Document:

Exhibit 10.3

 

Execution Copy

 

 

February 3, 2016

 

Michael W. Ferro, Jr.

c/o Merrick Ventures, LLC

350 North Orleans Street

10th Floor

Chicago, IL 60654

 

Re:                             Confidentiality and Recusal Agreement

 

Dear Mr. Ferro:

 

We are pleased to welcome you as a member and the non-executive Chairman of the Board of Directors (the “Board”) of Tribune Publishing Company (the “Company” and, together with its subsidiaries and affiliates as may now or hereafter exist, the “Tribune Entities”).

 

In connection with your appointment to the Board, this letter agreement confirms our mutual understanding regarding certain policies and procedures applicable to directors of the Company, as well as the treatment of certain competitively sensitive information.  As used herein, the term “Merrick-Related Entities” refers to Merrick Media, LLC, Merrick Ventures, LLC, Merrick Venture Management, LLC, Wrapports, LLC, Wrapports Ventures, Inc., and any other entity (other than the Company and the Sun Times-Related Entities, as defined below) in which you now or hereafter have a controlling or material investment, and each of their respective subsidiaries and affiliates as may now or hereafter exist.  The term “Sun Times-Related Entities” refers to STMH, Inc., and its subsidiaries.  The term “Competing Business” refers to the business of operating a major daily newspaper within the Chicago metropolitan area.  For the avoidance of doubt, none of the Merrick-Related Entities shall be deemed to be engaged in a Competing Business solely by reason of the fact that such entity owns a direct or indirect equity interest in any Sun Times-Related Entity.

 

1.                                      Policies and Procedures Applicable to Directors of the Company.  The policies and procedures applicable to directors of the Company (as the same may be amended, revised or supplemented from time to time, the “Director Policies and Procedures”) including without limitation, the Code of Ethics and Business Conduct, the Board of Directors Communication Policy, and the Corporate Governance Guidelines will apply to you during your service as a director in the same manner as applicable to all other directors of the Company.  The provisions of this agreement will supplement, and not supersede, such obligations under the Director Policies and Procedures; provided, however, that if any express provision of this letter agreement conflicts with the provisions of the Director Policies and Procedures, then this letter agreement shall control.

 

 

Michael W. Ferro, Jr.

Page 2

 

2.                                      Definition of Competitively Sensitive Proprietary Information.

 

a.                                For the purposes of this letter agreement, “Competitively Sensitive Proprietary Information” shall mean confidential, secret or trade secret, or proprietary information of any of the Tribune Entities or any of the Sun Times-Related Entities that relate to the Competing Business.  In furtherance of the foregoing, Competitively Sensitive Proprietary Information shall (1) include, without limitation, any (i) pricing, strategy/business plan, revenue, margin and cost information, and customer and supplier information relating to the Competing Business, and (ii) any notes, reports, summaries, analyses, compilations, forecasts, studies, interpretations, memoranda or other materials that contain, reference, reflect or are based on any Competitively Sensitive Proprietary Information and (2) not include aggregate financial or other operating information regarding the Tribune Entities as a whole, or financial or other operating information regarding Tribune Entities other than Tribune Entities operating the Competing Business, provided such information does not separately state, identify or describe Competitively Sensitive Proprietary Information of the Tribune Entities operating the Competing Business (“Aggregate Information”).

 

b.                                      Notwithstanding the foregoing, Competitively Sensitive Proprietary Information shall not include information that: (i) was or becomes available to any Tribune Entities, on the one hand, or any Sun Times-Related Entities, on the other hand, on a non-confidential basis and other than through your appointment to the Board of the Company; or (ii) was or becomes available to the public (other than as a result of a breach by you).

