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SUN INTERNATIONAL HOTELS LIMITED
and
SUN INTERNATIONAL NORTH AMERICA, INC.,
Issuers,
and
THE GUARANTORS NAMED HEREIN
and
THE BANK OF NEW YORK,
Trustee
----------------
INDENTURE
Dated as of March 10, 1997
----------------
$200,000,000
9% Senior Subordinated Notes due 2007
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
------- -------
310(a)(1)............................................................... 7.10
(a)(2)............................................................... 7.10
(a)(3)............................................................... N.A.
(a)(4)............................................................... N.A.
(a)(5)............................................................... 7.10
(b) ............................................................... 7.8;
............................................................... 7.10;
............................................................... 13.2
(c) ............................................................... N.A.
311(a) ............................................................... 7.11
(b) ............................................................... 7.11
(c) ............................................................... N.A.
312(a) ............................................................... 2.5
(b) ............................................................... 13.3
(c) ............................................................... 13.3
313(a) ............................................................... 7.6
(b)(1)............................................................... N.A.
(b)(2)............................................................... 7.6
(c) ............................................................... 7.6;
............................................................... 13.2
(d) ............................................................... 7.6
314(a) ............................................................... 4.7;
............................................................... 4.6
(b) ............................................................. N.A.
(c)(1)............................................................... 2.2;
............................................................... 7.2;
............................................................... 13.4
(c)(2)............................................................... 7.2;
............................................................... 13.4
(c)(3)............................................................... N.A
(d) ............................................................... N.A
(e) ............................................................... 13.5
(f) ............................................................... N.A.
315(a) ............................................................... 7.1(b)
(b) ............................................................... 7.5;
............................................................... 7.6;
............................................................... 13.2
(c) ............................................................... 7.1(a)
(d) ............................................................... 7.2;
............................................................... 6.11;
............................................................... 7.1(c)
(e) ............................................................... 6.14
316(a)(last sentence)................................................... 2.9
(a)(1)(A) ........................................................... 6.11
(a)(1)(B) ........................................................... 6.12
(a)(2)............................................................... N.A.
i
TIA Indenture
Section Section
------- -------
(b) ............................................................... 6.12;
............................................................... 6.8
317(a)(1)............................................................... 6.3
(a)(2)............................................................... 6.4
(b) ............................................................... 2.4
318(a) ............................................................... 13.1
----------
N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture.
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1 Definitions.............................................. 1
Section 1.2 Incorporation by Reference of TIA........................ 21
Section 1.3 Rules of Construction.................................... 22
ARTICLE II
THE SECURITIES
Section 2.1 Form and Dating.......................................... 22
Section 2.2 Execution and Authentication............................. 23
Section 2.3 Registrar and Paying Agent............................... 24
Section 2.4 Paying Agent to Hold Assets in Trust..................... 24
Section 2.5 Securityholder Lists..................................... 25
Section 2.6 Transfer and Exchange.................................... 25
Section 2.7 Replacement Securities................................... 32
Section 2.8 Outstanding Securities................................... 32
Section 2.9 Treasury Securities...................................... 33
Section 2.10 Temporary Securities..................................... 33
Section 2.11 Cancellation............................................. 33
Section 2.12 Defaulted Interest....................................... 34
Section 2.13 CUSIP Numbers ............................................34
ARTICLE III
REDEMPTION
Section 3.1 Right of Redemption...................................... 34
Section 3.2 Redemption Pursuant to Gaming Laws....................... 36
Section 3.3 Notices to Trustee....................................... 36
Section 3.4 Selection of Securities to Be Redeemed................... 36
Section 3.5 Notice of Redemption..................................... 37
Section 3.6 Effect of Notice of Redemption........................... 38
Section 3.7 Deposit of Redemption Price.............................. 38
Section 3.8 Securities Redeemed in Part.............................. 39
ARTICLE IV
COVENANTS
Section 4.1 Payment of Securities.................................... 39
Section 4.2 Maintenance of Office or Agency.......................... 40
Section 4.3 Limitation on Restricted Payments........................ 40
Section 4.4 Corporate Existence...................................... 41
Section 4.5 Payment of Taxes and Other Claims........................ 41
Section 4.6 Compliance Certificate; Notice of Default................ 42
Section 4.7 Reports.................................................. 43
Section 4.8 Waiver of Stay, Extension or Usury Laws.................. 43
Section 4.9 Limitation on Transactions with Affiliates............... 44
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Section 4.10 Limitation on Incurrence of Additional
Indebtedness and Disqualified Capital Stock........... 44
Section 4.11 Limitation on Dividends and Other Payment
Restrictions Affecting Subsidiaries................... 45
Section 4.12 Limitation on Liens Securing Indebtedness................ 46
Section 4.13 Limitation on Sale of Assets and
Subsidiary Stock...................................... 46
Section 4.14 Limitation on Layering Indebtedness.......................51
Section 4.15 Limitation on Lines of Business.......................... 51
Section 4.16 Limitation on Status as Investment Company............... 51
Section 4.17 Future Subsidiary Guarantors............................. 51
Section 4.18 Payment for Consent.......................................51
Section 4.19 Suspended Covenants.......................................52
Section 4.20 Payment of Additional Amounts.............................52
ARTICLE V
SUCCESSOR CORPORATION
Section 5.1 Limitation on Merger, Sale or Consolidation.............. 54
Section 5.2 Successor Corporation Substituted........................ 55
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
Section 6.1 Events of Default........................................ 55
Section 6.2 Acceleration of Maturity Date; Rescission
and Annulment......................................... 57
Section 6.3 Collection of Indebtedness and Suits for
Enforcement by Trustee................................ 59
Section 6.4 Trustee May File Proofs of Claim......................... 59
Section 6.5 Trustee May Enforce Claims Without
Possession of Securities.............................. 60
Section 6.6 Priorities............................................... 61
Section 6.7 Limitation on Suits...................................... 61
Section 6.8 Unconditional Right of Holders to Receive
Principal, Premium and Interest....................... 62
