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EXHIBIT 4.1
INDENTURE dated as of August 8, 1997 between Alliance Gaming
Corporation, a Nevada corporation (the "Company"), the Guarantors (as defined
below) and United States Trust Company of New York (the "Trustee").
The Company, the Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders of
the 10% Series A Senior Subordinated Notes due 2007 (the "Series A Notes") and
the 10% Series B Senior Subordinated Notes due 2007 (the "Series B Notes" and,
together with the Series A Notes, the "Notes"):
ARTICLE I
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Asset Sale" means (i) the sale, lease, conveyance or other disposition
of any assets or rights (including, without limitation, by way of a sale and
leaseback) other than dispositions of assets or rights in the ordinary course of
business, including, without limitation, sales of inventory and damaged, surplus
or obsolete property in the ordinary course of business, provided, however, that
the sale, lease, conveyance or other disposition of all or substantially all of
the assets of the Company and its Restricted Subsidiaries taken as a whole shall
not be deemed to be an "Asset Sale", and shall be governed by Sections 4.15
and/or 5.01 hereof, and (ii) the issue or sale by the Company or any of its
Restricted Subsidiaries of Equity Interests of any of the Company's Restricted
Subsidiaries, in the case of either clause (i) or (ii), whether in a single
transaction or a series of related transactions (a) that have a fair market
value in excess of $100,000 or (b) for net proceeds in excess of $100,000.
Notwithstanding the foregoing, the following will not be deemed to be "Asset
Sales": (i) a transfer of assets or rights by the Company to a Wholly Owned
Restricted Subsidiary or a Guarantor, or by a
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Restricted Subsidiary to the Company or to a Wholly Owned Restricted Subsidiary
or a Guarantor, (ii) an issuance of Equity Interests by a Wholly Owned
Restricted Subsidiary or a Guarantor to the Company or to a Wholly Owned
Restricted Subsidiary or a Guarantor, (iii) a Restricted Payment that is
permitted by Section 4.07 hereof and (iv) a Permitted Investment.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Bally Xxxxx" means, collectively, Alliance Automaten GmbH & Co. KG,
Bally Xxxxx Vertriebs GmbH, Bally Xxxxx Automaten GmbH, Geda
Automatengrosshandel GmbH, Xxxxxx Vertriebs GmbH, Bally Gaming International
GmbH, Xxxxxxx GmbH and Westav Westdeutscher Vertriebs GmbH.
"Board of Directors" means the Board of Directors of the Company, or any
authorized committee of the Board of Directors.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited) and
(iv) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person.
"Cash Equivalents" means (i) United States dollars and German
Deutschemarks (or the Euro, if and when such currency replaces the German
Deutschemark), (ii) securities issued or directly fully guaranteed or insured by
the United States government or any agency or instrumentality thereof having
maturities of not more than six months from the date of acquisition, (iii)
certificates of deposit and eurodollar time deposits with maturities of six
months or less from the date of acquisition, bankers' acceptances with
maturities not exceeding six months and overnight bank deposits, in each case
with any domestic commercial bank or commercial bank of a foreign country
recognized by the United States, in each case having capital and surplus in
excess of $500 million (or the foreign currency equivalent thereof) and having
outstanding debt which is rated "A" (or similar equivalent thereof) or higher by
at least one nationally recognized statistical rating organization (as defined
under Rule 436 under the Securities Act) or any money-market fund sponsored by a
registered broker dealer or mutual fund distributor, (iv) repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in clauses (ii) and (iii) above entered into with any financial
institution meeting the qualifications specified in clause (iii) above and (v)
commercial paper having one of the two highest ratings obtainable from Moody's
Investors
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Service, Inc. or Standard & Poor's Corporation and in each case maturing within
six months after the date of acquisition.
"Change of Control" means the occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Restricted Subsidiaries
taken as a whole to any "person" (as such term is used in Section 13(d)(3) of
the Exchange Act) other than an Exempt Person, (ii) the adoption of a plan
relating to the liquidation or dissolution of the Company, (iii) the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any "person" (as defined above),
other than an Exempt Person, becomes the "beneficial owner" (as such term is
defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that a
person shall be deemed to have "beneficial ownership" of all securities that
such person has the right to acquire, whether such right is currently
exercisable or is exercisable only upon the occurrence of a subsequent
condition), directly or indirectly, of 50% or more of the Voting Stock of the
Company (measured by voting power rather than number of shares), (iv) during any
period of 12 consecutive months after the date of this Indenture, individuals
who at the beginning of any such 12-month period constituted the Board of
Directors of the Company, together with any Continuing Directors, cease for any
reason to constitute a majority of the Board of Directors of the Company then in
office; and (v) the Company consolidates with, or merges with or into, any
Person or sells, assigns, conveys, transfers, leases or otherwise disposes of
all or substantially all of its assets to any Person, or any Person consolidates
with, or merges with or into, the Company, in any such event pursuant to a
transaction in which any of the outstanding Voting Stock of the Company is
converted into or exchanged for cash, securities or other property, other than
any such transaction where the Voting Stock of the Company outstanding
immediately prior to such transaction is converted into or exchanged for Voting
Stock of the surviving or transferee Person constituting a majority of the
outstanding shares of such Voting Stock of such surviving or transferee Person
(immediately after giving effect to such issuance), but only if the condition
specified in clause (iv) also has occurred.
"Company" means Alliance Gaming Corporation, a Nevada corporation, or
any successor pursuant to Section 5.02 hereof.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus (i) an
amount equal to any extraordinary loss plus any net loss realized in connection
with an Asset Sale (to the extent such losses were deducted in computing such
Consolidated Net Income), plus (ii) provision for taxes based on income or
profits of such Person and its Subsidiaries for such period, to the extent that
such provision for taxes was included in computing such Consolidated Net Income,
plus (iii) consolidated interest expense of such Person and its Subsidiaries for
such period, whether paid or accrued and whether or not capitalized (including,
without limitation, amortization of original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease Obligations,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net payments (if any) pursuant
to Interest Swap and Hedging Obligations), to the extent that any such expense
was deducted
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in computing such Consolidated Net Income, plus (iv) depreciation and
amortization (including amortization of goodwill and other intangibles but
excluding amortization of prepaid cash expenses that were paid in a prior
period) of such Person and its Subsidiaries for such period to the extent that
such depreciation and amortization were deducted in computing such Consolidated
Net Income, plus (v) prepayment premiums and other charges incurred in
connection with the Refinancing. Notwithstanding the foregoing, the provision
for taxes on the income or profits of, and the depreciation and amortization of,
a Subsidiary of the referent Person shall be added to Consolidated Net Income to
compute Consolidated Cash Flow only to the extent that a corresponding amount
would be permitted at the date of determination to be dividended or distributed
to the Company by such Subsidiary without prior governmental approval (that has
not been obtained), and without direct or indirect restriction pursuant to the
terms of its charter and all agreements, instruments, judgments, decrees,
orders, statutes, rules and governmental regulations applicable to that
Subsidiary or its stockholders.
"Consolidated Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person and its
Restricted Subsidiaries for such period to the Consolidated Interest Expense of
such Person and its Restricted Subsidiaries for such period. In the event that
the Company or any of its Restricted Subsidiaries incurs, assumes, Guarantees,
repays, redeems, retires, repurchases or defeases any Indebtedness or
Disqualified Stock (other than revolving credit borrowings) or issues preferred
stock subsequent to the commencement of the period for which the Consolidated
Coverage Ratio is being calculated but prior to the date on which the event for
which the calculation of the Consolidated Coverage Ratio is made (the
"Calculation Date"), then the Consolidated Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption, Guarantee, repayment
redemption, retirement, repurchase or defeasance of Indebtedness or Disqualified
Stock, or such issuance or redemption of preferred stock, as if the same had
occurred at the beginning of the applicable four-quarter reference period. In
addition, for purposes of making the computation referred to above, (i)
acquisitions of and investments in Restricted Subsidiaries that have been made
by the Company or any of its Restricted Subsidiaries, including through mergers
or investments or consolidations and including any related financing
transactions, during the four-quarter reference period or subsequent to such
reference period and on or prior to the Calculation Date shall be deemed to have
occurred on the first day of the four-quarter reference period and Consolidated
Cash Flow for such reference period shall be calculated without giving effect to
clause (iii) of the proviso set forth in the definition of Consolidated Net
Income, (ii) the Consolidated Cash Flow attributable to discontinued operations,
as determined in accordance with GAAP, and operations or businesses disposed of
prior to the Calculation Date, shall be excluded and (iii) the Consolidated
Interest Expense attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded, but only to the extent that the obligations
giving rise to such Consolidated Interest Expense will not be obligations of the
referent Person or any of its Restricted Subsidiaries following the Calculation
Date. For purposes of this definition, whenever pro forma effect is to be given
to an acquisition of assets, the amount of income or earnings relating thereto
and the amount of Consolidated Interest Expense associated with any Indebtedness
incurred in connection therewith, the pro forma calculations shall be determined
in good faith by a responsible financial or accounting officer of the Company.
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"Consolidated Interest Expense" means, with respect to any Person for
any period, the sum, without duplication, of (i) the consolidated interest
expense of such Person and its Restricted Subsidiaries for such period, whether
paid or accrued (including, without limitation, amortization of original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings, and
net payments (if any) pursuant to Interest Swap and Hedging Obligations) and
(ii) the consolidated interest expense of such Person and its Restricted
Subsidiaries that was capitalized during such period, and (iii) any interest
expense on Indebtedness of another Person that is Guaranteed by such Person or
one of its Restricted Subsidiaries or secured by a Lien on assets of such Person
or one of its Restricted Subsidiaries (whether or not such Guarantee or Lien is
called upon), and (iv) all dividend payments, whether or not in cash, on any
series of Disqualified Stock of such Person or any of its Restricted
Subsidiaries, other than dividend payments on Equity Interests payable solely in
Equity Interests of the Company.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that (i) the Net Income (to the extent positive) of any
Person that is not a Restricted Subsidiary or that is accounted for by the
equity method of accounting shall be included only to the extent of the amount
of dividends or distributions paid in cash to the referent Person or a
Restricted Subsidiary thereof, (ii) the Net Income of any Restricted Subsidiary
shall be excluded to the extent that the declaration or payment of dividends and
distributions by that Restricted Subsidiary of Net Income is not at the date of
determination permitted without any prior governmental approval (that has not
been obtained) or, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary or its
stockholders, (iii) the Net Income or loss of any Unrestricted Subsidiary shall
be excluded, whether or not distributed to the Company or one of its
Subsidiaries, (iv) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition shall
be excluded and (v) the cumulative effect of a change in accounting principles
shall be excluded.
"Consolidated Net Worth" means, with respect to any Person as of any
date, the sum of (i) the consolidated equity of the common stockholders of such
Person and its consolidated Subsidiaries as of such date plus (ii) the
respective amounts reported on such Person's balance sheet as of such date with
respect to any series of preferred stock (other than Disqualified Stock) that by
its terms is not entitled to the payment of dividends unless such dividends may
be declared and paid only out of net earnings, but only to the extent of any
cash received by such Person upon issuance of such preferred stock.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date of this Indenture or (ii) was nominated for
election or elected to such Board of Directors with the approval of a majority
of the Continuing Directors who were members of such Board at the time of such
nomination or election.
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"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 13.02 hereof or such other address as to which the
Trustee may give written notice to the Company.
"Credit Facilities" means, with respect to any Person, one or more debt
facilities (including, without limitation, the New Credit Facility) or
commercial paper facilities with banks or other institutional lenders as agent
providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
of credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time. Indebtedness under
Credit Facilities outstanding on the date on which Notes are first issued and
authenticated under this Indenture shall be deemed to have been incurred on such
date in reliance on the exception provided by clauses (i) and (ii) of the
definition of Permitted Debt.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Definitive Notes" means Notes that are in the form of the Notes
attached hereto as Exhibit A, that do not include the information called for by
footnotes 1 and 2 thereof.
"Depository" 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 Depository with respect to the Notes, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depository" shall mean or include such successor.
"Designated Senior Debt" means (i) any Indebtedness outstanding under
the New Credit Facility; provided that Indebtedness outstanding under any Credit
Facility that refinanced in part, but not in whole, the Indebtedness outstanding
under the New Credit Facility shall constitute Designated Senior Debt only if it
meets the requirements of succeeding clause (ii), and (ii) any other Senior Debt
of the Company which, at the date of determination, has an aggregate principal
amount outstanding of, or under which, at the date of determination, the holders
thereof are committed to lend up to at least $25.0 million and is specifically
designated by the Company in the instrument evidencing or governing such Senior
Debt as "Designated Senior Debt" for purposes of this Indenture.
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable other than at the Company's option), or upon the happening of any
event (other than the disqualification of the holder thereof by a Gaming
Authority), matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the Holder thereof,
in whole or in part, on or prior to the first anniversary of
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the Stated Maturity of the Notes other than for Equity Interests (other than
Disqualified Stock); provided, however, 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
first anniversary of 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 not more favorable to the holders of such
Capital Stock than the provisions set forth in Sections 4.10 and 4.15.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means an underwritten primary offering of common stock
of the Company pursuant to an effective registration statement, or a private
placement of common stock exempt from registration, under the Act.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means the offer that may be made by the Company
pursuant to the Registration Rights Agreement to exchange Series B Notes for
Series A Notes.
"Exempt Affiliate Transactions" means (i) any extension or renewal in
accordance with their terms, of those certain Employment Agreements dated as of
July 1, 1997 between the Company and each of Xxxxxxx X. XxXxxxxx and Xxxx
Xxxxxxxxxx (collectively, the "Employment Agreements") and that certain letter
agreement dated July 1, 1997 between the Company and Xxxxxxxx Investment
Corporation providing for the payment of overhead expenses, as well as any
restructuring of the Employment Agreements, provided that, in the case of a
restructuring of any Employment Agreement, the Board of Directors has determined
that the restructured terms are fair to the Company and, if the restructuring
involves aggregate consideration in excess of $10.0 million, the Company
delivers a fairness opinion of the type specified in clause (b) of Section 4.11
and (ii) any agreements between the Company and Xxxxxx X. Xxxxx or any of his
Affiliates providing for the payment by the Company of consulting fees or
similar fees in an aggregate amount not to exceed $500,000 per annum.
"Exempt Person" means (i) the Company or any employee benefit plan or
stock ownership plan of either the Company or any subsidiary of the Company,
(ii) any of Xxxxxxxx-Ft. Worth Investment Partners, L.P., Xxxxxxxx Investment
Corporation, Gaming Systems Advisors, L.P., Xxxxxx X. Xxxxx, or any of their
respective Affiliates, or any successor to Xxxxxxxx-Ft. Worth Investment
Partners, L.P., Xxxxxxxx Investment Corporation or Gaming Systems Advisors, L.P.
or any of their respective Affiliates by merger, sale or transfer of assets or
similar transaction, or by a transfer from Xxxxxx X. Xxxxx to any estate
planning vehicle controlled by Xxxxxx X. Xxxxx or established for the benefit of
Xxxxxx X. Xxxxx' family or his estate.
"Existing Indebtedness" means Indebtedness in existence on the date of
this Indenture, until such amounts are repaid.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified
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Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as have been
approved by a significant segment of the accounting profession, which are in
effect on the date of this Indenture.
"Gaming Authority" means any governmental agency which regulates gaming
in a jurisdiction in which the Company or any of its Subsidiaries conducts a
Gaming Business.
"Gaming Business" means the business conducted (or proposed to be
conducted) by the Company and its Subsidiaries as of the date of this Indenture,
including the management and operation of gaming machines and casinos, the
design, manufacture and distribution of gaming machines, equipment, monitoring
systems and amusement equipment, and other gaming- related businesses, including
but not limited to amusements, arcades, Internet-based gaming, pari-mutuel and
lottery-related activities, and any and all businesses that in the good faith
judgment of the Board of Directors of the Company are materially related
businesses.
"Gaming Licenses" means every material license, material franchise, or
other material authorization required to own, lease, operate or otherwise
conduct or manage riverboat, dockside or land-based gaming (including any
applicable liquor licenses) or to design, manufacture or distribute gaming
machines, equipment or systems in any state or jurisdiction where the Company or
any of its Subsidiaries conducts such business.
"Global Note" means a Note that contains the paragraph referred to in
footnote 1 and the additional schedule referred to in footnote 2 to the form of
the Note attached hereto as Exhibit A.
"Government Securities" means direct 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 is pledged.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Guarantors" means each of (i) the Subsidiaries of the Company that is a
party to this Indenture, and (ii) any other Subsidiary of the Company that
executes a Subsidiary Guarantee in accordance with Article XI hereof, and their
respective successors and assigns.
"Holder" means a Person in whose name a Note is registered.
"Indebtedness" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or banker's acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Interest Swap
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and Hedging Obligations, except any such balance that constitutes an accrued
expense or trade payable, if and to the extent any of the foregoing indebtedness
(other than letters of credit and Interest Swap and Hedging Obligations) would
appear as a liability upon a balance sheet of such Person prepared in accordance
with GAAP, as well as all Indebtedness of others secured by a Lien on any asset
of such Person (whether or not such indebtedness is assumed by such Person) and,
to the extent not otherwise included, the Guarantee by such Person of any
Indebtedness of any other Person. The amount of any Indebtedness outstanding as
of any date shall be (i) the accreted value thereof, in the case of any
Indebtedness that does not require current payments of interest, and (ii) the
principal amount thereof in the case of any other Indebtedness, except for
Indebtedness of others secured by a Lien on any asset of such Person, in which
case the amount of such Indebtedness shall be deemed to be the lesser of the
stated amount of such Indebtedness and the value of the assets of such Person
securing such Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time
to time, including, without limitation, the provisions of the TIA that are
deemed to be a part of and govern this instrument and any supplemental
indenture, respectively.
"Interest Swap and Hedging Obligations" means any obligation of any
person pursuant to any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate exchange agreement,
currency exchange agreement or any other agreement or arrangement designed to
protect (and not for the purpose of speculative investment) against fluctuations
in interest rates or currency values, including, without limitation, any
arrangement whereby, directly or indirectly, such person is entitled to receive
from time to time periodic payments calculated by applying either a fixed or
floating rate of interest on a stated notional amount in exchange for periodic
payments made by such person calculated by applying a fixed or floating rate of
interest on the same notional amount.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If the Company or any Restricted Subsidiary of the Company sells or otherwise
disposes of any Equity Interests of any direct or indirect Restricted Subsidiary
of the Company such that, after giving effect to any such sale or disposition,
such Person is no longer a Subsidiary of the Company, the Company shall be
deemed to have made an Investment on the date of any such sale or disposition
equal to the fair market value of the Equity Interests of such Restricted
Subsidiary not sold or disposed of in an amount determined as provided in
Section 4.07.
"Key Subsidiaries" means United Coin Machine Co., Bally Gaming
International, Inc., Bally Gaming, Inc., Alliance Automaten GmbH & Co. KG, Bally
Xxxxx Vertriebs GmbH, Bally Xxxxx Automaten GmbH, Foreign Gaming Ventures, Inc.,
Mississippi Ventures, Inc.,
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Louisiana Ventures, Inc., Video Services, Inc., United Gaming Rainbow and
Rainbow Casino-Vicksburg Partnership, L.P.
"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
for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in).
"Liquidated Damages" means all liquidated damages then owing pursuant to
Section 5 of the Registration Rights Agreement.
"Net Available Cash" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash payments received by way of a deferred
payment of principal pursuant to a note or installment receivable or otherwise
and proceeds received upon the sale or other disposition of any non-cash
consideration received in any Asset Sale), net of the direct costs relating to
such Asset Sale (including, without limitation, legal, accounting and investment
banking fees, and sales commissions) and any relocation expenses incurred as a
result thereof, taxes paid or payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing
arrangements), amounts required to be applied to the repayment of Indebtedness
(other than Indebtedness under Credit Facilities) secured by a Lien on the asset
or assets that are the subject of such Asset Sale, and any reserve for
adjustment in respect of the sale price of such asset or assets established in
accordance with GAAP.