 

3.                                      Treatment of Competitively Sensitive Proprietary Information.

 

a.                                We acknowledge and agree that (1) as a result of your prior activities on behalf of the Sun Times-Related Entities you may currently possess Competitively Sensitive Proprietary Information of the Sun Times-Related Entities; (2) you may have fiduciary or other confidentiality obligations to the Sun Times-Related Entities to maintain the confidentiality and not to use any such Competitively Sensitive Proprietary Information of the Sun Times-Related Entities, including in connection with your service as a director of the Company; (3) you shall keep any such Competitively Sensitive Proprietary Information of the Sun Times-Related Entities confidential and not disclose such information, directly or indirectly, to any of the Tribune Related Entities (including any of their respective shareholders, directors, officers, employees, members, managers, representatives, consultants or agents); and (4) nothing in this agreement, the Director Policies and Procedures, or your duties as a director of the Company shall obligate or require you to divest your indirect beneficial ownership in the Sun Times-Related Entities or disclose to, or use any Competitively Sensitive Proprietary Information of the Sun Times-Related Entities for any purpose on behalf of the Tribune Entities or in connection with the performance of your duties for the Tribune Entities.

 

 

Michael W. Ferro, Jr.

Page 3

 

b.                                You acknowledge and agree that you will keep all Competitively Sensitive Proprietary Information of the Tribune Entities confidential and not disclose such information, directly or indirectly, to any Sun Times-Related Entities or Merrick-Related Entities (including any of their respective directors, officers, employees, members, managers, representatives, consultants or agents).

 

c.                                 We acknowledge and agree that, notwithstanding general confidentiality obligations to the Tribune Entities, you may, on a need-to-know basis, disclose Aggregate Information to any of the Merrick-Related Entities or such of their shareholders, directors, officers, employees, members, managers, representatives or advisors who are not also shareholders, directors, officers, employees, members, managers, representatives or advisors to the Sun Times-Related Entities, provided that you shall instruct any such recipient to first sign a non-disclosure agreement that obligates the recipient not to disclose such Aggregate Information to any Sun Times-Related Entities or any other third parties; and provided, further, that nothing in this paragraph shall affect or diminish any obligations under applicable law, including the securities laws.

 

d.                                You and we acknowledge and agree that if hereafter you have reason to believe that other individuals at any of the Tribune Entities, any of the Merrick-Related Entities or any of the Sun Times-Related Entities are disclosing or using Competitively Sensitive Proprietary Information of the other party in a manner that if disclosed or used by you in the same manner would violate the terms of the letter agreement, you may and should contact the Company’s General Counsel and the general counsels of the Merrick-Related Entities and Sun Times-Related Entities regarding these events.

 

4.                                      Related Party Matters.

 

a.                                You and we acknowledge that there exist certain business relationships (including, without limitation, certain printing and distribution agreements) between one or more Sun Times-Related Entities and one or more Tribune Entities, and that there may, in the future, be other such dealings or relationships (the “Related Party Matters”).  You and we acknowledge and agree that during the course of your service as a director of the Company, it would be inappropriate for you to receive confidential, secret or trade secret, or proprietary information of any of the Tribune Entities regarding one or more Related Party Matters (“Related Party Information”), and therefore the Company will withhold such Related Party Information from you and/or redact such Related Party Information from materials otherwise distributed to the directors of the Company; provided that you will be advised if information has been so withheld or redacted.  You further agree that if, notwithstanding the Company’s commitment to withhold or redact Related Party Information, you should inadvertently receive any Related Party Information, you will promptly return or destroy such information and not use or otherwise disclose such information to any third party.

 

b.                                You and we acknowledge and agree that you will remove and recuse yourself from any meetings, decisions or other communications if and to the extent that you believe that they relate or could relate to Related Party Matters or to competition between a Competing Business of the Tribune Entities and a Competing Business of the Sun Times-Related Entities.  Similarly, you shall remove and recuse yourself from any meetings, decisions or other communications if and to the extent that the Board, on advice of counsel, has determined that they relate or could relate to Related Party Matters or to competition between a Competing Business of the Tribune Entities and a Competing Business of the Sun Times-Related Entities.

 

 

Michael W. Ferro, Jr.

