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EXHIBIT 4.4
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COAST HOTELS AND CASINOS, INC.
ISSUER
COAST RESORTS, INC.
GUARANTOR
9 1/2% SENIOR SUBORDINATED NOTES
DUE APRIL 1, 2009
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INDENTURE
Dated as of March 23, 1999
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FIRSTAR BANK OF MINNESOTA, N.A.
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).......................................................... 11.03
(c).......................................................... 11.03
313 (a).......................................................... 7.06
(b)(1)....................................................... 10.03
(b)(2)....................................................... 7.07
(c).......................................................... 7.06;
11.02
(d).......................................................... 7.06
314 (a).......................................................... 4.03;
11.02
(b).......................................................... 10.02
(c)(1)....................................................... 11.04
(c)(2)....................................................... 11.04
(c)(3)....................................................... N.A.
(d).......................................................... N.A.
(e).......................................................... 11.05
(f).......................................................... N.A.
315 (a).......................................................... 7.01
(b).......................................................... 7.05;
11.02
(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).......................................................... 11.01
(b).......................................................... N.A.
(c).......................................................... 11.01
N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.
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TABLE OF CONTENTS
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ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions...................................................................1
Section 1.02. Other Definitions............................................................23
Section 1.03. Incorporation by Reference of Trust Indenture Act............................23
Section 1.04. Rules of Construction........................................................23
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating..............................................................24
Section 2.02. Execution and Authentication.................................................24
Section 2.03. Registrar and Paying Agent...................................................25
Section 2.04. Paying Agent to Hold Money in Trust..........................................25
Section 2.05. Holder Lists.................................................................25
Section 2.06. Transfer and Exchange........................................................26
Section 2.07. Replacement Notes............................................................36
Section 2.08. Outstanding Notes............................................................36
Section 2.09. Treasury Notes...............................................................36
Section 2.10. Temporary Notes..............................................................37
Section 2.11. Cancellation.................................................................37
Section 2.12. Defaulted Interest...........................................................37
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee...........................................................37
Section 3.02. Selection of Notes to Be Redeemed............................................38
Section 3.03. Notice of Redemption.........................................................38
Section 3.04. Effect of Notice of Redemption...............................................39
Section 3.05. Deposit of Redemption Price..................................................39
Section 3.06. Notes Redeemed in Part.......................................................39
Section 3.07. Optional Redemption..........................................................39
Section 3.08. Gaming Redemption............................................................40
Section 3.09. No Mandatory Redemption......................................................41
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes.............................................................41
Section 4.02. Maintenance of Office or Agency..............................................41
Section 4.03. Commission Reports and Reports to Holders....................................42
Section 4.04. Compliance Certificate.......................................................42
Section 4.05. Taxes........................................................................43
Section 4.06. Stay, Extension and Usury Laws...............................................43
Section 4.07. Incurrence of Indebtedness and Issuances of Preferred Stock..................43
Section 4.08. No Senior Subordinated Indebtedness..........................................46
Section 4.09. Liens........................................................................46
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Section 4.10. Restricted Payments..........................................................46
Section 4.11. Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.................................................................48
Section 4.12. Limitations on the Issuance and Sale of Capital Stock of Wholly
Owned Restricted Subsidiaries................................................49
Section 4.13. Subsidiary Guarantees........................................................50
Section 4.14. Redemption of the Old First Mortgage Notes...................................50
Section 4.15. Construction of the New Casino...............................................50
Section 4.16. Transactions with Affiliates.................................................50
Section 4.17. Asset Sales..................................................................51
Section 4.18. Corporate Existence..........................................................52
Section 4.19. Limitation on Status as Investment Company...................................52
Section 4.20. Repurchase of Notes Upon a Change of Control.................................52
Section 4.21. Independent Directors........................................................52
Section 4.22. Line of Business.............................................................52
Section 4.23. Payments for Consent.........................................................53
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.....................................53
Section 5.02. Successor Corporation Substituted............................................53
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default............................................................54
Section 6.02. Acceleration.................................................................55
Section 6.03. Other Remedies...............................................................55
Section 6.04. Waiver of Past Defaults......................................................56
Section 6.05. Control by Majority..........................................................56
Section 6.06. Limitation on Suits..........................................................56
Section 6.07. Rights of Holders of Notes to Receive Payment................................57
Section 6.08. Collection Suit by Trustee...................................................57
Section 6.09. Trustee May File Proofs of Claim.............................................57
Section 6.10. Priorities...................................................................57
Section 6.11. Undertaking for Costs........................................................58
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee............................................................58
Section 7.02. Rights of Trustee............................................................59
Section 7.03. Individual Rights of Trustee.................................................60
Section 7.04. Trustee's Disclaimer.........................................................60
Section 7.05. Notice of Defaults...........................................................60
Section 7.06. Reports by Trustee to Holders of the Notes...................................60
Section 7.07. Compensation and Indemnity...................................................61
Section 7.08. Replacement of Trustee.......................................................61
Section 7.09. Successor Trustee by Merger, etc.............................................62
Section 7.10. Eligibility; Disqualification................................................62
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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..........................................................63
Section 8.04. Conditions to Legal or Covenant Defeasance...................................64
Section 8.05. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions...............................................65
Section 8.06. Repayment to Company.........................................................66
Section 8.07. Reinstatement................................................................66
Section 8.08. Satisfaction and Discharge...................................................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
SUBORDINATION
Section 10.01. Agreement to Subordinate.....................................................70
Section 10.02. Liquidation; Dissolution; Bankruptcy.........................................70
Section 10.03. Default on Designated Senior Indebtedness....................................70
Section 10.04. Acceleration of Notes........................................................71
Section 10.05. When Distribution Must Be Paid Over..........................................71
Section 10.06. Notice by Company............................................................72
Section 10.07. Subrogation..................................................................72
Section 10.08. Relative Rights..............................................................72
Section 10.09. Subordination May Not Be Impaired by Company.................................72
Section 10.10. Distribution or Notice to Representative.....................................72
Section 10.11. Rights of Trustee and Paying Agent...........................................73
Section 10.12. Authorization to Effect Subordination........................................73
Section 10.13. Amendments...................................................................73
ARTICLE 11
NOTE GUARANTEES
Section 11.01. Parent Guarantee.............................................................73
Section 11.02. Subordination of Guarantees..................................................74
Section 11.03. Limitation on Coast Resorts Liability........................................74
Section 11.04. Execution and Delivery of Parent Guarantee...................................75
Section 11.05. Guarantors May Consolidate, etc., on Certain Terms...........................75
Section 11.06. Releases Following Sale of Assets............................................76
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ARTICLE 12
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls.................................................76
Section 12.02. Notices......................................................................76
Section 12.03. Communication by Holders of Notes with Other Holders of Notes................78
Section 12.04. Certificate and Opinion as to Conditions Precedent...........................78
Section 12.05. Statements Required in Certificate or Opinion................................78
Section 12.06. Rules by Trustee and Agents..................................................78
Section 12.07. No Personal Liability of Directors, Officers, Employees and
Stockholders.................................................................78
Section 12.08. Governing Law................................................................79
Section 12.09. No Adverse Interpretation of Other Agreements................................79
Section 12.10. Successors...................................................................79
Section 12.11. Severability.................................................................79
Section 12.12. Counterpart Originals........................................................79
Section 12.13. Table of Contents, Headings, etc.............................................79
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EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED
INVESTOR
Exhibit E FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY SUBSEQUENT
SUBSIDIARY GUARANTORS
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INDENTURE dated as of March 23, 1999 among Coast Hotels and Casinos,
Inc., a Nevada corporation (the "Company"), Coast Resorts, Inc., a Nevada
corporation, as guarantor ("Coast Resorts"), and Firstar Bank of Minnesota,
N.A., as trustee (the "Trustee").
The Company, Coast Resorts and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders of
the 9 1/2% Series A Senior Subordinated Notes due 2009 (the "Series A Notes")
and the 9 1/2% Series B Senior Subordinated Notes due 2009 (the "Series B Notes"
and, together with the Series A Notes, 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 A 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 Indebtedness" means Indebtedness of a Person existing at the
time such Person becomes a Restricted Subsidiary or assumed in connection with
an Asset Acquisition from such Person by a Restricted Subsidiary and not
Incurred by such Person in connection with, or in anticipation of, such Person
becoming a Restricted Subsidiary or such Asset Acquisition; provided that
Indebtedness of such Person which is redeemed, defeased, retired or otherwise
repaid at the time of or immediately upon consummation of the transactions by
which such Person becomes a Restricted Subsidiary or such Asset Acquisition
shall not be Acquired Indebtedness.
"Additional Interest" means all additional interest then owing pursuant
to the Registration Rights Agreement.
"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.
"Adjusted Consolidated Net Income" means, for any period, the aggregate
net income (or loss) of the Company and its Restricted Subsidiaries and the net
income of any Unrestricted Subsidiary to the extent distributed to the Company
or one of its Restricted Subsidiaries for such period determined on a
consolidated basis in conformity with GAAP less, if and for so long as the
Company is a Pass-through Entity, the Tax Amount; provided that the following
items shall be excluded in computing Adjusted Consolidated Net Income (without
duplication): (i) the net income of any Person that is not a Subsidiary or that
is accounted for by the equity method of accounting, except to the extent of the
amount of dividends or other distributions actually paid to the Company or any
of its Restricted Subsidiaries by such Person during such period; (ii) solely
for the purposes of calculating the amount of Restricted Payments that may be
made pursuant to clause (iii) of the first paragraph of Section 4.10 (and in
such case, except to the extent includable pursuant to clause (i) above), the
net income (or loss) of any Person accrued prior to the date it becomes a
Restricted Subsidiary or is merged into or consolidated with the Company or any
of its Restricted Subsidiaries or all or substantially all of the property and
assets of such Person are
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acquired by the Company or any of its Restricted Subsidiaries; (iii) the net
income of any Restricted Subsidiary to the extent that the declaration or
payment of dividends or similar distributions by such Restricted Subsidiary of
such net income to the Company or any Restricted Subsidiary is not at the time
of such determination permitted by the operation of the terms of its charter or
any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Restricted Subsidiary; (iv) any gains
or losses (on an after-tax basis) attributable to Asset Sales; (v) all
extraordinary gains and extraordinary losses; (vi) the cumulative effect of a
change in accounting principles; and (vii) the fees, expenses and other costs
incurred in connection with the repurchase of the Old First Mortgage Notes
(including premium paid upon, original issue discount or accruals on, and
deferred financing costs written off in connection with the repurchase of the
Old First Mortgage Notes), the issuance of the Notes, the initial establishment
of the Indebtedness described under each of clauses (i) and (ii) of the
definition of "Credit Facility" below.
"Affiliate" means, as applied to any Person, any other Person directly
or indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise; provided that the
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"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 Cedel that apply to such transfer or exchange.
"Asset Acquisition" means (i) an investment by the Company or any of its
Restricted Subsidiaries in any other Person pursuant to which such Person shall
become a Restricted Subsidiary or shall be merged into or consolidated with the
Company or any of its Restricted Subsidiaries; provided that such Person's
primary business is related, ancillary or complementary to the businesses of the
Company and its Restricted Subsidiaries on the date of such investment or (ii)
an acquisition by the Company or any of its Restricted Subsidiaries of the
property and assets of any Person other than the Company or any of its
Restricted Subsidiaries that constitute substantially all of a division or line
of business (including any casino or hotel facility) of such Person; provided
that the property and assets acquired are related, ancillary or complementary to
the businesses of the Company and its Restricted Subsidiaries on the date of
such acquisition.
"Asset Disposition" means the sale or other disposition or
discontinuation of use by the Company or any of its Restricted Subsidiaries
(other than to the Company or another Restricted Subsidiary) of (i) all or
substantially all of the Capital Stock of any Restricted Subsidiary of the
Company or (ii) assets that constitute a business or operation of the Company or
any of its Restricted Subsidiaries.
"Asset Sale" means any sale, transfer or other disposition (including by
way of merger, consolidation or sale-leaseback transaction) in one transaction
or a series of related transactions by the Company or any of its Restricted
Subsidiaries to any Person other than the Company or any of its Restricted
Subsidiaries of (i) all or any of the Capital Stock of any Restricted
Subsidiary, (ii) all or substantially all of the property and assets of the
Company or any of its Restricted Subsidiaries or
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(iii) any other property and assets of the Company or any of its Restricted
Subsidiaries (other than the Capital Stock or other Investment in an
Unrestricted Subsidiary) outside the ordinary course of business of the Company
or such Restricted Subsidiary and, in each case, that is not governed by the
provisions of this Indenture applicable to mergers, consolidations and sales of
assets of the Company; provided that "Asset Sale" shall not include: (a) sales
or other dispositions of inventory, receivables and other current assets; (b)
sales, transfers or other dispositions of assets with a Fair Market Value not in
excess of $1.0 million in any transaction or series of related transactions; (c)
sales, transfers or other dispositions of assets constituting a Restricted
Payment permitted to be made under Section 4.10 or Investments permitted
pursuant to clause (vi) of the definition of "Permitted Investments"; (d) sales,
transfers or other dispositions of property or equipment that has become worn
out, obsolete or damaged or otherwise unsuitable for use in connection with the
business of the Company or its Restricted Subsidiaries; (e) the sale, transfer
or other disposition of any property or assets by any Restricted Subsidiary to
the Company or any Restricted Subsidiary; (f) the sale, transfer or other
disposition of any Designated Asset; and (g) any exchange of property or assets
(other than property or assets comprising The Orleans, the Gold Coast or the New
Casino) by the Company or a Restricted Subsidiary in exchange for property or
assets with a fair market value at least equal to the fair market value of the
property or assets disposed of and which are to be used or are useful in any
business in which the Company is permitted to engage pursuant to Section 4.22.
"Average Life" means, at any date of determination with respect to any
debt security, the quotient obtained by dividing (i) the sum of the products of
(A) the number of years from such date of determination to the dates of each
successive scheduled principal payment of such debt security and (B) the amount
of such principal payment by (ii) the sum of all such principal payments.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Barbary Coast" means the Barbary Coast Hotel and Casino.
"Barbary Sale" means a sale, transfer or disposition or the Barbary
Coast.
"Barbary EBITDA" means the earnings before interest, taxes, depreciation
and amortization of the Barbary Coast, calculated in the same manner as
Consolidated EBITDA is calculated for the Company and its Restricted
Subsidiaries pursuant to the definition of "Consolidated EBITDA"; provided that
for such calculations, an appropriate allocation shall be made for overhead that
is properly allocable to the Barbary Coast.
"Barbary Excess Net Cash Proceeds" means the Net Cash Proceeds of the
Barbary Sale minus an amount equal to the Barbary EBITDA for the then most
recent four fiscal quarters prior to the date of the Barbary Sale multiplied by
five.
"Board of Directors" means the Board of Directors of the Company, or any
authorized committee of the Board of Directors.
"Borrowing Facilities" means one or more debt facilities 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
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to borrow from such lenders against such receivables) or letters of credit, in
each case, as amended, restated, modified, renewed, refunded, replaced or
refinanced in whole or in part from time to time.
"Business Day" means any day other than a Legal Holiday.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) in equity of such Person, whether outstanding on the
Closing Date or issued thereafter, including, without limitation, all Common
Stock and Preferred Stock.
"Capitalized Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) of which the discounted present value
of the rental obligations of such Person as lessee, in conformity with GAAP, is
required to be capitalized on the balance sheet of such Person.
"Capitalized Lease Obligations" means the discounted present value of
the rental obligations under a Capitalized Lease.
"Casino" means any gaming establishment and other property or assets
directly ancillary thereto or used in connection therewith, including any
buildings, restaurants, hotels, theaters, parking facilities, retail shops,
land, golf courses and other recreation and entertainment facilities, vessels,
barges, ships and equipment.
"Cedel" means Cedel Bank, SA.
"Change of Control" means such time as: (i) Coast Resorts sells,
transfers, conveys or otherwise disposes of (other than by way of a merger or
consolidation), in one or a series of related transactions, of all or
substantially all of its assets to any "person" (as such term is used in Section
13(d)(3) of the Exchange Act) other than to (A) the Company or a wholly owned
Subsidiary of the Company or (B) Xxxxxxx X. Xxxxxxx or his Related Parties; (ii)
the Company and its Subsidiaries, taken as a whole, sell, transfer, convey or
otherwise dispose of (other than by way of a merger or consolidation), in one or
a series of related transactions, of all or substantially all of their assets to
any "person" (as such term is used in Section 13(d)(3) of the Exchange Act)
other than Coast Resorts or Xxxxxxx X. Xxxxxxx or his Related Parties; (iii) a
plan relating to the liquidation or dissolution of Coast Resorts or the Company
is adopted; (iv) the liquidation or dissolution of Coast Resorts or the Company;
(v) individuals who on the Closing Date constituted the Board of Directors of
Coast Resorts or the Company (together with any new or replacement directors
whose election by the Board of Directors or whose nomination by the Board of
Directors for election by Coast Resorts' or the Company's stockholders, as
applicable, was approved by a vote of at least a majority of the members of the
Board of Directors then still in office who either were members of the Board of
Directors on the Closing Date or whose election or nomination for election was
so approved) cease for any reason to constitute a majority of the members of the
Board of Directors of Coast Resorts or the Company, as applicable, then in
office; (vi) prior to the consummation of Coast Resorts' first Public Equity
Offering, (A) Xxxxxxx X. Xxxxxxx and his Related Parties cease to be the
"beneficial owners" (as such term is defined in Rule 13d-3 and Rule 13d-5 under
the Exchange Act) in the aggregate at least 20% of the Voting Stock of Coast
Resorts or (B) any "person" (as defined above) or "group" (as such term is used
in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, including any group
acting for the purpose of acquiring, holding or disposing of securities within
the meaning of Rule 13d-5(b)(1) under the Exchange Act), becomes the "beneficial
owner" (as defined above), directly or indirectly, more of the Voting Stock of
Coast Resorts than is "beneficially owned" by the Principals and
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their Related Parties; (vii) after the consummation of Coast Resorts' first
Public Equity Offering, a transaction is consummated (including, without
limitation, any merger or consolidation) which results in: (A) any "person" (as
defined above) or "group" (as such term is used in Section 13(d)(3) or Section
14(d)(2) of the Exchange Act, including any group acting for the purpose of
acquiring, holding or disposing of securities within the meaning of Rule
13d-5(b)(1) under the Exchange Act), other than the Principals and their Related
Parties, becoming the "beneficial owner" (as defined above), directly or
indirectly, of more than 40% of the Voting Stock of Coast Resorts; and (B) any
"person" (as defined above) or "group" (as defined above) becoming the
"beneficial owner" (as defined above), directly or indirectly, of more of the
Voting Stock of Coast Resorts than is at the time "beneficially owned" (as
defined above) by Principals and their Related Parties in the aggregate; but, in
the case of both clauses (A) and (B) of this clause (vii), excluding from the
percentage of Voting Stock held by any person consisting of a group the Voting
Stock owned by any Principal and his Related Parties who are deemed to be
members of the group; provided that such Principal and his Related Parties
beneficially own a majority of the total Voting Stock of Coast Resorts held by
such group; or (viii) Coast Resorts ceases to own 100% of the outstanding
Capital Stock of the Company (other than pursuant to a merger of the Company
into Coast Resorts). For purposes of this definition, any transfer of an equity
interest of an entity that was formed for the purpose of acquiring Voting Stock
of the Company will be deemed to be a transfer of such portion of such Voting
Stock as corresponds to the portion of the equity of such entity that has been
so transferred.
"Closing Date" means the date on which the Initial Notes are originally
issued under this Indenture.
"Coast Resorts" means Coast Resorts, Inc., a Nevada corporation.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's common equity, whether outstanding on the
Closing Date or issued thereafter.
"Company" means Coast Hotels and Casinos, Inc., a Nevada corporation,
and any and all successors thereto.
"Consolidated EBITDA" means, for any period, Adjusted Consolidated Net
Income for such period plus, to the extent such amount was deducted in
calculating such Adjusted Consolidated Net Income, (i) Consolidated Interest
Expense, (ii) income taxes (other than income taxes (either positive or
negative) attributable to extraordinary gains or losses or sales of assets) or,
so long as the Company is a Pass-through Entity, the Tax Amount, (iii)
depreciation expense, (iv) amortization expense, (v) any preopening expenses to
the extent that such preopening expenses were deducted in computing Consolidated
Net Income on a consolidated basis and determined in accordance with GAAP, and
(vi) all other non-cash items including deferred (non-cash) rent expense,
reducing Adjusted Consolidated Net Income less all non-cash items increasing
Adjusted Consolidated Net Income; provided, that if any Restricted Subsidiary is
not a Wholly Owned Restricted Subsidiary, Consolidated EBITDA shall be reduced
(to the extent not otherwise reduced in accordance with GAAP) by an amount equal
to (A) the amount of the Adjusted Consolidated Net Income attributable to such
Restricted Subsidiary multiplied by (B) the percentage ownership interest in the
income of such Restricted Subsidiary not owned on the last day of such period by
the Company or any of its Restricted Subsidiaries.