Section 6.9 Rights and Remedies Cumulative........................... 62
Section 6.10 Delay or Omission Not Waiver............................. 63
Section 6.11 Control by Holders....................................... 63
Section 6.12 Waiver of Past Default................................... 63
Section 6.13 Undertaking for Costs.................................... 64
Section 6.14 Restoration of Rights and Remedies....................... 64
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ARTICLE VII
TRUSTEE
Section 7.1 Duties of Trustee........................................ 65
Section 7.2 Rights of Trustee........................................ 66
Section 7.3 Individual Rights of Trustee............................. 67
Section 7.4 Trustee's Disclaimer..................................... 67
Section 7.5 Notice of Default........................................ 68
Section 7.6 Reports by Trustee to Holders............................ 68
Section 7.7 Compensation and Indemnity............................... 68
Section 7.8 Replacement of Trustee................................... 69
Section 7.9 Successor Trustee by Merger, Etc......................... 70
Section 7.10 Eligibility; Disqualification............................ 71
Section 7.11 Preferential Collection of Claims
Against Issuers....................................... 71
ARTICLE VIII
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.1 Option to Effect Legal Defeasance or
Covenant Defeasance................................... 71
Section 8.2 Legal Defeasance and Discharge........................... 71
Section 8.3 Covenant Defeasance...................................... 72
Section 8.4 Conditions to Legal or Covenant Defeasance............... 72
Section 8.5 Deposited Cash and U.S. Government
Obligations to Be Held in Trust;
Other Miscellaneous Provisions........................ 74
Section 8.6 Repayment to Issuers..................................... 75
Section 8.7 Reinstatement............................................ 75
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1 Supplemental Indentures Without Consent
of Holders............................................ 76
Section 9.2 Amendments, Supplemental Indentures and
Waivers with Consent of Holders....................... 76
Section 9.3 Compliance with TIA...................................... 78
Section 9.4 Revocation and Effect of Consents........................ 78
Section 9.5 Notation on or Exchange of Securities.................... 79
Section 9.6 Trustee to Sign Amendments, Etc.......................... 79
ARTICLE X
RIGHT TO REQUIRE REPURCHASE
Section 10.1 Repurchase of Securities at Option
of the Holder upon Change of Control.................. 80
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ARTICLE XI
GUARANTEES
Section 11.1 Guarantees............................................... 82
Section 11.2 Execution and Delivery of Guarantee...................... 84
Section 11.3 Certain Bankruptcy Events................................ 85
Section 11.4 Limitation on Merger, Consolidation,
Etc. of Guarantors.................................... 85
Section 11.5 Future Guarantors........................................ 85
ARTICLE XII
SUBORDINATION
Section 12.1 Securities Subordinated to Senior Debt................... 86
Section 12.2 No Payment on Securities in Certain
Circumstances......................................... 86
Section 12.3 Securities Subordinated to Prior Payment
of All Senior Debt on Dissolution,
Liquidation or Reorganization......................... 88
Section 12.4 Securityholders to Be Subrogated to
Rights of Holders of Senior Debt...................... 89
Section 12.5 Obligations of the Issuers Unconditional................. 89
Section 12.6 Trustee Entitled to Assume Payments
Not Prohibited in Absence of Notice................... 90
Section 12.7 Application by Trustee of Assets
Deposited with It..................................... 90
Section 12.8 Subordination Rights Not Impaired by
Acts or Omissions of the Issuers,
Guarantors or Holders of Senior Debt,
Etc.; Modifications.................................. 91
Section 12.9 Securityholders Authorize Trustee to
Effectuate Subordination of Securities................ 92
Section 12.10 Right of Trustee to Hold Senior Debt..................... 92
Section 12.11 Article XII Not to Prevent Events of
Default............................................... 92
Section 12.12 No Fiduciary Duty of Trustee to Holders
of Senior Debt........................................ 93
ARTICLE XIII
MISCELLANEOUS
Section 13.1 TIA Controls............................................. 93
Section 13.2 Notices.................................................. 93
Section 13.3 Communications by Holders with Other
Holders............................................... 94
Section 13.4 Certificate and Opinion as to Conditions
Precedent............................................. 94
Section 13.5 Statements Required in Certificate or
Opinion............................................... 95
Section 13.6 Rules by Trustee, Paying Agent, Registrar................ 95
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Section 13.7 Legal Holidays........................................... 95
Section 13.8 Governing Law............................................ 96
Section 13.9 No Adverse Interpretation of Other
Agreements............................................ 96
Section 13.10 No Recourse Against Others............................... 96
Section 13.11 Successors............................................... 96
Section 13.12 Duplicate Originals...................................... 97
Section 13.13 Severability............................................. 97
Section 13.14 Table of Contents, Headings, Etc......................... 97
vii
EXHIBITS
Exhibit A - Form of Note
Exhibit B - Form of Guarantee
viii
INDENTURE, dated as of March 10, 1997, among Sun International
Hotels Limited, an international business company organized under the laws of
the Commonwealth of The Bahamas ("Sun International"), Sun International North
America, Inc., a Delaware corporation and a wholly owned subsidiary of Sun
International ("SINA" and, together with Sun International, the "Issuers"), the
Guarantors referred to below and The Bank of New York, a New York banking
corporation, as Trustee.
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Issuer's 9%
Senior Subordinated Notes due 2007:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1 Definitions.
"Acceleration Notice" shall have the meaning specified in Section
6.2.
"Acquired Indebtedness" means Indebtedness or Disqualified Capital
Stock of any person existing at the time such person becomes a Subsidiary of
either of the Issuers or is merged or consolidated into or with either of the
Issuers or any of their Subsidiaries.
"Acquisition" means the purchase or other acquisition of any person
or all or substantially all the assets of any person by any other person, or the
acquisition of assets that constitute all or substantially all of an operating
unit of business, whether by purchase, merger, consolidation, or other transfer,
and whether or not for consideration.
"Additional Amounts" shall have the meaning specified in Section
4.20.
"Affiliate" means any person directly or indirectly controlling or
controlled by or under direct or indirect common control with Sun International.
For purposes of this definition, the term "control" means the power to direct
the management and policies of a person, directly or through one or more
intermediaries, whether through the ownership of voting securities, by contract,
or otherwise, provided, that, with respect to ownership interest in Sun
International and its Subsidiaries a Beneficial Owner of 10% or more of the
total voting power normally entitled to vote in the election of directors,
managers or trustees, as applicable, shall for such purposes be deemed to
constitute control.
"Affiliate Transaction" shall have the meaning specified in
Section 4.9.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Asset Sale" shall have the meaning specified in Section 4.13.
"Asset Sale Offer" shall have the meaning specified in Section 4.13.
"Asset Sale Offer Amount" shall have the meaning specified in
Section 4.13.
"Asset Sale Offer Price" shall have the meaning specified in Section
4.13.
"Average Life" means, as of the date of determination, with respect
to any security or instrument, the quotient obtained by dividing (i) the sum of
the products of (a) the number of years from the date of determination to the
date or dates of each successive scheduled principal (or redemption) payment of
such security or instrument and (b) the amount of each such respective principal
(or redemption) payment by (ii) the sum of all such principal (or redemption)
payments.