Page 4

 

c.                                       You acknowledge and agree that, for so long as you are a director of the Company, you will (1) resign as a director of, and thereafter not serve as a director, officer or employee of, attend Board or Board Committee meetings or otherwise be involved in the operations of, any of the Sun Times-Related Entities; (2) not request, and shall take reasonable steps to prevent the receipt of, or other access to, Competitively Sensitive Proprietary Information of any of the Sun Times-Related Entities; and (3) cause each of Merrick Ventures, LLC and Merrick Venture Management, LLC and any of their respective affiliated successors and assigns (collectively, the “Merrick Holders”) to relinquish all voting rights that they now have or may later obtain with respect to the election of directors or managers of Wrapports, LLC or any of the Sun-Times Related Entities, or the ability to access or obtain any Competitively Sensitive Proprietary Information of any of the Sun-Times Related Entities, including causing each of the Merrick Holders to comply with (and to enforce their right to cause any other party to comply with) any agreement or understanding between or among them to implement the limitations and restrictions contemplated by this Section 4(c).  For the avoidance of doubt, this provision is not intended to preclude your receipt of aggregated financial information that (i) is necessary to protect your investment in Sun Times-Related Entities and (ii) in the judgment of the General Counsel of Wrapports, would not be relevant to decisions or judgments that you may make with respect to the Tribune Entities.

 

5.                                      Governing Law.  This letter agreement shall be governed in all respects by the Laws of the State of Illinois without regard to choice of laws or conflict of laws provisions thereof that would require the application of the laws of any other jurisdiction.

 

Signature page follows.

 

 

If this letter agreement is acceptable to you, please acknowledge your understanding and agreement with the terms of this letter agreement by signing in the space provided below.

 

 

	
 
    	
Very truly yours,
    
	
 
    	
 
    
	
 
    	
TRIBUNE PUBLISHING COMPANY
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jack Griffin
    
	
 
    	
 
    	
Name:
    	
Jack Griffin
    
	
 
    	
 
    	
Title:
    	
President and Chief   Executive Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
Accepted and Agreed
    	
 
    
	
as of the date hereof:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/ Michael W.   Ferro, Jr.
    	
 
    
	
MICHAEL W. FERRO, JR.
    	
 
    

 

SIGNATURE PAGE TO CONFIDENTIALITY AND RECUSAL AGREEMENTEX-10.1

 Exhibit 10.1 

THIRD SUPPLEMENTAL AGREEMENT 

DATED 2 FEBRUARY 2016 

BETWEEN 
 MGM CHINA
HOLDINGS LIMITED 
 MGM GRAND PARADISE, S.A. 

MGM GRAND PARADISE (HK) LIMITED 

SUPEREMPREGO LIMITADA 

MGM - SECURITY SERVICES, LTD. 

AND 
 BANK OF AMERICA,
N.A. 
 as Facility Agent 

relating to a credit agreement originally dated 27 July 2010, 

as first amended and restated by a supplemental agreement dated 22 October 2012, 

such amendments being effective as of 29 October 2012 and as further amended and restated by a 

second supplemental agreement dated 9 June 2015, such amendments being effective as of 12 June 2015 

 
 

 
 Allen & Overy 

 CONTENTS 
  

							
	Clause	  	Page	 
			
	1.	  	 Interpretation
	  	 	2	  
	2.	  	 Amendments
	  	 	2	  
	3.	  	 Conditions Precedent
	  	 	2	  
	4.	  	 Representations
	  	 	2	  
	5.	  	 Guarantee
	  	 	3	  
	6.	  	 Fees
	  	 	3	  
	7.	  	 Indemnity
	  	 	3	  
	8.	  	 Miscellaneous
	  	 	3	  
	9.	  	 Governing Law
	  	 	4	  
		
	Schedule	  			
		
	Amendments to the Second Amended and Restated Credit Agreement	  	 	5	  
		
	Signatories	  	 	2	  

 THIS AGREEMENT is dated 2 February 2016 and made 

BETWEEN: 
  

	(1)	MGM CHINA HOLDINGS LIMITED (the Company); 

  

	(2)	MGM GRAND PARADISE, S.A. (MGMGP); 

  

	(3)	MGM GRAND PARADISE (HK) LIMITED, SUPEREMPREGO LIMITADA and MGM - SECURITY SERVICES, LTD. as original guarantors (the Original Guarantors); and 

 

	(4)	BANK OF AMERICA, N.A. as facility agent for and on behalf of the other Finance Parties under and as defined in the Second Amended and Restated Credit Agreement defined below (in this capacity, the Facility
Agent). 

