EXHIBIT 4.1
EXECUTION COPY
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AMERICAN REAL ESTATE PARTNERS, L.P.
AMERICAN REAL ESTATE FINANCE CORP.
AND
AMERICAN REAL ESTATE HOLDINGS LIMITED PARTNERSHIP, AS GUARANTOR
8-1/8% SENIOR NOTES DUE 2012
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INDENTURE
Dated as of May 12, 2004
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WILMINGTON TRUST COMPANY
Trustee
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CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310(a)(1)................................................................. 7.10
(a)(2)................................................................. 7.10
(a)(3)................................................................. N.A.
(a)(4)................................................................. N.A.
(a)(5)................................................................. 7.10
(b).................................................................... 7.10
(c).................................................................... N.A.
311(a).................................................................... 7.11
(b).................................................................... 7.11
(c).................................................................... N.A.
312(a).................................................................... 2.05
(b).................................................................... 12.03
(c).................................................................... 12.03
313(a).................................................................... 7.06
(b)(2)................................................................. 7.06; 7.07
(c).................................................................... 7.06; 12.02
(d).................................................................... 7.06
314(a).................................................................... 4.03;12.02; 12.05
(c)(1)................................................................. 12.04
(c)(2)................................................................. 12.04
(c)(3)................................................................. N.A.
(e).................................................................... 12.05
(f).................................................................... N.A.
315(a).................................................................... 7.01
(b).................................................................... 7.05; 12.02
(c).................................................................... 7.01
(d).................................................................... 7.01
(e).................................................................... 6.11
316(a) (last sentence).................................................... 2.09
(a)(1)(A).............................................................. 6.05
(a)(1)(B).............................................................. 6.04
(a)(2)................................................................. N.A.
(b).................................................................... 6.07
(c).................................................................... 2.12
317(a)(1)................................................................. 6.08
(a)(2)................................................................. 6.09
(b).................................................................... 2.04
318(a).................................................................... 12.01
(b).................................................................... N.A.
(c).................................................................... 12.01
N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions................................................................................ .1
Section 1.02 Other Definitions.......................................................................... 16
Section 1.03 Incorporation by Reference of Trust Indenture Act.......................................... 17
Section 1.04 Rules of Construction...................................................................... 17
ARTICLE 2
THE NOTES
Section 2.01 Form and Dating............................................................................ 18
Section 2.02 Execution and Authentication............................................................... 19
Section 2.03 Registrar and Paying Agent................................................................. 19
Section 2.04 Paying Agent to Hold Money in Trust........................................................ 20
Section 2.05 Holder Lists............................................................................... 20
Section 2.06 Transfer and Exchange...................................................................... 20
Section 2.07 Replacement Notes.......................................................................... 32
Section 2.08 Outstanding Notes.......................................................................... 33
Section 2.09 Treasury Notes............................................................................. 33
Section 2.10 Temporary Notes............................................................................ 33
Section 2.11 Cancellation............................................................................... 33
Section 2.12 Defaulted Interest......................................................................... 34
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee......................................................................... 34
Section 3.02 Selection of Notes to Be Redeemed or Purchased............................................. 34
Section 3.03 Notice of Redemption....................................................................... 35
Section 3.04 Effect of Notice of Redemption............................................................. 35
Section 3.05 Deposit of Redemption or Purchase Price.................................................... 36
Section 3.06 Notes Redeemed or Purchased in Part........................................................ 36
Section 3.07 Optional Redemption........................................................................ 36
Section 3.08 Redemption Pursuant to Gaming Laws......................................................... 37
Section 3.09 Mandatory Redemption....................................................................... 38
ARTICLE 4
COVENANTS
Section 4.01 Payment of Notes........................................................................... 38
Section 4.02 Maintenance of Office or Agency............................................................ 38
Section 4.03 Reports.................................................................................... 39
Section 4.04 Compliance Certificate..................................................................... 40
Section 4.05 Taxes...................................................................................... 40
Section 4.06 Stay, Extension and Usury Laws............................................................. 40
Section 4.07 Restricted Payments........................................................................ 41
Section 4.08 [Intentionally Omitted].................................................................... 43
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock................................. 43
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Section 4.10 [Intentionally Omitted].................................................................... 45
Section 4.11 Transactions with Affiliates............................................................... 45
Section 4.12 Liens...................................................................................... 47
Section 4.13 [Intentionally Omitted].................................................................... 48
Section 4.14 Corporate Existence........................................................................ 48
Section 4.15 Offer to Repurchase Upon Change of Control................................................. 49
Section 4.16 Maintenance of Interest Coverage........................................................... 50
Section 4.17 Maintenance of Total Unencumbered Assets................................................... 51
Section 4.18 Compliance with Law........................................................................ 51
Section 4.19 No Investment Company...................................................................... 51
ARTICLE 5
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets................................................... 51
Section 5.02 Relief from Obligation..................................................................... 54
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.......................................................................... 54
Section 6.02 Acceleration............................................................................... 56
Section 6.03 Other Remedies............................................................................. 56
Section 6.04 Waiver of Past Defaults.................................................................... 57
Section 6.05 Control by Majority........................................................................ 57
Section 6.06 Limitation on Suits........................................................................ 57
Section 6.07 Rights of Holders of Notes to Receive Payment.............................................. 57
Section 6.08 Collection Suit by Trustee................................................................. 58
Section 6.09 Trustee May File Proofs of Claim........................................................... 58
Section 6.10 Priorities................................................................................. 58
Section 6.11 Undertaking for Costs...................................................................... 59
ARTICLE 7
TRUSTEE
Section 7.01 Duties of Trustee.......................................................................... 59
Section 7.02 Rights of Trustee.......................................................................... 60
Section 7.03 Individual Rights of Trustee............................................................... 60
Section 7.04 Trustee's Disclaimer....................................................................... 61
Section 7.05 Notice of Defaults......................................................................... 61
Section 7.06 Reports by Trustee to Holders of the Notes................................................. 61
Section 7.07 Compensation and Indemnity................................................................. 61
Section 7.08 Replacement of Trustee..................................................................... 62
Section 7.09 Successor Trustee by Merger, etc........................................................... 63
Section 7.10 Eligibility; Disqualification.............................................................. 63
Section 7.11 Preferential Collection of Claims Against Company.......................................... 63
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance................................... 63
Section 8.02 Legal Defeasance and Discharge............................................................. 63
Section 8.03 Covenant Defeasance........................................................................ 64
Section 8.04 Conditions to Legal or Covenant Defeasance................................................. 64
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Section 8.05 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous
Provisions. ............................................................................... 66
Section 8.06 Repayment to Company....................................................................... 66
Section 8.07 Reinstatement.............................................................................. 66
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes........................................................ 67
Section 9.02 With Consent of Holders of Notes........................................................... 68
Section 9.03 Compliance with Trust Indenture Act........................................................ 69
Section 9.04 Revocation and Effect of Consents.......................................................... 69
Section 9.05 Notation on or Exchange of Notes........................................................... 69
Section 9.06 Trustee to Sign Amendments, etc............................................................ 69
ARTICLE 10
NOTE GUARANTEES
Section 10.01. Guarantee.................................................................................. 70
Section 10.02. Limitation on Guarantor Liability.......................................................... 71
Section 10.03. Execution and Delivery of Note Guarantee................................................... 71
Section 10.04. Guarantors May Consolidate, etc., on Certain Terms......................................... 71
Section 10.05. Releases................................................................................... 72
ARTICLE 11
SATISFACTION AND DISCHARGE
Section 11.01 Satisfaction and Discharge................................................................. 73
Section 11.02 Application of Trust Money................................................................. 73
ARTICLE 12
MISCELLANEOUS
Section 12.01 Trust Indenture Act Controls............................................................... 74
Section 12.02 Notices.................................................................................... 74
Section 12.03 Communication by Holders of Notes with Other Holders of Notes.............................. 75
Section 12.04 Certificate and Opinion as to Conditions Precedent......................................... 75
Section 12.05 Statements Required in Certificate or Opinion.............................................. 76
Section 12.06 Rules by Trustee and Agents................................................................ 76
Section 12.07 No Personal Liability of Directors, Officers, Employees and Stockholders................... 76
Section 12.08 Governing Law.............................................................................. 76
Section 12.09 No Adverse Interpretation of Other Agreements.............................................. 76
Section 12.10 Successors................................................................................. 77
Section 12.11 Severability............................................................................... 77
Section 12.12 Counterpart Originals...................................................................... 77
Section 12.13 Table of Contents, Headings, etc........................................................... 77
Section 12.14 Clarity.................................................................................... 77
EXHIBITS
Exhibit A1 FORM OF NOTE
Exhibit A2 FORM OF REGULATION S TEMPORARY GLOBAL NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
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Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Exhibit E FORM OF NOTATION OF GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL INDENTURE
Exhibit G FORM OF SECURITY AND CONTROL AGREEMENT
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INDENTURE dated as of May 12, 2004 among American Real Estate Partners,
L.P., a Delaware limited partnership, as issuer ("AREP"), American Real Estate
Finance Corp., a Delaware corporation, as co-issuer ("AREP Finance", and
together with AREP, the "Company"), American Real Estate Holdings Limited
Partnership, as Guarantor and Wilmington Trust Company, as trustee.
The Company, the Guarantor and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders (as
defined) of the 8-1/8% Senior Notes due 2012 (the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.
"144A Global Note" means a Global Note substantially in the form of
Exhibit A1 hereto bearing the Global Note Legend and the Private Placement
Legend and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Notes sold in reliance on Rule 144A.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other
Person is merged with or into or became a Subsidiary of such specified Person,
whether or not such Indebtedness is incurred in connection with, or in
contemplation of, such other Person merging with or into, or becoming a
Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such
specified Person.
"Additional Notes" means additional Notes (other than the Initial Notes)
issued under this Indenture in accordance with Sections 2.02 and 4.09 hereof, as
part of the same series as the Initial Notes.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person will be deemed to be control. For purposes of this
definition, the terms "controlling, "controlled by" and "under common control
with" have correlative meanings.
"Agent" means any Registrar, co-registrar, Paying Agent or additional
paying agent.
"API" means American Property Investors, Inc. (and not any of its
subsidiaries).
"AREH" means American Real Estate Holdings Limited Partnership (and not
any of its subsidiaries).
"AREP" means American Real Estate Partners, L.P. (and not any of its
subsidiaries).
"AREP Finance" means American Real Estate Finance Corp.
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"AREP Partnership Agreement" means AREP's Amended and Restated Agreement
of Limited Partnership, dated May 12, 1987 as amended February 22, 1995 and
August 16, 1996.
"Bad Boy Guarantees" means the Indebtedness of any specified Person
attributable to "bad boy" indemnification or Guarantees, which Indebtedness
would be non-recourse to the AREP and the Guarantor other than recourse relating
to the specific events specified therein, which such events shall be usual and
customary exceptions typically found in non-recourse financings at such time as
determined by management in its reasonable judgment.
"Applicable Procedures" means, with respect to any transfer or exchange of
or for beneficial interests in any Global Note, the rules and procedures of the
Depositary, Euroclear and Clearstream that apply to such transfer or exchange.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state
law for the relief of debtors.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" will be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only after the passage of time. The terms "Beneficially Owns" and
"Beneficially Owned" have a corresponding meaning.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors of the
corporation or any committee thereof duly authorized to act on behalf of
such board;
(2) with respect to a partnership, the Board of Directors of the
general partner of the partnership;
(3) with respect to a limited liability company, the managing member
or members or any controlling committee of managing members thereof or the
Board of Directors of the managing member; and
(4) with respect to any other Person, the board or committee of such
Person serving a similar function.
"Broker-Dealer" has the meaning set forth in the Registration Rights
Agreement.
"Business Day" means any day excluding Saturday, Sunday and any day which
is a legal holiday under the laws of the State of New York or is a day on which
banking institutions located in such jurisdictions are authorized or required by
law or other governmental action to close.
"Capital Lease Obligation" means, at the time any determination is to be
made, the amount of the liability in respect of a capital lease that would at
that time be required to be capitalized on a balance sheet prepared in
accordance with GAAP, and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be prepaid by the lessee without payment of a
penalty.
"Capital Stock" means:
2
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership interests (whether general or limited) or membership
interests; and
(4) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person but excluding from all of the foregoing any
debt securities convertible into Capital Stock, whether or not such debt
securities include any right of participation with Capital Stock.
"Cash Equivalents" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or insured by
the United States government or any agency or instrumentality of the
United States government (provided that the full faith and credit of the
United States is pledged in support of those securities) having maturities
of not more than one year from the date of acquisition;
(3) certificates of deposit and eurodollar time deposits with
maturities of one year or less from the date of acquisition, bankers'
acceptances with maturities not exceeding one year and overnight bank
deposits, in each case, with any domestic commercial bank having capital
and surplus in excess of $500.0 million and a Thomson Bank Watch Rating of
"B" or better;
(4) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses (2) and (3)
above entered into with any financial institution meeting the
qualifications specified in clause (3) above;
(5) commercial paper having one of the two highest ratings
obtainable from Xxxxx'x Investors Service, Inc. or Standard & Poor's
Rating Services and, in each case, maturing within one year after the date
of acquisition; and
(6) money market funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (1) through
(5) of this definition.
"Cash Flow of AREP and the Guarantors" means, with respect to any period,
the Net Income of AREP and the Guarantors for such period plus, without
duplication:
(1) provision for taxes based on income or profits of AREP and the
Guarantors or any payments of Tax Amounts by AREP for such period, to the
extent that such provision for taxes or such payments of Tax Amounts were
deducted in computing such Net Income of AREP or any Guarantor; plus
(2) the Fixed Charges of AREP or any Guarantor for such period, to
the extent that such Fixed Charges of AREP and such Guarantor were
deducted in computing such Net Income of AREP and such Guarantor; plus
3
(3) depreciation, amortization (including amortization of
intangibles but excluding amortization of prepaid cash expenses that were
paid in a prior period) and other non-cash expenses (excluding any such
non-cash expense to the extent that it represents an accrual of or reserve
for cash expenses in any future period or amortization of a prepaid cash
expense that was paid in a prior period) of AREP and any Guarantor for
such period to the extent that such depreciation, amortization and other
non-cash expenses were deducted in computing such Net Income of AREP and
any Guarantor; minus
(4) non-cash items increasing such Net Income of AREP and any
Guarantor for such period, other than the accrual of revenue in the
ordinary course of business,
in each case, consolidating such amounts for AREP and any Guarantor but
excluding any net income, provision for taxes, fixed charges, depreciation,
amortization or other amounts of any of the Subsidiaries of AREP (other than any
Guarantor) and otherwise determined in accordance with GAAP; provided, further,
that the Net Income of AREP and any Guarantor shall include income from
investments or Subsidiaries of AREP (other than any Guarantor) but only to the
extent such income is realized in Cash Equivalents by AREP or any Guarantor.
"Change of Control" means the occurrence of any of the following:
(1) the sale, lease, transfer, conveyance or other disposition by
AREP or the Guarantor (other than by way of merger or consolidation), in
one or a series of related transactions, of all or substantially all of
the properties or assets of AREP or AREH to any "person" (as that term is
used in Section 13(d) of the Exchange Act) other than the Principal or a
Related Party; provided, however, that (x) if AREP or AREH receives
consideration in Cash Equivalents and marketable securities with an
aggregate Fair Market Value determined at the time of the execution of
each relevant agreement of at least $1.0 billion for such sale, lease,
transfer, conveyance or other disposition of properties or assets, then
such transaction shall not be deemed a Change of Control and (y) any sale,
assignment, transfer or other disposition of Cash Equivalents, including,
without limitation, any investment or capital contribution of Cash
Equivalents or purchase of property, assets or Capital Stock with Cash
Equivalents, will not constitute a sale, assignment, transfer, conveyance
or other disposition of all or substantially all of the properties or
assets for purposes of this clause (1);
(2) the adoption of a plan relating to the liquidation or
dissolution of AREP;
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation), the result of which is that any
"person" (as defined above), other than the Principal or the Related
Parties, becomes the Beneficial Owner, directly or indirectly, of more
than 50% of the Voting Stock of a Controlling Entity of AREP, measured by
voting power rather than number of shares;
(4) the first day on which a majority of the members of the Board of
Directors of the Controlling Entity are not Continuing Directors; or
(5) for so long as the Company is a partnership, upon any general
partner of AREP ceasing to be an Affiliate of the Principal or a Related
Party.
"Change of Control Offer" has the meaning assigned to that term in this
Indenture governing the Notes.
4
"Clearstream" means Clearstream Banking, S.A.
"Company" means, collectively AREP and AREP Finance, and any and all
successors thereto.
"Consolidated Net Income" means, with respect to any specified Person for
any period, the aggregate of net income (loss) of such Person, on a consolidated
basis with its Subsidiaries, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends; provided that:
(1) the Net Income of any Person that is accounted for by the equity
method of accounting or that is a Subsidiary will be included only to the
extent of the amount of dividends or similar distributions paid in cash to
the specified Person or a Subsidiary of the Person;
(2) the Net Income of any of its Subsidiaries will be excluded to
the extent that the declaration or payment of dividends or similar
distributions by that Subsidiary of that Net Income is not at the date of
determination permitted without any prior governmental approval (that has
not been obtained) or, directly or indirectly, by operation of the terms
of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary or
its stockholders; and
(3) the cumulative effect of a change in accounting principles will
be excluded.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of AREP who:
(1) was a member of such Board of Directors on the date of this
Indenture; or
(2) was nominated for election or elected to such Board of Directors
with the approval of the Principal or any of the Related Parties or with
the approval of a majority of the Continuing Directors who were members of
such Board of Directors at the time of such nomination or election.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of management and policies of a Person, whether
through the ownership of Voting Stock, by agreement or otherwise.
"Controlling Entity" means (1) for so long as AREP is a partnership, any
general partner of AREP, (2) if AREP is a limited liability company, any
managing member of AREP or (3) if AREP is a corporation, AREP.
"Corporate Trust Office of the Trustee" will be at the address of the
Trustee specified in Section 12.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Credit Facilities" means, one or more debt facilities (including, without
limitation, the Credit Agreement) or commercial paper facilities, in each case
with banks or other institutional lenders providing for revolving credit loans,
term loans, receivables financing (including through the sale of receivables to
such lenders or to special purpose entities formed to borrow from such lenders
against such receivables) or letters of credit, in each case, as amended,
restated, modified, renewed, refunded, replaced (whether upon or after
termination or otherwise) or refinanced (including by means of sales of debt
securities to institutional investors) in whole or in part from time to time.
5
"Custodian" means the Trustee, as custodian with respect to the Notes in
global form, or any successor entity thereto.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name of the
Holder thereof and issued in accordance with Section 2.06 hereof, substantially
in the form of Exhibit A1 hereto except that such Note shall not bear the Global
Note Legend and shall not have the "Schedule of Exchanges of Interests in the
Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.03 hereof as the
Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case, at the option of the holder of the Capital Stock),
or upon the happening of any event, matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or redeemable at the option
of the holder of the Capital Stock, in whole or in part, on or prior to the date
that is 91 days after the date on which the Notes mature. Notwithstanding the
preceding sentence, any Capital Stock that would constitute Disqualified Stock
solely because the holders of the Capital Stock have the right to require AREP
or any Guarantor to repurchase such Capital Stock upon the occurrence of a
change of control, event of loss, an asset sale or other special redemption
event will not constitute Disqualified Stock if the terms of such Capital Stock
provide that AREP or any Guarantor may not repurchase or redeem any such Capital
Stock pursuant to such provisions unless such repurchase or redemption complies
with Section 4.07 hereof or where the funds to pay for such repurchase was from
the net cash proceeds of such Capital Stock and such net cash proceeds was set
aside in a separate account to fund such repurchase. Furthermore, any Capital
Stock that would constitute Disqualified Stock solely because the holders of the
Capital Stock have the right to require AREP or any Guarantor to redeem such
Capital Stock, including, without limitation, upon maturity will not constitute
Disqualified Stock if the terms of such Capital Stock provide that AREP or any
Guarantor may redeem such Capital Stock for other Capital Stock that is not
Disqualified Stock. The amount of Disqualified Stock deemed to be outstanding at
any time for purposes of this Indenture will be the maximum amount that AREP and
its Subsidiaries (including any Guarantor) may become obligated to pay upon the
maturity of, or pursuant to any mandatory redemption provisions of, such
Disqualified Stock, exclusive of accrued dividends. For the avoidance of doubt,
and by way of example, the Preferred Units, as in effect on the date of this
Indenture, do not constitute Disqualified Stock.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means an offer and sale of Capital Stock (other than
Disqualified Stock) of AREP (other than an offer and sale relating to equity
securities issuable under any employee benefit plan of AREP) or a capital
contribution in respect of Capital Stock (other than Disqualified Stock) of
AREP.
"Euroclear" means Euroclear Bank, S.A./N.V., as operator of the Euroclear
system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
6
"Exchange Notes" means the Notes issued in the Exchange Offer pursuant to
Section 2.06(f) hereof.
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
"Existing Indebtedness" means up to $43.8 million in aggregate principal
amount of Indebtedness of AREP and any Guarantor, in existence on the Issuance
Date, until such amounts are repaid.
"Fair Market Value" means the value that would be paid by a willing buyer
to an unaffiliated willing seller in a transaction not involving distress or
necessity of either party, determined in good faith by the Board of Directors of
AREP (unless otherwise provided in this Indenture).
"Fixed Charge Coverage Ratio of AREP and the Guarantors" means the ratio
of the Cash Flow of AREP and the Guarantors for such period to the Fixed Charges
of AREP and the Guarantors for such period. In the event that AREP or any
Guarantor incurs, assumes, guarantees, repays, repurchases, redeems, defeases or
otherwise discharges any Indebtedness (other than ordinary working capital
borrowings) or issues, repurchases or redeems preferred stock subsequent to the
commencement of the period for which the Fixed Charge Coverage Ratio of AREP and
the Guarantors is being calculated and on or prior to the Quarterly
Determination Date for which the calculation of the Fixed Charge Coverage Ratio
of AREP and the Guarantors is being made (the "Calculation Date"), then the
Fixed Charge Coverage Ratio of AREP and the Guarantors will be calculated giving
pro forma effect to such incurrence, assumption, Guarantee, repayment,
repurchase, redemption, defeasance or other discharge of Indebtedness, or such
issuance, repurchase or redemption of preferred stock, and the use of the
proceeds therefrom, as if the same had occurred at the beginning of the
applicable four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge Coverage Ratio:
(1) acquisitions that have been made by the specified Person,
including through mergers or consolidations, or any Person acquired by the
specified Person, and including any related financing transactions, during
the four-quarter reference period or subsequent to such reference period
and on or prior to the Calculation Date shall be given pro forma effect
(in accordance with Regulation S-X under the Securities Act) as if they
had occurred on the first day of the four-quarter reference period;
(2) the Cash Flow of AREP and the Guarantors attributable to
discontinued operations, as determined in accordance with GAAP, and
operations or businesses (and ownership interests therein) disposed of
prior to the Calculation Date, shall be excluded;
(3) the Fixed Charges of AREP and the Guarantors attributable to
discontinued operations, as determined in accordance with GAAP, and
operations or businesses (and ownership interests therein) disposed of
prior to the Calculation Date, will be excluded, but only to the extent
that such Fixed Charges of AREP and the Guarantors are equal to or less
than the Cash Flow of AREP and the Guarantors from the related
discontinued operation excluded under this clause (3) for such period; and
(4) if any Indebtedness bears a floating rate of interest, the
interest expense on such Indebtedness will be calculated as if the rate in
effect on the Calculation Date had been the
7
applicable rate for the entire period (taking into account any Hedging
Obligation applicable to such Indebtedness if such Hedging Obligation has
a remaining term as at the Calculation Date in excess of 12 months).
"Fixed Charges of AREP and the Guarantors" means, with respect to any
period, the sum, without duplication, of:
(1) the interest expense of AREP, and any Guarantor for such period,
whether paid or accrued, including, without limitation, amortization of
debt issuance costs and original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease
Obligations, commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers' acceptance financings, and net of
the effect of all payments made or received pursuant to Hedging
Obligations in respect of interest rates; plus
(2) the interest expense of AREP and any Guarantor that was
capitalized during such period; plus
(3) any interest on Indebtedness of another Person that is
guaranteed by AREP or any Guarantor (other than Bad Boy Guarantees unless
such Bad Boy Guarantee is called upon) or secured by a Lien on assets of
AREP or any additional Guarantor, whether or not such Guarantee or Lien is
called upon; provided that for purposes of calculating interest with
respect to Indebtedness that is Guaranteed or secured by a Lien, the
principal amount of Indebtedness will be calculated in accordance with the
last two paragraphs of the definition of Indebtedness; plus
(4) the product of (a) all dividends, whether paid or accrued and
whether or not in cash, on any series of preferred equity of AREP, other
than dividends on preferred stock to the extent payable in Equity
Interests of AREP (other than Disqualified Stock) or dividends on
preferred equity payable to AREP, times (b) a fraction, the numerator of
which is one and the denominator of which is one minus the then current
combined federal, state and local statutory income tax rate of AREP
(however, for so long as AREP is a partnership or otherwise a pass through
entity for federal income tax purposes, the combined federal, state and
local income tax rate shall be the rate that was utilized to calculate the
Tax Amount of such Person to the extent that the Tax Amount was actually
distributed with respect to such period (and if less than the Tax Amount
is distributed, such rate shall be proportionately reduced) and if no Tax
Amount was actually distributed during such period, such combined federal,
state and local income tax rate shall be zero), expressed as a decimal;
provided that this clause (4) will not include any Preferred Unit
Distribution paid in additional Preferred Units,
in each case, determined on a consolidated basis between AREP and any Guarantor
but on a nonconsolidated basis with the Subsidiaries of AREP (other than any
Guarantor) and otherwise in accordance with GAAP.
"GAAP" means generally accepted accounting principles in the United States
set forth in the statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as have been
approved by a significant segment of the accounting profession, which are in
effect on the Issuance Date. For the purposes of this Indenture, the term
"consolidated" with respect to any Person shall mean such Person consolidated
with its Subsidiaries.
"Gaming Authority" means any agency, authority, board, bureau, commission,
department, office or instrumentality of any nature whatsoever of the United
States or other national government, any state,
8
province or any city or other political subdivision, including, without
limitation, the State of Nevada, or the State of New Jersey, whether now or
hereafter existing, or any officer or official thereof and any other agency with
authority thereof to regulate any gaming operation (or proposed gaming
operation) owned, managed or operated by the Principal, its Related Parties, the
Company or any of their respective Subsidiaries or Affiliates.
"Gaming Law" means any gaming law or regulation of any jurisdiction or
jurisdictions to which the Company or any of its Subsidiaries (including AREH)
is, or may at any time after the issue date be, subject.
"GB Securities" means the 11% notes due 2005 issued by GB Property Funding
Corp.
