EXECUTION
SECOND AMENDED AND RESTATED LOAN AGREEMENT
Dated as of April 10, 2000
among
MGM GRAND, INC.,
as Borrower
MGM GRAND ATLANTIC CITY, INC.
and
MGM GRAND DETROIT, LLC
as Co-Borrowers
The Banks, Syndication Agent, Documentation Agents and Co-Documentation Agents
herein named
and
BANK OF AMERICA, N.A.
as Administrative Agent
BANC OF AMERICA SECURITIES LLC
Lead Arranger and Sole Book Manager
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TABLE OF CONTENTS
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Article 1
DEFINITIONS AND ACCOUNTING TERMS...................................................................... 1
1.1 Defined Terms.................................................................................... 1
1.2 Use of Defined Terms............................................................................. 29
1.3 Accounting Terms - Fiscal Periods................................................................ 29
1.4 Rounding......................................................................................... 29
1.5 Exhibits and Schedules........................................................................... 29
1.6 Miscellaneous Terms.............................................................................. 29
Article 2
LOANS AND LETTERS OF CREDIT........................................................................... 30
2.1 Committed Loans-General.......................................................................... 30
2.2 Base Rate Loans.................................................................................. 31
2.3 Eurodollar Rate Loans............................................................................ 31
2.4 Letters of Credit................................................................................ 32
2.5 Competitive Advances............................................................................. 36
2.6 Swing Line....................................................................................... 38
2.7 Co-Borrowers..................................................................................... 40
2.8 Voluntary Reduction of Commitment................................................................ 41
2.9 Optional Termination of Commitment............................................................... 41
2.10 Extension of Maturity Date...................................................................... 41
2.11 Administrative Agent's Right to Assume Funds Available for Advances............................. 42
2.12 Release and Reattachment of Collateral.......................................................... 42
2.13 Senior Indebtedness............................................................................. 44
Article 3
PAYMENTS AND FEES..................................................................................... 45
3.1 Principal and Interest........................................................................... 45
3.2 Lead Arranger's Fees............................................................................. 46
3.3 Upfront Fees..................................................................................... 46
3.4 Facility Fees.................................................................................... 47
3.5 Letter of Credit Fees............................................................................ 47
3.6 Agency Fees...................................................................................... 47
3.7 Increased Commitment Costs....................................................................... 47
3.8 Eurodollar Costs and Related Matters............................................................. 48
3.9 Late Payments.................................................................................... 52
3.10 Computation of Interest and Fees................................................................ 52
3.11 Non-Banking Days................................................................................ 52
3.12 Manner and Treatment of Payments................................................................ 52
3.13 Funding Sources................................................................................. 54
3.14 Failure to Charge Not Subsequent Waiver......................................................... 54
3.15 Administrative Agent's Right to Assume Payments Will be Made by Borrower and the
Co-Borrowers................................................................................. 54
3.16 Fee Determination Detail........................................................................ 54
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3.17 Survivability................................................................................... 54
Article 4
REPRESENTATIONS AND WARRANTIES........................................................................ 55
4.1 Existence and Qualification; Power; Compliance With Laws......................................... 55
4.2 Authority; Compliance With Other Agreements and Instruments and Government Regulations........... 55
4.3 No Governmental Approvals Required............................................................... 56
4.4 Subsidiaries..................................................................................... 56
4.5 Financial Statements............................................................................. 57
4.6 No Other Liabilities; No Material Adverse Changes................................................ 57
4.7 Title to Property................................................................................ 57
4.8 Intangible Assets................................................................................ 57
4.9 Public Utility Holding Company Act............................................................... 58
4.10 Litigation...................................................................................... 58
4.11 Binding Obligations............................................................................. 58
4.12 No Default...................................................................................... 58
4.13 ERISA........................................................................................... 58
4.14 Regulations T, U and X; Investment Company Act.................................................. 59
4.15 Disclosure...................................................................................... 59
4.16 Tax Liability................................................................................... 59
4.17 Projections..................................................................................... 59
4.18 Hazardous Materials............................................................................. 59
4.19 No Default Under Old Loan Agreement............................................................. 60
4.20 Mirage Merger Effective......................................................................... 60
Article 5
AFFIRMATIVE COVENANTS(OTHER THAN INFORMATION ANDREPORTING REQUIREMENTS)............................... 61
5.1 Preservation of Existence........................................................................ 61
5.2 Maintenance of Properties........................................................................ 61
5.3 Maintenance of Insurance......................................................................... 61
5.4 Compliance With Laws............................................................................. 61
5.5 Inspection Rights................................................................................ 61
5.6 Keeping of Records and Books of Account.......................................................... 62
5.7 Use of Proceeds.................................................................................. 62
5.8 New Restricted Subsidiaries...................................................................... 62
5.9 Hazardous Materials Laws......................................................................... 62
Article 6
NEGATIVE COVENANTS.................................................................................... 63
6.1 Payment of Subordinated Obligations.............................................................. 63
6.2 Disposition of Property.......................................................................... 63
6.3 Mergers.......................................................................................... 63
6.4 Hostile Acquisitions............................................................................. 64
6.5 ERISA............................................................................................ 64
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6.6 Change in Nature of Business..................................................................... 64
6.7 Liens and Negative Pledges....................................................................... 64
6.8 Leverage Ratio................................................................................... 65
6.9 Interest Charge Coverage Ratio................................................................... 66
Article 7
INFORMATION AND REPORTING REQUIREMENTS................................................................ 67
7.1 Financial and Business Information............................................................... 67
7.2 Compliance Certificates.......................................................................... 70
Article 8
CONDITIONS............................................................................................ 71
8.1 Initial Advances on the Closing Date............................................................. 71
8.2 Any Increasing Advance........................................................................... 73
Article 9
EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT.................................................. 75
9.1 Events of Default................................................................................ 75
9.2 Remedies Upon Event of Default................................................................... 77
Article 10
THE ADMINISTRATIVE AGENT.............................................................................. 80
10.1 Appointment and Authorization................................................................... 80
10.2 Administrative Agent and Affiliates............................................................. 80
10.3 Proportionate Interest in any Collateral........................................................ 80
10.4 Banks' Credit Decisions......................................................................... 80
10.5 Action by Administrative Agent.................................................................. 81
10.6 Liability of Administrative Agent............................................................... 82
10.7 Indemnification................................................................................. 83
10.8 Successor Administrative Agent.................................................................. 83
10.9 Foreclosure on Collateral....................................................................... 84
10.10 Intercreditor Arrangements; Attornment Agreements.............................................. 84
10.11 No Obligations of Borrower and the Co-Borrowers................................................ 84
Article 11
MISCELLANEOUS......................................................................................... 85
11.1 Cumulative Remedies; No Waiver.................................................................. 85
11.2 Amendments; Consents............................................................................ 85
11.3 Costs, Expenses and Taxes....................................................................... 86
11.4 Nature of Banks' Obligations.................................................................... 87
11.5 Survival of Representations and Warranties...................................................... 87
11.6 Notices......................................................................................... 87
11.7 Execution of Loan Documents..................................................................... 88
11.8 Binding Effect; Assignment...................................................................... 88
11.9 Right of Setoff................................................................................. 91
11.10 Sharing of Setoffs............................................................................. 91
11.11 Indemnity by Borrower and the Co-Borrowers..................................................... 92
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11.12 Nonliability of the Banks...................................................................... 93
11.13 No Third Parties Benefitted.................................................................... 94
11.14 Confidentiality................................................................................ 94
11.15 Further Assurances............................................................................. 94
11.16 Integration.................................................................................... 95
11.17 Governing Law.................................................................................. 95
11.18 Severability of Provisions..................................................................... 95
11.19 Headings....................................................................................... 95
11.20 Time of the Essence............................................................................ 95
11.21 Foreign Banks and Participants................................................................. 95
11.22 Hazardous Material Indemnity................................................................... 96
11.23 Gaming Boards.................................................................................. 97
11.24 Lien Releases.................................................................................. 97
11.25 Termination; Release of Liens.................................................................. 97
11.26 Nevada Gaming Collateral....................................................................... 97
11.27 Removal of a Bank.............................................................................. 98
11.28 Joint and Several.............................................................................. 98
11.29 Non-Involvement of Tracinda.................................................................... 98
11.30 Waiver of Right to Trial by Jury............................................................... 99
11.31 Purported Oral Amendments...................................................................... 99
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Exhibits
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A - Assignment Agreement
B - Assumption Agreement
C - Committed Advance Note
D - Competitive Advance Note
E - Competitive Bid
F - Competitive Bid Request
G - Compliance Certificate
H - Pricing Certificate
I - Request for Letter of Credit
J - Request for Loan
K - Joint Borrower Provisions
Schedules
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4.3 Governmental Approvals
4.4 Subsidiaries
4.7 Existing Liens and Negative Pledges
4.10 Material Litigation
4.17 Projections
4.18 Environmental Matters
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SECOND AMENDED AND RESTATED LOAN AGREEMENT
------------------------------------------
Dated as of April 10, 2000
This Second Amended and Restated Loan Agreement ("Agreement") is
entered into by and among MGM Grand, Inc., a Delaware corporation ("Borrower"),
MGM Grand Atlantic City, Inc., a New Jersey corporation ("Atlantic City") and
MGM Grand Detroit, LLC, a Delaware limited liability company ("Detroit"), as
initial Co-Borrowers, each Guarantor which may hereafter be designated as an
additional Co-Borrower pursuant to Section 2.7, each lender whose name is set
forth on the signature pages of this Agreement and each lender which may
hereafter become a party to this Agreement pursuant to Section 11.8
(collectively, the "Banks" and individually, a "Bank"), Bankers Trust Company,
as Syndication Agent, Citibank, N.A. and Commerzbank AG, as Documentation
Agents, CIBC World Markets, Societe Generale, The Bank of Nova Scotia, Bank One,
NA, Merrill Lynch Capital Corp. and Bear Stearns Corporate Lending Inc., as Co-
Documentation Agents, Comerica Bank, as Co-Agent, Fleet Bank, N.A., as Managing
Agent, and Bank of America, N.A., as Administrative Agent. Borrower, Atlantic
City, each Co-Borrower which hereafter becomes a Party hereto pursuant to
Section 2.7, the Administrative Agent and the other Creditors, covenant and
agree with reference to the following facts:
A. Borrower, Atlantic City and Detroit have previously entered into the
Old Loan Agreement described herein.