 BACKGROUND 
  

	(A)	MGMGP, MGM Grand Paradise (HK) Limited and Superemprego Limitada entered into a HK$7,410,000,000 credit agreement dated 27 July 2010 (the Existing Credit Agreement). 

 

	(B)	On 2 June 2011 the Company acceded to the Existing Credit Agreement as an Additional Guarantor. 

  

	(C)	On 22 October 2012 MGMGP, the Company and the Facility Agent, amongst others, entered into a supplemental agreement (the First Supplemental Agreement) which amended and restated the Existing Credit Agreement
(as amended by the First Supplemental Agreement, such amendments being effective as of 29 October 2012, the First Amended and Restated Credit Agreement). 

 

	(D)	On 6 February 2015, MGM Security Services, Ltd. acceded to the First Amended and Restated Credit Agreement as an Additional Guarantor. 

 

	(E)	On 9 June 2015 MGMGP, the Company and the Facility Agent, amongst others, entered into a second supplemental agreement (the Second Supplemental Agreement) which amended and restated the First Amended and
Restated Credit Agreement (as amended by the Second Supplemental Agreement, such amendments being effective as of 12 June 2015, the Second Amended and Restated Credit Agreement). 

 

	(F)	The Facility Agent delivered a letter dated 8 January 2016 to the Lenders (the Amendment Request Letter), asking the Lenders to respond to the Company’s and MGMGP’s request that the Lenders consent
to certain amendments to the Second Amended and Restated Credit Agreement described therein. 

  

	(G)	The Parties agree that on the Third Effective Date (as defined below) the Second Amended and Restated Credit Agreement will be amended on the terms, and subject to the conditions, of this Agreement. 

 

	(H)	Pursuant to clause 26.1 (Procedure) of the Second Amended and Restated Credit Agreement, the Majority Lenders (as defined in the Second Amended and Restated Credit Agreement) have consented to the amendments to the
Second Amended and Restated Credit Agreement contemplated by this Agreement. Accordingly, the Facility Agent is authorised to execute this Agreement on behalf of the Finance Parties. 

  
 1 

 IT IS AGREED as follows: 
  

	1.	INTERPRETATION 

  

	1.1	Definitions 

  

	(a)	In this Agreement: 

 Amended Credit Agreement means the Second Amended and Restated
Credit Agreement as amended by this Agreement. 
 Third Effective Date means the date upon which the Facility Agent issues the Third
Effective Date Notice pursuant to paragraph (b) of Clause 2 (Amendments). 
 Third Effective Date Notice has the meaning given to
that term in paragraph (b) of Clause 2 (Amendments). 
  

	(b)	Capitalised terms defined in the Second Amended and Restated Credit Agreement have, unless expressly defined in this Agreement, the same meaning in this Agreement. 

 

	1.2	Construction 

 The provisions of clause 1.2 (Construction), 1.4 (Third Parties) and 36
(Enforcement) of the Second Amended and Restated Credit Agreement apply to this Agreement as though they were set out in full in this Agreement except that references to the Second Amended and Restated Credit Agreement are to be construed as
references to this Agreement. 
  

	2.	AMENDMENTS 

  

	(a)	Subject to paragraph (b) below, the Second Amended and Restated Credit Agreement will be amended from the Third Effective Date in the manner set out in the Schedule (Amendments to the Second Amended and Restated
Credit Agreement). 