"Global Note Legend" means the legend set forth in Section 2.06(g)(2)
hereof, which is required to be placed on all Global Notes issued under this
Indenture.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes deposited with or on
behalf of and registered in the name of the Depository or its nominee,
substantially in the form of Exhibit A1 hereto and that bears the Global Note
Legend and that has the "Schedule of Exchanges of Interests in the Global Note"
attached thereto, issued in accordance with Section 2.01, 2.06(b)(3),
2.06(b)(4), 2.06(d)(2) or 2.06(f) hereof.
"Government Instrumentality" means any national, state or local government
(whether domestic or foreign), any political subdivision thereof or any other
governmental, quasi-governmental, judicial, public or statutory instrumentality,
authority, body, agency, court, tribunal, commission, bureau or entity or any
arbitrator with authority to bind a party at law.
"Government Securities" means securities that are (1) direct obligations
of the United States of America for the timely payment of which its full faith
and credit is pledged or (2) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States of America the
timely payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act), as custodian with respect to any such Government Security
or a specific payment of principal of or interest on any such Government
Security held by such custodian for the account of the holder of such depository
receipt; provided, that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the
Government Security or the specific payment of principal of or interest on the
Government Security evidenced by such depository receipt.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof), of all or any part of any Indebtedness (whether arising by virtue of
partnership arrangements, or by agreements to keep-well, to purchase assets,
goods, securities or services, to take or pay or to maintain financial statement
conditions or otherwise).
"Guarantor" means any Subsidiary of AREP (initially only AREH) that
executes a Note Guarantee in accordance with the provisions of this Indenture,
and their respective successors and assigns, in each case, until the Note
Guarantee of such Person has been released in accordance with the provisions of
this Indenture.
9
"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under:
(1) interest rate swap agreements (whether from fixed to floating or
from floating to fixed), interest rate cap agreements and interest rate
collar agreements;
(2) other agreements or arrangements designed to manage interest
rates or interest rate risk; and
(3) other agreements or arrangements designed to protect such Person
against fluctuations in currency exchange rates or commodity prices.
"Holder" means a Person in whose name a Note is registered.
"IAI Global Note" means a Global Note substantially in the form of Exhibit
A1 hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold to Institutional Accredited Investors.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person (excluding accrued expenses and trade payables),
whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof);
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations;
(5) representing the balance deferred and unpaid of the purchase
price of any property or services due more than six months after such
property is acquired or such services are completed; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance sheet
of the specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any Indebtedness of any other Person.
"Indenture" means this Indenture, as amended or supplemented from time to
time.
"Indirect Participant" means a Person who holds a beneficial interest in a
Global Note through a Participant.
"Initial Notes" means the first $353,000,000 aggregate principal amount of
Notes issued under this Indenture on the date hereof.
10
"Initial Purchaser" means Bear, Xxxxxxx & Co. Inc.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"Issuance Date" means the closing date for the sale and original issuance
of the Notes.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be prepared by
the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"Liquidated Damages" means all liquidated damages then owing pursuant to
the Registration Rights Agreement.
"NEG" means National Energy Group, Inc.
"NEG Credit Agreement" means the credit agreement, dated as of December
29, 2003, among NEG Operating LLC, certain commercial lending institutions party
thereto, including Mizuho Corporate Bank, Ltd. as the administrative agent, Bank
of Texas N.A. and Bank of Nova Scotia as co-agents.
"NEG Management Agreements" means the management agreement dated September
12, 2001, between NEG and NEG Operating LLC and the management agreement dated
August 28, 2003, between NEG and TransTexas Gas Corporation, each as in effect
on the date of this Indenture.
"Net Income" means, with respect to any specified Person for any four
consecutive fiscal quarter period, the net income (loss) of such Person
determined in accordance with GAAP and before any reduction in respect of
preferred stock dividends.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Note Guarantee" means the Guarantee by any Subsidiary of AREP of the
Company's obligations under this Indenture and the Notes, executed pursuant to
the provisions of this Indenture; which initially will only be by AREH.
"Notes" has the meaning assigned to it in the preamble to this Indenture.
The Initial Notes, the Exchange Notes and the Additional Notes shall be treated
as a single class for all purposes under this Indenture, and unless the context
otherwise requires, all references to the Notes shall include the Initial Notes,
the Exchange Notes and any Additional Notes.
11
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering Memorandum" means the offering memorandum dated May 6, 2004, as
supplemented by the Offering Memorandum supplement dated May 10, 2004, relating
to the issuance of the Notes.
"Officer" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of API or
AREP Finance by two Officers (or if AREP is (x) a limited liability company, two
Officers of the managing member of such limited liability company or (y) a
corporation, by two Officers thereof) of API or AREP Finance, one of whom must
be the principal executive officer, the principal financial officer, the
treasurer or the principal accounting officer of API or AREP Finance that meets
the requirements of Section 12.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 12.05 hereof.
The counsel may be an employee of or counsel to the Company, any Subsidiary of
the Company or any of its Affiliates or the Trustee.
"Other Liquidated Damages" means liquidated damages arising from a
registration default under a registration rights agreement with respect to the
registration of subordinated Indebtedness permitted to be incurred under this
Indenture.
"Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).
"Partners' Equity" with respect to any Person means as of any date, the
partners' equity as of such date shown on the consolidated balance sheet of such
Person and its Subsidiaries or if such Person is not a partnership, the
comparable line-item on a balance sheet, each prepared in accordance with GAAP.
"Permitted Refinancing Indebtedness" means any Indebtedness of AREP or any
Guarantor issued in exchange for, or the net proceeds of which are used to
renew, refund, refinance, replace, defease or discharge other Indebtedness of
AREP or any Guarantor (other than intercompany Indebtedness); provided that:
(1) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount
(or accreted value, if applicable) of the Indebtedness renewed, refunded,
refinanced, replaced, defeased or discharged (plus all accrued interest on
the Indebtedness and the amount of all fees and expenses, including
premiums, and Other Liquidated Damages, incurred in connection therewith);
(2) in the case of any Indebtedness other than Notes redeemed in
accordance with Section 3.08 hereof, such Permitted Refinancing
Indebtedness has a final maturity date later than the final maturity date
of, and has a Weighted Average Life to Maturity equal to or greater than
the Weighted Average Life to Maturity of, the Indebtedness being renewed,
refunded, refinanced, replaced, defeased or discharged; and
(3) if the Indebtedness being renewed, refunded, refinanced,
replaced, defeased or discharged is subordinated in right of payment to
the Notes, such Permitted Refinancing
12
Indebtedness has a final maturity date later than the final maturity date
of, and is subordinated in right of payment to, the Notes on terms at
least as favorable to the Holders of Notes as those contained in the
documentation governing the Indebtedness being renewed, refunded,
refinanced, replaced, defeased or discharged.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.
"Preferred Stock" means any Equity Interest with preferential right of
payment of dividends or upon liquidation, dissolution, or winding up.
"Preferred Units" means AREP's 5% Cumulative Pay-in-Kind Redeemable
Preferred Units payable on or before March 31, 2010.
"Preferred Unit Distribution" means the scheduled annual Preferred Unit
distribution, payable on March 31 of each year in additional Preferred Units at
the rate of 5% of the liquidation preference of $10.00 per Preferred Unit.
"Principal" means Xxxx Xxxxx.
"Principal Property" of a specified Person means any property, assets or
revenue of such Person now owned or hereafter acquired.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(1) hereof to be placed on all Notes issued under this Indenture except
where otherwise permitted by the provisions of this Indenture.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Quarterly Determination Date" means, in connection with AREP's first,
second and third fiscal quarters (commencing with the second fiscal quarter of
2004), the earlier of (i) the date AREP would have been required to file a
quarterly report with the SEC on Form 10-Q if AREP were required to file such
reports and (ii) the date AREP files its quarterly report with the SEC on Form
10-Q. In connection with AREP's fourth fiscal quarter, the earlier of (i) the
date AREP would have been required to file an annual report with the SEC on Form
10-K if AREP were required to file such a report and (ii) the date AREP files
its annual report with the SEC on Form 10-K.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of May __, 2004, among the Company, the Guarantor and the other parties
named on the signature pages thereof, as such agreement may be amended, modified
or supplemented from time to time and, with respect to any Additional Notes, one
or more registration rights agreements among the Company, the Guarantor and the
other parties thereto, as such agreement(s) may be amended, modified or
supplemented from time to time, relating to rights given by the Company to the
purchasers of Additional Notes to register such Additional Notes under the
Securities Act.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a Regulation S Temporary Global Note or
Regulation S Permanent Global Note, as appropriate.
13
"Regulation S Permanent Global Note" means a permanent Global Note in the
form of Exhibit A1 hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of and registered in the name
of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Regulation S Temporary Global Note upon
expiration of the Restricted Period.
"Regulation S Temporary Global Note" means a temporary Global Note in the
form of Exhibit A2 hereto deposited with or on behalf of and registered in the
name of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Notes initially sold in reliance on Rule 903
of Regulation S.
"Related Parties" means (1) Xxxx Xxxxx, any spouse and any child,
stepchild, sibling or descendant of Xxxx Xxxxx, (2) any estate of Xxxx Xxxxx or
any person under clause (1), (3) any person who receives a beneficial interest
in any estate under clause (2) to the extent of such interest, (4) any executor,
personal administrator or trustee who holds such beneficial interest in AREP for
the benefit of, or as fiduciary for, any person under clauses (1), (2) or (3) to
the extent of such interest and (5) any corporation, partnership, limited
liability company, trust, or similar entity, directly or indirectly owned or
Controlled by Xxxx Xxxxx or any other person or persons identified in clauses
(1), (2) or (3).
"Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Definitive Note" means a Definitive Note bearing the Private
Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private Placement
Legend.
"Restricted Period" means the 40-day distribution compliance period as
defined in Regulation S.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated under the Securities Act.
"SEC" means the United States Securities and Exchange Commission.
"Secured Indebtedness" of any specified Person means any Indebtedness
secured by a Lien upon the property of such Person.
"Securities Act" means the Securities Act of 1933, as amended.
"Security and Control Agreement" means a security and control agreement
substantially in the form of Exhibit G hereto.
"Shelf Registration Statement" means the Shelf Registration Statement as
defined in the Registration Rights Agreement.
14
"Significant Subsidiary" means any Subsidiary which would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such regulation is in effect on
the Issuance Date.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest, accreted value, or principal
prior to the date originally scheduled for the payment or accretion thereof.
"Subordinated Indebtedness" means any Indebtedness that by its terms is
expressly subordinated in right of payment in any respect (either in the payment
of principal or interest) to the payment of principal, Liquidated Damages or
interest on the Notes.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which
more than 50% of the total Voting Stock is at the time owned or
Controlled, directly or indirectly, by that Person or one or more of the
other Subsidiaries of that Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or
(b) the only general partners of which are that Person or one or more
Subsidiaries of that Person (or any combination thereof).
For the avoidance of doubt, AREH will be deemed to be a Subsidiary of AREP
so long as AREH remains a Guarantor.
"Tangible Net Worth" of any specified Person as of any date means, the
total shareholders' equity (or if such Person were not a corporation, the
equivalent account) of such Person and its Subsidiaries on a consolidated basis
determined in conformity with GAAP less any and all goodwill and other
intangible assets reflected on the consolidated balance sheet of such Person as
of the last day of the fiscal quarter most recently completed before the date of
determination for which financial statements are then available, but taking into
account any change in total shareholders' equity (or the equivalent account) as
a result of any (x) Restricted Payments made, (y) asset sales or (z)
contributions to equity or from the issuance or sale of Equity Interests
(excluding Disqualified Stock) or from the exchange or conversion (other than to
Disqualified Stock) of Disqualified Stock or debt securities, completed since
such fiscal quarter end.
"Tax Amount" means, for any period, the combined federal, state and local
income taxes, including estimated taxes, that would be payable by AREP if it
were a Delaware corporation filing separate tax returns with respect to its
Taxable Income for such period and owned 100% of AREH; provided, that in
determining the Tax Amount, the effect thereon of any net operating loss
carryforwards or other carryforwards or tax attributes, such as alternative
minimum tax carryforwards, that would have arisen if AREP were a Delaware
corporation shall be taken into account; provided, further that (i) if there is
an adjustment in the amount of the Taxable Income for any period, an appropriate
positive or negative adjustment shall be made in the Tax Amount, and if the Tax
Amount is negative, then the Tax Amount for succeeding periods shall be reduced
to take into account such negative amount until such negative amount is reduced
to zero and (ii) any Tax Amount other than amounts relating to estimated taxes
shall be computed by a nationally recognized accounting firm (but, including in
any event, AREP's auditors). Notwithstanding anything to the contrary, the Tax
Amount shall not include taxes resulting from AREP's change in the status to a
corporation for tax purposes.
15
"Taxable Income" means, for any period, the taxable income or loss of AREP
for such period for federal income tax purposes.
"TIA" means the Trust Indenture Act of 1939, as amended (15
U.S.C. Sections 77aaa-77bbbb).
"Total Unencumbered Assets" means, as of any Quarterly Determination Date,
the book value of all of the assets of AREP and any Guarantor (including,
without limitation, the Capital Stock of their Subsidiaries, but excluding
goodwill and intangibles) that do not secure, by a Lien, any portion of any
Indebtedness (other than assets secured by a Lien in favor of the Notes and such
assets are not secured by a Lien in favor of any other Indebtedness) as of such
date (determined on a consolidated basis between AREP and any Guarantor but not
on a consolidated basis with their Subsidiaries and otherwise in accordance with
GAAP).
"Trustee" means Wilmington Trust Company until a successor replaces it in
accordance with the applicable provisions of this Indenture and thereafter means
the successor serving hereunder.
"Unrestricted Definitive Note" means a Definitive Note that does not bear
and is not required to bear the Private Placement Legend.
"Unrestricted Global Note" means a Global Note that does not bear and is
not required to bear the Private Placement Legend.
"Unsecured Indebtedness" of AREP, AREH and any additional Guarantor means
any Indebtedness of such Person that is not Secured Indebtedness.
"U.S. Person" means a U.S. Person as defined in Rule 902(k) promulgated
under the Securities Act.
"Voting Stock" means, with respect to any Person that is (a) a
corporation, any class or series of capital stock of such Person that is
ordinarily entitled to vote in the election of directors thereof at a meeting of
stockholders called for such purpose, without the occurrence of any additional
event or contingency, (b) a limited liability company, membership interests
entitled to manage, or to elect or appoint the Persons that will manage the
operations or business of the limited liability company, or (c) a partnership,
partnership interests entitled to elect or replace the general partner thereof.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness or Disqualified Stock, as the case may be, at any date, the number
of years (calculated to the nearest one-twelfth) obtained by dividing (1) the
sum of the products obtained by multiplying (a) the amount of each then
remaining installment, sinking fund, serial maturity or other required payments
of principal or liquidation preference, including payment at final maturity, in
respect thereof, by (b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such payment,
by (2) the then outstanding principal amount or liquidation preference, as
applicable, of such Indebtedness or Disqualified Stock, as the case may be.
Section 1.02 Other Definitions.
16
Defined in
Term Section
---- -------
"Affiliate Transaction"............................................................. 4.11
"Application Date".................................................................. 3.08
"Authentication Order".............................................................. 2.02
"Calculation Date".................................................................. 1.01
"Change of Control Offer"........................................................... 4.15
"Change of Control Payment"......................................................... 4.15
"Change of Control Payment Date".................................................... 4.15
"Covenant Defeasance"............................................................... 8.03
"DTC"............................................................................... 2.03
"Event of Default".................................................................. 6.01
"incur"............................................................................. 4.09
"Legal Defeasance".................................................................. 8.02
"Paying Agent"...................................................................... 2.03
"Permitted Debt".................................................................... 4.09
"Payment Default" .................................................................. 6.01
"Registrar"......................................................................... 2.03
"Restricted Payments"............................................................... 4.07
Section 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes and the Note Guarantees means the Company and any
Guarantor, respectively, and any successor obligor upon the Notes and the Note
Guarantees, respectively.
Section 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
17
(5) "will" shall be interpreted to express a command;
(6) provisions apply to successive events and transactions; and
(7) references to sections of or rules under the Securities Act will
be deemed to include substitute, replacement of successor sections or
rules adopted by the SEC from time to time.
ARTICLE 2
THE NOTES
Section 2.01 Form and Dating.
(a) General. The Notes and the Trustee's certificate of authentication
will be substantially in the form of Exhibits A1 and A2 hereto. The Notes may
have notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note will be dated the date of its authentication. The Notes shall
be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes will constitute, and are
hereby expressly made, a part of this Indenture and the Company, the Guarantor
and the Trustee, by their execution and delivery of this Indenture, expressly
agree to such terms and provisions and to be bound thereby. However, to the
extent any provision of any Note conflicts with the express provisions of this
Indenture, the provisions of this Indenture shall govern and be controlling.
(b) Global Notes. Notes issued in global form will be substantially in the
form of Exhibits A1 or A2 attached hereto (including the Global Note Legend
thereon and the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Notes issued in definitive form will be substantially in the form of
Exhibit A1 hereto (but without the Global Note Legend thereon and without the
"Schedule of Exchanges of Interests in the Global Note" attached thereto). Each
Global Note will represent such of the outstanding Notes as will be specified
therein and each shall provide that it represents the aggregate principal amount
of outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any increase or
decrease in the aggregate principal amount of outstanding Notes represented
thereby will be made by the Trustee or the Custodian, at the direction of the
Trustee, in accordance with instructions given by the Holder thereof as required
by Section 2.06 hereof.
(c) Temporary Global Notes. Notes offered and sold in reliance on
Regulation S will be issued initially in the form of the Regulation S Temporary
Global Note, which will be deposited on behalf of the purchasers of the Notes
represented thereby with the Trustee, at its New York office, as custodian for
the Depositary, and registered in the name of the Depositary or the nominee of
the Depositary for the accounts of designated agents holding on behalf of
Euroclear or Clearstream, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. The Restricted Period will be terminated upon
the receipt by the Trustee of:
(1) a written certificate from the Depositary, together with copies
of certificates from Euroclear and Clearstream certifying that they have
received certification of non-United States beneficial ownership of 100%
of the aggregate principal amount of the Regulation S Temporary Global
Note (except to the extent of any beneficial owners thereof who acquired
an interest therein during the Restricted Period pursuant to another
exemption from registration under the Securities Act and who will take
delivery of a beneficial ownership interest in a 144A Global
18
Note or an IAI Global Note bearing a Private Placement Legend, all as
contemplated by Section 2.06(b) hereof); and
(2) an Officers' Certificate from the Company.
Following the termination of the Restricted Period, beneficial interests
in the Regulation S Temporary Global Note will be exchanged for beneficial
interests in the Regulation S Permanent Global Note pursuant to the Applicable
Procedures. Simultaneously with the authentication of the Regulation S Permanent
Global Note, the Trustee will cancel the Regulation S Temporary Global Note. The
aggregate principal amount of the Regulation S Temporary Global Note and the
Regulation S Permanent Global Note may from time to time be increased or
decreased by adjustments made on the records of the Trustee and the Depositary
or its nominee, as the case may be, in connection with transfers of interest as
hereinafter provided.
(3) Euroclear and Clearstream Procedures Applicable. The provisions
of the "Operating Procedures of the Euroclear System" and "Terms and
Conditions Governing Use of Euroclear" and the "General Terms and
Conditions of Clearstream Banking" and "Customer Handbook" of Clearstream
will be applicable to transfers of beneficial interests in the Regulation
S Temporary Global Note and the Regulation S Permanent Global Note that
are held by Participants through Euroclear or Clearstream.
Section 2.02 Execution and Authentication.
At least one Officer must sign the Notes for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Note no longer holds that office at
the time a Note is authenticated, the Note will nevertheless be valid.
A Note will not be valid until authenticated by the manual signature of
the Trustee. The signature will be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee will, upon receipt of a written order of the Company signed by
two Officers (an "Authentication Order"), authenticate Notes for original issue
that may be validly issued under this Indenture, including any Additional Notes
up to the aggregate principal amount stated in such Authentication Order. The
aggregate principal amount of Notes outstanding at any time may not exceed the
aggregate principal amount of Notes authorized for issuance by the Company
pursuant to one or more Authentication Orders, except as provided in Section
2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Notes. An authenticating agent may authenticate Notes whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with Holders or an Affiliate of the Company.
Section 2.03 Registrar and Paying Agent.
The Company will maintain an office or agency where Notes may be presented
for registration of transfer or for exchange ("Registrar") and an office or
agency where Notes may be presented for payment ("Paying Agent"). The Registrar
will keep a register of the Notes and of their transfer and exchange. The
Company may appoint one or more co-registrars and one or more additional paying
agents. The term "Registrar" includes any co-registrar and the term "Paying
Agent" includes any additional paying agent. The Company may change any Paying
Agent or Registrar without notice to any Holder. The Company
19
will notify the Trustee in writing of the name and address of any Agent not a
party to this Indenture. If the Company fails to appoint or maintain another
entity as Registrar or Paying Agent, the Trustee shall act as such. The Company
or any of its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to act
as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes.
Section 2.04 Paying Agent to Hold Money in Trust.
The Company will require each Paying Agent other than the Trustee to agree
in writing that the Paying Agent will hold in trust for the benefit of Holders
or the Trustee all money held by the Paying Agent for the payment of principal,
premium or Liquidated Damages, if any, or interest on the Notes, and will notify
the Trustee of any default by the Company in making any such payment. While any
such default continues, the Trustee may require a Paying Agent to pay all money
held by it to the Trustee. The Company at any time may require a Paying Agent to
pay all money held by it to the Trustee. Upon payment over to the Trustee, the
Paying Agent (if other than the Company or a Subsidiary) will have no further
liability for the money. If the Company or a Subsidiary acts as Paying Agent, it
will segregate and hold in a separate trust fund for the benefit of the Holders
all money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee will serve as Paying Agent for
the Notes.
Section 2.05 Holder Lists.
The Trustee will preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company will furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA Section 312(a).
Section 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred except as a whole by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Company for Definitive Notes if:
(1) the Company delivers to the Trustee notice from the Depositary
that it is unwilling or unable to continue to act as Depositary or that it
is no longer a clearing agency registered under the Exchange Act and, in
either case, a successor Depositary is not appointed by the Company within
120 days after the date of such notice from the Depositary;
(2) the Company in its sole discretion determines that the Global
Notes (in whole but not in part) should be exchanged for Definitive Notes
and delivers a written notice to such effect to the Trustee; provided that
in no event shall the Regulation S Temporary Global Note be exchanged by
the Company for Definitive Notes prior to (A) the expiration of the
Restricted
20
Period and (B) the receipt by the Registrar of any certificates required
pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act; or
(3) there has occurred and is continuing a Default or Event of
Default with respect to the Notes.
Upon the occurrence of either of the preceding events in (1) or (2) above,
Definitive Notes shall be issued in such names as the Depositary shall instruct
the Trustee. Global Notes also may be exchanged or replaced, in whole or in
part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and
delivered in exchange for, or in lieu of, a Global Note or any portion thereof,
pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be
authenticated and delivered in the form of, and shall be, a Global Note. A
Global Note may not be exchanged for another Note other than as provided in this
Section 2.06(a), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes. The
transfer and exchange of beneficial interests in the Global Notes will be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes will be subject to restrictions on transfer comparable to those set
forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also will require compliance with
either subparagraph (1) or (2) below, as applicable, as well as one or more of
the other following subparagraphs, as applicable:
(1) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend; provided, however,
that prior to the expiration of the Restricted Period, transfers of
beneficial interests in the Regulation S Temporary Global Note may not be
made to a U.S. Person or for the account or benefit of a U.S. Person
(other than an Initial Purchaser). Beneficial interests in any
Unrestricted Global Note may be transferred to Persons who take delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note. No written orders or instructions shall be required to be delivered
to the Registrar to effect the transfers described in this Section
2.06(b)(1).
(2) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of beneficial
interests that are not subject to Section 2.06(b)(1) above, the transferor
of such beneficial interest must deliver to the Registrar either:
(A) both:
(i) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to credit or
cause to be credited a beneficial interest in another Global
Note in an amount equal to the beneficial interest to be
transferred or exchanged; and
(ii) instructions given in accordance with the
Applicable Procedures containing information regarding the
Participant account to be credited with such increase; or
(B) both:
21
(i) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to cause to be
issued a Definitive Note in an amount equal to the beneficial
interest to be transferred or exchanged; and
(ii) instructions given by the Depositary to the
Registrar containing information regarding the Person in whose
name such Definitive Note shall be registered to effect the
transfer or exchange referred to in (1) above; provided that
in no event shall Definitive Notes be issued upon the transfer
or exchange of beneficial interests in the Regulation S
Temporary Global Note prior to (A) the expiration of the
Restricted Period and (B) the receipt by the Registrar of any
certificates required pursuant to Rule 903 under the
Securities Act. Upon consummation of an Exchange Offer by the
Company in accordance with Section 2.06(f) hereof, the
requirements of this Section 2.06(b)(2) shall be deemed to
have been satisfied upon receipt by the Registrar of the
instructions contained in the Letter of Transmittal delivered
by the Holder of such beneficial interests in the Restricted
Global Notes. Upon satisfaction of all of the requirements for
transfer or exchange of beneficial interests in Global Notes
contained in this Indenture and the Notes or otherwise
applicable under the Securities Act, the Trustee shall adjust
the principal amount of the relevant Global Note(s) pursuant
to Section 2.06(h) hereof.
(3) Transfer of Beneficial Interests to Another Restricted Global
Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(2) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor
must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Temporary Global Note or the
Regulation S Permanent Global Note, then the transferor must deliver
a certificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of a
beneficial interest in the IAI Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item
(3) thereof, if applicable.
(4) Transfer and Exchange of Beneficial Interests in a Restricted
Global Note for Beneficial Interests in an Unrestricted Global Note. A
beneficial interest in any Restricted Global Note may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of Section 2.06(b)(2) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of the beneficial interest to be transferred, in the
case of an exchange, or the transferee, in the case of a
22
transfer, certifies in the applicable Letter of Transmittal that it
is not (i) a Broker-Dealer, (ii) a Person participating in the
distribution of the Exchange Notes or (iii) a Person who is an
affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a beneficial interest in an Unrestricted Global
Note, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(a) thereof;
or
(ii) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note,
a certificate from such holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained
herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D) above
at a time when an Unrestricted Global Note has not yet been issued, the Company
shall issue and, upon receipt of an Authentication Order in accordance with
Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the aggregate principal
amount of beneficial interests transferred pursuant to subparagraph (B) or (D)
above.
Beneficial interests in an Unrestricted Global Note cannot be exchanged
for, or transferred to Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(1) Beneficial Interests in Restricted Global Notes to Restricted
Definitive Notes. If any holder of a beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a Restricted
Definitive Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of a Restricted Definitive Note, then,
upon receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note, a certificate from such holder in the
form of Exhibit C hereto, including the certifications in item
(2)(a) thereof;
23
(B) if such beneficial interest is being transferred to a QIB
in accordance with Rule 144A, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in item (1)
thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule
903 or Rule 904, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant
to an exemption from the registration requirements of the Securities
Act in accordance with Rule 144, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item
(3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption from
the registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a certificate to the
effect set forth in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if
applicable;
(F) if such beneficial interest is being transferred to the
Company or any of its Subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item
(3)(b) thereof; or
(G) if such beneficial interest is being transferred pursuant
to an effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Company shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive Note issued
in exchange for a beneficial interest in a Restricted Global Note pursuant to
this Section 2.06(c)(1) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.