B. Effective on the Closing Date, Borrower, the Administrative Agent and
the Banks desire to amend and restate the Old Loan Agreement in its
entirety by this Agreement, and to provide, inter alia (and subject to the
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terms and conditions set forth herein), for an increase in the amount of
the credit facilities provided by the Old Loan Agreement, an extension of
the maturity thereof and revisions to the covenants of Borrower set forth
therein.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements herein contained, Borrower, Atlantic City, Detroit,
each Co-Borrower which hereafter becomes a Party hereto pursuant to Section 2.7,
and each of the Creditors, hereby amend and restate the Old Loan Agreement as of
the Closing Date, and covenant and agree as follows:
Article 1
DEFINITIONS AND ACCOUNTING TERMS
--------------------------------
A. Defined Terms. As used in this Agreement, the following terms
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shall have the meanings set forth below:
"Absolute Rate Bid" means a Competitive Bid to provide Competitive
-----------------
Advances on the basis of a fixed interest rate.
"Acquisition" means any transaction, or any series of related
-----------
transactions, by which Borrower or its Restricted Subsidiaries directly or
indirectly (i) acquire any going business or all or substantially all of
the assets of any Person, or any division thereof, whether through
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purchase of assets, merger or otherwise, or (ii) acquire (in one transaction
or as the most recent transaction in a series of transactions) control of at
least a majority in ordinary voting power of the securities of a corporation
which have ordinary voting power for the election of directors, or (iii)
acquire control of a majority ownership interest in any partnership, joint
venture, limited liability company or any other Person.
"Administrative Agent" means Bank of America, when acting in its capacity
--------------------
as the Administrative Agent under any of the Loan Documents, or any successor
Administrative Agent.
"Administrative Agent's Office" means the Administrative Agent's address as
-----------------------------
set forth on the signature pages of this Agreement, or such other address as
the Administrative Agent hereafter may designate by written notice to
Borrower and the Banks.
"Advance" means any advance made or to be made by any Bank to Borrower or
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any Co-Borrower as provided in Article 2, and includes each Base Rate
--------
Advance, Eurodollar Rate Advance, Committed Advance, Swing Line Advance and
Competitive Advance.
"Affiliate" means, as to any Person, any other Person which directly or
---------
indirectly controls, or is under common control with, or is controlled by,
such Person. As used in this definition, "control" (and the correlative
terms, "controlled by" and "under common control with") shall mean
possession, directly or indirectly, of power to direct or cause the direction
of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise); provided
--------
that, in any event, any Person that owns, directly or indirectly, 10% or more
of the securities having ordinary voting power for the election of directors
or other governing body of a corporation that has more than 100 record
holders of such securities, or 10% or more of the partnership or other
ownership interests of any other Person that has more than 100 record holders
of such interests, will be presumed (subject to rebuttal by a preponderance
of the evidence) to control such corporation, partnership or other Person.
"Aggregate Effective Amount" means, as of any date of determination and
--------------------------
with respect to all Letters of Credit then outstanding, the sum of (a) the
---
aggregate effective face amounts of all such Letters of Credit not then paid
by the Issuing Bank plus (b) the aggregate amounts paid by the Issuing Bank
----
under such Letters of Credit not then reimbursed to the Issuing Bank by
Borrower and the Co-Borrowers pursuant to Section 2.4(d) and not the subject
of Advances made pursuant to Section 2.4(e).
"Agreement" means this Second Amended and Restated Loan Agreement, either
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as originally executed, or as it may from time to time be supplemented,
modified, amended, restated or extended.
"Assignment Agreement" means an Assignment Agreement substantially in the
--------------------
form of Exhibit A.
"Assumption Agreement" means each Assumption Agreement hereafter executed
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by a Co-Borrower pursuant to Section 2.7, substantially in the form of
Exhibit B either as originally
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executed or as the same may from time to time be supplemented, modified,
amended, renewed, extended or supplanted.
"Atlantic City" means MGM Grand Atlantic City, Inc., a New Jersey
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corporation, its successors and permitted assigns.
"Australia Companies" means, collectively, (a) MGM Grand Diamond, Inc., a
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Nevada corporation, (b) its wholly owned Subsidiary, MGM Grand Australia
Pty., Ltd., a corporation organized under the laws of the Northern Territory
of Australia, and (c) each Subsidiary of MGM Grand Australia Pty., Ltd.,
their successors and permitted assigns.
"Average Quarterly Funded Debt" means, as of the last day of each Fiscal
-----------------------------
Quarter, the average of the principal amount of Funded Debt outstanding on
the last day of each of the three calendar months comprising such Fiscal
Quarter, provided that as of the first Fiscal Quarter ending following the
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Closing Date, only calendar months ending following the Closing Date shall be
considered in computing this average.
"Bank" means each lender whose name is set forth in the signature pages of
----
this Agreement and each lender which may hereafter become a party to this
Agreement pursuant to Section 11.8 (and to the extent a party to a Related
Swap Agreement, any Affiliate of a Bank).
"Bank of America" means Bank of America, N.A., its successors and assigns.
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"Banking Day" means any Monday, Tuesday, Wednesday, Thursday or Friday,
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other than a day on which banks are authorized or required to be closed in
----------
California, Nevada or New York.
"Base Rate" means, as of any date of determination, the rate per annum
---------
(rounded upwards, if necessary, to the next 1/100 of 1%) equal to the higher
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of (a) the Prime Rate in effect on such date and (b) the Federal Funds Rate
--
in effect on such date plus 1/2 of 1% (50 basis points).
"Base Rate Advance" means an Advance made hereunder and specified to be a
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Base Rate Advance in accordance with Article 2.
"Base Rate Loan" means a Loan made hereunder and specified to be a Base
--------------
Rate Loan in accordance with Article 2.
"Base Rate Margin" means, as of each date of determination, the rate set
----------------
forth below (expressed in basis points) opposite the Pricing Level then in
effect.
Pricing Level Base Rate Margin
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I 0.0
II 0.0
III 5.0
IV 37.5
V 57.5
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"Borrower" means MGM Grand, Inc., a Delaware corporation, its successors
--------
and permitted assigns.
"Borrower Group EBITDA" means, for any fiscal period, the EBITDA of
---------------------
Borrower and its Restricted Subsidiaries for that fiscal period.
"Capital Expenditure" means any expenditure for or related to fixed assets
-------------------
or purchased intangibles that is treated as a capital expenditure under
Generally Accepted Accounting Principles, including any amount which is
---------
required to be treated as an asset subject to a Capital Lease Obligation.
"Capital Lease Obligations" means all monetary obligations of a Person
-------------------------
under any leasing or similar arrangement which, in accordance with Generally
Accepted Accounting Principles, is classified as a capital lease.
"Cash" means, when used in connection with any Person, all monetary and
----
non-monetary items owned by that Person that are treated as cash in
accordance with Generally Accepted Accounting Principles, consistently
applied.
"Cash Equivalents" means, when used in connection with any Person, that
----------------
Person's Investments in:
(a) Government Securities due within one year after the date of
the making of the Investment;
(b) readily marketable direct obligations of any State of the United
States of America or any political subdivision of any such State or any
public agency or instrumentality thereof given on the date of such
Investment a credit rating of at least Aa by Moody's or AA by S&P in each
case due within one year from the making of the Investment;
(c) certificates of deposit issued by, bank deposits in, eurodollar
deposits through, bankers' acceptances of, and repurchase agreements
covering Government Securities executed by any Bank or by any bank
incorporated under the Laws of the United States of America, any State
thereof or the District of Columbia and having on the date of such
Investment combined capital, surplus and undivided profits of at least
$250,000,000, or total assets of at least $5,000,000,000, in each case due
within one year after the date of the making of the Investment;
(d) certificates of deposit issued by, bank deposits in, eurodollar
deposits through, bankers' acceptances of, and repurchase agreements
covering Government Securities executed by any branch or office located in
the United States of America of a bank incorporated under the Laws of any
jurisdiction outside the United States of America having on the date of
such Investment combined capital, surplus and
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undivided profits of at least $500,000,000, or total assets of at least
$15,000,000,000, in each case due within one year after the date of the
making of the Investment;
(e) repurchase agreements covering Government Securities executed by
a broker or dealer registered under Section 15(b) of the Securities
Exchange Act of 1934, as amended, having on the date of the Investment
capital of at least $50,000,000, due within 90 days after the date of the
making of the Investment; provided that the maker of the Investment
--------
receives written confirmation of the transfer to it of record ownership of
the Government Securities on the books of a "primary dealer" in such
Government Securities or on the books of such registered broker or dealer,
as soon as practicable after the making of the Investment;
(f) readily marketable commercial paper or other debt securities
issued by corporations doing business in and incorporated under the Laws of
the United States of America or any State thereof or of any corporation
that is the holding company for a bank described in clause (c) or (d) above
given on the date of such Investment a credit rating of at least P-1 by
Moody's or A-1 by S&P, in each case due within one year after the date of
the making of the Investment;
(g) "money market preferred stock" issued by a corporation
incorporated under the Laws of the United States of America or any State
thereof (i) given on the date of such Investment a credit rating of at
least Aa by Moody's Investors Service, Inc. and AA by S&P, in each case
having an investment period not exceeding 50 days or (ii) to the extent
that investors therein have the benefit of a standby letter of credit
issued by a Bank or a bank described in clauses (c) or (d) above;
(h) a readily redeemable "money market mutual fund" sponsored by a
bank described in clause (c) or (d) hereof, or a registered broker or
dealer described in clause (e) hereof, that has and maintains an investment
policy limiting its investments primarily to instruments of the types
described in clauses (a) through (g) hereof and given on the date of such
Investment a credit rating of at least Aa by Moody's and AA by S&P; and
(i) corporate notes or bonds having an original term to maturity of
not more than one year issued by a corporation incorporated under the Laws
of the United States of America or any State thereof, or a participation
interest therein; provided that any commercial paper issued by such
--------
corporation is given on the date of such Investment a credit rating of at
least Aa by Moody's and AA by S&P.