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"Consolidated Interest Expense" means, for any period, the aggregate
amount of: (i) interest, including capitalized interest, in respect of
Indebtedness (including, without limitation, amortization of original issue
discount on any Indebtedness and the interest portion of any deferred payment
obligation, calculated in accordance with the effective interest method of
accounting; all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing; the net costs
associated with Interest Rate Agreements; and Indebtedness that is Guaranteed or
secured by the assets of the Company or any of its Restricted Subsidiaries);
(ii) all but the principal component of rentals in respect of Capitalized Lease
Obligations paid, accrued or scheduled to be paid or to be accrued by the
Company and its Restricted Subsidiaries during such period; and (iii) the
product of (a) all dividend payments, whether or not in cash, on any series of
Disqualified Stock of the Company, other than dividend payments on Capital Stock
payable solely in Capital Stock of the Company (other than Disqualified Stock)
or to the Company or a Restricted Subsidiary of the Company, times (b) a
fraction, the numerator or which is one and the denominator of which is one
minus the then current combined federal, state and local statutory tax rate or
such Person, expressed as a decimal, in each case, on a consolidated basis and
in accordance with GAAP; excluding, however, (A) any amount of such interest of
any Restricted Subsidiary if the net income of such Restricted Subsidiary is
excluded in the calculation of Adjusted Consolidated Net Income pursuant to
clause (iii) of the definition thereof (but only in the same proportion as the
net income of such Restricted Subsidiary is excluded from the calculation of
Adjusted Consolidated Net Income pursuant to clause (iii) of the definition
thereof) and (B) original issue discount written off in connection with the
repurchase of the Old First Mortgage Notes.
"Consolidated Net Worth" means, at any date of determination,
stockholders' equity as set forth on the most recently available quarterly or
annual consolidated balance sheet of the Company and its Restricted Subsidiaries
(which shall be as of a date not more than 135 days prior to the date of such
computation, and which shall not take into account Unrestricted Subsidiaries
except as investments), less any amounts attributable to Disqualified Stock or
any equity security convertible into or exchangeable for Indebtedness, the cost
of treasury stock and the principal amount of any promissory notes receivable
from the sale of the Capital Stock of the Company or any of its Restricted
Subsidiaries, each item to be determined in conformity with GAAP (excluding the
effects of foreign currency exchange adjustments under Financial Accounting
Standards Board Statement of Financial Accounting Standards No. 52).
"Construction and Design Contract" means any contract for the
construction, design, development or equipping, including any capital addition,
improvement, extension or repair, for any of the Company's Casinos existing now
or in the future, as finalized, amended, supplemented or otherwise modified from
time to time.
"Corporate Trust Office of the Trustee" shall 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 Agreement" means the Loan Agreement dated as of the date of this
Indenture, among the Company, and Bank of America NT&SA, as administrative
agent, and the lenders referred to therein, together with any agreements,
instruments and documents executed or delivered pursuant to or in connection
with such Loan Agreement (including, without limitation, any Guarantees and
security documents), in each case as such Loan Agreement or such agreements,
instruments or documents may be amended, supplemented, extended, renewed,
refinanced or otherwise modified from time to time.
"Credit Facility" means: (i) the Credit Agreement; provided that the
aggregate principal amount of all Indebtedness outstanding under the Credit
Agreement, including all Indebtedness incurred to
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refinance or replace any Indebtedness incurred pursuant to this clause (i), does
not exceed $75.0 million less permanent reductions in the available Indebtedness
under the Credit Agreement resulting from the application of Asset Sale
proceeds; and (ii) any other agreement evidencing Indebtedness; provided that:
(A) prior to the time that the New Casino is Operating, at least 75% of the
proceeds of such Indebtedness are used exclusively to finance the Project Costs
for the New Casino; (B) either (1) such Indebtedness is incurred under the
Credit Agreement or an amendment or supplement to the Credit Agreement, in
either case with the existing lenders under the Credit Agreement or other
Eligible Lenders or (2) if the Company is unable to incur Indebtedness pursuant
to clause (1) above on terms reasonably acceptable to the Company, (a) all of
the initial lenders or purchasers of such Indebtedness are Permitted Lenders,
(b) after giving pro forma effect to the issuance of all Indebtedness which is
outstanding as of the date of determination pursuant to the Credit Agreement and
which may otherwise be incurred under such Credit Facility, the Interest
Coverage Ratio would be at least 1.5 to 1 and (c) such Indebtedness is not
issued with any equity or cash flow participations; (C) prior to the time that
the New Casino is Operating, the aggregate principal amount of such Indebtedness
outstanding at any time, including any refinancings or replacements thereof,
shall not exceed the lesser of (1) $125.0 million and (2) 85% of the Project
Costs for the New Casino, less permanent reductions in such Indebtedness
resulting from the application of Asset Sale Proceeds; and (D) after the New
Casino is Operating, the aggregate principal amount of such Indebtedness
outstanding at any time, including any refinancings or replacements thereof and
including any Indebtedness which was previously incurred and is outstanding
under this clause (ii), shall not exceed $125.0 million less permanent
reductions in such Indebtedness resulting from the application of Asset Sale
proceeds; and provided, further, that the lenders under the Credit Facility
shall be conclusively entitled to rely on a certificate of the Company as to
compliance with the requirements of this definition.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement.
"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 after notice or passage of time 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 A 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.
"Designated Asset" means the Rancho Road Property and the aircraft owned
by the Company on the date of this Indenture.
"Designated Senior Indebtedness" means (i) any Indebtedness under the
Credit Agreement and any amendments, restatements, modifications, renewals or
replacements thereof and (ii) any other Indebtedness constituting Senior
Indebtedness that, at the date of determination, has commitments for or
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an aggregate principal amount outstanding of at least $20.0 million and that is
specifically designated by the Company, in the instrument creating or evidencing
such Senior Indebtedness, as "Designated Senior Indebtedness."
"Disqualified Stock" means any class or series of Capital Stock of any
Person that by its terms or otherwise is (i) required to be redeemed or is
redeemable at the option of the holder of such class or series of Capital Stock
at any time on or prior to the date that is 91 days after the Stated Maturity of
the Notes or (ii) convertible into or exchangeable for Capital Stock referred to
in clause (i) above or Indebtedness having a scheduled maturity on or prior to
the date that is 91 days after the Stated Maturity of the Notes; provided that
any Capital Stock that would not constitute Disqualified Stock but for
provisions thereof giving holders thereof the right to require such Person to
repurchase or redeem such Capital Stock upon the occurrence of an "asset sale"
or "change of control" occurring prior to the Stated Maturity of the Notes shall
not constitute Disqualified Stock if the "asset sale" or "change of control"
provisions applicable to such Capital Stock are no more favorable to the holders
of such Capital Stock than the provisions contained in Section 4.17 and Section
4.20 and such Capital Stock specifically provides that such Person will not
repurchase or redeem any such stock pursuant to such provision prior to the
Company's repurchase of such Notes as are required to be repurchased pursuant to
Section 4.17 and Section 4.20.
"Eligible Lenders" means (i) the lenders under the Credit Agreement,
(ii) any affiliate of any lender under the Credit Agreement, (iii) any
commercial bank, savings bank or loan association having a combined capital and
surplus of at least $100.0 million and (iv) any other financial institution,
including a mutual fund or other fund, having total assets of at least $250.0
million.
"Euroclear" means Xxxxxx Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"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 Casino" means any Casino of the Company in existence on the
Closing Date and the New Casino.
"Fair Market Value" means the price that would be paid in an
arm's-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer under no compulsion to buy,
which in the case of a transaction involving $5.0 million or more, shall be as
determined in good faith by the Board of Directors, whose determination shall be
conclusive if evidenced by a resolution of the Board of Directors.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Closing Date, including, without
limitation, those set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
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Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as approved by
a significant segment of the accounting profession. All ratios and computations
contained or referred to in this Indenture shall be computed in conformity with
GAAP applied on a consistent basis.
"Gaming Authority" means any agency, authority, board, bureau,
commission, department, office or instrumentality of the United States or
foreign government, any state province or any city or other political
subdivision, or any officer of official thereof, including the Nevada Gaming
Commission, the Nevada State Gaming Control Board, the City of Las Vegas and any
other agency with authority to regulate any gaming operation (or proposed gaming
operation) owned, managed or operated by the Company or any of its Subsidiaries.
"Gaming License" means every license, franchise or other authorization
required to own, lease, operate or otherwise conduct the present and future
gaming activities of the Company and its Subsidiaries.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, substantially in the
form of Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(ii) or 2.06(f) hereof.
"Global Note Legend" means the legend set forth in Section 2.06(g)(ii),
which is required to be placed on all Global Notes issued under this Indenture.
"Gold Coast" means the Gold Coast Hotel and Casino.
"Government Securities" means direct obligations of, obligations fully
guaranteed by, or participations in pools consisting solely of obligations of or
obligations guaranteed by, the United States of America for the payment of which
guarantee or obligations the full faith and credit of the United States of
America is pledged and which are not callable or redeemable at the option of the
issuer thereof.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness of any other Person and,
without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person: (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services
(unless such purchase arrangements are on arm's-length terms and are entered
into in the ordinary course of business), to take-or-pay, or to maintain
financial statement conditions or otherwise); or (ii) entered into for purposes
of assuring in any other manner the obligee of such Indebtedness of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part); provided that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Guarantor" means Coast Resorts or any Subsidiary Guarantor and each of
their respective successors and assigns.
"Holder" means a Person in whose name a Note is registered on the
Registrar's books.
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"Incur" means, with respect to any Indebtedness, to incur, create,
issue, assume, Guarantee or otherwise become liable for or with respect to, or
become responsible for, the payment of, contingently or otherwise, such
Indebtedness, including an "Incurrence" of Acquired Indebtedness; provided that
the accrual of interest or accretion of principal shall not be considered an
Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person at any date of
determination (without duplication): (i) all indebtedness of such Person for
borrowed money; (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments; (iii) all obligations of such
Person in respect of letters of credit, banker's acceptances or other similar
instruments (including reimbursement obligations with respect thereto), other
than obligations with respect to letters of credit securing obligations (other
than obligations described in this definition) entered into in the ordinary
course of business of such person to the extent such letters of credit are not
drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no
later than the third business day following receipt by such Person of a demand
for reimbursement following payment on the letter of credit; (iv) all
obligations of such Person to pay the deferred and unpaid purchase price of
property or services, which purchase price is due more than six months after the
date of placing such property in service or taking delivery and title thereto or
the completion of such services, except Trade Payables; (v) all Capitalized
Lease Obligations; (vi) all Indebtedness of other Persons secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed by such
Person; provided that the amount of such Indebtedness shall be the lesser of (A)
the Fair Market Value of such asset at such date of determination and (B) the
amount of such Indebtedness; (vii) all Indebtedness of other Persons Guaranteed
by such Person to the extent such Indebtedness is Guaranteed by such Person; and
(viii) to the extent not otherwise included in this definition, obligations
under Currency Agreements and Interest Rate Agreements. The amount of
Indebtedness of any Person at any date shall be the outstanding balance at such
date of all unconditional obligations as described above and, with respect to
contingent obligations, the maximum liability upon the occurrence of the
contingency giving rise to the obligation for the payment of principal (with
letters of credit being deemed to have a principal amount equal to the maximum
potential liability of the Company and its Restricted Subsidiaries thereunder),
provided (A) that the amount outstanding at any time of any Indebtedness issued
with original issue discount is the face amount of such Indebtedness less the
remaining unamortized portion of the original issue discount of such
Indebtedness at such time as determined in conformity with GAAP, (B) that money
borrowed and set aside at the time of the Incurrence of any Indebtedness in
order to prefund the payment of the interest on such Indebtedness shall not be
deemed to be "Indebtedness" so long as such money is held to secure the payment
of such interest and (C) that Indebtedness shall not include (1) any liability
for federal, state, local or other taxes or the obligation to make payments
pursuant to a Tax Agreement or (2) obligations arising from the honoring by a
bank or other financial institution of a check, draft or similar instrument
inadvertently (except in the case of day-light overdrafts) drawn against
insufficient funds in the ordinary course of business; provided, however, that
such obligations are extinguished within three business days of incurrence.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Independent Directors" means any members of the Board of Directors of
the Company other than (1) Xxxxxxx X. Xxxxxxx, J. Xxxx Xxxxxxx, Xxxxx Xxxxxx,
Xxxxxx X. Xxxxxxx, Xxxx Xxxxxxx, (2) any spouses, siblings, parents or lineal
descendants of any person set forth in clause (1) above and any spouse of any
such sibling or lineal descendant and (3) any officer or other employee of Coast
Resorts or any Affiliate of Coast Resorts, including the Company.
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"Indirect Participant" means a Person who holds a beneficial interest in
a Global Note through a Participant.
"Initial Notes" means the first $175,000,000 aggregate principal amount
of Notes issued under this Indenture on the date hereof.
"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.
"Interest Coverage Ratio" means, on any Transaction Date, the ratio of
(i) the aggregate amount of Consolidated EBITDA for the then most recent four
fiscal quarters prior to such Transaction Date for which reports have been filed
with the Commission or provided to the Trustee pursuant to Section 4.03 hereof
(the "Four Quarter Period") to (ii) the aggregate Consolidated Interest Expense
during such Four Quarter Period. In making the foregoing calculation: (A) pro
forma effect shall be given to any Indebtedness Incurred or repaid during the
period (the "Reference Period") commencing on the first day of the Four Quarter
Period and ending on the Transaction Date (other than Indebtedness Incurred
under a revolving credit or similar arrangement to the extent of the commitment
thereunder (or under any predecessor revolving credit or similar arrangement) in
effect on the last day of such Four Quarter Period except to the extent any
portion of such Indebtedness is projected, in the reasonable judgment of the
senior management of the Company, to remain outstanding for a period in excess
of 12 months from the date of the Incurrence thereof), in each case as if such
Indebtedness had been Incurred or repaid on the first day of such Reference
Period (and pro forma effect shall be given to the purchase of any U.S.
government securities required to be purchased with the proceeds of any such
Indebtedness and set aside to prefund the payment of interest on such
Indebtedness at the time such Indebtedness is Incurred); (B) Consolidated
Interest Expense attributable to interest on any Indebtedness (whether existing
or being Incurred) computed on a pro forma basis and bearing a floating interest
rate shall be computed as if the rate in effect on the Transaction Date (taking
into account any Interest Rate Agreement applicable to such Indebtedness if such
Interest Rate Agreement has a remaining term in excess of 12 months or, if
shorter, at least equal to the remaining term of such Indebtedness) had been the
applicable rate for the entire period; (C) pro forma effect shall be given to
Asset Dispositions and Asset Acquisitions (including giving pro forma effect to
the application of proceeds of any Asset Disposition and to any discharge of or
other relief from Indebtedness to which the Company and its continuing
Restricted Subsidiaries are not liable following any Asset Disposition and the
reduction of any associated Consolidated Interest Expense and the change in
Consolidated EBITDA resulting therefrom) and the designation of Unrestricted
Subsidiaries as Restricted Subsidiaries that occur during such Reference Period
as if they had occurred and such proceeds had been applied and such discharge or
relief had occurred on the first day of such Reference Period; and (D) pro forma
effect shall be given to asset dispositions and asset acquisitions (including
giving pro forma effect to the application of proceeds of any asset disposition
and to any discharge of or other relief from Indebtedness to which the Company
and its continuing Restricted Subsidiaries are not liable following any asset
disposition) that have been made by any Person that has become a Restricted
Subsidiary or has been merged with or into the Company or any Restricted
Subsidiary during such Reference Period and that would have constituted Asset
Dispositions or Asset Acquisitions had such transactions occurred when such
Person was a Restricted Subsidiary as if such asset dispositions or asset
acquisitions were Asset Dispositions or Asset Acquisitions that occurred on the
first day of such Reference Period; provided that to the extent that clause (C)
or (D) of this sentence requires that pro forma effect be given to an Asset
Acquisition or Asset Disposition, such pro forma calculation shall be based upon
the four full fiscal quarters immediately preceding the Transaction Date of the
Person, or division or line of business of the Person, that is acquired or
disposed for which
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financial information is available. For purposes of this definition, whenever
pro forma effect is given to a transaction, the pro forma calculations shall be
made in good faith by a senior financial or accounting officer of the Company.
Interest on a Capitalized Lease Obligation shall be deemed to accrue at an
interest rate reasonably determined by a senior financial or accounting officer
of the Company to be the rate of interest implicit in such Capitalized Lease
Obligation in accordance with GAAP.
"Interest Rate Agreement" means any interest rate protection agreement,
interest rate future agreement, interest rate option agreement, interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedge agreement, option or future contract or other similar
agreement or arrangement.
"Investment" in any Person means any direct or indirect advance, loan or
other extension of credit (including, without limitation, by way of Guarantee or
similar arrangement; but excluding advances to customers, suppliers or
contractors in the ordinary course of business that are, in conformity with
GAAP, recorded as accounts receivable, prepaid expenses or deposits on the
balance sheet of the Company or its Restricted Subsidiaries) or capital
contribution to (by means of any transfer of cash or other property to others or
any payment for property or services for the account or use of others), or any
purchase or acquisition of Capital Stock, bonds, notes, debentures or other
similar instruments issued by, such Person and shall include: (i) the
designation of a Restricted Subsidiary as an Unrestricted Subsidiary; and (ii)
the Fair Market Value of the Capital Stock (or any other Investment) held by the
Company or any of its Restricted Subsidiaries of (or in) any Person that has
ceased to be a Restricted Subsidiary; provided that the Fair Market Value of the
Investment remaining in any Person that has ceased to be a Restricted Subsidiary
shall not exceed the aggregate amount of Investments previously made in such
Person valued at the time such Investments were made less the net reduction of
such Investments. For purposes of the definition of "Unrestricted Subsidiary"
and Section 4.10: (i) "Investment" shall include the Fair Market Value of the
assets (net of liabilities (other than liabilities to the Company or any of its
Restricted Subsidiaries)) of any Restricted Subsidiary at the time that such
Restricted Subsidiary is designated an Unrestricted Subsidiary; (ii) the Fair
Market Value of the assets (net of liabilities (other than liabilities to the
Company or any of its Restricted Subsidiaries)) of any Unrestricted Subsidiary
at the time that such Unrestricted Subsidiary is designated a Restricted
Subsidiary shall be considered a reduction in outstanding Investments; and (iii)
any property transferred to or from an Unrestricted Subsidiary shall be valued
at its Fair Market Value at the time of such transfer. Notwithstanding the
foregoing, in no event shall any issuance of Capital Stock (other than
Disqualified Stock) of the Company in exchange for Capital Stock, property or
assets of another Person or any redemption or repurchase of the Notes or other
Indebtedness of the Company or any Restricted Subsidiary for cash constitute an
Investment by the Company in such other Person.
"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 for use by such Holders in connection
with the Exchange Offer.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind (including, without limitation, any conditional sale or
other title retention agreement or lease in the nature
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thereof or any agreement to give any security interest in the future); provided
that in no event shall an operating lease be deemed to constitute a Lien.
"Liquor License" means every license, franchise or other authorization
required to serve liquor at any of casinos owned or operated by the Company or
any of its Restricted Subsidiaries.
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
"Net Cash Proceeds" means: (i) with respect to any Asset Sale, the
proceeds of such Asset Sale in the form of cash or cash equivalents, including
payments in respect of deferred payment obligations (to the extent corresponding
to the principal, but not interest, component thereof) when received in the form
of cash or cash equivalents (except to the extent such obligations are financed
or sold by the Company or any Restricted Subsidiary with recourse to the Company
or any Restricted Subsidiary) and proceeds from the conversion of other property
received when converted to cash or cash equivalents, net of: (A) brokerage
commissions and other fees and expenses (including fees and expenses of counsel
and investment bankers) related to such Asset Sale; (B) provisions for all taxes
(whether or not such taxes will actually be paid or are payable), including
payments under any Tax Agreement, as a result of such Asset Sale without regard
to the consolidated results of operations of the Company and its Restricted
Subsidiaries, taken as a whole; (C) payments made to repay Indebtedness other
than Senior Indebtedness or any other obligation outstanding at the time of such
Asset Sale that either (1) is secured by a Lien on the property or assets sold
or (2) is required to be paid as a result of such sale; and (D) appropriate
amounts to be provided by the Company or any Restricted Subsidiary as a reserve
against any liabilities associated with such Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale, all as determined in conformity
with GAAP; and (2) with respect to any issuance or sale of Capital Stock, the
proceeds of such issuance or sale in the form of cash or cash equivalents,
including payments in respect of deferred payment obligations (to the extent
corresponding to the principal, but not interest, component thereof) when
received in the form of cash or cash equivalents (except to the extent such
obligations are financed or sold by the Company or any Restricted Subsidiary
with recourse to the Company or any Restricted Subsidiary) and proceeds from the
conversion of other property received when converted to cash or cash
equivalents, net of attorney's fees, accountants' fees, underwriters' or
placement agents' fees, discounts or commissions and brokerage, consultant and
other fees incurred in connection with such issuance or sale and net of taxes
paid or payable as a result thereof.
"New Casino" means the pending project to develop, construct and operate
a new hotel-casino to be located on approximately 50 acres at the intersection
of Rampart Boulevard and Alta Drive in Las Vegas, Nevada.
"Note Guarantee" means any Subsidiary Guarantee or the Guarantee by
Coast Resorts of the Company's payment obligations under this Indenture and on
the Notes, executed pursuant to the provisions of this Indenture.
"Notes" has the meaning assigned to it in the preamble to this
Indenture, and shall include the Initial Notes and the Additional Notes, which
shall be treated as a single class for all purposes under this Indenture.
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"Obligations" means any principal, interest, premium, if any, penalties,
fees, indemnifications, reimbursements, damages or other liabilities payable
under the documentation governing or otherwise in respect of any Indebtedness,
in each case whether now or hereafter existing, renewed or restructured, whether
or not from time to time decreased or extinguished and later increased, created
or incurred, whether or not arising on or after the commencement of a proceeding
under Title 11, U.S. Code or any similar federal or state law for the relief of
debtors (including post-petition interest) and whether or not allowed or
allowable as a claim in any such proceeding.