"Net Cash Proceeds", with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable by the
Company as a result thereof.
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain or loss,
together with any related provision for taxes on such gain or loss, realized in
connection with (a) any Asset Sale (including, without limitation, dispositions
pursuant to sale and leaseback transactions) or (b) the disposition of any
securities by such Person or any of its Restricted Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its Restricted
Subsidiaries, (ii) any extraordinary or nonrecurring gain or loss, together with
any related provision for taxes on such extraordinary
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or nonrecurring gain or loss and (iii) prepayment premiums and other charges
incurred in connection with the Refinancing.
"New Credit Facility" means the Credit Agreement to be entered into by
and among the Company, certain of its Subsidiaries, the lenders referred to
therein and Credit Suisse First Boston, as Administrative Agent, together with
the related documents thereto (including without limitation the term loans and
revolving loans thereunder, any guarantees and security documents), as amended,
extended, renewed, restated, supplemented or otherwise modified (in whole or in
part, and without limitation as to amount terms, conditions, covenants and other
provisions) from time to time, and any agreement (and related document)
governing Indebtedness incurred to refund or refinance, in whole or in part, the
borrowings and commitments then outstanding or permitted to be outstanding under
such New Credit Facility or a successor New Credit Facility, whether by the same
or any other lender or group of lenders.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the
Company nor any of its Restricted Subsidiaries (a) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable (as a guarantor
or otherwise), or (c) constitutes the lender; and (ii) no default with respect
to which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness (other than
Indebtedness represented by the Notes or outstanding under the New Credit
Facility or any replacement Credit Facility) of the Company or any of its
Restricted Subsidiaries to declare a default on such other Indebtedness or cause
the payment thereof to be accelerated or payable prior to its stated maturity;
and (iii) as to which the lenders have been notified in writing that they will
not have any recourse to the stock or assets of the Company or any of its
Restricted Subsidiaries.
"Note Custodian" means the Trustee, as custodian with respect to the
Notes in global form, or any successor entity thereto.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities and amounts
payable under the documentation governing any Indebtedness.
"Offering" means the Offering of the Notes by the Company.
"Officer" means, with respect to any Person (other than the Trustee),
the Chairman of the Board, the Chief Executive Officer, the President, the Chief
Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant
Treasurer, the Controller, the Secretary or any Vice President of such Person.
"Officers' Certificate" means a certificate signed on behalf of 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 13.05 hereof.
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"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
13.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Permitted Investments" means (i) any Investment in the Company, a
Wholly Owned Restricted Subsidiary of the Company or a Guarantor, in each case
that is engaged in a Gaming Business, or any Investment in the form of a loan to
a foreign Restricted Subsidiary that is engaged in a Gaming Business; (ii) any
Investment in Cash Equivalents; (iii) any Investment by the Company or any
Restricted Subsidiary of the Company in a Person, if as a result of such
Investment (a) such Person becomes a Wholly Owned Restricted Subsidiary of the
Company or a Guarantor and is engaged in a Gaming Business or (b) such Person is
merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company, a Wholly
Owned Restricted Subsidiary of the Company or a Guarantor and is engaged in a
Gaming Business; (iv) any Restricted Investment made as a result of the receipt
of non-cash consideration from an Asset Sale that was made pursuant to and in
compliance with Section 4.10; (v) any acquisition of assets solely in exchange
for the issuance of Equity Interests (other than Disqualified Stock) of the
Company; (vi) payments made to consummate the transactions contemplated by that
certain agreement dated as of July 11, 1996 among HFS Gaming Corporation,
National Gaming Mississippi, Inc. and the Company; (vii) repurchase of Notes;
(viii) Investments acquired by the Company or any of its Restricted Subsidiaries
(a) in exchange for any other Investment or accounts receivable held by the
Company or such Restricted Subsidiary in connection with or as a result of a
bankruptcy workout, reorganization or recapitalization of the issuer of such
Investment or accounts receivable or (b) as a result of a foreclosure by the
Company or such Restricted Subsidiary or other transfer of title with respect to
any secured Investment in default; (ix) Investments by the Company or any of its
Restricted Subsidiaries in securities issued directly or indirectly and fully
guaranteed or insured by the United States government or any agency or
instrumentality thereof in an amount outstanding at any time equal to the net
present value of the aggregate amount of payments owed to winners of jackpots
from progressive games and having maturities that are approximately the same as
the due dates for future jackpot payments; and (x) Investments in any Person
engaged in the Gaming Business having an aggregate fair market value (measured
on the date each such Investment was made and without giving effect to
subsequent changes in value), when taken together with all other Investments
made pursuant to this clause (x) that are at the time outstanding (after giving
effect to any such Investments that are returned or repaid to the Company or to
any Restricted Subsidiary, without restriction, in cash or property on or prior
to the date of any such calculation), not to exceed an amount equal to (A) $20.0
million, plus (B) 50% of any dividends or distributions received by the Company
or any Restricted Subsidiary after the date of this Indenture from Unrestricted
Subsidiaries of the Company in excess of the full amount of all outstanding
Investments of the Company and its Restricted Subsidiaries in Unrestricted
Subsidiaries, provided that such dividends may be used to make an Investment
only if the Consolidated Coverage Ratio for the Company's most recently ended
four full fiscal quarters for which internal financial statements are available
immediately preceding the date on which such Investment is made would have been
at least 2.25 to 1.
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"Permitted Refinancing Indebtedness" means any Indebtedness or
Disqualified Stock of the Company or any of its Restricted Subsidiaries issued
in exchange for, or the net proceeds of which are used to extend, refinance,
renew, replace, defease or refund other Indebtedness of the Company or any of
its Restricted Subsidiaries; provided that: (i) the principal amount (or
accreted value, if applicable) of such Permitted Refinancing Indebtedness does
not exceed the principal amount of (or accreted value, if applicable), plus
premium and accrued interest on, the Indebtedness so extended, refinanced,
renewed, replaced, defeased or refunded (plus the amount of reasonable expenses
(including defeasance costs) incurred in connection therewith); (ii) such
Permitted Refinancing Indebtedness has a final maturity date the same as or
later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; (iii) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the Notes,
such Permitted Refinancing Indebtedness is subordinated in right of payment to,
the Notes on terms at least as favorable to the Holders of Notes as those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and (iv) such Indebtedness
is incurred either by (a) the Restricted Subsidiary who is the obligor on the
Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded
or (b) the Company.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or agency or political subdivision thereof.
"RCVP" means Rainbow Casino-Vicksburg Partnership, L.P., a Mississippi
limited partnership.
"Refinancing" means collectively (i) the Company's cash tender offer to
purchase any and all of the Company's 12 7/8% Senior Secured Notes due 2003,
plus accrued interest to the date of purchase, (ii) the redemption at
liquidation value of all of the Company's Series B Preferred Stock plus an
amount equal to accrued dividends thereon, (iii) the purchase from HFS Gaming
Corporation of the right to receive royalty payments based on revenues of the
Rainbow Casino and the purchaser of related debt owed to National Gaming
Mississippi, Inc., (iv) the repayment of certain existing lines of credit and
other indebtedness, (v) the offer and sale of the Notes, (vi) entering into the
New Credit Facility and (vii) the payment of related transaction fees and
expenses.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of August 8, 1997, by and 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.
"Representative" means any trustee, agent or representative for any
issue of Senior Debt; provided, however, that if and for so long as any Senior
Debt lacks such a representative, then the Representative for such Senior Debt
shall at all times be the holders of a majority in outstanding principal amount
of such Senior Debt.
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"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 or her
knowledge of and familiarity with the particular subject.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of the Company or a
Guarantor, as applicable, secured by a Lien.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" means, with respect to the Company or any Guarantor (i)
all Indebtedness outstanding under Credit Facilities and all Interest Swap and
Hedging Obligations, (ii) any other Indebtedness permitted to be incurred by the
Company or such Guarantor, as the case may be, under the terms of this
Indenture, unless the instrument under which such Indebtedness is incurred
expressly provides that it is on a parity with or subordinated in right of
payment to the Notes (in the case of Senior Debt of the Company) or the relevant
Guarantee (in the case of Senior Debt of such Guarantor), and (iii) all
Obligations with respect to the foregoing. Notwithstanding anything to the
contrary in the foregoing, Senior Debt will not include (t) any Indebtedness
described under clause (xii) of Section 4.09, (u) any liability for federal,
state, local or other taxes owed or owing by the Company or such Guarantor, as
the case may be, (v) any Indebtedness of the Company or such Guarantor to any of
their respective Subsidiaries, (w) any trade payables, (x) that portion of any
Indebtedness which at the time of incurrence is incurred in violation of this
Indenture (but as to any such Indebtedness under the New Credit Facility, no
such violation shall be deemed to exist if the Representative of the Lenders
thereunder shall have received an officer's certificate of the Company to the
effect that the issuance of such Indebtedness does not violate this Indenture
and, if incurred pursuant to the first paragraph under the limitation on
incurrence of indebtedness covenant, setting forth in reasonable detail the
reasons therefor), (y) any Indebtedness represented by the Company's 127/8%
Senior Secured Notes due 2003 that remain outstanding after the date of this
Indenture and any Indebtedness represented by any guarantees made by any of the
Company's Subsidiaries in respect thereof, or (z) any Indebtedness of any of the
Company's Subsidiaries existing on the date of this Indenture.
"Significant Subsidiary" means any Restricted Subsidiary that would be a
"significant subsidiary" as defined in Article I, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Act, as such Regulation is in effect on the date
hereof.
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"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"SVS" means Southern Video Services, Inc., a Louisiana corporation.
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C.
SectionSection 77aaa-77bbbb), as in effect on the date on which this Indenture
is qualified under the TIA, except as otherwise provided in Section 9.03.
"Transfer Restricted Securities" means securities that bear or are
required to bear the legend set forth in Section 2.06 hereof.
"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 Subsidiary" means any Subsidiary (other than the Key
Subsidiaries or any successor to any of them) that is designated by the Board of
Directors as an Unrestricted Subsidiary pursuant to a Board Resolution, but only
to the extent that such Subsidiary: (i) has no Indebtedness other than
Non-Recourse Debt; (ii) is a Person with respect to which neither the Company
nor any of its Restricted Subsidiaries has any direct or indirect obligation (a)
to subscribe for additional Equity Interests or (b) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any specified
levels of operating results; and (iii) has not guaranteed or otherwise directly
or indirectly provided credit support for any Indebtedness of the Company or any
of its Restricted Subsidiaries. Any such designation by the Board of Directors
shall be evidenced to the Trustee by filing with the Trustee a certified copy of
the Board Resolution giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
conditions and was permitted by the provisions of Section 4.07. If, at any time,
any Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date
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(and, if such Indebtedness is not permitted to be incurred as of such date under
the provisions of Section 4.09, the Company shall be in default of such
covenant).
"VDS" means Video Distributing Services, Inc., a Louisiana corporation.
"VSI" means Video Services, Inc., a Louisiana corporation.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares or shares
held by foreign nationals in each case to the extent required by applicable law)
shall at the time be owned by such Person or by one or more Wholly Owned
Restricted Subsidiaries of such Person and one or more Wholly Owned Restricted
Subsidiaries of such Person.
SECTION 1.02. OTHER DEFINITIONS.
Term Defined in Section
-------------------------------- ------------------
"Affiliate Transaction" 4.11
"Asset Sale Offer" 4.10
"Change of Control Offer" 4.15
"Change of Control Payment" 4.15
"Change of Control Payment Date" 4.15
"Covenant Defeasance" 8.03
"DTC" 2.03
"Event of Default" 6.01
"Excess Proceeds" 4.10
"incur" 4.09
"Legal Defeasance" 8.02
"Offer Amount" 3.09
"Offer Period" 3.09
"Paying Agent" 2.03
"Payment Blockage Notice" 10.03
"Permitted Debt" 4.09
"Purchase Date" 3.09
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"Registrar" 2.03
"Restricted Payments" 4.07
"Subsidiary Guarantees" 11.01
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;
"obligor" on the Notes means the Company and any successor obligor upon
the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular;
(5) provisions apply to successive events and transactions;
and
(6) 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 SEC from time to time.
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ARTICLE II
THE NOTES
SECTION 2.01. FORM AND DATING.
The Notes and the Trustee's certificate of authentication in respect
thereof 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 and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
(a) Global Securities. Notes offered and sold to "qualified
institutional buyers" in reliance on Rule 144A under the Securities Act or to
non-U.S. persons in reliance on Regulation S under the Securities Act, in each
case as provided in a Purchase Agreement relating to the Notes, dated August 4,
1997, between the Company, and Credit Suisse First Boston Corporation as Initial
Purchaser, shall be issued initially in the form of one or more permanent global
Notes in definitive, fully registered form without interest coupons with the
legends set forth in Exhibit A hereto (each, a "Global Note"), which shall be
deposited on behalf of the purchasers of the Notes represented thereby with the
Trustee, at the Corporate Trust Office of the Trustee, as custodian for the
Depository (or with such other custodian as the Depository may direct), and
registered in the name of the Depository or a nominee of the Depository, duly
executed by the Company and authenticated and delivered by the Trustee as
hereinafter provided. The aggregate principal amount of the Global Notes may
from time to time be increased or decreased by adjustments made on the records
of the Trustee and the Depository or its nominee in accordance with instructions
given by the Holder thereof as hereinafter provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a
Global Note or the nominee of such Depository and (b) shall apply only to a
Global Note deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance with this
Section 2.1(b), authenticate and deliver initially one or more Global Notes that
(a) shall be registered in the name of the Depository or the nominee of such
Depository and (b) shall be delivered by the Trustee to the Depository or
pursuant to the Depository's instructions or held by the Trustee as custodian
for the Depository.
Members of or participants in the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depository or by the Trustee as the custodian of the
Depository or under such Global Note, and the Depository may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the absolute
owner of such Global Note for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any
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agent of the Company of the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depository or
impair, as between the Depository and its Agent Members, the operation of
customary practices of such Depository governing the exercise of the rights of a
holder of a beneficial interest in any Global Note.
(c) Certificated Securities. Except as provided in Section 2.06(d),
owners of beneficial interests in Global Notes will not be entitled to receive
physical delivery of Notes in certificated form.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
Two Officers 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 two
Officers, authenticate Notes for original issue up to the aggregate principal
amount stated 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 the Company or
an Affiliate of the Company or any of their respective Subsidiaries.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may be
presented or surrendered 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.
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The Company initially appoints The Depository Trust Company ("DTC") to
act as Depository with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent in connection with the Notes and to act as Note 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 Liquidated Damages, if any, or interest on the Notes, and
will notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee and to account for any assets
distributed. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent
(if other than the Company or a Subsidiary) shall have no further liability for
the money. If the Company, a Guarantor or a Subsidiary acts as Paying Agent, it
shall segregate and hold in a separate trust fund for the benefit of the Holders
or the Trustee 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 cause the Registrar to furnish to the
Trustee at least seven Business Days before each interest payment date and at
such other times as the Trustee may request in writing, a list in such form and
as of such date as the Trustee may reasonably require of the names and addresses
of the Holders of Notes and the Company shall otherwise comply with TIA Section
312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Definitive Notes. When Definitive Notes are
presented by a Holder to the Registrar with a request (x) to register the
transfer of the Definitive Notes or (y) to exchange such Definitive Notes for an
equal principal amount of Definitive Notes of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met; provided, however, that the
Definitive Notes presented or surrendered for register of transfer or exchange
(i) shall be duly endorsed or accompanied by a written instruction of transfer
in form satisfactory to the Registrar and the Trustee duly executed by such
Holder or by his attorney, duly authorized in writing, and (ii) in the case of a
Definitive Note that is a Transfer Restricted Security, such request shall be
accompanied by the following additional information and documents, as
applicable: (A) if such Transfer Restricted Security is being delivered to the
Registrar by a Holder for registration in the name of such Holder without
transfer, a certification to that effect
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from such Holder (in substantially the form of Exhibit B hereto); or (B) if such
Transfer Restricted Security is being transferred to a "qualified institutional
buyer" in accordance with Rule 144A under the Securities Act, outside the United
States to a non-U.S. person in a transaction meeting the requirements of Rule
904 under the Securities Act, pursuant to an exemption from registration in
accordance with Rule 144 under the Securities Act or pursuant to an effective
registration statement under the Securities Act, a certification to that effect
from such Holder (in substantially the form of Exhibit B hereto); or (C) if such
Transfer Restricted Security is being transferred in reliance on another
exemption from the registration requirements of the Securities Act, a
certification to that effect from such Holder (in substantially the form hereto)
and an Opinion of Counsel from such Holder or the transferee and other evidence
reasonable satisfactory reasonably acceptable to the Company, the Trustee and to
the Registrar to the effect that such transfer is in compliance with the
Securities Act.
(b) Transfer of a Definitive Note for a Beneficial Interest in a
Global Note. A Definitive Note may not be exchanged for a beneficial interest in
a Global Note except upon satisfaction of the requirements set forth below. Upon
receipt by the Registrar of a Definitive Note, duly endorsed or accompanied by
appropriate instruments of transfer, in form satisfactory to the Registrar,
together with (i) if such Definitive Note is a Transfer Restricted Security, a
certification from the Holder thereof (in substantially the form of Exhibit B
hereto) to the effect that such Definitive Note is being transferred by such
Holder to a "qualified institutional buyer" in accordance with Rule 144A under
the Securities Act or, outside the United States to a non-U.S. person in a
transaction meeting the requirements of Rule 904 under the Securities Act; and
(ii) whether or not such Definitive Note is a Transfer Restricted Security,
written instructions from the Holder thereof directing the Registrar to make, or
to direct the Note Custodian to make, an endorsement on the Global Note to
reflect an increase in the aggregate principal amount of the Notes represented
by the Global Note, the Registrar shall cancel such Definitive Note in
accordance with Section 2.11 hereof and cause, or direct the Note Custodian to
cause, in accordance with the standing instructions and procedures existing
between the Depository and the Note Custodian, the aggregate principal amount of
Notes represented by the Global Note to be increased accordingly, provided,
however, that such Definitive Note shall not be cancelled if the Global Notes
have been previously exchanged for Definitive Notes. If no Global Notes are then
outstanding, the Company shall issue and the Trustee, upon receipt of an
authentication order in the form of an Officers' Certificate, shall authenticate
and deliver a new Global Note in the appropriate principal amount.
(c) Transfer and Exchange of Global Notes. The transfer and exchange
of Global Notes or beneficial interests therein shall be effected through the
Depository, in accordance with this Indenture and the procedures of the
Depository therefor, which shall include restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act. A
transferor of a beneficial interest in a Global Note shall deliver to the
Registrar a written order given in accordance with the Depository's procedures
containing information regarding the participant account of the Depository to be
credited with a beneficial interest in the Global Note. The Registrar shall, in
accordance with such instructions, instruct the Depository to credit to the
account of the Person specified in such instructions a beneficial interest in
the Global Note and to debit the account of the Person making the transfer the
beneficial interest in the Global Note being transferred.
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(d) Transfer of a Beneficial Interest in a Global Note for a
Definitive Note.
(i) A Global Note deposited with the Depository or with the
Trustee as custodian for the Depository pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof in the form of Definitive Notes in
an aggregate principal amount equal to the principal amount of such Global Note,
in exchange for such Global Note, only if such transfer complies with the
following paragraph (ii), and (A) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for such Global Security or if at
any time such Depository ceases to be a "clearing agency" registered under the
Exchange Act and a successor depository is not appointed by the Company within
90 days of such notice, or (B) an Event of Default has occurred and is
continuing or (C) the Company, in its sole discretion, notifies the Trustee in
writing that it elects to cause the issuance of certificated Notes under this
Indenture.