(2) Beneficial Interests in Regulation S Temporary Global Note to
Definitive Notes. Notwithstanding Sections 2.06(c)(1)(A) and (C) hereof, a
beneficial interest in the Regulation S Temporary Global Note may not be
exchanged for a Definitive Note or transferred to a Person who takes
delivery thereof in the form of a Definitive Note prior to (A) the
expiration of the Restricted Period and (B) the receipt by the Registrar
of any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the
Securities Act, except in the case of a transfer pursuant to an exemption
from the registration requirements of the Securities Act other than Rule
903 or Rule 904.
(3) Beneficial Interests in Restricted Global Notes to Unrestricted
Definitive Notes. A holder of a beneficial interest in a Restricted Global
Note may exchange such beneficial interest
24
for an Unrestricted Definitive Note or may transfer such beneficial
interest to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of such beneficial interest, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not (i) a
Broker-Dealer, (ii) a Person participating in the distribution of
the Exchange Notes or (iii) a Person who is an affiliate (as defined
in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for an Unrestricted Definitive Note, a certificate
from such holder in the form of Exhibit C hereto, including
the certifications in item (1)(b) thereof; or
(ii) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the
form of an Unrestricted Definitive Note, a certificate from
such holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained
herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
(4) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any holder of a beneficial interest in
an Unrestricted Global Note proposes to exchange such beneficial interest
for a Definitive Note or to transfer such beneficial interest to a Person
who takes delivery thereof in the form of a Definitive Note, then, upon
satisfaction of the conditions set forth in Section 2.06(b)(2) hereof, the
Trustee will cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Company will execute and the Trustee will authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.06(c)(4) will be registered in such
name or names and in such authorized denomination or denominations as the
holder of such beneficial interest requests through instructions to the
Registrar from or through the Depositary and the Participant or Indirect
Participant. The Trustee will deliver such Definitive Notes to the Persons
in whose names such Notes are so registered. Any Definitive Note issued in
exchange for a beneficial interest pursuant to this Section 2.06(c)(4)
will not bear the Private Placement Legend.
25
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
(1) Restricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a Restricted
Global Note or to transfer such Restricted Definitive Notes to a Person
who takes delivery thereof in the form of a beneficial interest in a
Restricted Global Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the Holder of such Restricted Definitive Note proposes
to exchange such Note for a beneficial interest in a Restricted
Global Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred to
a QIB in accordance with Rule 144A, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (1)
thereof;
(C) if such Restricted Definitive Note is being transferred to
a Non-U.S. Person in an offshore transaction in accordance with Rule
903 or Rule 904, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144, a certificate to the
effect set forth in Exhibit B hereto, including the certifications
in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred to
an Institutional Accredited Investor in reliance on an exemption
from the registration requirements of the Securities Act other than
those listed in subparagraphs (B) through (D) above, a certificate
to the effect set forth in Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item
(3) thereof, if applicable;
(F) if such Restricted Definitive Note is being transferred to
the Company or any of its Subsidiaries, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in item
(3)(b) thereof; or
(G) if such Restricted Definitive Note is being transferred
pursuant to an effective registration statement under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(c) thereof,
the Trustee will cancel the Restricted Definitive Note, increase or
cause to be increased the aggregate principal amount of, in the case
of clause (A) above, the appropriate Restricted Global Note, in the
case of clause (B) above, the 144A Global Note, in the case of
clause (C) above, the Regulation S Global Note, and in all other
cases, the IAI Global Note.
(2) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Restricted Definitive Note to a Person who takes
delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note only if:
26
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (i) a Broker-Dealer, (ii) a Person
participating in the distribution of the Exchange Notes or (iii) a
Person who is an affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Definitive Notes proposes to
exchange such Notes for a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in
the form of Exhibit C hereto, including the certifications in
item (1)(c) thereof; or
(ii) if the Holder of such Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery
thereof in the form of a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in
the form of Exhibit B hereto, including the certifications in
item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained
herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in
this Section 2.06(d)(2), the Trustee will cancel the Definitive Notes and
increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Note.
(3) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Definitive Notes to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note at any time. Upon receipt of a request for such an exchange or
transfer, the Trustee will cancel the applicable Unrestricted Definitive
Note and increase or cause to be increased the aggregate principal amount
of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (2)(B), (2)(D)
or (3) above at a time when an Unrestricted Global Note has not yet been
issued, the Company will issue and, upon receipt of an Authentication
Order in accordance with Section 2.02 hereof, the Trustee will
authenticate one or more Unrestricted Global Notes in an aggregate
principal amount equal to the principal amount of Definitive Notes so
transferred.
27
(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon
request by a Holder of Definitive Notes and such Holder's compliance with the
provisions of this Section 2.06(e), the Registrar will register the transfer or
exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder must present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
must provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(1) Restricted Definitive Notes to Restricted Definitive Notes. Any
Restricted Definitive Note may be transferred to and registered in the
name of Persons who take delivery thereof in the form of a Restricted
Definitive Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A, then
the transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule
904, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2) thereof;
and
(C) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities Act,
then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications, certificates and
Opinion of Counsel required by item (3) thereof, if applicable.
(2) Restricted Definitive Notes to Unrestricted Definitive Notes.
Any Restricted Definitive Note may be exchanged by the Holder thereof for
an Unrestricted Definitive Note or transferred to a Person or Persons who
take delivery thereof in the form of an Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (i) a Broker-Dealer, (ii) a Person
participating in the distribution of the Exchange Notes or (iii) a
Person who is an affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(d) thereof;
or
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(ii) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests, an Opinion of Counsel in form reasonably
acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
(3) Unrestricted Definitive Notes to Unrestricted Definitive Notes.
A Holder of Unrestricted Definitive Notes may transfer such Notes to a
Person who takes delivery thereof in the form of an Unrestricted
Definitive Note. Upon receipt of a request to register such a transfer,
the Registrar shall register the Unrestricted Definitive Notes pursuant to
the instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company will issue and,
upon receipt of an Authentication Order in accordance with Section 2.02 hereof,
the Trustee will authenticate:
(1) one or more Unrestricted Global Notes in an aggregate principal
amount equal to the principal amount of the beneficial interests in the
Restricted Global Notes accepted for exchange in the Exchange Offer by
Persons that certify in the applicable Letters of Transmittal that (A)
they are not Broker-Dealers, (B) they are not participating in a
distribution of the Exchange Notes and (C) they are not affiliates (as
defined in Rule 144) of the Company; and
(2) Unrestricted Definitive Notes in an aggregate principal amount
equal to the principal amount of the Restricted Definitive Notes accepted
for exchange in the Exchange Offer by Persons that certify in the
applicable Letters of Transmittal that (A) they are not Broker-Dealers,
(B) they are not participating in a distribution of the Exchange Notes and
(C) they are not affiliates (as defined in Rule 144) of the Company.
Concurrently with the issuance of such Notes, the Trustee will cause the
aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company will execute and the Trustee will
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Unrestricted Definitive Notes in the appropriate principal
amount.
(g) Legends. The following legends will appear on the face of all Global
Notes and Definitive Notes issued under this Indenture unless specifically
stated otherwise in the applicable provisions of this Indenture.
(1) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each Global
Note and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear the legend in
substantially the following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX XXXXXX
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND THE
29
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF American REal Estate Partners, L.P. AND AMERICAN REAL ESTATE FINANCE
CORP. THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY (1) (a) IN THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (c) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (d) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN
RULE 501 (a) (1), (2), (3) OR (7) OF THE SECURITIES ACT) THAT, PRIOR TO SUCH
TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH CAN BE OBTAINED FROM THE
TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF
NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO AMERICAN REAL
ESTATE PARTNERS, L.P. THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES
ACT OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF
AMERICAN REAL ESTATE PARTNERS, L.P. SO REQUESTS), (2) TO AMERICAN REAL ESTATE
PARTNERS, L.P. OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN
EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE. IF
AT ANY TIME THE NEVADA GAMING COMMISSION OR THE NEW JERSEY CASINO CONTROL
COMMISSION FIND THAT A HOLDER OF THIS SECURITY IS UNSUITABLE TO CONTINUE TO OWN
THE SECURITY, AMERICAN REAL ESTATE PARTNERS, L.P. SHALL HAVE THE RIGHT TO
REQUIRE SUCH HOLDER TO DISPOSE OF SUCH SECURITY AS PROVIDED BY THE GAMING LAWS
OF THE STATE OF NEVADA OR THE STATE OF NEW JERSEY AND THE RESPECTIVE REGULATIONS
PROMULGATED THEREUNDER. ALTERNATIVELY, AMERICAN REAL ESTATE PARTNERS, L.P. SHALL
HAVE THE RIGHT TO REDEEM THE SECURITY FROM THE HOLDER AT A PRICE SPECIFIED IN
THE INDENTURE GOVERNING THE SECURITY. NEVADA AND NEW JERSEY GAMING LAWS AND
REGULATIONS RESTRICT THE RIGHT UNDER CERTAIN CIRCUMSTANCES: (A) TO PAY OR
RECEIVE ANY INTEREST UPON SUCH SECURITY; (B) TO EXERCISE, DIRECTLY OR THROUGH
ANY TRUSTEE OR NOMINEE, ANY VOTING RIGHT CONFERRED BY SUCH SECURITY; OR (C) TO
RECEIVE ANY REMUNERATION IN ANY FORM FROM AMERICAN REAL ESTATE PARTNERS, L.P.,
FOR SERVICES RENDERED OR OTHERWISE."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(4), (c)(3),
(c)(4), (d)(2), (d)(3), (e)(2), (e)(3) or (f) of this Section 2.06
(and all Notes issued in exchange therefor or substitution thereof)
will not bear the Private Placement Legend.
(2) Global Note Legend. Each Global Note will bear a legend in
substantially the following form:
30
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF AMERICAN REAL ESTATE PARTNERS, L.P.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("XXX"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
(3) Regulation S Temporary Global Note Legend. The Regulation S
Temporary Global Note will bear a Legend in substantially the following
form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON."
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note will be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note will be
reduced accordingly and an endorsement will be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note will be increased accordingly and
an endorsement will be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
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(1) To permit registrations of transfers and exchanges, the Company
will execute and the Trustee will authenticate Global Notes and Definitive
Notes upon receipt of an Authentication Order in accordance with Section
2.02 hereof or at the Registrar's request.
(2) No service charge will be made to a Holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.10, 3.06, 4.15 and 9.05 hereof).
(3) The Registrar will not be required to register the transfer of
or exchange of any Note selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed in part.
(4) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
will be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Global
Notes or Definitive Notes surrendered upon such registration of transfer
or exchange.
(5) Neither the Registrar nor the Company will be required:
(A) to issue, to register the transfer of or to exchange any
Notes during a period beginning at the opening of business 15 days
before the day of any selection of Notes for redemption under
Section 3.02 hereof and ending at the close of business on the day
of selection;
(B) to register the transfer of or to exchange any Note
selected for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part; or
(C) to register the transfer of or to exchange a Note between
a record date and the next succeeding interest payment date.
(6) Prior to due presentment for the registration of a transfer of
any Note, the Trustee, any Agent and the Company may deem and treat the
Person in whose name any Note is registered as the absolute owner of such
Note for the purpose of receiving payment of principal of and interest on
such Notes and for all other purposes, and none of the Trustee, any Agent
or the Company shall be affected by notice to the contrary.
(7) The Trustee will authenticate Global Notes and Definitive Notes
in accordance with the provisions of Section 2.02 hereof.
(8) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06 to
effect a registration of transfer or exchange may be submitted by
facsimile.
Section 2.07 Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Company will issue and the Trustee, upon receipt of an
Authentication Order, will authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by
32
the Holder that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any Agent and any authenticating agent from
any loss that any of them may suffer if a Note is replaced. The Company may
charge for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and will
be entitled to all of the benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.
Section 2.08 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation,
those reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions hereof, and those described in this Section 2.08
as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not
cease to be outstanding because the Company or an Affiliate of the Company holds
the Note; however, Notes held by the Company or a Subsidiary of the Company
shall not be deemed to be outstanding for purposes of Sections 3.07(a) or 9.02
hereof.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a protected purchaser.
If the principal amount of any Note is considered paid under Section 4.01
hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) holds, on a redemption date or maturity date, money sufficient
to pay Notes payable on that date, then on and after that date such Notes will
be deemed to be no longer outstanding and will cease to accrue interest.
Section 2.09 Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company or any Guarantor, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any
Guarantor, will be considered as though not outstanding, except that for the
purposes of determining whether the Trustee will be protected in relying on any
such direction, waiver or consent, only Notes that the Trustee knows are so
owned will be so disregarded.
Section 2.10 Temporary Notes.
Until certificates representing Notes are ready for delivery, the Company
may prepare and the Trustee, upon receipt of an Authentication Order, will
authenticate temporary Notes. Temporary Notes will be substantially in the form
of certificated Notes but may have variations that the Company considers
appropriate for temporary Notes and as may be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company will prepare and the Trustee
will authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes will be entitled to all of the benefits of this
Indenture.
Section 2.11 Cancellation.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent will forward to the Trustee any Notes surrendered
to them for registration of transfer,
33
exchange or payment. The Trustee and no one else will cancel all Notes
surrendered for registration of transfer, exchange, payment, replacement or
cancellation and will destroy canceled Notes (subject to the record retention
requirement of the Exchange Act). Certification of the destruction of all
canceled Notes will be delivered to the Company. The Company may not issue new
Notes to replace Notes that it has paid or that have been delivered to the
Trustee for cancellation.
Section 2.12 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it will pay
the defaulted interest in any lawful manner plus, to the extent lawful, interest
payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company will notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company will fix or cause to be fixed each such
special record date and payment date; provided that no such special record date
may be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) will mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional redemption
provisions of Section 3.07 hereof, it must furnish to the Trustee, at least 15
days but not more than 60 days before a redemption date, an Officers'
Certificate setting forth:
(1) the clause of this Indenture pursuant to which the redemption
shall occur;
(2) the redemption date;
(3) the principal amount of Notes to be redeemed; and
(4) the redemption price.
Section 3.02 Selection of Notes to Be Redeemed or Purchased.
If less than all of the Notes are to be redeemed or purchased in an offer
to purchase at any time, the Trustee will select Notes for redemption or
purchase on a pro rata basis except:
(1) if the Notes are listed on any national securities exchange, in
compliance with the requirements of the principal national securities
exchange on which the Notes are listed; or
(2) if otherwise required by law.
In the event of partial redemption or purchase by lot, the particular
Notes to be redeemed or purchased will be selected, unless otherwise provided
herein, not less than 15 nor more than 60 days prior to the redemption or
purchase date by the Trustee from the outstanding Notes not previously called
for redemption or purchase.
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The Trustee will promptly notify the Company in writing of the Notes
selected for redemption or purchase and, in the case of any Note selected for
partial redemption or purchase, the principal amount thereof to be redeemed or
purchased. Notes and portions of Notes selected will be in amounts of $1,000 or
whole multiples of $1,000; except that if all of the Notes of a Holder are to be
redeemed or purchased, the entire outstanding amount of Notes held by such
Holder, even if not a multiple of $1,000, shall be redeemed or purchased. Except
as provided in the preceding sentence, provisions of this Indenture that apply
to Notes called for redemption or purchase also apply to portions of Notes
called for redemption or purchase.
Section 3.03 Notice of Redemption.
The Company will mail or cause to be mailed, at least 15 days but not more
than 60 days before a redemption date, by first class mail, a notice of
redemption to each Holder whose Notes are to be redeemed at its registered
address, except that redemption notices may be mailed more than 60 days prior to
a redemption date if the notice is issued in connection with a defeasance of the
Notes or a satisfaction and discharge of this Indenture pursuant to Articles 8
or 11 hereof.
The notice will identify the Notes to be redeemed and will state:
(1) the redemption date;
(2) the redemption price;
(3) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion will be issued upon
cancellation of the original Note;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(6) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the redemption date;
(7) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(8) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Notes.
At the Company's request, the Trustee will give the notice of redemption
in the Company's name and at its expense; provided, however, that the Company
has delivered to the Trustee, at least 45 days prior to the redemption date, an
Officers' Certificate requesting that the Trustee give such notice and setting
forth the information to be stated in such notice as provided in the preceding
paragraph.
Section 3.04 Effect of Notice of Redemption.
35
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.
Section 3.05 Deposit of Redemption or Purchase Price.
One Business Day prior to the redemption or purchase date, the Company
will deposit with the Trustee or with the Paying Agent money sufficient to pay
the redemption or purchase price of and accrued interest and Liquidated Damages,
if any, on all Notes to be redeemed or purchased on that date. The Trustee or
the Paying Agent will promptly return to the Company any money deposited with
the Trustee or the Paying Agent by the Company in excess of the amounts
necessary to pay the redemption or purchase price of, and accrued interest and
Liquidated Damages, if any, on, all Notes to be redeemed or purchased.
If the Company complies with the provisions of the preceding paragraph, on
and after the redemption or purchase date, interest will cease to accrue on the
Notes or the portions of Notes called for redemption or purchase. If a Note is
redeemed or purchased on or after an interest record date but on or prior to the
related interest payment date, then any accrued and unpaid interest shall be
paid to the Person in whose name such Note was registered at the close of
business on such record date. If any Note called for redemption or purchase is
not so paid upon surrender for redemption or purchase because of the failure of
the Company to comply with the preceding paragraph, interest shall be paid on
the unpaid principal, from the redemption or purchase date until such principal
is paid, and to the extent lawful on any interest not paid on such unpaid
principal, in each case at the rate provided in the Notes and in Section 4.01
hereof.
Section 3.06 Notes Redeemed or Purchased in Part.
Upon surrender of a Note that is redeemed or purchased in part, the
Company will issue and, upon receipt of an Authentication Order, the Trustee
will authenticate for the Holder at the expense of the Company a new Note equal
in principal amount to the unredeemed or unpurchased portion of the Note
surrendered.
Section 3.07 Optional Redemption.
(a) At any time prior to June 1, 2007, the Company may on one or more
occasions redeem up to 35% of the aggregate principal amount of Notes (including
Additional Notes) issued under this Indenture at a redemption price of 108.125%
of the principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, to the redemption date, with the net cash proceeds of one or
more Equity Offerings; provided, however, that:
(1) at least 65% of the aggregate principal amount of Notes issued
under this Indenture remains outstanding immediately after the occurrence
of such redemption (excluding Notes held by AREP and its Subsidiaries
(including any Guarantor)); and
(2) the redemption occurs within 60 days of the date of the closing
of such Equity Offering.
(b) Except pursuant to the preceding paragraph, the Notes will not be
redeemable at the Company's option prior to June 1, 2008.
36
(c) On or after June 1, 2008, the Company may redeem all or a part of the
Notes upon not less than 15 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest and Liquidated Damages, if any, on the Notes
redeemed, to the applicable redemption date, if redeemed during the twelve-month
period beginning on one of the years indicated below:
Year Percentage
---- ----------
2008............................................................................. 104.063%
2009............................................................................. 102.031%
2010 and thereafter.............................................................. 100.000%
Unless the Company defaults in the payment of the redemption price,
interest will cease to accrue on the Notes or portions thereof called for
redemption on the applicable redemption date.
(d) Any redemption pursuant to this Section 3.07 shall be made pursuant to
the provisions of Sections 3.01 through 3.06 hereof.
Section 3.08 Redemption Pursuant to Gaming Laws.
(a) Notwithstanding any other provision of this Article 3, if any Gaming
Authority requires that a Holder or Beneficial Owner of Notes be licensed,
qualified or found suitable under any applicable Gaming Law and such Holder or
Beneficial Owner:
(1) fails to apply for a license, qualification or a finding of
suitability within 30 days (or such shorter period as may be required by
the applicable Gaming Authority) after being requested to do so by the
Gaming Authority; or
(2) is denied such license or qualification or not found suitable;
AREP shall then have the right, at its option:
(1) to require each such Holder or Beneficial Owner to dispose of
its Notes within 30 days (or such earlier date as may be required by the
applicable Gaming Authority) of the occurrence of the event described in
clause (1) or (2) above, or
(2) to redeem the Notes of each such Holder or Beneficial Owner, in
accordance with Rule 14e-1, if applicable, at a redemption price equal to
the lowest of:
(a) the principal amount thereof, together with accrued and
unpaid interest and Liquidated Damages, if any, to the earlier of the date
of redemption, the date 30 days after such Holder or Beneficial Owner is
required to apply for a license, qualification or finding of suitability
(or such shorter period that may be required by any applicable Gaming
Authority) if such Holder or Beneficial Owner fails to do so ("Application
Date") or of the date of denial of license or qualification or of the
finding of unsuitability by such Gaming Authority;
(b) the price at which such Holder or Beneficial Owner
acquired the Notes, together with accrued and unpaid interest and
Liquidated Damages, if any, to the earlier of the date of redemption, the
Application Date or the date of the denial of license or qualification or
of the finding of unsuitability by such Gaming Authority; and
37
(c) such other lesser amount as may be required by any Gaming
Authority.
Immediately upon a determination by a Gaming Authority that a Holder or
Beneficial Owner of the Notes will not be licensed, qualified or found suitable
and must dispose of the Notes, the Holder or Beneficial Owner will, to the
extent required by applicable Gaming Laws, have no further right:
(1) to exercise, directly or indirectly, through any trustee or
nominee or any other person or entity, any right conferred by the Notes,
the Note Guarantee or this Indenture; or
(2) to receive any interest, Liquidated Damages, dividend, economic
interests or any other distributions or payments with respect to the Notes
and the Note Guarantee or any remuneration in any form with respect to the
Notes and the Note Guarantee from the Company, any Note Guarantor or the
Trustee, except the redemption price referred to above.
(b) AREP shall notify the Trustee in writing of any such redemption as
soon as practicable. Any Holder or Beneficial Owner that is required to apply
for a license, qualification or a finding of suitability will be responsible for
all fees and costs of applying for and obtaining the license, qualification or
finding of suitability and of any investigation by the applicable Gaming
Authorities and the Company and any Note Guarantor will not reimburse any Holder
or Beneficial Owner for such expense.
(c) In connection with any redemption pursuant to this Section 3.08, and
except as may be required by a Gaming Authority, the Company shall be required
to comply with Sections 3.01 through 3.06 hereof.
Section 3.09 Mandatory Redemption.
The Company is not required to make mandatory redemption or sinking fund
payments with respect to the Notes.
ARTICLE 4
COVENANTS
Section 4.01 Payment of Notes.
The Company shall pay or cause to be paid the principal of, premium, if
any, and interest and Liquidated Damages, if any, on, the Notes on the dates and
in the manner provided in the Notes. Principal, premium, if any, and interest
and Liquidated Damages, if any will be considered paid on the date due if the
Paying Agent, if other than the Company or a Subsidiary thereof, holds as of
10:00 a.m. Eastern Time on the due date money deposited by the Company in
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest then due. The Company shall pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful.
Section 4.02 Maintenance of Office or Agency.
38
The Company shall maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
fails to maintain any such required office or agency or fails to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, however,
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough of Manhattan,
the City of New York for such purposes. The Company shall give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee as
one such office or agency of the Company in accordance with Section 2.03 hereof.
Section 4.03 Reports.
Whether or not required by the rules and regulations of the SEC, so long
as any Notes are outstanding, the Company shall furnish to the Holders of Notes
or cause the Trustee to furnish to the Holders of Notes, within the time periods
specified in the SEC's rules and regulations:
(1) all quarterly and annual reports that would be required to be
filed with the SEC on Forms 10-Q and 10-K if the Company were required to
file such reports; and
(2) all current reports that would be required to be filed with the
SEC on Form 8-K if the Company were required to file such reports.
All such reports shall be prepared in all material respects in accordance
with all of the rules and regulations applicable to such reports. Each annual
report on Form 10-K shall include a report on the Company's consolidated
financial statements by the Company's certified independent accountants. In
addition, the Company shall file a copy of each of the reports referred to in
clauses (1) and (2) above with the SEC for public availability within the time
periods specified in the rules and regulations applicable to such reports
(unless the SEC will not accept such a filing) and, if the SEC will not accept
such a filing, shall post the reports on its website within those time periods.
If, at any time, the Company is no longer subject to the periodic
reporting requirements of the Exchange Act for any reason, the Company shall
nevertheless continue filing the reports specified in the preceding paragraphs
of this Section 4.03 with the SEC within the time periods specified above unless
the SEC will not accept such a filing. The Company shall not take any action for
the purpose of causing the SEC not to accept any such filings. If,
notwithstanding the foregoing, the SEC will not accept the Company's filings for
any reason, the Company shall post the reports referred to in the preceding
paragraphs on its website within the time periods that would apply if the
Company were required to file those reports with the SEC.
In addition, the Company agrees that, for so long as any Notes remain
outstanding, if at any time it is not required to file with the SEC the reports
required by the preceding paragraphs, it shall furnish to
39
the Holders of Notes and to securities analysts and prospective investors, upon
their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.
Section 4.04 Compliance Certificate.
(a) The Company and each Guarantor (to the extent that such Guarantor is
so required under the TIA) shall deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officers' Certificate stating that a review of
the activities of the Company and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default has occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action the Company is taking or
proposes to take with respect thereto) and that to the best of his or her
knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03 above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) So long as any of the Notes are outstanding, the Company shall deliver
to the Trustee, forthwith upon any Officer becoming aware of any Default or
Event of Default, an Officers' Certificate specifying such Default or Event of
Default and what action the Company is taking or proposes to take with respect
thereto.
Section 4.05 Taxes.
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.
Section 4.06 Stay, Extension and Usury Laws.
The Company and each of the Guarantors covenants (to the extent that it
may lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each of the Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not, by resort to any such law, hinder, delay or impede the
40
execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law has been enacted.
Section 4.07 Restricted Payments.