"Offer to Purchase" means an offer to purchase Notes by the Company from
the Holders commenced by mailing a notice to the Trustee and each Holder
stating: (i) the section of this Indenture pursuant to which the offer is being
made and that all Notes validly tendered will be accepted for payment on a pro
rata basis; (ii) the purchase price and the date of purchase (which shall be a
Business Day no earlier than 30 days nor later than 60 days from the date such
notice is mailed) (the "Payment Date"); (iii) that any Note not tendered will
continue to accrue interest pursuant to its terms; (iv) that, unless the Company
defaults in the payment of the purchase price, any Note accepted for payment
pursuant to the Offer to Purchase shall cease to accrue interest on and after
the Payment Date; (v) that Holders electing to have a Note purchased pursuant to
the Offer to Purchase will be required to surrender the Note, together with the
form entitled "Option of the Holder to Elect Purchase" on the reverse side of
the Note completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the Business Day immediately preceding the
Payment Date; (vi) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than the close of business on the third
Business Day immediately preceding the Payment Date, a telegram, facsimile
transmission or letter setting forth the name of such Holder, the principal
amount of Notes delivered for purchase and a statement that such Holder is
withdrawing his election to have such Notes purchased; and (vii) that Holders
whose Notes are being purchased only in part will be issued new Notes equal in
principal amount to the unpurchased portion of the Notes surrendered; provided
that each Note purchased and each new Note issued shall be in a principal amount
of $1,000 or integral multiples thereof. On the Payment Date, the Company shall:
(i) accept for payment on a pro rata basis Notes or portions thereof tendered
pursuant to an Offer to Purchase; (ii) deposit with the Paying Agent money
sufficient to pay the purchase price of all Notes or portions thereof so
accepted; and (iii) deliver, or cause to be delivered, to the Trustee all Notes
or portions thereof so accepted together with an Officers' Certificate
specifying the Notes or portions thereof accepted for payment by the Company.
The Paying Agent shall promptly mail to the Holders of Notes so accepted payment
in an amount equal to the purchase price, and the Trustee shall promptly
authenticate and mail to such Holders a new Note equal in principal amount to
any unpurchased portion of the Note surrendered; provided that each Note
purchased and each new Note issued shall be in a principal amount of $1,000 or
integral multiples thereof. The Company will publicly announce the results of an
Offer to Purchase as soon as practicable after the Payment Date. The Trustee
shall act as the Paying Agent for an Offer to Purchase. The Company will comply
with Rule 14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations are applicable,
in the event that the Company is required to repurchase Notes pursuant to an
Offer to Purchase. To the extent that the provisions of any securities laws or
regulations conflict with the provisions for such Offer to Purchase, the Company
will comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations with respect to such Offer to Purchase
by virtue thereof.
"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.
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"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 12.05 hereof.
"Old First Mortgage Notes" means the 13% First Mortgage Notes due 2002
and the 10 7/8% First Mortgage Notes due 2001 of the Company.
"Operating" means, with respect to the New Casino, the first time that
(i) all Gaming Licenses necessary to commence operations at the New Casino have
been granted and have not been revoked or suspended, (ii) the project manager
and the architect of the New Casino have delivered a certificate to the Trustee
certifying that the New Casino is complete in all material respects in
accordance with the plans and specifications therefor and all applicable
building laws, ordinances and regulations, (iii) the New Casino is in a
condition (including installation of furnishings, fixtures and equipment) to
receive guests in the ordinary course of business, (iv) gaming and other
operations in accordance with applicable law are open to the general public and
are being conducted at the New Casino, (v) a permanent or temporary certificate
of occupancy has been issued for the New Casino by Xxxxx County, Nevada and (vi)
a notice of completion of the New Casino has been duly recorded.
"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 the Trustee.
"Pari Passu Indebtedness" means all Indebtedness of the Company ranking
pari passu in right of payment with the Notes.
"Participant" means, with respect to the Depositary, Euroclear or Cedel,
a Person who has an account with the Depositary, Euroclear or Cedel,
respectively (and, with respect to DTC, shall include Euroclear and Cedel).
"Participating Broker-Dealer" has the meaning set forth in the
Registration Rights Agreement.
"Pass-through Entity" means any entity taxed as a partnership for
federal income tax purposes, any disregarded entity for federal income tax
purposes, including a qualified Subchapter S subsidiary, an S-Corporation, or
any other entity whose items of income and deductions are passed through to its
equityholders for federal income tax purposes and retain the same
characteristics in the hands of such equityholders.
"Permitted FF&E Financing" means Indebtedness of the Company or any of
its Restricted Subsidiaries that is Incurred to finance the acquisition or lease
after the date of this Indenture of newly acquired or leased furniture, fixtures
or equipment ("FF&E") used directly in the operation of any of the Company's
Casinos and secured by a Lien on such FF&E, which Indebtedness has a principal
amount not to exceed 100% of the cost of the FF&E so purchased or leased.
"Permitted Investment" means: (i) an Investment in the Company or a
Restricted Subsidiary of the Company or a Person which will, upon the making of
such Investment, become a Restricted Subsidiary or be merged or consolidated
with or into or transfer or convey all or substantially all its assets to, the
Company or a Restricted Subsidiary; provided that such person's primary business
is related, ancillary or complementary to the businesses of the Company and its
Restricted Subsidiaries on the date
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of such Investment; (ii) Temporary Cash Investments; (iii) payroll, travel and
similar advances to cover matters that are expected at the time of such advances
ultimately to be treated as expenses in accordance with GAAP; (iv) advances and
loans to employees of the Company or any of its Restricted Subsidiaries in the
ordinary course of business; provided that the aggregate amount of such
Investments does not exceed $1.0 million; (v) stock, obligations or securities
received in satisfaction of judgments, foreclosure of Liens or good faith
settlement of litigation, disputes or other debts; (vi) Investments in any
Person the primary business of which is related, ancillary or complementary to
the businesses of the Company and its Restricted Subsidiaries; provided that the
aggregate amount of such Investments does not exceed $10.0 million; (vii)
Investments made as a result of the receipt of non-cash consideration from an
Asset Sale that was made in compliance with Section 4.17 hereof; (viii)
Investments in Currency Agreements and Interest Rate Agreements with respect to
Indebtedness otherwise permissible under this Indenture; (ix) receivables owing
to the Company or any Restricted Subsidiary, if created or acquired in the
ordinary course of business consistent with past practices and payable or
dischargeable in accordance with customary terms; and (x) Investments acquired
in exchange for Capital Stock (other than Disqualified Stock) of the Company or
for Capital Stock of Coast Resorts.
"Permitted Junior Securities" means Capital Stock of the Company, any
Restricted Subsidiary or any affiliate of or successor to the Company pursuant
to a plan of reorganization or debt securities of the Company, any Restricted
Subsidiary or any affiliate of or successor to the Company pursuant to a plan of
reorganization that are subordinated to all Senior Indebtedness (and any debt
securities issued in exchange for Senior Indebtedness) to substantially the same
extent as, or to a greater extent than, the Notes are subordinated to Senior
Indebtedness pursuant to this Indenture on the Closing Date, so long as (i) the
effect of the use of this defined term in the subordination provisions described
under the caption "Subordination" is not to cause the Notes to be treated as
part of (a) the same class of claims in any plan of reorganization as the Senior
Indebtedness or (b) any class of claims in any plan of reorganization pari passu
with, or senior to, the Senior Indebtedness for any payment or distribution in
any case or proceeding or similar event relating to the liquidation, insolvency,
bankruptcy, dissolution, winding up or reorganization of the Company and (ii) to
the extent that any Senior Indebtedness outstanding on the date of consummation
of any such plan of reorganization is not paid in full in cash on such date,
either (a) the holders of any such Senior Indebtedness not so paid in full in
cash have consented to the terms of such plan of reorganization or readjustment
or (b) such holders receive securities which constitute Senior Indebtedness and
which have been determined by the relevant court to have a value, as of the
effective date of such plan of reorganization, of at least the value of such
holder's interest in the estate's interest in such Senior Indebtedness.
"Permitted Lender" means any Eligible Lender, any other Person that
qualifies as a "qualified institutional buyer" pursuant to Rule 144A under the
Securities Act, any purchaser of Indebtedness pursuant to Regulation S under the
Securities Act and any purchaser of Indebtedness that is registered under the
Securities Act.
"Permitted Lien" means: (i) Liens securing Senior Indebtedness
(including related Obligations) that is permitted to be incurred pursuant to
this Indenture; (ii) Liens existing on the date of this Indenture; (iii) Liens
for taxes, assessments or governmental charges or claims which are not yet
delinquent or which are being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted and if a reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made therefor; (iv) banker's liens, rights of setoff and Liens
incurred or deposits made to secure the performance of tenders, bids, leases,
statutory obligations, surety and appeal bonds, government contracts,
performance and return-of-money bonds and other obligations of like nature
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incurred in the ordinary course of business (exclusive of obligations for the
payment of borrowed money); (v) Liens on the aircraft owned by the Company on
the Closing Date (or any replacement aircraft) and on the Rancho Road Property
to secure Indebtedness permitted by the terms of this Indenture under clause (i)
of the second paragraph of Section 4.07(a) hereof set forth below (and any
Permitted Refinancing Indebtedness applied to the refinancing thereof); (vi)
Liens in favor of the Company or a Restricted Subsidiary; (vii) Liens incurred
to secure the purchase price or cost of construction or improvement of property,
which Lien shall not cover any property other than that being acquired,
purchased, improved or constructed; (viii) any interest or title of a lessor
under Capitalized Lease Obligations otherwise permitted under this Indenture;
(ix) Liens securing Acquired Indebtedness created prior to (and not in
connection with or in contemplation of) the incurrence of such Indebtedness by
the Company or any Restricted Subsidiary; provided that such Lien does not
extend to any property or assets of the Company or any Subsidiary other than the
assets acquired in connection with the incurrence of such Acquired Indebtedness;
(x) Liens on property existing at the time of acquisition thereof by the Company
or a Restricted Subsidiary; (xi) carriers', warehousemen's, mechanics',
landlords', materialmen's, repairmen's or other like Liens arising in the
ordinary course of business in respect of obligations that are not yet due or
that are bonded or that are being contested in good faith and by appropriate
proceedings if adequate reserves with respect thereto are maintained on the
books of the Company or such Restricted Subsidiary, as the case may be, in
accordance with GAAP; (xii) Liens arising by reason of a judgment, decree or
court order, to the extent not otherwise resulting in an Event of Default;
(xiii) Liens securing obligations under Currency Agreements and Interest Rate
Agreements entered into in the ordinary course of business; (xiv) extensions,
renewals or refunding of any Liens referred to in clauses (i) through (xi)
above, provided that the renewal, extension or refunding is limited to all or
part of the property securing the original Lien; and (xv) Liens in addition to
the foregoing incurred in the ordinary course of business provided that the
amount of the obligations secured by such Liens does not exceed in the aggregate
$5.0 million at any one time outstanding and that (A) are not incurred in
connection with the borrowing of money or the obtaining of advances or credit
(other than trade credit in the ordinary course of business) and (B) do not in
the aggregate materially detract from the value of the property or materially
impair the use thereof in the operation of business by the Company or any of its
Subsidiaries.
"Permitted Tax Distribution" means (1) payments to Coast Resorts
required to be made pursuant to the Tax Sharing Agreement and (2) if and for so
long as the Company is treated as a Pass-through Entity, distributions to
equityholders of the Company (or, if such equityholder is a Pass-through Entity,
its equityholders) in an amount not to exceed the Tax Amount; provided that (A)
prior to the first such distribution to equityholders, the Company delivers to
the Trustee an opinion of counsel reasonably satisfactory to the Trustee
confirming that (i) the Company is a Pass-through Entity and (ii) the holders of
the outstanding Notes will not recognize income, gain or loss for federal income
tax purposes as a result of the transaction pursuant to which the Company
becomes a Pass-through Entity and will be subject to federal income tax in the
same manner and at the same times as would have been the case if such
transaction had not occurred and (B) prior to any such distribution, the Company
delivers to the Trustee a certificate of the Company's Chief Financial Officer
to the effect that the Company is a taxable as Pass-through Entity.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.
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"Preferred Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's preferred or preference stock, whether
outstanding on the Closing Date or issued thereafter.
"Principals" means Xxxxxxx X. Xxxxxxx, J. Xxxx Xxxxxxx, Xxxxx Xxxxxx and
Xxxxxxxx Xxxx.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(i) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"Project Costs" means, with respect to the development, construction or
acquisition of any of the Company's Casinos not in existence on the date of this
Indenture, including the New Casino, or any expansion or refurbishment of an
Existing Casino, as the case may be, the aggregate costs required to complete
such development, construction and acquisition, including all direct costs
related thereto such as construction management, architectural, engineering and
interior design fees, site work, utility installations and hook-up fees,
construction permits, certificates and bonds, land acquisition costs, costs of
furniture, fixtures, furnishings, machinery and equipment, non-construction
supplies and pre-opening payroll, but excluding principal or interest payments
on any Indebtedness (other than interest which is required to be capitalized in
accordance with GAAP, which shall be included in determining Project Costs).
"Public Equity Offering" means an underwritten public offering of Coast
Resorts common stock which is registered under the Securities Act and results in
net proceeds to Coast Resorts of at least $20.0 million.
"QIB" means a "qualified institutional buyer" as defined in Rule 000X.
"Xxxxxx Xxxx Property" means the approximately 29 acres of raw land
owned by the Company on the Closing Date located at 0000 Xxxx Xxxxx Xxxxxx,
Xxxxx Xxx Xxxxx, Xxxxxx.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of the Closing Date among the Company 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 between the Company 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 global Note bearing the Private
Placement Legend and deposited with or on behalf of the Depositary 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, with respect to any Principal, (i) any spouse,
sibling, parent or lineal descendant of such Principal or any spouse of any such
sibling or lineal descendant and (ii) any trust, corporation, partnership or
other entity the beneficiaries, shareholders, partners, owners or Persons
beneficially holding an 80% or more controlling interest of which consist of
such Principal and/or such other Person referred to in the immediately preceding
clause (i).
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"Representative" means any agent or representative in respect of any
Designated Senior Indebtedness; provided that if, and for so long as, any
Designated Senior Indebtedness lacks such a representative, then the
Representative for such Designated Senior Indebtedness shall at all times
constitute the holders of a majority in outstanding principal amount of such
Designated Senior Indebtedness.
"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 Subsidiary" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.
"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 the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means the following obligations of the Company or
a Guarantor, whether outstanding on the Closing Date or thereafter Incurred: (i)
all Indebtedness and all other Obligations (including, without limitation,
expenses, fees, principal, interest, reimbursement obligations under letters of
credit and indemnities payable in connection therewith) of the Company or a
Guarantor under (or in respect of) the Credit Agreement or any amendments,
restatements, modifications, renewals or replacements thereof or a Borrowing
Facility or any Interest Rate Agreement or Currency Agreement relating to or
otherwise in respect of the Indebtedness under the Credit Agreement or any
amendments, restatements, modifications, renewals or replacements thereof or a
Borrowing Facility; and (ii) all other Indebtedness and all other monetary
obligations of the Company (other than the Notes) or a Guarantor, including
principal and interest on such Indebtedness, unless such Indebtedness or
obligations, by its terms or by the terms of any agreement or instrument
pursuant to which such Indebtedness or obligation is issued, is pari passu with,
or subordinated in right of payment to, the Notes, the Parent Guarantee or
Subsidiary Guarantees, as the case may be. Notwithstanding anything to the
contrary in clauses (i) and (ii) above, Senior Indebtedness shall not include:
(a) any Indebtedness of the Company or a Guarantor that, when Incurred, was
without recourse to the Company or the Guarantor, as the case may be; (b) any
Indebtedness of the Company to a Subsidiary or Affiliate of the Company; (c) any
Indebtedness of the Company or a Guarantor, as the case may be, to the extent
not permitted by Section 4.07 or Section 4.08; provided that as to any
Indebtedness under the Credit Agreement which exceeds the dollar limitations set
forth in clause (i) of the definition of "Credit Facility" and any Indebtedness
otherwise incurred pursuant to Credit Facilities which exceeds the dollar
limitations set forth in clause (ii) of the definition of "Credit
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Facility," no such violation shall be deemed to exist for purposes of this
clause (c) if the lenders thereunder have obtained a legal opinion (which legal
opinion, in the case of revolving Indebtedness, shall be given on the date of
the credit commitment by such lenders with respect to such Indebtedness) to the
effect that the issuance of such Indebtedness does not violate Section 4.07 or
Section 4.08 as of such date; (d) any repurchase, redemption or other obligation
in respect of Disqualified Stock; (e) any Indebtedness to any employee of the
Company or any of its Subsidiaries; (f) any liability for taxes owed or owing by
the Company or any of its Subsidiaries or any amounts paid or payable under any
Tax Agreement; and (g) any Trade Payables.
"Shelf Registration Statement" means the Shelf Registration Statement as
defined in the Registration Rights Agreement.
"Significant Subsidiary" means, at any date of determination, any
Restricted Subsidiary that, together with its Restricted Subsidiaries: (i) for
the most recent fiscal year of the Company, accounted for more than 10% of the
consolidated revenues of the Company and its Restricted Subsidiaries; or (ii) as
of the end of such fiscal year, was the owner of more than 10% of the
consolidated assets of the Company and its Restricted Subsidiaries, all as set
forth on the most recently available consolidated financial statements of the
Company for such fiscal year.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, and its successors.
"Stated Maturity" means, (i) with respect to any debt security, the date
specified in such debt security as the fixed date on which the final installment
of principal of such debt security is due and payable and (ii) with respect to
any scheduled installment of principal of or interest on any debt security, the
date specified in such debt security as the fixed date on which such installment
is due and payable.
"Subordinated Notes" means the promissory notes executed by Gold Coast
Hotel and Casino, a Nevada limited partnership, in an aggregate principal amount
not to exceed $2.0 million, as assumed by the Company.
"Subsidiary" means, with respect to any Person, any corporation,
association, business trust or other business entity of which more than 50% of
the voting power of the outstanding Voting Stock is owned, directly or
indirectly, by such Person and one or more other Subsidiaries of such Person.
"Subsidiary Guarantee" means the Guarantee by a Subsidiary Guarantor of
the Company's payment obligations under this Indenture and on the Notes,
executed pursuant to the provisions of this Indenture.
"Subsidiary Guarantor" means a future Subsidiary of the Company that
executes a Subsidiary Guarantee in accordance with the provisions of this
Indenture, until released from that Subsidiary Guarantee in accordance with this
Indenture.
"Tax Agreement" means (i) the Tax Sharing Agreement and (ii) if and for
so long as the Company is treated as a Pass-through Entity, any agreement among
the Company, Coast Resorts and the equityholders of the Company and Coast
Resorts with respect to distributions of the Tax Amount.
"Tax Amount" means, with respect to any period, the federal, state and
local tax liability of equityholders of the Company (or, if such holder is a
Pass-though Entity, its equityholders), assuming
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maximum rates, in respect of their direct or indirect interests in the Company
for such period plus any additional amounts payable to such equityholders to
cover taxes arising from ownership of such equity interests.
"Tax Sharing Agreement" means that certain Tax Sharing Agreement dated
January 30, 1996, among Coast Resorts, the Company and Coast West, Inc., as in
existence on the date of this Indenture.
"Temporary Cash Investment" means any of the following: (i) direct
obligations of the United States of America or any agency thereof or obligations
fully and unconditionally guaranteed by the United States of America or any
agency thereof; (ii) demand deposit accounts, time deposit accounts,
certificates of deposit and money market deposits maturing within one year of
the date of acquisition thereof issued by a bank or trust company which is
organized under the laws of the United States of America, any state thereof or
any foreign country recognized by the United States of America, and which bank
or trust company has capital, surplus and undivided profits aggregating in
excess of $50.0 million (or the foreign currency equivalent thereof) and (unless
such accounts, certificates or deposits are fully insured by the FDIC) has
outstanding debt which is rated "A" (or such similar equivalent rating) or
higher by at least one nationally recognized statistical rating organization (as
defined in Rule 436 under the Securities Act) or any money-market fund sponsored
by a registered broker dealer or mutual fund distributor; (iii) repurchase
obligations with a term of not more than 30 days for underlying securities of
the types described in clause (i) above entered into with a bank meeting the
qualifications described in clause (ii) above; (iv) commercial paper, maturing
not more than one year after the date of acquisition, issued by a corporation
(other than an Affiliate of the Company) organized and in existence under the
laws of the United States of America, any state thereof or any foreign country
recognized by the United States of America with a rating at the time as of which
any investment therein is made of "P-2" (or higher) according to Moody's or
"A-2" (or higher) by S&P; (v) securities with maturities of one year or less
from the date of acquisition issued or fully and unconditionally guaranteed by
any state, commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least "A" by S&P
or Moody's; and (vi) other dollar denominated securities issued by any Person
incorporated in the United States rated at least "A" or the equivalent by S&P or
at least "A2" or the equivalent by Moody's and in each case either (A) maturing
not more than one year after the date of acquisition or (B) which are subject to
a repricing arrangement (such as a Dutch auction) not more than one year after
the date of acquisition (and reprices at least yearly thereafter) which the
Person making the investment believes in good faith will permit such Person to
sell such security at par in connection with such repricing mechanism.
"The Orleans" means The Orleans Hotel and Casino.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
thereunder.
"Trade Payables" means, with respect to any Person, any accounts payable
or any other indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person or any of its Restricted Subsidiaries
arising in the ordinary course of business in connection with the acquisition of
goods or services.
"Transaction Date" means, with respect to the Incurrence of any
Indebtedness by the Company or any of its Restricted Subsidiaries, the date such
Indebtedness is to be Incurred and, with respect to any Restricted Payment, the
date such Restricted Payment is to be made.
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"Trustee" means the party named as such above until a successor replaces
it in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.