  

	(b)	The Second Amended and Restated Credit Agreement will not be amended by this Agreement unless the Facility Agent notifies the Company and each Lender that it has received all of the documents and evidence set out in
Clause 3 (Conditions precedent) below in form and substance satisfactory to the Facility Agent (the Third Effective Date Notice). The Facility Agent must issue the Third Effective Date Notice as soon as reasonably practicable.

  

	3.	CONDITIONS PRECEDENT 

 The conditions precedent to be delivered to the Facility Agent by
the Company in accordance with paragraph (b) of Clause 2 (Amendments) above are: 
  

	 	(a)	an executed copy of this Agreement; and 

  

	 	(b)	evidence that all fees, costs and expenses then due and payable from the Company in connection with this Agreement and the amendments contemplated herein have been paid. 

 

	4.	REPRESENTATIONS 

 Each Obligor makes the representations and warranties set out in clause
16 (Representations and Warranties) of the Second Amended and Restated Credit Agreement on the date of this Agreement and on the Third Effective Date, in each case as if references to the Second Amended and Restated Credit Agreement are references
to the Amended Credit Agreement with reference to the facts and 

  
 2 

 
circumstances then existing and in each case as if references to the Second Effective Date are references to the Third Effective Date. 

 

	5.	GUARANTEE 

 Each Obligor, with effect on and from the Third Effective Date: 

 

	 	(a)	confirms its acceptance of the Amended Credit Agreement; 

  

	 	(b)	agrees that it is bound as an Obligor by the terms of the Amended Credit Agreement; and 

  

	 	(c)	(if a Guarantor) confirms that the guarantee given by it or created under a Finance Document will: 

  

	 	(i)	continue in full force and effect; and 

  

	 	(ii)	extend to the liabilities and obligations of the Obligors to the Finance Parties under the Finance Documents (including the Amended Credit Agreement). 

 

	6.	FEES 

 By no later than the Third Effective Date, the Company shall pay to the Facility
Agent (for the account of each relevant Lender) to the account notified to the Company by the Facility Agent for this purpose, a fee of: 
  

	 	(a)	(in respect of each Lender that provided its consent to the Facility Agent pursuant to the Amendment Request Letter on or before 5:00 p.m. (Hong Kong time) on 22 January 2016) 0.40 per cent. flat; and

  

	 	(b)	(in respect of each Lender that provided its consent to the Facility Agent pursuant to the Amendment Request Letter after 5:00 p.m. (Hong Kong time) on 22 January 2016 and on or prior to 5:00 p.m. (Hong Kong time)
on 29 January 2016) 0.25 per cent. flat, 

 in each case, on the aggregate amount of that Lender’s Term Loan
Commitment and Revolving Credit Commitment immediately prior to the Third Effective Date. 
  

	7.	INDEMNITY 

 Without prejudice to any indemnity provided under the Finance Documents, each
Obligor must, jointly and severally and immediately on demand by any Party (other than an Obligor), indemnify that Party against any cost (including, without limitation, legal costs), expense, loss or liability which that Party incurs in connection
with, or as a consequence of, entering into this Agreement. 
  

	8.	MISCELLANEOUS 

  

	(a)	No part of this Agreement is intended to or will create a registrable Security Interest. 

  

	(b)	Each of this Agreement and the Amended Credit Agreement is a Finance Document. 

  

	(c)	Subject to the terms of this Agreement, the Second Amended and Restated Credit Agreement will remain in full force and effect and, from the Third Effective Date, the Second Amended and Restated Credit Agreement and this
Agreement will be read and construed as one document. 

  
 3 

	9.	GOVERNING LAW 

 This Agreement and any non-contractual obligations arising out of or in
connection with it are governed by English law. 
 THIS AGREEMENT has been entered into on the date stated at the beginning of this Agreement. 