AREP shall not, and shall not permit any of its Subsidiaries (including
any Guarantor) to:
(1) declare or pay any dividend or make any other distribution on
account of AREP's or any of its Subsidiaries' (including any Guarantor's)
Equity Interests or to the Holders of AREP's or any of its Subsidiaries'
(including AREH's) Equity Interests in their capacity as such (other than
dividends or distributions payable in Equity Interests (other than
Disqualified Stock) of AREP or to AREP or a Subsidiary of AREP (including
AREH));
(2) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation involving AREP) any Equity Interests of AREP; or
(3) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness of AREP
or any Guarantor that is contractually subordinated to the Notes or to any
Note Guarantee (excluding any intercompany Indebtedness between or among
AREP and any of its Subsidiaries (including any Guarantor)), except a
payment of interest, Other Liquidated Damages or principal at the Stated
Maturity on such subordinated Indebtedness (all such payments and other
actions set forth in these clauses (1) through (3) (except as excluded
therein) above being collectively referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted
Payment:
(1) no Default or Event of Default has occurred and is continuing or
would occur as a consequence of such Restricted Payment;
(2) AREP or any Guarantor would, at the time of such Restricted
Payment and after giving pro forma effect thereto as if such Restricted
Payment had been made at the beginning of the most recently ended
four-quarter period for which financial statements are available, have
been permitted to incur at least $1.00 of additional Indebtedness pursuant
to Section 4.09(a); and
(3) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments made by AREP and its Subsidiaries (including
any Guarantor) after the Issuance Date (excluding Restricted Payments
permitted by clauses (2), (3), (4), (6) and (8) of the second paragraph of
Section 4.07) is less than the sum, without duplication, of.
(A) 50% of the Consolidated Net Income of AREP for the period
(taken as one accounting period) from July 1, 2006 to the end of
AREP's most recently ended fiscal quarter for which financial
statements are available at the time of such Restricted Payment (or,
if such Consolidated Net Income for such period is a deficit, less
100% of such deficit); provided, however, that to the extent any
payments of Tax Amounts were not deducted in the calculation of
Consolidated Net Income during the applicable period, for purposes
of this clause (a), such payments of Tax Amounts shall be deducted
from Consolidated Net Income, plus
41
(B) 100% of the aggregate net cash proceeds received by AREP
since the date of this Indenture as a contribution to its equity
capital or from the issue or sale of Equity Interests of AREP
(excluding Disqualified Stock) or from the issue or sale of
convertible or exchangeable Disqualified Stock or convertible or
exchangeable debt securities of AREP that have been converted into
or exchanged for such Equity Interests (other than Equity Interests
or Disqualified Stock or debt securities sold to a Subsidiary of
AREP (including AREH)).
So long as no Default or Event of Default has occurred and is continuing
or would be caused thereby (except with respect to clauses (6) and (8), which
payments shall be permitted notwithstanding a Default or Event of Default), the
preceding provisions shall not prohibit:
(1) the payment of any dividend or the consummation of any
irrevocable redemption or payment within 60 days after the date of
declaration of the dividend or giving of the redemption notice or becoming
irrevocably obligated to make such payment, as the case may be, if at the
date of declaration or notice or becoming irrevocably obligated to make
such payment, the dividend or payment would have complied with the
provisions of this Indenture;
(2) the making of any Restricted Payment in exchange for, or out of
the net cash proceeds of the substantially concurrent sale (other than to
a Subsidiary of AREP (including any Guarantor)) of, Equity Interests
(other than Disqualified Stock) or from the substantially concurrent
contribution of equity capital to AREP (including any contribution of
equity capital by or to, or sale of Equity Interests of a successor or
substitute entity pursuant to Section 5.01); provided, however, that the
amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement, defeasance or other acquisition shall
be excluded from clause (3)(B) of the preceding paragraph;
(3) the repurchase, redemption, defeasance or other acquisition or
retirement for value of Indebtedness of AREP or any Guarantor that is
contractually subordinated to the Notes with the net cash proceeds from a
substantially concurrent incurrence of Permitted Refinancing Indebtedness;
(4) the declaration or payment of any dividend or distribution by a
Subsidiary of AREP (including any Guarantor) to the holders of its Equity
Interests; provided, that if any such dividend or distribution is paid to
an Affiliate of the Principal (other than AREP or any of its Subsidiaries
(including any Guarantor)), that any such dividend or distribution is paid
on a pro rata basis to all Holders (including AREP or any of its
Subsidiaries (including any Guarantor)) that hold securities whose terms
(either contractually or by law) entitle them to the same distribution
upon which such dividend or distribution is paid;
(5) the repurchase, redemption or other acquisition or retirement
for value of any Equity Interests of AREP or any Subsidiary of AREP
(including any Guarantor) held by any member of AREP's (or any of its
Subsidiaries' (including any Guarantors)) management pursuant to any
management equity subscription agreement, stock option agreement or
similar agreement; provided that the aggregate price paid for all such
repurchased, redeemed, acquired or retired Equity Interests shall not
exceed $2.0 million;
(6) for so long as AREP is a partnership or otherwise a pass-through
entity for federal income tax purposes for any period, AREP may make cash
distributions to its equity holders or partners in an amount not to exceed
the Tax Amount for such period; provided that a distribution of the Tax
Amount shall be made no earlier than 20 days prior to the due date for
such tax (or the
42
date that quarterly estimated taxes are required to be paid) that would be
payable by AREP if it were a Delaware corporation;
(7) the purchase, redemption or retirement for value of Capital
Stock of AREP not owned by the Principal or any Affiliate of the
Principal, provided that (a) AREP would, at the time of such Restricted
Payment and after giving pro forma effect thereto as if such Restricted
Payment had been made at the beginning of the most recently ended
four-quarter period for which financial statements are available, have
been permitted to incur at least $1.00 of additional Indebtedness pursuant
to Section 4.09(a) hereof and (b) after giving effect to such purchase,
redemption or retirement, the Partners' Equity is at least $1.0 billion;
(8) the payment of dividends on the Preferred Units in the form of
additional Preferred Units or other Capital Stock of AREP (that is not
Disqualified Stock) or the payment of cash dividends on the Preferred
Units in lieu of fractional Preferred Units; provided that the aggregate
amount of cash under this clause (8) does not exceed $100,000 in any
calendar year;
(9) the purchase, redemption or retirement for value of the
Preferred Units on or before March 31, 2010, provided that (a) AREP would,
at the time of such Restricted Payment and after giving pro forma effect
thereto as if such Restricted Payment had been made at the beginning of
the most recently ended four-quarter period for which financial statements
are available, have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to the first paragraph of Section 4.09 and (b) after
giving effect to such purchase, redemption or retirement, the Partners'
Equity is at least $1.0 billion; and
(10) other Restricted Payments in an aggregate amount not to exceed
$50.0 million since the date of this Indenture.
For purposes of determining compliance with this Section 4.07, in the
event that a proposed Restricted Payment meets the criteria of more than one of
the categories of Restricted Payments described in clauses (1) through (10) of
the immediately preceding paragraph, or is permitted to be made pursuant to the
first paragraph of this Section 4.07, AREP shall, in its sole discretion,
classify (or later reclassify, in whole or in part, in its sole discretion) such
Restricted Payment in any manner that complies with this Section 4.07.
The amount of all Restricted Payments (other than cash) shall be the Fair
Market Value on the date of the Restricted Payment of the assets, property or
securities proposed to be transferred or issued by AREP or such Subsidiary
(including AREH), as the case may be, pursuant to the Restricted Payment.
Section 4.08 [Intentionally Omitted]
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock.
(a) Neither AREP nor any Guarantor shall create, incur, issue, assume,
guarantee or otherwise become liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including Acquired Debt), and neither
AREP nor any Guarantor shall issue any Disqualified Stock; provided, however,
that AREP or any Guarantor may incur Indebtedness (including Acquired Debt) or
issue Disqualified Stock, if immediately after giving effect to the incurrence
of additional Indebtedness (including Acquired Debt) or issuance of Disqualified
Stock (including a pro forma application of the net proceeds therefrom), the
ratio of the aggregate principal amount of all outstanding Indebtedness
(excluding Indebtedness incurred pursuant to clauses (4), (7) and (8) of Section
4.09(b) and any Hedging Obligations of AREP's Subsidiaries that are not
Guarantors) of AREP and its Subsidiaries (including any
43
Guarantor) on a consolidated basis determined in accordance with GAAP (including
an amount of Indebtedness equal to the principal amount of any Guarantees by
AREP or its Subsidiaries (including any Guarantor) of any Indebtedness of a
Person (that is not AREP or a Subsidiary) to the extent such Guarantees were not
included in computing AREP's or its Subsidiaries' (including any Guarantor's)
outstanding Indebtedness) to the Tangible Net Worth of AREP and its Subsidiaries
(including any Guarantor) on a consolidated basis, would have been less than
1.75 to 1.
(b) The provisions of Section 4.09(a) shall not prohibit the incurrence of
any of the following items of Indebtedness (collectively, "Permitted Debt"):
(1) the incurrence by AREP or any Guarantor of Indebtedness
represented by the Notes to be issued on the date of this Indenture and
the Exchange Notes to be issued pursuant to the Registration Rights
Agreement;
(2) the incurrence by AREP or any Guarantor of Permitted Refinancing
Indebtedness in exchange for, or the net proceeds of which are used to
refund, refinance or replace Indebtedness (other than intercompany
Indebtedness) that was incurred under Section 4.09(a) or clauses (1), (2)
or (9) of this Section 4.09(b) or any Existing Indebtedness;
(3) the incurrence by AREP or any Guarantor of intercompany
Indebtedness between or among AREP and any of its Subsidiaries (including
AREH) or the issuance of Disqualified Stock by any Guarantor to AREP;
(4) the incurrence by AREP or any Guarantor of Hedging Obligations
that are incurred in the normal course of business;
(5) the incurrence by AREP or any Guarantor of Indebtedness arising
from the honoring by a bank or other financial institution of a check,
draft or similar instrument inadvertently drawn against insufficient
funds, so long as such Indebtedness is covered within five Business Days;
(6) the incurrence by AREP or any Guarantor of the Existing
Indebtedness;
(7) Indebtedness arising from any agreement entered into by AREP or
AREH providing for indemnification, purchase price adjustment or similar
obligations, in each case, incurred or assumed in connection with an asset
sale;
(8) Indebtedness of AREP or any Guarantor attributable to Bad Boy
Guarantees; and
(9) the incurrence by AREP or any Guarantor of additional
Indebtedness in an aggregate principal amount at any time outstanding,
including all Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any Indebtedness incurred pursuant to this clause
(9), not to exceed $10.0 million at any one time outstanding.
Neither AREP nor any Guarantor shall incur any Indebtedness (including
Permitted Debt) that is contractually subordinated in right of payment to any
other Indebtedness of AREP or any Guarantor unless such Indebtedness is also
contractually subordinated in right of payment to the Notes and the Note
Guarantee, as applicable, on substantially identical terms; provided, however,
that no Indebtedness of AREP or any Guarantor shall be deemed to be
contractually subordinated in right of payment to any other Indebtedness of AREP
or any Guarantor for purposes of this paragraph solely by virtue of being
unsecured or secured to a lesser extent or on a junior Lien basis.
44
To the extent AREP or any Guarantor incurs any intercompany Indebtedness,
(a) if AREP or any Guarantor is the obligor on such Indebtedness, such
Indebtedness (other than intercompany Indebtedness of any Guarantor to or from
AREP or another Guarantor) must be expressly subordinated to the prior payment
in full in cash of all Obligations with respect to the Notes and (b)(i) any
subsequent issuance or transfer of Equity Interests that results in any such
Indebtedness being held by a Person other than AREP or a Subsidiary of AREP
(including any Guarantor) and (ii) any sale or other transfer of any such
Indebtedness to a Person that is not either AREP or a Subsidiary of AREP
(including any Guarantor) shall be deemed, in each case, to constitute an
incurrence of such Indebtedness by AREP or any Guarantor, that is not
intercompany Indebtedness; provided that in the case of clause (a), that no
restriction on the payment of principal, interest or other obligations in
connection with such intercompany Indebtedness shall be required by such
subordinated terms except during the occurrence and continuation of a Default or
Event of Default.
For purposes of determining compliance with Section 4.09, in the event
that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (1) through (9) above or is
entitled to be incurred pursuant to Section 4.09(a), in each case, as of the
date of incurrence thereof, AREP shall, in its sole discretion, classify (or
later reclassify in whole or in part, in its sole discretion) such item of
Indebtedness in any manner that complies with this Section 4.09 and such
Indebtedness shall be treated as having been incurred pursuant to such clauses
or Section 4.09(a), as the case may be, designated by AREP.
The accrual of interest, the accretion or amortization of original issue
discount, the payment of interest or Other Liquidated Damages on any
Indebtedness in the form of additional Indebtedness with the same terms, the
reclassification of preferred stock as Indebtedness due to a change in
accounting principles, and the payment of dividends on Disqualified Stock in the
form of additional shares of the same class of Disqualified Stock shall not be
deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock
for purposes of this Section 4.09. Notwithstanding any other provision of
Section 4.09, the maximum amount of Indebtedness that AREP or any Guarantor may
incur pursuant to Section 4.09 shall not be deemed to be exceeded solely as a
result of fluctuations in exchange rates or currency values.
The amount of any Indebtedness outstanding as of any date shall be:
(1) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any
other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien
on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such assets at the date of
determination; and
(B) the amount of the Indebtedness of the other Person.
Section 4.10 [Intentionally Omitted]
Section 4.11 Transactions with Affiliates.
(a) AREP shall not, and shall not permit any of its Subsidiaries
(including any Guarantor) to, make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or
45
purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, any Affiliate of AREP (each, an "Affiliate Transaction"), unless:
(1) the Affiliate Transaction is on terms that are not materially
less favorable to AREP or the relevant Subsidiary (including any
Guarantor) than those that would have been obtained in a comparable
transaction by AREP or such Subsidiary (including any Guarantor) with an
unrelated Person as determined in good faith by the Board of Directors of
AREP; and
(2) AREP delivers to the Trustee:
(a) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in excess
of $2.0 million, a resolution of the Board of Directors of AREP set forth
in an Officers' Certificate certifying that such Affiliate Transaction
complies with this Section 4.11 and that such Affiliate Transaction has
been approved by a majority of the disinterested members of the Board of
Directors of AREP; and
(b) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in excess
of $10.0 million, an opinion as to the fairness to AREP or such Subsidiary
(including any Guarantor) of such Affiliate Transaction from a financial
point of view issued by an accounting, appraisal or investment banking
firm of recognized standing.
(b) The following items shall not be deemed to be Affiliate Transactions
and, therefore, shall not be subject to the provisions of Section 4.11(a):
(1) any employment agreement, employee benefit plan, officer or
director indemnification agreement or any similar arrangement entered into
by AREP or any of its Subsidiaries (including any Guarantor) in the
ordinary course of business and payments pursuant thereto including
payments or reimbursement of payments by API with respect to any such
agreement, plan or arrangement entered into by API with respect to or for
the benefit of officers or directors of API (other than any such
agreements, plans or arrangements entered into by AREP or any of its
Subsidiaries (including AREH) with Xxxx Xxxxx (other than employee benefit
plans and officer or director indemnification agreements generally
applicable to officers and directors of API, AREP or its Subsidiaries
(including AREH)));
(2) transactions between or among AREP, any Guarantor and/or their
respective Subsidiaries (except any Subsidiaries of which Xxxx Xxxxx or
Affiliates of Xxxx Xxxxx (other then AREP, AREH or their Subsidiaries) own
more than 10% of the Voting Stock);
(3) payment (or reimbursement of payments by API) of directors' fees
to Persons who are not otherwise Affiliates of AREP;
(4) any issuance of Equity Interests (other than Disqualified Stock)
and Preferred Unit Distributions of AREP to Affiliates of AREP;
(5) Restricted Payments that do not violate Section 4.07 hereof;
(6) the acquisition of the membership interests of Charlie's Holding
LLC pursuant to the membership interest purchase agreement, dated as of
January 5, 2004, by and among American
46
Casino and Entertainment Properties LLC, Starfire Holding Corporation and
Xxxx Xxxxx, as amended, and the other transactions contemplated thereby;
(7) transactions between AREP and/or any of its Subsidiaries
(including any Guarantor), on the one hand, and other Affiliates, on the
other hand, for the provision of goods or services in the ordinary course
of business by such other Affiliates; provided that such other Affiliate
is in the business of providing such goods or services in the ordinary
course of business to unaffiliated third parties and the terms and pricing
for such goods and services overall are not less favorable to AREP and/or
its Subsidiaries (including AREH) than the terms and pricing upon which
such goods and services are provided to unaffiliated third parties;
(8) the provision or receipt of accounting, financial, management,
information technology and other ancillary services to or from Affiliates,
provided that AREP or its Subsidiaries (including any Guarantor) in the
case of the provision of such services, are paid a fee not less than its
out of pocket costs and allocated overhead (including a portion of
salaries and benefits) and in the case of the receipt of such services,
paid a fee not more than such Person's out-of-pocket costs and allocated
overhead (including a portion of salaries and benefits), in each case, as
determined by AREP in its reasonable judgment;
(9) the license of a portion of office space pursuant to a license
agreement, dated as of February 1, 1997, between AREP and an Affiliate of
API and any renewal thereof;
(10) the payment to API and reimbursements of payments made by API
of expenses relating to AREP's, AREH's or any Guarantors' status as a
public company;
(11) services provided and payments received by NEG from NEG
Operating LLC and TransTexas Gas Corporation pursuant to the NEG
Management Agreements;
(12) the pledge by NEG of its interest in the Capital Stock of NEG
Holding LLC pursuant to the NEG Credit Agreement;
(13) the exchange by AREH of its GB Securities for other securities
of GB Holdings, Inc.; provided that such exchange is on terms no less
favorable to AREH as the exchange of GB Securities offered to other
non-Affiliated Persons; and
(14) payments by AREH, AREP or any Subsidiary to API in connection
with services provided to AREH, AREP or any Subsidiary in accordance with
the AREP Partnership Agreement.
Section 4.12 Liens.
Neither AREP nor any Guarantor shall, (a) issue, assume or guarantee any
Indebtedness if such Indebtedness is secured by a Lien upon, or (b) secure any
then outstanding Indebtedness by granting a Lien upon, any Principal Property of
AREP or any Guarantor, now owned or hereafter acquired by AREP or any Guarantor,
without effectively providing that the Notes and the Note Guarantee shall be
secured equally and ratably with such Indebtedness, except that the foregoing
restrictions shall not apply to:
(1) Liens on any Principal Property acquired after the Issuance Date
to secure or provide for the payment of the purchase price or acquisition
cost thereof,
47
(2) Liens on Principal Property acquired after the Issuance Date
existing at the time such Principal Property is acquired;
(3) Liens on any Principal Property acquired from a corporation
merged with or into AREP or any Guarantor;
(4) Liens in favor of AREP or any Guarantor;
(5) Liens in existence on any Principal Property on the Issuance
Date;
(6) Liens on any Principal Property constituting unimproved real
property constructed or improved after the Issuance Date to secure or
provide for the payment or cost of such construction or improvement;
(7) Liens in favor of, or required by, governmental authorities;
(8) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insure carriers under insurance arrangements;
(9) Liens for taxes, assessments or governmental charges or
statutory liens of landlords, carriers, warehousemen, mechanics,
suppliers, materialmen, repairmen or other similar Liens arising in the
ordinary course of business or in the improvement or repair of any
Principal Property not yet due or which are being contested in good faith
by appropriate proceedings;
(10) any judgment attachment or judgment Lien not constituting an
Event of Default;
(11) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a like
nature incurred in the ordinary course of business and in the improvement
or repair of any Principal Property and which obligations are not
expressly prohibited by this Indenture;
(12) Liens to secure Indebtedness of AREP or any Guarantor
attributable to Bad Boy Guarantees;
(13) Liens in favor of the Trustee and required by Section 4.16;
(14) Liens to secure margin Indebtedness; provided that such Liens
are secured solely by the applicable margin securities; or
(15) any extension, renewal, substitution or replacement (or
successive extensions, renewals, substitutions or replacements), in whole
or in part, of any Lien referred to in the foregoing clauses (1) through
(14), inclusive;
provided that in the case of clauses (1), (2) and (3) such Liens shall
only extend to the Principal Property so acquired (including through any merger
or consolidation) and not to any other Principal Property of AREP or any
Guarantor.
Section 4.13 [Intentionally Omitted]
Section 4.14 Corporate Existence.
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Subject to Article 5 hereof, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect:
(1) its partnership or corporate or limited liability company
existence, in accordance with the respective organizational documents (as
the same may be amended from time to time) of the Company; and
(2) the rights (charter and statutory), licenses and franchises of
the Company.
Section 4.15 Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, the Company shall make an
offer (a "Change of Control Offer") to each Holder to repurchase all or any part
(equal to $1,000 or an integral multiple of $1,000) of that Holder's Notes at a
purchase price in cash equal to 101% of the aggregate principal amount of Notes
repurchased plus accrued and unpaid interest and Liquidated Damages, if any, on
the Notes repurchased to the date of purchase, subject to the rights of Holders
on the relevant record date to receive interest due on the relevant interest
payment date (the "Change of Control Payment"). Within thirty days following any
Change of Control, the Company shall mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and stating:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.15 and that all Notes tendered shall be accepted for payment;
(2) the purchase price and the purchase date, which shall be no
earlier than 30 days and no later than 60 days from the date such notice
is mailed (the "Change of Control Payment Date");
(3) that any Note not tendered shall continue to accrue interest;
(4) that, unless the Company defaults in the payment of the Change
of Control Payment, all Notes accepted for payment pursuant to the Change
of Control Offer shall cease to accrue interest after the Change of
Control Payment Date;
(5) that Holders electing to have any Notes purchased pursuant to a
Change of Control Offer shall be required to surrender the Notes, with the
form entitled "Option of Holder to Elect Purchase" attached to the Notes
completed, or transfer by book-entry transfer, to the Paying Agent at the
address specified in the notice prior to the close of business on the
third Business Day preceding the Change of Control Payment Date;
(6) that Holders shall be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on the second
Business Day preceding the Change of Control Payment Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of Notes delivered for purchase, and a
statement that such Holder is withdrawing his election to have the Notes
purchased; and
(7) that Holders whose Notes are being purchased only in part shall
be issued new Notes equal in principal amount to the unpurchased portion
of the Notes surrendered, which unpurchased portion must be equal to
$1,000 in principal amount or an integral multiple thereof.
The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in
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connection with the repurchase of the Notes as a result of a Change in Control.
To the extent that the provisions of any securities laws or regulations conflict
with the provisions of this Section 4.15, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section 4.15 by virtue of such compliance.
(b) On the Change of Control Payment Date, the Company shall, to the
extent lawful:
(1) accept for payment all Notes or portions of Notes properly
tendered and not withdrawn pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the Change of
Control Payment in respect of all Notes or portions of Notes properly
tendered; and
(3) deliver or cause to be delivered to the Trustee the Notes
properly accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions of Notes being purchased
by the Company.
The Paying Agent shall promptly mail (but in any case not later than five
days after the Change of Control Payment Date) to each Holder of Notes properly
tendered the Change of Control Payment for such Notes, and the Trustee shall
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided that any new Note shall be in a
principal amount of $1000 or an integral multiple of $1,000. The Company shall
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
(c) Notwithstanding anything to the contrary in this Section 4.15, the
Company shall not be required to make a Change of Control Offer upon a Change of
Control if (1) a third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements set forth in this
Section 4.15 and purchases all Notes properly tendered and not withdrawn under
the Change of Control Offer, or (2) notice of redemption has been given pursuant
to Section 3.07 hereof, unless and until there is a default in payment of the
applicable redemption price.
Section 4.16 Maintenance of Interest Coverage.
On each Quarterly Determination Date, the Fixed Charge Coverage Ratio of
AREP and the Guarantors shall be at least 1.5 to 1.0 for the four consecutive
fiscal quarters most recently completed prior to such Quarterly Determination
Date; provided that, in the event that the Fixed Charge Coverage Ratio of AREP
and the Guarantors is less than 1.5 to 1.0 for such four consecutive fiscal
quarters, the Company shall be deemed to have satisfied this maintenance test if
there is deposited, within 2 Business Days of such Quarterly Determination Date,
an amount in cash such that the deposited funds, together with any funds
previously deposited pursuant to this Section 4.16 (and that have not been paid
out or otherwise released) are in an amount equal to the Company's obligations
to pay interest on the Notes for one year; provided further, that the Company
shall grant to the Trustee, on behalf of the Holders of the Notes, a first
priority security interest in such deposited funds by executing and delivering a
Security and Control Agreement and by delivering to the Trustee an Opinion of
Counsel to the effect that the Security and Control Agreement (i) has been duly
authorized, executed and delivered and is the legal, valid and binding
obligation of the Company, enforceable against the Company, (ii) creates a valid
security interest in the Pledged Account and Collateral (each as defined in the
Security and Control Agreement) in favor of the Trustee on behalf of the Holders
and (iii) upon compliance with the terms thereof, the security interest in the
Pledged Account and Collateral in favor of the Trustee on behalf of the Holders
is perfected. At any subsequent Quarterly Determination Date, if the Fixed
Charge Coverage Ratio of
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AREP and the Guarantors is at least 1.5 to 1.0 for the four consecutive fiscal
quarters most recently completed prior to such Quarterly Determination Date,
such deposited funds shall be released from the security interest granted to the
Trustee and paid to or at the direction of AREP.
Section 4.17 Maintenance of Total Unencumbered Assets
On each Quarterly Determination Date, the ratio of Total Unencumbered
Assets to the then outstanding principal amount of the Unsecured Indebtedness
shall be greater than 1.5 to 1.0 as of the last day of the fiscal quarter most
recently completed.
Section 4.18 Compliance with Law
AREP shall, and shall cause its Subsidiaries (including any Guarantor) to,
comply in all material respects with all applicable laws, rules and regulations.
Section 4.19 No Investment Company
Neither AREP nor any Guarantor shall register as an "investment company"
as such term is defined in the Investment Company Act of 1940, as amended.
ARTICLE 5
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets.
(a) AREP will not: (1) consolidate or merge with or into another Person
(whether or not AREP, is the surviving entity) or (2) sell, assign, transfer,
convey or otherwise dispose of all or substantially all of the properties or
assets of AREP in one or more related transactions, to another Person; unless:
(1) either:
(A) AREP is the surviving entity, or
(B) the Person formed by or surviving any such consolidation
or merger (if other than AREP) or to which such sale, assignment,
transfer, conveyance or other disposition has been made is a
corporation, limited liability company or limited partnership entity
organized or existing under the laws of the United States, any state
of the United States or the District of Columbia;
(2) the Person formed by or surviving any such consolidation or
merger (if other than AREP) or the Person to which such sale, assignment,
transfer, conveyance or other disposition has been made assumes all the
obligations of AREP under the Notes, this Indenture and the Registration
Rights Agreement and upon such assumption such Person will become the
successor to, and be substituted for, AREP hereunder and thereunder and
all references to AREP in each thereof shall then become references to
such Person and such Person shall thereafter be able to exercise every
right and power of AREP hereunder and thereunder;
(3) immediately after such transaction no Default or Event of
Default exists;
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(4) AREP or the Person formed by or surviving any such consolidation
or merger (if other than AREP), or to which such sale, assignment,
transfer, conveyance or other disposition has been made would, on the date
of such transaction after giving pro forma effect thereto and any related
financing transactions as if the same had occurred at the last day of the
immediately preceding quarter, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to Section 4.09(a); and
(5) AREP has delivered to the Trustee an Officers' Certificate and
Opinion of Counsel, which may be an opinion of in-house counsel of AREP or
an Affiliate, each stating that such transaction complies with the terms
of this Indenture.