(ii) If permitted under the preceding paragraph (i) and an
owner of a beneficial interest in a Global Note deposited with the Depository or
with the Trustee as custodian for the Depository desires to transfer its
interest in such Global Note to a Person who is required to take delivery
thereof in the form of a Definitive Note, such owner may, subject to the rules
and procedures of Euroclear or Cedel, if applicable, and the Depository, cause
the exchange of such interest for one or more certificated Notes of any
authorized denomination or denominations and of the same aggregate principal
amount at maturity. Upon receipt by the Registrar of written instructions or
such other form of instructions as is customary for the Depository from the
Depository or its nominee on behalf of any Person having a beneficial interest
in a Global Note, and, in the case of a Transfer Restricted Security, the
following additional information and documents (all of which may be submitted by
facsimile): (A) if such beneficial interest is being transferred to the Person
designated by the Depository as being the beneficial owner, a certification to
that effect from such Person (in substantially the form of Exhibit B hereto); or
(B) if such beneficial interest is being transferred to a "qualified
institutional buyer" in accordance with Rule 144A under the Securities Act,
outside the United States to a non-U.S. person in a transaction meeting the
requirements of Rule 904 under the Securities Act, pursuant to an exemption from
registration in accordance with Rule 144 under the Securities Act or pursuant to
an effective registration statement under the Securities Act, a certification to
that effect from the transferor (in substantially the form of Exhibit B hereto);
or (C) if such beneficial interest is being transferred in reliance on another
exemption from the registration requirements of the Securities Act, a
certification to that effect from the transferor (in substantially the form of
Exhibit B hereto) and an Opinion of Counsel from the transferee and other
evidence reasonably satisfactory to the Company and to the Registrar to the
effect that such transfer is in compliance with the Securities Act, the
Registrar or the Note Custodian, at the direction of the Trustee, shall, in
accordance with the standing instructions and procedures existing between the
Depository and the Note Custodian, cause the aggregate principal amount of
Global Notes to be reduced accordingly and, following such reduction, the
Company shall execute and, upon receipt of an authentication order in accordance
with Section 2.02 hereof, the Trustee shall authenticate and deliver to the
transferee a Definitive Note in the appropriate principal amount.
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(iii) Definitive Notes issued in exchange for a beneficial
interest in a Global Note pursuant to this Section 2.06(d) shall be registered
in such names and in such authorized denominations as the Depository, pursuant
to instructions from its direct or indirect participants or otherwise, shall
instruct the Registrar. The Registrar shall deliver such Definitive Notes to the
Persons in whose names such Notes are so registered.
(e) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provision of this Indenture (other than the provisions
set forth in subsection (f) of this Section 2.06), a Global Note may not be
transferred as a whole except by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor Depository or
a nominee of such successor Depository.
(f) Authentication of Definitive Notes in Absence of Depository. If
at any time, (i) the Depository for the Notes notifies the Company that the
Depository is unwilling or unable to continue as Depository for the Global Notes
and a successor Depository for the Global Notes is not appointed by the Company
within 90 days after delivery of such notice; or (ii) the Company, at its sole
discretion, notifies the Trustee in writing that it elects to cause the issuance
of Definitive Notes under this Indenture, then the Company shall execute, and
the Trustee shall, upon receipt of an authentication order in accordance with
Section 2.02 hereof, authenticate and deliver, Definitive Notes in an aggregate
principal amount equal to the principal amount of the Global Notes in exchange
for such Global Notes.
(g) Legend.
(i) Except as permitted by the following paragraphs (ii) and
(iii), each Note certificate evidencing Global Notes and Definitive Notes (and
all Notes issued in exchange therefor or substitution thereof) shall bear a
legend in substantially the following form:
"THE SECURITY EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX XXXXXX SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY
NOT BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE
SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF THE COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (1) (a) TO A PERSON WHO THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c)
OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE
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904 UNDER THE SECURITIES ACT, OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION
OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THE NOTE EVIDENCED HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE."
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a Global
Note) pursuant to Rule 144 under the Securities Act or pursuant to an effective
registration statement under the Securities Act, (A) in the case of any Transfer
Restricted Security that is a Definitive Note, the Registrar shall permit the
Holder thereof to exchange such Transfer Restricted Security for a Definitive
Note that does not bear the legend set forth in (i) above and rescind any
restriction on the transfer of such Transfer Restricted Security; and (B) in the
case of any Transfer Restricted Security represented by a Global Note, such
Transfer Restricted Security shall not be required to bear the legend set forth
in (i) above, but shall continue to be subject to the provisions of Section
2.06(c) hereof; provided, however, that with respect to any request for an
exchange of a Transfer Restricted Security that is represented by a Global Note
for a Definitive Note that does not bear the legend set forth in (i) above,
which request is made in reliance upon Rule 144, the Holder thereof shall
certify in writing to the Registrar that such request is being made pursuant to
Rule 144 (such certification to be substantially in the form of Exhibit B
hereto).
(iii) Notwithstanding the foregoing, upon consummation of the
Exchange Offer, the Company shall issue and, upon receipt of an authentication
order in accordance with Section 2.02 hereof, the Trustee shall authenticate
Series B Notes in exchange for Series A Notes accepted for exchange in the
Exchange Offer, which Series B Notes shall not bear the legend set forth in (i)
above, and the Registrar shall rescind any restriction on the transfer of such
Notes, in each case unless the Holder of such Series A Notes is either (A) a
broker-dealer, (B) a Person participating in the distribution of the Series A
Notes or (C) a Person who is an affiliate (as defined in Rule 144A) of the
Company.
(h) Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in Global Notes have been exchanged for Definitive
Notes, redeemed, repurchased or cancelled, all Global Notes shall be returned to
or retained and cancelled 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 Definitive Notes, redeemed, repurchased or cancelled, 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 the Notes Custodian, at the direction of the Trustee, to reflect such
reduction.
(i) General Provisions Relating to Transfers and Exchanges.
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(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Definitive Notes and
Global Notes at the Registrar's request.
(ii) No service charge shall be made to a Holder 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 3.07,
4.10, 4.15 and 9.05 hereto).
(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 Definitive Notes and Global Notes issued upon any
registration of transfer or exchange of Definitive Notes or Global Notes shall
be the valid obligations of the Company, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the Definitive Notes or Global
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 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.
(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 neither the Trustee, any Agent nor the Company shall be affected by
notice to the contrary.
(vii) The Trustee shall authenticate Definitive Notes and
Global Notes in accordance with the provisions of Section 2.02 hereof.
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, in the absence of notice to the Company and the Trustee that
such Note has been acquired by a bona-fide purchaser, the Company shall issue
and the Trustee, upon the written order of the Company signed by two Officers of
the Company, shall authenticate and deliver 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
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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 (including the fees and expenses of the
Trustee) 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 cancelled 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 and the Company receive proof satisfactory to
them that the replaced Note is held by a bona fide purchaser, in which case the
replacement Note shall cease to be outstanding, subject to the provisions of
Section 8-405 of the Uniform Commercial Code.
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.
SECTION 2.10. TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate and deliver temporary Notes upon a written
order of the Company signed by two Officers of the Company. Temporary Notes
shall be substantially in the form of definitive Notes but may have variations
that the Company and the Trustee consider appropriate. Without
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unreasonable delay, the Company shall prepare and the Trustee shall authenticate
definitive Notes in exchange for temporary Notes.
Until so exchanged, the temporary Notes shall in all respects be
entitled to the same rights, privileges and benefits under this Indenture as
permanent Notes authenticated and delivered hereunder.
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 shall cancel and destroy all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
cancelled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all cancelled Notes shall be delivered
to the Company. Subject to Section 2.07, the Company may not issue new Notes to
replace Notes that it has paid or that have been delivered to the Trustee for
cancellation. No Notes shall be authenticated in lieu of or in exchange for any
Notes cancelled as provided in this Section 2.11, except as expressly permitted
in the form of Notes and as permitted by this Indenture.
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 each such special record
date shall not be more than 15 days nor less than 10 days prior to the related
payment date for such defaulted interest, whether or not such day is a Business
Day, and if the Company does not promptly fix any special record date, the
Trustee may fix such date. At least 10 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 each
Holder a notice that states the special record date, the related payment date
and the amount of such defaulted interest to be paid.
ARTICLE III
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
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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. Any such notice to the Trustee may be cancelled at any time up to one
Business Day prior to notice of such redemption being mailed to any Holder and
shall thereby be void and of no effect.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time, the
Trustee shall select the Notes to be redeemed 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, the Registrar and the
Paying Agent, if applicable, 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)
the CUSIP number of the Notes to be redeemed and that no representation is made
as to the correctness or accuracy of the CUSIP number, if any, listed in such
notice or printed on the Notes.
At the Company's request, the Trustee 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
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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.
At least one Business Day prior to the redemption date, the Company
shall deposit with the Trustee or with the Paying Agent (other than the Company
or any Affiliate of the Company) money in immediately available funds 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
and deliver to the Holder at the expense of the Company a new Note equal in
principal amount to the unredeemed portion of the Note surrendered.
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SECTION 3.07. OPTIONAL REDEMPTION.
(a) Except as set forth in clauses (b) and (c) of this Section 3.07,
the Company shall not have the option to redeem the Notes pursuant to this
Section 3.07 prior to August 1, 2002. 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 Liquidated Damages thereon, if any, to the applicable
redemption date, if redeemed during the twelve-month period beginning on August
1 of the years indicated below:
YEAR PERCENTAGE
---- ----------
2002 105.000%
2003 103.333%
2004 101.667%
2005 and thereafter 100.000%
(b) Notwithstanding the provisions of clause (a) of this Section
3.07, at any time prior to August 9, 2000, the Company may redeem up to an
aggregate of 33 1/3% of the original aggregate principal amount of the Notes at
a redemption price of 110% of the principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the redemption date,
with the net cash proceeds of one or more Equity Offerings; provided that in
each case, at least 66 2/3% of the original aggregate principal amount of the
Notes remain outstanding immediately after the occurrence of such redemption;
and provided, further, that such redemption shall occur within 45 days of the
date of the closing of each such Equity Offering.
(c) Notwithstanding any other provisions hereof, if any Gaming
Authority requires that a Holder or beneficial owner of Notes must be licensed,
qualified or found suitable under any applicable gaming law and such Holder or
beneficial owner fails to apply for a license, qualification or a finding of
suitability within 30 days after being requested to do so by the Gaming
Authority (or such lesser period that may be required by such Gaming Authority),
or if such Holder or such beneficial owner is not so licensed, qualified or
found suitable, the Company will have the right, at its option, (i) to require
such Holder or beneficial owner to dispose of such Holder's or beneficial
owner's Notes within 30 days of receipt of such notice of such finding by the
applicable Gaming Authority or such earlier date as may be ordered by such
Gaming Authority or (ii) to redeem the Notes of such Holder or beneficial owner
at the lesser of (a) the price at which such Holder or beneficial owner acquired
such Notes, without accrued interest or Liquidated Damages, if any, unless the
payment of such interest or Liquidated Damages, if any, is permitted by the
applicable Gaming Authority, in which case such interest and Liquidated Damages,
if any, shall be paid through
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the date of redemption, (b) the fair market value of such Notes on such
redemption date and (c) the principal amount of such Notes without accrued
interest or Liquidated Damages, if any, thereon, unless the payment of such
interest or Liquidated Damages, if any, is permitted by the applicable Gaming
Authority, in which case such interest and Liquidated Damages, if any, shall be
paid through the date of redemption. The Holder or beneficial owner of Notes
applying for a license, qualification or a finding of suitability must pay all
costs of the licensure or investigation for such qualification or finding of
suitability. The Company is not required to pay or reimburse any Holder or
beneficial owner of Notes who is required to apply for such license,
qualification or finding of suitability for the costs of the licensure or
investigation for such qualification or finding of suitability.
(d) 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. MANDATORY REDEMPTION.
Except as set forth under Sections 4.10 and 4.15 hereof, the Company
shall not be required to make mandatory redemption payments with respect to the
Notes.
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
(a) In the event that, pursuant to Section 4.10 hereof, the Company
shall be required to commence an Asset Sale Offer, it shall follow the
procedures specified below. The Asset Sale Offer shall remain open for a period
of 20 Business Days following its commencement and no longer, except to the
extent that a longer period is required by applicable law (the "Offer Period").
No later than five Business Days after the termination of the Offer Period (the
"Purchase Date"), the Company shall purchase the principal amount of Notes
required to be purchased pursuant to Section 4.10 hereof (the "Offer Amount")
or, if less than the Offer Amount has been tendered, all Notes validly tendered
in response to the Asset Sale Offer. Payment for any Notes so purchased shall be
made in the same manner as interest payments are made. If the Purchase Date is
on or after an interest record date and on or before the related interest
payment date, any accrued and unpaid interest shall be paid to the Person in
whose name a Note is registered at the close of business on such record date,
and no additional interest shall be payable to Holders who tender Notes pursuant
to the Asset Sale Offer.
(b) Upon the commencement of an Asset Sale Offer, the Company shall
send, by first class mail, a notice to the Trustee and each of the Holders, with
a copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale
Offer. The Asset Sale Offer shall be made to all Holders. The notice, which
shall govern the terms of the Asset Sale Offer, shall state (i) that the Asset
Sale Offer is being made pursuant to this Section 3.09 and Section 4.10 hereof
and the length of time the Asset Sale Offer shall remain open; (ii) the Offer
Amount, the purchase price and the Purchase Date; (iii) that any Note not
tendered or accepted for payment shall continue to accrue interest; (iv) that,
unless the Company defaults in making such payment, any Note accepted for
payment pursuant to the Asset Sale Offer shall cease to accrete or accrue
interest after the Purchase Date; (v) that Holders electing to have a Note
purchased pursuant to an Asset Sale Offer may elect only to have all of such
Note purchased and may not elect to have only a portion of such Note purchased;
(vi) that Holders electing to have a Note purchased pursuant to any Asset Sale
Offer shall be required to surrender the Note, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Note completed, or
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transfer by book-entry transfer, to the Company, a depositary, if appointed by
the Company, or a Paying Agent at the address specified in the notice at least
three days before the Purchase Date; (vii) that Holders shall be entitled to
withdraw their election if the Company, the depositary or the Paying Agent, as
the case may be, receives, not later than the expiration of the Offer Period, a
telegram, telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Note the Holder delivered for purchase and a
statement that such Holder is withdrawing his election to have such Note
purchased; (viii) that, if the aggregate principal amount of Notes surrendered
by Holders exceeds the Offer Amount, the Company shall select the Notes to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $1,000, or
integral multiples thereof, shall be purchased); and (ix) that Holders whose
Notes were purchased only in part shall be issued new Notes equal in principal
amount to the unpurchased portion of the Notes surrendered (or transferred by
book-entry transfer).
(c) On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale
Offer, or if less than the Offer Amount has been tendered, all Notes tendered,
and shall deliver to the Trustee an Officers' Certificate stating that such
Notes or portions thereof were accepted for payment by the Company in accordance
with the terms of this Section 3.09. The Company, the Depository or the Paying
Agent, as the case may be, shall promptly (but in any case not later than five
days after the Purchase Date) deliver to each tendering Holder an amount equal
to the purchase price of the Notes tendered by such Holder and accepted by the
Company for purchase, and the Company shall promptly issue a new Note, and the
Trustee, upon written order pursuant to an Officers' Certificate from the
Company shall authenticate and deliver such new Note to such Holder, in a
principal amount equal to any unpurchased portion of the Note surrendered. Any
Note not so accepted shall be promptly mailed or delivered by the Company to the
Holder thereof. The Company shall publicly announce the results of the Asset
Sale Offer on the Purchase Date.
(d) Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 shall be made pursuant to the provisions
of Sections 3.01 through 3.06 hereof.
ARTICLE IV
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 the Company or a Subsidiary thereof,
holds as of 12:00 p.m. New York City time on the due date money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due. The Company shall pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.
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The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
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.
SECTION 4.03. REPORTS.
Whether or not required by the rules and regulations of the SEC, so long
as any Notes are outstanding, the Company shall furnish to the Holders of Notes,
within 15 days after the Company is or would have been required to file each of
the following with the SEC, (i) all quarterly and annual financial information
that would be required to be contained in a filing with the SEC 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" that describes the financial condition and results of operations of
the Company and its consolidated Subsidiaries (showing in reasonable detail on
the face of the financial statements, in the footnotes thereto or in
Management's Discussion and Analysis of Financial Condition and Results of
Operations 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) and, with respect to
the annual information only, a report thereon by the Company's certified
independent accountants and (ii) all current reports that would be required to
be filed with the SEC on Form 8-K if the
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Company were required to file such reports. In addition, whether or not required
by the rules and regulations of the SEC, the Company shall file a copy of all
such information and reports with the SEC for public availability (unless the
SEC will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request. In addition, for so
long as any Notes remain outstanding, the Company and the Guarantors 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. Notwithstanding anything to the contrary
herein, the Trustee shall have no duty to review such documents for purposes of
determining compliance with any provisions of the Indenture.
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 complying with Section
314(a)(4) of the TIA and 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 and its
Subsidiaries have kept, observed, performed and fulfilled each and every
covenant contained in this Indenture and are 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 and/or its Subsidiaries 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 and/or its
Subsidiaries 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 IV or Article V hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) 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. The Trustee shall not be deemed to have knowledge of any
Default or Event of Default unless one of its Responsible Officers receives
written notice thereof from the Company or any of the Holders.
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(d) The Issuer shall, within 30 days of the date of this Indenture,
deliver to the Trustee an Officer's Certificate listing all entities
constituting Gaming Authorities as of such date, and shall further deliver to
the Trustee, for so long as any of the Notes are outstanding, written notice of
any changes from or additions to such list within 15 Business Days of becoming
aware of any such change or addition.
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 would not have a material adverse
effect on the Company and its Subsidiaries taken as a whole.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Company and each of the Guarantors covenants (to the extent that it
may lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each Guarantor (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. RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries, directly or indirectly, to: (i) declare or pay any dividend or
make any other payment or distribution on account of the Company's or any of its
Restricted Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation) or to the direct or
indirect holders of the Company's or any of its Restricted Subsidiaries' Equity
Interests in their capacity as such (other than dividends or distributions
payable in Equity Interests (other than Disqualified Stock) of the Company and
dividends and distributions payable solely to the Company or to a Restricted
Subsidiary); (ii) purchase, redeem or otherwise acquire or retire for value
(including without limitation, in connection with any merger or consolidation
involving the Company) any Equity Interests of the Company or any direct or
indirect parent of the Company; (iii) make any payment on or with respect to, or
purchase, redeem, defease or otherwise acquire or retire for value any
Indebtedness that is subordinated to the Notes, except a payment of interest or
principal at Stated Maturity; or (iv) make any Restricted Investment (all such
payments and other actions set forth in clauses (i) through (iv) above being
collectively referred to as "Restricted Payments"); unless, at the time of and
after giving effect to such Restricted Payment:
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(A) no Default or Event of Default shall have
occurred and be continuing or would occur as a consequence thereof;
(B) the Company would, at the time of such
Restricted Payment and after giving pro forma effect thereto as if such
Restricted Payment had been made at the beginning of the applicable four-quarter
period, have been permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Consolidated Coverage Ratio test set forth in Section 4.09; and
(C) such Restricted Payment, together with the
aggregate amount of all other Restricted Payments made by the Company and its
Restricted Subsidiaries after the date of this Indenture (excluding Restricted
Payments permitted by clauses (ii), (iii) and (viii) of the next succeeding
paragraph and excluding 50% of Restricted Payments made to holders of Equity
Interests not held by the Company or any of its Restricted Subsidiaries to the
extent permitted by clause (iv) of the next succeeding paragraph), is less than
the sum of (i) 50% of the Consolidated Net Income of the Company for the period
(taken as one accounting period) from the date of this Indenture to the end of
the Company's most recently ended fiscal quarter for which internal financial
statements are available at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit, less 100% of such
deficit), plus (ii) 100% of the aggregate net cash proceeds, or the GAAP
purchase accounting valuation of assets or property (determined on the date of
issuance or conversion), received by the Company from the issue or sale since
the date of this Indenture of Equity Interests of the Company (other than
Disqualified Stock) or of Disqualified Stock or debt securities of the Company
that have been converted into or exchanged for such Equity Interests (other than
Equity Interests, Disqualified Stock or convertible debt securities sold to a
Subsidiary of the Company and other than Disqualified Stock or convertible debt
securities that have been converted into Disqualified Stock), plus (iii) the
amount by which Indebtedness or Disqualified Stock of the Company is reduced on
the Company's balance sheet upon the conversion or exchange (other than by a
Restricted Subsidiary of the Company) subsequent to the date of this Indenture
of any Indebtedness or Disqualified Stock of the Company convertible or
exchangeable for Capital Stock of the Company (less the amount of any cash, or
other property, distributed by the Company upon such conversion or exchange),
plus (iv) the amount equal to the net reduction in Investments (other than
Permitted Investments) made by the Company or any of its Restricted Subsidiaries
in any Person resulting from (a) dividends or distributions on or repurchases or
redemptions of such Investments by such Person, proceeds realized upon the sale
of such Investment to an unaffiliated purchaser, reductions in amounts
guaranteed, and repayments of loans or advances or other transfers of assets by
such Person to the Company or any Restricted Subsidiary of the Company or (b)
the redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries
(valued as provided in the second succeeding paragraph); provided, however, that
no amount shall be included under this clause (iv) to the extent it is already
included in Consolidated Net Income.