"Cash Flow" means, for any period, and without duplication, (a) Borrower
---------
Group EBITDA for that period, plus (b) Other Available EBITDA for that
----
period.
"Cash Interest Charges" means, for any Person and for any period, that
---------------------
portion of Interest Charges of that Person which are paid or currently
payable in Cash during that period excluding intercompany accounts.
"Certificate of a Responsible Official" means a certificate signed by a
-------------------------------------
Responsible Official of the Person providing the certificate.
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"Change in Control" means (a) any transaction or series of related
-----------------
transactions in which any Unrelated Person or two or more Unrelated Persons
acting in concert acquire beneficial ownership (within the meaning of Rule
13d-3(a)(1) under the Securities Exchange Act of 1934, as amended), directly
or indirectly, of 25% or more of the outstanding common stock of Borrower or
(b) during any period of 24 consecutive months, individuals who at the
beginning of such period constituted the board of directors of Borrower
(together with any new or replacement directors whose election by the board
of directors, or whose nomination for election, was approved by a vote of at
least a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
reelection was previously so approved) cease for any reason to constitute a
majority of the directors then in office, provided, however, that no Change
--------
in Control shall exist for so long as Tracinda Corporation, a Nevada
corporation, and its Affiliates continue to be the beneficial owner of 25% or
more of the common stock of Borrower and no other Person is the owner of more
of the common stock of Borrower than Tracinda Corporation and its Affiliates.
"Closing Date" means the time and Banking Day on which the conditions set
------------
forth in Section 8.1 are satisfied or waived. The Administrative Agent shall
notify Borrower and the Creditors of the date that is the Closing Date.
"Co-Agent" has the meaning set forth in the Preamble to this Agreement.
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The Co-Agent shall have no duties under this Agreement or the Loan Documents
other than those arising in its capacity as a Bank.
"Co-Borrowers" means, collectively, Atlantic City, Detroit and each other
------------
Guarantor which is hereafter designated as a Co-Borrower pursuant to Section
2.7.
"Co-Documentation Agents" have the meanings set forth in the Preamble to
-----------------------
this Agreement. The Co-Documentation Agents shall have no duties under this
Agreement or the Loan Documents other than those arising in their capacity as
a Bank.
"Code" means the Internal Revenue Code of 1986, as amended or replaced and
----
as in effect from time to time.
"Collateral Event" means the occurrence of (a) any reduction in the credit
----------------
rating assigned by S&P to any MGM Senior Notes (or, if S&P does not rate the
MGM Senior Notes, its corporate rating of Borrower) to an unsecured credit
rating which is below BBB- or (b) any reduction in the credit rating assigned
--
by Moody's to any MGM Senior Notes (or, if Moody's does not rate the MGM
Senior Notes, its corporate rating of Borrower) to an unsecured credit rating
which is below Baa3, in either case to the extent that the same requires the
granting of any Lien to the trustees for or holders of any MGM Senior Notes
in any Property of Borrower or any of its Subsidiaries.
"Collateral Release" has the meaning set forth for that term in Section
------------------
2.12.
"Commercial Letter of Credit" means each Letter of Credit issued to support
---------------------------
the purchase of goods by Borrower or any Co-Borrower which is determined to
be a commercial letter of credit by the Issuing Bank.
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"Commitment" means, subject to any decrease in the amount thereof pursuant
----------
to Sections 2.8, 2.9 or 11.27, $2,000,000,000.
"Committed Advance Note" means each promissory note made by Borrower and
----------------------
each Co-Borrower to a Bank evidencing the Committed Advances made by that
Bank under its Pro Rata Share of the Commitment, substantially in the form of
Exhibit C, either as originally executed or as the same may from time to time
be supplemented, modified, amended, renewed, extended or supplanted.
"Committed Advances" means an Advance by a Bank as a ratable part of a
------------------
Committed Loan pursuant to such Bank's Pro Rata Share of the Commitment.
"Committed Loan" means a Loan consisting of ratable Advances by the Banks
--------------
pursuant to their respective Pro Rata Shares.
"Competitive Advance" means an Advance made to Borrower or any Co-Borrower
-------------------
by any Bank not determined by that Bank's Pro Rata Share pursuant to Section
2.5.
"Competitive Advance Note" means each promissory note made by Borrower and
------------------------
each Co-Borrower to a Bank evidencing the Competitive Advances made by that
Bank, substantially in the form of Exhibit D, either as originally executed
or as the same may from time to time be supplemented, modified, amended,
renewed, extended or supplanted
"Competitive Bid" means (a) a written bid to provide a Competitive Advance
---------------
substantially in the form of Exhibit E, signed by a Responsible Official of a
Bank and properly completed to provide all information required to be
included therein or (b) at the election of any Bank, a telephonic bid by that
Bank to provide a Competitive Advance which, if so made, shall be made by a
Responsible Official of that Bank and deemed to have been made incorporating
the substance of Exhibit E, and shall promptly be confirmed by a written
Competitive Bid.
"Competitive Bid Request" means (a) a written request submitted by Borrower
-----------------------
or any Co-Borrower to the Administrative Agent to provide a Competitive Bid,
substantially in the form of Exhibit F, signed by a Responsible Official of
Borrower and any relevant Co-Borrower and properly completed to provide all
information required to be included therein or (b) at the election of
Borrower, a telephonic request by Borrower to the Administrative Agent to
provide a Competitive Bid which, if so made, shall be made by a Responsible
Official of Borrower and deemed to have been made incorporating the substance
of Exhibit F, and shall promptly be confirmed by a written Competitive Bid
Request.
"Compliance Certificate" means a certificate substantially in the form of
----------------------
Exhibit G, properly completed and signed by a Senior Officer of Borrower and
each Co-Borrower.
"Contractual Obligation" means, as to any Person, any provision of any
----------------------
outstanding security issued by that Person or of any material agreement,
instrument or undertaking to which that Person is a party or by which it or
any of its Property is bound.
"Creditors" means, collectively, the Administrative Agent, the Issuing
---------
Bank, the Swing Line Bank, each Bank and, where the context requires, any one
or more of them.
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"Debt Rating" means, as of any date of determination, the credit ratings
-----------
assigned by Moody's and S&P to the credit facilities provided hereunder
whether senior secured or senior unsecured (or, if the facilities hereunder
are not rated, the corporate rating assigned by Moody's and S&P to Borrower's
most senior indebtedness), provided however that (a) if the credit facilities
-------- -------
hereunder receive a split-rating and the rating differential is one level,
the higher of the two ratings will apply, and (b) if such the credit
facilities hereunder are "split-rated" and the ratings differential is more
than one level, the highest intermediate rating shall be used.
"Debtor Relief Laws" means the Bankruptcy Code of the United States of
------------------
America, as amended from time to time, and all other applicable liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, receivership,
insolvency, reorganization, or similar debtor relief Laws from time to time
in effect affecting the rights of creditors generally.
"Default" means any event that, with the giving of any applicable notice or
-------
passage of time specified in Section 9.1, or both, would be an Event of
Default.
"Default Rate" means the interest rate prescribed in Section 3.9.
------------
"Deposit Account" means the following accounts located at Bank of America,
---------------
Nevada ABA #122400724 (a) as to Borrower, account no. 990063133 with Bank of
America, (b) as to Atlantic City, account no. 990112948 with Bank of America,
(c) as to Detroit, account no. 990126617 with Bank of America, and (d) as to
each other Co-Borrower, a deposit account to be maintained by that Co-
Borrower with Bank of America designated by such Co-Borrower with the
reasonable approval of the Administrative Agent.
"Designated Eurodollar Market" means, with respect to any Eurodollar Rate
----------------------------
Loan, (a) the London Eurodollar Market, (b) if prime banks in the London
Eurodollar Market are at the relevant time not accepting deposits of Dollars
or if the Administrative Agent determines in good faith that the London
Eurodollar Market does not represent at the relevant time the effective
pricing to the Banks for deposits of Dollars in the London Eurodollar Market,
the Cayman Islands Eurodollar Market or (c) if prime banks in the Cayman
Islands Eurodollar Market are at the relevant time not accepting deposits of
Dollars or if the Administrative Agent determines in good faith that the
Cayman Islands Eurodollar Market does not represent at the relevant time the
effective pricing to the Banks for deposits of Dollars in the Cayman Islands
Eurodollar Market, such other Eurodollar Market as may from time to time be
selected by the Administrative Agent with the approval of Borrower, the Co-
Borrowers and the Requisite Banks. The Administrative Agent will endeavor to
provide prompt notice to Borrower and the Co-Borrowers of any change in the
location of the Designated Eurodollar Market.