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
"Beneficial Owner" or "beneficial owner" has the meaning attributed
to it in Rules 13d-3 and 13d-5 under the Exchange Act (as in effect on the Issue
Date), whether or not applicable, except that a "person" shall be deemed to have
"beneficial ownership" of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time.
"Board of Directors" means, with respect to any person, the Board of
Directors of such person or any committee of the Board of Directors of such
person authorized, with respect to any particular matter, to exercise the power
of the Board of Directors of such person.
"Board Resolution" means, with respect to any person, a duly adopted
resolution of the Board of Directors of such person.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York, New York or
the New York Stock Exchange are authorized or obligated by law or executive
order to close.
2
"Capital Stock" means, with respect to any corporation, any and all
shares, interests, rights to purchase (other than convertible or exchangeable
Indebtedness that is not otherwise itself capital stock), warrants, options,
participations or other equivalents of or interests (however designated) in
stock issued by that corporation.
"Capitalized Lease Obligation" means, as applied to any person, any
lease of any property (whether real, personal or mixed) of which the discounted
present value of the rental obligations of such person, as lessee, in conformity
with GAAP, is required to be capitalized on the balance sheet of such person.
"Cash" or "cash" means such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public or private debts.
"Cash Equivalent" means (a) (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof), (ii) time deposits and
certificates of deposit of any domestic commercial bank of recognized standing
having capital and surplus in excess of $500 million or (iii) commercial paper
issued by others rated at least A-1 or the equivalent thereof by Standard &
Poor's Corporation or at least P-1 or the equivalent thereof by Xxxxx'x
Investors Service, Inc., and in the case of each of (i), (ii) and (iii) above
maturing within one year after the date of acquisition or (b) shares of money
market mutual funds or similar funds having assets in excess of $500 million.
"Change of Control" means (i) Sun International ceases to be the
"beneficial owner," directly or indirectly, of 100% of the Equity Interests of
SINA; (ii) any sale, transfer or other conveyance, whether direct or indirect,
of all or substantially all of the assets, on a consolidated basis, of Sun
International or SINA, in one transaction or a series of related transactions
(in each case other than to a person that is a Permitted Holder); (iii) any
merger or consolidation of Sun International with or into any person if,
immediately after giving effect to such transaction, any "person" or "group" (as
such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange
Act, whether or not applicable) (other than a Permitted Holder) is or becomes
the "beneficial owner," directly or indirectly, of more than 50% of the total
voting power in the aggregate normally entitled to vote in the election of
directors, managers, or trustees, as applicable, of the surviving entity or
entities; (iv) any "person" or "group" (as such terms are used for purposes of
Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable) (other
than a Permitted Holder) is or becomes the "beneficial
3
owner," directly or indirectly, of more than 50% of the total voting power in
the aggregate of all classes of Capital Stock of Sun International then
outstanding normally entitled to vote in elections of directors; (v) during any
period of 12 consecutive months after the Issue Date, individuals who at the
beginning of any such 12-month period constituted the Board of Directors of Sun
International or SINA (together with any new directors whose election by such
Board or whose nomination for election by the shareholders of Sun International
or SINA, as applicable, was approved by a vote of a majority of the directors
then still in office who were either directors at the beginning of such period
or whose election or nomination for election was previously so approved) cease
for any reason to constitute a majority of the Board of Directors of Sun
International or SINA then in office; or (vi) the adoption of a plan relating to
the liquidation or dissolution of either of the Issuers.
"Change of Control Offer" shall have the meaning specified in
Section 10.1.
"Change of Control Purchase Date" shall have the meaning specified
in Section 10.1.
"Change of Control Purchase Price" shall have the meaning specified
in Section 10.1.
"Change of Control Triggering Event" shall be deemed to have
occurred if either of the Rating Agencies shall downgrade or withdraw their
rating of the Notes as a result of, or, in any case, within 90 days of, a Change
of Control.
"Consolidated Coverage Ratio" of any person on any date of
determination (a "Transaction Date") means the ratio, on a pro forma basis, of
(a) the aggregate amount of Consolidated EBITDA of such person attributable to
continuing operations and businesses (exclusive of amounts attributable to
operations and businesses permanently discontinued or disposed of) for the
Reference Period to (b) the aggregate Consolidated Fixed Charges of such person
(exclusive of amounts attributable to operations and businesses permanently
discontinued or disposed of, but only to the extent that the obligations giving
rise to such Consolidated Fixed Charges would no longer be obligations
contributing to such person's Consolidated Fixed Charges subsequent to the
Transaction Date) during the Reference Period; provided, that for purposes of
such calculation, (i) Acquisitions which occurred during the Reference Period or
subsequent to the Reference Period and on or prior to the Transaction Date shall
be assumed to have occurred on the first day of the Reference Period, (ii)
transactions giving rise to the need to calculate the Consolidated Coverage
Ratio shall be assumed to have occurred on the first day of the Reference
Period, (iii) the incurrence of any Indebtedness or issuance of any Disqualified
Capital Stock during the Refer-
4
ence Period or subsequent to the Reference Period and on or prior to the
Transaction Date (and the application of the proceeds therefrom to the extent
used to refinance or retire other Indebtedness) shall be assumed to have
occurred on the first day of such Reference Period, and (iv) the Consolidated
Fixed Charges of such person attributable to interest on any Indebtedness or
dividends on any Disqualified Capital Stock bearing a floating interest (or
dividend) rate shall be computed on a pro forma basis as if the rate in effect
on the Transaction Date had been the applicable rate for the entire period,
unless such person or any of its Subsidiaries is a party to an Interest Swap or
Hedging Obligation (which shall remain in effect for the 12-month period
immediately following the Transaction Date) that has the effect of fixing the
interest rate on the date of computation, in which case such rate (whether
higher or lower) shall be used.
"Consolidated EBITDA" means, with respect to any person, for any
period, the Consolidated Net Income of such person for such period adjusted to
add thereto (to the extent deducted from net revenues in determining
Consolidated Net Income), without duplication, the sum of (i) Consolidated
income tax expense, (ii) Consolidated depreciation and amortization expense,
provided that consolidated depreciation and amortization of a Subsidiary that is
a less than wholly owned Subsidiary shall only be added to the extent of the
equity interest of such person in such Subsidiary and (iii) Consolidated Fixed
Charges, less any non-cash interest income.
