Loan Parties against all of the obligations of the Loan Parties now or hereafter existing under this Agreement or any other Transaction Document to that Lender or the L/C Issuer or their respective Affiliates, irrespective of whether or not that Lender or the L/C Issuer or Affiliate shall have made any demand under this Agreement or any other Transaction Document and although such obligations of the Loan Parties may be contingent or unmatured or are owed to a branch or office of that Lender different from the branch or office holding such deposit or obligated on such indebtedness; provided, that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.12 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the L/C Issuer and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff.  The rights of each Lender, the L/C Issuer and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that that Lender, the L/C Issuer or their respective Affiliates may have.  Each Lender and the L/C Issuer agrees to notify Borrower and the Administrative Agent promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application.

 

10.09      Interest Rate Limitation.  Notwithstanding anything to the contrary contained in any Transaction Document, the interest paid or agreed to be paid under the Transaction Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”).  If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to Borrower.  In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Bank Obligations hereunder.

 

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10.10      Counterparts; Integration; Effectiveness.  This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Agreement and the other Transaction Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede all previous agreements and understandings, oral or written, relating to the subject matter hereof.  Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto.  Delivery of an executed counterpart of a signature page of this Agreement by telecopy or other electronic imaging means shall be effective as delivery of a manually executed counterpart of this Agreement.

 

10.11      Survival of Representations and Warranties.  All representations and warranties made hereunder and in any other Transaction Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof.  Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Bank Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

 

10.12      Severability.  If any provision of this Agreement or the other Transaction Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Transaction Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions.  The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  Without limiting the foregoing provisions of this Section 10.12, if and to the extent that the enforceability of any provisions in this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good faith by the Administrative Agent or the L/C Issuer, as applicable, then such provisions shall be deemed to be in effect only to the extent not so limited.

 

10.13      Replacement of Lenders.  If (i) any Lender requests compensation under Section 3.04, (ii) Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, (iii) any Lender is a Defaulting Lender, (iv) any Lender determines that any Law or action of any Governmental Authority adversely impacts that Lender’s or its applicable Lending Office’s ability to make, maintain or fund Eurodollar Rate Loans as set forth in Section 3.02, (v) if any Lender is subject to a Disqualification, then so long as no Event of Default shall be continuing, Borrower may, at its sole expense and effort, upon notice to that Lender and the Administrative Agent, require that Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 10.06), all of its interests, rights 

 

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(other than its existing rights to payments pursuant to Sections 3.01 and 3.04) and obligations under this Agreement and the related Transaction Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:

 

(a)           Borrower shall have paid to the Administrative Agent the assignment fee specified in Section 10.06(b);

 

(b)           that Lender shall have received payment of an amount equal to the outstanding principal of its Loans and L/C Advances, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Transaction Documents (including any amounts under Section 3.05) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or Borrower (in the case of all other amounts);

 

(c)           in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section 3.01, such assignment will result in a reduction in such compensation or payments thereafter; and

 

(d)           such assignment does not conflict with applicable Laws.

 

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by that Lender or otherwise, the circumstances entitling Borrower to require such assignment and delegation cease to apply.

 

10.14      Governing Law; Jurisdiction; Etc. (a) GOVERNING LAW.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL (EXCEPT TO THE EXTENT OTHERWISE EXPRESSLY PROVIDED THEREIN) BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEVADA.

 

(b)           SUBMISSION TO JURISDICTION.  BORROWER IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEVADA SITTING IN CLARK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE DISTRICT OF NEVADA, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEVADA STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, THE L/C ISSUER OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO 

 

116

 

THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(c)           WAIVER OF VENUE.  BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

(d)           SERVICE OF PROCESS.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02.  NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

 

10.15      Waiver of Jury Trial.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

10.16      No Advisory or Fiduciary Responsibility.  In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Transaction Document), Borrower acknowledges and agrees that: (i) (A) the arranging and other services regarding this Agreement provided by the Administrative Agent and the Arrangers are arm’s-length commercial transactions between the Loan Parties, on the one hand, and the Administrative Agent and the Arrangers, on the other hand, (B) each Loan Party has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) each Loan Party is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Transaction Documents; (ii) (A) the Administrative Agent and the Arrangers each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Loan Parties, the Sponsor Entities or any other Person and (B) neither the Administrative 