"Detroit" means MGM Grand Detroit, LLC, a Delaware limited liability
-------
company which is the proposed owner of the Detroit Project, its successors
and permitted assigns.
"Detroit Operating Agreement" means the Operating Agreement of MGM Grand
---------------------------
Detroit, LLC dated as of July 7, 1997 between MGM Grand Detroit, Inc., a
Delaware corporation which is a wholly-owned Subsidiary of Borrower, and
Partners Detroit, L.L.C., a Michigan limited liability company, as in effect
on the date of this Agreement.
-8-
<PAGE>
"Detroit Project" means the proposed, design, development and construction,
---------------
by Borrower and its Restricted Subsidiaries (whether individually, through
Detroit, or in concert with one or more partners or joint venturers) of a
permanent hotel, casino and entertainment complex in Detroit, Michigan or its
environs (in addition to the currently operating temporary casino located at
1300 John C. Lodge Freeway, Detroit, Michigan).
"Detroit Temporary" means MGM Grand Detroit II, LLC, a Delaware limited
-----------------
liability company, and its successors.
"Disposition" means the voluntary sale, transfer or other disposition, in
-----------
one transaction or any series of related transactions, of any asset.
"Disqualification" means, with respect to any Bank or any holder of
----------------
Subordinated Obligations:
(a) the failure of that Person timely to file pursuant to applicable
Gaming Laws (i) any application requested of that Person by any Gaming
Board in connection with any licensing required of that Person as a lender
to Borrower or a Co-Borrower or (ii) any required application or other
papers in connection with determination of the suitability of that Person
as a lender to Borrower or a Co-Borrower;
(b) the withdrawal by that Person (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 Person is "unsuitable" as a lender to Borrower or
a Co-Borrower, (ii) that such Person shall be "disqualified" as a lender to
Borrower or a Co-Borrower or (iii) denying the issuance to that Person of
any license required under applicable Gaming Laws to be held by all lenders
to Borrower or any Co-Borrower.
"Distribution" means, with respect to any shares of capital stock or any
------------
warrant or option to purchase an equity security or other equity security
issued by a Person, (a) the retirement, redemption, purchase or other
acquisition for Cash or for Property (other than capital stock, or any
warrants or options to purchase an equity security or other security of such
Person) by such Person of any such security, (b) the declaration or (without
duplication) payment by such Person of any dividend in Cash or in Property
(other than capital stock, or any warrants or options to purchase an equity
security or other security of such Person) on or with respect to any such
security, (c) any Investment by such Person in the holder of 5% or more of
any such security if a purpose of such Investment is to avoid
characterization of the transaction as a Distribution and (d) any other
payment in Cash or Property (other than capital stock, or any warrants or
options to purchase an equity security or other security of such Person) by
such Person constituting a distribution under applicable Laws with respect to
such security.
"Documentation Agents" have the meanings set forth in the Preamble to this
--------------------
Agreement. The Documentation Agents shall have no duties under this Agreement
or the Loan Documents other than those arising in their capacity as a Bank.
"Dollars" or "$" means United States dollars.
------- -
-9-
<PAGE>
"EBITDA" means, with respect to any fiscal period and with respect to any
------
Person, the sum of (a) Net Income of such Person for that period, plus (b)
--- -- ----
any extraordinary loss reflected in such Net Income, minus (c) any
-----
extraordinary gain reflected in such Net Income, plus (d) Interest Charges of
----
such Person for that period, plus (e) the aggregate amount of federal, state
----
and local taxes on or measured by income of such Person for that period
(whether or not payable during that period) plus (f) depreciation,
----
amortization and all non-recurring and/or other non-cash expenses to the
extent deducted in arriving at Net Income for that period, plus (g) expenses
----
classified as "pre-opening expenses" on the applicable financial statements
of that Person for that fiscal period, in each case as determined in
accordance with Generally Accepted Accounting Principles.
"Eligible Assignee" means (a) another Bank, (b) with respect to any Bank,
-----------------
any Affiliate of that Bank having combined capital and surplus of
$100,000,000 or more, (c) any commercial bank having a combined capital and
surplus of $100,000,000 or more, (d) any insurance company engaged in the
business of writing insurance which (i) has a net worth of $200,000,000 or
more, (ii) is engaged in the business of lending money and extending credit
under credit facilities substantially similar to those extended under this
Agreement and (iii) is operationally and procedurally able to meet the
obligations of a Bank hereunder to the same degree as a commercial bank and
(e) any other financial institution (including a mutual fund or other fund)
---------
having total assets of $250,000,000 or more which meets the requirements set
forth in subclauses (ii) and (iii) of clause (d) above; provided that each
--------
Eligible Assignee must either (a) be organized under the Laws of the United
States of America, any State thereof or the District of Columbia or (b) be
organized under the Laws of the Cayman Islands or any country which is a
member of the Organization for Economic Cooperation and Development, or a
political subdivision of such a country, and (i) act hereunder through a
branch, agency or funding office located in the United States of America,
(ii) be exempt from withholding of tax on interest and deliver the documents
related thereto pursuant to Section 11.21, and (iii) to the extent required
under applicable Gaming Laws, each Eligible Assignee must not be the subject
of a Disqualification.
"Enhanced Eurodollar Margin" means, for any period, the sum of (i) the
-------------------------- ---
Eurodollar Margin then in effect plus (ii) such interest rate margin as the
----
Requisite Banks specify is necessary to adjust the Eurodollar Rate to a rate
which represents the effective pricing to such Banks for deposits of Dollars
in the Designated Eurodollar Market in the relevant amount for the applicable
Eurodollar Period and which adequately and fairly reflects the cost to such
Banks of making the applicable Eurodollar Rate Advances.
"ERISA" means the Employee Retirement Income Security Act of 1974, and any
-----
regulations issued pursuant thereto, as amended or replaced and as in effect
from time to time.
"ERISA Affiliate" means, with respect to any Person, any other Person (or
---------------
any trade or business, whether or not incorporated) that is under common
control with that Person within the meaning of Section 414 of the Code.
"Eurodollar Banking Day" means any Banking Day on which dealings in Dollar
----------------------
deposits are conducted by and among Banks in the Designated Eurodollar
Market.
-10-
<PAGE>
"Eurodollar Lending Office" means, as to each Bank, its office or branch so
-------------------------
designated by written notice to Borrower and the Administrative Agent as its
Eurodollar Lending Office. If no Eurodollar Lending Office is designated by a
Bank, its Eurodollar Lending Office shall be its office at its address for
purposes of notices hereunder.
"Eurodollar Margin" means, as of each date of determination, the rate set
-----------------
forth below (expressed in basis points) opposite the Pricing Level then in
effect.
Pricing Level Eurodollar Margin
------------- -----------------
I 60.0
II 82.5
III 105.0
IV 137.5
V 157.5.
"Eurodollar Margin Bid" means a Competitive Bid to provide a Competitive
---------------------
Advance on the basis of a margin over the Eurodollar Rate.
"Eurodollar Market" means a regular established market located outside the
-----------------
United States of America by and among banks for the solicitation, offer and
acceptance of Dollar deposits in such banks.
"Eurodollar Obligations" means eurocurrency liabilities, as defined in
----------------------
Regulation D or any comparable regulation of any Governmental Agency having
jurisdiction over any Bank.
"Eurodollar Period" means, as to each Eurodollar Rate Loan, the period
-----------------
commencing on the date specified by Borrower or a Co-Borrower pursuant to
Section 2.1(b) and ending 1, 2, 3 or 6 months (or, with the written consent
of all of the Banks, any other period) thereafter, as specified by Borrower
or a Co-Borrower in the applicable Request for Loan; provided that:
--------
(a) The first day of any Eurodollar Period shall be a Eurodollar
Banking Day;
(b) Any Eurodollar Period that would otherwise end on a day that is
not a Eurodollar Banking Day shall be extended to the next succeeding
Eurodollar Banking Day unless such Eurodollar Banking Day falls in another
calendar month, in which case such Eurodollar Period shall end on the next
preceding Eurodollar Banking Day; and
(c) No Eurodollar Period shall extend beyond the Maturity Date.
"Eurodollar Rate" means, with respect to any Eurodollar Rate Loan and any
---------------
Competitive Rate Advance based upon a margin over the Eurodollar Rate, the
interest rate per annum (rounded upward, if necessary, to the next 1/100 of
1%) at which deposits in Dollars are offered by Bank of America to prime
banks in the Designated Eurodollar Market at or about 11:00 a.m. local time
in the Designated Eurodollar Market, two Eurodollar Banking Days before the
first day of the applicable Eurodollar Period in an aggregate amount
approximately
-11-
<PAGE>
equal to the amount of the Advance made by Bank of America with respect to
such Eurodollar Rate Loan and for a period of time comparable to the number
of days in the applicable Eurodollar Period.
"Eurodollar Rate Advance" means an Advance made hereunder and specified to
-----------------------
be a Eurodollar Rate Advance in accordance with Article 2.
"Eurodollar Rate Loan" means a Loan made hereunder and specified to be a
--------------------
Eurodollar Rate Loan in accordance with Article 2.
"Event of Default" shall have the meaning provided in Section 9.1.
----------------
"Existing Letters of Credit" means the letters of credit issued under the
--------------------------
Old Loan Agreement and outstanding as of the Closing Date.