The foregoing provisions will not prohibit (i) the payment of any
dividend within 60 days after the date of declaration thereof if, at said date
of declaration, such payment would have complied with the provisions of this
Indenture; (ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any Indebtedness that is subordinated to the Notes or Equity
Interests of the Company out of the Net Cash Proceeds of the substantially
concurrent sale
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(other than to a Subsidiary of the Company) of other Equity Interests of the
Company (other than any Disqualified Stock) issued after the date of this
Indenture or any exchange of Equity Interests of the Company (other than
Disqualified Stock) issued after the date of this Indenture for any Indebtedness
that is subordinated to the Notes or Equity Interests of the Company; provided
that the amount of any such Net Cash Proceeds that are utilized for any such
redemption, repurchase, retirement, defeasance or other acquisition shall be
excluded from clause (c) (ii) of the preceding paragraph; (iii) the defeasance,
redemption, repurchase or other acquisition of Indebtedness that is subordinated
to the Notes with the Net Cash Proceeds from an incurrence of or exchange for
Permitted Refinancing Indebtedness; (iv) the payment of any dividend or
distribution on account of Equity Interests by a Restricted Subsidiary of the
Company to the holders of its respective Equity Interests on a pro rata basis;
(v) the repurchase, redemption or other acquisition or retirement for value of
any Equity Interests of the Company or any Subsidiary of the Company held by
employees of the Company (or any of its Subsidiaries) pursuant to any stock
ownership or option plan in effect from time to time; provided that the
aggregate price paid for all such repurchased, redeemed, acquired or retired
Equity Interests shall not exceed $1.0 million in any twelve-month period; (vi)
loans and advances to officers and directors of the Company or any of its
Restricted Subsidiaries made in the ordinary course of business the aggregate of
which shall not exceed $1.5 million outstanding at any time; (vii) the
redemption by the Company or any Restricted Subsidiary of any subordinated debt
or Equity Interest if (A) counsel to the Company delivers an opinion that
failure to so redeem would subject the Company to a materially adverse action by
a Gaming Authority (or, if applicable, a failure so to act with a materially
adverse consequence to the Company) or is required to preserve a Gaming License
and (B) the Company determines (as evidenced by a resolution of the Board of
Directors of the Company delivered to the Trustee) that such adverse action or
failure so to act would be likely to have a material adverse effect on the
Company; (viii) the redemption of all outstanding shares of the Company's 15%
Non-Voting Senior Pay-In-Kind Special Stock, Series B, within 60 days following
the date of this Indenture; and (ix) payments that would otherwise be Restricted
Payments in an aggregate amount not to exceed $7.5 million.
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if such designation would not cause a Default. For
purposes of making such determination, all outstanding Investments by the
Company and its Restricted Subsidiaries in the Subsidiary so designated will be
deemed to be Restricted Payments at the time of such designation and will reduce
the amount available for Restricted Payments under the first paragraph of this
covenant. All such outstanding Investments will be deemed to constitute
Investments in an amount equal to the fair market value of such Investments at
the time of such designation. Such designation will be permitted only if such
Restricted Payment would be permitted at such time and if such Restricted
Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. Upon a
redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary, the
Company shall be deemed to continue to have a permanent "Investment" in an
Unrestricted Subsidiary in an amount (if positive) equal to (x) the Company's
"Investment" in such Unrestricted Subsidiary at the time of such redesignation
less (y) the portion (proportionate to the Company's equity interest in such
Unrestricted Subsidiary) of the fair market value of the net assets of such
Unrestricted Subsidiary at the time that such Subsidiary is so redesignated a
Restricted Subsidiary.
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The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any non-cash Restricted Payment shall be determined by
the Board of Directors whose resolution with respect thereto shall be delivered
to the Trustee. Not later than ten business days following the end of each
fiscal quarter, the Company shall deliver to the Trustee an Officers'
Certificate identifying each Restricted Payment made by the Company during such
fiscal quarter and stating that each such Restricted Payment is permitted and
setting forth the basis upon which the calculations required by this Section
4.07 were computed.
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction on the
ability of any Subsidiary to (i)(a) pay dividends or make any other
distributions to the Company or any of its Restricted Subsidiaries (1) on its
Capital Stock or (2) with respect to any other interest or participation in, or
measured by, its profits, or (b) pay any indebtedness owed to the Company or any
of its Restricted Subsidiaries, (ii) make loans or advances to the Company or
any of its Restricted Subsidiaries or (iii) transfer any of its properties or
assets to the Company or any of its Restricted Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of (a) the New Credit
Facility as in effect on the date of this Indenture and any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings thereof, provided that the dividend and other
payment restrictions contained therein are no more restrictive than those
contained in the New Credit Facility as in effect on the date of this Indenture,
(b) any agreement in effect at or entered into on the date of this Indenture,
(c) this Indenture and the Notes, (d) any instrument or agreement of a Person
acquired by the Company or any of its Restricted Subsidiaries as in effect at
the time of such acquisition (except to the extent such instrument or agreement
was entered into in connection with or in contemplation of such acquisition),
which encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the property or
assets of the Person, so acquired, provided that, in the case of Indebtedness,
such Indebtedness was permitted by the terms of this Indenture to be incurred,
(e) by reason of customary non-assignment provisions in leases entered into in
the ordinary course of business and consistent with past practices, (f) purchase
money obligations for property acquired in the ordinary course of business that
impose restrictions of the nature described in clause (iii) above on the
property so acquired, (g) Permitted Refinancing Indebtedness, provided that the
restrictions contained in the agreements governing such Permitted Refinancing
Indebtedness are no more restrictive than those contained in the agreements
governing the Indebtedness being refinanced, (h) restrictions contained in
security agreements or mortgages to the extent such restrictions restrict the
transfer of the property or assets subject to such security agreements or
mortgages, (i) any restriction with respect to a Restricted Subsidiary imposed
pursuant to an agreement entered into for the sale or disposition of all or
substantially all of the capital stock or assets of such Restricted Subsidiary
pending the closing of such sale or disposition, (j) any restriction in any
agreement that is not more restrictive than the restrictions under the terms of
the New Credit
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Facility as in effect on the date of this Indenture and (k) in the case of
clause (iii) above, encumbrances and restrictions in the ordinary course of
business that do not individually or in the aggregate detract from the value of
property or assets of the Company or a Restricted Subsidiary in a material
manner.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt) and that the Company and the Guarantors shall not issue any Disqualified
Stock and the Company shall not permit any of its Restricted Subsidiaries which
are not Guarantors to issue any shares of preferred stock; provided, however,
that the Company and any Guarantor may incur Indebtedness (including Acquired
Debt and Indebtedness under the New Credit Facility) or issue shares of
Disqualified Stock if the Consolidated Coverage Ratio for the Company's most
recently ended four full fiscal quarters for which internal financial statements
are available immediately preceding the date on which such additional
Indebtedness is incurred or such Disqualified Stock is issued would have been at
least 2.0 to 1, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred, or the Disqualified Stock had been issued, as the case may
be, and such net proceeds been applied, at the beginning of such four-quarter
period.
The provisions of the first paragraph of this Section 4.09 will not
apply to the incurrence of any of the following items of Indebtedness
(collectively, "Permitted Debt"):
(i) the incurrence by the Company or any of its Restricted
Subsidiaries of term Indebtedness under the New Credit Facility; provided that
the aggregate principal amount of all term Indebtedness outstanding under the
New Credit Facility after giving effect to each such incurrence does not exceed
an amount equal to $115.0 million plus an additional $25.0 million of deferred
term Indebtedness which shall be utilized to effect the Rainbow Royalty Buyout
and to repurchase the Rainbow Note Payable, less the aggregate amount of all
principal repayments actually made from time to time after the date of this
Indenture with respect to such Indebtedness (other than principal payments made
from any permitted refinancings thereof);
(ii) the incurrence by the Company or any of its Restricted
Subsidiaries of revolving credit Indebtedness (inclusive of letters of credit,
which shall be deemed to have a principal amount equal to the maximum potential
liability of the Company and its Restricted Subsidiaries thereunder) under the
New Credit Facility; provided that the aggregate principal amount of all
revolving credit Indebtedness outstanding under the New Credit Facility after
giving effect to such incurrence, including all Permitted Refinancing
Indebtedness incurred to refund, refinance or replace any other Indebtedness
incurred pursuant to this clause (ii), does not exceed the greater of (x) $90.0
million and (y) the sum of (A) 75% of the book value of the accounts receivable
of the Company and its Restricted Subsidiaries and (B) 40% of the book value of
the inventory of the Company and its Restricted Subsidiaries;
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(iii) the incurrence by the Company and its Restricted
Subsidiaries of the Existing Indebtedness;
(iv) the incurrence by the Company and the Guarantors of
Indebtedness represented by the Notes;
(v) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage
financings or purchase money obligations, in each case incurred for the purpose
of financing all or any part of the purchase price or cost of construction or
improvement of property, plant or equipment used in the business of the Company
or such Restricted Subsidiary; provided that the aggregate principal amount of
such Indebtedness that is not Non-Recourse Debt (except as to the property,
plant or equipment being financed) does not exceed $20.0 million at any time
outstanding (including any Permitted Refinancing Indebtedness relating thereto);
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net
proceeds of which are used to refund, refinance or replace Indebtedness or
Disqualified Stock that was permitted by this Indenture to be incurred (other
than pursuant to clause (i) or (ii) of this paragraph);
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and any
of its Restricted Subsidiaries; provided, however, that (A) if the Company is
the obligor on such Indebtedness and the payee is not a Guarantor, such
Indebtedness is expressly subordinated to the prior payment in full in cash of
all Obligations with respect to the Notes and (B)(1) any subsequent issuance or
transfer of Equity Interests that results in any such Indebtedness being held by
a Person other than the Company or a Restricted Subsidiary or (2) any sale or
other transfer of any such Indebtedness to a Person that is not either the
Company or a Restricted Subsidiary shall be deemed, in each case, to constitute
an incurrence of such Indebtedness by the Company or such Restricted Subsidiary,
as the case may be;
(viii) the incurrence by the Company of Interest Swap and
Hedging Obligations;
(ix) the incurrence by the Company or any of its Restricted
Subsidiaries of (A) Indebtedness in respect of performance, completion,
guarantee, surety or similar bonds provided by the Company or any Restricted
Subsidiary in the ordinary course of business, or (B) Indebtedness in respect of
any bond or surety obligation 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 to the extent required by applicable law and consistent
in character and amount with customary industry practice;
(x) the incurrence by the Company or any of its Restricted
Subsidiaries of reimbursement obligations with respect to letters of credit in
respect of workers' compensation claims consistent in character and amount with
customary industry practice;
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(xi) the guarantee by the Company or any of its Restricted
Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the
Company that was permitted to be incurred by another provision of this covenant;
(xii) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by liabilities for jackpots payable for
progressive games in a manner consistent with industry practice;
(xiii) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness (which may, but need not, be incurred
under the New Credit Facility) in an aggregate principal amount (or accreted
value, as applicable) not to exceed $20.0 million at any time outstanding
(including any Permitted Refinancing Indebtedness relating thereto).
For purposes of determining compliance with this covenant, in the event
that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (xiii) above or is
entitled to be incurred pursuant to the first paragraph of this covenant, the
Company shall, in its sole discretion, classify such item of Indebtedness in any
manner that complies with this covenant and such item of Indebtedness will be
treated as having been incurred pursuant to only one of such clauses or pursuant
to the first paragraph hereof. Neither the accrual of interest nor the accretion
of accreted value will be deemed to be an incurrence of Indebtedness for
purposes of this covenant. The maximum amount of Indebtedness that the Company
or a Restricted Subsidiary may incur pursuant to this covenant shall not be
deemed to be exceeded with respect to any outstanding Indebtedness due solely to
the result of the fluctuations in the exchange rates of currencies.
SECTION 4.10. ASSET SALES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) the Company (or the
Restricted Subsidiary, as the case may be) receives consideration at the time of
such Asset Sale at least equal to the fair market value (evidenced by a
resolution of the Board of Directors set forth in an Officers' Certificate
delivered to the Trustee) of the assets or Equity Interests issued or sold or
otherwise disposed of and (ii) at least 75% of the consideration therefor
received by the Company or such Restricted Subsidiary is in the form of cash or
Cash Equivalents; provided that the amount of (x) any liabilities (as shown on
the Company's or such Restricted Subsidiary's most recent balance sheet) or
Indebtedness of the Company or any Restricted Subsidiary (other than contingent
liabilities and liabilities that are by their terms subordinated to the Notes or
any guarantee thereof) that are assumed by the transferee of any such assets
pursuant to a customary novation agreement that releases the Company or such
Restricted Subsidiary from further liability and (y) any securities, notes or
other obligations received by the Company or any such Restricted Subsidiary from
such transferee that are promptly converted by the Company or such Restricted
Subsidiary into cash (to the extent of the cash received), shall be deemed to be
cash for purposes of this paragraph.
Within 360 days after the receipt of any Net Available Cash from any
Asset Sale, the Company or any Restricted Subsidiary shall apply such Net
Available Cash, at its option, (a)
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to repay Senior Debt (and to correspondingly reduce commitments with respect
thereto in the case of revolving borrowings) of the Company or any Restricted
Subsidiary or, in the case of any Asset Sale involving assets of any Restricted
Subsidiary that is not a Guarantor, to repay any Indebtedness of such Restricted
Subsidiary, or (b) to invest in assets and property (other than notes, bonds,
obligations and securities) which in the good faith judgment of the Board of
Directors of the Company will constitute or be a part of a Gaming Business
immediately following such transaction. Pending the final application of any
such Net Available Cash, the Company may temporarily reduce Senior Debt or
otherwise invest such Net Available Cash in any manner that is not prohibited by
this Indenture. Notwithstanding the foregoing provisions of this paragraph, the
Company and its Restricted Subsidiaries shall not be required to apply any Net
Available Cash in accordance with this paragraph except to the extent that the
aggregate Net Available Cash from all Asset Sales which is not applied in
accordance with this paragraph exceeds $5.0 million. Any Net Available Cash
(other than Net Available Cash not so applied pursuant to the preceding
sentence) from Asset Sales that is not applied or invested as provided in the
first sentence of this paragraph will be deemed to constitute "Excess Proceeds."
When the aggregate amount of Excess Proceeds exceeds $10.0 million, the Company
will be required to make an offer to all Holders of Notes (an "Asset Sale
Offer") to purchase the maximum principal amount of Notes that may be purchased
out of the Excess Proceeds, at an offer price in cash in an amount equal to 100%
of the principal amount thereof plus accrued and unpaid interest and Liquidated
Damages thereon, if any, to the date of purchase, in accordance with the
procedures set forth in this Indenture. To the extent that the aggregate amount
of Notes tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company and any Restricted Subsidiary may use any remaining Excess
Proceeds for general corporate purposes. If the aggregate principal amount of
Notes surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes to be purchased on a pro rata basis. Upon
completion of such offer to purchase, the amount of Excess Proceeds shall be
reset at zero.
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, enter into any transaction (including the purchase, sale, lease
or exchange of property or the rendering of services) with any Affiliate (each
of the foregoing, an "Affiliate Transaction"), unless (i) such Affiliate
Transaction is on terms that are no less favorable to the Company or the
relevant Restricted Subsidiary than those that would have been obtained in a
comparable transaction by the Company or such Restricted Subsidiary with an
unrelated Person and (ii) the Company delivers to the Trustee (a) with respect
to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $1.0 million, a resolution of the
Board of Directors set forth in an Officers' Certificate certifying that such
Affiliate Transaction complies with clause (i) above and that such Affiliate
Transaction has been approved by a majority of the disinterested members of the
Board of Directors and (b) with respect to any Affiliate Transaction or series
of related Affiliate Transactions involving aggregate consideration in excess of
$10.0 million, an opinion as to the fairness to the Company of such Affiliate
Transaction from a financial point of view issued by an accounting, appraisal or
investment banking firm of national standing; provided that (w) any Exempt
Affiliate Transaction, (x) any compensation or indemnity arrangement with any
officer or
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director of the Company (pertaining to his or her duties as an officer or
director) entered into in the ordinary course of business, (y) transactions
between or among the Company and/or its Restricted Subsidiaries and (z)
Restricted Payments that are permitted by the provisions of Section 4.07 of this
Indenture, in each case, shall not be deemed Affiliate Transactions.
SECTION 4.12. LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK OF WHOLLY OWNED
SUBSIDIARIES.
The Company (i) shall not, and shall not permit any Wholly Owned
Restricted Subsidiary of the Company or RCVP, VSI, SVS or VDSI to, transfer,
convey, sell, lease or otherwise dispose of any Capital Stock of any Wholly
Owned Restricted Subsidiary of the Company, RCVP, VSI, SVS or VDSI to any Person
(other than the Company or a Wholly Owned Restricted Subsidiary of the Company),
unless (a) such transfer, conveyance, sale, lease or other disposition is of all
the Capital Stock of such Wholly Owned Restricted Subsidiary, RCVP, VSI, SVS or
VDSI and (b) the Net Available Cash from such transfer, conveyance, sale, lease
or other disposition are applied in accordance with Section 4.10 hereof and (ii)
shall not permit any Wholly Owned Restricted Subsidiary of the Company or RCVP,
VSI, SVS or VDSI to issue any of its Equity Interests (other than, if necessary,
shares of its Capital Stock constituting directors' qualifying shares) to any
Person other than to the Company or a Wholly Owned Restricted Subsidiary of the
Company; provided that the Company may sell or cause to be issued to a third
party Equity Interests of Alliance Automaten GmbH & Co, KG or any other Wholly
Owned Restricted Subsidiary into which the Company consolidates or transfers its
Bally Xxxxx operations in advance of such offering of Equity Interests (provided
that the Equity Interests sold to a third party represent no more than 20% of
the Equity Interests of such entity outstanding immediately after such sale) if
such sale complies in all respects with the provisions of Section 4.10 hereof.
SECTION 4.13. LINE OF BUSINESS.
The Company shall not, and shall not permit any Restricted Subsidiary
to, engage in any business other than a Gaming Business, except to such extent
as would not be material to the Company and its Subsidiaries taken as a whole.
SECTION 4.14. CORPORATE EXISTENCE.
Subject to Article V 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, and the corporate, partnership or other existence of each
of its Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of the Company or any such
Subsidiary and (ii) the rights (charter and statutory), licenses and franchises
of the Company and its 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 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 of the Notes.