"Consolidated Fixed Charges" of any person means, for any period,
the aggregate amount (without duplication and determined in each case in
accordance with GAAP) of (a) interest expensed or capitalized, paid, accrued, or
scheduled to be paid or accrued (including, in accordance with the following
sentence, interest attributable to Capitalized Lease Obligations) of such person
and its Consolidated Subsidiaries during such period, including (i) original
issue discount and non-cash interest payments or accruals on any Indebtedness,
(ii) the interest portion of all deferred payment obligations and (iii) all
commissions, discounts and other fees and charges owed with respect to bankers'
acceptances and letters of credit financings and currency and Interest Swap and
Hedging Obligations, in each case to the extent attributable to such period, but
excluding interest payments on SINA's First Mortgage Non-Recourse Pass Through
Notes due June 30, 2000, and (b) the amount of dividends accrued or payable (or
guaranteed) by such person or any of its Consolidated Subsidiaries in respect of
preferred stock (other than by Subsidiaries of such person to such person or
such person's wholly owned Subsidiaries). For purposes of this definition, (x)
interest on a Capitalized Lease Obligation shall be deemed to accrue at an
interest rate reasonably determined by Sun International to be the rate of
interest implicit in such Capitalized Lease Obligation in accordance with GAAP
and (y) interest expense
5
attributable to any Indebtedness represented by the guaranty by such person or a
Subsidiary of such person of an obligation of another person shall be deemed to
be the interest expense attributable to the Indebtedness guaranteed.
"Consolidated Net Income" means, with respect to any person for any
period, the net income (or loss) of such person and its Consolidated
Subsidiaries (determined on a consolidated basis in accordance with GAAP) for
such period, adjusted to exclude (only to the extent included in computing such
net income (or loss) and without duplication): (a) all gains (but not losses)
which are either extraordinary (as determined in accordance with GAAP), unusual
or nonrecurring (including any gain from the sale or other disposition of assets
or currency transactions outside the ordinary course of business or from the
issuance or sale of any capital stock), (b) the net income, if positive, of any
person, other than a Consolidated Subsidiary, in which such person or any of its
Consolidated Subsidiaries has an interest, except to the extent of the amount of
any dividends or distributions actually paid in cash to such person or a wholly
owned Consolidated Subsidiary of such person during such period, but in any case
not in excess of such person's pro rata share of such person's net income for
such period, (c) the net income or loss of any person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition, (d)
the net income, if positive, of any of such person's Consolidated Subsidiaries
to the extent that the declaration or payment of dividends or similar
distributions is not at the time permitted by operation of the terms of its
charter or bylaws or any other agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to such Consolidated
Subsidiary, except for existing restrictions under the Credit Agreement and (e)
the net income attributable to the lease with respect to the 10 acres under the
Showboat Casino Hotel in Atlantic City, New Jersey.
"Consolidated Net Worth" of any person at any date means the
aggregate consolidated stockholders' equity of such person (plus amounts of
equity attributable to preferred stock) and its Consolidated Subsidiaries, as
would be shown on the consolidated balance sheet of such person prepared in
accordance with GAAP, adjusted to exclude (to the extent included in calculating
such equity), the amount of any such stockholders' equity attributable to
Disqualified Capital Stock or treasury stock of such person and its Consolidated
Subsidiaries.
"Consolidated Subsidiary" means, for any person, each Subsidiary of
such person (whether now existing or hereafter created or acquired) the
financial statements of which are consolidated for financial statement reporting
purposes with the financial statements of such person in accordance with GAAP.
6
"Credit Agreement" means the credit agreement dated as of November
1, 1996 by and among Sun International Bahamas Limited, Sun International,
certain of Sun International's subsidiaries, certain financial institutions and
The Bank of Nova Scotia, as administrative and collateral agent, providing for
an aggregate $250 million revolving credit facility (excluding any amounts with
respect to Interest Swap and Hedging Obligations complying with the provisions
set forth below) (which amount may be increased to $375 million and may be
increased to $500 million upon the later of the Paradise Island Expansion
Opening and December 31, 1998), including any related notes, guarantees,
collateral documents, instruments and agreements executed in connection
therewith, as such credit agreement and/or related documents may be amended,
restated, supplemented, renewed, replaced or otherwise modified from time to
time whether or not with the same agent, trustee, representative lenders or
holders, and, subject to the proviso to the next succeeding sentence,
irrespective of any changes in the terms and conditions thereof. Without
limiting the generality of the foregoing, the term "Credit Agreement" shall
include agreements in respect of Interest Swap and Hedging Obligations with
lenders party to the Credit Agreement or their affiliates entered into for bona
fide hedging purposes and not entered into for speculative purposes and shall
also include any amendment, amendment and restatement, renewal, extension,
restructuring, supplement or modification to any Credit Agreement and all
refundings, refinancings and replacements of any Credit Agreement, including any
agreement (i) extending or shortening the maturity of any Indebtedness incurred
thereunder or contemplated thereby, (ii) adding or deleting borrowers or
guarantors thereunder, so long as borrowers and issuers include one or more of
Sun International and its Subsidiaries and their respective successors and
assigns, (iii) increasing the amount of Indebtedness incurred thereunder or
available to be borrowed thereunder, provided that on the date such Indebtedness
is incurred it would not be prohibited by clause (a) of the definition of
"Permitted Indebtedness," or (iv) otherwise altering the terms and conditions
thereof in a manner not prohibited by the terms hereof.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Debt Incurrence Ratio" shall have the meaning specified in Section
4.10.
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"Definitive Securities" means Securities that are in the form of the
Note attached hereto as Exhibit A that do not include the information called for
by footnotes 1 and 3 thereof.
7
"Depository" means, with respect to the Securities issuable or
issued in whole or in part in global form, the person specified in Section 2.3
as the Depository with respect to the Securities, 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.
"Disqualified Capital Stock" means (i) except as set forth in (ii),
with respect to any person, Equity Interests of such person that, by its terms
or by the terms of any security into which it is convertible, exercisable or
exchangeable, is, or upon the happening of an event or the passage of time would
be, required to be redeemed or repurchased (including at the option of the
holder thereof) by such person or any of its Subsidiaries, in whole or in part,
on or prior to the Stated Maturity of the Securities and (ii) with respect to
any Subsidiary of such person (other than the Guarantors), any Equity Interests
other than any common equity with no preference, privileges, or redemption or
repayment provisions.
"Equity Interest" of any person means any shares, interests,
participations or other equivalents (however designated) in such person's
equity, and shall in any event include any Capital Stock issued by, or
partnership or membership interests in, such person.
"Event of Default" shall have the meaning specified in Section 6.1.