"Facility Fee Rate" means, as of each date of determination, the rate set
-----------------
forth below (expressed in basis points) opposite the Pricing Level then in
effect.
Pricing Level Facility Fee Rate
------------- -----------------
I 15.0
II 17.5
III 20.0
IV 25.0
V 30.0.
"Federal Funds Rate" means, as of any date of determination, the rate set
------------------
forth in the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Board (including any
such successor, "H.15(519)") for such date opposite the caption "Federal
Funds (Effective)". If for any relevant date such rate is not yet published
in H.15(519), the rate for such date will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the "Composite 3:30
p.m. Quotation") for such date under the caption "Federal Funds Effective
Rate". If on any relevant date the appropriate rate for such date is not yet
published in either H.15(519) or the Composite 3:30 p.m. Quotations, the rate
for such date will be the arithmetic mean of the rates for the last
transaction in overnight Federal funds arranged prior to 9:00 a.m. (New York
City time) on that date by each of three leading brokers of Federal funds
transactions in New York City selected by the Administrative Agent. For
purposes of this Agreement, any change in the Base Rate due to a change in
the Federal Funds Rate shall be effective as of the opening of business on
the effective date of such change.
"Fiscal Quarter" means the fiscal quarter of Borrower consisting, subject
--------------
to Section 1.3, of the three calendar month periods ending on each March 31,
June 30, September 30 and December 31.
"Fiscal Year" means the fiscal year of Borrower consisting, subject to
-----------
Section 1.3, of the twelve month period ending on each December 31.
-12-
<PAGE>
"Funded Debt" means, as of any date of determination, the sum (without
----------- ---
duplication) of (a) all principal Indebtedness of Borrower and its Restricted
Subsidiaries for borrowed money (including debt securities issued by Borrower
---------
or any of its Restricted Subsidiaries) on that date (other than any such
----- ----
Indebtedness to the extent it has been legally or contractually defeased or
is the subject of a deposit in Cash or Cash Equivalents for the purpose of
defeasing the same in accordance with its terms), plus (b) the aggregate
----
amount of all Capital Lease Obligations of Borrower and its Restricted
Subsidiaries on that date, plus (c) obligations in respect of letters of
----
credit or other similar instruments which support Indebtedness of the type
described in clause (a) (except as limited by the definition of
Indebtedness), to the extent of the amount drawable under such letters of
credit or similar instruments, provided that no Guaranty Obligation by
--------
Borrower or its Restricted Subsidiaries of the Indebtedness of another Person
shall be deemed to be Funded Debt except to the extent that Generally
Accepted Accounting Principles require that Guaranty Obligation to be set
forth on Borrower's consolidated balance sheet (and not merely as a footnote)
as the exposure of Borrower and its Subsidiaries with respect thereto.
"Gaming Board" means, collectively, (a) the Nevada Gaming Commission, (b)
------------
the Nevada State Gaming Control Board, (c) the New Jersey Casino Control
Commission, (d) the New Jersey Division of Gaming Enforcement, (e) the
Mississippi Gaming Commission, (f) the Michigan Gaming Control Board, and (g)
any other Governmental Agency that holds regulatory, licensing or permit
authority over gambling, gaming or casino activities conducted by Borrower,
any Co-Borrower or any Restricted Subsidiary within its jurisdiction.
"Gaming Laws" means all Laws pursuant to which any Gaming Board possesses
-----------
regulatory, licensing or permit authority over gambling, gaming or casino
activities conducted by Borrower and its Restricted Subsidiaries within its
jurisdiction.
"Generally Accepted Accounting Principles" means, as of any date of
----------------------------------------
determination, accounting principles (a) set forth as generally accepted in
then currently effective Opinions of the Accounting Principles Board of the
American Institute of Certified Public Accountants, (b) set forth as
generally accepted in then currently effective Statements of the Financial
Accounting Standards Board or (c) that are then approved by such other entity
as may be approved by a significant segment of the accounting profession in
the United States of America. The term "consistently applied," as used in
--------------------
connection therewith, means that the accounting principles applied are
consistent in all material respects with those applied at prior dates or for
prior periods.
"Government Securities" means readily marketable (a) direct full faith and
---------------------
credit obligations of the United States of America or obligations guaranteed
by the full faith and credit of the United States of America and (b)
obligations of an agency or instrumentality of, or corporation owned,
controlled or sponsored by, the United States of America that are generally
considered in the securities industry to be implicit obligations of the
United States of America.
"Governmental Agency" means (a) any international, foreign, federal, state,
-------------------
county or municipal government, or political subdivision thereof, (b) any
governmental or quasi-governmental agency, authority, board, bureau,
commission, department, instrumentality or public body or (c) any court or
administrative tribunal of competent jurisdiction.
-13-
<PAGE>
"Guarantors" means, collectively, Las Vegas, Atlantic City, Mirage, New
----------
York, MGM Grand Monorail, Inc., each other Restricted Subsidiary of Borrower
which exists as of the Closing Date (after giving effect to the Mirage Merger
Agreement), and each other Restricted Subsidiary of Borrower which hereafter
becomes a Guarantor pursuant to Section 5.8, provided that any Guarantor
--------
which is sold or otherwise transferred in a Disposition permitted by Section
6.2 may be released from the Guaranty in accordance with Section
11.2(d)(iii).
"Guaranty" means each of the continuing guaranties of the Obligations (or,
--------
in the case of Detroit, of the portion of the Obligations which are used,
directly or indirectly, to finance the design, development, construction or
operation of the Detroit Project or which are actually borrowed or received
by Detroit) executed and delivered by the Guarantors on the Closing Date (in
the case of Mirage and its Restricted Subsidiaries, immediately following the
consummation of the Mirage Merger Agreement), substantially in the form of
the Subsidiary Guaranty executed in connection with the Old Loan Agreement.
"Guaranty Obligation" means, as to any Person (without duplication), any
-------------------
(a) guarantee by that Person of Indebtedness of, or other obligation
performable by, any other Person or (b) assurance given by that Person to an
obligee of any other Person with respect to the performance of an obligation
by, or the financial condition of, such other Person, whether direct,
indirect or contingent, including any purchase or repurchase agreement
---------
covering such obligation or any collateral security therefor, any agreement
to provide funds (by means of loans, capital contributions or otherwise) to
such other Person, any agreement to support the solvency or level of any
balance sheet or income statement item of such other Person or any "keep-
well" or other arrangement of whatever nature given for the purpose of
assuring or holding harmless such obligee against loss with respect to any
obligation of such other Person; provided, however, that the term Guaranty
-----------------
Obligation shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount of any Guaranty
Obligation in respect of Indebtedness shall be deemed to be an amount equal
to the stated or determinable amount of the related Indebtedness (unless the
Guaranty Obligation is limited by its terms to a lesser amount, in which case
to the extent of such amount) or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
Person in good faith. The amount of any other Guaranty Obligation shall be
deemed to be zero unless and until the amount thereof has been (or in
accordance with Financial Accounting Standards Board Statement No. 5 should
be) quantified and reflected or disclosed in the consolidated financial
statements (or notes thereto) of Borrower and its Subsidiaries.
"Hazardous Materials" means substances defined as "hazardous substances"
-------------------
pursuant to the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. (S) 9601 et seq., or as "hazardous", "toxic"
or "pollutant" substances or as "solid waste" pursuant to the Hazardous
Materials Transportation Act, 49 U.S.C. (S) 1801, et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. (S) 6901, et seq., or as "friable
asbestos" pursuant to the Toxic Substances Control Act, 15 U.S.C. (S) 2601 et
seq., in each case as such Laws are amended from time to time.
"Hazardous Materials Laws" means all Laws governing the treatment,
------------------------
transportation or disposal of Hazardous Materials applicable to any of the
Real Property.
-14-
<PAGE>
"Indebtedness" means, as to any Person (without duplication), (a)
------------
indebtedness of such Person for borrowed money or for the deferred purchase
price of Property (excluding trade and other accounts payable in the ordinary
course of business in accordance with ordinary trade terms), including any
---------
Guaranty Obligation for any such indebtedness, (b) indebtedness of such
Person of the nature described in clause (a) that is non-recourse to the
credit of such Person but is secured by assets of such Person, to the extent
of the value of such assets, (c) Capital Lease Obligations of such Person,
(d) indebtedness of such Person arising under bankers' acceptance facilities
or under facilities for the discount of accounts receivable of such Person,
(e) any direct or contingent obligations of such Person under letters of
credit issued for the account of such Person, provided that letters of credit
--------
and other similar instruments in an aggregate amount not to exceed
$150,000,000 shall be excluded from Indebtedness of that Person for so long
as the same have not been drawn upon and (f) any net obligations of such
Person under Swap Agreements.
"Intangible Assets" means assets that are considered intangible assets
-----------------
under Generally Accepted Accounting Principles, including customer lists,
---------
goodwill, computer software, copyrights, trade names, trademarks and patents.
"Intercreditor Agreement" means the Intercreditor Agreement dated as of
-----------------------
February 6, 1998 among PNC Bank, National Association, as trustee, U.S. Trust
Company of California, N.A., as trustee (in each case for the MGM Senior
Notes) and the Administrative Agent (acting under the Old Loan Agreement).