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SECTION 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Holder of Notes
shall have the right to require the Company to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of such Holder's Notes pursuant to
the offer described below (the "Change of Control Offer") at an offer price in
cash equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of purchase
(the "Change of Control Payment"). Subject to compliance with paragraph (b)
below, within 10 days following any Change of Control, the Company shall mail a
notice to each Holder stating: (1) that the Change of Control Offer is being
made pursuant to this Section 4.15 and that all Notes validly tendered will be
accepted for payment; (2) the purchase price and the purchase date, which shall
be no earlier than 30 days and no later than 60 business days from the date such
notice is mailed (the "Change of Control Payment Date"); (3) that any Note not
repurchased will continue to accrue interest; (4) that, unless the Company
defaults in the payment of the Change of Control Payment, all Notes accepted for
payment pursuant to the Change of Control Offer shall cease to accrue interest
after the Change of Control Payment Date; (5) that Holders electing to have any
Notes purchased pursuant to a Change of Control Offer will be required to
surrender the Notes, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Notes completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the third Business Day
preceding the Change of Control Payment Date; (6) that Holders will be entitled
to withdraw their election if the Paying Agent receives, not later than the
close of business on the second Business Day preceding the Change of Control
Payment Date, a telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of Notes delivered for purchase,
and a statement that such Holder is withdrawing his election to have the Notes
purchased; and (7) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered, which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof.
(b) If the terms of the New Credit Facility prohibit the Company
from making the foregoing offer upon a Change of Control or from purchasing any
Notes pursuant thereto, prior to the mailing of the notice to Holders described
in the preceding paragraph, but in any event within 30 days following any Change
of Control, the Company covenants to (i) repay in full all indebtedness
outstanding under the New Credit Facility or offer to repay in full all such
indebtedness and repay the indebtedness of each lender who has accepted such
offer or (ii) obtain the requisite consent under the New Credit Facility to
permit the purchase of the Notes as described above. The Company must first
comply with the covenant described in the preceding sentence before it will be
required to purchase Notes in the event of a Change of Control; provided,
however, that the Company's failure to comply with the covenant described in the
preceding sentence or to make a Change of Control Offer because of any such
failure shall constitute a Default described in clause (d) of Section 6.01 (and
not under clause (b) or (c) thereof). The Company shall comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Notes as a result of a
Change of Control.
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(c) On the Change of Control Payment Date, the Company shall, to the
extent lawful, (1) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (2) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all Notes
or portions thereof so tendered and (3) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof being purchased by the
Company. The Paying Agent will promptly mail to each Holder of Notes so tendered
the Change of Control Payment for such Notes, and the Trustee, upon receipt of
an authentication order in the form of an Officers' Certificate from the
Company, will promptly authenticate and deliver (or cause to be transferred by
book entry) to each Holder a new Note equal in principal amount to the
unpurchased portion of the Notes surrendered, if any; provided that each such
new Note will be in a principal amount of $1,000 or an integral multiple
thereof. The Company shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date.
(d) The Company shall not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Indenture applicable to a Change of Control Offer
made by the Company and purchases all Notes validly tendered and not withdrawn
under such Change of Control Offer.
SECTION 4.16. NO SENIOR SUBORDINATED DEBT.
Notwithstanding the provisions of Section 4.09 hereof, the Company shall
not, and shall not permit any Guarantor to, incur (i) any Indebtedness if such
Indebtedness is expressly subordinate or junior in right of payment to any
Senior Debt of the Company or such Guarantor and senior in any respect of right
of payment to the Notes, or (ii) any Secured Indebtedness (other than
Indebtedness described under clause (xii) of Section 4.09 hereof) that is not
Senior Debt unless contemporaneously therewith effective provision is made to
secure the Notes or the relevant Guarantee, as applicable, equally and ratably
with such Secured Debt for so long as such Secured Debt is secured by a Lien.
SECTION 4.17. LIMITATION ON ISSUANCES OF GUARANTEES OF INDEBTEDNESS.
Company shall not permit any domestic Restricted Subsidiary that is not
a Guarantor, directly or indirectly, to Guarantee or pledge any assets to secure
the payment of any other Indebtedness of the Company unless such Subsidiary
simultaneously executes and delivers a supplemental indenture to the Indenture
providing for the Subsidiary Guarantee of the payment of the Notes by such
Restricted Subsidiary, which Subsidiary Guarantee shall be senior to or pari
passu with such Restricted Subsidiary's Guarantee of or pledge to secure such
other Indebtedness (except in the case of Guarantees issued in respect of Senior
Debt, which shall be senior to any Subsidiary Guarantee of the payment of the
Notes). Notwithstanding the foregoing, (i) RCVP shall not be required to issue
such a Guarantee as a result of RCVP providing a Guarantee of the Company's
Obligations under the New Credit Facility or in respect of any similar Credit
Facility and (ii) any Guarantee of the Notes by a Restricted Subsidiary pursuant
to this covenant shall provide by its terms that it shall be automatically and
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unconditionally released and discharged upon any sale, exchange or transfer, to
any Person not an Affiliate of the Company, of all of the Company's stock in, or
all or substantially all the assets of, such Subsidiary, which sale, exchange or
transfer is made in compliance with the applicable provisions of the Indenture.
SECTION 4.18. REDEMPTION OF SERIES B PREFERRED STOCK.
On the date of this Indenture, the Company shall issue a notice of
redemption pursuant to the requirements of the certificate of designation
governing the rights of the Company's Series B Preferred Stock and, as soon as
practicable after the first day that redemption is permitted under such
certificate of designation, and in any event within 60 days following the giving
of such notice, shall redeem all of the Company's outstanding Series B Preferred
Stock.
SECTION 4.19. DESIGNATION OF AN UNRESTRICTED SUBSIDIARY AS A RESTRICTED
SUBSIDIARY.
The Company may designate any Unrestricted Subsidiary as a Restricted
Subsidiary, provided that (i) at the time of such designation, after giving pro
forma effect thereto as if such designation had occurred and as if any
Non-Recourse Debt previously incurred by such Unrestricted Subsidiary had been
incurred at the beginning of the Company's most recently completed four fiscal
quarters for which internal financial statements are available preceding the
date of such designation, (a) the Company would be permitted to incur $1.00 of
additional Indebtedness pursuant to the Consolidated Coverage Ratio test set
forth in Section 4.09, or (b) the Consolidated Coverage Ratio of the Company is
increased by such designation; (ii) except if not required under Section 11.10,
such newly designated Restricted Subsidiary executes and delivers a Subsidiary
Guarantee and an opinion of counsel relating to the enforceability and
authorization of such Subsidiary Guarantee as required by this Indenture; and
(iii) no Default has occurred and is continuing immediately preceding such
designation and after giving pro forma effect thereto.
SECTION 4.20. DESIGNATION OF A SUBSIDIARY AS AN UNRESTRICTED SUBSIDIARY.
The Company may designate any newly-organized Subsidiary as an
Unrestricted Subsidiary at the time of its formation, provided that such
Subsidiary has total assets of $1,000 or less at the time of such designation.
The Company may designate any Restricted Subsidiary as an Unrestricted
Subsidiary (at which time such Restricted Subsidiary's Guarantee will
terminate), provided that, (i) at the time of such designation after giving pro
forma effect thereto as if such designation had occurred at the beginning of the
Company's most recently completed four fiscal quarters for which internal
financial statements are available preceding the date of such designation, (A)
the Company would be permitted to incur $1.00 of additional Indebtedness
pursuant to the Consolidated Coverage Ratio test set forth in Section 4.09 and
(B) if the Restricted Subsidiary is a Key Subsidiary, the Consolidated Coverage
Ratio is not less than 80% of the Consolidated Coverage Ratio for such period
without giving pro forma effect to such designation; and (ii) no Default has
occurred and is continuing immediately preceding such designation and after
giving pro forma effect thereto, including the requirement set forth
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in Section 4.07 that any Investment in such Restricted Subsidiary be
deemed to be a Restricted Payment made on the date of such designation.
SECTION 4.21. LIMITATION ON STATUS AS INVESTMENT COMPANY.
The Company and its Subsidiaries shall take all actions (and refrain
from taking all actions) necessary to ensure that neither the Company nor any of
its Subsidiaries will be required to register as an "investment company" (as
that term is defined in the Investment Company Act of 1940, as amended), or will
otherwise become subject to regulation under the Investment Company Act.
ARTICLE V
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company shall not consolidate or merge with or into (whether or not
the Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions, to another corporation, Person or
entity unless (i) the Company is the surviving corporation or the entity or the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia; (ii) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or Person to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made assumes all the obligations of the Company under the Notes
and this Indenture pursuant to a supplemental indenture in a form reasonably
satisfactory to the Trustee; (iii) immediately after such transaction no Default
or Event of Default exists; (iv) except in the case of a merger of the Company
with or into a Wholly Owned Restricted Subsidiary of the Company, the Company or
the entity or Person formed by or surviving any such consolidation or merger (if
other than the Company), or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made (A) will have Consolidated
Net Worth immediately after the transaction equal to or greater than the
Consolidated Net Worth of the Company immediately preceding the transaction and
(B) will, at the time of such transaction and after giving pro forma effect
thereto as if such transaction had occurred at the beginning of the applicable
four-quarter period, be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Consolidated Coverage Ratio test set forth in
Section 4.09 hereof; and (v) any such transaction would not require the Holders
of Notes generally to obtain a Gaming License or be qualified under the laws of
any applicable gaming jurisdiction in the absence of such transactions, provided
that a transaction involving a jurisdiction that does not require the licensing
or qualification of any of the Holders of the Notes, but reserves the
discretionary right to require the licensing or qualification of any Holder of
Notes, shall not be prohibited pursuant to the terms of this clause (v).
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On or prior to the consummation of a proposed transaction contemplated
by Section 5.01, the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that (a) such consolidation,
merger, sale, assignment, conveyance, transfer, lease or disposition and such
supplemental indenture executed in connection therewith comply with this
Indenture and (b) such transaction will not impair the rights and powers of the
Trustee and Holders of the Notes thereunder. The Trustee shall be entitled to
conclusively rely upon such Officers' Certificate and Opinion of Counsel.
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 Person
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 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 or
substantially all of the Company's properties or assets that meets the
requirements of Section 5.01 hereof.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(a) the Company defaults in the payment when due of interest on, or
Liquidated Damages with respect to, the Notes and such default continues for a
period of 30 days (whether or not prohibited by the subordination provisions of
this Indenture);
(b) the Company defaults 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 or otherwise (whether or not prohibited by the subordination
provisions of the Indenture);
(c) the Company fails to comply with the repurchase provisions set
forth in Section 4.10 hereof;
(d) the Company fails to observe or perform any other covenant,
representation, warranty or other agreement in this Indenture or the Notes for
60 days after notice in writing to the Company by the Trustee, or to the Company
and the Trustee by the
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Holders of at least 25% in principal amount of the Notes then outstanding,
specifying such default and requiring that it be remedied;
(e) a default occurs under any mortgage, indenture or instrument
under which there is issued or by which there is secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries), whether such Indebtedness or guarantee now exists, or
is created after the date of this Indenture, which default results in the
acceleration of such Indebtedness prior to its express maturity and, in each
case, the principal amount of such Indebtedness, together with the principal
amount of any other such Indebtedness the maturity of which has been so
accelerated, aggregates $10 million or more;
(f) the Company or any of its Significant Subsidiaries fails to pay
final judgments aggregating in excess of $10.0 million, which judgments are not
paid, discharged or stayed for a period of 60 days and, in the event such
judgments are covered by insurance, an enforcement proceeding has been commenced
by any creditor upon any of such judgments which is not promptly stayed;
(g) the Company or any of its Significant 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 or (iv) makes a general assignment for the
benefit of its creditors;
(h) 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 Significant Subsidiaries in an involuntary case; (ii) appoints a Custodian
of the Company or any of its Significant Subsidiaries or for all or
substantially all of the property of the Company or any of its Significant
Subsidiaries; or (iii) orders the liquidation of the Company or any of its
Significant Subsidiaries; and the order or decree remains unstayed and in effect
for 60 consecutive days;
(i) except as permitted by this Indenture, any Subsidiary Guarantee
shall be held in any judicial proceeding to be unenforceable or invalid or shall
cease for any reason to be in full force and effect or any Guarantor, or any
Person acting on behalf of any Guarantor, shall deny or disaffirm its
obligations under its Subsidiary Guarantee; or
(j) any Gaming License of the Company or any of its Restricted
Subsidiaries is revoked, terminated or suspended or otherwise ceases to be
effective, resulting in the cessation or suspension, for a period of more than
90 days, of operations of any portion of the business of the Company or any of
its Restricted Subsidiaries that accounted for more than 10% of the Consolidated
Cash Flow of the Company for the period of the four consecutive fiscal quarters
most recently ended for which internal financial statements are available,
provided that any voluntary relinquishment of a Gaming License if such
relinquishment is, in the reasonable, good faith judgment of the Board of
Directors of the Company, evidenced by a resolution of such Board, both
desirable in the conduct of the business of the Company and
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its Restricted Subsidiaries, taken as a whole, and not disadvantageous in any
material respect to the Holders of the Notes, shall not constitute an Event of
Default hereunder.
SECTION 6.02. ACCELERATION.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes, by
notice in writing to the Company (and to the Trustee if such notice is given by
such Holders), may, and the Trustee at the request of such Holders shall,
declare all unpaid principal of, premium, if any, Liquidated Damages, if any,
and accrued interest on all Notes to be due and payable. Upon any such
declaration, such principal, premium, Liquidated Damages and interest on the
Notes shall become due and payable immediately; provided that if upon such
declaration there are any amounts outstanding under the New Credit Facility and
the amounts thereunder have not been accelerated, such principal and interest
shall be due and payable upon the earlier of such time such amounts are
accelerated or five Business Days after the receipt by the Company and the
Representative under the New Credit Facility of such declaration.
Notwithstanding the foregoing, if an Event of Default specified in clause (g) or
(h) of Section 6.01 hereof occurs with respect to the Company, 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 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.
Subject to Section 6.08, Holders of not less than a majority in
aggregate principal amount of the then outstanding Notes by written notice to
the Trustee may on behalf of the Holders of all of the Notes waive an existing
Default or Event of Default and its consequences hereunder, except a continuing
Default or Event of Default in the payment of the principal of, premium and
Liquidated Damages, if any, or interest on, the Notes. 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 Event of Default
or impair any right consequent thereon. In the
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case of any such waiver, the Company, the Trustee and the Holders of all the
Notes shall be restored to their former positions and rights hereunder,
respectively.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding Notes
may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
(i) conflicts with law or this Indenture, (ii) the Trustee determines may be
unduly prejudicial to the rights of other Holders of Notes or (iii) may involve
the Trustee in personal liability.
SECTION 6.06. LIMITATION ON SUITS.
No Holder of any Note shall have any right to order or direct the
Trustee to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder unless:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy in
respect of such Event of Default in its own name as Trustee hereunder;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense to be incurred or reasonably probable to be
incurred in compliance with such order or direction;
(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 principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of
another Holder of a Note or to obtain a preference or priority over another
Holder of a Note, except in the manner herein provided and for the equal and
ratable benefit of all the Holders.
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed in the Note, 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.
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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 Liquidated Damages, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money,
securities or other property payable or deliverable upon conversion or exchange
of the Notes or upon 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 VI, it shall
pay out the money in the following order: first, to the Trustee, its agents and
attorneys for amounts due under Section 7.07 hereof, including payment of all
reasonable compensation, expense and liabilities incurred, and all reasonable
advances, if any, made, by the Trustee and the costs and expenses of collection;
second, to the holders of Senior Debt to the extent required by Article X;
third, to Holders of Notes for amounts due and unpaid on the Notes for
principal, premium and Liquidated Damages, if any, and interest, ratably,
without preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium and Liquidated Damages, if any and
interest, respectively; and fourth, to the Company or to such party as a
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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.
All parties to this Indenture agree, and each Holder of any Note by its
acceptance thereof shall be deemed to have agreed, that 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 VII
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 man would exercise or use under the circumstances in the conduct of his
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 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.
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(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to the
provisions of this Section 7.01.
(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 or Holders 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 otherwise 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, which shall conform
to Sections 12.04 and 12.05. 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 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 or the TIA.
(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.
(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.
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(g) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may
see fit.
(h) The Trustee shall have no duty to inquire as to the performance
with the Company's covenants in Article IV hereof or as to the performance by
any Agent of its duties hereunder. In addition, the Trustee shall not be deemed
to have knowledge of any Default or Event of Default except any Default or Event
of Default of which the Trustee shall have received written notification or with
respect to which a Responsible Officer or Trustee shall have actual knowledge.
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,
subject to and in accordance with Section 310(b) of the TIA, in the event that
the Trustee acquires any conflicting interest it must eliminate such conflict
within 90 days, apply to the SEC 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 the
Board of Directors of the Trustee, the executive committee or a trust committee
of such Board of Directors and/or Responsible Officer in good faith determines
that withholding the notice is in the interests of the Holders of the Notes.
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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). If applicable, the Trustee also shall
comply with TIA Section 313(b) and 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 SEC 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 or automated quotation system.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services hereunder. 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, if any, 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 gross
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
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 money or property held in trust to pay principal and
interest on particular Notes.
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
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services (including the fees and expenses of its agents and counsel) are
intended to constitute expenses of administration under any Bankruptcy Law.
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 Notes 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 and may appoint a
successor trustee with the Company's consent. The Company may remove the Trustee
and the Holder of any Notes who has been a beneficial Holder of a Note for at
least six months may, on behalf of such Holder and all Holders similarly
situated, petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor trustee if (a) the Trustee fails to
comply with Section 7.10 hereof; (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 or the court of competent
jurisdiction, as the case may be, shall promptly appoint a successor Trustee.
Within one year after the successor Trustee is appointed, 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.
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 of the Notes. 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, if such successor
corporation is otherwise eligible hereunder, be the successor Trustee.
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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).
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 VIII
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 VIII.
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 solely from the trust fund described in Section
8.04 hereof, and as more fully set forth in such Section, payments in respect of
the principal of, premium, if any, and interest on such Notes when such payments
are due, (b) the Company's obligations with respect to such Notes under Article
II (other than Section 2.12) and Section 4.02 hereof, (c) the rights, powers,
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trusts, duties and immunities of the Trustee and the Company's obligations in
connection therewith and (d) this Article VIII. Subject to compliance with this
Article VIII, 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 4.04, 4.07, 4.08, 4.09,
4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17, 4.18, 4.19, 4.20, 4.21, 11.10 and the
provisions of Section 5.01(iv) and (v) hereof with respect to the outstanding
Notes on and after the date the conditions set forth below 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. For this purpose, Covenant Defeasance means
that, 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.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(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 (without the need to reinvest), in the opinion of a nationally
recognized firm of independent public accountants, to pay the principal of,
premium and Liquidated Damages, if any, and interest on the outstanding Notes on
the stated date for payment thereof or on the applicable redemption date, as the
case may be;
(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
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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 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 VIII
concurrently with such incurrence) or 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;
(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
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;
(f) 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 or with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Company; and
(g) 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 and the Paying Agent
against any tax, fee or other charge imposed on or assessed against the cash or
non-callable Government
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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 VIII to the contrary notwithstanding, the
Trustee and the Paying Agent 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.
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, without limiting the effect of any applicable
abandoned property law, the Holder of such Note shall thereafter, as a general
creditor, 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.
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SECTION 8.08. SUBORDINATION.
Notwithstanding anything to the contrary herein, the rights and
obligations of the parties under this Article VIII are subject to the
subordination provisions set forth in Article X of this Indenture to the extent
set forth therein.
ARTICLE IX
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, the Company and the
Trustee may amend or supplement this Indenture 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; (c) to provide for the assumption of the Company's obligations to the
Holders of the Notes in the case of a merger or consolidation pursuant to
Article V hereof; (d) to make any change that would provide any additional
rights or benefits to the Holders of the Notes or that does not adversely affect
the legal rights hereunder of any Holder of the Note in any material respect; or
(e) to comply with requirements of the SEC in order to effect or maintain the
qualification of this Indenture under the TIA. 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 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.