"Unrestricted Global Note" means a permanent global Note substantially
in the form of Exhibit A attached hereto that bears the Global Note Legend and
that has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary, representing a series of Notes that do not bear the Private
Placement Legend.
"Unrestricted Definitive Note" means one or more Definitive Notes that
do not bear and are not required to bear the Private Placement Legend.
"Unrestricted Subsidiary" means: (i) any Subsidiary of the Company that
is designated an Unrestricted Subsidiary by the Board of Directors of the
Company in the manner provided below; and (ii) any Subsidiary of an Unrestricted
Subsidiary. The Board of Directors may designate any Restricted Subsidiary
(including any newly acquired or newly formed Subsidiary of the Company) to be
an Unrestricted Subsidiary unless such Subsidiary owns any Capital Stock of, or
owns or holds any Lien on any property of, the Company or any Restricted
Subsidiary; provided that: (A) any Guarantee by the Company or any Restricted
Subsidiary of any Indebtedness of the Subsidiary being so designated shall be
deemed an "Incurrence" of such Indebtedness and an "Investment" by the Company
or such Restricted Subsidiary (or both, if applicable) at the time of such
designation; (B) either (1) the Subsidiary to be so designated has total assets
of $1,000 or less or (2) if such Subsidiary has assets greater than $1,000, such
designation would be permitted under Section 4.10 hereof; and (3) if applicable,
the "Incurrence" of Indebtedness and the "Investment" referred to in clause (A)
of this proviso would be permitted under Section 4.07 and Section 4.10 hereof.
The Board of Directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided that: (i) no Default or Event of Default shall
have occurred and be continuing at the time of or after giving effect to such
designation; and (ii) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately after such designation would, if Incurred at such time,
have been permitted to be Incurred (and shall be deemed to have been Incurred)
for all purposes of this Indenture. Any such designation by the Board of
Directors shall be evidenced to the Trustee by promptly filing with the Trustee
a copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing provisions.
"U.S. Person" means a U.S. person as defined in Rule 902(o) under the
Securities Act.
"Voting Stock" means, with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the sum
of the products obtained by multiplying (x) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (y) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (b) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" means, with respect to any
Subsidiary of any Person, the ownership of all of the outstanding Capital Stock
of such Subsidiary (other than any director's qualifying shares) by such Person
or one or more Wholly Owned Restricted Subsidiaries of such Person.
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SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
---- ----------
"Authentication Order".............................................. 2.02
"Covenant Defeasance"............................................... 8.03
"DTC"............................................................... 2.03
"Event of Default".................................................. 6.01
"Excess Proceeds"................................................... 4.07
"Legal Defeasance".................................................. 8.02
"Paying Agent"...................................................... 2.03
"Registrar"......................................................... 2.03
"Restricted Payments"............................................... 4.10
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 the
Guarantors, respectively, and any successor obligor upon the Notes and the Note
Guarantees, respectively.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule under
the TIA have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the plural
include the singular;
(e) provisions apply to successive events and transactions; and
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(f) references to sections of or rules under the Securities Act
shall be deemed to include substitute, replacement of successor sections or
rules adopted by the Commission 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 shall be substantially in the form of Exhibit A hereto. The Notes
may have notations, legends or endorsements required by law, stock exchange rule
or usage. Each Note shall 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 shall 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 shall be substantially
in the form of Exhibit A 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 shall be substantially in the form of
Exhibit A attached 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 shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent 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 shall 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) Euroclear and Cedel 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 Cedel Bank"
and "Customer Handbook" of Cedel Bank shall be applicable to transfers of
beneficial interests in the Regulation S Global Notes that are held by
Participants through Euroclear or Cedel Bank.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
An Officer shall sign the Notes for the Company by manual or facsimile
signature. The Company's seal shall be reproduced on the Notes and may be in
facsimile form. If an Officer whose signature is on a Note no longer holds that
office at the time a Note is authenticated, the Note shall nevertheless be
valid. A Note shall not be valid until authenticated by the manual signature of
the Trustee. The signature shall be conclusive evidence that the Note has been
authenticated under this Indenture. The Trustee shall, upon a written order of
the Company signed by an Officer (an "Authentication Order"), authenticate Notes
for original issue up to the aggregate principal amount stated
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in paragraph 4 of the Notes. The aggregate principal amount of Notes outstanding
at any time may not exceed such amount 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 shall 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 shall 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 shall 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 shall 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 Additional Interest, 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, Coast Resorts
or a Subsidiary of the Company) shall have no further liability for the money.
If the Company, Coast Resorts or a Subsidiary of the Company acts as Paying
Agent, it shall 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 shall serve as
Paying Agent for the Notes.
SECTION 2.05. HOLDER LISTS.
The Trustee shall 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 shall 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).
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SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except 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 (i) 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, (ii)
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 or (iii) upon request of the Trustee or any
Holders if there shall have occurred and be continuing a Default or Event of
Default with respect to the Notes. Upon the occurrence of any of the preceding
events in (i), (ii) or (iii) 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
shall be effected through the Depositary, in accordance with the provisions of
this Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Notes shall 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 shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:
(i) 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
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)(i).
(ii) 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)(i) above, the transferor of such beneficial interest must
deliver to the Registrar either (A) (1) 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 (2) instructions given in accordance with the Applicable
Procedures containing
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information regarding the Participant account to be credited with such
increase or (B) (1) 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 (2) 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 (B)(1) above. 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)(ii) 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.
(iii) 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)(ii) 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; and
(B) if the transferee will take delivery in the form
of a beneficial interest in the Regulation S Global Note, then
the transferor must deliver a certificate in the form of Exhibit
B hereto, including the certifications in item (2) thereof.
(iv) Transfer and Exchange of Beneficial Interests in a
Restricted Global Note for Beneficial Interests in the 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)(ii) 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 transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) 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 Participating
Broker-Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Registration Rights Agreement;
or
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(D) the Registrar receives the following: (1) 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 (2) 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), an Opinion of Counsel in form reasonably
acceptable to the Registrar and the Company 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.
(i) 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;
(B) if such beneficial interest is being transferred
to a QIB in accordance with Rule 144A under the Securities Act,
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 under the Securities Act, 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 under the
Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (3)(a) thereof;
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(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)(i) shall bear the Private Placement Legend and
shall be subject to all restrictions on transfer contained therein.
(ii) 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 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 (1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) 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 Participating
Broker-Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Registration Rights Agreement;
or
(D) the Registrar receives the following: (1) if the
holder of such beneficial interest in a Restricted Global Note
proposes to exchange such beneficial interest for a Definitive
Note that does not bear the Private Placement Legend, a
certificate from such holder in the form of
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Exhibit C hereto, including the certifications in item (1)(b)
thereof; or (2) 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 Definitive Note that does not bear the Private Placement
Legend, 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), an Opinion
of Counsel in form reasonably acceptable to the Registrar and
the Company 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.
(iii) 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)(ii) hereof, 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 pursuant to
this Section 2.06(c)(iii) 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 pursuant to this Section 2.06(c)(iii)
shall not bear the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial
Interests.
(i) 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 under the
Securities Act, 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 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (2) thereof;
the Trustee shall 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
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Note, in the case of clause (B) above, the 144A Global Note, in the case
of clause (C) above, the Regulation S Global Note.
(ii) 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:
(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 (1) a
broker-dealer, (2) a Person participating in the distribution of
the Exchange Notes or (3) 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 Participating
Broker-Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Registration Rights Agreement;
or
(D) the Registrar receives the following: (1) 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 (2) 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), an Opinion of
Counsel in form reasonably acceptable to the Registrar and the
Company 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)(ii), the Trustee shall cancel the Definitive
Notes and increase or cause to be increased the aggregate principal
amount of the Unrestricted Global Note.
(iii) 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 shall 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 (ii)(B),
(ii)(D) or (iii) 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
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accordance with Section 2.02 hereof, the Trustee shall authenticate one
or more Unrestricted Global Notes in an aggregate principal amount equal
to the principal amount of Definitive Notes so transferred.
(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 shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall 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
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(i) 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 under the Securities Act, 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.
(ii) 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 (1) a
broker-dealer, (2) a Person participating in the distribution of
the Exchange Notes or (3) 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 Participating
Broker-Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Registration Rights Agreement;
or
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(D) the Registrar receives the following: (1) 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 (2) 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), an Opinion of Counsel in form reasonably
acceptable to the Registrar and the Company 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.
(iii) 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 shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.02, the
Trustee shall authenticate (i) 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 tendered for acceptance by Persons that
certify in the applicable Letters of Transmittal that (x) they are not
broker-dealers, (y) they are not participating in a distribution of the Exchange
Notes and (z) they are not affiliates (as defined in Rule 144) of the Company,
and accepted for exchange in the Exchange Offer and (ii) Definitive Notes in an
aggregate principal amount equal to the principal amount of the Restricted
Definitive Notes accepted for exchange in the Exchange Offer. Concurrently with
the issuance of such Notes, the Trustee shall cause the aggregate principal
amount of the applicable Restricted Global Notes to be reduced accordingly, and
the Company shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Definitive Notes so accepted Definitive
Notes in the appropriate principal amount.
(g) Legends. The following legends shall 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.
(i) 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:
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S.
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PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT, WITHIN TWO
YEARS AFTER THE ORIGINAL ISSUANCE OF THE NOTES, RESELL OR OTHERWISE TRANSFER
THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E)
INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO
SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS
NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE) AND IF SUCH
TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES OF LESS THAN
$100,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS
IN COMPLIANCE WITH THE SECURITIES ACT, OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE
WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THE NOTES, THE HOLDER MUST CHECK
THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF
SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL
OPINIONS, OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES," AND "U.S.
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS."
(B) Notwithstanding the foregoing, any Global Note
or Definitive Note issued pursuant to subparagraphs (b)(iv),
(c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f)
to this Section 2.06 (and all Notes issued in exchange therefor
or substitution thereof) shall not bear the Private Placement
Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend
in substantially the following form:
"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 (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO
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SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE
TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS
GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN
CONSENT OF COAST HOTELS AND CASINOS, INC."
(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 shall 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 shall be
reduced accordingly and an endorsement shall 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 shall be increased accordingly
and an endorsement shall 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.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes
and Definitive Notes upon the receipt of an Authenticating Order.
(ii) No service charge shall 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, 4.17, 4.20 and 9.05 hereof).
(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid obligations of the Company, evidencing the same
Indebtedness, and entitled to the same benefits under this Indenture, as
the Global Notes or Definitive Notes surrendered upon such registration
of transfer or exchange.
(v) The Company shall not 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 so 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.
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(vi) 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.
(vii) The Trustee shall authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.02
hereof.
(viii) 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 shall issue and the Trustee, upon receipt of an
Authentication Order, shall 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 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 shall 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 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. 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 bona fide 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 shall be deemed to be no longer outstanding
and shall 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 by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that the Trustee knows are so owned shall be so disregarded.
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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,
shall authenticate temporary Notes. Temporary Notes shall be substantially in
the form of certificated Notes but may have variations that the Company
considers appropriate for temporary Notes and as shall be reasonably acceptable
to the Trustee. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes shall 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 shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
canceled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all canceled Notes shall 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 shall
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 shall 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 shall fix or cause to be fixed each such
special record date and payment date, provided that no such special record date
shall 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) shall 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 shall furnish to the Trustee,
at least 30 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Notes to be redeemed and (iv) the redemption price.
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SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed or purchased in an
offer to purchase at any time, the Trustee shall select the Notes to be redeemed
or purchased among the Holders of the Notes in compliance with the requirements
of the principal national securities exchange, if any, on which the Notes are
listed or, if the Notes are not so listed, on a pro rata basis, by lot or in
accordance with any other method the Trustee considers fair and appropriate. In
the event of partial redemption by lot, the particular Notes to be redeemed
shall be selected, unless otherwise provided herein, not less than 30 nor more
than 60 days prior to the redemption date by the Trustee from the outstanding
Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall 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, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.09 hereof, at least 30 days but
not more than 60 days before a redemption date, the Company shall mail or cause
to be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) 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 shall be issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(f) 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;
(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(h) 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.
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At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have 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.
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 PRICE.
One Business Day prior to the redemption date, the Company shall deposit
with the Trustee or with the Paying Agent money sufficient to pay the redemption
price of and accrued interest on all Notes to be redeemed on that date. The
Trustee or the Paying Agent shall 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 price of, and accrued interest on, all
Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph,
on and after the redemption date, interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed 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 shall not be so paid upon surrender for redemption
because of the failure of the Company to comply with the preceding paragraph,
interest shall be paid on the unpaid principal, from the redemption 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 IN PART.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and, upon the Company's written request, the Trustee shall authenticate
for the Holder at the expense of the Company a new Note equal in principal
amount to the unredeemed portion of the Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) Except as set forth in clause (b) of this Section 3.07, the
Company shall not have the option to redeem the Notes pursuant to this Section
3.07 prior to April 1, 2004. Thereafter, the Company shall have the option to
redeem the Notes, in whole or in part, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest and Additional Interest thereon, if any, to the applicable redemption
date, if redeemed during the twelve-month period beginning on April 1 of the
years indicated below:
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Year Percentage
---- ----------
2004............................................................. 104.750%
2005............................................................. 103.167%
2006............................................................. 101.583%
2007 and thereafter.............................................. 100.000%
(b) Notwithstanding the provisions of clause (a) of this Section
3.07, at any time prior to April 1, 2002, the Company may on any one or more
occasions redeem up to 35% of the aggregate principal amount of Notes issued
under this Indenture with the Net Cash Proceeds to the Company of one or more
Public Equity Offerings or the capital contributions to the Company by Coast
Resorts with the Net Cash Proceeds to Coast Resorts of one or more Public Equity
Offerings at a redemption price equal to 109.500% of the aggregate principal
amount thereof plus accrued and unpaid interest and Additional Interest, if any,
to the redemption date; provided that at least $113.75 million in aggregate
principal amount of Notes remains outstanding immediately after the occurrence
of such redemption (excluding Notes held by the Company and its Subsidiaries)
and provided further, that such redemption occurs within 45 days of the date of
the closing of such Public Equity Offering.
(c) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.
SECTION 3.08. GAMING REDEMPTION
(a) Notwithstanding any other provision of this Indenture, if any
Gaming Authority notifies a holder or beneficial owner of Notes that: (1) the
holder or beneficial owner must obtain a license, qualification or finding of
suitability under an applicable gaming law and the holder or beneficial owner
does not apply for such license, qualification or finding of suitability within
30 days (or such shorter period required by the Gaming Authority); or (2) the
holder or beneficial owner will not be licensed, qualified or found suitable
under an applicable gaming law; then the Company shall have the right, at its
option, (1) to require that the holder or beneficial owner dispose of the
holder's or beneficial owner's Notes within 30 days (or such earlier date as
required by the Gaming Authority) of (A) the termination of the 30 day period
described above for the holder or beneficial owner to apply for a license,
qualification or finding of suitability or (B) the receipt of the notice from
the Gaming Authority that the holder or beneficial owner will not be licensed,
qualified or found suitable; or (2) to redeem the holder's or beneficial owner's
Notes at a price equal to 100% of the principal amount thereof, plus accrued and
unpaid interest and Additional Interest, if any, to the date of redemption (or
such earlier date as required by the Gaming Authority or applicable gaming
laws).
(b) Immediately upon a determination that a holder or beneficial
owner will not be licensed, qualified or found suitable, the holder or
beneficial owner will have no further rights (1) to exercise any right conferred
by the Notes, directly or indirectly, through any trustee, nominee or any other
Person or entity, or (2) to receive any interest or other distribution or
payment with respect to the Notes or any remuneration in any form from the
Company for services rendered or otherwise, except the redemption price of the
Notes. The holder or beneficial owner applying for a license, qualification or
finding of suitability must pay all related costs.
(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.
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SECTION 3.09. NO MANDATORY REDEMPTION.
The Company shall not be required to make mandatory redemption 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 on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than Coast Resorts, the Company or a
Subsidiary thereof, holds as of 12:00 noon 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 Additional Interest, 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 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 Additional Interest (without regard to any
applicable grace period) at the same rate to the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
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
shall fail to maintain any such required office or agency or shall fail 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.
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SECTION 4.03. COMMISSION REPORTS AND REPORTS TO HOLDERS.
(a) Whether or not required by the rules and regulations of the
Commission, so long as any Notes are outstanding, the Company shall furnish to
the Holders: (1) all quarterly and annual financial information that would be
required to be contained in a filing with the Commission on Forms 10-Q and 10-K
if the Company were required to file such Forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and,
with respect to the annual information only, a report thereon by the Company's
certified independent accountants; and (2) all current reports that would be
required to be filed with the Commission on Form 8-K if the Company were
required to file such reports. in each case, within the time periods specified
in the Commission's rules and regulations.
(b) If the Company has designated any of its Subsidiaries as
Unrestricted Subsidiaries, then the quarterly and annual financial information
required by the preceding paragraph shall include a reasonably detailed
presentation, either on the face of the financial statements or in the footnotes
thereto, and in Management's Discussion and Analysis of Financial Condition and
Results of Operations, of the financial condition and results of operations of
the Company and its Restricted Subsidiaries separate from the financial
condition and results of operations of the Unrestricted Subsidiaries of the
Company.
(c) In addition, whether or not required by the rules and
regulations of the Commission, the Company shall file a copy of all such
information and reports referred to in clauses (a)(1) and (a)(2) above with the
Commission for public availability (unless the Commission will not accept such a
filing) and make such information available to securities analysts and
prospective investors upon request. For so long as any Notes remain outstanding,
the Company, Coast Resorts and each Subsidiary Guarantor shall furnish to the
Holders 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 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 shall have 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(a) 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
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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) The Company shall, so long as any of the Notes are outstanding,
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.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
Each of the Company, Coast Resorts and each Subsidiary Guarantor
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 each of the Company, Coast Resorts and each of the
Subsidiary 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 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. INCURRENCE OF INDEBTEDNESS AND ISSUANCES OF PREFERRED STOCK.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, Incur any Indebtedness (other than the Notes and any
Guarantees thereof issued on the Closing Date and other Indebtedness existing on
the Closing Date, including the Old First Mortgage Notes until redeemed) or
issue any shares of Disqualified Stock or, in the case of any Restricted
Subsidiary, issue any shares of preferred stock; provided that the Company or
any Restricted Subsidiary may Incur Indebtedness and the Company may issue
Disqualified Stock if, after giving effect to the Incurrence of such
Indebtedness or the issuance of such Disqualified Stock, in each case after the
receipt and application of the proceeds therefrom, the Interest Coverage Ratio
would be greater than 2.0:1.
Notwithstanding the foregoing, the Company and any Restricted Subsidiary
(except as specified below) may Incur each and all of the following:
(i) Indebtedness under the Credit Facility; provided that the aggregate
principal amount of all Indebtedness outstanding pursuant to this clause
(i) does not exceed $200.0 million;
(ii) Indebtedness owed (A) by a Restricted Subsidiary to the Company or (B)
by the Company or a Restricted Subsidiary to any Restricted Subsidiary;
provided that any event which results in any such Restricted Subsidiary
ceasing to be a Restricted Subsidiary or any subsequent transfer of
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such Indebtedness (other than to the Company or another Restricted
Subsidiary) shall be deemed, in each case, to constitute an Incurrence
of such Indebtedness not permitted by this clause (ii);
(iii) Indebtedness issued in exchange for, or the net proceeds of which are
used to refinance or refund, then outstanding Indebtedness (other than
Indebtedness Incurred under clause (i), (ii), (iv), (vii), (viii) or
(ix) of this paragraph) and any refinancings thereof in an amount not to
exceed the amount so refinanced or refunded (plus premiums, accrued
interest, fees and expenses); provided that Indebtedness the proceeds of
which are used to refinance or refund the Notes or Indebtedness that is
pari passu with, or subordinated in right of payment to, the Notes shall
only be permitted under this clause (iii) if: (A) in case the Notes are
refinanced in part or the Indebtedness to be refinanced is pari passu
with the Notes, such new Indebtedness, by its terms or by the terms of
any agreement or instrument pursuant to which such new Indebtedness is
outstanding, is expressly made pari passu with, or subordinate in right
of payment to, the remaining Notes; (B) in case the Indebtedness to be
refinanced is subordinated in right of payment to the Notes, such new
Indebtedness, by its terms or by the terms of any agreement or
instrument pursuant to which such new Indebtedness is issued or remains
outstanding, is expressly made subordinate in right of payment to the
Notes at least to the extent that the Indebtedness to be refinanced is
subordinated to the Notes; and (C) such new Indebtedness, determined as
of the date of Incurrence of such new Indebtedness, does not mature
prior to the Stated Maturity of the Indebtedness to be refinanced or
refunded, and the Average Life of such new Indebtedness is at least
equal to the remaining Average Life of the Indebtedness to be refinanced
or refunded; and provided further that in no event may Indebtedness of
the Company that is pari passu with or subordinated in right of payment
to the Notes be refinanced by means of any Indebtedness of any
Restricted Subsidiary pursuant to this clause (iii);
(iv) Indebtedness (A) in respect of performance, surety or appeal bonds,
completion guarantees or similar instruments provided in the ordinary
course of business, (B) under Currency Agreements and Interest Rate
Agreements; provided that such agreements (1) are designed solely to
protect the Company or its Restricted Subsidiaries against fluctuations
in foreign currency exchange rates or interest rates and (2) do not
increase the Indebtedness of the obligor outstanding at any time other
than as a result of fluctuations in foreign currency exchange rates or
interest rates or by reason of fees, indemnities and compensation
payable thereunder; or (C) arising from agreements providing for
indemnification, adjustment of purchase price or similar obligations, or
from Guarantees or letters of credit, surety bonds or performance bonds
securing any obligations of the Company or any of its Restricted
Subsidiaries pursuant to such agreements, in any case Incurred in
connection with the disposition of any business, assets or Restricted
Subsidiary (other than Guarantees of Indebtedness Incurred by any Person
acquiring all or any portion of such business, assets or Restricted
Subsidiary for the purpose of financing such acquisition), in a
principal amount not to exceed the gross proceeds actually received by
the Company or any Restricted Subsidiary in connection with such
disposition;
(v) Indebtedness of the Company, to the extent the net proceeds thereof are
promptly (A) used to purchase Notes tendered in an Offer to Purchase
made as a result of a Change in Control or (B) deposited to defease the
Notes under Article 8;
(vi) Indebtedness outstanding under Permitted FF&E Financings which are
either (x) Non-Recourse Indebtedness of the Company and its Restricted
Subsidiaries or (y) limited in principal amount,
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including all refinancings and replacements thereof, to $10.0 million at
any one time outstanding secured by Liens described in clause (vii) of
the definition of "Permitted Liens";
(vii) Indebtedness evidenced by letters of credit or similar instruments
issued in the ordinary course of business of the Company or any
Restricted Subsidiary including any such instrument to secure workers'
compensation or other insurance coverage or security or lease deposits;
(viii) Indebtedness, in addition to Indebtedness permitted under clauses (i)
through (vii) above and (ix) through (xii) below, in an aggregate
principal amount outstanding at any time not to exceed $15.0 million;
(ix) obligations under letters of credit, bonds and other surety arrangements
posted by the Company or any Subsidiary of the Company in order to
prevent the loss or material impairment of or to obtain a Gaming License
or as otherwise required by an order of any Gaming Authority or by
applicable law or regulation and consistent in character and amount with
industry practice;
(x) Indebtedness of the Company (and Guarantees thereof by the Subsidiaries
of the Company that are Guarantors) Incurred to finance the expansion or
refurbishment of an Existing Casino, provided the aggregate principal
amount of such Indebtedness at any time outstanding, together with any
Indebtedness applied to the refinancing thereof, does not exceed the
lesser of $20.0 million or 80% of the aggregate Project Costs of such
expansion or refurbishment;
(xi) following the date on which the New Casino is operating, Indebtedness of
the Company (and Guarantees thereof by the Subsidiaries of the Company
that are Guarantors) Incurred to finance the expansion or refurbishment
of an Existing Casino, provided the aggregate principal amount of such
Indebtedness at any time outstanding, together with any Indebtedness
applied to the refinancing thereof, does not exceed the lesser of $30.0
million or 80% of the aggregate Project Costs of such expansion or
refurbishment; and
(xii) the Guarantee by the Company or any Restricted Subsidiary of
Indebtedness of the Company or a Restricted Subsidiary of the Company
that was permitted to be incurred by another provision of this Section
4.07.