"Interest Charge Coverage Ratio" means, as of the last day of each Fiscal
------------------------------
Quarter, the ratio of:
(a) Cash Flow; to
(b) Cash Interest Charges of Borrower and its Restricted Subsidiaries;
in each case for the four Fiscal Quarter period then ended (or, in the case
of the first four Fiscal Quarters ending following the Closing Date, for the
period since the Closing Date then ended), provided that:
--------
(i) if as of any date of determination of the Interest Charge
Coverage Ratio, the Closing Date has occurred two full calendar
months or more prior to such date, then the Interest Charge
Coverage Ratio for that date (and only for that date) shall be
computed on the basis of the combined consolidated results of
operations of Borrower and Mirage for the period since the
Closing Date, annualized on a straight line basis; or
(ii) if as of any date of determination, the Closing Date has occurred
less than two full calendar months prior to such date, then the
Interest Charge Coverage Ratio for that date (and only for that
date) shall be computed on the basis of the pro forma combined
--- -----
consolidated results of operations of Borrower and Mirage for the
Fiscal Quarter ending on that date (multiplied by four), after
----------
(X) reduction of Cash Interest Charges by an amount equal to the
annual interest associated with assumed debt reductions of
$250,000,000, (Y) giving
-15-
<PAGE>
effect in the calculation of Cash Flow to $125,000,000 in annual
savings anticipated as a result of the merger of Borrower and
Mirage and (Z) adding back, to the extent deducted in arriving at
Net Income, the actual costs to Borrower and Mirage of the
transactions contemplated by the Mirage Merger Agreement.
"Interest Charges" means, for any Person, as of the last day of any fiscal
----------------
period, the sum of (a) all interest, fees, charges and related expenses paid
------
or payable (without duplication) for that fiscal period by that Person to a
lender in connection with borrowed money (including any obligations for fees,
---------
charges and related expenses payable to the issuer of any letter of credit)
or the deferred purchase price of assets that are considered "interest
expense" under Generally Accepted Accounting Principles, plus (b) the portion
----
of rent paid or payable (without duplication) for that fiscal period by that
Person under Capital Lease Obligations that should be treated as interest in
accordance with Financial Accounting Standards Board Statement No. 13.
"Interest Differential" means, with respect to any prepayment of a
---------------------
Eurodollar Rate Loan on a day other than the last day of the applicable
Eurodollar Period and with respect to any failure to borrow a Eurodollar Rate
Loan on the date or in the amount specified in any Request for Loan, (a) the
Eurodollar Rate payable (or, with respect to a failure to borrow, the
Eurodollar Rate which would have been payable) with respect to the Eurodollar
Rate Loan minus (b) the Eurodollar Rate on, or as near as practicable to, the
-----
date of the prepayment or failure to borrow for a Eurodollar Rate Loan with
an Eurodollar Period commencing on such date and ending on the last day of
the Eurodollar Period of the Eurodollar Rate Loan so prepaid or which would
have been borrowed on such date.
"Investment" means, when used in connection with any Person, any investment
----------
by or of that Person, whether by means of purchase or other acquisition of
stock or other securities of any other Person or by means of a loan, advance
creating a debt, capital contribution, guaranty or other debt or equity
participation or interest in any other Person, including any partnership and
---------
joint venture interests of such Person. The amount of any Investment shall be
the amount actually invested (minus any return of capital with respect to
-----
such Investment which has actually been received in Cash or Cash Equivalents
or has been converted into Cash or Cash Equivalents), without adjustment for
subsequent increases or decreases in the value of such Investment.
"Issuing Bank" means Bank of America, N.A.
------------
"Las Vegas" means MGM Grand Hotel, Inc., a Nevada corporation which is the
---------
owner of the MGM Grand Hotel and Casino in Las Vegas, Nevada, its successors
and permitted assigns.
"Laws" means, collectively, all international, foreign, federal, state and
----
local statutes, treaties, rules, regulations, ordinances, codes and
administrative or judicial precedents.
"Lead Arranger" means Banc of America Securities, LLC.
-------------
"Letters of Credit" means any of the Standby Letters of Credit or
-----------------
Commercial Letters of Credit issued by the Issuing Bank under the Commitment
pursuant to Section 2.4, including
-16-
<PAGE>
without limitation the Existing Letters of Credit, either as originally
issued or as the same may be supplemented, modified, amended, renewed,
extended or supplanted.
"Leverage Ratio" means, as of the last day of each Fiscal Quarter, the
--------------
ratio of (a) Average Quarterly Funded Debt as of that date to (b) Cash Flow
----- -- --
for the four Fiscal Quarter period then ended, provided that:
-------- ----
(i) to the extent that any portion of such four Fiscal Quarter period
includes periods prior to the Closing Date, Cash Flow shall
instead be computed on the basis of the results of operations
during the period from the Closing Date to that date, annualized
on a straight line basis;
(ii) if as of any date of determination of the Leverage Ratio, the
Closing Date has occurred two full calendar months or more prior
to such date, then Cash Flow for that date (and only for that
date) shall be computed on the basis of the combined consolidated
results of operations of Borrower and Mirage for the period since
the Closing Date, annualized on a straight line basis; or
(iii) if as of any date of determination, the Closing Date has occurred
less than two full calendar months prior to such date, then the
Leverage Ratio for that date (and only for that date) shall be
computed on the basis of the pro forma combined consolidated
--- -----
results of operations of Borrower and Mirage for the Fiscal
Quarter ending on that date (multiplied by four), after (X)
----------
reduction of Average Quarterly Funded Debt by anticipated asset
sales following the Closing Date in the amount of $250,000,000
(without duplication on any relevant date as to any such asset
sales which have then occurred), (Y) giving effect in the
calculation of Cash Flow to $125,000,000 in annual savings
anticipated as a result of the merger of Borrower and Mirage and
(Z) adding back, to the extent deducted in arriving at Net
Income, the actual costs to Borrower and Mirage of the
transactions contemplated by the Mirage Merger Agreement.
"License Revocation" means the revocation, failure to renew or suspension
------------------
of, or the appointment of a receiver, supervisor or similar official with
respect to, any casino, gambling or gaming license issued by any Gaming Board
covering any casino or gaming facility.
"Lien" means any mortgage, deed of trust, pledge, hypothecation, assignment
----
for security, security interest, encumbrance or lien of any kind, whether
voluntarily incurred or arising by operation of Law or otherwise, affecting
any Property, including any agreement to grant any of the foregoing, any
---------
conditional sale or other title retention agreement, any lease in the nature
of a security interest, and/or the filing of or agreement to give any
financing statement (other than a precautionary financing statement with
----- ----
respect to a lease that is not in the nature of a security interest) under
the Uniform Commercial Code or comparable Law of any jurisdiction with
respect to any Property.
"Loan" means the aggregate of the Advances made at any one time by the
----
Banks pursuant to Article 2.
-17-
<PAGE>
"Loan Documents" means, collectively, this Agreement, the Notes, the Swing
--------------
Line Documents, the Guaranty, the Intercreditor Agreement, each Request for
Loan, each Request for Letter of Credit, each Competitive Bid Request, each
Pricing Certificate, each Compliance Certificate, any Related Swap Agreement
and any other agreements of any type or nature hereafter executed and
delivered by Borrower or any of its Restricted Subsidiaries to the
Administrative Agent or to any Bank in any way relating to or in furtherance
of this Agreement, in each case either as originally executed or as the same
may from time to time be supplemented, modified, amended, restated, extended
or supplanted.
"Maintenance Capital Expenditure" means a Capital Expenditure for the
-------------------------------
maintenance, repair, restoration or refurbishment of tangible Property, but
excluding any Capital Expenditures which adds to or further improves any such
---------
Property.
"Managing Agent" has the meaning set forth in the Preamble to this
--------------
Agreement. The Managing Agent shall have no duties under this Agreement or
the Loan Documents other than those arising in its capacity as a Bank.
"Margin Stock" means "margin stock" as such term is defined in Regulation
------------
U.
"Material Adverse Effect" means any set of circumstances or events which
-----------------------
(a) has or could reasonably be expected to have any material adverse effect
whatsoever upon the validity or enforceability of any Loan Document, (b) is
or could reasonably be expected to be material and adverse to the business or
condition (financial or otherwise) of Borrower and its Subsidiaries, taken as
a whole and with a view to the totality of circumstances then existing with
respect to Borrower and its Subsidiaries, provided that it is understood that
--------
this clause (b) shall not be deemed to expand the obligations of Borrower
under any express covenants set forth herein, but is rather understood to
describe a set of circumstances or events which, although not the subject of
a specific covenant, are material and adverse in the manner described above,
or (c) materially impairs or could reasonably be expected to materially
impair the ability of Borrower or Guarantors (taken as a whole) to perform
the Obligations.
"Maturity Date" means the date which is the fifth anniversary of the
-------------
Closing Date (but not later than November 30, 2005), or such later
anniversary of such date to which the Maturity Date may be extended pursuant
to Section 2.10.
"Maximum Competitive Advance" means, with respect to any Competitive Bid
---------------------------
made by a Bank, the amount set forth therein as the maximum Competitive
Advance which that Bank is willing to make in response to the related
Competitive Bid Request.
"Maximum Competitive Outstandings Amount" means, as of each date of
---------------------------------------
determination, one half of the then effective amount of the Commitment.
"MGM Grand - Atlantic City" means the proposed MGM Grand Hotel and Casino
-------------------------
in Atlantic City, New Jersey. The MGM Grand - Atlantic City project may be
the result of new construction or of the redevelopment of existing
hotel/casino properties.
"MGM Grand Monorail, Inc." means MGM Grand Monorail, Inc., a Nevada
------------------------
corporation, its successors and permitted assigns.
-18-
<PAGE>
"MGM Senior Notes" means Borrower's aggregate principal $500,000,000
----------------
Senior Notes issued pursuant to (a) the Indenture dated as of February 2,
1998 between Borrower and PNC Bank, National Association, and (b) the
Indenture dated as of February 6, 1998 between Borrower and U.S. Trust
Company of California, N.A .