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.
(a) Except as provided below in this Section 9.02, the Company and
the Trustee may amend or supplement this Indenture (including Sections 3.09,
4.10 and 4.15 hereof) and the Notes may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of the Notes
then outstanding (including consents obtained in connection with a tender offer
or exchange offer for 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 or the Notes may
be waived with the consent of the Holders of a majority in principal amount of
the then outstanding Notes (including consents obtained in connection with a
tender offer or exchange offer for 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
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by the Trustee of the documents described in Section 7.02 hereof, the Trustee
shall join with the Company in the execution of such amended or supplemental
Indenture unless such amended or supplemental Indenture 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.
(b) 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 or waiver, but it shall be sufficient if such consent approves the
substance thereof.
(c) After an amendment, supplement or waiver under this Section
becomes effective, the Company shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver.
(d) Notwithstanding the foregoing, without the consent of each
Holder affected, an amendment or waiver may not (with respect to any Notes held
by a non-consenting Holder):
(i) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(ii) 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 3.09, 4.10 and
4.15 hereof;
(iii) reduce the rate of or change the time for payment of
interest, including default interest, on any Note;
(iv) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Notes (except a rescission
of acceleration of the Notes by the Holders of at least a majority in aggregate
principal amount of the then outstanding Notes and a waiver of the payment
default that resulted from such acceleration);
(v) make any Note payable in money other than that stated in
the Notes;
(vi) make any change in the provisions of this Indenture
relating to waivers of past Defaults or the rights of Holders of Notes to
receive payments of principal of or premium, if any, or interest on the Notes;
(vii) waive a redemption payment with respect to any Notes
except as provided above with respect to Sections 3.09, 4.10 and 4.15 hereof; or
(viii) make any change in the foregoing amendment and waiver
provisions.
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(e) In connection with any amendment, supplement or waiver under
this Article X, the Company may, but shall not be obligated to, offer to any
Holder who consents to such amendment, supplement or waiver, or to all Holders,
consideration for such Holder's consent to such amendment, supplement or waiver.
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 in the form of an Officers' Certificate from the Company,
authenticate and deliver 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 IX 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) shall be fully
protected in conclusively relying upon, 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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SECTION 9.07. SUBORDINATION.
Notwithstanding anything to the contrary herein, no amendment may be
made to the subordination provisions set forth in Article X or XII or elsewhere
in this Indenture or the Notes if such amendment adversely affects the rights of
any holder of Senior Debt then outstanding unless the holders of such Senior
Debt (or their Representative) consent to such change.
ARTICLE X
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.
The Company agrees, and each holder of a Note by accepting a Note
agrees, that the payment of principal of, premium, if any, and interest and
Liquidated Damages on, and all other Obligations with respect to, the Notes are
subordinated in right of payment, to the extent and in the manner provided in
this Article X, to the prior payment in full, in cash, of all Obligations with
respect to Senior Debt (whether outstanding on the date hereof or hereafter
created, incurred, assumed or guaranteed), including the obligations of the
Company and the Guarantors under the New Credit Facility, and that the
subordination is for the benefit of, and shall be enforceable directly by, the
holders of Senior Debt of the Company.
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any payment or distribution to creditors of the Company in a
liquidation or dissolution of the Company or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to the Company or its
property, or upon an assignment for the benefit of creditors or any marshalling
of the Company's assets and liabilities, in each case whether voluntary or
involuntary:
(a) the holders of Senior Debt of the Company shall be entitled to
receive payment in full in cash of all Obligations due in respect of such Senior
Debt (including all interest accruing after the commencement of any such
proceeding at the rate specified in the applicable Senior Debt, whether or not
such interest is an allowed claim under applicable law) before Holders of Notes
shall be entitled to receive any payment or distribution with respect to the
Notes (except that Holders of Notes may receive payments made from any trust
created pursuant to Section 8.05 hereof so long as, at the time of deposit
thereof in such trust, such payments did not violate this Article X and
otherwise complied with the provisions of Article VIII); and
(b) until all Obligations with respect to Senior Debt of the Company
are paid in full in cash, any payment or distribution to which Holders of Notes
would be entitled but for this Article X shall be made to holders of Senior Debt
of the Company (except that Holders of Notes may receive payments made from any
trust created pursuant to Section 8.05 hereof so
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long as, at the time of deposit thereof in such trust, such payments did not
violate this Article X and otherwise complied with the provisions of Article
VIII).
SECTION 10.03. DEFAULT ON SENIOR DEBT.
In addition to the provisions of preceding Section 10.02, neither the
Company nor any Person on its behalf may make any payment (in cash, property or
other assets) upon or in respect of the Notes (other than payments made from any
trust created pursuant to Section 8.05 hereof so long as, at the time of deposit
thereof in such trust, such payments did not violate this Article X and
otherwise complied with the provisions of Article VIII) until all principal and
other Obligations with respect to all Senior Debt of the Company have been paid
in full in cash if:
(a) any Obligations with respect to Senior Debt of the Company are
not paid when due; or
(b) any other default on Designated Senior Debt occurs and is
continuing that then permits holders of the Designated Senior Debt as to which
such default relates to accelerate its maturity and the Trustee receives a
notice of such default (a "Payment Blockage Notice") from the Representative of
the holders of such Designated Senior Debt.
The Company may and shall resume payments on the Notes:
(a) in cases where clause (a) of the immediately preceding paragraph
is applicable, upon such date when all payment defaults as described therein are
cured or waived, or
(b) in the case described in clause (b) of the immediately preceding
paragraph, 179 days after the date on which the applicable Payment Blockage
Notice is received (or earlier if the respective payment blockage period is
terminated (i) by written notice to the Trustee and the Company from the person
or persons who gave the respective Payment Blockage Notice or (ii) because no
defaults continue in existence which would permit the acceleration of maturity
of any Designated Senior Debt at such time), unless the maturity of any
Designated Senior Debt has been accelerated (with each payment blockage period
described above in this clause (b) being herein called a ("Payment Blockage
Period").
No new Payment Blockage Period may be commenced pursuant to clause (b)
of the first paragraph of this Section 10.03 unless and until 360 days have
elapsed since the effectiveness of the immediately prior Payment Blockage
Notice. No nonpayment default which existed or was continuing (it being
acknowledged that any subsequent action that would give rise to a default
pursuant to any provision under which a default previously existed or was
continuing, and any failure to comply with a financial covenant for a subsequent
period, shall constitute a new default for this purpose) on the date of the
commencement of any Payment Blockage Period shall be the basis of the
commencement of a subsequent Payment Blockage Period by the Representative of
such Designated Senior Debt, even if not within a period of 360 consecutive
days, unless such default shall have been cured or waived for a period of not
less than 90 consecutive days.
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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 Debt of the acceleration.
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder of Notes receives any
payment of any Obligations with respect to the Notes at a time when such payment
is prohibited by Section 10.02 or 10.03 hereof, such payment shall be held by
the Trustee or such Holder of Notes, in trust for the benefit of, and shall be
paid forthwith over and delivered, upon written request, to, the holders of
Senior Debt of the Company as their interests may appear or their Representative
under the indenture or other agreement (if any) pursuant to which Senior Debt
may have been issued, as their respective interests may appear, for application
to the payment of all Obligations with respect to Senior Debt of the Company
remaining unpaid to the extent necessary to pay such Obligations in full in cash
in accordance with their terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt of the Company .
With respect to the holders of Senior Debt of the Company, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article X, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. Notwithstanding anything to the contrary herein,
the Trustee shall not be deemed to owe any fiduciary duty to any present or
future holders of Senior Debt, and shall not be liable to any such holders if
the Trustee shall pay over or distribute to or on behalf of Holder of Notes or
the Company or any other Person money or assets to which any holders of Senior
Debt shall be entitled by virtue of this Article X and in Article XII, except if
such payment is made as a result of the willful misconduct or gross negligence
of the Trustee.
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 X, but failure to give such
notice shall not affect the subordination of the Notes to the Senior Debt as
provided in this Article X.
SECTION 10.07. SUBROGATION.
After all Obligations with respect to Senior Debt of the Company are
paid in full in cash and until the Notes are paid in full, Holder of Notes shall
be subrogated (equally and ratably with all other Indebtedness pari passu with
the Notes) to the rights of holders of Senior Debt of the Company to receive
distributions applicable to Senior Debt of the Company to the extent that
distributions otherwise payable to the Holder of Notes have been applied to the
payment of Senior Debt of the Company. A distribution made under this Article X
to holders of Senior Debt of the Company that otherwise would have been made to
Holders of Notes is
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not, as between the Company and such Holders of Notes, a payment by the Company
on the Notes.
SECTION 10.08. RELATIVE RIGHTS.
This Article X defines the relative rights of Holders of Notes and
holders of Senior Debt. Nothing in this Indenture shall:
(a) 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;
(b) affect the relative rights of Holders of Notes and creditors of
the Company other than their rights in relation to holders of Senior Debt of the
Company; or
(c) 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 Debt of the Company to receive distributions and
payments otherwise payable to Holders of Notes.
If the Company fails because of this Article X to pay principal of or
interest on a Note on the due date, the failure is still a Default or Event of
Default in accordance with the provisions of Section 6.01.
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY ACTS OF OMISSIONS OF
THE COMPANY OR HOLDERS OF SENIOR DEBT.
No right of any present or future holders of any Senior Debt to enforce
subordination as provided herein shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
of failure to act, in good faith, by any such holder, or by any noncompliance by
the Company with the terms of this Indenture, regardless of any knowledge
thereof which any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Debt may, at any time and from time to time, without the
consent of or notice to the Trustee, without incurring responsibility to the
Trustee or the Holders of the Notes and without impairing or releasing the
subordination provided in this Article X or the obligations hereunder of the
Holders of the Notes to the holders of the Senior Debt, do any one or more of
the following: (i) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, Senior Debt, or otherwise amend or
supplement in any manner Senior Debt, or any instrument evidencing the same or
any agreement under which Senior Debt is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Debt; (iii) release any Person liable in any manner for the
payment or collection of Senior Debt; and (iv) exercise or refrain from
exercising any rights against the Company and any other Person.
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SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, 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 X, 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 Debt 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 X.
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article X 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 one Business Day 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 X. Only the Company, a
Guarantor, a holder of Senior Debt or a Representative for holders of Senior
Debt may give the notice. Nothing in this Article X shall (x) impair the claims
of, or payments to, the Trustee under or pursuant to Section 7.07 hereof or (y)
affect the Obligations of Holders of Notes pursuant to Section 10.05 with
respect to any payments received by them when prohibited by Section 10.02 or
10.03 hereof, as the case may be.
The Trustee in its individual or any other capacity may hold Senior Debt
of the Company 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 a Note by the Holder's acceptance thereof authorizes and
directs the Trustee on the Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article X, and appoints the Trustee to act as the 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 Representative is hereby authorized to file an appropriate claim for
and on behalf of the Holders of the Notes.
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SECTION 10.13. AMENDMENTS.
The provisions of this Article X shall not be amended or modified in any
manner that is adverse to the holders of any Senior Debt without the written
consent of all such holders of Senior Debt or their Representative.
ARTICLE XI
GUARANTEES
SECTION 11.01. UNCONDITIONAL GUARANTEE.
Subject to the provisions of this Article XI, each Guarantor hereby
unconditionally, jointly and severally, on a senior subordinated basis,
guarantees (each such Guarantee being a "Subsidiary Guarantee" and all such
Guarantees being the "Subsidiary 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 the Notes or
this Indenture, that: (i) the principal of and interest and Liquidated Damages,
if any, on the Notes will be promptly paid in full when due, subject to any
applicable grace period, whether at maturity, by
acceleration or otherwise and interest on the overdue principal, if any, and
interest on any interest to the extent lawful, of the Notes 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 of any such other obligations, the same will be promptly
paid in full when due or performed in accordance with the terms of the extension
or renewal, subject to any applicable grace period, whether at stated maturity,
by acceleration or otherwise, subject, however, in the case of clauses (i) and
(ii) above, to the limitations set forth in Section 11.05. Each Guarantor 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. Each Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever and covenants that the
Subsidiary Guarantees will not be discharged except by complete performance of
the obligations contained in the Notes, this Indenture and in the Subsidiary
Guarantees. If any Holder of Notes or the Trustee is required by any court or
otherwise to return to the Company, any Guarantor, or any custodian, trustee,
liquidator or other similar official acting in relation to the Company or any
Guarantor, any amount paid by the Company or any Guarantor to the Trustee or
such Holder of Notes, the Subsidiary Guarantees, to the extent theretofore
discharged, shall be reinstated in full force and effect. Each Guarantor further
agrees that, as between each Guarantor, 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 VI for the purposes of the
Subsidiary Guarantees, notwithstanding any stay, injunction or other
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prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any acceleration of such obligations
as provided in Article VI, such obligations (whether or not due and payable)
shall forthwith become due and payable by each Guarantor for the purpose of the
Subsidiary Guarantees.
SECTION 11.02. SUBORDINATION OF GUARANTEE.
The obligations of each Guarantor under the Subsidiary Guarantees and
under this Indenture are expressly subordinate and subject in right of payment
to the prior payments in full in cash of all Obligations with respect to Senior
Debt of such Guarantor, to the extent and in the manner provided in Article XII.
SECTION 11.03. SEVERABILITY.
In case any provision of this Guarantee 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 11.04. RELEASE OF A GUARANTOR.
In the event of a sale or other disposition of all of the assets of any
Guarantor, by way of merger, consolidation or otherwise, or a sale or other
disposition of all of the capital stock of any Guarantor, then such Guarantor
(in the event of a sale or other disposition, by way of such a merger,
consolidation or otherwise, of all of the capital stock of such Guarantor) or
the corporation acquiring the property (in the event of a sale or other
disposition of all or substantially all of the assets of such Guarantor) shall
be released and relieved of any obligations under its Subsidiary Guarantee;
provided that the Net Available Cash of such sale or other disposition shall be
applied in accordance with Section 4.10 and the other applicable provisions of
the Indenture. The Trustee shall deliver an appropriate instrument evidencing
such release upon receipt of a request by the Company accompanied by an
Officers' Certificate certifying as to the compliance with this Section 11.04.
Any Guarantor not so released remains liable for the full amount of principal of
and interest on the Notes as provided in this Article XI.
SECTION 11.05. LIMITATION OF GUARANTOR'S LIABILITY.
Each Guarantor and by its acceptance of a Note each Holder confirms that
it is the intention of all such parties that the Subsidiary Guarantee by such
Guarantor pursuant to its Subsidiary Guarantee does not constitute a fraudulent
transfer or conveyance for purposes of the Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
federal or state law. To effectuate the foregoing intention, the Holders and
such Guarantor hereby irrevocably agree that the obligations of such Guarantor
under the Subsidiary Guarantees shall be limited to the maximum amount as will,
after giving effect to all other contingent and fixed liabilities of such
Guarantor (including without limitation all guarantees of such Guarantor given
in respect of the New Credit Facility and all other Senior Debt of such
Guarantor) and after giving effect to any collections from or
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payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under the Subsidiary Guarantees or pursuant
to Section 11.07, result in the obligations of such Guarantor under the
Subsidiary Guarantees not constituting such fraudulent transfer or conveyance.
SECTION 11.06. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
No Guarantor may 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 (other than mergers with or into
the Company or another Guarantor) unless (i) subject to the provisions of
Section 11.04, the Person formed by or surviving any such consolidation or
merger (if other than such Guarantor) assumes all the obligations of such
Guarantor pursuant to a supplemental indenture in form and substance reasonably
satisfactory to the Trustee, under the Notes and this Indenture; and (ii)
immediately after giving effect to such transaction, no Default or Event of
Default exists.
SECTION 11.07. CONTRIBUTION.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under the
Subsidiary Guarantees, such Funding Guarantor shall be entitled to a
contribution from all other Guarantors in a pro rata amount based on the net
assets of each Guarantor (including the Funding Guarantor) for all payments,
damages and expenses incurred by that Funding Guarantor in discharging the
Company's obligations with respect to the Notes or any other Guarantor's
obligations with respect to the Subsidiary Guarantees.
SECTION 11.08. WAIVER OF SUBROGATION.
Each Guarantor hereby irrevocably waives, until and unless all of the
Obligations guaranteed hereby are indefeasibly discharged, any claim or other
rights which it may now or hereafter acquire against the Company that arise from
the existence, payment, performance or enforcement of such Guarantor's
obligations under the Subsidiary Guarantees and this Indenture, including,
without limitation, any right of subrogation, reimbursement, exoneration,
indemnification, and any right to participate in any claim or remedy of any
Holder of Notes against the Company, whether or not such claim, remedy or right
arises in equity, or under contract, statute or common law, including, without
limitation, the right to take or receive from the Company, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim or other rights. If any amount
shall be paid to any Guarantor in violation of the preceding sentence and the
Notes shall not have been paid in full, such amount shall have been deemed to
have been paid to such Guarantor for the benefit of, and held in trust for the
benefit of, the Holders of the Notes, and shall forthwith be paid to the Trustee
for the benefit of such Holders to be credited and applied upon the Notes,
whether matured or unmatured, in accordance with the terms of this Indenture.
Each Guarantor acknowledges that it will receive direct and indirect benefits
from the financing arrangements
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contemplated by this Indenture and that the waiver set forth in this Section
11.08 is knowingly made in contemplation of such benefits.
SECTION 11.09. EXECUTION OF GUARANTEE.
To evidence their guarantee to the Holder of Notes specified in Section
11.01, the Guarantors hereby agree to execute the Subsidiary Guarantees in
substantially the form of Exhibit A recited to be endorsed on each Note ordered
to be authenticated and delivered by the Trustee. Each Guarantor hereby agrees
that the Subsidiary Guarantees set forth in Section 11.01 shall remain in full
force and effect notwithstanding any failure to endorse on each Note a notation
of the Subsidiary Guarantees. Each such Subsidiary Guarantee shall be signed on
behalf of each Guarantor by two Officers, or an Officer and an Assistant
Secretary, or one Officer shall sign and one Officer or an Assistant Secretary
(each of whom shall, in each case, have been duly authorized by all requisite
corporate actions) shall attest to such Subsidiary Guarantee prior to the
authentication of the Note on which it is endorsed, and the delivery of such
Note by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of such Subsidiary Guarantee on behalf of such
Guarantor. Such signatures upon the Subsidiary Guarantees may be by manual or
facsimile signature of such officers and may be imprinted or otherwise
reproduced on the Subsidiary Guarantees, and in case any such officer who shall
have signed the Subsidiary Guarantees shall cease to be such officer before the
Note on which such Guarantee is endorsed shall have been authenticated and
delivered by the Trustee or disposed of by the Company, such Note nevertheless
may be authenticated and delivered or disposed of as though the person who
signed the Subsidiary Guarantees had not ceased to be such officer of the
Guarantor.
SECTION 11.10. ADDITIONAL SUBSIDIARY GUARANTEES.
If the Company or any of its Restricted Subsidiaries shall acquire or
create another Subsidiary after the date of the Indenture, then such newly
acquired or created Subsidiary shall execute a Subsidiary Guarantee and deliver
an opinion of counsel relating to the enforceability and authorization of such
Subsidiary Guarantee in accordance with the terms of the Indenture, pursuant to
which such Subsidiary shall become a Guarantor, on a senior subordinated basis,
of the Company's payment obligations under the Notes and this Indenture;
provided, that this covenant shall not apply to any Subsidiary during such
period as such Subsidiary (w) is organized in any jurisdiction outside the
United States, (x) is organized in any jurisdiction in which the issuance of a
Subsidiary Guarantee requires regulatory approval by a Gaming Authority,
provided that the Company or such Subsidiary has made a good faith effort to
obtain such approval and such approval is denied, (y) has been properly
designated as an Unrestricted Subsidiary in accordance with this Indenture for
so long as it continues to constitute an Unrestricted Subsidiary or (z) has less
than $100,000 of outstanding Indebtedness owed to any Person other than the
Company or any Restricted Subsidiary. Notwithstanding the foregoing, each of
RCVP, VSI, SVS and VDSI shall become subject to the terms of this covenant upon
becoming a Wholly Owned Restricted Subsidiary.