(b) Notwithstanding any other provision of this Section 4.07, the
maximum amount of Indebtedness that the Company or a Restricted Subsidiary may
Incur pursuant to this Section 4.07 shall not be deemed to be exceeded, with
respect to any outstanding Indebtedness, due solely to the result of
fluctuations in the exchange rates of currencies.
(c) For purposes of determining any particular amount of
Indebtedness under this Section 4.07, (1) Indebtedness Incurred under the Credit
Facility first shall be treated as Incurred pursuant to clause (i) of the second
paragraph of this Section 4.07(a) to the full extent of Indebtedness permitted
under such clause (it being understood that additional Indebtedness under the
Credit Facility may be incurred to the full extent permitted under any other
provision of this Indenture); (2) Guarantees, Liens or obligations with respect
to letters of credit supporting Indebtedness otherwise included in the
determination of such particular amount shall not be included; and (3) any Liens
granted pursuant to the equal and ratable provisions referred to in Section 4.09
shall not be treated as Indebtedness. For purposes of determining compliance
with this Section 4.07, in the event that an item of Indebtedness meets the
criteria of more than one of the types of Indebtedness described in the above
clauses (other than
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Indebtedness referred to in clause (1) of the preceding sentence), the Company,
in its sole discretion, shall classify, and from time to time may reclassify,
such item of Indebtedness and only be required to include the amount and type of
such Indebtedness in one of such clauses.
SECTION 4.08. NO SENIOR SUBORDINATED INDEBTEDNESS.
The Company shall not Incur any Indebtedness that is subordinate in
right of payment to any Senior Indebtedness unless such Indebtedness is pari
passu with, or subordinated in right of payment to, the Notes. No Guarantor
shall Incur any Indebtedness that is subordinate in right of payment to any
Senior Indebtedness of such Guarantor unless such Indebtedness is pari passu
with, or subordinated in right of payment to, the Parent Guarantee or Subsidiary
Guarantee, as the case may be, executed by such Guarantor.
SECTION 4.09. LIENS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien of any kind securing Indebtedness or trade payables on any asset
now owned or hereafter acquired, except Permitted Liens, unless the Notes and
the Subsidiary Guarantees are secured on an equal and ratable basis with the
Indebtedness secured.
SECTION 4.10. RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly: (i) declare or pay any dividend or make any
distribution on or with respect to the Company's or any Restricted Subsidiaries'
Capital Stock (other than (A) dividends or distributions payable solely in
shares of its Capital Stock (other than Disqualified Stock) or in options,
warrants or other rights to acquire shares of such Capital Stock and (B) pro
rata dividends or distributions on Common Stock of Restricted Subsidiaries held
by minority stockholders) held by Persons other than the Company or any of its
Restricted Subsidiaries; (ii) purchase, redeem, retire or otherwise acquire for
value any shares of Capital Stock of (A) the Company (including options,
warrants or other rights to acquire such shares of Capital Stock) held by any
Person or (B) a Restricted Subsidiary (including options, warrants or other
rights to acquire such shares of Capital Stock) held by any Affiliate of the
Company (other than a Restricted Subsidiary) or any holder (or any Affiliate of
such holder) of 5% or more of the Capital Stock of the Company; (iii) make any
voluntary or optional principal payment, or voluntary or optional redemption,
repurchase, defeasance, or other acquisition or retirement for value, of
Indebtedness of the Company that is subordinated in right of payment to the
Notes or the Subsidiary Guarantees, except a payment of interest or principal at
the Stated Maturity thereof; or (iv) make any Investment, other than a Permitted
Investment, in any Person (such payments or any other actions described in
clauses (i) through (iv) above being collectively "Restricted Payments") if, at
the time of, and after giving effect to, the proposed Restricted Payment: (A) a
Default or Event of Default shall have occurred and be continuing; (B) the
Company could not Incur at least $1.00 of Indebtedness under Section 4.07(a)
hereof; or (C) the aggregate amount of all Restricted Payments (the amount of
any Restricted Payment with a fair market value in excess of $1.0 million, if
other than in cash, to be determined in good faith by the Board of Directors,
whose determination shall be conclusive and evidenced by a Board Resolution)
made after the Closing Date shall exceed the sum of: (1) 50% of the aggregate
amount of the Adjusted Consolidated Net Income (or, if the Adjusted Consolidated
Net Income is a loss, minus 100% of the amount of such loss) (determined by
excluding income resulting from transfers of assets by the Company or a
Restricted Subsidiary to an Unrestricted Subsidiary) accrued on a cumulative
basis during the period (taken as one
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accounting period) beginning on January 1, 1999 and ending on the last day of
the last fiscal quarter preceding the Transaction Date for which reports have
been filed with the Commission or provided to the Trustee pursuant to Section
4.03; plus (2) the aggregate Net Cash Proceeds received by the Company after the
Closing Date from the issuance and sale permitted by this Indenture of its
Capital Stock (other than Disqualified Stock) to a Person who is not a
Subsidiary of the Company, including an issuance or sale permitted by this
Indenture of Indebtedness of the Company for cash subsequent to the Closing Date
upon the conversion of such Indebtedness into Capital Stock (other than
Disqualified Stock) of the Company, or from the issuance to a Person who is not
a Subsidiary of the Company of any options, warrants or other rights to acquire
Capital Stock of the Company (in each case, exclusive of any Disqualified Stock
or any options, warrants or other rights that are redeemable at the option of
the holder, or are required to be redeemed, prior to the Stated Maturity of the
Notes); plus (3) 100% of the aggregate capital contributions from Coast Resorts;
plus (4) an amount equal to the net reduction in Investments (other than
reductions in Permitted Investments) in any Person resulting from payments of
interest on Indebtedness, dividends, repayments of loans or advances, or other
transfers of assets, in each case to the Company or any Restricted Subsidiary or
from the Net Cash Proceeds from the sale of any such Investment (except, in each
case, to the extent any such payment or proceeds are included in the calculation
of Adjusted Consolidated Net Income), or from redesignations of Unrestricted
Subsidiaries as Restricted Subsidiaries (valued in each case as provided in the
definition of "Investments"), not to exceed, in each case, the amount of
Investments previously made by the Company or any Restricted Subsidiary in such
Person or Unrestricted Subsidiary.
The foregoing provision shall not be violated by reason of: (i) the
payment of any dividend within 60 days after the date of declaration thereof if,
at said date of declaration, such payment would comply with the foregoing
paragraph; (ii) the redemption, repurchase, defeasance or other acquisition or
retirement for value of Indebtedness that is subordinated in right of payment to
the Notes including premium, if any, and accrued and unpaid interest, with the
proceeds of, or in exchange for, Indebtedness Incurred under clause (iii) of
Section 4.07(a); (iii) the repurchase, redemption or other acquisition of
Capital Stock of the Company or a Restricted Subsidiary (or options, warrants or
other rights to acquire such Capital Stock) in exchange for, or out of the
proceeds of a substantially concurrent offering of, shares of Capital Stock
(other than Disqualified Stock) of the Company or of Coast Resorts to the extent
the net proceeds thereof are contributed to the Company (or options, warrants or
other rights to acquire such Capital Stock); (iv) the redemption or repurchase
(and the payment of dividends by the Company to Coast Resorts to fund any
redemption or repurchase by Coast Resorts) of any debt or equity securities of
the Company, any Restricted Subsidiary or Coast Resorts required by, and in
accordance with, any order of any Gaming Authority, provided that the Company
has used its reasonable best efforts to effect a disposition of such securities
to a third-party and has been unable to do so; (v) the making of any principal
payment or the repurchase, redemption, retirement, defeasance or other
acquisition for value of Indebtedness of the Company or a Restricted Subsidiary
which is subordinated in right of payment to the Notes or the Subsidiary
Guarantee executed by such Restricted Subsidiary in exchange for, or out of the
proceeds of, a substantially concurrent offering of, shares of the Capital Stock
(other than Disqualified Stock) of the Company or of Coast Resorts to the extent
the net proceeds thereof are contributed to the Company or of Coast Resorts to
the extent the net proceeds thereof are contributed to the Company (or options,
warrants or other rights to acquire such Capital Stock); (vi) dividends or other
payments to Coast Resorts in an aggregate amount not to exceed $500,000 per
fiscal year to pay accounting, legal, corporate reporting and other
administrative expenses of Coast Resorts in the ordinary course of business;
(vii) payments or distributions to dissenting stockholders (and the payment of
dividends by the Company to Coast Resorts to fund any such payments) pursuant to
applicable law pursuant to or in connection with a consolidation, merger or
transfer of assets that complies with the provisions of this Indenture
applicable
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to mergers, consolidations and transfers of all or substantially all of the
property and assets of the Company or Coast Resorts; (viii) payments of amounts
required for any repurchase, redemption, retirement or other acquisition of any
Capital Stock of the Company or Coast Resorts (and the payment of dividends by
the Company to Coast Resorts to fund any such payments) or any options or rights
to acquire such Capital Stock of the Company or Coast Resorts owned by any
director, officer or employee of the Company or its Subsidiaries pursuant to any
management equity subscription agreement, stock option agreement or similar
agreement, or otherwise upon the death, disability, retirement or termination of
employment or departure from the Company; provided that the aggregate price paid
for all such repurchased, redeemed, retired or acquired Capital Stock of the
Company or options shall not exceed in the aggregate $2.0 million; (ix)
Investments in any Person so long as such Person is engaged in a line of
business in which the Company is permitted to be engaged pursuant to Section
4.22 in an aggregate amount not to exceed $15.0 million; (x) Restricted Payments
up to an amount equal to the Barbary Excess Net Cash Proceeds; (xi) payments for
the repurchase, redemption, retirement, defeasance or other acquisition of any
of the Subordinated Notes in an aggregate amount not to exceed $2.0 million;
(xii) Permitted Tax Distributions; (xiii) dividends or other payments (and the
payments of dividends by the Company to Coast Resorts to fund any such payments)
to the former partners of the Gold Coast Hotel and Casino, a Nevada partnership,
or the Barbary Coast Hotel and Casino, a Nevada partnership, in an aggregate
amount not to exceed $1.5 million to pay income tax liability incurred as such
partners and assessed after the date of this Indenture; or (xiv) Restricted
Payments in an aggregate amount not to exceed $15.0 million provided that,
except in the case of clauses (i), (iv), (vii), (viii) and (xiii), no Default or
Event of Default shall have occurred and be continuing or occur as a consequence
of the actions or payments set forth therein.
Each Restricted Payment permitted pursuant to the preceding paragraph
(other than the Restricted Payment referred to in clause (ii), (vi), (xii) and
(xiii) thereof and an exchange of Capital Stock for Capital Stock or
Indebtedness referred to in clause (iii) or (v) thereof) and the Net Cash
Proceeds from any issuance of Capital Stock referred to in clauses (iii) and
(v), shall be included in calculating whether the conditions of clause (C) of
the first paragraph of this Section 4.10 have been met with respect to any
subsequent Restricted Payments.
SECTION 4.11. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES.
The Company shall not, and shall not permit any Restricted Subsidiary
to, create or otherwise cause or suffer to exist or become effective any
consensual encumbrance or restriction of any kind on the ability of any
Restricted Subsidiary to: (i) pay dividends or make any other distributions
permitted by applicable law on any Capital Stock of such Restricted Subsidiary
owned by the Company or any other Restricted Subsidiary; (ii) pay any
Indebtedness owed to the Company or any other Restricted Subsidiary; (iii) make
loans or advances to the Company or any other Restricted Subsidiary; or (iv)
transfer any of its property or assets to the Company or any other Restricted
Subsidiary.
The foregoing provisions shall not restrict any encumbrances or
restrictions: (i) existing on the Closing Date in the Credit Agreement, this
Indenture or any other agreements in effect on the Closing Date, and any
modifications, extensions, refinancings, renewals, substitutions or replacements
of such agreements; provided that the encumbrances and restrictions in any such
modifications, extensions, refinancings, renewals, substitutions or replacements
are no less favorable in any material respect to the Holders than those
encumbrances or restrictions that are then in effect and that are being
modified, extended, refinanced, renewed, substituted or replaced; (ii) contained
in any Indebtedness incurred under
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an agreement described in clause (ii)(B)(1) of the definition of "Credit
Facility" and any modifications, extensions, refinancings, renewals,
substitutions or replacements of such agreement; provided that the encumbrances
and restrictions in any such modifications, extensions, refinancings, renewals,
substitutions or replacements are no less favorable in any material respect to
the Holders than those encumbrances or restrictions that are then in effect in
such agreement; (iii) existing under or by reason of applicable law; (iv)
contained in any agreement so long as such encumbrances and restrictions are no
more restrictive than those contained in this Indenture; (v) existing with
respect to any Person or the property or assets of such Person acquired by the
Company or any Restricted Subsidiary, existing at the time of such acquisition
and not incurred in contemplation thereof, which encumbrances or restrictions
are not applicable to any Person or the property or assets of any Person other
than such Person or the property or assets of such Person so acquired; (vi) in
the case of clause (iv) of the first paragraph of this Section 4.11, (A) that
restrict in a customary manner the subletting, assignment or transfer of any
property or asset that is a lease, license, conveyance or contract or similar
property or asset, (B) existing by virtue of any transfer of, agreement to
transfer, option or right with respect to, or Lien on, any property or assets of
the Company or any Restricted Subsidiary not otherwise prohibited by this
Indenture, (C) arising or agreed to in the ordinary course of business, not
relating to any Indebtedness, and that do not, individually or in the aggregate,
detract from the value of property or assets of the Company or any Restricted
Subsidiary in any manner material to the Company or any Restricted Subsidiary,
(D) existing by reason of customary provisions in leases entered into in the
ordinary course of business or (E) provisions with respect to the disposition or
distribution of assets or property in joint venture agreements and other similar
agreements entered into in the ordinary course of business; (vii) with respect
to a Restricted Subsidiary and imposed pursuant to an agreement that has been
entered into for the sale or disposition of all or substantially all of the
Capital Stock of, or property and assets of, such Restricted Subsidiary; (viii)
contained in the terms of any Indebtedness or any agreement pursuant to which
such Indebtedness was issued if (A) the encumbrance or restriction applies only
in the event of any default contained in such Indebtedness or agreement, (B) the
encumbrance or restriction is not materially more disadvantageous to the Holders
of the Notes than is customary in comparable financings and (C) the Company
believes that any such encumbrance or restriction will not materially affect the
Company's ability to make principal or interest payments on the Notes.
Nothing contained in this Section 4.11 shall prevent the Company or any
Restricted Subsidiary from (i) creating, incurring, assuming or suffering to
exist any Liens otherwise permitted in Section 4.09 or (ii) restricting the sale
or other disposition of property or assets of the Company or any of its
Restricted Subsidiaries that secure Indebtedness of the Company or any of its
Restricted Subsidiaries.
SECTION 4.12. LIMITATIONS ON THE ISSUANCE AND SALE OF CAPITAL STOCK OF WHOLLY
OWNED RESTRICTED SUBSIDIARIES.
The Company shall not, and shall not permit any Restricted Subsidiary,
to transfer, sell, convey or otherwise dispose of any shares of Capital Stock of
a Wholly Owned Restricted Subsidiary (including options, warrants or other
rights to purchase shares of such Capital Stock) other than to the Company or
one of its Wholly Owned Restricted Subsidiaries unless: (i) such transfer, sale,
conveyance or disposition is of all of the Capital Stock of such Wholly Owned
Subsidiary; and (ii) the Net Cash Proceeds of any such transfer, sale,
conveyance or disposition are applied in accordance with clause (A) or (B) of
Section 4.17.
In addition, the Company shall not permit any Wholly Owned Restricted
Subsidiary of the Company to issue any Capital Stock (other than, if necessary,
shares of its Capital Stock constituting
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directors' qualifying shares) to any Person other than to the Company or a
Wholly Owned Restricted Subsidiary of the Company.
SECTION 4.13. SUBSIDIARY GUARANTEES.
If a Restricted Subsidiary acquired or created after the date of this
Indenture has at any time a Fair Market Value of more than $250,000, then that
Restricted Subsidiary shall execute a Subsidiary Guarantee substantially in the
form of Exhibit E hereto and deliver an Opinion of Counsel, pursuant to which
such Subsidiary shall become a Subsidiary Guarantor, on a senior subordinated
basis (pursuant to subordination provisions substantially similar to those
described in Article 10 and Section 11.02), of the Company's payment obligations
under the Notes and this Indenture; provided that the aggregate Fair Market
Value of Restricted Subsidiaries of the Company that are not Subsidiary
Guarantors shall not at any time exceed $1.0 million.
SECTION 4.14. REDEMPTION OF THE OLD FIRST MORTGAGE NOTES.
On December 15, 2000, the Company shall redeem any Old First Mortgage
Notes then outstanding.
SECTION 4.15. CONSTRUCTION OF THE NEW CASINO.
Simultaneously with the closing of any transaction pursuant to which the
Company may incur the Indebtedness referred to in clause (ii) of the definition
of "Credit Facility", the Company shall provide to the Trustee: (i) a budget
setting forth in reasonable detail all amounts to be expended in connection with
the development, construction and opening the New Casino; (ii) an Officers'
Certificate certifying that to best of their knowledge after due inquiry: (A)
based upon the Company's internal projections, the Company has sufficient funds,
together with funds available under the Credit Facility, to cause the New Casino
to be completed and operating within 21 months of the closing of any transaction
pursuant to which the Company may incur the Indebtedness referred to in clause
(ii) of the definition of "Credit Facility"; and (B) the Company's internal
projections with respect to the development, construction and opening of the New
Casino are reasonable.
SECTION 4.16. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, enter into, renew or extend any transaction
(including, without limitation, the purchase, sale, lease or exchange of
property or assets, or the rendering of any service) with any Affiliate of the
Company or any Restricted Subsidiary, unless: (i) such transaction is on fair
and reasonable terms no less favorable to the Company or such Restricted
Subsidiary than could be obtained, at the time of such transaction or, if such
transaction is pursuant to a written agreement, at the time of the execution of
the agreement providing therefor, in a comparable arm's-length transaction with
a Person that is not such a holder or an Affiliate; and (ii) the Company
delivers to the Trustee: (a) with respect to any transaction or series of
related transactions the aggregate amount of which exceeds $2.0 million in
value, a resolution of the Board of Directors set forth in an Officers'
Certificate certifying that such transaction complies with this covenant and has
been approved by a majority of the Independent Directors; and (b) with respect
to any transaction or series of related transactions the aggregate amount of
which exceeds $5.0 million in value, a written opinion of a nationally
recognized accounting, appraisal or investment banking firm stating that the
transaction is fair to the Company or such Restricted Subsidiary from a
financial point of view.