  
 4 

 SCHEDULE 

AMENDMENTS TO THE SECOND AMENDED AND RESTATED CREDIT AGREEMENT 

 

	1.	Clause 1.1 (Definitions) is to be amended by: 

  

	 	(a)	inserting the following new definition after the definition of “Defaulting Lender” and before the definition of “Designated Jurisdiction”: 

“Designated Accounting Date means each of the three Accounting Dates occurring on and from the last day of the first full fiscal
quarter following the MGM Cotai Opening Date.”; 
  

	 	(b)	inserting the following new definitions after the definition of “MGM Cotai” and before the definition of “MGM Cotai Floating Charge”: 

“MGM Cotai Annualised EBITDA means on a Designated Accounting Date, the MGM Cotai EBITDA accrued on and from the MGM Cotai Opening
Date to that Designated Accounting Date calculated on an annualised basis. 
 MGM Cotai EBITDA means the EBITDA attributable to MGM
Cotai.”; 
  

	 	(c)	deleting the definition of “Permitted Restricted Payment” in its entirety and replacing it with the following: 

“Permitted Restricted Payments means Restricted Payments which: 

 

	 	(a)	are made at a time when: 

  

	 	(i)	no Default is outstanding or will result from the making of the Restricted Payment; 

  

	 	(ii)	the Company has delivered a Restricted Payment Certificate at least five Business Days prior to the making of that Restricted Payment or, in the case of any Restricted Payment referred to in paragraph (e) of the
definition of “Restricted Payment” five days after the making of that Restricted Payment; and 

  

	 	(iii)	the Pro Forma Leverage Ratio does not exceed 4.00:1.00 immediately after that Restricted Payment, 

provided that, notwithstanding the above, no such Restricted Payment may be made by virtue of this paragraph (a) if as a result of the
making of such Restricted Payment, the aggregate amount of Restricted Payments which have been made: 
  

	 	(A)	during the preceding twelve month period; and 

  

	 	(B)	at a time when the Pro Forma Leverage Ratio was equal to or exceeded 3.50:1.00, 

 would be in
excess of US$300,000,000 (or its equivalent) unless, after giving effect to that Restricted Payment, the Pro Forma Leverage Ratio will be less than 3.50:1.00; or 

  
 5 

	 	(b)	are made at a time when: 

  

	 	(i)	no Default is outstanding or will result from the making of the Restricted Payment; 

  

	 	(ii)	the Company has delivered a Restricted Payment Certificate at least five Business Days prior to the making of that Restricted Payment or, in the case of any Restricted Payment referred to in paragraph (e) of the
definition of “Restricted Payment” five days after the making of that Restricted Payment; and 

  

	 	(iii)	the Pro Forma Leverage Ratio will exceed 4.00:1.00 immediately after that Restricted Payment, 

provided that notwithstanding the above, no such Restricted Payment may be made by virtue of this paragraph (b) if as a result of the
making of such Restricted Payment, the aggregate amount of Restricted Payments which have been made: 
  

	 	(A)	during the preceding twelve month period; and 

  

	 	(B)	at a time when the Pro Forma Leverage Ratio was equal to or exceeded 3.50:1.00, 

 would be in
excess of US$150,000,000 (or its equivalent); or 
  

	 	(c)	constitute the repurchase by the Company of its shares to the extent necessary to counter any dilution of MGM’s ownership interests, as a result of the exercise of rights under employee share incentive plans, to
ownership interest representing less than 51 per cent. ownership of the Company, provided that no Default is outstanding or will result from the making of such repurchase.”; and 

 

	 	(d)	deleting the definition of “Pro Forma Leverage Ratio” in its entirety and replacing it with the following: 

“Pro Forma Leverage Ratio means, on any date, the ratio of: 

 

	 	(a)	Total Debt on the date upon which the related Restricted Payment is proposed to be made (the test date), after giving effect to any prepayment of the Facilities to be made and any additional Financial
Indebtedness to be incurred or assumed on that date; to 

  

	 	(b)	EBITDA for the four consecutive financial quarters ending on the most recent Accounting Date falling prior to the test date (the relevant period) for which the Company’s unaudited consolidated financial
statements have then been prepared, 

 as adjusted (without duplication) by: 

 