ARTICLE XII
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SUBORDINATION OF GUARANTEES
SECTION 12.01. AGREEMENT TO SUBORDINATE.
Each Guarantor agrees, and each holder of a Note by accepting a Note
agrees, that the payment of principal of, premium, if any, and interest and
Liquidated Damages on, and all other Obligations with respect to, the Notes are
subordinated in right of payment, to the extent and in the manner provided in
this Article XII, to the prior payment in full, in cash, of all Obligations with
respect to Senior Debt (whether outstanding on the date hereof or hereafter
created, incurred, assumed or guaranteed) of the Guarantor; including the
obligations of the Guarantors under, or with respect to, the New Credit
Facility, and that the subordination is for the benefit of, and shall be
enforceable directly by, the holders of Senior Debt of the Guarantor.
SECTION 12.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any payment or distribution to creditors of any Guarantor in a
liquidation or dissolution of such Guarantor or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to such Guarantor or its
property, or upon an assignment for the benefit of creditors or any marshalling
of such Guarantor's assets and liabilities, in each case whether voluntary or
involuntary:
(a) the holders of Senior Debt of such Guarantor shall be entitled
to receive payment in full in cash of all Obligations due in respect of such
Senior Debt (including all interest accruing after the commencement of any such
proceeding at the rate specified in the applicable Senior Debt, whether or not
such interest is an allowed claim under applicable law) before Holders of Notes
shall be entitled to receive any payment or distribution with, under or with
respect to, the Subsidiary Guarantee of such Guarantor (except that Holders of
Notes may receive payments made from any trust created pursuant to Section 8.05
hereof so long as, at the time of deposit thereof in such trust, such payments
did not violate this Article XII and otherwise complied with the provisions of
Article VIII); and
(b) until all Obligations with respect to all Senior Debt of such
Guarantor are paid in full in cash, any payment or distribution to which Holders
of Notes would be entitled but for this Article XII shall be made to holders of
Senior Debt of such Guarantor (except that Holders of Notes may receive payments
made from any trust created pursuant to Section 8.05 hereof so long as, at the
time of deposit thereof in such trust, such payments did not violate this
Article XII and otherwise complied with the provisions of Article VIII).
SECTION 12.03. DEFAULT ON SENIOR DEBT.
In addition to the provisions of preceding Section 12.02, no Guarantor
nor any Person on its behalf may make any payment (in cash, property or other
assets) upon or in respect of the Notes or any Subsidiary Guarantee (other than
payments made from any trust created pursuant to Section 8.05 hereof so long as,
at the time of deposit thereof in such trust, such payments did not violate this
Article XII and otherwise complied with the provisions of Article
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VIII) until all principal and other Obligations with respect to all Senior Debt
of such Guarantor has been paid in full in cash if:
(a) any Obligations with respect to Senior Debt of, or guaranteed
by, such Guarantor are not paid when due; or
(b) any Payment Blockage Period is then in effect pursuant to
Section 10.03.
The Company may and shall resume payments on the Notes:
(a) in cases where clause (a) of the immediately preceding paragraph
is applicable, upon such date when all payment defaults as described therein are
cured or waived, or
(b) in the case described in clause (b) of the immediately preceding
paragraph, when the respective Payment Blockage Period has ended in accordance
with the provisions of Section 10.03 unless the maturity of any Designated
Senior Debt has been accelerated.
SECTION 12.04. ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event of Default,
each Guarantor shall promptly notify, or cause to be notified, holders of Senior
Debt of such Guarantor of the acceleration.
SECTION 12.05. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder of Notes receives any
payment of any Obligations with respect to any Subsidiary Guarantee at a time
when such payment is prohibited by Section 12.02 or 12.03 hereof, such payment
shall be held by the Trustee or such Holder of Notes in trust for the benefit
of, and shall be paid forthwith over and delivered, upon written request, to,
the holders of Senior Debt of the respective Guarantor as their interests may
appear or their Representative under the indenture or other agreement (if any)
pursuant to which Senior Debt of the Guarantor may have been issued, as their
respective interests may appear, for application to the payment of all
Obligations with respect to Senior Debt of the respective Guarantor remaining
unpaid to the extent necessary to pay such Obligations in full in cash in
accordance with their terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt of the respective Guarantor.
With respect to the holders of Senior Debt of the Guarantors, the
Trustee undertakes to perform only such obligations on the part of the Trustee
as are specifically set forth in Article X and in this Article XII, and no
implied covenants or obligations with respect to the holders of Senior Debt of
the Guarantors shall be read into this Indenture against the Trustee.
Notwithstanding anything to the contrary herein, the Trustee shall not be deemed
to owe any fiduciary duty to any present or future holders of Senior Debt of
such Guarantors, and shall not be liable to any such holders if the Trustee
shall pay over or distribute to or on behalf of Holder of Notes or the Company
or any other Person money or assets to which any holders
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of Senior Debt of such Guarantors shall be entitled by virtue of this Article
XII, except if such payment is made as a result of the willful misconduct or
gross negligence of the Trustee.
SECTION 12.06. NOTICE BY GUARANTORS.
Each Guarantor shall promptly notify the Trustee and the Paying Agent of
any facts known to such Guarantor that would cause a payment of any Obligations
with respect to the Subsidiary Guarantees to violate this Article XII, but
failure to give such notice shall not affect the subordination of the Subsidiary
Guarantees to the Senior Debt of the Guarantors as provided in this Article XII.
SECTION 12.07. SUBROGATION.
After all Obligations with respect to Senior Debt of the Guarantors are
paid in full in cash 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 Debt of the Guarantor to
receive distributions applicable to Senior Debt of the Guarantor to the extent
that distributions otherwise payable to the Holders of Notes have been applied
to the payment of Senior Debt of the Guarantor. A distribution made under this
Article XII to holders of Senior Debt of the Guarantor that otherwise would have
been made to Holders of Notes is not, as between the Company and such Holders of
Notes, a payment of the Guarantor on the Notes.
SECTION 12.08. RELATIVE RIGHTS.
This Article XII defines the relative rights of Holders of Notes and
holders of Senior Debt of the Guarantor. Nothing in this Indenture shall:
(a) impair, as between the Guarantors and Holders of Notes, the
obligation of the Guarantors, which is absolute and unconditional, to pay
principal of and interest on the Notes in accordance with the terms of the
Subsidiary Guarantees;
(b) affect the relative rights of Holders of Notes and creditors of
the Guarantors other than their rights in relation to holders of Senior Debt of
the Guarantors; or
(c) 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 Debt of the Guarantors to receive distributions and
payments otherwise payable to Holders of Notes.
If the Company fails because of this Article XII to pay principal of or
interest on a Note on the due date, the failure is still a Default or Event of
Default in accordance with the provisions of Section 6.01.
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SECTION 12.09. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF
THE GUARANTORS OR HOLDERS OF SENIOR DEBT.
No right of any present or future holders of any Senior Debt of any
Guarantor to enforce subordination as provided herein shall at any time in any
way be prejudiced or impaired by any act or any failure to act on the part of
any Guarantor or by any act of failure to act, in good faith, by any such
holder, or by any noncompliance by any Guarantor with the terms of this
Indenture, regardless of any knowledge thereof which any such holder may have or
otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Debt of a Guarantor may, at any time and from time to
time, without the consent of or notice to the Trustee, without incurring
responsibility to the Trustee or the Holders of the Notes and without impairing
or releasing the subordination provided in this Article XII or the obligations
hereunder of the Holders of the Notes to the holders of such Senior Debt, do any
one or more of the following: (i) change the manner, place or terms of payment
or extend the time of payment of, or renew or alter, such Senior Debt, or any
instrument evidencing the same or any agreement under which such Senior Debt is
outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing such Senior Debt; (iii) release any
Person liable in any manner for the payment or collection of Senior such Debt;
and (iv) exercise or refrain from excising any rights against such Guarantor and
any other Person.
SECTION 12.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt of any Guarantor, the distribution may be made and the notice given
to their Representative.
Upon any payment or distribution of assets of any Guarantor referred to
in this Article XII, 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 Debt and other Indebtedness of the
respective Guarantor, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to
this Article XII.
SECTION 12.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article XII 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 one Business Day 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 XII. Only the Company, a
Guarantor, a Representative or
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a holder of Senior Debt of a Guarantor may give the notice. Nothing in this
Article XII shall (i) impair the claims of, or payments to, the Trustee under or
pursuant to Section 7.07 hereof or (ii) affect the Obligations of Holders of
Notes pursuant to Section 12.05 with respect to any payments received by them
when prohibited by Section 12.02 or 10.03 hereof, as the case may as be.
The Trustee in its individual or any other capacity may hold Senior Debt
of any Guarantor with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
SECTION 12.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Note by the Holder's acceptance thereof authorizes and
directs the Trustee on the Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article XII, and appoints the Trustee to act as the 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 Representative is hereby authorized to file an appropriate claim
for and on behalf of the Holders of the Notes.
SECTION 12.13. AMENDMENTS.
The provisions of this Article XII shall not be amended or modified in
any manner that is adverse to the holders of any Senior Debt of the Guarantors
without the written consent of such holders of Senior Debt or their
Representative.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01. 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 13.02. NOTICES.
Any notice or communication by the Company or the Trustee to the other
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 courier guaranteeing next day delivery, to the others' address:
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If to the Company or any Guarantor:
Alliance Gaming Corporation
0000 Xxxxx Xxxxxxx Xxxx
Xxx Xxxxx, Xxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Corporate Secretary
If to the Trustee:
United States Trust Company of New York
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-000
Telecopier No.: (000) 000-0000
Attention: Corporate Trust and Agency Division
The Company or the Trustee, by written 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 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 13.03. 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 13.04. 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 13.05 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 13.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
SECTION 13.05. 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 or her 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 13.06. 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 13.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No past, present or future director, officer, employee, incorporator or
stockholder (or other Person performing similar functions with respect to a
Person that is not a corporation) of the Company or any Guarantor, as such,
shall have any liability for any obligations of the Company or any Guarantor
under the Notes, 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.
SECTION 13.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE GUARANTEES.
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SECTION 13.09. 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 13.10. SUCCESSORS AND ASSIGNS.
All agreements of the Company and the Guarantors in this Indenture and
the Notes shall bind their successors and assigns. All agreements of the Trustee
in this Indenture shall bind its successors.
SECTION 13.11. 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 13.12. 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 13.13. 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 August 8, 1997 ALLIANCE GAMING CORPORATION
By:______________________________________
Name: Xxxxx Xxxxxxxxxxxx
Title: Senior Vice President - Finance,
Chief Financial Officer and
Treasurer
Attest:
___________________________ (SEAL)
Dated as of August 8, 1997 APT GAMES, INC.
By:______________________________________
Name: Xxxxx Xxxxxxxxxxxx
Title: Treasurer
Attest:
___________________________ (SEAL)
Dated as of August 8, 1997 UNITED COIN MACHINE CO.
By:______________________________________
Name: Xxxxx Xxxxxxxxxxxx
Title: Treasurer
Attest:
___________________________ (SEAL)
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83
Dated as of August 8, 1997 PLANTATION INVESTMENTS, INC.
By:______________________________________
Name: Xxxxx Xxxxxxxxxxxx
Title: Treasurer
Attest:
___________________________ (SEAL)
Dated as of August 8, 1997 ALLIANCE HOLDING COMPANY
By:______________________________________
Name: Xxxxx Xxxxxxxxxxxx
Title: Treasurer
Attest:
___________________________ (SEAL)
Dated as of August 8, 1997 BALLY GAMING INTERNATIONAL, INC.
By:______________________________________
Name: Xxxxx Xxxxxxxxxxxx
Title: Treasurer
Attest:
___________________________ (SEAL)
Dated as of August 8, 1997 BALLY GAMING, INC.
By:______________________________________
Name: Xxxxx Xxxxxxxxxxxx
Title: Treasurer
Attest:
___________________________ (SEAL)
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84
Dated as of August 8, 1997 FOREIGN GAMING VENTURES, INC.
By:______________________________________
Name: Xxxxx Xxxxxxxxxxxx
Title: Treasurer
Attest:
___________________________ (SEAL)
Dated as of August 8, 1997 LOUISIANA VENTURES, INC.
By:______________________________________
Name: Xxxxx Xxxxxxxxxxxx
Title: Treasurer
Attest:
___________________________ (SEAL)
Dated as of August 8, 1997 UNITED GAMING RAINBOW
By:______________________________________
Name: Xxxxx Xxxxxxxxxxxx
Title: Treasurer
Attest:
___________________________ (SEAL)
Dated as of August 8, 1997 NATIVE AMERICAN INVESTMENT, INC.
By:______________________________________
Name: Xxxxx Xxxxxxxxxxxx
Title: Treasurer
Attest:
___________________________ (SEAL)
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85
Dated as of August 8, 0000 XXXXXX XXXXXX TRUST COMPANY OF NEW YORK
By:______________________________________
Name: Xxxx Xxxxxxxx
Title: Vice President
Attest:
___________________________
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EXHIBIT A
(Face of Note)
No. GR-1 $150,000,000
CUSIP #00000XXX0
ALLIANCE GAMING CORPORATION
10% [SERIES A][SERIES B] SENIOR SUBORDINATED NOTES DUE 2007
Alliance Gaming Corporation promises to pay to __________ or registered assigns
the principal sum of one _____________________ Dollars on August 1, 2007.
Interest Payment Dates: February 1 and August 1
Record Dates: January 15 and July 15
Dated: ______________ Alliance Gaming Corporation
By:______________________________________
Name:
Title:
-----------------------------------------
Attest
This is one of the (SEAL)
Notes referred to in the
within-mentioned Indenture:
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
By:__________________________________
Authorized Signature:
A-1
87
(Back of Note)
10% [Series A] [Series B] Senior Subordinated Notes due 2007
Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized representative
of The Depository Trust Company (55 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx) ("XXX"),
to the issuer or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or such other
name as may be requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or such other entity as may be requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.(1)
THE SECURITY EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX XXXXXX SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY
NOT BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE
SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF THE COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY (1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN OF RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, OUTSIDE THE
UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 904 UNDER THE SECURITIES ACT OR IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION
OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
----------
(1) This paragraph should be included only if the Note is issued in global form.
A-2
88
REQUIRED TO, NOTIFY ANY PURCHASER OF THE NOTE EVIDENCED HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE.
Capitalized terms used herein shall have the meanings assigned to them
in this Indenture referred to below unless otherwise indicated.
1. INTEREST. Alliance Gaming Corporation, a Nevada corporation (the
"Company"), promises to pay interest on the principal amount of this Note at 10%
per annum from August 8, 1997 until maturity and shall pay the Liquidated
Damages payable pursuant to Section 5 of the Registration Rights Agreement
referred to below. The Company will pay interest and Liquidated Damages
semi-annually on February 1 and August 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 February 1, 1998. 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 at a
rate that is 1% per annum in excess of 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 Liquidated Damages
(without regard to any applicable grace periods) from time to time 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 Liquidated Damages to the Persons who are
registered Holders of Notes at the close of business on the January 15 or July
15 next preceding the Interest Payment Date, even if such Notes are cancelled
after such record date and on or before such Interest Payment Date, except as
provided in Section 2.12 of this Indenture with respect to defaulted interest.
The Notes will be payable as to principal, premium, interest and Liquidated
Damages at the office or agency of the Company maintained for such purpose
within or without the City and State of New York, or, at the option of the
Company, payment of interest and Liquidated Damages 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 Liquidated
Damages 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, United States Trust
Company of New York, the Trustee under the Indenture, will act as Paying Agent
and Registrar. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company or any of its Subsidiaries may, subject to
certain exceptions, act in any such capacity.
X-0
00
0. INDENTURE. The Company issued the Notes under an Indenture dated
as of August 8, 1997 (the "Indenture") between the Company, the Guarantors 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 this Indenture and such
Act for a statement of such terms. The Notes are unsecured senior subordinated
obligations of the Company limited to $150,000,000 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 prior to
August 1, 2002. Thereafter, the Company shall have the option to redeem the
Notes, in whole or in part, upon not less than 30 nor more than 60 days' notice,
at the redemption prices (expressed as percentages of principal amount) set
forth below plus accrued and unpaid interest thereon to the applicable
redemption date, if redeemed during the twelve-month period beginning on August
1 of the years indicated below:
YEAR PERCENTAGE
---- ----------
2002..................................................... 105.000%
2003..................................................... 103.333%
2004..................................................... 101.667%
2005 and thereafter...................................... 100.000%
(b) Notwithstanding the provisions of subparagraph (a) of
this Paragraph 5, at any time prior to August 9, 2000, the Company may redeem up
to an aggregate of 33 1/3% of the original aggregate principal amount of the
Notes at a redemption price equal to 110% of the principal amount thereof, plus
accrued and unpaid interest and Liquidated Damages thereon, if any, to the
redemption date, with the net cash proceeds of one or more Equity Offerings;
provided that at least 66 2/3% of the original aggregate principal amount of the
Notes remain outstanding immediately after the occurrence of such redemption;
and provided, further, that such redemption shall occur within 45 days of the
date of the closing of each such Equity Offering.
(c) Notwithstanding any other provisions hereof, if any
Gaming Authority requires that a Holder or beneficial owner of Notes must be
licensed, qualified or found suitable under any applicable gaming law and such
Holder or beneficial owner fails to apply for a license, qualification or a
finding of suitability within 30 days after being requested to do so by the
Gaming Authority (or such lesser period that may be required by such Gaming
Authority), or if such Holder or such beneficial owner is not so licensed,
qualified or found suitable, the Company will have the right, at its option, (i)
to require such Holder or beneficial owner to dispose of such Holder's or
beneficial owner's Notes within 30 days of receipt of such notice of such
finding by the applicable Gaming Authority or such earlier date as may be
ordered by such Gaming Authority or (ii) to redeem the Notes of such Holder or
beneficial owner at the lesser of (a) the price at which such Holder or
beneficial owner acquired such Notes, without
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accrued interest or Liquidated Damages, if any, unless the payment of such
interest or Liquidated Damages, if any, is permitted by the applicable Gaming
Authority, in which case such interest and Liquidated Damages, in any, shall be
paid through the date of redemption, (b) the fair market value of such Notes on
such redemption date and (c) the principal amount of such Notes without accrued
interest or Liquidated Damages, if any, thereon, unless the payment of such
interest or Liquidated Damages, if any, is permitted by the applicable Gaming
Authority, in which case such interest and Liquidated Damages, if any, shall be
paid through the date of redemption. The Holder or beneficial owner of Notes
applying for a license, qualification or a finding of suitability must pay all
costs of the licensure or investigation for such qualification or finding of
suitability. The Company is not required to pay or reimburse any Holder or
beneficial owner of Notes who is required to apply for such license,
qualification or finding of suitability for the costs of the licensure or
investigation for such qualification or finding of suitability.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall not be
required to make mandatory redemption payments with respect to the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be
required, subject to the provisions of Section 4.15 of the Indenture, to make an
offer (a "Change of Control Offer") to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of each Holder's Notes at a purchase
price equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of purchase
(the "Change of Control Payment"). Within 10 days following any Change of
Control, the Company shall, subject to the provisions of Section 4.15 of the
Indenture, mail a notice to each Holder setting forth the procedures governing
the Change of Control Offer as required by the Indenture.