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The foregoing limitation does not limit, and shall not apply to: (i) any
employment or related agreement or arrangement entered into by the Company or
any of its Subsidiaries in the ordinary course of business on terms customary in
the hotel-casino industry; (ii) transactions solely between or among the Company
and any of its Restricted Subsidiaries; (iii) payment of customary directors'
fees and indemnities; (iv) any Restricted Payments not prohibited by Section
4.10 and Investments permitted under clause (iii) of the definition of
"Permitted Investments"; (v) any Tax Agreement; and (vi) in the case of clause
(ii)(b) of the first paragraph of this Section 4.16 only, (A) any Construction
and Design Contract approved by all of the Independent Directors and (B) any
amounts paid pursuant to any agreement or arrangement existing on the Closing
Date between the Company and any of LGT Advertising, Las Vegas Dissemination,
Inc., RJS, Inc. or Nevada Wallboards, Inc., and any renewals or replacements of
any such agreement or arrangement, in each case with terms no less favorable to
the Company than those in effect on the Closing Date.
SECTION 4.17. ASSET SALES.
The Company shall not, and shall not permit any Restricted Subsidiary
to, consummate any Asset Sale, unless (i) the consideration received by the
Company or such Restricted Subsidiary is at least equal to the fair market value
of the assets sold or disposed of and (ii) at least 75% of the consideration
(excluding contingent liabilities assumed by the transferee of any such assets)
received consists of cash or Temporary Cash Investments or the assumption of
Senior Indebtedness of the Company or a Subsidiary Guarantor, provided that the
Company or such Restricted Subsidiary is irrevocably released from all liability
under such Indebtedness. Within 360 days after the receipt of any Net Cash
Proceeds from an Asset Sale (other than Barbary Excess Net Cash Proceeds), the
Company shall or shall cause the relevant Restricted Subsidiary to (i)(A) apply
an amount equal to such Net Cash Proceeds to permanently repay Senior
Indebtedness of the Company or a Subsidiary Guarantor or (B) invest an equal
amount, or the amount not so applied pursuant to clause (A) (or enter into a
definitive agreement committing to so invest within 12 months after the date of
such agreement), in property or assets (other than current assets) of a nature
or type or that are used in a business (or in Capital Stock of a company having
property and assets of a nature or type, or engaged in a business) similar or
related to the nature or type of the property and assets of, or the business of,
the Company and its Restricted Subsidiaries existing on the date of such
investment and (ii) apply (no later than the end of the 12-month period referred
to in clause (i)) such excess Net Cash Proceeds (to the extent not applied
pursuant to clause (i)) as provided in the following paragraph of this Section
4.17. The amount of such excess Net Cash Proceeds required to be applied (or to
be committed to be applied) during such 12-month period as set forth in clause
(i) of the preceding sentence and not applied as so required by the end of such
period shall constitute "Excess Proceeds." Pending application of such Net Cash
Proceeds by the end of the relevant period, the Company and its Restricted
Subsidiaries may use such Net Cash Proceeds to temporarily repay revolving
Indebtedness.
If, as of the first day of any calendar month, the aggregate amount of
Excess Proceeds not theretofore subject to an Offer to Purchase pursuant to this
Section 4.17 totals at least $10.0 million, the Company must commence, not later
than the fifteenth Business Day of such month, an Offer to Purchase to the
Holders and, to the extent required by the terms of any Pari Passu Indebtedness,
an Offer to Purchase to all holders of such Pari Passu Indebtedness, the maximum
principal amount of Notes and any such Pari Passu Indebtedness that may be
purchased out of the Excess Proceeds, at an offer price equal to 100% of the
principal amount thereof, plus, in each case, accrued and unpaid interest and
Additional Interest, if any, to the Payment Date. If the aggregate principal
amount of Notes and any such Pari Passu Indebtedness tendered by holders thereof
exceeds the amount of Excess Proceeds, the Notes and Xxxx
00
00
Passu Indebtedness shall be purchased on a pro rata basis. Upon the completion
of any such Offers to Purchase, the amount of Excess Proceeds shall be reset at
zero.
SECTION 4.18. CORPORATE EXISTENCE.
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 (i) its
corporate existence (or its existence as a Pass-through Entity), and the
corporate, partnership or other existence of each of its Restricted
Subsidiaries, in accordance with the respective organizational documents (as the
same may be amended from time to time) of the Company or any such Restricted
Subsidiary and (ii) the rights (charter and statutory), licenses and franchises
of the Company and its Restricted Subsidiaries; provided, however, that the
Company shall not be required to preserve any such right, license or franchise,
or the corporate, partnership or other existence of any of its Restricted
Subsidiaries, if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Subsidiaries, taken as a whole, and that the loss thereof is not adverse in
any material respect to the Holders.
SECTION 4.19. LIMITATION ON STATUS AS INVESTMENT COMPANY
None of the Company or any of its subsidiaries shall become subject to
registration as an "investment company" (as that term is defined in the
Investment Company Act of 1940, as amended), or otherwise become subject to
regulation under the Investment Company Act of 1940.
SECTION 4.20. REPURCHASE OF NOTES UPON A CHANGE OF CONTROL.
Within 20 days of the occurrence of a Change of Control, the Company
shall commence and thereafter shall consummate an Offer to Purchase for all
Notes then outstanding, at a purchase price equal to 101% of the principal
amount thereof, plus accrued interest and Additional Interest, if any, to the
Payment Date. The Company shall not be required to make an Offer to Purchase
pursuant to this Section 4.20 if a third party makes an Offer to Purchase in
compliance with this Section 4.20 and repurchases all Notes validly tendered and
not withdrawn under such Offer to Purchase.
SECTION 4.21. INDEPENDENT DIRECTORS.
Coast Resorts and the Company shall each cause its Board of Directors to
include at least two Independent Directors at all times.
SECTION 4.22. LINE OF BUSINESS.
The Company shall not, and shall not permit any Subsidiary which, for
the most recent fiscal year of the Company, accounted for more than 10% of the
consolidated revenues of the Company and its Subsidiaries or was the owner of
more than 10% of the consolidated assets of the Company and its Subsidiaries (in
each case as set forth on the most recently available consolidated financial
statements of the Company for such fiscal year) to, engage in any business other
than the gaming and hotel businesses and such business activities as are
incidental or related or complementary thereto.
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SECTION 4.23. PAYMENTS FOR CONSENT.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, pay or cause to be paid any consideration to or for the
benefit of any Holder for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Indenture or the Notes
unless such consideration is offered to be paid and is paid to all Holders that
consent, waive or agree to amend in the time frame set forth in the solicitation
documents relating to such consent, waiver or agreement.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company shall not consolidate with, merge with or into, or sell,
convey, transfer, lease or otherwise dispose of all or substantially all of its
property and assets (as an entirety or substantially an entirety in one
transaction or a series of related transactions) to, any Person or permit any
Person to merge with or into the Company unless: (i) the Company shall be the
continuing Person, or the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or that acquired or leased
such property and assets of the Company shall be a corporation organized and
validly existing under the laws of the United States of America or any state or
jurisdiction thereof and shall expressly assume, by a supplemental indenture,
executed and delivered to the Trustee, all of the obligations of the Company on
all of the Notes and under this Indenture; (ii) immediately after giving effect
to such transaction, no Default or Event of Default exists; (iii) immediately
after giving effect to such transaction on a pro forma basis, the Company or any
Person becoming the successor obligor of the Notes shall have a Consolidated Net
Worth equal to or greater than the Consolidated Net Worth of the Company
immediately prior to such transaction; (iv) immediately after giving effect to
such transaction on a pro forma basis as if the transaction had occurred at the
beginning of the applicable four-quarter period, the Company, or any Person
becoming the successor obligor of the Notes, as the case may be, could Incur at
least $1.00 of Indebtedness under the first paragraph of Section 4.07(a); and
(v) the Company delivers to the Trustee an Officers' Certificate (attaching the
arithmetic computations to demonstrate compliance with clauses (iii) and (iv))
and Opinion of Counsel, in each case stating that such consolidation, merger or
transfer and such supplemental indenture complies with this provision and that
all conditions precedent provided for herein relating to such transaction have
been complied with. Notwithstanding the foregoing clause (iii), (a) any
Restricted Subsidiary may consolidate with, merge into or transfer all or part
of its properties and assets to the Company, and (b) the Company may merge with
an Affiliate incorporated solely for the purpose of reincorporating the Company
in another jurisdiction.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.01 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of
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the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein; provided, however, that the
predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Notes except in the case of a sale of all of
the Company's assets that meets the requirements of Section 5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
Each of the following constitutes an Event of Default:
(a) default for 30 days in the payment when due of interest on, or
Additional Interest, if any, with respect to, the Notes, whether or not such
payment is prohibited by Article 10;
(b) default in the payment when due of 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,
whether or not such payment is prohibited by Article 10;
(c) failure by the Company or any of its Subsidiaries to comply with
any of the provisions of Section 4.07, 4.10, 4.17, 4.20 or 5.01 hereof;
(d) failure by the Company or any of its Restricted Subsidiaries to
observe or perform any other covenant or agreement in this Indenture or the
Notes for 45 days after 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;
(e) the occurrence with respect to any issue or issues of
Indebtedness of the Company or any Significant Subsidiary having an outstanding
principal amount of $5.0 million or more in the aggregate for all such issues or
all such Persons, whether such Indebtedness now exists or shall hereafter be
created, of (i) an event of default that has caused the holder thereof to
declare such Indebtedness to be due and payable prior to its Stated Maturity and
such Indebtedness has not been discharged in full or such acceleration has not
been rescinded or annulled within 30 days of such acceleration or (ii) the
failure to make a principal payment at the final (but not any interim) fixed
maturity and such defaulted payment shall not have been made, waived or extended
within 30 days of such payment default;
(f) a final judgment or final judgments for the payment of money
shall be entered by a court or courts of competent jurisdiction against the
Company or any of its Restricted Subsidiaries and such judgment or judgments are
not paid, discharged or stayed for a period of 60 days, provided that the
aggregate of all such judgments exceeds $5.0 million;
(g) except as permitted by this Indenture, any Note Guarantee is
held in any judicial proceeding to be unenforceable or invalid or shall cease
for any reason to be in full force and effect or any Guarantor, or any Person
acting on behalf of any Guarantor, shall deny or disaffirm its obligations under
such Guarantor's Note Guarantee;
(h) the revocation, termination, suspension or other cessation of
effectiveness for a period of more than 90 consecutive days of any Gaming
License that results in the cessation or suspension of
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gaming operations or any Liquor License that results in the cessation or
suspension of the ability to serve liquor, in each case at any of The Orleans,
Gold Coast, Barbary Coast, or New Casino (after it begins operations); provided
that the Company may relinquish a Gaming License or Liquor License with respect
to any of its hotel casinos other than The Orleans, the Gold Coast or the New
Casino if such relinquishment is, in the reasonable, good faith judgment of the
Board of Directors of the Company or the Restricted Subsidiary, as applicable,
both desirable in the conduct of the business of the Company and its Restricted
Subsidiaries, taken as a whole, and not disadvantageous in any material respect
to the Holders;
(i) the Company or any of its Restricted Subsidiaries pursuant to or
within the meaning of Bankruptcy Law: (i) commences a voluntary case, (ii)
consents to the entry of an order for relief against it in an involuntary case,
(iii) consents to the appointment of a custodian of it or for all or
substantially all of its property, (iv) makes a general assignment for the
benefit of its creditors, or (v) generally is not paying its debts as they
become due; or
(j) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that: (i) is for relief against the Company or any of
its Restricted Subsidiaries in an involuntary case; (ii) appoints a custodian of
the Company or any of its Restricted Subsidiaries or for all or substantially
all of the property of the Company or any of its Restricted Subsidiaries; or
(iii) orders the liquidation of the Company or any of its Restricted
Subsidiaries; and, in any such case the order or decree remains unstayed and in
effect for 60 consecutive days.
SECTION 6.02. ACCELERATION.
If any Event of Default (other than an Event of Default specified in
clause (i) or (j) of Section 6.01 hereof with respect to the Company, any
Significant Subsidiary or any group of Significant Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary) occurs and is continuing, the
Trustee or the Holders of at least 25% in 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.
Notwithstanding the foregoing, if an Event of Default specified in clause (i) or
(j) of Section 6.01 hereof occurs with respect to the Company, any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary, all outstanding Notes shall be due
and payable immediately without further action or notice. 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 that has become due solely because of the
acceleration) have been cured or waived.
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, 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 exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
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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 Additional Interest, 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.
The Holders of at least a majority in aggregate principal amount of the
outstanding Notes may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture, that may involve the
Trustee in personal liability or that the Trustee determines in good faith may
be unduly prejudicial to the rights of Holders not joining in the giving of such
direction and may take any other action it deems proper that is not inconsistent
with any such direction received from Holders.
SECTION 6.06. LIMITATION ON SUITS.
A Holder may not pursue any remedy with respect to this Indenture or the
Notes unless:
(a) the Holder gives the Trustee written notice of a continuing
Event of Default;
(b) the 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;
(c) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any costs, liability or
expense;
(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period, the Holders of a majority in
aggregate principal amount of the outstanding Notes do not give the Trustee a
direction that is inconsistent with the request.
However, such limitations do not apply to the right of any Holder to receive
payment of the principal of or premium, if any, or interest on, such Note or to
bring suit for the enforcement of any such payment, on or after the due date
expressed in the Notes, which right shall not be impaired or affected without
the consent of the Holder.
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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 Additional
Interest, 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 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(a) or (b) 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 Additional Interest, 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, it shall pay
out the money in the following order:
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First: to the Trustee, its agents and attorneys for amounts due
under Section 7.07 hereof, including payment of all compensation,
expense 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 Additional Interest, 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
Additional Interest, if any and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
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 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
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, the
Trustee shall 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:
(i) the duties of the Trustee shall 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
(ii) 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
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shall examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(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:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Trustee shall 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
(iii) the Trustee shall 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.
(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.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall 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 the 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 shall 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 and the written advice of such counsel or any Opinion of Counsel shall
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 shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall 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 shall be sufficient if
signed by an Officer of the Company.
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(f) The Trustee shall 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 shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
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 may otherwise deal with the Company or any Affiliate of
the Company with the same rights it would have if it were not Trustee. However,
in the event that the Trustee acquires any conflicting interest it must
eliminate such conflict within 90 days, apply to the Commission for permission
to continue as trustee or resign. Any Agent may do the same with like rights and
duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Notes, 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 shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall 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 and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium, 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.
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
shall 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 shall comply with TIA
Section 313(b)(2). The Trustee shall also transmit by mail all reports as
required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company and filed with the Commission and each stock
exchange on which the Notes are listed in accordance with TIA Section 313(d).
The Company shall promptly notify the Trustee when the Notes are listed on any
stock exchange.
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SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time such compensation
for its acceptance of this Indenture and services hereunder as may be separately
agreed in writing. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall 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 shall include the reasonable compensation, disbursements
and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee 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 Indenture, including the
costs and expenses of enforcing this Indenture against the Company (including
this Section 7.07) and defending itself against any claim (whether asserted by
the Company or any Holder or any other person) or liability in connection with
the exercise or performance of any of its powers or duties hereunder, except to
the extent any such loss, liability or expense may be attributable to its
negligence or bad faith. The Trustee shall notify the Company promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify the
Company shall not relieve the Company of its obligations hereunder. The Company
shall defend the claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Company shall pay the reasonable fees
and expenses of such counsel. The Company need not pay for any settlement made
without its consent, which consent shall not be unreasonably withheld.
The obligations of the Company under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section, the Trustee
shall 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 shall survive the satisfaction and discharge of this
Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(g) or (h) 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.
The Trustee shall comply with the provisions of TIA Section 313(b)(2) to
the extent applicable.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
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
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:
(a) the Trustee fails to comply with Section 7.10 hereof;
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(b) 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;
(c) a custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
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 principal amount of the then outstanding Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
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, such Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall 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 shall 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 shall be the successor
Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall 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 million
as set forth in its most recent published annual report of condition.
This Indenture shall 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).
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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 the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, 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.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes, which shall 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 (a) and (b) below, and to have satisfied all its other
obligations under such Notes 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 shall survive
until otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive payments in respect of the principal of, premium,
if any, and interest and Additional Interest, if any, on such Notes when such
payments are due from the trust described in Section 8.04 hereof, (b) the
Company's obligations with respect to such Notes under Article 2 and Section
4.02 hereof, (c) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Company's obligations in connection therewith and (d)
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 shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Sections 4.03, 4.04, 4.05, 4.07,
4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.19, 4.20, 4.21,
4.22 and 4.23 hereof and clauses (iii) and (iv) of Section 5.01 hereof with
respect to the outstanding Notes on and after the date the conditions set forth
in Section 8.04 are satisfied (hereinafter, "Covenant Defeasance"), and the
Notes shall 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 shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Notes shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that,
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with respect to the outstanding Notes, the Company may omit to comply with and
shall 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 shall 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 shall be unaffected thereby. In addition, upon the
Company's exercise under Section 8.01 hereof of the option applicable to this
Section 8.03 hereof, subject to the satisfaction of the conditions set forth in
Section 8.04 hereof, Sections 6.01(c) through 6.01(f) hereof shall not
constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of Legal
Defeasance under Section 8.02 or Covenant Defeasance under Section 8.03 to the
outstanding Notes:
(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, cash in United States dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, premium, if any, and interest and
Additional Interest, if any, 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 maturity or to
a particular redemption date;
(b) in the case of an election under Section 8.02 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee 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;
(c) in the case of an election under Section 8.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee 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;
(d) no Default or Event of Default shall have occurred and be
continuing either: (A) on the date of such deposit (other than a Default or
Event of Default resulting from the incurrence of Indebtedness all or a portion
of the proceeds of which will be used to defease the Notes pursuant to this
Article 8 concurrently with such incurrence) or (B) insofar as Sections 6.01(g)
or 6.01(h) hereof is concerned, at any time in the period ending on the 91st day
after the date of deposit and receipt of good and readily available funds;
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(e) such Legal Defeasance or Covenant Defeasance shall 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
Restricted Subsidiaries is a party or by which the Company or any of its
Restricted Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Opinion of
Counsel (which may be subject to customary exceptions) to the effect that on the
91st day following the deposit and receipt of good and readily available funds,
the trust funds will not be part of any "estate" formed by the bankruptcy or
reorganization of the Company or subject to the "automatic stay" under the
Bankruptcy Code or, in the case of an election under Section 8.03 hereof, will
be subject to a first priority perfected Lien in favor of the trustee for the
benefit of the Holders;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders over any other creditors of the Company with the
intent of defeating, hindering, delaying or defrauding creditors of the Company
or others; and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or 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
shall 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, if any, and interest, but
such money need not be segregated from other funds except to the extent required
by law.
The Company shall 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.
Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall 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(a) 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.
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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, if any,
or interest on any Note and remaining unclaimed for two years after such
principal, and premium, 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) shall be
discharged from such trust; and the Holder of such Note shall thereafter 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, shall 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 shall 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.
If the Trustee or Paying Agent is unable to apply any United States
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 obligations under this Indenture and the Notes
shall 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, if any, or interest on any Note following 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 held by the
Trustee or Paying Agent.
SECTION 8.08. SATISFACTION AND DISCHARGE
This Indenture shall cease to be of further effect (except that the
Company's obligations under Sections 2.02 through 2.07, 4.01, 4.02, 4.06, 4.18,
7.07, 7.08, 8.06 and 8.07 hereof, the obligations of Coast Resorts under
Sections 4.06 and 11.01, any Subsidiary Guarantor's obligations under its
Subsidiary Guarantee, and the Paying Agent's obligations under Section 8.08
shall survive until the Notes are no longer outstanding, after which only such
obligations under Sections 7.07, 8.06 and 8.08 shall survive) and the Trustee,
at the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture when: (a) either: (i) all the Notes
theretofore authenticated and delivered (other than destroyed, lost or stolen
Notes that have been replaced or paid and Notes that are subject to defeasance
as described under Article 8 have been delivered to the Trustee for
cancellation; or (ii) all Notes not theretofore delivered to the Trustee for
cancellation (A) have become due and payable, (B) will become due and payable at
maturity within 45 days or (C) are to be called for redemption within 45 days
under arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company, and
the Company has irrevocably deposited or caused to be deposited with the Trustee
funds in trust for such purpose, together with a statement by the Company that
such deposit is irrevocable, in an amount sufficient to pay and discharge the
entire Indebtedness on such Notes not theretofore delivered to the Trustee for
cancellation, for principal (and premium, if any, on) and interest and
Additional Interest, if any, on the Notes to the date of such deposit (in case
of Notes that have become due and payable) or to the Stated Maturity or
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redemption date, as the case may be; (b) the Company has paid or caused to be
paid all sums payable under this Indenture by the Company; and (c) the Company
and each Guarantor have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent provided in this
Indenture relating to the satisfaction and discharge of this Indenture have been
complied with.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, the Company, Coast
Resorts and the Trustee may amend or supplement this Indenture, any Note
Guarantee or the Notes without the consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place
of certificated Notes or to alter the provisions of Article 2 hereof (including
the related definitions) in a manner that does not materially adversely affect
any Holder;
(c) to provide for the assumption of the Company's or a Guarantor's
obligations to the Holders of the Notes by a successor to the Company or a
Guarantor pursuant to Article 5 or Article 11 hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders or that does not adversely affect the legal rights
hereunder of any Holder;
(e) to provide for additional Subsidiary Guarantees as set forth in
Section 4.13 or for the release of a Guarantor in compliance with this
Indenture;
(f) to comply with requirements of the Commission in order to effect
or maintain the qualification of this Indenture under the TIA; or
(g) to provide for the issuance of Additional Notes in accordance
with the limitations set forth in this Indenture.
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 shall 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 therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.