	 	(i)	deducting (to the extent not already deducted) the EBITDA for the relevant period attributable to any business or asset of the Restricted Group which was disposed of during: 

  
 6 

	 	(A)	the relevant period; or 

  

	 	(B)	the period commencing on the last day of the relevant period and ending on the test date; 

  

	 	(ii)	adding (to the extent not already added) the EBITDA for the relevant period attributable to any business or asset of the Restricted Group which was acquired or into which investment is made during:

  

	 	(A)	the relevant period; or 

  

	 	(B)	the period commencing on the last day of the relevant period and ending on the test date; and 

  

	 	(iii)	assuming that, for the purposes of calculating the Pro Forma Leverage Ratio in connection with any acquisition of, or investment in, a person which is not a member of the Restricted Group immediately prior to that
acquisition or investment where that person will become a member of the Restricted Group immediately after the relevant acquisition or investment, references to: 

  

	 	(A)	“consolidated net income (or loss) of the Company” in the definition of “Net Income” in Subclause 18.1 (Financial covenant definitions) shall be deemed to include the net income (or loss) of that
person during that period; and 

  

	 	(B)	“the Restricted Group” in the definitions of “Net Income” and “Total Debt” in Subclause 18.1 (Financial covenant definitions) shall be deemed to include that person as a member of the
Restricted Group, 

 provided however, that for the purposes only of calculating the Pro Forma Leverage Ratio on a date where
the most recent Accounting Date falling prior to that date is a Designated Accounting Date, EBITDA shall include MGM Cotai Annualised EBITDA (without double counting) rather than MGM Cotai EBITDA.” 

 

	2.	Clause 18.1 (Financial covenant definitions) is to be amended by deleting the definition of “Leverage Ratio” in its entirety and replacing it with the following: 

“Leverage Ratio means, on any Accounting Date, the ratio of: 

 

	 	(a)	Total Debt on that Accounting Date; to 

  

	 	(b)	EBITDA for the 12 month period ending on that Accounting Date, 

 provided however, that for the
purposes only of calculating Leverage Ratio under Clause 18.3 (Leverage Ratio) on a Designated Accounting Date, EBITDA shall include MGM Cotai Annualised EBITDA (without double counting) rather than MGM Cotai EBITDA.” 

 

	3.	Clause 18.3 (Leverage Ratio) is to be amended by deleting the table of number and figures contained therein and replacing it with the following: 

  
 7 

			
	 Accounting Date
	  	Leverage Ratio
		
	 31 March 2016 and 30 June 2016
	  	4.50 to 1.00
		
	 30 September 2016, 31 December 2016, 31 March 2017 and 30 June 2017
	  	6.00 to 1.00
		
	 30 September 2017
	  	5.50 to 1.00
		
	 31 December 2017
	  	5.00 to 1.00
		
	 Each Accounting Date occurring on and after 31 March 2018
	  	4.50 to 1.00

  

	4.	Schedule 9 (Form of Restricted Payment Certificate) is to be amended by deleting the form of Restricted Payment Certificate in its entirety and replacing it with the form of Restricted Payment Certificate set out in the
Annex to this Schedule. 

  
 8 

 ANNEX 

FORM OF RESTRICTED PAYMENT CERTIFICATE 
  

			
		
	To:	  	[BANK OF AMERICA, N.A.] as Facility Agent
		
	From:	  	MGM CHINA HOLDINGS LIMITED
		
	Date:	  	[                    ]

 MGM CHINA HOLDINGS LIMITED and MGM GRAND PARADISE, S.A. – Term and Revolving Facilities Agreement in
relation to HK$23,400,000,000 Term and Revolving Facilities originally dated 27 July 2010 as amended and restated on 29 October 2012 and as further amended and restated on 9 June 2015 effective as of 12 June 2015 and as further
amended on 2 February 2016 effective as of      February 2016 (the Agreement) 
  

	1.	We refer to the Agreement. This is a Restricted Payment Certificate. 

  