(b) When the aggregate amount of Excess Proceeds exceeds
$10.0 million, the Company shall commence an offer to all Holders of Notes (as
"Asset Sale Offer") pursuant to Section 4.10 of the Indenture to purchase the
maximum principal amount of Notes that may be purchased out of the Excess
Proceeds at an offer price in cash in an amount equal to 100% of the principal
amount thereof plus accrued and unpaid interest and Liquidated Damages thereon,
if any, to the date of purchase, in accordance with the procedures set forth in
the Indenture. To the extent that the aggregate amount of Notes tendered
pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company
(or any Restricted Subsidiary) may use any remaining Excess Proceeds for general
corporate purposes. If the aggregate principal amount of Notes surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select
the Notes to be purchased on a pro rata basis. Holders of Notes that are the
subject of an offer to purchase will receive an Asset Sale Offer from the
Company prior to any related purchase date and may elect to have such Notes
purchased by completing the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Notes.
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8. 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.
9. SUBORDINATION. The payment of the principal of, interest on or
any other amounts due on the Notes is subordinated in right of payment to all
existing and future Senior Debt of the Company, as described in the Indenture.
Each holder, by accepting a Note, agrees to such subordination and authorizes
and directs the Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate the subordination so provided and appoints the Trustee
as its attorney-in-fact for such purpose.
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 this 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 this 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, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and
the corresponding Interest Payment Date.
11. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Indenture or the Notes 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 any existing default or compliance with any provision of this
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, this Indenture 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, to
provide for the assumption of the Company's obligations to Holders of the Notes
in case of a merger or consolidation, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under this Indenture of any such Holder, or to
comply with the requirements of the SEC in order to effect or maintain the
qualification of this Indenture under the Trust Indenture Act.
13. DEFAULTS AND REMEDIES. Events of Default include: (i) default
for 30 days in the payment when due of interest or Liquidated Damages on the
Notes; (ii) default in 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
X-0
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xxxxxxxxx, (xxx) failure by the Company to comply with Section 4.10 of the
Indenture; (iv) failure by the Company for 60 days after written notice to the
Company by the Trustee or the Holders of at least 25% in principal amount of the
Notes then outstanding to comply with any other covenant, representation,
warranty or other agreement in the Indenture or the Notes; (v) default under
certain other agreements relating to Indebtedness of the Company which default
results in the acceleration of such Indebtedness prior to its express maturity
and the principal amount of all Indebtedness the maturity of which has been so
accelerated aggregates $10.0 million or more; (vi) certain final judgments for
the payment of money that remain undischarged for a period of 60 days; (vii)
certain events of bankruptcy or insolvency with respect to the Company or any of
its Significant Subsidiaries; (viii) any Subsidiary Guarantee shall be held in
any judicial proceeding to be unenforceable or invalid or shall cease for any
reason to be in full force and effect; and (ix) any Gaming License of the
Company or any of its Restricted Subsidiaries is revoked, terminated or
suspended or otherwise ceases to be effective, resulting in the cessation or
suspension, for a period of more than 90 days, of operations of any portion of
the business of the Company or any of its Restricted Subsidiaries that accounted
for more than 10% of the Consolidated Cash Flow of the Company for the period of
the four consecutive fiscal quarters most recently ended for which internal
financial statements are available, provided that any voluntary relinquishment
of a Gaming License if such relinquishment is, in the reasonable good faith
judgment of the Board of Directors of the Company, evidenced by a resolution of
such Board, 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 of the Notes shall not constitute an Event of
Default hereunder. If any Event of Default 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. Upon such a declaration, such
principal and interest shall be due and payable immediately; provided that if
upon such declaration there are any amounts outstanding under the New Credit
Facility and the amounts thereunder have not been accelerated, such principal
and interest shall be due and payable upon the earlier of the time such amounts
are accelerated or five Business Days after the receipt by the Company and the
Representative under the New Credit Facility of such declaration.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency with respect to the Company, all
outstanding Notes will become due and payable without further action or notice.
Holders may not enforce the Indenture or the Notes except as provided in the
Indenture. Subject to certain limitations, Holders of a majority in principal
amount of the then outstanding Notes may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of the Notes notice of
any continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. The Company is required to deliver to
the Trustee annually a statement regarding compliance with the Indenture, and
the Company is required upon becoming aware of any Default or Event of Default
to deliver to the Trustee a statement specifying such Default or Event of
Default.
14. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
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00. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator or stockholder (or other Person performing
similar functions with respect to a Person that is not a corporation) of the
Company, as such, shall have any liability for any obligations of the Company
under the Notes or 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 the issuance of the Notes.
16. AUTHENTICATION. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
18. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES.
In addition to the rights provided to Holders of Notes under this Indenture,
Holders of Transferred Restricted Securities shall have all the rights set forth
in the A/B Exchange Registration Rights Agreement dated as of August 8, 1997,
between the Company and the parties named on the signature pages thereof (the
"Registration Rights Agreement").
19. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of this Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Alliance Gaming Corporation
0000 Xxxxx Xxxxxxx Xxxx
Xxx Xxxxx, Xxxxxx 00000
Attention: Secretary
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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 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:_____________________________________
(Signature must be guaranteed)
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to have this Note purchased by the Company pursuant to
Section 4.10 or 4.15 of this Indenture, check the box below:
[ ] Section 4.10 [ ] Section 4.15
If you want to have only part of the Note purchased by the Company
pursuant to Section 4.10 or Section 4.15 of this 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:_____________________________________
(Signature must be guaranteed)
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SCHEDULE OF EXCHANGES OF DEFINITIVE NOTE(2)
The following exchanges of a part of this Global Note for Definitive Notes have
been made:
Principal amount of Signature of
Amount of decrease Amount of increase this Global Note authorized officer
in principal amount in principal amount following such of Trustee or Note
Date of Exchange of this Global Note of this Global Note decrease(or increase) Custodian
---------------- ------------------- ------------------- --------------------- ------------------
----------
(2) This should be included only if the Note is issued in global form.
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[FORM OF NOTATION ON NOTE RELATING TO GUARANTEE]
SUBORDINATED GUARANTEE
For good and valuable consideration, the adequacy and receipt of which
are hereby acknowledged, the Guarantors (as defined in the Indenture (the
"Indenture") referred to in the Note upon which this notation is endorsed and
each hereinafter referred to as a "Guarantor," which term includes any successor
person under the Indenture) have, jointly and severally, unconditionally
guaranteed on a senior subordinated unsecured basis (such guarantee by each
Guarantor being referred to herein as the "Guarantee") (i) the due and punctual
payment of the principal of and interest and Liquidated Damages, if any, on the
Notes, whether at maturity, by acceleration or otherwise, the due and punctual
payment of interest on the overdue principal and interest and Liquidated
Damages, if any, on the Notes, to the extent lawful, and the due and punctual
performance of all other obligations of the Company to the Holders or the
Trustee all in accordance with the terms set forth in Articles XI and XII of the
Indenture and (ii) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, 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 of Notes and to the
Trustee pursuant to the Guarantee and the Indenture are expressly set forth, and
are senior subordinated unsecured obligations, of each such Guarantor to the
extent and in the manner provided in Section 11.02 and Article XII of the
Indenture and may be released under certain circumstances. Reference is hereby
made to such Indenture for the precise terms of the Guarantee therein made.
No past, present or future director, officer, employee, incorporator or
stockholder (or other Persons performing similar functions with respect to a
Person that is not a corporation) of any Guarantor, as such, shall have any
liability under the Guarantee by reason of his or its status as such
stockholder, officer, director or incorporator.
The Guarantee shall not be valid or obligatory for any purpose until the
certificate of authentication on the Notes upon which the Guarantee is noted
shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
GUARANTORS:
APT GAMES, INC.
By:_____________________________________
Name: Xxxxx Xxxxxxxxxxxx
Title: Treasurer
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UNITED COIN MACHINE CO.
By:_____________________________________
Name: Xxxxx Xxxxxxxxxxxx
Title: Treasurer
PLANTATION INVESTMENTS, INC.
By:_____________________________________
Name: Xxxxx Xxxxxxxxxxxx
Title: Treasurer
ALLIANCE HOLDING COMPANY
By:_____________________________________
Name: Xxxxx Xxxxxxxxxxxx
Title: Treasurer
BALLY GAMING INTERNATIONAL, INC.
By:_____________________________________
Name: Xxxxx Xxxxxxxxxxxx
Title: Treasurer
BALLY GAMING, INC.
By:_____________________________________
Name: Xxxxx Xxxxxxxxxxxx
Title: Treasurer
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FOREIGN GAMING VENTURES, INC.
By:_____________________________________
Name: Xxxxx Xxxxxxxxxxxx
Title: Treasurer
LOUISIANA VENTURES, INC.
By:_____________________________________
Name: Xxxxx Xxxxxxxxxxxx
Title: Treasurer
UNITED GAMING RAINBOW
By:_____________________________________
Name: Xxxxx Xxxxxxxxxxxx
Title: Treasurer
NATIVE AMERICAN INVESTMENT, INC.
By:_____________________________________
Name: Xxxxx Xxxxxxxxxxxx
Title: Treasurer
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EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF NOTES
Re: 10% Senior Subordinated Notes due 2007 of Alliance Gaming Corporation.
This Certificate relates to $_____ principal amount of Notes held in
* ________ book-entry or *_______ definitive form by ________________ (the
"Transferor").
The Transferor*:
[ ] has requested the Trustee by written order to deliver in exchange for
its beneficial interest in the Global Note held by the Depository a Note or
Notes in definitive, registered form of authorized denominations in an aggregate
principal amount equal to its beneficial interest in such Global Note (or the
portion thereof indicated above); or
[ ] has requested the Trustee by written order to exchange or
register the transfer of a Note or Notes.
In connection with such request and in respect of each such Note, the
Transferor does hereby certify that Transferor is familiar with this Indenture
relating to the above captioned Notes and as provided in Section 2.06 of such
Indenture, the transfer of this Note does not require registration under the
Securities Act (as defined below) because:*
[ ] Such Note is being acquired for the Transferor's own account without
transfer (in satisfaction of Section 2.06(a)(ii)(A) or Section 2.06(d)(ii)(A) of
this Indenture).
[ ] Such Note is being transferred to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act")) in reliance on Rule 144A (in satisfaction of Section
2.06(a)(ii)(B), Section 2.06(b)(A) or Section 2.06(d)(ii) (B) of this Indenture)
or outside the United States to a foreign person in a transaction meeting the
requirements of Rule 904 under the Securities Act (in satisfaction of Section
2.06(a)(ii)(B) or Section 2.06(d)(ii)(B) of this Indenture.)
----------
*Check applicable box.
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[ ] Such Note is being transferred in accordance with Rule 144 under the
Securities Act, or pursuant to an effective registration statement under the
Securities Act (in satisfaction of Section 2.06(a)(ii)(B) or Section
2.06(d)(ii)(B) of this Indenture).
[ ] Such Note is being transferred in reliance on and in compliance with an
exemption from the registration requirements of the Securities Act, other than
Rule 144A, 144 or Rule 904 under the Securities Act. An Opinion of Counsel to
the effect that such transfer does not require registration under the Securities
Act accompanies this Certificate (in satisfaction of Section 2.06(a)(ii)(C) or
Section 2.06(d)(ii)(C) of this Indenture).
-----------------------------------------
[INSERT NAME OF TRANSFEROR]
By:______________________________________
Date:_______________________________
----------
*Check applicable box.
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================================================================================
ALLIANCE GAMING CORPORATION
SERIES A AND SERIES B
10% SENIOR SUBORDINATED NOTES DUE 2007
-----------------
INDENTURE
Dated as of August 8, 1997
-----------------
UNITED STATES TRUST COMPANY OF NEW YORK
-----------------
================================================================================
103
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)........................................................ 10.03, 10.04, 10.05
(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 this Indenture.
104
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions............................................ 1
Section 1.02. Other Definitions...................................... 16
Section 1.03. Incorporation by Reference of Trust Indenture Act...... 17
Section 1.04. Rules of Construction.................................. 17
ARTICLE II
THE NOTES
Section 2.01. Form and Dating........................................ 18
Section 2.02. Execution and Authentication........................... 19
Section 2.03. Registrar and Paying Agent............................. 19
Section 2.04. Paying Agent to Hold Money in Trust.................... 20
Section 2.05. Holder Lists........................................... 20
Section 2.06. Transfer and Exchange.................................. 20
Section 2.07. Replacement Notes...................................... 25
Section 2.08. Outstanding Notes...................................... 26
Section 2.09. Treasury Notes......................................... 26
Section 2.10. Temporary Notes........................................ 26
Section 2.11. Cancellation........................................... 27
Section 2.12. Defaulted Interest..................................... 27
ARTICLE III
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee..................................... 27
Section 3.02. Selection of Notes to Be Redeemed...................... 28
Section 3.03. Notice of Redemption................................... 28
Section 3.04. Effect of Notice of Redemption......................... 29
Section 3.05. Deposit of Redemption Price............................ 29
Section 3.06. Notes Redeemed in Part................................. 29
Section 3.07. Optional Redemption.................................... 30
Section 3.08. Mandatory Redemption................................... 31
Section 3.09. Offer to Purchase by Application of Excess Proceeds.... 31
ARTICLE IV
COVENANTS
Section 4.01. Payment of Notes....................................... 32
Section 4.02. Maintenance of Office or Agency........................ 33
Section 4.03. Reports................................................ 33
Section 4.04. Compliance Certificate................................. 34
Section 4.05. Taxes.................................................. 35
Section 4.06. Stay, Extension and Usury Laws......................... 35
Section 4.07. Restricted Payments.................................... 35
Section 4.08. Dividend and Other Payment Restrictions
Affecting Subsidiaries................................. 38
Section 4.09. Incurrence of Indebtedness and Issuance of
Preferred Stock........................................ 39
Section 4.10. Asset Sales............................................ 41
Section 4.11. Transactions with Affiliates........................... 42
Section 4.12. Limitation on Issuances and Sales of
Capital Stock of Wholly Owned Subsidiaries............. 43
i
105
Section 4.13. Line of Business....................................... 43
Section 4.14. Corporate Existence.................................... 43
Section 4.15. Offer to Repurchase Upon Change of Control............. 44
Section 4.16. No Senior Subordinated Debt............................ 45
Section 4.17. Limitation on Issuances of Guarantees of
Indebtedness........................................... 45
Section 4.18. Redemption of Series B Preferred Stock................. 46
Section 4.19. Designation of an Unrestricted Subsidiary as a
Restricted Subsidiary.................................. 46
Section 4.20. Designation of a Subsidiary as an Unrestricted
Subsidiary............................................. 46
Section 4.21. Limitation on Status as Investment Company............. 47
ARTICLE V
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets............... 47
Section 5.02. Successor Corporation Substituted...................... 48
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.01. Events of Default...................................... 48
Section 6.02. Acceleration........................................... 50
Section 6.03. Other Remedies......................................... 50
Section 6.04. Waiver of Past Defaults................................ 50
Section 6.05. Control by Majority.................................... 51
Section 6.06. Limitation on Suits.................................... 51
Section 6.07. Rights of Holders of Notes to Receive Payment.......... 51
Section 6.08. Collection Suit by Trustee............................. 52
Section 6.09. Trustee May File Proofs of Claim....................... 52
Section 6.10. Priorities............................................. 52
Section 6.11. Undertaking for Costs.................................. 53
ARTICLE VII
TRUSTEE
Section 7.01. Duties of Trustee...................................... 53
Section 7.02. Rights of Trustee...................................... 54
Section 7.03. Individual Rights of Trustee........................... 55
Section 7.04. Trustee's Disclaimer................................... 55
Section 7.05. Notice of Defaults..................................... 55
Section 7.06. Reports by Trustee to Holders of the Notes............. 56
Section 7.07. Compensation and Indemnity............................. 56
Section 7.08. Replacement of Trustee................................. 57
Section 7.09. Successor Trustee by Merger, etc....................... 57
Section 7.10. Eligibility; Disqualification.......................... 58
Section 7.11. Preferential Collection of Claims Against
Company................................................ 58
ARTICLE VIII
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant
Defeasance............................................. 58
Section 8.02. Legal Defeasance and Discharge......................... 58
Section 8.03. Covenant Defeasance.................................... 59
Section 8.04. Conditions to Legal or Covenant Defeasance............. 59
Section 8.05. Deposited Money and Government Securities to
be Held in Trust; Other Miscellaneous Provisions....... 60
Section 8.06. Repayment to Company................................... 61
Section 8.07. Reinstatement.......................................... 61
ii
106
Section 8.08. Subordination.......................................... 62
ARTICLE IX
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes.................... 62
Section 9.02. With Consent of Holders of Notes....................... 62
Section 9.03. Compliance with Trust Indenture Act.................... 64
Section 9.04. Revocation and Effect of Consents...................... 64
Section 9.05. Notation on or Exchange of Notes....................... 64
Section 9.06. Trustee to Sign Amendments, etc........................ 64
Section 9.07. Subordination.......................................... 65
ARTICLE X
SUBORDINATION
Section 10.01. Agreement to Subordinate............................... 66
Section 10.02. Liquidation; Dissolution; Bankruptcy................... 66
Section 10.03. Default on Senior Debt................................. 66
Section 10.04. Acceleration of Notes.................................. 67
Section 10.05. When Distribution Must Be Paid Over.................... 67
Section 10.06. Notice by Company...................................... 68
Section 10.07. Subrogation............................................ 68
Section 10.09. Subordination May Not Be Impaired by Acts of
Omissions of the Company............................... 69
Section 10.10. Distribution or Notice to Representative............... 69
Section 10.11. Rights of Trustee and Paying Agent..................... 70
Section 10.12. Authorization to Effect Subordination.................. 70
Section 10.13. Amendments............................................. 70
ARTICLE XI
GUARANTEES
Section 11.01. Unconditional Guarantee................................ 70
Section 11.02. Subordination of Guarantee............................. 71
Section 11.03. Severability........................................... 72
Section 11.04. Release of a Guarantor................................. 72
Section 11.05. Limitation of Guarantor's Liability.................... 72
Section 11.06. Guarantors May Consolidate, etc., on Certain
Terms.................................................. 72
Section 11.07. Contribution........................................... 73
Section 11.08. Waiver of Subrogation.................................. 73
Section 11.09. Execution of Guarantee................................. 73
Section 11.10. Additional Subsidiary Guarantees....................... 74
ARTICLE XII
SUBORDINATION OF GUARANTEES
Section 12.01. Agreement to Subordinate............................... 74
Section 12.02. Liquidation; Dissolution; Bankruptcy................... 75
Section 12.03. Default on Senior Debt................................. 75
Section 12.04. Acceleration of Notes.................................. 76
Section 12.05. When Distribution Must Be Paid Over.................... 76
Section 12.06. Notice by Guarantors................................... 76
Section 12.07. Subrogation............................................ 77
Section 12.09. Subordination Rights Not Impaired by Acts or
Omissions of the Guarantors ........................... 77
Section 12.10. Distribution or Notice to Representative............... 78
Section 12.11. Rights of Trustee and Paying Agent..................... 78
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107
Section 12.12. Authorization to Effect Subordination.................. 78
Section 12.13. Amendments............................................. 79
ARTICLE XIII
MISCELLANEOUS
Section 13.01. Trust Indenture Act Controls........................... 79
Section 13.02. Notices................................................ 79
Section 13.03. Communication by Holders of Notes with Other
Holders of Notes....................................... 80
Section 13.04. Certificate and Opinion as to Conditions
Precedent.............................................. 80
Section 13.05. Statements Required in Certificate or Opinion.......... 80
Section 13.06. Rules by Trustee and Agents............................ 81
Section 13.07. No Personal Liability of Directors, Officers,
Employees and Stockholders............................. 81
Section 13.08. Governing Law.......................................... 81
Section 13.09. No Adverse Interpretation of Other Agreements.......... 81
Section 13.10. Successors and Assigns................................. 81
Section 13.11. Severability........................................... 81
Section 13.12. Counterpart Originals.................................. 82
Section 13.13. Table of Contents, Headings, etc....................... 82
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B CERTIFICATE OF TRANSFEROR
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