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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 Sections 4.17 and 4.20
hereof), any Note Guarantee and the Notes with the consent of the Holders of at
least a majority in principal amount of the Notes (including Additional Notes,
if any) then outstanding 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, 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, any Note
Guarantee or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes (including Additional
Notes, if any) voting as a single class (including consents obtained in
connection with a tender offer or exchange offer for, or purchase of, 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 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 shall
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 shall not be
obligated to, enter into such amended or supplemental Indenture.
It shall 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 shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes a notice briefly
describing the amendment, supplement or waiver. Any failure of the Holders to
receive such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such amended or supplemental Indenture or
waiver. However, without the consent of each Holder affected, an amendment or
waiver under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must consent
to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note
or alter or waive any of the provisions with respect to the redemption of the
Notes except as provided above with respect to Sections 4.17 and 4.20 hereof;
(c) reduce the rate of or change the time for payment of interest on
any Note;
(d) waive a Default or Event of Default in the payment of principal
of or premium, interest or Additional Interest, if any, 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 then outstanding Notes (including Additional
Notes, if any) and a waiver of the payment default that resulted from such
acceleration);
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(e) make any Note payable in money other than that stated in the
Notes;
(f) 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, interest or Additional Interest, if any, on the
Notes;
(g) waive a redemption payment with respect to any Note (other than,
subject to the requirements of the TIA, a payment required by Sections 4.17 or
4.20 hereof); or
(h) make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes shall 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 waiver, supplement or amendment 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 shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article Nine if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amendment or supplemental Indenture until the Board of Directors
approves it. In executing any amended or supplemental indenture, the Trustee
shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully
protected in relying upon, in addition to the documents required by Section
11.04 hereof, an Officer's Certificate and an Opinion of Counsel stating that
the execution of such amended or supplemental indenture is authorized or
permitted by this Indenture.
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ARTICLE 10
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder by accepting a Note agrees, that the
Indebtedness evidenced by the Notes is subordinated in right of payment, to the
extent and in the manner provided in this Article 10, to the prior payment in
full in cash of all Senior Indebtedness (whether outstanding on the date hereof
or hereafter created, incurred, assumed or guaranteed), and that the
subordination is for the benefit of the holders of such Senior Indebtedness.
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of Coast Resorts, the Company or any
Subsidiary Guarantor in a liquidation or dissolution of such entity or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to such entity or its property, in an assignment for the benefit of
creditors of such entity or any marshaling of the assets and liabilities of such
entity:
(i) holders of Senior Indebtedness of such entity shall be
entitled to receive payment in full in cash of all Obligations due in
respect of such Senior Indebtedness (including interest after the
commencement of any such proceeding at the rate specified in the
applicable Senior Indebtedness whether or not allowed or allowable in
such proceeding) before Holders of the Notes shall be entitled to
receive any payment with respect to the Notes, the Parent Guarantee or a
Subsidiary Guarantee, as applicable (except that Holders may receive (A)
Permitted Junior Securities and (B) payments and other distributions
made from any defeasance trust created pursuant to Section 8.01 hereof);
and
(ii) until all Obligations due with respect to Senior
Indebtedness of such entity (as provided in clause (i) above) are paid
in full in cash, any distribution to which Holders would be entitled but
for this Article 10 shall be made to holders of Senior Indebtedness
(except that Holders of Notes may receive (A) Permitted Junior
Securities and (B) payments and other distributions made from any
defeasance trust created pursuant to Section 8.01 hereof), as their
interests may appear.
SECTION 10.03. DEFAULT ON DESIGNATED SENIOR INDEBTEDNESS.
(a) The Company may not make any payment in respect of the Notes nor
may Coast Resorts or any Subsidiary Guarantor make any payment with respect to
the Parent Guarantee or a Subsidiary Guarantee (other than (A) Permitted Junior
Securities and (B) payments and other distributions made from any defeasance
trust created pursuant to Section 8.01 hereof) if:
(i) a payment default on Designated Senior Indebtedness
occurs and is continuing beyond any applicable grace period (including
any acceleration of the Designated Senior Indebtedness); or
(ii) a default, other than a payment default, on Designated
Senior Indebtedness occurs and is continuing that then permits holders
of the Designated Senior Indebtedness to accelerate its maturity and the
Trustee receives a notice of the default (a "Payment Blockage Notice")
from the Company, a Representative, or the holders of a majority of
outstanding principal amount of any
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issue of Designated Senior Indebtedness. If the Trustee receives any
such Payment Blockage Notice, no subsequent Payment Blockage Notice
shall be effective for purposes of this Section unless and until (A) 360
days have elapsed since the effectiveness of the immediately prior
Payment Blockage Notice and (B) all scheduled payments of principal,
premium, interest and Additional Interest, if any, on the Notes that
have come due have been paid in full in cash. No nonpayment default that
existed or was continuing on the date of delivery of any Payment
Blockage Notice to the Trustee shall be, or be made, the basis for a
subsequent Payment Blockage Notice unless such default shall have been
waived for a period of not less than 180 days.
(b) Payments on the Notes, the Parent Guarantee and the Subsidiary
Guarantee may and shall be resumed:
(i) in the case of a payment default, upon the date on which
such default is cured or waived, or
(ii) in the case of a default referred to in clause (ii) of
Section 10.03(a) hereof, the earlier of the date on which such default
is cured or waived or 179 days after the date on which the applicable
Payment Blockage Notice is received, unless the maturity of any
Designated Senior Indebtedness has been accelerated.
SECTION 10.04. ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event of Default,
the Company shall promptly notify holders of Senior Indebtedness of the
acceleration, but failure to give such notice shall not affect the subordination
of the Notes to the Senior Indebtedness as provided in this Article 10.
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives any payment of any
Obligations with respect to the Notes at a time when the Trustee or such Holder,
as applicable, has actual knowledge that such payment is prohibited by Section
10.04 hereof, such payment shall be held by the Trustee or such Holder, in trust
for the benefit of, and shall be paid forthwith over and delivered, upon written
request, to, the holders of Senior Indebtedness as their interests may appear or
their Representative under the indenture or other agreement (if any) pursuant to
which Senior Indebtedness may have been issued, as their respective interests
may appear, for application to the payment of all Obligations with respect to
Senior Indebtedness remaining unpaid to the extent necessary to pay such
Obligations in full in accordance with their terms, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Indebtedness.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 10, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness, and shall not be
liable to any such holders if the Trustee shall pay over or distribute to or on
behalf of Holders or the Company or any other Person money or assets to which
any holders of Senior Indebtedness shall be entitled by virtue of this Article
10, except if such payment is made as a result of the willful misconduct or
gross negligence of the Trustee.
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SECTION 10.06. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of any Obligations
with respect to the Notes to violate this Article 10, but failure to give such
notice shall not affect the subordination of the Notes to the Senior
Indebtedness as provided in this Article 10.
SECTION 10.07. SUBROGATION.
After all Senior Indebtedness is paid in full and until the Notes are
paid in full, Holders of Notes shall be subrogated (equally and ratably with all
other Indebtedness pari passu with the Notes) to the rights of holders of Senior
Indebtedness to receive distributions applicable to Senior Indebtedness to the
extent that distributions otherwise payable to the Holders of Notes have been
applied to the payment of Senior Indebtedness. A distribution made under this
Article 10 to holders of Senior Indebtedness that otherwise would have been made
to Holders of Notes is not, as between the Company and Holders, a payment by the
Company on the Notes.
SECTION 10.08. RELATIVE RIGHTS.
This Article 10 defines the relative rights of Holders of Notes and
holders of Senior Indebtedness. Nothing in this Indenture shall: (i) impair, as
between the Company and Holders of Notes, the obligation of the Company, which
is absolute and unconditional, to pay principal of and interest on the Notes in
accordance with their terms; (ii) affect the relative rights of Holders of Notes
and creditors of the Company other than their rights in relation to holders of
Senior Indebtedness; or (iii) prevent the Trustee or any Holder of Notes from
exercising its available remedies upon a Default or Event of Default, subject to
the rights of holders and owners of Senior Indebtedness to receive distributions
and payments otherwise payable to Holders of Notes.
If the Company fails because of this Article 10 to pay principal of or
interest on a Note on the due date, the failure is still a Default or Event of
Default.
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Indebtedness to enforce the
subordination of the Indebtedness evidenced by the Notes shall be impaired by
any act or failure to act by the Company or any Holder or by the failure of the
Company or any Holder to comply with this Indenture.
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Indebtedness, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred to in
this Article 10, the Trustee and the Holders of Notes shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction or upon any
certificate of such Representative or of the liquidating trustee or agent or
other Person making any distribution to the Trustee or to the Holders of Notes
for the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Indebtedness
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and other Indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 10.
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other provision
of this Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least two Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
with respect to the Notes to violate this Article 10. Only the Company or a
Representative may give the notice. Nothing in this Article 10 shall impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of Notes, by the Holder's acceptance thereof, authorizes and
directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10, and appoints the Trustee to act as such Holder's attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof of
claim or proof of debt in the form required in any proceeding referred to in
Section 6.09 hereof at least 30 days before the expiration of the time to file
such claim, the Representatives are hereby authorized to file an appropriate
claim for and on behalf of the Holders of the Notes.
SECTION 10.13. AMENDMENTS.
The provisions of this Article 10 shall not be amended or modified
without the written consent of the holders of all Senior Indebtedness.
ARTICLE 11
NOTE GUARANTEES
SECTION 11.01. PARENT GUARANTEE.
Subject to this Article 11, Coast Resorts 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: (a) the principal of and premium,
interest and Additional Interest, if any, 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 and premium, if any, and interest on the
Notes, if lawful, and all other obligations of the Company to the Holders or the
Trustee hereunder or thereunder shall be promptly paid in full or performed, all
in accordance with the terms hereof and thereof; and (b) 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
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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, Coast Resorts shall be obligated
to pay the same immediately. Coast Resorts agrees that this is a guarantee of
payment and not a guarantee of collection.
Coast Resorts hereby agrees that its obligations hereunder shall be
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. Coast Resorts 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 the Parent Guarantee shall not be discharged except by
complete performance of the obligations contained in the Notes and this
Indenture.
If any Holder or the Trustee is required by any court or otherwise to
return to the Company, Coast Resorts or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or Coast
Resorts, any amount paid by either to the Trustee or such Holder, this Parent
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect.
Coast Resorts agrees that it shall 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. Coast Resorts
further agrees that, as between Coast Resorts, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article 6 hereof for the
purposes of this Parent Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) 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) shall forthwith become due and payable by Coast Resorts for
the purpose of this Parent Guarantee. Coast Resorts shall 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 Parent Guarantee.
SECTION 11.02. SUBORDINATION OF GUARANTEES.
The Obligations of each Guarantor under its Note Guarantee pursuant to
this Article 11 shall be junior and subordinated to the Senior Indebtedness of
such Guarantor on the same basis as the Notes are junior and subordinated to
Senior Indebtedness of the Company. For the purposes of the foregoing sentence,
the Trustee and the Holders shall have the right to receive and/or retain
payments by any of the Guarantors only at such times as they may receive and/or
retain payments in respect of the Notes pursuant to this Indenture, including
Article 10 hereof.
SECTION 11.03. LIMITATION ON GUARANTOR LIABILITY.
Each Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Note Guarantees
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 the Note
Guarantees. To
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effectuate the foregoing intention, the Trustee, the Holders and each Guarantor
hereby irrevocably agree that the obligations of each Guarantor 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 11, result in the
obligations of such Guarantor under its Note Guarantee not constituting a
fraudulent transfer or conveyance.
SECTION 11.04. EXECUTION AND DELIVERY OF NOTE GUARANTEES.
To evidence its Parent Guarantee set forth in Section 11.01, Coast
Resorts hereby agrees that a notation of such Parent Guarantee substantially in
the form included in Exhibit E shall be endorsed by an Officer of Coast Resorts
on each Note authenticated and delivered by the Trustee and that this Indenture
shall be executed on behalf of Coast Resorts by its President or one of its Vice
Presidents. Coast Resorts hereby agrees that its Parent Guarantee set forth in
Section 11.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Parent Guarantee. If an Officer whose
signature is on this Indenture or on the Parent Guarantee no longer holds that
office at the time the Trustee authenticates the Note on which the Parent
Guarantee is endorsed, the Parent Guarantee shall be valid nevertheless. The
delivery of any Note by the Trustee, after the authentication thereof hereunder,
shall constitute due delivery of the Parent Guarantee set forth in this
Indenture on behalf of Coast Resorts.
In the event that the Company creates or acquires any new Subsidiaries
subsequent to the date of this Indenture, if required by Section 4.13 hereof,
the Company shall cause such Subsidiaries to execute supplemental indentures to
this Indenture and Note Guarantees in accordance with Section 4.13 hereof, to
the extent applicable.
SECTION 11.05. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
Except as otherwise provided in Section 11.06, no Guarantor may
consolidate with or merge with or into (whether or not such Guarantor is the
surviving Person) another Person whether or not affiliated with such Guarantor
unless:
(a) subject to Section 11.06 hereof, the Person formed by or
surviving any such consolidation or merger (if other than such Guarantor)
unconditionally assumes all the obligations of such Guarantor, pursuant to a
supplemental indenture in form and substance reasonably satisfactory to the
Trustee, under this Indenture and the Note Guarantee on the terms set forth
herein or therein; and
(b) immediately after giving effect to such transaction, no Default
or Event of Default exists.
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 shall 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 shall in all respects have the same legal rank and benefit
under this Indenture as the Note Guarantees
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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
clauses (a) and (b) above, nothing contained in this Indenture or in any of the
Notes shall prevent any consolidation or merger of a Guarantor with or into the
Company or another Guarantor, or shall 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.
SECTION 11.06. RELEASES FOLLOWING SALE OF ASSETS.
In the event of (a) a sale or other disposition of all of the assets of
any Guarantor, by way of merger, consolidation or otherwise, (b) a sale or other
disposition of all of the capital stock of any Guarantor or (c) the designation
of any Subsidiary Guarantor as an Unrestricted Subsidiary in accordance with the
terms of this Indenture, 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 in the event of its designation as an Unrestricted
Subsidiary) or the corporation acquiring the property (in the event of a sale or
other disposition of all of the assets of such Guarantor) will be released and
relieved of any obligations under its Note Guarantee; provided that the Net Cash
Proceeds of such sale or other disposition are applied in accordance with the
applicable provisions of this Indenture, including without limitation Section
4.17 hereof. 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, including without limitation Section 4.17 hereof, the Trustee shall
execute any documents reasonably required in order to evidence the release of
any Guarantor from its obligations under its Note Guarantee.
Any Guarantor not released from its obligations under its Note Guarantee
shall remain liable for the full amount of principal of and interest on the
Notes and for the other obligations of any Guarantor under this Indenture as
provided in this Article 11.
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 shall 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 mailed by
first class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:
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If to the Company or any Guarantor:
Coast Hotels and Casinos
c/o Coast Resorts, Inc.
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: President
With a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
If to the Trustee:
Firstar Bank of Minnesota, N.A.
000 Xxxx 0xx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Corporate Trust Department
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) shall
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 answered back, if telexed; when receipt acknowledged,
if telecopied; 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 shall 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 shall 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 shall
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 shall
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).
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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:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall 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
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall 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)) shall comply with the provisions of TIA
Section 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(b) 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;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
satisfied; and
(d) 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 past, present or future director, officer, employee, incorporator or
stockholder of the Company or any Guarantor, as such, shall have any liability
for any obligations of the Company or such Guarantor under the Notes, the Note
Guarantees, this 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 issuance of the Notes. The waiver may not be effective to
waive liabilities under the federal securities laws and it is the view of the
Commission that such waiver is against public policy.
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SECTION 12.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL 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.
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 Company in this Indenture and the Notes shall bind
its successors. All agreements of the Trustee in this Indenture shall bind its
successors. All agreements of Coast Resorts in this Indenture shall bind its
successors, except as otherwise provided in Section 11.06.
SECTION 12.11. SEVERABILITY.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall 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 shall 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 shall in
no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
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SIGNATURES
Dated as of March 23, 1999
COAST HOTELS AND CASINOS, INC.
By: [SIG ILLEGIBLE]
-------------------------------------
Name:
Title:
COAST RESORTS, INC.
By: [SIG ILLEGIBLE]
-------------------------------------
Name:
Title:
FIRSTAR BANK OF MINNESOTA, N.A.
By: [SIG ILLEGIBLE]
-------------------------------------
Name:
Title:
88
EXHIBIT A
[Face of Note]
--------------------------------------------------------------------------------
CUSIP No.:[ (144A)]
[ (Reg. S)]
[ (ISIN)]
9 1/2% Senior Subordinated Notes due 2009
No. ___ $175.0 million
COAST HOTELS AND CASINOS, INC.
promises to pay to
--------------------------------------------------------------
or registered assigns,
the principal sum of
-----------------------------------------------------------
Dollars on April 1, 2009.
Interest Payment Dates: April 1 and October 1
Record Dates: March 15 and September 15
Dated: March 23, 1999
COAST HOTELS AND CASINOS, INC.
By:
-------------------------------------
Name:
Title:
(SEAL)
This is one of the [Global] Notes referred to in the within-mentioned Indenture:
FIRSTAR BANK OF MINNESOTA, N.A.,
as Trustee
By:
-------------------------------------
Authorized Signatory
--------------------------------------------------------------------------------
A-1
89
[Back of Note]
9 1/2% Senior Subordinated Notes due 2009
[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 (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF COAST HOTELS AND
CASINOS, INC.](1)
[THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON
AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT, WITHIN TWO
YEARS AFTER THE ORIGINAL ISSUANCE OF THE NOTES, RESELL OR OTHERWISE TRANSFER
THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E)
INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO
SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS
NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE) AND IF SUCH
TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES OF LESS THAN
$100,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS
IN COMPLIANCE WITH THE SECURITIES ACT, OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE
WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THE NOTES, THE HOLDER MUST CHECK
THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF
SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL
OPINIONS, OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO
CONFIRM THAT
--------
(1) This legend should be included on the Global Notes and omitted from
Definitive Notes.
A-2
90
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES," AND "U.S. PERSON"
HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE
INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY
TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.](2)
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Coast Hotels and Casinos, Inc., a Nevada corporation
(the "Company"), promises to pay interest on the principal amount of this Note
at 9 1/2% per annum from March 23, 1999 until maturity and shall pay the
Additional Interest payable pursuant to Section 2(d) of the Registration Rights
Agreement referred to below. The Company will pay interest and Additional
Interest semi-annually in arrears on April 1 and October 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 October 1, 1999. The Company shall 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 the rate then in effect; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Additional Interest (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 interest on the Notes
(except defaulted interest) and Additional Interest to the Persons who are
registered Holders of Notes at the close of business on the March 15 or
September 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 Additional
Interest, 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 Additional Interest may be made
by check mailed to the Holders at their addresses set forth in the register of
Holders, and provided that payment by wire transfer of immediately available
funds will be required with respect to principal of and interest, premium and
Additional Interest on, all Global Notes and all other Notes the Holders of
which shall have provided wire transfer instructions to the Company or the
Paying Agent. Such payment shall 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, Firstar Bank of
Minnesota, N.A., the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying
----------
(2) This legend should be included on the Restricted Global Notes and
Restricted Definitive Notes and omitted from Unrestricted Global Notes
and Unrestricted Definitive Notes.
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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 March 23, 1999 ("Indenture") between the Company 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 Trust Indenture Act of 1939, as amended (15
U.S. Code Sections 77aaa-77bbbb). 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 obligations of the Company limited to $175.0 million
in aggregate principal amount.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Company shall not have the option to redeem the Notes pursuant to this Paragraph
5 prior to April 1, 2004. Thereafter, the Company shall have the option to
redeem the Notes, in whole or in part, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest and Additional Interest thereon, if any, to the applicable redemption
date, if redeemed during the twelve-month period beginning on April 1 of the
years indicated below:
Year Percentage
---- ----------
2004............................................................. 104.750%
2005............................................................. 103.167%
2006............................................................. 101.583%
2007 and thereafter.............................................. 100.000%
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time prior to April 1, 2002, the Company may on any one or
more occasions redeem up to 35% of the aggregate principal amount of Notes
issued under the Indenture with the Net Cash Proceeds to the Company of one or
more Public Equity Offerings or the capital contributions to the Company by
Coast Resorts with the Net Cash Proceeds to Coast Resorts of one or more Public
Equity Offerings at a redemption price equal to 109.500% of the aggregate
principal amount thereof plus accrued and unpaid interest and Additional
Interest, if any, to the redemption date; provided that at least $113.75 million
in aggregate principal amount of Notes remains outstanding immediately after the
occurrence of such redemption (excluding Notes held by the Company and its
Subsidiaries) and provided further, that such redemption occurs within 45 days
of the date of the closing of such Public Equity Offering.
6. GAMING REDEMPTION.
(a) Notwithstanding the provisions of paragraph 5(a), if any Gaming
Authority notifies a holder or beneficial owner of Notes that: (1) the holder or
beneficial owner must obtain a license, qualification or finding of suitability
under an applicable gaming law and the holder or beneficial owner does not apply
for such license, qualification or finding of suitability within 30 days (or
such shorter period required by the Gaming Authority); or (2) the holder or
beneficial owner will not be licensed, qualified or found suitable under an
applicable gaming law; then the Company shall have the right, at its option, (1)
to require that the holder or beneficial owner dispose of the holder's or
beneficial owner's Notes within 30 days (or such earlier date as required by the
Gaming Authority) of (A) the termination of the 30 day period described above
for the holder or beneficial owner to apply for a license, qualification
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or finding of suitability or (B) the receipt of the notice from the Gaming
Authority that the holder or beneficial owner will not be licensed, qualified or
found suitable; or (2) to redeem the holder's or beneficial owner's Notes at a
price equal to 100% of the principal amount thereof, plus accrued and unpaid
interest and Additional Interest, if any, to the date of redemption (or such
earlier date as required by the Gaming Authority or applicable gaming laws).