"Mirage" means Mirage Resorts, Incorporated, a Nevada corporation.
------
"Mirage Loan Agreement" means the Amended and Restated Loan Agreement
---------------------
dated as of March 7, 1997 among Mirage, the lenders therein named, Morgan
Guaranty Trust Company of New York, as Documentation Agent, and Bank of
America, as Administrative Agent, as amended and in effect on the date
hereof.
"Mirage Merger Agreement" means the Agreement and Plan of Merger dated
-----------------------
March 6, 2000 among Borrower, Mirage and MGMGMR Acquisition, Inc., a wholly-
owned Subsidiary of Borrower, as amended, supplemented or otherwise modified
as of the Closing Date, and as the same may thereafter be further amended
(unless the Requisite Banks have reasonably objected to any such amendment).
"Mirage Senior Notes" means, collectively, the notes issued pursuant to
-------------------
(a) the Indenture dated October 15, 1996 between Mirage and Firstar Bank
Minnesota, N.A., as trustee, (b) the Indenture dated August 1, 1997 between
Mirage and First Security Bank, National Association, as trustee, and (c) the
Indenture dated February 4, 1998 between Mirage and PNC Bank, National
Association, as trustee.
"Monorail" means The MGM Grand - Bally's Monorail Limited Liability
--------
Company, a Nevada limited liability company, its successors and assigns.
"Moody's" means Moody's Investors Service, Inc.
-------
"Multiemployer Plan" means any employee benefit plan of the type described
------------------
in Section 4001(a)(3) of ERISA to which Borrower or any of its ERISA
Affiliates contribute or are obligated to contribute.
"Negative Pledge" means a Contractual Obligation that contains a covenant
---------------
binding on Borrower or any of its Restricted Subsidiaries that prohibits
Liens on any of its or their Property, other than (a) any such covenant
----------
contained in a Contractual Obligation granting a Lien permitted under Section
6.7 which affects only the Property that is the subject of such permitted
Lien and (b) any such covenant that does not apply to Liens securing the
Obligations or any indebtedness which is used, directly or indirectly, to
refinance the Obligations.
"Net Income" means, with respect to any fiscal period and with respect to
----------
any Person, the consolidated net income of that Person from continuing
operations for that period, determined in accordance with Generally Accepted
Accounting Principles, consistently applied.
"New York" means New York-New York Hotel & Casino LLC, a Nevada limited
--------
liability company, its successors and permitted assigns.
-19-
<PAGE>
"Notes" means, collectively, the Competitive Advance Notes and the
-----
Committed Advance Notes.
"Obligations" means all present and future obligations of every kind or
-----------
nature of Borrower, the Co-Borrowers or the Guarantors at any time and from
time to time owed to the Administrative Agent, the Issuing Bank, the Swing
Line Bank or the Banks or any one or more of them, under any one or more of
the Loan Documents, whether due or to become due, matured or unmatured,
liquidated or unliquidated, or contingent or noncontingent, including
---------
obligations of performance as well as obligations of payment, and including
interest that accrues after the commencement of any proceeding under any
Debtor Relief Law by or against Borrower or Affiliate of Borrower, whether or
not allowed as a claim in such proceeding.
"Old Loan Agreement" means the Amended and Restated Loan Agreement dated
------------------
July 17, 1997 among Borrower, Atlantic City, the lenders referred to therein,
and the Administrative Agent, as amended, to which Detroit is a party as an
additional Co-Borrower.
"Opinions" means the favorable written legal opinions of (a) Christensen,
--------
Miller, Fink, Jacobs, Glaser, Weil and Shapiro, LLP, counsel to Borrower, and
(b) Lionel Sawyer & Collins, Nevada counsel to Borrower, (c) Sterns &
Weinroth, a professional corporation, New Jersey counsel to Borrower, (d)
Eaton and Cottrell, Mississippi counsel to Borrower, and (e) Dickinson Wright
PLLC, Michigan counsel to Borrower, together with copies of all factual
certificates and legal opinions upon which such counsel has relied.
"Other Available EBITDA" means, for any fiscal period, that portion of the
----------------------
EBITDA of (a) any Unrestricted Subsidiaries for that fiscal period, and (b)
any other joint venture or other Person in which Borrower or its Restricted
Subsidiaries have any Investment for that fiscal period, in each case to the
extent that the same may be distributed in Cash by that Unrestricted
Subsidiary to Borrower and its Restricted Subsidiaries during that fiscal
period in accordance with applicable Law and subject to any Contractual
Obligations (including without limitation credit documents) which are binding
upon such Unrestricted Subsidiary or its Property (whether or not so
distributed).
"Other Loan Agreements" means, collectively, (a) the $1,000,000,000 364-Day
---------------------
Loan Agreement of even date herewith among Borrower, the Co-Borrowers, the
lenders referred to therein, and Bank of America, as Administrative Agent,
and (b) the $1,300,000,000 Term Loan Agreement dated as of April 7, 2000,
among Borrower, the Co-Borrowers, the lenders referred to therein, and Bank
of America, as Administrative Agent, in each case, either as originally
executed or as they may from time to time be supplemented, modified, amended,
restated or extended.
"Outstanding Obligations" means, as of each date of determination, and
-----------------------
giving effect to the making of any such credit accommodations requested on
that date, the sum of (i) the aggregate principal amount of the outstanding
---
Committed Loans, plus (ii) the aggregate principal amount of the outstanding
Competitive
Advances, plus (iii) the Swing Line Outstandings, plus (iv) the Aggregate
---- ----
Effective Amount of all Letters of Credit.
"Party" means any Person other than the Creditors which now or hereafter is
-----
a party to any of the Loan Documents.
-20-
<PAGE>
"Pension Plan" means any "employee pension benefit plan" (as such term is
------------
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, which is
----------
subject to Title IV of ERISA and is maintained by Borrower or any of its
Subsidiaries or to which Borrower or any of its Subsidiaries contributes or
has an obligation to contribute.
"Permitted Encumbrances" means:
----------------------
(a) inchoate Liens incident to construction on or maintenance of
Property; or Liens incident to construction on or maintenance of Property
now or hereafter filed of record for which adequate reserves have been set
aside (or deposits made pursuant to applicable Law) and which are being
contested in good faith by appropriate proceedings and have not proceeded
to judgment, provided that, by reason of nonpayment of the obligations
--------
secured by such Liens, no such Property is subject to a material risk of
loss or forfeiture;
(b) Liens for taxes and assessments on Property which are not yet
past due; or Liens for taxes and assessments on Property for which adequate
reserves have been set aside and are being contested in good faith by
appropriate proceedings and have not proceeded to judgment, provided that,
--------
by reason of nonpayment of the obligations secured by such Liens, no such
Property is subject to a material risk of loss or forfeiture;
(c) minor defects and irregularities in title to any Property which
in the aggregate do not materially impair the fair market value or use of
the Property for the purposes for which it is or may reasonably be expected
to be held;
(d) easements, exceptions, reservations, or other agreements for the
purpose of pipelines, conduits, cables, wire communication lines, power
lines and substations, streets, trails, walkways, drainage, irrigation,
water, and sewerage purposes, dikes, canals, ditches, the removal of oil,
gas, coal, or other minerals, and other like purposes affecting Property,
facilities, or equipment which in the aggregate do not materially burden or
impair the fair market value or use of such Property for the purposes for
which it is or may reasonably be expected to be held;
(e) easements, exceptions, reservations, or other agreements for the
purpose of facilitating the joint or common use of Property in or adjacent
to a shopping center or similar project affecting Property which in the
aggregate do not materially burden or impair the fair market value or use
of such Property for the purposes for which it is or may reasonably be
expected to be held;
(f) rights reserved to or vested in any Governmental Agency to
control or regulate, or obligations or duties to any Governmental Agency
with respect to, the use of any Property;
(g) rights reserved to or vested in any Governmental Agency to
control or regulate, or obligations or duties to any Governmental Agency
with respect to, any right, power, franchise, grant, license, or permit;
-21-
<PAGE>
(h) present or future zoning laws and ordinances or other laws and
ordinances restricting the occupancy, use, or enjoyment of Property;
(i) statutory Liens, other than those described in clauses (a) or (b)
above, arising in the ordinary course of business with respect to
obligations which are not delinquent or are being contested in good faith,
provided that, if delinquent, adequate reserves have been set aside with
--------
respect thereto and, by reason of nonpayment, no Property is subject to a
material risk of loss or forfeiture;
(j) covenants, conditions, and restrictions affecting the use of
Property which in the aggregate do not materially impair the fair market
value or use of the Property for the purposes for which it is or may
reasonably be expected to be held;
(k) rights of tenants under leases and rental agreements covering
Property entered into in the ordinary course of business of the Person
owning such Property;
(l) Liens consisting of pledges or deposits to secure obligations
under workers' compensation laws or similar legislation, including Liens of
judgments thereunder which are not currently dischargeable;
(m) Liens consisting of pledges or deposits of Property to secure
performance in connection with operating leases made in the ordinary course
of business to which Borrower or a Restricted Subsidiary of Borrower is a
party as lessee, provided the aggregate value of all such pledges and
--------
deposits in connection with any such lease does not at any time exceed 20%
of the annual fixed rentals payable under such lease;
(n) Liens consisting of deposits of Property to secure bids made with
respect to, or performance of, contracts (other than contracts creating or
----- ----
evidencing an extension of credit to the depositor);
(o) Liens consisting of any right of offset, or statutory bankers'
lien, on bank deposit accounts maintained in the ordinary course of
business so long as such bank deposit accounts are not established or
maintained for the purpose of providing such right of offset or bankers'
lien;
(p) Liens consisting of deposits of Property to secure statutory
obligations of Borrower or a Restricted Subsidiary of Borrower;
(q) Liens consisting of deposits of Property to secure (or in lieu
of) surety, appeal or customs bonds in proceedings to which Borrower or a
Restricted Subsidiary of Borrower is a party;
(r) Liens created by or resulting from any litigation or legal
proceeding involving Borrower or a Restricted Subsidiary of Borrower in the
ordinary course of its business which is currently being contested in good
faith by appropriate proceedings, provided that adequate reserves have been
--------
set aside by Borrower or the relevant
-22-
<PAGE>
Restricted Subsidiary and no material Property is subject to a material
risk of loss or forfeiture; and
(s) other non-consensual Liens incurred in the ordinary course of
business but not in connection with an extension of credit, which do not in
the aggregate, when taken together with all other Liens, materially impair
the value or use of the Property of the Borrower and the Restricted
Subsidiaries of Borrower, taken as a whole.