Clauses (1), (2) or (4) above will not apply to, or be required to be
complied with in connection with, any merger or consolidation or the sale,
assignment, transfer, conveyance or other disposition of all or substantially
all of AREP's properties or assets to:
(1) an Affiliate that has no material assets or liabilities where
the primary purpose of such transaction is to change AREP into a
corporation or other form of business entity or to change the jurisdiction
of formation of AREP and such transaction does not cause the realization
of any material federal or state tax liability that will be paid by AREP
or any of its Subsidiaries (including AREH). For purposes of this
paragraph (1), the term material refers to any assets, liabilities or tax
liabilities that are greater than 5.0% of the Tangible Net Worth of AREP
and its Subsidiaries (including AREH) on a consolidated basis; or
(2) any Person; provided that AREP receives consideration in Cash
Equivalents and marketable securities with an aggregate Fair Market Value
determined at the time of the execution of such relevant agreement of at
least $1.0 billion for such merger or consolidation or the sale,
assignment, transfer, conveyance or other disposition of all or
substantially all of AREP's properties or assets. In any transaction
referred to in this clause (2), and subject to the terms and conditions
thereof, the Trustee shall, without the need of any action by the Holders,
(x) confirm that such other Person shall not be liable for and shall
release such other Person from any obligation of AREP's under this
Indenture and the Notes and (y) release any Guarantor from all obligations
under its Note Guarantee if such Guarantor was directly or indirectly
sold, assigned, transferred, conveyed or otherwise disposed of to such
Person in such transaction.
AREP or the Person formed by or surviving any merger or consolidation will
not have to comply with clause (4) above in connection with any merger or
consolidation if the effect of the merger or consolidation is to cause the
Capital Stock of AREP not owned by the Principal or any Affiliate of the
Principal to be retired or extinguished for consideration that was provided by
the Principal or an Affiliate of the Principal (other than AREP or its
Subsidiaries (including AREH) or the Person formed by or surviving any merger or
consolidation) and the Partners' Equity immediately after giving effect to the
merger or consolidation is not less than the Partners' Equity immediately prior
to such merger or consolidation.
In addition, AREP may not lease all or substantially all of its properties
or assets, in one or more related transactions, to any other Person. In the case
of a lease of all or substantially all of the assets of AREP, AREP will not be
released from its obligations under the Notes or this Indenture, as applicable.
(b) AREH will not: (1) consolidate or merge with or into another Person
(whether or not AREH, is the surviving entity) or (2) sell, assign, transfer,
convey or otherwise dispose of all or substantially all of the properties or
assets of AREH in one or more related transactions, to another Person; unless:
52
(1) either: (a) AREH is the surviving entity, or (b) the Person
formed by or surviving any such consolidation or merger (if other than
AREH) or to which such sale, assignment, transfer, conveyance or other
disposition has been made is a corporation, limited liability company or
limited partnership entity organized or existing under the laws of the
United States, any state of the United States or the District of Columbia;
(2) the Person formed by or surviving any such consolidation or
merger (if other than AREH) or the Person to which such sale, assignment,
transfer, conveyance or other disposition has been made assumes all the
obligations of AREH under the Note Guarantee (and becomes a Guarantor),
the Notes, this Indenture and the Registration Rights Agreement, and upon
such assumption such Person will become the successor to, and be
substituted for, AREH hereunder and thereunder, and all references to AREH
in each thereof shall than become references to such Person and such
Person shall thereafter be able to exercise every right and power of AREH
hereunder and thereunder;
(3) immediately after such transaction no Default or Event of
Default exists;
(4) AREH or the Person formed by or surviving any such consolidation
or merger (if other than AREP), or to which such sale, assignment,
transfer, conveyance or other disposition has been made would, on the date
of such transaction after giving pro forma effect thereto and any related
financing transactions as if the same had occurred at the last day of the
immediately preceding quarter, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to Section 4.09(a); and
(5) AREH has delivered to the Trustee an Officers' Certificate and
Opinion of Counsel which may be an opinion of in-house counsel of AREP or
an Affiliate, each stating that such transaction complies with the terms
of this Indenture.
Clauses (1), (2) or (4) above will not apply to, or be required to be
complied with in connection with, any merger or consolidation or the sale,
assignment, transfer, conveyance or other disposition of all or substantially
all of AREH's properties or assets to:
(1) an Affiliate that has no material assets or liabilities where
the primary purpose of such transaction is to change AREH into a
corporation or other form of business entity or to change the jurisdiction
of formation of AREH and such transaction does not cause the realization
of any material federal or state tax liability that will be paid by AREH
or any of its Subsidiaries. For purposes of this paragraph (1), the term
material refers to any assets, liabilities or tax liabilities that are
greater than 5.0% of the Tangible Net Worth of AREP and its Subsidiaries
(including AREH) on a consolidated basis;
(2) any Person; provided that AREP receives consideration in Cash
Equivalents and marketable securities with an aggregate Fair Market Value
determined at the time of the execution of such relevant agreement of at
least $1.0 billion for such merger or consolidation or the sale,
assignment, transfer, conveyance or other disposition of all or
substantially all of AREH's properties or assets; or
(3) any Person; provided that AREH receives consideration in Cash
Equivalents and marketable securities with an aggregate Fair Market Value
determined at the time of the execution of such relevant agreement of at
least $1.0 billion for such merger or consolidation or the sale,
assignment, transfer, conveyance or other disposition of all or
substantially all of AREH's properties or assets and AREH remains a
Subsidiary of AREP.
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In any transaction referred to in clause (2) or (3) above, and subject to
the terms and conditions thereof, the Trustee shall, without the need of any
action by the Holders, (x) confirm that such other Person shall not be liable
for and shall release such other Person from any obligation of AREP's or AREH's
under this Indenture, the Notes and the Note Guarantees, and (y) release any
Guarantor from all obligations under its Note Guarantee if such Guarantor was
directly or indirectly sold, assigned, transferred, conveyed or otherwise
disposed of to such Person in such transaction.
(c) This Section 5.01 will not apply to:
(1) any consolidation or merger, or any sale, assignment, transfer,
conveyance, lease or other disposition of assets between or among AREP,
AREH or any one or more Guarantors; or
(2) any sale, assignment, transfer, conveyance or other disposition
of Cash Equivalents, including, without limitation, any investment or
capital contribution of Cash Equivalents, or any purchase of property and
assets, including, without limitation, securities, debt obligations or
Capital Stock, with Cash Equivalents.
Section 5.02 Relief from Obligation.
Except as provided in the Indenture, neither AREP nor AREH shall be
relieved from the obligation to pay the principal of and interest on the Notes.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.
Each of the following is an "Event of Default":
(1) the Company defaults for 30 days in the payment when due of
interest on, or Liquidated Damages with respect to, the Notes or under any
Note Guarantee;
(2) the Company defaults in the payment when due and payable (at
maturity, upon redemption or otherwise) of the principal of, or premium,
if any, on the Notes or under any Note Guarantee;
(3) failure by the Company to comply with the provisions of Section
4.15 hereof;
(4) failure by AREP or any Guarantor for 30 days after written
notice from the Trustee to comply with the provisions Sections 4.07, 4.09;
4.16 or 4.17 hereof;
(5) the Company or any Guarantor fails to observe or perform any
other covenant, representation, warranty or other agreement in this
Indenture or the Notes or the Note Guarantee for 60 days after notice to
the Company by the Trustee or the Holders of at least 25% in aggregate
principal amount of the Notes then outstanding voting as a single class;
(6) default under any mortgage, indenture or instrument under which
there is issued or by which there is secured or evidenced any Indebtedness
for money borrowed by the Company or any Guarantor or default on any
Guarantee by the Company or AREH of Indebtedness, whether such
Indebtedness or Guarantee now exists or is created after the Issuance
Date, which default
54
(A) is caused by a failure to pay when due at final maturity
(giving effect to any grace period or waiver related thereto) the
principal of such Indebtedness (a "Payment Default"); or
(B) results in the acceleration of such Indebtedness prior to
its express maturity and, in each case, the principal amount of any
such Indebtedness as to which AREP or any Guarantor is obligated to
pay, together with the principal amount of any other such
Indebtedness under which a Payment Default then exists or with
respect to which the maturity thereof has been so accelerated or
which has not been paid at maturity as to which AREP or any
Guarantor is obligated to pay, aggregates $10.0 million or more;
(7) failure by the Company or any Guarantor to pay final judgments
aggregating in excess of $10.0 million, which final judgments remain
unpaid, undischarged or unstayed for a period of more than 60 days after
such judgment becomes a final judgment;
(8) except as permitted by this Indenture, any Note Guarantee shall
be held in any judicial proceeding to be unenforceable or invalid or shall
cease for any reason to be in full force and effect, or AREH or any other
Guarantor, or any Person acting on behalf of any Guarantor, shall deny or
disaffirm its obligations under its Note Guarantee;
(9) the Company or any Subsidiary of the Company that is a
Significant Subsidiary or any group of Subsidiaries of the Company that,
taken together, would constitute a Significant Subsidiary pursuant to or
within the meaning of Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in
an involuntary case,
(C) consents to the appointment of a custodian of it or for
all or substantially all of its property,
(D) makes a general assignment for the benefit of its
creditors, or
(E) generally is not paying its debts as they become due; or
(10) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any Subsidiary of the
Company that is a Significant Subsidiary or any group of
Subsidiaries of the Company that, taken together, would constitute a
Significant Subsidiary in an involuntary case;
(B) appoints a custodian of the Company or any of its
Subsidiaries that is a Significant Subsidiary or any group of
Subsidiaries of the Company that, taken together, would constitute a
Significant Subsidiary or for all or substantially all of the
property of the Company or any of its Subsidiaries that is a
Significant Subsidiary or any group of Subsidiaries of the Company
that, taken together, would constitute a Significant Subsidiary; or
55
(C) orders the liquidation of the Company or any of its
Subsidiaries that is a Significant Subsidiary or any group of
Subsidiaries of the Company that, taken together, would constitute a
Significant Subsidiary;
(D) and the order or decree remains unstayed and in effect for
60 consecutive days.
Section 6.02 Acceleration.
In the case of an Event of Default specified in clause (9) or (10) of
Section 6.01 hereof, with respect to the Company, any Guarantor that is a
Significant Subsidiary or any group of Subsidiaries of the Company that, taken
together, would constitute a Significant Subsidiary, all outstanding Notes will
become due and payable immediately without further action or notice. If any
other Event of Default occurs and is continuing, the Trustee or the Holders of
at least 25% in aggregate principal amount of the then outstanding Notes may
declare all the Notes to be due and payable immediately.
Upon any such declaration, the Notes shall become due and payable
immediately.
The Holders of a majority in aggregate principal amount of the then
outstanding Notes by written notice to the Trustee may, on behalf of all of the
Holders, rescind an acceleration and its consequences, if the rescission would
not conflict with any judgment or decree and if all existing Events of Default
(except nonpayment of principal, interest or premium or Liquidated Damages, if
any, that has become due solely because of the acceleration) have been cured or
waived.
If an Event of Default occurs on or after June 1, 2008 by reason of any
willful action (or inaction) taken (or not taken) by or on behalf of the Company
with the intention of avoiding payment of the premium that the Company would
have had to pay if the Company then had elected to redeem the Notes pursuant to
Section 3.07 hereof, then, upon acceleration of the Notes, an equivalent premium
shall also become and be immediately due and payable, to the extent permitted by
law, anything in this Indenture or in the Notes to the contrary notwithstanding.
If an Event of Default occurs prior to June 1, 2008 by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding the prohibition on redemption of the Notes prior to
such date, then, upon acceleration of the Notes, an additional premium shall
also become and be immediately due and payable, to the extent permitted by law,
in an amount, for each of the years beginning on June 1 of the years set forth
below, as set forth below (expressed as a percentage of the principal amount of
the Notes on the date of payment that would otherwise be due but for the
provisions of this sentence):
YEAR PERCENTAGE
---- ----------
2004............................................................................. 8.125%
2005............................................................................. 7.109%
2006............................................................................. 6.094%
2007............................................................................. 5.078%
Section 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal, premium and Liquidated
Damages, if any, and interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder of a Note in
56
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. All remedies are cumulative to the extent permitted by law.
Section 6.04 Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of the
then outstanding Notes by notice to the Trustee may on behalf of the Holders of
all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium and Liquidated Damages, if any, or interest
on, the Notes (including in connection with an offer to purchase); provided,
however, that the Holders of a majority in aggregate principal amount of the
then outstanding Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration. Upon
any such waiver, such Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
Section 6.05 Control by Majority.
Holders of a majority in aggregate principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture that the Trustee determines
may be unduly prejudicial to the rights of other Holders of Notes or that may
involve the Trustee in personal liability.
Section 6.06 Limitation on Suits.
A Holder may pursue a remedy with respect to this Indenture or the Notes
only if:
(1) such Holder gives to the Trustee written notice that an Event of
Default is continuing;
(2) Holders of at least 25% in aggregate principal amount of the
then outstanding Notes make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer and, if requested, provide to the
Trustee security or indemnity reasonably satisfactory to the Trustee
against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of security or indemnity; and
(5) during such 60-day period, Holders of a majority in aggregate
principal amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with such request.
A Holder of a Note may not use this Indenture to prejudice the rights of
another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
Section 6.07 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or
57
to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.
Section 6.08 Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(1) or (2) hereof occurs
and is continuing, the Trustee is authorized to recover judgment in its own name
and as trustee of an express trust against the Company for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on, the Notes and interest on overdue principal and, to the extent
lawful, interest and such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
Section 6.09 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.10 Priorities.
If the Trustee collects any money pursuant to this Article 6, it shall pay
out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.07 hereof, including payment of all compensation, expenses
and liabilities incurred, and all advances made, by the Trustee and the
costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium and Liquidated Damages, if any, and interest,
ratably, without preference or priority of any kind, according to the
amounts due and payable on the Notes for principal, premium and Liquidated
Damages, if any and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
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The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder of
a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
aggregate principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
Section 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing of which a
Responsible Officer of the Trustee has actual knowledge or of which written
notice shall have been given to the Trustee in accordance with the terms of the
Indenture, the Trustee will exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in its exercise, as
a prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of an Event of Default of which a
Responsible Officer of the Trustee has actual knowledge or of which written
notice shall have been given to the Trustee in accordance with the terms of the
Indenture:
(1) the duties of the Trustee will be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee will examine the certificates and opinions to
determine whether or not they conform on their face to the requirements of
this Indenture, but shall not verify the contents thereof.
(c) The Trustee may not be relieved from liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(1) this paragraph does not and shall not be construed to limit the
effect of paragraph (b) of this Section 7.01;
(2) the Trustee will not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
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(3) the Trustee will not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(4) the Trustee shall not be required to examine any of the reports,
information or documents delivered to it under this Indenture to determine
whether there has been any breach of the covenants of the Company
contained herein, except that if any breach or default is expressly stated
in any such reports, information or documents, the Trustee shall be deemed
to have actual knowledge of such breach or default.
(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), and (c) of this Section 7.01.
(e) No provision of this Indenture will require the Trustee to expend or
risk its own funds or incur any liability.
(f) The Trustee will not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 7.02 Rights of Trustee.
(a) The Trustee may conclusively rely upon any document believed by it to
be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in any such document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee will not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel of its choice and the written advice of such counsel or any Opinion of
Counsel will be full and complete authorization and protection from liability in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and will not be
responsible for the misconduct or negligence of any attorney or agent appointed
with due care.
(d) The Trustee will not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company or any Guarantor will be
sufficient if signed by an Officer of the Company or any Guarantor, as
applicable.
(f) The Trustee will be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders unless such Holders have offered to the Trustee indemnity or
security satisfactory to it against the losses, liabilities and expenses that
might be incurred by it in compliance with such request or direction.
Section 7.03 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and, subject to TIA Section 310(b), may otherwise deal with
the Company or any Affiliate of the Company with
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the same rights it would have if it were not Trustee. Any Agent may do the same
with like rights and duties.
Section 7.04 Trustee's Disclaimer.
The Trustee will not be responsible for and makes no representation as to
the validity or adequacy of this Indenture, the Notes or the Note Guarantee, it
shall not be accountable for the Company's use of the proceeds from the Notes or
any money paid to the Company or upon the Company's direction under any
provision of this Indenture, it will not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it will not be responsible for any statement or recital herein or any
statement in the Notes or any other document in connection with the sale of the
Notes or pursuant to this Indenture other than its certificate of
authentication.
Section 7.05 Notice of Defaults.
If a Default or Event of Default occurs and is continuing of which a
Responsible Officer of the Trustee has actual knowledge, the Trustee will mail
to Holders of Notes a notice of the Default or Event of Default within 90 days
after such Responsible Officer has actual knowledge of such Default or Event of
Default. Except in the case of a Default or Event of Default in payment of
principal of, premium or Liquidated Damages, if any, or interest on, any Note,
the Trustee may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interests of the Holders of the Notes.
Section 7.06 Reports by Trustee to Holders of the Notes.
(a) Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Notes remain outstanding, the
Trustee will mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA Section 313(a) (but if no event described
in TIA Section 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also will comply
with TIA Section 313(b)(2). The Trustee will also transmit by mail all reports
as required by TIA Section 313(c).
(b) A copy of each report at the time of its mailing to the Holders of
Notes will be mailed by the Trustee to the Company and filed by the Trustee with
the SEC and each stock exchange on which the Notes are listed in accordance with
TIA Section 313(d). The Company will promptly notify the Trustee when the Notes
are listed on any stock exchange.
Section 7.07 Compensation and Indemnity.
(a) The Company and the Guarantor will pay to the Trustee from time to
time reasonable compensation for its acceptance of this Indenture and services
hereunder. The Trustee's compensation will not be limited by any law on
compensation of a trustee of an express trust. The Company will reimburse the
Trustee promptly upon request for all reasonable disbursements, advances and
expenses incurred or made by it in addition to the compensation for its
services. Such expenses will include the reasonable compensation, disbursements,
costs and expenses of the Trustee's agents, consultants and counsel (including
the costs and expenses of collection on the Notes and the Note Guarantees and
the enforcement and administration of any right or remedy or observing any of
its duties under this Indenture).
(b) The Company and the Guarantor will indemnify the Trustee and hold the
Trustee harmless against any and all losses, liabilities or expenses incurred by
it arising out of or in connection with the
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acceptance or administration of its duties under this Indenture, including the
costs and expenses of enforcing this Indenture against the Company and the
Guarantor (including this Section 7.07) and defending itself against any claim
(whether asserted by the Company, the Guarantor, any Holder or any other Person)
or liability in connection with the exercise or performance of any of its powers
or duties hereunder, except any such loss, liability or expense attributable to
its negligence or bad faith. The Trustee will notify the Company and the
Guarantor promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Company and the Guarantor will not relieve the Company
or any of the Guarantors of their obligations hereunder. The Company or such
Guarantor will defend the claim and the Trustee will cooperate in the defense.
The Trustee may have separate counsel and the Company will pay the reasonable
fees and expenses of such counsel. Neither the Company nor any Guarantor need
pay for any settlement made without its consent, which consent will not be
unreasonably withheld.
(c) The obligations of the Company and the Guarantor under this Section
7.07 shall constitute additional Indebtedness hereunder and will survive the
satisfaction and discharge of this Indenture.
(d) To secure the Company's and the Guarantor's payment obligations in
this Section 7.07, the Trustee will have a Lien prior to the Notes on all money
or property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Notes. Such Lien will survive the
satisfaction and discharge of this Indenture.
(e) When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(9) or (10) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
(f) The Trustee will comply with the provisions of TIA Section 313(b)(2)
to the extent applicable.
Section 7.08 Replacement of Trustee.
(a) A resignation or removal of the Trustee and appointment of a successor
Trustee will become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
(b) The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of a majority
in aggregate principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(3) a custodian or public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company will promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in aggregate principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
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(d) If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in aggregate principal amount of the then
outstanding Notes may petition any court of competent jurisdiction, at the
expense of the Company for the appointment of a successor Trustee.
(e) If the Trustee, after written request by any Holder who has been a
Holder for at least six months, fails to comply with Section 7.10 hereof, such
Holder may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
(f) A successor Trustee will deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee will become effective, and the
successor Trustee will have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee will mail a notice of its succession
to Holders. The retiring Trustee will promptly transfer all property held by it
as Trustee to the successor Trustee; provided all sums owing to the Trustee
hereunder have been paid and subject to the Lien provided for in Section 7.07
hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof will continue for the
benefit of the retiring Trustee.
Section 7.09 Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act will be the successor Trustee.
Section 7.10 Eligibility; Disqualification.
There will at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100.0
million as set forth in its most recent published annual report of condition.
This Indenture will always have a Trustee who satisfies the requirements
of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to TIA Section
310(b).
Section 7.11 Preferential Collection of Claims Against Company.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may at any time, at the option of its Board of Directors
evidenced by a resolution set forth in an Officers' Certificate, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
Section 8.02 Legal Defeasance and Discharge.
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Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company and each of the Guarantors will,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be deemed to have been discharged from their obligations with respect to all
outstanding Notes (including the Note Guarantees) on the date the conditions set
forth below are satisfied (hereinafter, "Legal Defeasance"). For this purpose,
Legal Defeasance means that the Company and the Guarantors will be deemed to
have paid and discharged the entire Indebtedness represented by the outstanding
Notes (including the Note Guarantees), which will thereafter be deemed to be
"outstanding" only for the purposes of Section 8.05 hereof and the other
Sections of this Indenture referred to in clauses (1) and (2) below, and to have
satisfied all their other obligations under such Notes, the Note Guarantees and
this Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following provisions which will survive until otherwise terminated or discharged
hereunder:
(1) the rights of Holders of outstanding Notes to receive payments
in respect of the principal of, or interest or premium and Liquidated
Damages, if any, on, such Notes when such payments are due from the trust
referred to in Section 8.04 hereof;
(2) the Company's obligations with respect to such Notes under
Article 2 and Section 4.02 hereof;
(3) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and the Company's and the Guarantors' obligations in connection
therewith; and
(4) this Article 8.
Subject to compliance with this Article 8, the Company may exercise its
option under this Section 8.02 notwithstanding the prior exercise of its option
under Section 8.03 hereof.
Section 8.03 Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company and each of the Guarantors will,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be released from each of their obligations under the covenants contained in
Sections 4.07, 4.09, 4.11, 4.12, 4.15, 4.16, 4.17, 4.18 and 4.19 hereof, Section
5.01(a)(4) and Section 5.01(b)(4) hereof with respect to the outstanding Notes
on and after the date the conditions set forth in Section 8.04 hereof are
satisfied (hereinafter, "Covenant Defeasance"), and the Notes will thereafter be
deemed not "outstanding" for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but will continue to be deemed "outstanding" for
all other purposes hereunder (it being understood that such Notes will not be
deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes and Note
Guarantees, the Company and the Guarantors may omit to comply with and will have
no liability in respect of any term, condition or limitation set forth in any
such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply will not constitute a Default or an Event of Default under
Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Notes and Note Guarantees will be unaffected thereby. In
addition, upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, subject to the satisfaction of the conditions
set forth in Section 8.04 hereof, Sections 6.01(3) through 6.01(6) hereof will
not constitute Events of Default.
Section 8.04 Conditions to Legal or Covenant Defeasance.
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In order to exercise either Legal Defeasance or Covenant Defeasance under
either Section 8.02 or 8.03 hereof:
(1) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, cash in U.S. dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will
be sufficient, in the opinion of a nationally recognized investment bank,
appraisal firm, or firm of independent public accountants, to pay the
principal of, premium and Liquidated Damages, if any, and interest on, the
outstanding Notes on the stated date for payment thereof or on the
applicable redemption date, as the case may be, and the Company must
specify whether the Notes are being defeased to such stated date for
payment or to a particular redemption date;
(2) in the case of an election under Section 8.02 hereof, the
Company must deliver to the Trustee an Opinion of Counsel confirming that:
(A) the Company has received from, or there has been published
by, the Internal Revenue Service a ruling; or
(B) since the date of this Indenture, there has been a change
in the applicable federal income tax law,
in either case to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Holders of the outstanding Notes
will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such Legal Defeasance
had not occurred;
(3) in the case of an election under Section 8.03 hereof, the
Company must deliver to the Trustee an Opinion of Counsel confirming that
the Holders of the outstanding Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such Covenant
Defeasance and will be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such Covenant Defeasance had not occurred;
(4) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the borrowing of funds to be applied to such
deposit) and the deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which the Company or
any Guarantor is a party or by which the Company or any Guarantor is
bound;
(5) such Legal Defeasance or Covenant Defeasance will not result in
a breach or violation of, or constitute a default under, any material
agreement or instrument (other than this Indenture) to which the Company
or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound;
(6) the Company must deliver to the Trustee an Opinion of Counsel,
containing customary assumptions and exceptions, to the effect that upon
and immediately following the deposit, the trust funds will not be subject
to the effect of any applicable bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally under any applicable
law;
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(7) the Company must deliver to the Trustee an Officers' Certificate
stating that the deposit was not made by the Company with the intent of
preferring the Holders of Notes over the other creditors of the Company
with the intent of defeating, hindering, delaying or defrauding any
creditors of the Company or others; and
(8) the Company must deliver to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
relating to the Legal Defeasance or the Covenant Defeasance have been
complied with.
Section 8.05 Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
will be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium and Liquidated Damages, if
any, and interest, but such money need not be segregated from other funds except
to the extent required by law.
The Company will pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Notwithstanding anything in this Article 8 to the contrary, the Trustee
will deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(1) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06 Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of, premium or Liquidated
Damages, if any, or interest on, any Note and remaining unclaimed for two years
after such principal, premium or Liquidated Damages, if any, or interest has
become due and payable shall be paid to the Company on its request or (if then
held by the Company) will be discharged from such trust; and the Holder of such
Note will thereafter be permitted to look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to
such trust money, and all liability of the Company as trustee thereof, will
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in the New York Times and The Wall Street
Journal (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which will not be less than 30 days from the
date of such notification or publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
Section 8.07 Reinstatement.
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If the Trustee or Paying Agent is unable to apply any U.S. dollars or
non-callable Government Securities in accordance with Section 8.02 or 8.03
hereof, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's and the Guarantors' obligations under this
Indenture and the Notes and the Note Guarantees will be revived and reinstated
as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until
such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.02 or 8.03 hereof, as the case may be; provided,
however, that, if the Company makes any payment of principal of, premium or
Liquidated Damages, if any, or interest on, any Note following the reinstatement
of its obligations, the Company will be subrogated to the rights of the Holders
of such Notes to receive such payment from the money held by the Trustee or
Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture or the Notes
or the Note Guarantees without the consent of any Holder of Note:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in place
of certificated Notes;
(3) to provide for the assumption of the Company's or a Guarantor's
obligations to the Holders of the Notes and Note Guarantees by a successor
to the Company or such Guarantor pursuant to Article 5 or Article 10
hereof;
(4) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the
legal rights hereunder of any Holder;
(5) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(6) to conform the text of this Indenture or the Notes to any
provision of the "Description of Notes" section of the Company's Offering
Memorandum, relating to the initial offering of the Notes, to the extent
that such provision in that "Description of Notes" was intended to be a
verbatim recitation of a provision of this Indenture, the Note Guarantees
or the Notes;
(7) to provide for the issuance of Additional Notes in accordance
with the limitations set forth in this Indenture as of the date hereof; or
(8) to allow any Guarantor to execute a supplemental indenture
and/or a Note Guarantee with respect to the Notes.