(b) Immediately upon a determination that a holder or beneficial
owner will not be licensed, qualified or found suitable, the holder or
beneficial owner will have no further rights (1) to exercise any right conferred
by the Notes, directly or indirectly, through any trustee, nominee or any other
Person or entity, or (2) to receive any interest or other distribution or
payment with respect to the Notes or any remuneration in any form from the
Company for services rendered or otherwise, except the redemption price of the
Notes. The holder or beneficial owner applying for a license, qualification or
finding of suitability must pay all related costs.
7. MANDATORY REDEMPTION.
The Company shall not be required to make mandatory redemption payments
with respect to the Notes.
8. OFFERS TO PURCHASE.
(a) Change of Control. Within 20 days of the occurrence of a Change
of Control, the Company shall commence and thereafter shall consummate an Offer
to Purchase for all Notes then outstanding, at a purchase price equal to 101% of
the principal amount thereof, plus accrued interest and Additional Interest, if
any, to the Payment Date. The Company shall not be required to make an Offer to
Purchase pursuant to this paragraph 8(a) if a third party makes an Offer to
Purchase in compliance with the Indenture and repurchases all Notes validly
tendered and not withdrawn under such Offer to Purchase.
(b) Asset Sales. The Company shall not, and shall not permit any
Restricted Subsidiary to, consummate any Asset Sale, unless (i) the
consideration received by the Company or such Restricted Subsidiary is at least
equal to the fair market value of the assets sold or disposed of and (ii) at
least 75% of the consideration (excluding contingent liabilities assumed by the
transferee of any such assets) received consists of cash or Temporary Cash
Investments or the assumption of Senior Indebtedness of the Company or a
Subsidiary Guarantor, provided that the Company or such Restricted Subsidiary is
irrevocably released from all liability under such Indebtedness. Within 360 days
after the receipt of any Net Cash Proceeds from an Asset Sale (other than
Barbary Excess Net Cash Proceeds), the Company shall or shall cause the relevant
Restricted Subsidiary to (i)(A) apply an amount equal to such Net Cash Proceeds
to permanently repay Senior Indebtedness of the Company or a Subsidiary
Guarantor or (B) invest an equal amount, or the amount not so applied pursuant
to clause (A) (or enter into a definitive agreement committing to so invest
within 12 months after the date of such agreement), in property or assets (other
than current assets) of a nature or type or that are used in a business (or in
Capital Stock of a company having property and assets of a nature or type, or
engaged in a business) similar or related to the nature or type of the property
and assets of, or the business of, the Company and its Restricted Subsidiaries
existing on the date of such investment and (ii) apply (no later than the end of
the 12-month period referred to in clause (i)) such excess Net Cash Proceeds (to
the extent not applied pursuant to clause (i)) as provided in the following
paragraph of this subparagraph 8(b). The amount of such excess Net Cash Proceeds
required to be applied (or to be committed to be applied) during such 12-month
period as set forth in clause (i) of the preceding sentence and not applied as
so required by the end of
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such period shall constitute "Excess Proceeds." Pending application of such Net
Cash Proceeds by the end of the relevant period, the Company and its Restricted
Subsidiaries may use such Net Cash Proceeds to temporarily repay revolving
Indebtedness.
If, as of the first day of any calendar month, the aggregate amount of Excess
Proceeds not theretofore subject to an Offer to Purchase pursuant to this
subparagraph 8(b) totals at least $10.0 million, the Company must commence, not
later than the fifteenth Business Day of such month, an Offer to Purchase to the
Holders and, to the extent required by the terms of any Pari Passu Indebtedness,
an Offer to Purchase to all holders of such Pari Passu Indebtedness, the maximum
principal amount of Notes and any such Pari Passu Indebtedness that may be
purchased out of the Excess Proceeds, at an offer price equal to 100% of the
principal amount thereof, plus, in each case, accrued and unpaid interest and
Additional Interest, if any, to the Payment Date. If the aggregate principal
amount of Notes and any such Pari Passu Indebtedness tendered by holders thereof
exceeds the amount of Excess Proceeds, the Notes and Pari Passu Indebtedness
shall be purchased on a pro rata basis. Upon the completion of any such Offers
to Purchase, the amount of Excess Proceeds shall be reset at zero.
9. NOTICE OF REDEMPTION. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Notes are to be redeemed at its registered address. 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. On and after the redemption date interest ceases to accrue on Notes or
portions thereof called for redemption.
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, any Note Guarantee or the Notes may be amended or supplemented
with the consent of the Holders of at least a majority in principal amount of
the then outstanding Notes and Additional Notes, if any, voting as a single
class, and any existing default or compliance with any provision of the
Indenture, any Note Guarantee or the Notes may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Notes and
Additional Notes, if any, voting as a single class. Without the consent of any
Holder of a Note, the Indenture, any Note Guarantee or the Notes 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 or to
alter the provisions of Article 2 of the Indenture (including the related
definitions) in a manner that does not materially adeversely affect any Holder,
to provide for the assumption of the Company's or Guarantor's obligations to
Holders of the Notes by a successor to the Company or a Guarantor 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
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affect the legal rights under the Indenture of any such Holder, to comply with
the requirements of the Commission in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act, 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. Each of the following constitutes an
Event of Default: (a) default for 30 days in the payment when due of interest
on, or Additional Interest, if any, with respect to, the Notes, whether or not
such payment is prohibited by Article 10 of the Indenture; (b) default in the
payment when due of 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, whether or not such payment is
prohibited by Article 10 of the Indenture; (c) failure by the Company or any of
its Subsidiaries to comply with any of the provisions of Section 4.07, 4.10,
4.17, 4.20 or 5.01 of the Indenture; (d) failure by the Company or any of its
Restricted Subsidiaries to observe or perform any other covenant,
representation, warranty or other agreement in this Indenture or the Notes for
45 days after 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; (e) the occurrence with respect
to any issue or issues of Indebtedness of the Company or any Significant
Subsidiary having an outstanding principal amount of $5.0 million or more in the
aggregate for all such issues or all such Persons, whether such Indebtedness now
exists or shall hereafter be created, of (i) an event of default that has caused
the holder thereof to declare such Indebtedness to be due and payable prior to
its Stated Maturity and such Indebtedness has not been discharged in full or
such acceleration has not been rescinded or annulled within 30 days of such
acceleration or (ii) the failure to make a principal payment at the final (but
not any interim) fixed maturity and such defaulted payment shall not have been
made, waived or extended within 30 days of such payment default; (f) a final
judgment or final judgments for the payment of money shall be entered by a court
or courts of competent jurisdiction against the Company or any of its Restricted
Subsidiaries and such judgment or judgments are not paid, discharged or stayed
for a period of 60 days, provided that the aggregate of all such judgments
exceeds $5.0 million; (g) except as permitted by this Indenture, any Note
Guarantee is held in any judicial proceeding to be unenforceable or invalid or
shall cease for any reason to be in full force and effect or any Guarantor, or
any Person acting on behalf of any Guarantor, shall deny or disaffirm its
obligations under such Guarantor's Note Guarantee; (h) the revocation,
termination, suspension or other cessation of effectiveness for a period of more
than 90 consecutive days of any Gaming License that results in the cessation or
suspension of gaming operations or any Liquor License that results in the
cessation or suspension of the ability to serve liquor, in each case at any of
The Orleans, Gold Coast, Barbary Coast, or New Casino (after it begins
operations); provided that the Company may relinquish a Gaming License or Liquor
License with respect to any of its hotel casinos other than The Orleans, the
Gold Coast or the New Casino if such relinquishment is, in the reasonable, good
faith judgment of the Board of Directors of the Company or the Restricted
Subsidiary, as applicable, both desirable in the conduct of the business of the
Company and its Restricted Subsidiaries, taken as a whole, and not
disadvantageous in any material respect to the Holders; (i) the Company or any
of its Restricted Subsidiaries pursuant to or within the meaning of Bankruptcy
Law: (i) commences a voluntary case, (ii) consents to the entry of an order for
relief against it in an involuntary case, (iii) consents to the appointment of a
custodian of it or for all or substantially all of its property, (iv) makes a
general assignment for the benefit of its creditors, or (v) generally is not
paying its debts as they become due; or (j) a court of competent jurisdiction
enters an order or decree under any Bankruptcy Law that: (i) is for relief
against the Company or any of its Restricted Subsidiaries in an involuntary
case; (ii) appoints a custodian of the Company or any of its Restricted
Subsidiaries or for all or substantially all of the property of the Company or
any of its Restricted Subsidiaries; or (iii) orders the liquidation of the
Company or any of its Restricted
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Subsidiaries; and, in any such case the order or decree remains unstayed and in
effect for 60 consecutive days. If any Event of Default (other than an Event of
Default arising from certain events of bankruptcy or insolvency) occurs and is
continuing, the Trustee or the Holders of at least 25% in 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 without further action or notice. If an Event of
Default occurs and is continuing, the Trustee may pursue any available remedy to
collect the payment of principal, premium, if any, and interest on the Notes or
to enforce the performance of any provision of the Notes or the 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 exercise 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.
14. SUBORDINATION. The Notes and the Note Guarantees are
subordinated in right of payment, to the extent and in the manner provided in
Article 10 and Section 11.2 of the Indenture, to the prior payment in full of
all Senior Indebtedness. The Company agrees, and each Holder by accepting a Note
consents and agrees, to the subordination provided in the Indenture and
authorizes the Trustee to give it effect.
15. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or
any other capacity, may become the owner or pledgee of Notes and may otherwise
deal with the Company or any Affiliate of the Company with the same rights it
would have if it were not Trustee.
16. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator or stockholder, of the Company or any Guarantor,
as such, shall have any liability for any obligations of the Company or the
Guarantor under the Notes 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.
17. AUTHENTICATION. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
18. 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).
19. 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 shall have all the rights set forth in the A/B Exchange
Registration Rights Agreement dated as of March 23, 1999, between the Company
and the parties named on the signature pages thereof (the "Registration Rights
Agreement").
20. 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
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contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
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:
Coast Hotels and Casinos, Inc.
c/o Coast Resorts, Inc.
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: President
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NOTE GUARANTEE
Coast Resorts, Inc., a Nevada corporation, (hereinafter referred to as
the "Guarantor" which term includes any successors or assigns under the
Indenture and any additional Subsidiary Guarantors), has irrevocably and
unconditionally guaranteed (i) the due and punctual payment of the principal of,
premium, if any, and interest and Additional Interest, if any, on the 9 1/2%
Senior Subordinated Notes due 2009 (the "Notes") of Coast Hotels and Casinos,
Inc., a Nevada corporation (the "Company"), whether at stated maturity, by
acceleration or otherwise, the due and punctual payment of interest on the
overdue principal and premium, if any, and (to the extent permitted by law)
interest on any interest or Additional Interest, if any, on the Notes, 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 set forth in Article 11
of the Indenture and (ii) in case of any extension of time of payment or renewal
of any Notes or any 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 each Guarantor to the Holders and to the Trustee
pursuant to this Note Guarantee and the Indenture are expressly set forth in
Article 11 of the Indenture and reference is hereby made to such Indenture for
the precise terms of this Note Guarantee.
The obligations of each Guarantor to the Holders and to the Trustee
pursuant to this Note Guarantee and the Indenture are expressly subordinated to
Senior Indebtedness of the Guarantor as set forth in Section 11.2 and Article 10
of the Indenture and reference is hereby made to such Section and Article for
the precise terms of such subordination.
No stockholder, employee, officer, director or incorporator, as such,
past, present or future of each Guarantor shall have any liability under this
Note Guarantee by reason of his or its status as such stockholder, employee,
officer, director or incorporator.
This is a continuing Note Guarantee and shall remain in full force and
effect and shall be binding upon each Guarantor and its successors and assigns
until full and final payment of all of the Company's obligations under the Notes
and Indenture or until released or has no further force or effect in accordance
with the Indenture and shall inure to the benefit of the successors and assigns
of the Trustee and the Holders, and, in the event of any transfer or assignment
of rights by any Holder or the Trustee, the rights and privileges herein
conferred upon that party shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions hereof. This is
a Note Guarantee of payment and not of collectibility.
This Note Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Note upon which this Note
Guarantee is noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized officers.
The Obligations of each Guarantor under its Note Guarantee shall be
limited to the extent necessary to insure that it does not constitute a
fraudulent conveyance under applicable law.
THE TERMS OF ARTICLE 11 OF THE INDENTURE ARE INCORPORATED HEREIN BY
REFERENCE.
This Note Guarantee shall be governed by the laws of the state of New
York.
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Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.
Dated as of March 23, 1999 COAST RESORTS, INC.
By:
-------------------------------------
Name:
Title:
(SEAL)
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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).
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant
to Section 4.17 or 4.20 of the Indenture, check the appropriate box below:
[ ] Section 4.17 [ ] Section 4.20
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.17 or Section 4.20 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).
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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 Signature of
Amount of decrease in Amount of decrease in of this Global Note authorized officer of
Principal Amount Principal Amount following such decrease Trustee or Note
Date of Exchange of this Global Note of this Global Note (or increase) Custodian
---------------- --------------------- --------------------- ----------------------- ---------------------
* This schedule should be included only if the Note is issued in global
form.
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EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Coast Hotels and Casinos, Inc.
c/o Coast Resorts, Inc.
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Telephone No.: (000) 000-0000
Attention: General Counsel
Firstar Bank of Minnesota, N.A.
000 Xxxx 0xx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Telephone No.: (000) 000-0000
Attention: Corporate Trust Department
Re: 9 1/2% Senior Subordinated Notes due 2009
Reference is hereby made to the Indenture, dated as of March 23, 1999
(the "Indenture"), among Coast Hotels and Casinos, Inc., as issuer (the
"Company"), Coast Resorts, Inc., as guarantor, and Firstar Bank of Minnesota,
N.A., 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 DEFINITIVE NOTE PURSUANT TO RULE 144A. The
Transfer is being effected pursuant to and in accordance with Rule 144A under
the United States 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 believed and 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 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 GLOBAL NOTE OR A 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 originated, the
Transferee was outside the United States or such Transferor
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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 Global Note and/or the
Definitive Note and in the Indenture and the Securities Act.
3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN A 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 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 $100,000, an Opinion of Counsel acceptable
to the Company 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
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Definitive Note will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Definitive
Notes and in the Indenture and the Securities Act.
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:
------------------------------
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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
(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) [ ] Unrestricted Global Note (CUSIP ); or
(b) [ ] a Restricted Definitive Note; or
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
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EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Coast Hotels and Casinos, Inc.
c/o Coast Resorts, Inc.
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Telephone No.: (000) 000-0000
Attention: General Counsel
Firstar Bank of Minnesota, N.A.
000 Xxxx 0xx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Telephone No.: (000) 000-0000
Attention: Corporate Trust Department
Re: 9 1/2% Senior Subordinated Notes due 2009
Dear Sirs:
Reference is hereby made to the Indenture, dated as of March 23, 1999
(the "Indenture"), among Coast Hotels and Casinos, Inc., as issuer (the
"Company"), Coast Resorts, Inc., as guarantor, and Firstar Bank of Minnesota,
N.A., 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 United States 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 pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
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EXHIBIT C
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 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.
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EXHIBIT C
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:
------------------------------
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EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Coast Hotels and Casinos, Inc.
c/o Coast Resorts, Inc.
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Telephone No.: (000) 000-0000
Attention: General Counsel
Firstar Bank of Minnesota, N.A.
000 Xxxx 0xx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Telephone No.: (000) 000-0000
Attention: Corporate Trust Department
Re: 9 1/2% Senior Subordinated Notes due 2009
Dear Sirs:
Reference is hereby made to the Indenture, dated as of March 23, 1999
(the "Indenture"), among Coast Hotels and Casinos, Inc., as issuer (the
"Company"), Coast Resorts, Inc., as guarantor, and Firstar Bank of Minnesota,
N.A., 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 United States
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 $100,000, an
Opinion of Counsel in form reasonably acceptable to the Company to the effect
that such transfer is in
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000
XXXXXXX X
compliance with the Securities Act, (D) outside the United States in accordance
with Rule 904 of Regulation S under the 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.
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 Transferor]
By:
-------------------------------------
Name:
Title:
Dated:
------------------------------
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EXHIBIT E
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT SUBSIDIARY GUARANTORS
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
________________, among __________________ (the "Guaranteeing Subsidiary"), a
subsidiary of Coast Hotels and Casinos, Inc. (or its permitted successor), a
Nevada corporation (the "Company"), the Company, the other Guarantors (as
defined in the Indenture referred to herein) and Firstar Bank of Minnesota,.
N.A., 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 March 23, 1999 providing for
the issuance of an aggregate principal amount of up to $175,000,000 of 9 1/2%
Senior Subordinated Notes due 2009 (the "Notes");
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall 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 as follows:
(a) Along with all Guarantors named in the Indenture, to
jointly and severally Guarantee to each Holder of a Note authenticated
and delivered by the Trustee and to the Trustee and its successors and
assigns, the Notes or the obligations of the Company hereunder or
thereunder, that:
(i) the principal of 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
(ii) 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 Guarantors shall be
jointly and severally obligated to pay the same immediately.
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EXHIBIT E
(b) The obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Notes
or the 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.
(c) The following is hereby waived: 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.
(d) This Note Guarantee shall not be discharged except by
complete performance of the obligations contained in the Notes and the
Indenture, and the Guaranteeing Subsidiary accepts all obligations of a
Guarantor under the Indenture.
(e) If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guarantors, or any Custodian,
Trustee, liquidator or other similar official acting in relation to
either the Company or the Guarantors, any amount paid by either to the
Trustee or such Holder, this Note Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect.
(f) The Guaranteeing Subsidiary shall 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.
(g) As between the Guarantors, on the one hand, and the
Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article
6 of the Indenture for the purposes of this Note Guarantee,
notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby, and
(y) in the event of any declaration of acceleration of such obligations
as provided in Article 6 of the Indenture, such obligations (whether or
not due and payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Note Guarantee.
(h) The Guarantors shall 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 Guarantee.
(i) Pursuant to Section 11.03 of the Indenture, after giving
effect to any maximum amount and any other contingent and fixed
liabilities that are relevant under any applicable Bankruptcy or
fraudulent conveyance 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 Article 11 of the Indenture, this new Note
Guarantee shall be limited to the maximum amount permissible such that
the obligations of such Guarantor under this Note Guarantee will not
constitute a fraudulent transfer or conveyance.
3. EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees that
the Note Guarantees shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Note Guarantee.
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EXHIBIT E
4. GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.
(a) The Guaranteeing Subsidiary may not consolidate with or merge
with or into (whether or not such Guarantor is the surviving Person) another
corporation, Person or entity whether or not affiliated with such Guarantor
unless:
(i) subject to Sections 11.05 and 11.06 of the Indenture,
the Person formed by or surviving any such consolidation or merger (if
other than such Guarantor) unconditionally assumes all the obligations
of such Guarantor, pursuant to a supplemental indenture in form and
substance reasonably satisfactory to the Trustee, under the Indenture
and the Note Guarantee on the terms set forth therein or herein; and
(ii)immediately after giving effect to such transaction, no
Default or Event of Default exists.
(b) 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 the Indenture to be
performed by the Guarantor, such successor Person shall succeed to and be
substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor corporation 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 shall in all
respects have the same legal rank and benefit under the Indenture as the Note
Guarantees theretofore and thereafter issued in accordance with the terms of the
Indenture as though all of such Note Guarantees had been issued at the date of
the execution hereof.
(c) Except as set forth in Articles 4 and 5 and Section 11.06 of
Article 11 of the Indenture, and notwithstanding clauses (a) and (b) above,
nothing contained in the Indenture or in any of the Notes shall prevent any
consolidation or merger of a Guarantor with or into the Company or another
Guarantor, or shall 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.
5. RELEASES.
(a) In the event of (a) a sale or other disposition of all of the
assets of any Guarantor, by way of merger, consolidation or otherwise, (b) a
sale or other disposition of all of the capital stock of any Guarantor or (c)
the designation of any Subsidiary Guarantor as an Unrestricted Subsidiary in
accordance with the terms of this Indenture, 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 in the event of its designation as
an Unrestricted Subsidiary) or the corporation acquiring the property (in the
event of a sale or other disposition of all of the assets of such Guarantor)
will be released and relieved of any obligations under its Note Guarantee;
provided that the Net Cash Proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of this Indenture,
including without limitation Section 4.17 of the Indenture. 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, including without limitation
Section 4.17 of the Indenture, the Trustee shall execute any documents
reasonably required in order to evidence the release of any Guarantor from its
obligations under its Note Guarantee.
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EXHIBIT E
(b) Any Guarantor not released from its obligations under its Note
Guarantee shall remain liable for the full amount of principal of and interest
on the Notes and for the other obligations of any Guarantor under this Indenture
as provided in Article 11 of the Indenture.
6. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the Company
or any Guaranteeing Subsidiary under the Notes, any Note Guarantees, the
Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their 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. Such waiver may
not be effective to waive liabilities under the federal securities laws and it
is the view of the Commission that such a waiver is against public policy.
7. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW
YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT
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.
8. 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.
9. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
10. 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.
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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: _______________, ____
[GUARANTEEING SUBSIDIARY]
By:
-------------------------------------
Name:
Title:
COAST HOTELS AND RESORTS, INC.
By:
-------------------------------------
Name:
Title:
[EXISTING GUARANTORS]
By:
-------------------------------------
Name:
Title:
FIRSTAR BANK OF MINNESOTA, N.A.
as Trustee
By:
-------------------------------------
Authorized Signatory
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