"Event of Loss" means, with respect to any property or asset, any
(i) loss, destruction or damage of such property or asset or (ii) any
condemnation, seizure or taking, by exercise of the power of eminent domain or
otherwise, of such property or asset, or confiscation or requisition of the use
of such property or asset.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC thereunder.
"Exchange Offer" means the offer by the Issuers and the Guarantors
to exchange the Series B Notes and Guarantees thereof for the Original Notes and
Guarantees thereof made pursuant to the Registration Rights Agreement.
"Exempted Affiliate Transaction" means transactions solely between
Sun International and any of its wholly owned Subsidiaries or solely among
wholly owned Subsidiaries of Sun International.
8
"FF&E Indebtedness" means any Indebtedness of a person to any seller
or other person incurred to finance the acquisition (including in the case of a
Capitalized Lease Obligation, the lease) of any gaming facility or hotel or
gaming or hotel related fixtures, furniture or equipment which is directly
related to a Related Business of Sun International and which is incurred
concurrently with such acquisition and is secured only by the assets so
financed.
"GAAP" means United States generally accepted accounting principles
set forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession in the United States as in effect on the Issue Date.
"Gaming Authority" means any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
the United States or a foreign government, any state, province or any city or
other political subdivision or otherwise and whether now or hereafter in
existence, or any officer or official thereof, responsible for gaming licenses
held by Sun International or a Subsidiary of Sun International.
"Global Security" means a Security that contains the paragraph
referred to in footnote 1 and the additional schedule referred to in footnote 3
to the form of Security attached hereto as Exhibit A.
"Guarantee" shall have the meaning provided in Section 11.1.
"Guarantors" means Sun International Bahamas Limited, Paradise
Island Limited, Island Hotel Company Limited, Paradise Beach Inn Limited,
Paradise Enterprises Limited, Paradise Acquisitions Limited, Sun International
Management Limited, Sun Cove Limited, Resorts International Hotel, Inc., and
GGRI, Inc. and any future newly created, acquired or designated Subsidiary of
Sun International.
"Holder" or "Securityholder" means the person in whose name a
Security is registered on the Registrar's books.
"incur" shall have the meaning specified in Section 4.10.
"Incurrence Date" shall have the meaning specified in Section 4.10.
9
"Indebtedness" of any person means, without duplication, (a) all
liabilities and obligations, contingent or otherwise, of such any person, (i) in
respect of borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such person or only to a portion thereof), (ii) evidenced
by bonds, notes, debentures or similar instruments, (iii) representing the
balance deferred and unpaid of the purchase price of any property or services,
except those incurred in the ordinary course of its business that would
constitute ordinarily trade payables to trade creditors that are not more than
60 days past their original due date, (iv) evidenced by bankers' acceptances or
similar instruments issued or accepted by banks, (v) relating to any Capitalized
Lease Obligation, or (vi) evidenced by a letter of credit or a reimbursement
obligation of such person with respect to any letter of credit; (b) all net
obligations of such person under Interest Swap and Hedging Obligations; (c) all
liabilities and obligations of others of the kind described in the preceding
clause (a) or (b) that such person has guaranteed or that is otherwise its legal
liability or which are secured by any assets or property of such person and (d)
any and all deferrals, renewals, extensions, refinancing and refundings (whether
direct or indirect) of, or amendments, modifications or supplements to, any
liability of the kind described in any of the preceding clauses (a), (b) or (c),
or this clause (d), whether or not between or among the same parties, and (e)
all Disqualified Capital Stock of such person (measured at the greater of its
voluntary or involuntary maximum fixed repurchase price plus accrued and unpaid
dividends). For purposes hereof, the "maximum fixed repurchase price" of any
Disqualified Capital Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Capital Stock as if
such Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to the Indenture, and if such price
is based upon, or measured by, the Fair Market Value of such Disqualified
Capital Stock, such Fair Market Value to be determined in good faith by the
board of directors of the issuer (or managing general partner of the issuer) of
such Disqualified Capital Stock.
"Indenture" means this Indenture, as amended or supplemented from
time to time in accordance with the terms hereof.
"Initial Purchasers" means Bear, Xxxxxxx & Co. Inc., Societe
Generale Securities Corporation and Scotia Capital Markets (USA) Inc.
"Interest Payment Date" means the stated due date of an installment
of interest on the Securities.
"Interest Swap and Hedging Obligation" means any obligation of any
person pursuant to any interest rate swap agreement, interest rate cap
agreement, interest rate collar
10
agreement, interest rate exchange agreement, currency exchange agreement or any
other agreement or arrangement designed to protect 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.
"Investment" by any person in any other person means (without
duplication) (a) the acquisition (whether by purchase, merger, consolidation or
otherwise) by such person (whether for cash, property, services, securities or
otherwise) of capital stock, bonds, notes, debentures, partnership or other
ownership interests or other securities, including any options or warrants, of
such other person or any agreement to make any such acquisition; (b) the making
by such person of any deposit with, or advance, loan or other extension of
credit to, such other person (including the purchase of property from another
person subject to an understanding or agreement, contingent or otherwise, to
resell such property to such other person) or any commitment to make any such
advance, loan or extension (but excluding accounts receivable or deposits
arising in the ordinary course of business); (c) other than guarantees of
Indebtedness of Sun International or any Subsidiary to the extent permitted by
Section 4.10, the entering into by such person of any guarantee of, or other
credit support or contingent obligation with respect to, Indebtedness or other
liability of such other person; (d) the making of any capital contribution by
such person to such other person; and (e) the designation by the Board of
Directors of Sun International of any person to be an Unrestricted Subsidiary.
Sun International shall be deemed to make an Investment in an amount equal to
the fair market value of the net assets of any subsidiary (or, if neither Sun
International nor any of its Subsidiaries has theretofore made an Investment in
such subsidiary, in an amount equal to the Investments being made), at the time
that such subsidiary is designated an Unrestricted Subsidiary, and any property
transferred to an Unrestricted Subsidiary from Sun International or a Subsidiary
shall be deemed an Investment valued at its fair market value at the time of
such transfer.
"Investment Grade Rating" means a rating equal to or higher than
Baa3 (or the equivalent) by Moody's (or any successor to the rating agency
business thereof) or BBB- (or the equivalent) by S&P (or any successor to the
rating agency business thereof).
"Investment Grade Status" means any time at which the ratings of the
Notes by both Moody's (or any successor to the
11
rating agency business thereof) and S&P (or any successor to the rating agency
business thereof) are Investment Grade Ratings.
"Issue Date" means the date of first issuance of the Notes under the
Indenture.
"Issuer" means each party named as such in this Indenture until a
successor replaces it pursuant to the Indenture and thereafter means such
successor.