Upon the request of the Company accompanied by a resolution of its Board
of Directors authorizing the execution of any such amended or supplemental
indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee will join with the Company and the Guarantors in the
execution of any amended or supplemental indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be
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therein contained, but the Trustee will not be obligated to enter into such
amended or supplemental indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
Section 9.02 With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company and the Trustee
may amend or supplement this Indenture (including, without limitation, Section
4.15 hereof) and the Notes and the Note Guarantees with the consent of the
Holders of at least a majority in aggregate principal amount of the then
outstanding Notes (including, without limitation, Additional Notes, if any)
voting as a single class (including, without limitation, consents obtained in
connection with a tender offer or exchange offer for, or purchase of, the
Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or
Event of Default (other than a Default or Event of Default in the payment of the
principal of, premium or Liquidated Damages, if any, or interest on, the Notes,
except a payment default resulting from an acceleration that has been rescinded)
or compliance with any provision of this Indenture or the Notes or the Note
Guarantees may be waived with the consent of the Holders of a majority in
aggregate principal amount of the then outstanding Notes (including, without
limitation, Additional Notes, if any) voting as a single class (including,
without limitation, consents obtained in connection with a tender offer or
exchange offer for, or purchase of, the Notes). Section 2.08 hereof shall
determine which Notes are considered to be "outstanding" for purposes of this
Section 9.02.
Upon the request of the Company accompanied by a resolution of its Board
of Directors authorizing the execution of any such amended or supplemental
indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee will
join with the Company and the Guarantors in the execution of such amended or
supplemental indenture unless such amended or supplemental indenture directly
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but will not be
obligated to, enter into such amended or supplemental Indenture.
It is not be necessary for the consent of the Holders of Notes under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it is sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company will mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, will not, however, in
any way impair or affect the validity of any such amended or supplemental
indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding voting as a
single class may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Notes or the Note Guarantees. However,
without the consent of each Holder affected, an amendment, supplement or waiver
under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):
(1) reduce the principal amount of Notes whose Holders must consent
to an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any Note
or alter or waive the provisions with respect to the redemption of the
Notes (except as provided above with respect to Section 4.15 hereof);
(3) reduce the rate of or change the time for payment of interest on
any Note;
68
(4) waive a Default or Event of Default in the payment of principal
of, premium or interest on the Notes (except a rescission of acceleration
of the Notes by the Holders of at least a majority in aggregate principal
amount of the Notes and a waiver of the payment default that resulted from
such acceleration);
(5) make any Note payable in money other than that stated in the
Notes;
(6) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive
payments of principal of or premium, if any, or interest on the Notes;
(7) waive a redemption payment with respect to any Note (other than
a payment required by Section 4.15 hereof);
(8) release any Guarantor from any of its obligations under its Note
Guarantee or this Indenture, except in accordance with the terms of this
Indenture; or
(9) make any change in this Article 9 relating to the amendment and
waiver provisions
Section 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes will be set
forth in a amended or supplemental indenture that complies with the TIA as then
in effect.
Section 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to
it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the amendment, supplement or waiver becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section 9.05 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note will not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06 Trustee to Sign Amendments, etc.
The Trustee will sign any amended or supplemental indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amended or supplemental indenture until the Board of Directors
of AREP approves it. In executing any amended or supplemental indenture, the
Trustee will be entitled to receive and (subject to Section 7.01 hereof) will be
fully protected in relying upon, in addition
69
to the documents required by Section 12.04 hereof, an Officers' Certificate and
an Opinion of Counsel stating that the execution of such amended or supplemental
indenture is authorized or permitted by this Indenture.
ARTICLE 10
NOTE GUARANTEES
Section 10.01. Guarantee.
(a) Subject to this Article 10, the Guarantor hereby unconditionally
guarantees to each Holder of a Note authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, irrespective of the validity
and enforceability of this Indenture, the Notes or the obligations of the
Company hereunder or thereunder, that:
(1) the principal of, premium and Liquidated Damages, if any, and
interest on, the Notes will be promptly paid in full when due, whether at
maturity, by acceleration, redemption or otherwise, and interest on the
overdue principal of and interest on the Notes, if any, if lawful, and all
other obligations of the Company to the Holders or the Trustee hereunder
or thereunder will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and
(2) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, that same will be promptly paid in
full when due or performed in accordance with the terms of the extension
or renewal, whether at stated maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Guarantor will pay the same immediately. The
Guarantor agrees that this is a guarantee of payment and not a guarantee of
collection.
(b) The Guarantor hereby agrees that its obligations hereunder are
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. The Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenant that this Note Guarantee will not be discharged except by complete
performance of the obligations contained in the Notes and this Indenture.
(c) If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantor or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or the
Guarantor, any amount paid by either to the Trustee or such Holder, this Note
Guarantee, to the extent theretofore discharged, will be reinstated in full
force and effect.
(d) The Guarantor agrees that it will not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. The Guarantor
further agrees that, as between any Guarantors, on the one hand, and the Holders
and the Trustee, on the other hand, (1) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article 6 hereof for the
purposes of this Note Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed
70
hereby, and (2) in the event of any declaration of acceleration of such
obligations as provided in Article 6 hereof, such obligations (whether or not
due and payable) will forthwith become due and payable by the Guarantor for the
purpose of this Note Guarantee. The Guarantors will have the right to seek
contribution from any non-paying Guarantor so long as the exercise of such right
does not impair the rights of the Holders under the Note Guarantee.
Section 10.02. Limitation on Guarantor Liability.
The Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Note Guarantee
not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy
Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act
or any similar federal or state law to the extent applicable to any Note
Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and
the Guarantor hereby irrevocably agree that the obligations of such Guarantor
will be limited to the maximum amount that will, after giving effect to such
maximum amount and all other contingent and fixed liabilities of such Guarantor
that are relevant under such laws, and after giving effect to any collections
from, rights to receive contribution from or payments made by or on behalf of
any other Guarantor in respect of the obligations of such other Guarantor under
this Article 10, result in the obligations of such Guarantor under its Note
Guarantee not constituting a fraudulent transfer or conveyance.
Section 10.03. Execution and Delivery of Note Guarantee.
To evidence its Note Guarantee set forth in Section 10.01 hereof, each
Guarantor hereby agrees that a notation of such Note Guarantee substantially in
the form attached as Exhibit E hereto will be endorsed by an Officer of such
Guarantor on each Note authenticated and delivered by the Trustee and that this
Indenture will be executed on behalf of such Guarantor by one of its Officers.
Each Guarantor hereby agrees that its Note Guarantee set forth in Section
10.01 hereof will remain in full force and effect notwithstanding any failure to
endorse on each Note a notation of such Note Guarantee.
If an Officer whose signature is on this Indenture or on the Note
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Note Guarantee is endorsed, the Note Guarantee will be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication thereof
hereunder, will constitute due delivery of the Note Guarantee set forth in this
Indenture on behalf of the Guarantors.
Section 10.04. Guarantors May Consolidate, etc., on Certain Terms.
(a) Except as otherwise provided in Section 10.05 hereof and subject to
10.04(b) hereof, no Guarantor may sell or otherwise dispose of all or
substantially all of its assets to, or consolidate with or merge with or into
(whether or not such Guarantor is the surviving Person) another Person, other
than the Company or another Guarantor, unless:
(1) immediately after giving effect to such transaction, no Default or
Event of Default exists; and
(2) subject to Section 10.05 hereof, the Person acquiring the property in
any such sale or disposition or the Person formed by or surviving any such
consolidation or merger unconditionally assumes all the obligations of
that Guarantor under this Indenture, its Note
71
Guarantee and the Registration Rights Agreement on the terms set forth
herein or therein, pursuant to a supplemental indenture in form and
substance reasonably satisfactory to the Trustee.
In case of any such consolidation, merger, sale or conveyance and upon the
assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the Note
Guarantee endorsed upon the Notes and the due and punctual performance of all of
the covenants and conditions of this Indenture to be performed by the Guarantor,
such successor Person will succeed to and be substituted for the Guarantor with
the same effect as if it had been named herein as a Guarantor. Such successor
Person thereupon may cause to be signed any or all of the Note Guarantees to be
endorsed upon all of the Notes issuable hereunder which theretofore shall not
have been signed by the Company and delivered to the Trustee. All the Note
Guarantees so issued will in all respects have the same legal rank and benefit
under this Indenture as the Note Guarantees theretofore and thereafter issued in
accordance with the terms of this Indenture as though all of such Note
Guarantees had been issued at the date of the execution hereof.
Except as set forth in Articles 4 and 5 hereof, and notwithstanding clause
2 above, nothing contained in this Indenture or in any of the Notes will prevent
any consolidation or merger of a Guarantor with or into the Company or another
Guarantor, or will prevent any sale or conveyance of the property of a Guarantor
as an entirety or substantially as an entirety to the Company or another
Guarantor.
(b) Notwithstanding the foregoing, any merger or consolidation of AREH (or
an Affiliate referred to in clause (1) of the second paragraph of Section
5.01(b) or any Person that is the successor of AREH or any such successor ad
infinitum) or any sale of all or substantially all of AREH's assets (or of an
Affiliate referred to in clause (1) of the second paragraph of Section 5.01(b)
or any Person that is the successor of AREH or any such successor ad infinitum)
shall be governed by Section 5.01(b) hereof and Section 10.04(a) shall not apply
to any such transaction.
Section 10.05. Releases.
(a) In the event of any sale or other disposition of all or substantially
all of the assets of any Guarantor, by way of merger, consolidation or
otherwise, or a sale or other disposition of all of the Capital Stock of any
Guarantor, in each case to a Person that is not (either before or after giving
effect to such transactions) the Company or another Guarantor, then such
Guarantor (in the event of a sale or other disposition, by way of merger,
consolidation or otherwise, of all of the Capital Stock of such Guarantor) or
the entity acquiring the property (in the event of a sale or other disposition
of all or substantially all of the assets of such Guarantor) will be released
and relieved of any obligations under its Note Guarantee. Upon delivery by the
Company to the Trustee of an Officers' Certificate and an Opinion of Counsel to
the effect that such sale or other disposition was made by the Company in
accordance with the provisions of this Indenture the Trustee will execute any
documents reasonably required in order to evidence the release of any Guarantor
from its obligations under its Note Guarantee.
(b) Upon Legal Defeasance in accordance with Article 8 hereof or
satisfaction and discharge of this Indenture in accordance with Article 11
hereof, each Guarantor will be released and relieved of any obligations under
its Note Guarantee.
Any Guarantor not released from its obligations under its Note Guarantee
as provided in this Section 10.05 will remain liable for the full amount of
principal of and interest and premium and Liquidated Damages, if any, on the
Notes and for the other obligations of any Guarantor under this Indenture as
provided in this Article 10.
72
ARTICLE 11
SATISFACTION AND DISCHARGE
Section 11.01 Satisfaction and Discharge.
This Indenture will be discharged and will cease to be of further effect
as to all Notes and Note Guarantees issued hereunder, when:
(1) either:
(a) all Notes that have been authenticated, except lost,
stolen or destroyed Notes that have been replaced or paid and Notes for
whose payment money has theretofore been deposited in trust and thereafter
repaid to AREP, have been delivered to the Trustee for cancellation; or
(b) all Notes that have not been delivered to the Trustee for
cancellation (1) have become due and payable by reason of the mailing of a
notice of redemption or otherwise, (2) will become due and payable within
one year or (3) are to be called for redemption within 12 months under
arrangements reasonably satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the reasonable
expense of the Company, and the Company or any Guarantor have irrevocably
deposited or caused to be deposited with the Trustee as trust funds in
trust solely for the benefit of the Holders, cash in U.S. dollars,
non-callable Government Securities, or a combination of cash in U.S.
dollars and non-callable Government Securities, in amounts as will be
sufficient without consideration of any reinvestment of interest, to pay
and discharge the entire Indebtedness on the Notes not delivered to the
Trustee for cancellation for principal and premium, if any, and accrued
but unpaid interest to the date of maturity or redemption;
(2) no Default of Event of Default has occurred and is continuing on
the date of the deposit or will occur as a result of the deposit and the
deposit will not result in a breach or violation of, or constitute a
default under, any other material instrument to which the Company is a
party or by which the Company is bound;
(3) the Company has paid or caused to be paid all sums payable by it
under this Indenture; and
(4) the Company or any Guarantor have delivered irrevocable
instructions to the Trustee under this Indenture to apply the deposited
money toward the payment of the Notes at maturity or the redemption date,
as the case may be.
In addition, the Company must deliver an Officers' Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, if money
has been deposited with the Trustee pursuant to subclause (b) of clause (1) of
this Section 11.01, the provisions of Sections 11.02 and 8.06 hereof will
survive. In addition, nothing in this Section 11.01 will be deemed to discharge
those provisions of Section 7.07 hereof, that, by their terms, survive the
satisfaction and discharge of this Indenture.
Section 11.02 Application of Trust Money.
73
Subject to the provisions of Section 8.06 hereof, all money deposited with
the Trustee pursuant to Section 11.01 hereof shall be held in trust and applied
by it, in accordance with the provisions of the Notes and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium and Liquidated Damages, if any)
and interest for whose payment such money has been deposited with the Trustee;
but such money need not be segregated from other funds except to the extent
required by law.
If the Trustee or Paying Agent is unable to apply any money or Government
Securities in accordance with Section 11.01 hereof by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's and any Guarantor's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 11.01 hereof; provided that if the Company has made any payment of
principal of, premium or Liquidated Damages, if any, or interest on, any Notes
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Notes to receive such payment from the
money or Government Securities held by the Trustee or Paying Agent.
ARTICLE 12
MISCELLANEOUS
Section 12.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA Section 318(c), the imposed duties will control.
Section 12.02 Notices.
Any notice or communication by the Company, any Guarantor or the Trustee
to the others is duly given if in writing and delivered in Person or by first
class mail (registered or certified, return receipt requested), facsimile
transmission or overnight air courier guaranteeing next day delivery, to the
others' address:
If to the Company and/or any Guarantor:
American Real Estate Partners, L.P.
American Real Estate Finance Corp.
000 Xxxxx Xxxxxxx Xxxx
Xx. Xxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx X.
Xxxxxx, Esq.
With a copy to:
Xxxxx Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
74
If to the Trustee:
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Telecopier No.:(000) 000-0000
Attention: Xxxxxxx X. Xxxxx
With a copy to:
Xxxxxx, Xxxxxx-Xxxxxxx, Colt & Mosle LLP
000 Xxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.:(000) 000-0000
Attention: Xxxxxxx Xxxxxxx, Esq.
Xxxxxx X. Xxxxxxx, Esq.
The Company, any Guarantor or the Trustee, by notice to the others, may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) will be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when receipt acknowledged, if transmitted by facsimile; and
the next Business Day after timely delivery to the courier, if sent by overnight
air courier guaranteeing next day delivery.
Any notice or communication to a Holder will be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication will also be so mailed to any
Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it will
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it will mail a
copy to the Trustee and each Agent at the same time.
Section 12.03 Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA Section
312(c).
Section 12.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
75
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which must include the statements set forth
in Section 12.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which must include the statements set forth
in Section 12.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
Section 12.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) must comply with the provisions of TIA
Section 314(e) and must include:
(1) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him or
her to express an informed opinion as to whether or not such covenant or
condition has been satisfied; and
(4) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
Section 12.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 12.07 No Personal Liability of Directors, Officers, Employees and
Stockholders.
No director, officer, employee, incorporator, manager (or managing member)
direct or indirect member, partner or stockholder of the Company, AREH, API or
any additional Guarantor shall have any liability for any obligations of the
Company, AREH, API or any additional Guarantor under the Notes, this Indenture,
any Note Guarantee or for any claim based on, in respect of, or by reason of
such obligations or its creation. Each Holder of the Notes by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
Section 12.08 Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT
TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION
OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Section 12.09 No Adverse Interpretation of Other Agreements.
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This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 12.10 Successors.
All agreements of the Trustee in this Indenture will bind its successors.
All agreements of each Guarantor in this Indenture will bind its successors,
except as otherwise provided in Sections 5.01 and 10.05 hereof.
Section 12.11 Severability.
In case any provision in this Indenture, the Note Guarantees or in the
Notes is invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions will not in any way be affected or
impaired thereby.
Section 12.12 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy will be an original, but all of them together represent the same agreement.
Section 12.13 Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part of this Indenture and will in no way
modify or restrict any of the terms or provisions hereof.
Section 12.14 Clarity.
For the avoidance of doubt, the inclusion of exceptions to the provisions
(including covenants and definitions) set forth in this Indenture will not be
interpreted to imply that the matters permitted by the exception would be
limited by the terms of such provisions but for such exceptions.
[Signatures on following page]
77
SIGNATURES
Dated as of May 12, 2004
AMERICAN REAL ESTATE PARTNERS L.P.
By: American Property Investors, Inc.,
its general partner
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President and Chief
Executive Officer
AMERICAN REAL ESTATE FINANCE CORP.
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President and Chief
Executive Officer
AMERICAN REAL ESTATE HOLDINGS LIMITED
PARTNERSHIP
By: American Property Investors, Inc.,
its general partner
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President and Chief
Executive Officer
WILMINGTON TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxx, Xx.
-----------------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
Title: Senior Financial Services
Officer
EXHIBIT A1
[Face of Note]
CUSIP/CINS ____________
8-1/8% Senior Notes due 2012
No. ___ $____________
AMERICAN REAL ESTATE PARTNERS, L.P.
AMERICAN REAL ESTATE FINANCE CORP.
promises to pay to ___________ or registered assigns,
the principal sum of __________________________________________________________
DOLLARS on June 1, 2012.
Interest Payment Dates: June 1 and December 1
Record Dates: May 15 and November 15
Dated:
AMERICAN REAL ESTATE PARTNERS, L.P.
By: American Property Investors, Inc.,
its general partner
By: ___________________________________
Name:
Title:
AMERICAN REAL ESTATE FINANCE CORP.
By: ___________________________________
Name:
Title:
This is one of the Notes referred to
in the within-mentioned Indenture:
WILMINGTON TRUST COMPANY,
as Trustee
By: _______________________________
Authorized Signatory
A1-1
[Back of Note]
8-1/8% Senior Notes due 2012
[Insert the Global Note Legend, if applicable pursuant to the provisions of the
Indenture]
[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture]
Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
(1) INTEREST. American Real Estate Partners, L.P., a Delaware
limited partnership ("AREP") and American Real Estate Finance Corp. ("AREP
Finance", together with AREP, the "Company"), promises to pay interest on
the principal amount of this Note at 8-1/8% per annum from
________________, 20__ until maturity and shall pay the Liquidated
Damages, if any, payable pursuant to Section 5 of the Registration Rights
Agreement referred to below. The Company will pay interest and Liquidated
Damages, if any, semi-annually in arrears on June 1 and December 1 of each
year, or if any such day is not a Business Day, on the next succeeding
Business Day (each, an "Interest Payment Date"). Interest on the Notes
will accrue from the most recent date to which interest has been paid or,
if no interest has been paid, from the date of issuance; provided that if
there is no existing Default in the payment of interest, and if this Note
is authenticated between a record date referred to on the face hereof and
the next succeeding Interest Payment Date, interest shall accrue from such
next succeeding Interest Payment Date; provided further that the first
Interest Payment Date shall be _____________, 20__. The Company will pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to
time on demand at a rate that is 1% per annum in excess of the rate then
in effect to the extent lawful; it will pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest and Liquidated Damages, if any, (without
regard to any applicable grace periods) from time to time on demand at the
same rate to the extent lawful. Interest will be computed on the basis of
a 360-day year of twelve 30-day months.
(2) METHOD OF PAYMENT. The Company will pay or cause to pay interest
on the Notes (except defaulted interest) and Liquidated Damages, if any,
to the Persons who are registered Holders of Notes at the close of
business on the May 15 or November 15 next preceding the Interest Payment
Date, even if such Notes are canceled after such record date and on or
before such Interest Payment Date, except as provided in Section 2.12 of
the Indenture with respect to defaulted interest. The Notes will be
payable as to principal, premium and Liquidated Damages, if any, and
interest at the office or agency of the Company maintained for such
purpose within or without the City and State of New York, or, at the
option of the Company, payment of interest and Liquidated Damages, if any,
may be made by check mailed to the Holders at their addresses set forth in
the register of Holders; provided that payment by wire transfer of
immediately available funds will be required with respect to principal of
and interest, premium and Liquidated Damages, if any, on, all Global Notes
and all other Notes the Holders of which will have provided wire transfer
instructions to the Company or the Paying Agent. Such payment will be in
such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.
(3) PAYING AGENT AND REGISTRAR. Initially, Wilmington Trust Company,
the Trustee under the Indenture, will act as Paying Agent and Registrar.
The Company may change any
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Paying Agent or Registrar without notice to any Holder. The Company or any
of its Subsidiaries may act in any such capacity.
(4) INDENTURE. The Company issued the Notes under an Indenture dated
as of May 12, 2004 (the "Indenture") among the Company, the Guarantor and
the Trustee. The terms of the Notes include those stated in the Indenture
and those made part of the Indenture by reference to the TIA. The Notes
are subject to all such terms, and Holders are referred to the Indenture
and such Act for a statement of such terms. To the extent any provision of
this Note conflicts with the express provisions of the Indenture, the
provisions of the Indenture shall govern and be controlling. The Notes are
unsecured obligations of the Company.
(5) OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Company will not have the option to redeem the Notes prior to June 1, 2008. On
or after June 1, 2008, the Company will have the option to redeem all or a part
of the Notes upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and Liquidated Damages, if any, on the Notes
redeemed to the applicable redemption date, if redeemed during the twelve-month
period beginning on June 1 of the years indicated below, subject to the rights
of Holders on the relevant record date to receive interest on the relevant
interest payment date:
Year Percentage
---- ----------
2008............................................................................. 104.063%
2009............................................................................. 102.031%
2010 and thereafter.............................................................. 100.000%
Unless the Company defaults in the payment of the redemption price,
interest will cease to accrue on the Notes or portions thereof called for
redemption on the applicable redemption date.
(b) Notwithstanding the provisions of subparagraph (a) of this Paragraph
5, at any time prior to June 1, 2007, the Company may on one or more occasions
redeem up to 35% of the aggregate principal amount of Notes (including
Additional Notes) issued under the Indenture at a redemption price of 108.125%
of the principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, to the redemption date, with the net cash proceeds of one or
more Equity Offerings; provided that at least 65% of the aggregate principal
amount of Notes issued under the Indenture remains outstanding immediately after
the occurrence of such redemption (excluding Notes held by AREP and its
Subsidiaries (including any Guarantor)) and such redemption occurs within 60
days of the date of the closing of such Equity Offering.
(6) MANDATORY REDEMPTION.
Other than in connection with redemption pursuant to Gaming Laws, the
Company is not required to make mandatory redemption or sinking fund payments
with respect to the Notes.
(7) REDEMPTION PURSUANT TO GAMING LAWS
If any Gaming Authority requires that a Holder or Beneficial Owner of
Notes be licensed, qualified or found suitable under any applicable Gaming Law
and such Holder or Beneficial Owner:
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(1) fails to apply for a license, qualification or a finding of
suitability within 30 days (or such shorter period as may be required by the
applicable Gaming Authority) after being requested to do so by the Gaming
Authority; or
(2) is denied such license or qualification or not found suitable;
AREP shall then have the right, at its option:
(1) to require each such Holder or Beneficial Owner to dispose of its
Notes within 30 days (or such earlier date as may be required by the applicable
Gaming Authority) of the occurrence of the event described in clause (1) or (2)
above, or
(2) to redeem the Notes of each such Holder or Beneficial Owner, in
accordance with Rule 14e-1 of the Exchange Act, if applicable, at a redemption
price equal to the lowest of:
(a) the principal amount thereof, together with accrued and unpaid
interest and Liquidated Damages, if any, to the earlier of the date of
redemption, the date 30 days after such Holder or Beneficial Owner is required
to apply for a license, qualification or finding of suitability (or such shorter
period that may be required by any applicable Gaming Authority) if such Holder
or Beneficial Owner fails to do so ("Application Date") or of the date of denial
of license or qualification or of the finding of unsuitability by such Gaming
Authority;
(b) the price at which such Holder or Beneficial Owner acquired the Notes,
together with accrued and unpaid interest and Liquidated Damages, if any, to the
earlier of the date of redemption, the Application Date or the date of the
denial of license or qualification or of the finding of unsuitability by such
Gaming Authority; and
(c) such other lesser amount as may be required by any Gaming Authority.
Immediately upon a determination by a Gaming Authority that a Holder or
Beneficial Owner of the Notes will not be licensed, qualified or found suitable
and must dispose of the Notes, the Holder or Beneficial Owner will, to the
extent required by applicable Gaming Laws, have no further right:
(1) to exercise, directly or indirectly, through any trustee or nominee or
any other person or entity, any right conferred by the Notes, the Note Guarantee
or the Indenture; or
(2) to receive any interest, Liquidated Damages, dividend, economic
interests or any other distributions or payments with respect to the Notes and
the Note Guarantee or any remuneration in any form with respect to the Notes and
the Note Guarantee from the Company, any Note Guarantor or the Trustee, except
the redemption price referred to above.
AREP shall notify the Trustee in writing of any such redemption as soon as
practicable. Any Holder or Beneficial Owner that is required to apply for a
license, qualification or a finding of suitability will be responsible for all
fees and costs of applying for and obtaining the license, qualification or
finding of suitability and of any investigation by the applicable Gaming
Authorities and the Company and any Note Guarantor will not reimburse any Holder
or Beneficial Owner for such expense.
(8) REPURCHASE AT THE OPTION OF HOLDER.
(a) If there is a Change of Control, the Company will be
required to make an offer (a "Change of Control Offer") to each Holder to
repurchase all or any part (equal to $1,000
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or an integral multiple thereof) of each Holder's Notes at a purchase
price in cash equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Liquidated Damages, if any, thereon to the
date of purchase, subject to the rights of Holders on the relevant record
date to receive interest due on the relevant interest payment date (the
"Change of Control Payment"). Within 30 days following any Change of
Control, the Company will mail a notice to each Holder setting forth the
procedures governing the Change of Control Offer as required by the
Indenture.