"Person" means any individual or entity, including a trustee, corporation,
------ ---------
limited liability company, general partnership, limited partnership, joint
stock company, trust, estate, unincorporated organization, business
association, firm, joint venture, Governmental Agency, or other entity.
"Pricing Certificate" means a certificate substantially in the form of
-------------------
Exhibit H, properly completed and signed by a Senior Officer of Borrower and
each Co-Borrower.
"Pricing Level" means, as of each date of determination, the pricing level
-------------
set forth below opposite (a) the Debt Rating then in effect or (b) at any
time following August 15, 2000, the Leverage Ratio as of the last day of the
Fiscal Quarter ending approximately 45 days prior to the first day of that
Pricing Period, provided that if the Leverage Ratio and the Debt Rating, as
--------
so determined, are at different Pricing Levels, then the Pricing Level which
yields the lowest Eurodollar Margin shall apply:
<TABLE>
<CAPTION>
Pricing Level Pricing Criteria
------------- ---------------------------------
Leverage Ratio Debt Rating
-------------- -----------
<S> <C> <C>
I Less than 2.75 to 1.00 At least BBB+ or Baa1
II Equal to or greater than 2.75 to 1.00 but BBB or Baa2
less than 3.50 to 1.00
III Equal to or greater than 3.50 to 1.00 but BBB- or Baa3
less than 4.00 to 1.00
IV Equal to or greater than 4.00 to 1.00 but BB+ or Ba1
less than 4.50 to 1.00
V Equal to or greater than 4.50 to 1.00 BB or Ba2 or lower
</TABLE>
provided that in the event that the then prevailing Debt Ratings are "split
--------
ratings" and to the extent that the applicable Pricing Level is then based
upon the Debt Ratings, Borrower will receive the benefit of the higher Debt
Rating, unless the split is a "double split rating" (in which case the
------
intermediate Pricing Level will apply) or a "triple split rating" (in which
case the Pricing Level below that applicable to the higher Debt Rating will
apply).
-23-
<PAGE>
"Pricing Period" means (a) the period commencing on the date hereof
--------------
and ending on August 16, 2000, and (b) the subsequent concurrent quarterly
periods of approximately 90 days each commencing on each November 16,
February 16, May 16 and August 16.
"Prime Rate" means the rate of interest publicly announced from time
----------
to time by Bank of America, as its "prime rate." It is a rate set by Bank
of America based upon various factors including Bank of America's costs and
desired return, general economic conditions and other factors, and is used
as a reference point for pricing some loans, which may be priced at, above,
or below such announced rate. Any change in the 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.
"Principal Resort Casino Properties" means The MGM Grand Hotel and
----------------------------------
Casino, the Bellagio Hotel and Casino, and the Mirage Resort Hotel and
Casino.
"Pro Rata Share" means, with respect to each Bank, the percentage of
--------------
the Commitment, the Loans (except for Competitive Advances), the Letters of
Credit and the Swing Line Advances held by that Bank (or by a SPC for which
that Bank is the Granting Bank). As of the Closing Date, each Bank has
been informed by the Lead Arranger of the amount and percentage of its Pro
Rata Share. The percentage Pro Rata Share of each Bank (but without the
consent of that Bank not the dollar amount thereof) is subject to
adjustment pursuant to any Assignment Agreement executed in accordance with
Section 11.8.
"Projections" means the financial projections for Borrower and its
-----------
Subsidiaries attached hereto as Schedule 4.17 prepared on behalf of
Borrower and heretofore distributed to the Banks.
"Property" means any interest in any kind of property or asset, whether
--------
real, personal or mixed, or tangible or intangible.
"Quarterly Payment Date" means each September 30, December 31, March 31
----------------------
and June 30.
"Real Property" means, as of any date of determination, all real
-------------
Property then or theretofore owned, leased or occupied by Borrower or any
of its Restricted Subsidiaries.
"Regulations D, T, U and X" means Regulations D, T, U and X, as at any
-------------------------
time amended, of the Board of Governors of the Federal Reserve System, or
any other regulations in substance substituted therefor.
"Related Swap Agreement" means a Swap Agreement between Borrower and a
----------------------
Bank or an Affiliate of a Bank (but, in the case of any such Affiliate,
only to the extent that the same expressly relates to the Obligations).
"Request for Letter of Credit" means a written request for a Letter of
----------------------------
Credit substantially in the form of Exhibit H, signed by a Responsible
Official of Borrower or a Co-Borrower, on its behalf, and properly
completed to provide all information required to be included therein.
-24-
<PAGE>
"Request for Loan" means a written request for a Loan substantially in
----------------
the form of Exhibit I, signed by a Responsible Official of Borrower or a
Co-Borrower, on its behalf, and properly completed to provide all
information required to be included therein.
"Requirement of Law" means, as to any Person, the articles or
------------------
certificate of incorporation and by-laws or other organizational or
governing documents of such Person, and any Law, or judgment, award,
decree, writ or determination of a Governmental Agency, in each case
applicable to or binding upon such Person or any of its Property or to
which such Person or any of its Property is subject.
"Requisite Banks" means (a) as of any date of determination if the
---------------
Commitment is then in effect, Banks having Pro Rata Shares which are, in
the aggregate, a majority of the Pro Rata Shares of the Commitment then in
effect and (b) as of any date of determination if the Commitment has then
been terminated and there are then any Obligations outstanding, Banks or
other creditors holding a majority of the Outstanding Obligations.
"Responsible Official" means (a) when used with reference to a Person
--------------------
other than an individual, any officer or manager of such Person, general
partner of such Person, officer of a corporate or limited liability company
general partner of such Person, officer of a corporate or limited liability
company general partner of a partnership that is a general partner of such
Person, or any other responsible official thereof duly acting on behalf
thereof, and (b) when used with reference to a Person who is an individual,
such Person, provided that for the purposes of this Agreement and the other
--------
Loan Documents, each Responsible Official of Borrower shall be deemed to
also be a Responsible Official of each Co-Borrower, and each Responsible
Official of a Co-Borrower shall also be deemed to be a Responsible Official
of Borrower and any other Co-Borrowers. The Banks shall be entitled to
conclusively rely upon any document or certificate that is signed or
executed by a Responsible Official of Borrower or any of its Restricted
Subsidiaries as having been authorized by all necessary corporate, limited
liability company, partnership and/or other action on the part of Borrower
or such Restricted Subsidiary.
"Restricted Subsidiary" means each Subsidiary of Borrower other than
--------------------- -----
the Australia Companies, Detroit Temporary, Monorail, Subsidiaries formed
under the Laws of foreign nations whose only tangible assets are located in
foreign nations, and pure holding companies for such foreign Subsidiaries
(including without limitation MGM Grand South Africa, Inc., a Nevada
corporation) owning as their sole asset the stock or other securities and
obligations thereof. As of the Closing Date, Victoria Partners, a Nevada
general partnership, is 50% owned by Borrower, and is therefore not a
Subsidiary of Borrower.
"Senior Officer" means the (a) chief executive officer or manager, (b)
--------------
president, (c) executive vice president, (d) senior vice president, (e)
chief financial officer, (f) treasurer, (g) assistant treasurer, (h)
secretary, or (i) assistant secretary of Borrower or any Co-Borrower.
"Solvent" means, as to any Person, that (a) the sum of the assets of
-------
such Person, both at a fair valuation and at present fair saleable value,
exceeds its liabilities, including its probable liability in respect of
contingent liabilities, (b) such Person will have sufficient capital with
which to conduct its business as presently conducted and as proposed to be
conducted and
-25-
<PAGE>
(c) such Person has not incurred debts, and does not intend to incur debts,
beyond its ability to pay such debts as they mature.
"South African Companies" mean MGM Grand South Africa PTY Ltd., a
-----------------------
South African corporation, and MGM South Africa, Inc., a Nevada
corporation.
"SPC" means, as to each Bank, one or more special purpose funding
---
vehicles maintained or established by that Bank.
"Special Eurodollar Circumstance" means the application or adoption
-------------------------------
after the Closing Date of any Law or interpretation, or any change therein
or thereof, or any change in the interpretation or administration thereof
by any Governmental Agency, central bank or comparable authority charged
with the interpretation or administration thereof, or compliance by any
Bank or its Eurodollar Lending Office with any request or directive
(whether or not having the force of Law) of any such Governmental Agency,
central bank or comparable authority, or the existence or occurrence of
circumstances affecting the Designated Eurodollar Market generally that are
beyond the reasonable control of the Banks.
"Standby Letter of Credit" means each Letter of Credit that is not a
------------------------