"Junior Security" means any Qualified Capital Stock and any
Indebtedness of an Issuer or a Guarantor, as applicable, that (i) is
subordinated in right of payment to Senior Debt at least to the same extent as
the Notes or the Guarantee, as applicable, (ii) has no scheduled installment of
principal due, by redemption, sinking fund payment or otherwise, on or prior to
the Stated Maturity of the Notes, (iii) does not have covenants or default
provisions materially more beneficial to the holders of the Notes than those in
effect with respect to the Notes on the Issue Date and (iv) was authorized by an
order or decree of a court of competent jurisdiction that gave effect to (and
states in such order or decree that effect has been given to) the subordination
of such securities to all Senior Debt of the applicable Issuer or Guarantor not
paid in full in cash or Cash Equivalents in connection with such reorganization;
provided that all such Senior Debt is assumed by the reorganized corporation and
the rights of the holders of any such Senior Debt are not, without the consent
of such holders, altered by such reorganization, which consent shall be deemed
to have been given if the holders of such Senior Debt, individually or as a
class, shall have approved such reorganization.
"Legal Holiday" shall have the meaning provided in Section 13.7.
"Lien" means any mortgage, charge, pledge, lien (statutory or
otherwise), privilege, security interest, hypothecation or other encumbrance
upon or with respect to any property of any kind, real or personal, movable or
immovable, now owned or hereafter acquired.
"Liquidated Damages" shall have the meaning specified in the
Registration Rights Agreement.
"Maturity Date," when used with respect to any Security, means the
date on which the principal of such Security becomes due and payable as therein
or herein provided, whether at Stated Maturity, a Change of Control Purchase
Date, a purchase date with respect to an Asset Sale Offer or by declaration of
acceleration, call for redemption or otherwise.
"Moody's" means Xxxxx'x Investor Services, Inc.
12
"Net Cash Proceeds" means the aggregate amount of Cash or Cash
Equivalents received by Sun International in the case of a sale of Qualified
Capital Stock and by Sun International and its Subsidiaries in respect of an
Asset Sale plus, in the case of an issuance of Qualified Capital Stock upon any
exercise, exchange or conversion of securities (including options, warrants,
rights and convertible or exchangeable debt) of Sun International that were
issued for cash on or after the Issue Date, the amount of cash originally
received by Sun International upon the issuance of such securities (including
options, warrants, rights and convertible or exchangeable debt) less, in each
case, the sum of all payments, fees, commissions and reasonable and customary
expenses (including, without limitation, the fees and expenses of legal counsel
and investment banking fees and expenses) incurred in connection with such Asset
Sale or sale of Qualified Capital Stock, and, in the case of an Asset Sale only,
less the amount (estimated reasonably and in good faith by Sun International) of
income, franchise, sales and other applicable taxes required to be paid by Sun
International or any of its respective Subsidiaries in connection with such
Asset Sale.
"Non-Recourse Indebtedness" means Indebtedness of a person to the
extent that under the terms thereof or pursuant to applicable law (i) no
personal recourse shall be had against such person for the payment of the
principal of or interest or premium, if any, on such Indebtedness, and (ii)
enforcement of obligations on such Indebtedness is limited only to recourse
against interests in property purchased with the proceeds of the incurrence of
such Indebtedness and as to which none of the Issuers or any of its Subsidiaries
provides any credit support or is liable.
"Non-Strategic Real Estate" means (i) any real estate on Paradise
Island in the Bahamas, other than the real estate upon which the Atlantis Resort
& Casino property is located, and (ii) any real property in and around Atlantic
City, New Jersey, other than the Resorts Casino Hotel, the former site of the
Chalfonte Hotel and any other real estate contiguous to such sites.
"Notes" See "Securities."
"Offering Memorandum" means the Offering Memorandum of the Issuers
dated March 10, 1997 with respect to the Securities.
"Officer" means, with respect to the Issuers, the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer, the Treasurer, the Controller, or the Secretary or Assistant
Secretary.
13
"Officers' Certificate" means, with respect to the Issuers or any
Guarantor, a certificate signed by two Officers of both of the Issuers or such
Guarantor and otherwise complying with the requirements of Sections 13.4 and
13.5.
"Opinion of Counsel" means a written opinion from legal counsel to
the Issuers complying with the requirements of Sections 13.4 and 13.5. Unless
otherwise required by this Indenture, the counsel may be in-house counsel to the
Issuers.
"Original Notes" means the 9% Senior Subordinated Notes due 2007, as
amended and supplemented from time to time in accordance with the terms hereof,
that are issued pursuant to this Indenture.
"Paradise Island Expansion Opening" means the time when Sun
International's approximately $450 million expansion of its Atlantis Resort &
Casino property located on Paradise Island, The Bahamas, as more fully described
in the Offering Memorandum, shall have been substantially completed and the new
hotel and casino comprising the expansion shall be ready for occupancy and
operation.
"Paying Agent" shall have the meaning specified in Section 2.3.
"Permitted Holder" means Xxxxxxx Xxxxxxx, his immediate family or a
trust or similar entity existing solely for his benefit or for the benefit of
his immediate family.
"Permitted Indebtedness" means Indebtedness incurred as follows:
(a) the Issuers and the Guarantors may incur (i) Indebtedness
pursuant to the Credit Agreement up to an aggregate principal amount outstanding
(including any Indebtedness issued to refinance, refund or replace such
Indebtedness) at any time of $375 million (excluding any amounts with respect to
Interest Swap and Hedging Obligations) (which amount may be increased to $500
million upon the later to occur of the Paradise Island Expansion Opening or
December 31, 1998), minus the amount of any such Indebtedness retired with Net
Cash Proceeds from any Asset Sale or assumed by a transferee in an Asset Sale
(provided any commitment in respect of such Indebtedness is permanently reduced)
and (ii) the Issuers and the Guarantors may incur Indebtedness with respect to
Interest Swap and Hedging Obligations entered into for bona fide hedging
purposes and not entered into for speculative purposes;
(b) the Issuers and the Guarantors may incur Indebtedness
evidenced by the Notes and the Guarantees and repre-
14
sented by the Indenture up to the amounts specified therein as of the date
thereof;
(c) the Issuers and the Guarantors may incur FF&E Indebtedness
on or after the Issue Date, provided, that (i) such FF&E Indebtedness is
Non-Recourse Indebtedness and (ii) such Indebtedness shall not constitute more
than 100% of the cost (determined in accordance with GAAP) to the Issuers or
such Guarantor, as applicable, of the property so purchased or leased;
(d) the Issuers and the Guarantors may incur Indebtedness
solely in respect of bankers acceptances and performance bonds (to the extent
that such incurrence does not result in the incurrence of any obligation to
repay any obligation relating to borrowed money of others), all in the ordinary
course of business in accordance with customary industry practices, in amounts
and for the purposes customary in their industry;
(e) the Issuers may incur Indebtedness to any wholly owned
Subsidiary, and any wholly owned Subsidiary may incur Indebtedness to any other
wholly owned Subsidiary or to an Issuer; provided, that, in the case of
Indebtedness of the Issuers (other than Indebtedness that is required to be
pledged to the lenders under the Credit Agreement), such obligations shall be
unsecured and subordinated in all respects to the Issuers' obligations pursuant
to the Notes, and the date of any event that causes a Subsidiary to no longer be
a wholly owned Subsidiary shall be an Incurrence Date; and
(f) the Issuers and their Subsidiaries, as applicable, may
incur Refinancing Indebtedness with respect to any Indebtedness or Disqualified
Capital Stock, as applicable, described in clauses (b) and (f) of this
definition or incurred under the Debt Incurrence Ratio contained in Section 4.10
or which is outstanding on the Issue Date (after giving effect to consummation
of the Tender Offer) so long as such Refinancing Indebtedness is secured only by
the assets that secured the Indebtedness so refinanced or otherwise replaced.