(9) NOTICE OF REDEMPTION. Notice of redemption will be mailed at
least 15 days but not more than 60 days before the redemption date to each
Holder whose Notes are to be redeemed at its registered address, except
that redemption notices may be mailed more than 60 days prior to a
redemption date if the notice is issued in connection with a defeasance of
the Notes or a satisfaction or discharge of the Indenture. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed.
(10) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged
as provided in the Indenture. The Registrar and the Trustee may require a
Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes
and fees required by law or permitted by the Indenture. The Company need
not exchange or register the transfer of any Note or portion of a Note
selected for redemption, except for the unredeemed portion of any Note
being redeemed in part. Also, the Company need not exchange or register
the transfer of any Notes for a period of 15 days before a selection of
Notes to be redeemed or during the period between a record date and the
corresponding Interest Payment Date.
(11) PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
(12) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture or the Notes or the Note Guarantees may be
amended or supplemented with the consent of the Holders of at least a
majority in aggregate principal amount of the then outstanding Notes
including Additional Notes, if any, voting as a single class, and any
existing Default or Event or Default or compliance with any provision of
the Indenture or the Notes or the Note Guarantees may be waived with the
consent of the Holders of a majority in aggregate principal amount of the
then outstanding Notes including Additional Notes, if any, voting as a
single class. Without the consent of any Holder of a Note, the Indenture
or the Notes or the Note Guarantees may be amended or supplemented to cure
any ambiguity, defect or inconsistency, to provide for uncertificated
Notes in addition to or in place of certificated Notes, to provide for the
assumption of the Company's or a Guarantor's obligations to Holders of the
Notes and Note Guarantees in case of a merger or consolidation, to make
any change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect the legal rights
under the Indenture of any such Holder, to comply with the requirements of
the SEC in order to effect or maintain the qualification of the Indenture
under the TIA, to conform the text of the Indenture or the Notes to any
provision of the "Description of Notes" section of the Company's Offering
Memorandum dated May 6, 2004, as supplemented, relating to the initial
offering of the Notes, to the extent that such provision in that
"Description of Notes" was intended to be a verbatim recitation of a
provision of the Indenture, the Note Guarantees or the Notes; to provide
for the issuance of Additional Notes in accordance with the limitations
set forth in the Indenture, or to
A1-5
allow any Guarantor to execute a supplemental indenture to the Indenture
and/or a Note Guarantee with respect to the Notes.
(13) DEFAULTS AND REMEDIES. Events of Default include: (i) default
for 30 days in the payment when due of interest on, or Liquidated Damages,
if any, with respect to the Notes, whether or not prohibited by the
subordination provisions of the Indenture; (ii) default in the payment
when due of the principal of, or premium, if any, on, the Notes when the
same becomes due and payable at maturity, upon redemption (including in
connection with an offer to purchase) or otherwise, (iii) failure by the
Company to comply with Section 4.15, of the Indenture; (iv) failure by the
Company or any Guarantor to comply with Sections 4.07, 4.09, 4.16 or 4.17
for 30 days after written notice from the Trustee, (v) failure by the
Company or any Guarantor for 60 days after written notice to the Company
by the Trustee or the Holders of at least 25% in aggregate principal
amount of the Notes including Additional Notes, if any, then outstanding
voting as a single class to comply with any of the other agreements in the
Indenture or the Notes; (vi) default under certain other agreements
relating to Indebtedness of the Company or any Guarantor which default
results in the acceleration of such Indebtedness prior to its express
maturity; (vii) certain final judgments for the payment of money that
remain undischarged for a period of 60 days; (viii) certain events of
bankruptcy or insolvency with respect to the Company or any Guarantor that
is a Significant Subsidiary and (ix) except as permitted by the Indenture,
any Note Guarantee is held in any judicial proceeding to be unenforceable
or invalid or ceases for any reason to be in full force and effect or AREH
or any other Guarantor or any Person acting on behalf of any Guarantor
denies or disaffirms its obligations under such Guarantor's Note
Guarantee. If any Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in aggregate principal amount of the then
outstanding Notes may declare all the Notes to be due and payable
immediately. Notwithstanding the foregoing, in the case of an Event of
Default arising from certain events of bankruptcy or insolvency, all
outstanding Notes will become due and payable immediately without further
action or notice. Holders may not enforce the Indenture or the Notes
except as provided in the Indenture. Subject to certain limitations,
Holders of a majority in aggregate principal amount of the then
outstanding Notes may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of the Notes notice of any
continuing Default or Event of Default (except a Default or Event of
Default relating to the payment of principal or interest or premium or
Liquidated Damages, if any,) if it determines that withholding notice is
in their interest. The Holders of a majority in aggregate principal amount
of the then outstanding Notes by notice to the Trustee may, on behalf of
the Holders of all of the Notes, rescind an acceleration or waive any
existing Default or Event of Default and its consequences under the
Indenture except a continuing Default or Event of Default in the payment
of interest or premium or Liquidated Damages, if any, on, or the principal
of, the Notes. The Company is required to deliver to the Trustee annually
a statement regarding compliance with the Indenture, and the Company is
required, upon becoming aware of any Default or Event of Default, to
deliver to the Trustee a statement specifying such Default or Event of
Default.
(14) TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual
or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal
with the Company or its Affiliates, as if it were not the Trustee.
(15) NO RECOURSE AGAINST OTHERS. A director, officer, manager (or
managing member), direct or indirect member, partner, employee,
incorporator or stockholder of the Company API, or the general partner of
the Company or any Guarantor or any of the Guarantors, as such, will not
have any liability for any obligations of the Company or the Guarantors
under the Notes, the Note Guarantees or the Indenture or for any claim
based on, in respect of, or by
A1-6
reason of, such obligations or their creation. Each Holder by accepting a
Note waives and releases all such liability. The waiver and release are
part of the consideration for the issuance of the Notes.
(16) AUTHENTICATION. This Note will not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
(17) ABBREVIATIONS. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).
(18) ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders
of Notes under the Indenture, Holders of Restricted Global Notes and
Restricted Definitive Notes will have all the rights set forth in the
Registration Rights Agreement dated as of May 12, 2004, among the Company,
the Guarantor and the other parties named on the signature pages thereof
or, in the case of Additional Notes, Holders of Restricted Global Notes
and Restricted Definitive Notes will have the rights set forth in one or
more registration rights agreements, if any, among the Company, the
Guarantor and the other parties thereto, relating to rights given by the
Company and the Guarantor to the purchasers of any Additional Notes
(collectively, the "Registration Rights Agreement").
(19) CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes, and the Trustee may use
CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as
printed on the Notes or as contained in any notice of redemption, and
reliance may be placed only on the other identification numbers placed
thereon.
(20) GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL
GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND THE NOTE
GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF
LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION
WOULD BE REQUIRED THEREBY.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
American Real Estate Partners, L.P.
American Real Estate Finance Corp.
000 Xxxxx Xxxxxxx Xxxx
Xx. Xxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
A1-7
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:___________________________________
(Insert assignee's legal name)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date: _______________
Your Signature:________________________
(Sign exactly as your name appears
on the face of this Note)
Signature Guarantee*: _____________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A1-8
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant
to Section 4.15 of the Indenture, check the box below:
Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.15 of the Indenture, state the amount you elect to
have purchased:
$________________
Date: _______________
Your Signature:________________________
(Sign exactly as your name appears on
the face of this Note)
Tax Identification No.:________________
Signature Guarantee*: ____________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A1-9
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE *
The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:
Principal Amount
Amount of decrease Amount of increase in at maturity of this Signature of
in Principal Amount Principal Amount Global Note following authorized officer
at maturity of at maturity of such decrease of Trustee or
Date of Exchange this Global Note this Global Note (or increase) Custodian
---------------- ------------------- --------------------- --------------------- ------------------
* This schedule should be included only if the Note is issued in global form.
A1-10
EXHIBIT A2
[Face of Regulation S Temporary Global Note]
CUSIP/CINS __________
8-1/8% Senior Notes due 2012
No. ___ $__________
AMERICAN REAL ESTATE PARTNERS, L.P.
AMERICAN REAL ESTATE FINANCE CORP.
promises to pay to CEDE & CO. or registered assigns,
the principal sum of ____________________________________________________DOLLARS
on June 1, 2012.
Interest Payment Dates: June 1 and December 1
Record Dates: May 15 and November 15
Dated:
AMERICAN REAL ESTATE PARTNERS, L.P.
By: American Property Investors, Inc.,
its general partner
By:____________________________________
Name:
Title:
AMERICAN REAL ESTATE FINANCE CORP.
By:____________________________________
Name:
Title:
This is one of the Notes referred to
in the within-mentioned Indenture:
WILMINGTON TRUST COMPANY,
as Trustee
By: ______________________________
Authorized Signatory
A2-1
[Back of Regulation S Temporary Global Note]
8-1/8% Senior Notes due 2012
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON.
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF AMERICAN REAL ESTATE PARTNERS, L.P.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("XXX"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX XXXXXX
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF American REal Estate Partners, L.P. AND AMERICAN REAL ESTATE FINANCE
CORP. THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY (1) (a) IN THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
A2-2
SECURITIES ACT, (c) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (d) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN
RULE 501 (a) (1), (2), (3) OR (7) OF THE SECURITIES ACT) THAT, PRIOR TO SUCH
TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH CAN BE OBTAINED FROM THE
TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF
NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO AMERICAN REAL
ESTATE PARTNERS, L.P. THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES
ACT OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF
AMERICAN REAL ESTATE PARTNERS, L.P. SO REQUESTS), (2) TO AMERICAN REAL ESTATE
PARTNERS, L.P. OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN
EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
(1) INTEREST. American Real Estate Partners, L.P., a Delaware
limited partnership ("AREP") and American Real Estate Finance Corp. ("AREP
Finance", together with AREP, the "Company"), promises to pay interest on
the principal amount of this Note at 8-1/8% per annum from
________________, 20__ until maturity and shall pay the Liquidated
Damages, if any, payable pursuant to Section 5 of the Registration Rights
Agreement referred to below. The Company will pay interest and Liquidated
Damages, if any, semi-annually in arrears on June 1 and December 1 of each
year, or if any such day is not a Business Day, on the next succeeding
Business Day (each, an "Interest Payment Date"). Interest on the Notes
will accrue from the most recent date to which interest has been paid or,
if no interest has been paid, from the date of issuance; provided that if
there is no existing Default in the payment of interest, and if this Note
is authenticated between a record date referred to on the face hereof and
the next succeeding Interest Payment Date, interest shall accrue from such
next succeeding Interest Payment Date; provided further that the first
Interest Payment Date shall be _____________, 20__. The Company will pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to
time on demand at a rate that is 1% per annum in excess of the rate then
in effect to the extent lawful; it will pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest and Liquidated Damages, if any, (without
regard to any applicable grace periods) from time to time on demand at the
same rate to the extent lawful. Interest will be computed on the basis of
a 360-day year of twelve 30-day months.
Until this Regulation S Temporary Global Note is exchanged for one or more
Regulation S Permanent Global Notes, the Holder hereof shall not be entitled to
receive payments of interest hereon; until so exchanged in full, this Regulation
S Temporary Global Note shall in all other respects be entitled to the same
benefits as other Notes under the Indenture.
(2) METHOD OF PAYMENT. The Company will pay or cause to pay interest
on the Notes (except defaulted interest) and Liquidated Damages, if any,
to the Persons who are registered Holders of Notes at the close of
business on the May 15 or November 15 next preceding the
A2-3
Interest Payment Date, even if such Notes are canceled after such record
date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Indenture with respect to defaulted interest. The
Notes will be payable as to principal, premium and Liquidated Damages, if
any, and interest at the office or agency of the Company maintained for
such purpose within or without the City and State of New York, or, at the
option of the Company, payment of interest and Liquidated Damages, if any,
may be made by check mailed to the Holders at their addresses set forth in
the register of Holders; provided that payment by wire transfer of
immediately available funds will be required with respect to principal of
and interest, premium and Liquidated Damages, if any, on, all Global Notes
and all other Notes the Holders of which will have provided wire transfer
instructions to the Company or the Paying Agent. Such payment will be in
such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.
(3) PAYING AGENT AND REGISTRAR. Initially, Wilmington Trust Company,
the Trustee under the Indenture, will act as Paying Agent and Registrar.
The Company may change any Paying Agent or Registrar without notice to any
Holder. The Company or any of its Subsidiaries may act in any such
capacity.
(4) INDENTURE. The Company issued the Notes under an Indenture dated
as of May 12, 2004 (the "Indenture") among the Company, the Guarantor and
the Trustee. The terms of the Notes include those stated in the Indenture
and those made part of the Indenture by reference to the TIA. The Notes
are subject to all such terms, and Holders are referred to the Indenture
and such Act for a statement of such terms. To the extent any provision of
this Note conflicts with the express provisions of the Indenture, the
provisions of the Indenture shall govern and be controlling. The Notes are
unsecured obligations of the Company.
(5) OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph
5, the Company will not have the option to redeem the Notes prior to June
1, 2008. On or after June 1, 2008, the Company will have the option to
redeem all or a part of the Notes upon not less than 30 nor more than 60
days' notice, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest and
Liquidated Damages, if any, on the Notes redeemed to the applicable
redemption date, if redeemed during the twelve-month period beginning on
June 1 of the years indicated below, subject to the rights of Holders on
the relevant record date to receive interest on the relevant interest
payment date:
Year Percentage
---- ----------
2008............................................................................. 104.063%
2009............................................................................. 102.031%
2010 and thereafter.............................................................. 100.000%
Unless the Company defaults in the payment of the redemption price,
interest will cease to accrue on the Notes or portions thereof called for
redemption on the applicable redemption date.
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time prior to June 1, 2007, the Company may on one or
more occasions redeem up to 35% of the aggregate principal amount of Notes
(including Additional Notes) issued under the Indenture at a redemption
price of 108.125% of the principal amount thereof, plus accrued and unpaid
interest and Liquidated Damages, if any, to the redemption date, with the
net cash proceeds of one or more Equity Offerings; provided that at least
65% of the aggregate principal amount of
A2-4
Notes issued under the Indenture remains outstanding immediately after the
occurrence of such redemption (excluding Notes held by AREP and its
Subsidiaries (including any Guarantor)) and such redemption occurs within
60 days of the date of the closing of such Equity Offering.
(6) MANDATORY REDEMPTION.
Other than in connection with redemption pursuant to Gaming Laws, the
Company is not required to make mandatory redemption or sinking fund payments
with respect to the Notes.
(7) REDEMPTION PURSUANT TO GAMING LAWS
If any Gaming Authority requires that a Holder or Beneficial Owner of
Notes be licensed, qualified or found suitable under any applicable Gaming Law
and such Holder or Beneficial Owner:
(1) fails to apply for a license, qualification or a finding of
suitability within 30 days (or such shorter period as may be required by the
applicable Gaming Authority) after being requested to do so by the Gaming
Authority; or
(2) is denied such license or qualification or not found suitable;
AREP shall then have the right, at its option:
(1) to require each such Holder or Beneficial Owner to dispose of its
Notes within 30 days (or such earlier date as may be required by the applicable
Gaming Authority) of the occurrence of the event described in clause (1) or (2)
above, or
(2) to redeem the Notes of each such Holder or Beneficial Owner, in
accordance with Rule 14e-1 of the Exchange Act, if applicable, at a redemption
price equal to the lowest of:
(a) the principal amount thereof, together with accrued and unpaid
interest and Liquidated Damages, if any, to the earlier of the date of
redemption, the date 30 days after such Holder or Beneficial Owner is required
to apply for a license, qualification or finding of suitability (or such shorter
period that may be required by any applicable Gaming Authority) if such Holder
or Beneficial Owner fails to do so ("Application Date") or of the date of denial
of license or qualification or of the finding of unsuitability by such Gaming
Authority;
(b) the price at which such Holder or Beneficial Owner acquired the Notes,
together with accrued and unpaid interest and Liquidated Damages, if any, to the
earlier of the date of redemption, the Application Date or the date of the
denial of license or qualification or of the finding of unsuitability by such
Gaming Authority; and
(c) such other lesser amount as may be required by any Gaming Authority.
Immediately upon a determination by a Gaming Authority that a Holder or
Beneficial Owner of the Notes will not be licensed, qualified or found suitable
and must dispose of the Notes, the Holder or Beneficial Owner will, to the
extent required by applicable Gaming Laws, have no further right:
(1) to exercise, directly or indirectly, through any trustee or nominee or
any other person or entity, any right conferred by the Notes, the Note Guarantee
or the Indenture; or
A2-5
(2) to receive any interest, Liquidated Damages, dividend, economic
interests or any other distributions or payments with respect to the Notes and
the Note Guarantee or any remuneration in any form with respect to the Notes and
the Note Guarantee from the Company, any Note Guarantor or the Trustee, except
the redemption price referred to above.
AREP shall notify the Trustee in writing of any such redemption as soon as
practicable. Any Holder or Beneficial Owner that is required to apply for a
license, qualification or a finding of suitability will be responsible for all
fees and costs of applying for and obtaining the license, qualification or
finding of suitability and of any investigation by the applicable Gaming
Authorities and the Company and any Note Guarantor will not reimburse any Holder
or Beneficial Owner for such expense.
(8) REPURCHASE AT THE OPTION OF HOLDER.
(a) If there is a Change of Control, the Company will be
required to make an offer (a "Change of Control Offer") to each Holder to
repurchase all or any part (equal to $1,000 or an integral multiple
thereof) of each Holder's Notes at a purchase price in cash equal to 101%
of the aggregate principal amount thereof plus accrued and unpaid interest
and Liquidated Damages, if any, thereon to the date of purchase, subject
to the rights of Holders on the relevant record date to receive interest
due on the relevant interest payment date (the "Change of Control
Payment"). Within 30 days following any Change of Control, the Company
will mail a notice to each Holder setting forth the procedures governing
the Change of Control Offer as required by the Indenture.
(9) NOTICE OF REDEMPTION. Notice of redemption will be mailed at
least 15 days but not more than 60 days before the redemption date to each
Holder whose Notes are to be redeemed at its registered address, except
that redemption notices may be mailed more than 60 days prior to a
redemption date if the notice is issued in connection with a defeasance of
the Notes or a satisfaction or discharge of the Indenture. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed.
(10) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged
as provided in the Indenture. The Registrar and the Trustee may require a
Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes
and fees required by law or permitted by the Indenture. The Company need
not exchange or register the transfer of any Note or portion of a Note
selected for redemption, except for the unredeemed portion of any Note
being redeemed in part. Also, the Company need not exchange or register
the transfer of any Notes for a period of 15 days before a selection of
Notes to be redeemed or during the period between a record date and the
corresponding Interest Payment Date.
This Regulation S Temporary Global Note is exchangeable in whole or in
part for one or more Global Notes only (i) on or after the termination of the
40-day distribution compliance period (as defined in Regulation S) and (ii) upon
presentation of certificates (accompanied by an Opinion of Counsel, if
applicable) required by Article 2 of the Indenture. Upon exchange of this
Regulation S Temporary Global Note for one or more Global Notes, the Trustee
shall cancel this Regulation S Temporary Global Note.
A2-6
(11) PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
(12) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture or the Notes or the Note Guarantees may be
amended or supplemented with the consent of the Holders of at least a
majority in aggregate principal amount of the then outstanding Notes
including Additional Notes, if any, voting as a single class, and any
existing Default or Event or Default or compliance with any provision of
the Indenture or the Notes or the Note Guarantees may be waived with the
consent of the Holders of a majority in aggregate principal amount of the
then outstanding Notes including Additional Notes, if any, voting as a
single class. Without the consent of any Holder of a Note, the Indenture
or the Notes or the Note Guarantees may be amended or supplemented to cure
any ambiguity, defect or inconsistency, to provide for uncertificated
Notes in addition to or in place of certificated Notes, to provide for the
assumption of the Company's or a Guarantor's obligations to Holders of the
Notes and Note Guarantees in case of a merger or consolidation, to make
any change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect the legal rights
under the Indenture of any such Holder, to comply with the requirements of
the SEC in order to effect or maintain the qualification of the Indenture
under the TIA, to conform the text of the Indenture or the Notes to any
provision of the "Description of Notes" section of the Company's Offering
Memorandum dated May 6, 2004, as supplemented, relating to the initial
offering of the Notes, to the extent that such provision in that
"Description of Notes" was intended to be a verbatim recitation of a
provision of the Indenture, the Note Guarantees or the Notes; to provide
for the issuance of Additional Notes in accordance with the limitations
set forth in the Indenture, or to allow any Guarantor to execute a
supplemental indenture to the Indenture and/or a Note Guarantee with
respect to the Notes.
(13) DEFAULTS AND REMEDIES. Events of Default include: (i) default
for 30 days in the payment when due of interest on, or Liquidated Damages,
if any, with respect to the Notes, whether or not prohibited by the
subordination provisions of the Indenture; (ii) default in the payment
when due of the principal of, or premium, if any, on, the Notes when the
same becomes due and payable at maturity, upon redemption (including in
connection with an offer to purchase) or otherwise, (iii) failure by the
Company to comply with Section 4.15, of the Indenture; (iv) failure by the
Company or any Guarantor to comply with Sections 4.07, 4.09, 4.16 or 4.17
for 30 days after written notice from the Trustee, (v) failure by the
Company or any Guarantor for 60 days after written notice to the Company
by the Trustee or the Holders of at least 25% in aggregate principal
amount of the Notes including Additional Notes, if any, then outstanding
voting as a single class to comply with any of the other agreements in the
Indenture or the Notes; (vi) default under certain other agreements
relating to Indebtedness of the Company or any Guarantor which default
results in the acceleration of such Indebtedness prior to its express
maturity; (vii) certain final judgments for the payment of money that
remain undischarged for a period of 60 days; (viii) certain events of
bankruptcy or insolvency with respect to the Company or any Guarantor that
is a Significant Subsidiary and (ix) except as permitted by the Indenture,
any Note Guarantee is held in any judicial proceeding to be unenforceable
or invalid or ceases for any reason to be in full force and effect or AREH
or any other Guarantor or any Person acting on behalf of any Guarantor
denies or disaffirms its obligations under such Guarantor's Note
Guarantee. If any Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in aggregate principal amount of the then
outstanding Notes may declare all the Notes to be due and payable
immediately. Notwithstanding the foregoing, in the case of an Event of
Default arising from certain events of bankruptcy or insolvency, all
outstanding Notes will become due and payable immediately without further
action or notice. Holders may not enforce the Indenture or the Notes
except as provided in the Indenture. Subject to certain limitations,
Holders of a
A2-7
majority in aggregate principal amount of the then outstanding Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of the Notes notice of any continuing Default or
Event of Default (except a Default or Event of Default relating to the
payment of principal or interest or premium or Liquidated Damages, if
any,) if it determines that withholding notice is in their interest. The
Holders of a majority in aggregate principal amount of the then
outstanding Notes by notice to the Trustee may, on behalf of the Holders
of all of the Notes, rescind an acceleration or waive any existing Default
or Event of Default and its consequences under the Indenture except a
continuing Default or Event of Default in the payment of interest or
premium or Liquidated Damages, if any, on, or the principal of, the Notes.
The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Company is required, upon
becoming aware of any Default or Event of Default, to deliver to the
Trustee a statement specifying such Default or Event of Default.
(14) TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual
or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal
with the Company or its Affiliates, as if it were not the Trustee.
(15) NO RECOURSE AGAINST OTHERS. A director, officer, manager (or
managing member), direct or indirect member, partner, employee,
incorporator or stockholder of the Company API, or the general partner of
the Company or any Guarantor or any of the Guarantors, as such, will not
have any liability for any obligations of the Company or the Guarantors
under the Notes, the Note Guarantees or the Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Notes.
(16) AUTHENTICATION. This Note will not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
(17) ABBREVIATIONS. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).
(18) ADDITIONAL RIGHTS OF HOLDERS. In addition to the rights
provided to Holders of Notes under the Indenture, Holders of Restricted
Global Notes and Restricted Definitive Notes will have all the rights set
forth in the Registration Rights Agreement dated as of May 12, 2004, among
the Company, the Guarantor and the other parties named on the signature
pages thereof or, in the case of Additional Notes, Holders of Restricted
Global Notes and Restricted Definitive Notes will have the rights set
forth in one or more registration rights agreements, if any, among the
Company, the Guarantor and the other parties thereto, relating to rights
given by the Company and the Guarantor to the purchasers of any Additional
Notes (collectively, the "Registration Rights Agreement").
(19) CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes, and the Trustee may use
CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as
printed on the Notes or as contained in any notice of redemption, and
reliance may be placed only on the other identification numbers placed
thereon.
A2-8
(20) GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL
GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND THE NOTE
GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF
LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION
WOULD BE REQUIRED THEREBY.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
American Real Estate Partners, L.P.
American Real Estate Finance Corp.
000 Xxxxx Xxxxxxx Xxxx
Xx. Xxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
A2-9
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to: __________________________________
(Insert assignee's legal name)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date: _______________
Your Signature: ______________________________
(Sign exactly as your name appears on the
face of this Note)
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A2-10
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant
to Section 4.15 of the Indenture, check the box below:
Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.15 of the Indenture, state the amount you elect to
have purchased:
$______________
Date: _______________
Your Signature:_____________________________
(Sign exactly as your name appears on
the face of this Note)
Tax Identification No.:_____________________
Signature Guarantee*: _____________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A2-11
SCHEDULE OF EXCHANGES OF INTERESTS IN THE REGULATION S TEMPORARY GLOBAL NOTE
The following exchanges of a part of this Regulation S Temporary Global
Note for an interest in another Global Note, or exchanges of a part of another
other Restricted Global Note for an interest in this Regulation S Temporary
Global Note, have been made:
Principal Amount
Amount of decrease Amount of increase in at maturity of this Signature of
in Principal Amount Principal Amount Global Note following authorized officer
at maturity of at maturity of such decrease of Trustee or
Date of Exchange this Global Note this Global Note (or increase) Custodian
---------------- ------------------- --------------------- --------------------- ------------------
A2-12
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
American Real Estate Partners, L.P.
American Real Estate Finance Corp.
000 Xxxxx Xxxxxxx Xxxx
Xx. Xxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
Re: 8 1/8% Senior Notes due 2012
Reference is hereby made to the Indenture, dated as of May 12, 2004 (the
"Indenture"), among American Real Estate Partners, L.P. ("AREP"), American Real
Estate Finance Corp. ("AREP Finance", together with AREP, the "Company"), the
Guarantor party thereto and Wilmington Trust Company, as trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture.
___________________, (the "Transferor") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to ___________________________ (the "Transferee"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE 144A GLOBAL NOTE OR A RESTRICTED DEFINITIVE NOTE PURSUANT TO RULE 144A. The
Transfer is being effected pursuant to and in accordance with Rule 144A under
the Securities Act of 1933, as amended (the "Securities Act"), and, accordingly,
the Transferor hereby further certifies that the beneficial interest or
Definitive Note is being transferred to a Person that the Transferor reasonably
believes is purchasing the beneficial interest or Definitive Note for its own
account, or for one or more accounts with respect to which such Person exercises
sole investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A in a transaction
meeting the requirements of Rule 144A, and such Transfer is in compliance with
any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Note and/or the Restricted Definitive Note and
in the Indenture and the Securities Act.
2. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE REGULATION S TEMPORARY GLOBAL NOTE, THE REGULATION S PERMANENT GLOBAL NOTE
OR A RESTRICTED DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is being
effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and, accordingly, the Transferor hereby further certifies that
(i) the Transfer is not being made to a Person in the United States and (x) at
the time the buy order was
B-1
originated, the Transferee was outside the United States or such Transferor and
any Person acting on its behalf reasonably believed and believes that the
Transferee was outside the United States or (y) the transaction was executed in,
on or through the facilities of a designated offshore securities market and
neither such Transferor nor any Person acting on its behalf knows that the
transaction was prearranged with a buyer in the United States, (ii) no directed
selling efforts have been made in contravention of the requirements of Rule
903(b) or Rule 904(b) of Regulation S under the Securities Act (iii) the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act and (iv) if the proposed transfer is being
made prior to the expiration of the Restricted Period, the transfer is not being
made to a U.S. Person or for the account or benefit of a U.S. Person (other than
an Initial Purchaser). Upon consummation of the proposed transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will be subject to the restrictions on Transfer enumerated in
the Private Placement Legend printed on the Regulation S Permanent Global Note,
the Regulation S Temporary Global Note and/or the Restricted Definitive Note and
in the Indenture and the Securities Act.
3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE IAI GLOBAL NOTE OR A RESTRICTED DEFINITIVE NOTE PURSUANT TO ANY
PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):
(a) [ ] such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Company or a
subsidiary thereof;
or
(c) [ ] such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;
or
(d) [ ] such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144, Rule
903 or Rule 904, and the Transferor hereby further certifies that it has
not engaged in any general solicitation within the meaning of Regulation D
under the Securities Act and the Transfer complies with the transfer
restrictions applicable to beneficial interests in a Restricted Global
Note or Restricted Definitive Notes and the requirements of the exemption
claimed, which certification is supported by (1) a certificate executed by
the Transferee in the form of Exhibit D to the Indenture and (2) if such
Transfer is in respect of a principal amount of Notes at the time of
transfer of less than $250,000, an Opinion of Counsel provided by the
Transferor or the Transferee (a copy of which the Transferor has attached
to this certification), to the effect that such Transfer is in compliance
with the Securities Act. Upon consummation of the proposed transfer in
accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the IAI
Global Note and/or the Restricted Definitive Notes and in the Indenture
and the Securities Act.
B-2
4. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.
(b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
(c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer
is being effected pursuant to and in compliance with an exemption from the
registration requirements of the Securities Act other than Rule 144, Rule 903 or
Rule 904 and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any State of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will not be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Restricted Global Notes or
Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
__________________________________
[Insert Name of Transferor]
By:_______________________________
Name:
Title:
Dated: __________________
B-3
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP _________), or
(iii) [ ] IAI Global Note (CUSIP _________); or
(b) [ ] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP _________), or
(iii) [ ] IAI Global Note (CUSIP _________); or
(iv) [ ] Unrestricted Global Note (CUSIP _________); or
(b) [ ] a Restricted Definitive Note; or
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
American Real Estate Partners, L.P.
American Real Estate Finance Corp.
000 Xxxxx Xxxxxxx Xxxx
Xx. Xxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
Re: 8 1/8% Senior Notes due 2012
(CUSIP ____________)
Reference is hereby made to the Indenture, dated as of May 12, 2004 (the
"Indenture"), among American Real Estate Partners, L.P. ("AREP"), American Real
Estate Finance Corp. ("AREP Finance", together with AREP, the "Company"), the
Guarantor party thereto and Wilmington Trust Company, as trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture.
__________________________, (the "Owner") owns and proposes to exchange
the Note[s] or interest in such Note[s] specified herein, in the principal
amount of $____________ in such Note[s] or interests (the "Exchange"). In
connection with the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the Securities Act of 1933, as
amended (the "Securities Act"), (iii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest in
an Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
(b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and
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pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Definitive Note is being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.
(c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL
INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the Owner's Exchange
of a Restricted Definitive Note for a beneficial interest in an Unrestricted
Global Note, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL
INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange of the
Owner's Restricted Definitive Note for a beneficial interest in the [CHECK ONE]
|_|144A Global Note, |_|Regulation S Global Note, |_|IAI Global Note with an
equal principal amount, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, and in compliance with any applicable blue sky securities
laws of any state of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the beneficial interest
issued will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the relevant Restricted Global Note and in the
Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
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___________________________________
[Insert Name of Transferor]
By: _______________________________
Name:
Title:
Dated: ______________________
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EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
American Real Estate Partners, L.P.
American Real Estate Finance Corp.
000 Xxxxx Xxxxxxx Xxxx
Xx. Xxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
Re: 8 1/8% Senior Notes due 2012
Reference is hereby made to the Indenture, dated as of May 12, 2004 (the
"Indenture"), among American Real Estate Partners, L.P. ("AREP"), American Real
Estate Finance Corp. ("AREP Finance", together with AREP, the "Company"), the
Guarantor party thereto and Wilmington Trust Company, as trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of:
(a) [ ] a beneficial interest in a Global Note, or
(b) [ ] a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any interest
therein is subject to certain restrictions and conditions set forth in the
Indenture and the undersigned agrees to be bound by, and not to resell, pledge
or otherwise transfer the Notes or any interest therein except in compliance
with, such restrictions and conditions and the Securities Act of 1933, as
amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and, if such transfer is in respect of
a principal amount of Notes, at the time of transfer of less than $250,000, an
Opinion of Counsel in form reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities Act, (D) outside the
United States in accordance with Rule 904 of Regulation S under the
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EXHIBIT D
Securities Act, (E) pursuant to the provisions of Rule 144(k) under the
Securities Act or (F) pursuant to an effective registration statement under the
Securities Act, and we further agree to provide to any Person purchasing the
Definitive Note or beneficial interest in a Global Note from us in a transaction
meeting the requirements of clauses (A) through (E) of this paragraph a notice
advising such purchaser that resales thereof are restricted as stated herein.
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3. We understand that, on any proposed resale of the Notes or beneficial
interest therein, we will be required to furnish to you and the Company such
certifications, legal opinions and other information as you and the Company may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us will bear a
legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes or beneficial interest therein purchased by
us for our own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
______________________________________
[Insert Name of Accredited Investor]
By:__________________________________
Name:
Title:
Dated: _____________________
D-3
EXHIBIT E
FORM OF NOTATION OF GUARANTEE
For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in the Indenture and subject to the
provisions in the Indenture dated as of May 12, 2004 (the "Indenture"), among
American Real Estate Partners, L.P. ("AREP"), American Real Estate Finance Corp.
("AREP Finance", together with AREP, the "Company"), the Guarantor party thereto
and Wilmington Trust Company, as trustee (the "Trustee"), (a) the due and
punctual payment of the principal of, premium and Liquidated Damages, if any,
and interest on, the Notes, whether at maturity, by acceleration, redemption or
otherwise, the due and punctual payment of interest on overdue principal of and
interest on the Notes, if any, if lawful, and the due and punctual performance
of all other obligations of the Company to the Holders or the Trustee all in
accordance with the terms of the Indenture and (b) in case of any extension of
time of payment or renewal of any Notes or any of such other obligations, that
the same will be promptly paid in full when due or performed in accordance with
the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise. The obligations of the Guarantors to the Holders of
Notes and to the Trustee pursuant to the Note Guarantee and the Indenture are
expressly set forth in Article 10 of the Indenture and reference is hereby made
to the Indenture for the precise terms of the Note Guarantee. Each Holder of a
Note, by accepting the same, (a) agrees to and shall be bound by such provisions
and (b) appoints the Trustee attorney-in-fact of such Holder for all purposes
Capitalized terms used but not defined herein have the meanings given to
them in the Indenture.
[NAME OF GUARANTOR(S)]
By:____________________________________
Name:
Title:
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EXHIBIT F
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
________________, 200__, among __________________ (the "Guaranteeing
Subsidiary"), a subsidiary of American Real Estate Partners, L.P., a Delaware
limited partnership, as issuer ("AREP") (or its permitted successor), American
Real Estate Finance Corp., a Delaware corporation, as co-issuer ("AREP Finance",
together with AREP, the "Company"), the other Guarantors (as defined in the
Indenture referred to herein) and Wilmington Trust Company, as trustee under the
Indenture referred to below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the Trustee
an indenture (the "Indenture"), dated as of May 12, 2004 providing for the
issuance of 8 1/8% Senior Notes due 2012 (the "Notes");
WHEREAS, the Indenture provides that a Guaranteeing Subsidiary may execute
and deliver to the Trustee a supplemental indenture pursuant to which the
Guaranteeing Subsidiary shall unconditionally guarantee all of the Company's
Obligations under the Notes and the Indenture on the terms and conditions set
forth herein (the "Note Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees to
provide an unconditional Guarantee on the terms and subject to the conditions
set forth in the Note Guarantee and in the Indenture including but not limited
to Article 10 thereof.
4. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator, manager (or managing member) direct or indirect member, partner or
stockholder of the Company, AREH, API or any additional Guarantor shall have any
liability for any obligations of the Company, AREH, API or any additional
Guarantor under the Notes, this Indenture, any Note Guarantee or for any claim
based on, in respect of, or by reason of such obligations or its creation. Each
Holder of the Notes by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for issuance of the Notes.
5. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE WITHOUT GIVING EFFECT
TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION
OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
F-1
6. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
7. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.
8. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiary and the Company.
F-2
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: _______________, 20___
[GUARANTEEING SUBSIDIARY]
By: _______________________________
Name:
Title:
AMERICAN REAL ESTATE PARTNERS, L.P.
By: American Property Investors, Inc.,
its general partner
By: _______________________________
Name:
Title:
AMERICAN REAL ESTATE FINANCE CORP.
By: _______________________________
Name:
Title:
AMERICAN REAL ESTATE HOLDINGS LIMITED
PARTNERSHIP
By: American Property Investors, Inc.,
its general partner
By: _______________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
as Trustee
By: _______________________________
Authorized Signatory
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EXHIBIT G
FORM OF SECURITY AND CONTROL AGREEMENT
This Security and Control Agreement (this "Agreement") dated as of
[__________], 200[ ] among American Real Estate Partners, L.P. (the "Grantor" or
"AREP"), Wilmington Trust Company in its capacity as Trustee on behalf of the
Holders (as defined in the Indenture) (the "Secured Party") and Wilmington Trust
Company in its capacity as a "bank" as defined in Section 9-102 of the UCC (in
such capacity, the "Financial Institution"). Capitalized terms used but not
defined herein shall have the meanings assigned in the Indenture, dated as of
May 12, 2004, between the Grantor, American Real Estate Holdings Limited
Partnership, a Delaware limited partnership ("AREH") and the Secured Party (the
"Indenture"). All references herein to the "UCC" shall mean the Uniform
Commercial Code as in effect in the State of New York.
WHEREAS, the Grantor, AREH and the Secured Party on behalf of the
Noteholders have entered into the Indenture relating to the Grantor's and
AMERICAN Real Estate Finance Corp.'s, a Delaware corporation ("Finance Corp",
together with the Grantor, the "Issuers"), 8 1/8% senior notes due 2012;
WHEREAS, the Grantor and the Secured Party are entering into this
Agreement to grant the Secured Party a security interest in the Pledged Account
(as hereinafter defined) and the Collateral (as hereinafter defined);
WHEREAS, the parties hereto are entering into this Agreement to perfect
and ensure the priority of such security interest;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. GRANT OF SECURITY.
(a) The Grantor hereby assigns, grants, hypothecates and pledges to,
and grants a lien on and a security interest in favor of the Secured Party, on
behalf of the Noteholders, on all estate, right, title and interest of the
Grantor, whether now owned or hereafter acquired, in the Pledged Account and in
all cash and other assets or property held therein or credited thereto or
received in connection therewith and all proceeds thereof, including all rights
of the Grantor to receive moneys due in respect of such Pledged Account, and all
claims with respect to such Pledged Account, all income or gain earned in
respect of any assets held in or credited to such Pledged Account, and all
proceeds receivable or received when any asset held in or credited to such
Pledged Account is collected, exchanged or otherwise disposed of, whether
voluntarily or involuntarily (all of the foregoing being collectively referred
to as the "Collateral").
(b) The Grantor agrees that from time to time it shall promptly
execute and deliver all instruments and documents, and take all actions, that
may be reasonably necessary, or that the Secured Party may reasonably request,
in order to perfect and protect the assignment and security interest granted or
intended to be granted hereby or to enable the Secured Party to exercise or
enforce its rights and remedies hereunder with respect to the
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Pledged Account and the Collateral. Furthermore, the Grantor hereby authorizes
the Secured Party to file such financing or continuation statements, or
amendments thereto, and such other instruments, endorsements or notices, as the
Secured Party may reasonably deem necessary or advisable in order to perfect and
preserve the assignment and security interest granted or purported to be granted
hereby.
(c) The Grantor represents and warrants that:
(i) the Agreement constitutes the valid and legally binding obligation of
the Grantor, enforceable in accordance with its terms and conditions;
(ii) it has not assigned any of its rights under the Pledged Account or
the Collateral;
(iii) it has not executed and is not aware of any effective financing
statement, security agreement, control agreement or other instrument similar in
effect covering all or any part of the Pledged Account or the Collateral;
(iv) it has full power and authority to grant a security interest in and
assign its right, title and interest in the Pledged Account and the Collateral;
and
(v) upon the execution and delivery of this Agreement by the Grantor, the
security interest granted to the Secured Party pursuant to this Agreement in and
to the Pledged Account and the Collateral will constitute, a first priority
perfected security interest.
SECTION 2. Establishment and Maintenance of Collateral Accounts.
(a) The Financial Institution hereby represents and warrants that it
has established and currently maintains the account listed on Schedule 1 hereto
as a separate account segregated from all other custodial, collateral or other
accounts, and that the Grantor is its sole customer with respect to such account
(such account and any successor account being referred to herein as the "Pledged
Account.") The Financial Institution agrees to act as bank with respect to the
Pledged Account and covenants and agrees that it shall not change the name or
account number of the Pledged Account without the prior written consent of the
Secured Party or, except in an Event of Default, the Grantor;
(b) The Financial Institution represents and warrants that the
Pledged Account is a "deposit account" (as defined in Section 9-102(a)(29) of
the UCC); and
(c) Each of the Financial Institution and the Grantor represents,
warrants and covenants that no investment property (as defined in Section
9-102(a)(49) of the UCC) shall be deposited or otherwise included in the Pledged
Account and agrees no funds on deposit in the Pledged Account shall be invested
in any investment property.
SECTION 3. SECURED PARTY'S CONTROL OF THE PLEDGED ACCOUNTS. If at any time
the Financial Institution shall receive any instruction (within the meaning of
Section 9-104 of the UCC, i.e., an order directing the disposition of funds in a
Pledged Account) originated by
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the Secured Party, the Financial Institution shall comply with such instruction
without further consent by the Grantor or any other person.
SECTION 4. GRANTOR'S ACCESS TO THE ACCOUNT.
(a) It is understood and agreed that until this Agreement is
terminated in accordance with the terms hereof, the Financial Institution shall
not comply with instructions of the Grantor or any person other than the Secured
Party without the express consent of the Secured Party to each such instruction;
(b) Except if an Event of Default shall have occurred and be
continuing, if at any Quarterly Determination Date the amount of Collateral
exceeds the amount required to then be deposited in the Pledged Account pursuant
to Section 4.16 of the Indenture, the Grantor may provide a Notice of Partial
Release in substantially the form of Exhibit A hereto requesting that the
Secured Party instruct the Financial Institution to release such excess amount
to the Grantor.
SECTION 5. SUBORDINATION OF LIEN; WAIVER OF SET-OFF. In the event that the
Financial Institution has or subsequently obtains by agreement, by operation of
law or otherwise a security interest in the Pledged Account or the Collateral,
the Financial Institution hereby agrees that such security interest shall be
subordinate to the security interest of the Secured Party. The money and other
items credited to the Pledged Account will not be subject to deduction, set-off,
banker's lien, or any other right in favor of any person other than the Secured
Party.
SECTION 6. REMEDIES. If any Event of Default shall have occurred and be
continuing, the Secured Party may exercise in respect of the Pledged Account and
the Collateral, in addition to all other rights and remedies provided for
herein, in the Indenture or otherwise available to it at law or in equity, all
right and remedies of the Secured Party on default under the UCC (whether or not
the UCC applies to the affected Pledged Account or any Collateral) to collect,
enforce or satisfy any Obligation then owing, whether by acceleration or
otherwise, including, without limitation, applying any or all of the cash in the
Pledged Account in full or partial satisfaction of the Obligations, or otherwise
selling in one or more public or private sales or retaining in full or partial
satisfaction of the Obligations any or all of the Collateral granted hereunder.
SECTION 7. CHOICE OF LAW. This Agreement shall each be governed by the
laws of the State of New York. Regardless of any provision in any other
agreement, for purposes of the UCC, with respect to the Pledged Account, New
York shall be deemed to be the bank's jurisdiction (within the meaning of
Section 9-304 of the UCC). The Pledged Account shall be governed by the laws of
the State of New York.
SECTION 8. CONFLICT WITH OTHER AGREEMENTS. The Financial Institution
hereby represents, warrants, covenants and agrees that:
(a) There are no other agreements entered into between the Financial
Institution and the Grantor (or any other person) with respect to the Pledged
Account or the Collateral;
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(b) It has not entered into, and until the termination of this
Agreement will not enter into, any agreement with any person other than the
Secured Party relating to the Pledged Account or the Collateral pursuant to
which it agrees or has agreed to comply with instructions (within the meaning of
Section 9-104 of the UCC) of such other person;
(c) It has not entered into, and until the termination of this
Agreement will not enter into, any agreement with the Grantor or the Secured
Party purporting to limit or condition the obligation of the Financial
Institution to comply with instructions with respect to the Pledged Account or
the Collateral; and
(d) In the event of any conflict between this Agreement (or any
portion thereof) and any other agreement now existing or hereafter entered into
with respect to the Pledged Account or the Collateral, the terms of this
Agreement shall prevail.
SECTION 9. ADVERSE CLAIMS. The Financial Institution represents and
warrants that except for the claims and interest of the Secured Party and of the
Grantor in the Pledged Account and the Collateral, it does not know of any
security interest in, lien on or claim to, or other interest in, the Pledged
Account or the Collateral. If any person asserts any lien, encumbrance or
adverse claim (including any writ, garnishment, judgment, warrant of attachment,
execution or similar process) against the Pledged Account or the Collateral, the
Financial Institution will promptly notify the Secured Party and the Grantor
thereof.
SECTION 10. ADDITIONAL PROVISIONS REGARDING MAINTENANCE OF ACCOUNTS. The
Financial Institution covenants and agrees:
(a) Statements and Confirmations. The Financial Institution will
promptly send copies of all statements, confirmations and other correspondence
concerning the Pledged Account or the Collateral, simultaneously to each of the
Grantor and the Secured Party at the address for each set forth in Section 14 of
this Agreement.
(b) Tax Reporting. All interest, if any, relating to the Pledged
Account, shall be reported to the Internal Revenue Service and all state and
local taxing authorities under the name and taxpayer identification number of
the Grantor.
SECTION 11. ADDITIONAL REPRESENTATION AND WARRANTY OF THE FINANCIAL
INSTITUTION. The Financial Institution represents and warrants that this
Agreement constitutes the valid and legally binding obligation of the Financial
Institution, enforceable in accordance with its terms and conditions.
SECTION 12. INDEMNIFICATION OF FINANCIAL INSTITUTION AND SECURED PARTY.
(a) The Grantor hereby agrees that the Financial Institution shall be
relieved from liabilities (i) arising from the error of judgment made in good
faith by it, unless it is proved that the Financial Institution was negligent in
ascertaining the pertinent facts; and (ii) with respect to any action it takes
or omits to take in good faith in accordance with a direction received pursuant
to the terms of this Agreement.
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The Financial Institution (i) will not be liable for any action it takes
or omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Agreement; (ii) may act through its
attorneys and agents and will not be responsible for the misconduct or
negligence of any attorney or agent appointed with due care; (iii) may
conclusively rely upon any document believed by it to be genuine and to have
been signed or presented by the proper person and it need not investigate any
fact or matter stated in any such document; and (iv) may consult with counsel of
its choice and the written advice of such counsel will be full and complete
authorization and protection from liability in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon.
The Grantor will indemnify the Financial Institution and hold it harmless
against any and all losses, liabilities or expenses incurred by it arising out
of or in connection with the acceptance or administration of its duties under
this Agreement, including the costs and expenses of enforcing this Agreement
against the Grantor (including this Section 12) and defending itself against any
claim (whether asserted by the Grantor or any other person) or liability in
connection with the exercise or performance of any of its powers or duties
hereunder, except any such loss, liability or expense attributable to its
negligence or bad faith. The Financial Institution will notify the Grantor
promptly of any claim for which it may seek indemnity. Failure by the Financial
Institution to so notify the Grantor will not relieve the Grantor of its
obligations hereunder. The Grantor will defend the claim and the Financial
Institution will cooperate in the defense. The Financial Institution may have
separate counsel and the Grantor will pay the reasonable fees and expenses of
such counsel. The Grantor need not pay for any settlement made without its
consent, which consent will not be unreasonably withheld.
(b) The Secured Party shall be entitled to all benefits and rights arising
under the protections and indemnification granted to it by Grantor under the
terms of the Indenture in connection with any actions taken or omissions made by
the Secured Party with respect to its duties and obligations hereunder as if
such protections and indemnification were explicitly granted hereunder.
(c) The obligations of the Grantor under this Section 12 will survive the
termination of this Agreement.
SECTION 13. SUCCESSORS; ASSIGNMENT. The terms of this Agreement shall be
binding upon, and shall inure to the benefit of, the parties hereto and their
respective successors and assigns, except that neither the Grantor nor the
Financial Institution may delegate their obligations hereunder without the prior
written consent of the Secured Party. Additionally, in the event that the
Secured Party is replaced as Trustee under the Indenture any entity that
succeeds to such role shall be entitled to the benefits of this Agreement. The
Secured Party agrees to send written notice to the Financial Institution of any
such replacement.
SECTION 14. NOTICES. Any notice, request or other communication required
or permitted to be given under this Agreement shall be in writing and deemed to
have been properly given when delivered in person, or when sent by telecopy or
other electronic means and electronic confirmation of error free receipt is
received or two days after being sent by certified or registered United States
mail, return receipt requested, postage prepaid, addressed to the party at the
address set forth below.
G-5
Grantor:
American Real Estate Partners, L.P.
000 Xxxxx Xxxxxxx Xxxx
Xx. Xxxxx, Xxx Xxxx 00000
Attention: Chief Financial Officer
Facsimile: [ ]
Secured Party:
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administration
Xxxxxxx X. Xxxxx
Facsimile: (000) 000-0000
Financial Institution:
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Capital Markets
Trust Officer
Facsimile: (000) 000-0000
Any party may change its address for notices by giving notice to the other
parties hereto in the manner set forth above.
SECTION 15. AMENDMENT. No amendment or modification of this Agreement or
waiver of any right hereunder shall be binding on any party hereto unless it is
in writing and is signed by all of the parties hereto.
SECTION 16. TERMINATION.
(a) The obligations of the Financial Institution to the Secured
Party pursuant to this Agreement shall continue in effect until the security
interests of the Secured Party in the Pledged Account and the Collateral have
been terminated pursuant to the terms of the Indenture and the Secured Party has
notified the Financial Institution of such termination in writing. The Secured
Party agrees to provide Notice of Termination in substantially the form of
Exhibit B hereto to the Financial Institution upon the request of the Grantor on
or after the termination of the Secured Party's security interest in the Pledged
Account and the Collateral pursuant to the terms of the Indenture. The
termination of this Agreement shall not terminate the Pledged Account or alter
the obligations of the Financial Institution to the Grantor pursuant to any
other agreement with respect to the Pledged Account.
G-6
(b) Without limitation to the foregoing, if at any Quarterly
Determination Date, the Fixed Charge Coverage Ratio of AREP and the Guarantors
is at least 1.5 to 1.0 for the four consecutive fiscal quarters most recently
completed prior to such Quarterly Determination Date, the Secured Party shall
provide to the Financial Institution a Notice of Termination in the form of
Exhibit B.
SECTION 17. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing and delivering one or more
counterparts.
[Remainder of page intentionally left blank]
G-7
IN WITNESS WHEREOF, each of the Grantor, the Secured Party and the
Financial Institution have caused this Agreement to be duly executed and
delivered by their respective officers thereunto duly authorized as of the date
first written above.
AMERICAN REAL ESTATE PARTNERS,
L.P., as Grantor
By: American Property Investors, Inc.,
its general partner
By: ___________________________________
Name:
Title:
WILMINGTON TRUST COMPANY, as Secured
Party in its capacity as Trustee on
behalf of the Noteholders
By: ___________________________________
Name:
Title:
WILMINGTON TRUST COMPANY, in its
capacity as Financial Institution
By: ___________________________________
Name:
Title:
G-8
SCHEDULE 1
Existing Deposit Account Subject to this Agreement
Exact Name of Account Account Number
G-9
Exhibit A
[Letterhead of Grantor]
[Date]
[Name and Address of Secured Party]
Attention: ______
Re: Notice of Partial Release
Reference is made to the Security and Control Agreement, between you, the
Financial Institution and the undersigned, dated as of [__________, 200__]. We
hereby notify you that as of [________, 200__] the Collateral held in the
Pledged Account exceeded the amount required to be deposited in the Pledged
Account, as follows:
QUARTERLY DETERMINATION BALANCE: $[ ]
LESS: ONE YEAR OF INTEREST PAYMENTS: $[ ]
AMOUNT OF PARTIAL RELEASE: $[ ]
We hereby request that you instruct the Financial Institution to release
to us such Amount of Partial Release.
We hereby certify that no Event of Default has occurred and is continuing
under the Indenture.
Very truly yours,
[Grantor]
By: ___________________________________
Title:
G-10
Exhibit B
[Letterhead of Grantor]
[Date]
[Name and Address of Secured Party]
Attention: ______
Re: Termination of Security and Control Agreement
You are hereby notified that the Security and Control Agreement between
you, the Grantor and the undersigned is terminated and you have no further
obligations to the undersigned pursuant to such Agreement. Notwithstanding any
previous instructions to you, you are hereby instructed to accept all future
directions with respect to account number _______from the Grantor. This notice
terminates any obligations you may have to the undersigned with respect to such
account, however nothing contained in this notice shall alter any obligations
which you may otherwise owe to the Grantor pursuant to any other agreement.
You are instructed to deliver a copy of this notice by facsimile
transmission to American Real Estate Partners, L.P.
Very truly yours,
[Name of Secured Party]
By: _______________________________
Title:
G-11