 

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Agent nor any Arranger has any obligation to the Loan Parties or the Sponsor Entities with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Transaction Documents; and (iii) the Administrative Agent and the Arrangers and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Loan Parties and the Sponsor Entities, and neither the Administrative Agent nor any Arranger has any obligation to disclose any of such interests to any Person.  To the fullest extent permitted by law, Borrower hereby waives and releases any claims that it may have against the Administrative Agent and the Arrangers with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

 

10.17      Electronic Execution of Assignments and Certain Other Documents.  The words “execute,” “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption or in any amendment or other modification hereof (including waivers and consents) shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Administrative Agent, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

 

10.18      USA PATRIOT ACT.  Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies Borrower that pursuant to the requirements of the USA PATRIOT ACT (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies each Loan Party, which information includes the name and address of each Loan Party and other information that will allow that Lender or the Administrative Agent, as applicable, to identify each Loan Party in accordance with the Act.  Borrower shall, promptly following a request by the Administrative Agent or any Lender, provide all documentation and other information that the Administrative Agent or that Lender requests in order to comply with its ongoing obligations under applicable “know your customer” an anti-money laundering rules and regulations, including the Act.

 

10.19      Time of the Essence.  Time is of the essence of the Transaction Documents.

 

10.20      ENTIRE AGREEMENT.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

10.21      Conflict with Loan Documents.  In the event of any conflict between the terms hereof and the terms of any other Loan Document (other than the Intercreditor Agreements, to which the terms hereof concerning Collateral are subject in all respects and other than a Secured Hedge Agreement and a Secured Cash Management Agreement), the terms hereof shall control.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

	
 
    	
CITYCENTER   HOLDINGS, LLC,
    
	
 
    	
a   Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
Project   CC, LLC, a Nevada limited liability company, its managing member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:   
    	
/s/   Daniel J. D’Arrigo
    
	
 
    	
 
    	
Name:
    	
Daniel   J. D’Arrigo
    
	
 
    	
 
    	
Title:
    	
Treasurer
    

 

[CityCenter Credit Agreement]

 

 

	
 
    	
BANK   OF AMERICA, N.A., as
    
	
 
    	
Administrative   Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Maurice Washington
    
	
 
    	
Name:
    	
Maurice   Washington
    
	
 
    	
Title:
    	
Vice   President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
BANK   OF AMERICA, N.A., as
    
	
 
    	
L/C   Issuer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Brian D. Corum
    
	
 
    	
Name:
    	
Brian   D. Corum
    
	
 
    	
Title:
    	
Managing   Director
    

 

[CityCenter Credit Agreement]

 

 

	
 
    	
BANK   OF AMERICA, N.A.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Brian D. Corum
    
	
 
    	
Name:
    	
Brian   D. Corum
    
	
 
    	
Title:
    	
Managing   Director
    

 

[CityCenter Credit Agreement]

 

 

	
 
    	
BARCLAYS   BANK PLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Noam Azachi
    
	
 
    	
Name:
    	
Noam   Azachi
    
	
 
    	
Title:
    	
Assistant   Vice President
    

 

[CityCenter Credit Agreement]

 

 

	
 
    	
BNP   Paribas
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Duane Helkowski
    
	
 
    	
Name:
    	
Duane   Helkowski
    
	
 
    	
Title:
    	
Managing   Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   James Goodall
    
	
 
    	
Name:
    	
James   Goodall
    
	
 
    	
Title:
    	
Managing   Director
    

 

[CityCenter Credit Agreement]

 

 

	
 
    	
Sumitomo   Mitsui Banking Corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Ryo Suzuki
    
	
 
    	
Name:
    	
Ryo   Suzuki
    
	
 
    	
Title:
    	
Managing   Director
    

 

[CityCenter Credit Agreement]

 

 

	
 
    	
UBS   Loan Finance LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Mary E. Evans
    
	
 
    	
Name:
    	
Mary   E. Evans
    
	
 
    	
Title:
    	
Associate   Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Irja R. Otsa
    
	
 
    	
Name:
    	
Irja   R. Otsa
    
	
 
    	
Title:
    	
Associate   Director
    

 

[CityCenter Credit Agreement]

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