"Permitted Investment" means (a) any Investment in any of the Notes;
(b) any Investment in Cash Equivalents; (c) any Investment in intercompany notes
to the extent permitted under clause (b) of the definition of "Permitted
Indebtedness"; (d) any Investment in a person in a Related Business who, after
such Investment, becomes a Subsidiary of an Issuer and a Guarantor of the Notes;
and (e) any Investment in any property or assets to be used by an Issuer or
Guarantor in a Related Business.
"Permitted Lien" means (a) any Lien securing the Notes; (b) any Lien
securing Indebtedness of a person existing at the time such person becomes a
Subsidiary or is merged with or into either of the Issuers or a Subsidiary of
either of the Issuers or
15
Liens securing Indebtedness incurred in connection with an Acquisition, provided
that such Liens were in existence prior to the date of such acquisition, merger
or consolidation, were not incurred in anticipation thereof, and do not extend
to any other assets; (c) any Lien in favor of either of the Issuers or any
Guarantor; and (d) any Lien arising from FF&E Indebtedness permitted to be
incurred under clause (c) of the definition of "Permitted Indebtedness",
provided such Lien relates solely to the property which is subject to such FF&E
Indebtedness.
"person" means any individual, limited liability company,
corporation, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or other agency or political
subdivision thereof.
"principal" of any Indebtedness (including the Securities) means the
principal of such Indebtedness plus any applicable premium, if any, on such
Indebtedness.
"Property" or "property" means any right or interest in or to
property or assets of any kind whatsoever, whether real, personal or mixed and
whether tangible, intangible, contingent, indirect or direct.
"Public Equity Offering" means an underwritten public offering of
Common Stock of Sun International.
"Qualified Capital Stock" means any Capital Stock of Sun
International that is not Disqualified Capital Stock.
"Qualified Exchange" means any legal defeasance, redemption,
retirement, repurchase or other acquisition of Capital Stock or Indebtedness of
Sun International issued on or after the Issue Date with the Net Cash Proceeds
received by Sun International from the substantially concurrent sale of
Qualified Capital Stock or any exchange of Qualified Capital Stock for any
Capital Stock or Indebtedness of Sun International issued on or after the Issue
Date.
"Rating Agencies" means S&P and Moody's or any successor to the
respective rating agency businesses thereof.
"Record Date" means a Record Date specified in the Securities
whether or not such Record Date is a Business Day.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to Article III of
this Indenture and Paragraph 5 in the form of Security.
"Redemption Price," when used with respect to any Security to be
redeemed, means the redemption price for such redemp-
16
tion set forth in Paragraph 5 in the form of Security, which shall include in
each case accrued and unpaid interest with respect to such Security to the
applicable Redemption Date.
"Reference Period" with regard to any person means the four full
fiscal quarters (or such lesser period during which such person has been in
existence) ended immediately preceding any date upon which any determination is
to be made pursuant to the terms of the Notes or the Indenture.
"Refinancing Indebtedness" means Indebtedness or Disqualified
Capital Stock (a) issued in exchange for, or the proceeds from the issuance and
sale of which are used substantially concurrently to repay, redeem, defease,
refund, refinance, discharge or otherwise retire for value, in whole or in part,
or (b) constituting an amendment, modification or supplement to, or a deferral
or renewal of ((a) and (b) above are, collectively, a "Refinancing"), any
Indebtedness or Disqualified Capital Stock in a principal amount or, in the case
of Disqualified Capital Stock, liquidation preference, not to exceed (after
deduction of reasonable and customary fees and expenses incurred in connection
with the Refinancing) the lesser of (i) the principal amount or, in the case of
Disqualified Capital Stock, liquidation preference, of the Indebtedness or
Disqualified Capital Stock so Refinanced and (ii) if such Indebtedness being
Refinanced was issued with an original issue discount, the accreted value
thereof (as determined in accordance with GAAP) at the time of such Refinancing;
provided, that (A) such Refinancing Indebtedness of any Subsidiary of Sun
International shall only be used to Refinance outstanding Indebtedness or
Disqualified Capital Stock of such Subsidiary, (B) such Refinancing Indebtedness
shall (x) not have an Average Life shorter than the Indebtedness or Disqualified
Capital Stock to be so refinanced at the time of such Refinancing and (y) in all
respects, be no less subordinated or junior, if applicable, to the rights of
Holders of the Notes than was the Indebtedness or Disqualified Capital Stock to
be refinanced and (C) such Refinancing Indebtedness shall have a final stated
maturity or redemption date, as applicable, no earlier than the final stated
maturity or redemption date, as applicable, of the Indebtedness or Disqualified
Capital Stock to be so refinanced.
"Registrar" shall have the meaning specified in Section 2.3.
"Registration Rights Agreement" means the Registration Rights
Agreement by and among the Issuers, the Guarantors and the Initial Purchasers,
dated as of the Issue Date.
"Related Business" means the gaming or hotel business and other
businesses necessary for, or in the good faith judgment of the Board of
Directors of Sun International, incident to,
17
connected with, arising out of, or developed or operated to permit or facilitate
the conduct or pursuit of the gaming or hotel business (including developing or
operating sports or entertainment facilities, retail facilities, restaurants,
night clubs, transportation and communications services or other related
activities or enterprises and any additions or improvements thereto) and
potential opportunities in the gaming or hotel business.