	2.	We refer to [Insert details of relevant Restricted Payment] (the proposed Restricted Payment). 

  

	3.	We confirm that: 

  

	 	(a)	no Default is outstanding or would occur immediately after the making of the proposed Restricted Payment; 

  

	 	(b)	the Pro Forma Leverage Ratio immediately after the making of that proposed Restricted Payment will be
[                    ]; therefore the Pro Forma Leverage Ratio [will not][will]1 exceed
4.00:1.00; 

  

	 	(c)	[over the preceding 12 months, we have made the following Restricted Payments when the Pro Forma Leverage Ratio at the time was equal to or exceeded 3.50:1.00: 

[                       
     ] 
 and the aggregate amount of those Restricted Payments, when aggregated with the proposed Restricted
Payment, is not in excess of [US$300,000,000][US$150,000,000] 2 ;] 3 and 

 

	 	(d)	the Company will not be in breach of subclause 19.8 (Continuation of business of Principal Resorts) of the Agreement following the proposed Restricted Payment. 

 

	4.	We enclose the financial statements for the period upon which the EBITDA component of the Pro Forma Leverage Ratio referred to paragraph 3(b) above is based. 

 

	5.	We set out below the calculations establishing the figures in paragraph 3(b) above: 

[                       
     ]. 
  

	
	MGM CHINA HOLDINGS LIMITED
	
	By:
	  

	Chief Financial Officer
	
	Encl
	  

  
 9 

	1 	Delete as applicable depending on whether Restricted Payment is being made under paragraph (a) or paragraph (b) of definition of “Permitted Restricted Payment” 

	2 	Delete as applicable depending on whether Restricted Payment is being made under paragraph (a) or paragraph (b) of definition of “Permitted Restricted Payment” 

	3 	Insert if Restricted Payment is made when Pro Forma Leverage Ratio is equal to or greater than 3.50:1.00 

  
 10 

 SIGNATORIES 
  

									
	Company	 		 		 	
				
	For and on behalf of	 		 		 	
				
	MGM CHINA HOLDINGS LIMITED	 		 		 	
					
	By:	 	/s/ Grant R. Bowie	 		 		 	/s/ Antonio Menano
		 	Grant R. Bowie	 		 		 	Antonio Menano

  
 Third Supplemental Agreement 

									
	MGMGP	 		 		 	
				
	For and on behalf of	 		 		 	
				
	MGM GRAND PARADISE, S.A.	 		 		 	
					
	By:	 	/s/ Grant R. Bowie	 		 		 	/s/ Antonio Menano
		 	Grant R. Bowie	 		 		 	Antonio Menano

  
 Third Supplemental Agreement 

									
	Original Guarantor	 		 		 	
				
	For and on behalf of	 		 		 	
				
	MGM GRAND PARADISE (HK) LIMITED	 		 		 	
					
	By:	 	/s/ Grant R. Bowie	 		 		 	/s/ Antonio Menano
		 	Grant R. Bowie	 		 		 	Antonio Menano

  
 Third Supplemental Agreement 

									
	Original Guarantor	 		 		 	
				
	For and on behalf of	 		 		 	
				
	MGM - SECURITY SERVICES, LTD.	 		 		 	
					
	By:	 	/s/ Grant R. Bowie	 		 		 	/s/ Antonio Menano
		 	Grant R. Bowie	 		 		 	Antonio Menano

  
 Third Supplemental Agreement 

									
	Original Guarantor	 		 		 	
				
	For and on behalf of	 		 		 	
				
	SUPEREMPREGO LIMITADA	 		 		 	
					
	By:	 	/s/ Grant R. Bowie	 		 		 	/s/ Antonio Menano
		 	Grant R. Bowie	 		 		 	Antonio Menano

  
 Third Supplemental Agreement 

					
	Facility Agent
	
	BANK OF AMERICA, N.A.
		
	By:	 	 /s/ Wynnie Lam

		 	Name:	 	Wynnie Lam
		 	Title:	 	Vice President

  
 Third Supplemental Agreement

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