"Representative" means The Bank of Nova Scotia or any successor or
successors under the Credit Agreement.
"Restricted Payment" means, with respect to any person, (a) the
declaration or payment of any dividend or other distribution in respect of
Equity Interests of such person or any parent or Subsidiary of such person, (b)
any payment on account of the purchase, redemption or other acquisition or
retirement for value of Equity Interests of such person or any Subsidiary or
parent of such person, (c) other than with the proceeds from the substantially
concurrent sale of, or in exchange for, Refinancing Indebtedness, any purchase,
redemption, or other acquisition or retirement for value of, any payment in
respect of any amendment of the terms of or any defeasance of, any Subordinated
Indebtedness, directly or indirectly, by such person or a parent or Subsidiary
of such person prior to the scheduled maturity, any scheduled repayment of
principal, or scheduled sinking fund payment, as the case may be, of such
Indebtedness and (d) any Investment by such person, other than a Permitted
Investment; provided, however, that the term "Restricted Payment" does not
include (i) any dividend, distribution or other payment on or with respect to
Equity Interests of an Issuer to the extent payable solely in shares of
Qualified Capital Stock of such Issuer; or (ii) any dividend, distribution or
other payment to the Issuers, or to any Guarantors, by Sun International or any
of its Subsidiaries.
"Required Regulatory Redemption" shall have the meaning specified in
Section 3.2.
"S&P" means Standard and Poor's Ratings Group, a division of the
XxXxxx-Xxxx Companies, Inc.
"SEC" means the Securities and Exchange Commission.
"Securities" or "Notes" means, prior to the Exchange Offer, the
Original Notes, and after the Exchange Offer, the Original Notes (if any) and
the Series B Notes, in each case as amended or modified from time to time in
accordance with the terms hereof, issued under this Indenture.
18
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"Securities Custodian" means the Trustee, as custodian with respect
to the Securities in global form, or any successor entity thereto.
"Securityholder" See "Holder."
"Senior Debt" of Sun International, SINA or any Guarantor means
Indebtedness (including and together with all monetary obligations in respect of
the Credit Agreement, and interest, whether or not allowable, accruing on
Indebtedness incurred pursuant to the Credit Agreement after the filing of a
petition initiating any proceeding under any bankruptcy, insolvency or similar
law or which would have accrued but for such filing) of Sun International, SINA
or such Guarantor arising under the Credit Agreement or that, by the terms of
the instrument creating or evidencing such Indebtedness, is expressly designated
Senior Debt and made senior in right of payment to the Notes or the applicable
Guarantee; provided, that in no event shall Senior Debt include (a) Indebtedness
to any Subsidiary of Sun International or any officer, director or employee of
Sun International or any Subsidiary of Sun International (other than
Indebtedness that is required to be pledged to the lenders under the Credit
Agreement), (b) Indebtedness incurred in violation of the terms of the Indenture
including, without limitation, Indebtedness claiming to be subordinated to any
other Indebtedness and senior to the Notes (c) Indebtedness to trade creditors,
(d) Disqualified Capital Stock, and (e) any liability for taxes owed or owing by
Sun International, SINA or such Guarantor.
"Series B Notes" means the Series B 9% Senior Subordinated Notes due
2007, in substantially the form set forth on the Form of Note set forth as
Exhibit A hereto, to be issued pursuant to this Indenture in connection with the
Exchange Offer.
"Significant Subsidiary" shall have the meaning provided under
Regulation S-X under the Securities Act, as in effect on the Issue Date.
"Stated Maturity," when used with respect to any Note, means March
15, 2007.
"Subordinated Indebtedness" means Indebtedness of Sun International,
SINA or a Guarantor that is subordinated in right of payment to the Notes or
such Guarantee, as applicable, in any respect or, for purposes of the definition
of Restricted Payments only, has a stated maturity on (except for the Notes) or
after the Stated Maturity.
19
"Subsidiary," with respect to any person, means (i) a corporation a
majority of whose Equity Interests with voting power, under ordinary
circumstances, to elect directors is at the time, directly or indirectly, owned
by such person, by such person and one or more Subsidiaries of such person or by
one or more Subsidiaries of such person, (ii) any other person (other than a
corporation) in which such person, one or more Subsidiaries of such person, or
such person and one or more Subsidiaries of such person, directly or indirectly,
at the date of determination thereof has at least majority ownership interest,
or (iii) a partnership in which such person or a Subsidiary of such person is,
at the time, a general partner. Notwithstanding the foregoing, an Unrestricted
Subsidiary shall not be a Subsidiary of Sun International or any Subsidiary of
Sun International. Unless the context requires otherwise, Subsidiary means each
direct and indirect Subsidiary of Sun International.
"Tender Offer" means the tender offer (to be consummated
concurrently with the issuance of the Notes hereunder) by Resorts International
Hotel Financing, Inc., an indirect wholly owned subsidiary of Sun International,
to purchase approximately $160 million of its mortgage notes, as more fully
described in the Offering Memorandum.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
ss. 77aaa-77bbbb) as in effect on the date of the execution of this Indenture,
except as permitted in Section 9.3.
"Transfer Restricted Securities" means Securities that bear or are
required to bear the legend set forth in Section 2.6.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"Trust Officer" means any officer within the corporate trust
department (or any successor group) of the Trustee including any vice president,
assistant vice president, assistant secretary or any other officer or assistant
officer of the Trustee customarily performing functions similar to those
performed by the persons who at that time shall be such officers, and also
means, with respect to a particular corporate trust matter, any other officer of
the corporate trust department (or any successor group) of the Trustee to whom
such trust matter is referred because of his knowledge of and familiarity with
the particular subject.
"Unrestricted Subsidiary" means any subsidiary of Sun International
(other than SINA) that does not own any Capital Stock of, or own or hold any
Lien on any property of, Sun International or any other Subsidiary of Sun
International or SINA and that shall be designated an Unrestricted Subsidiary by
the Board
20
of Directors of Sun International; provided, that (i) such subsidiary shall not
engage, to any substantial extent, in any line or lines of business activity
other than a Related Business, (ii) neither immediately prior thereto nor after
giving pro forma effect to such designation would there exist a Default or Event
of Default and (iii) immediately after giving pro forma effect thereto, Sun
International could incur at least $1.00 of Indebtedness pursuant to the Debt
Incurrence Ratio in Section 4.10. The Board of Directors of Sun International
may designate any Unrestricted Subsidiary to be a Subsidiary, provided, that (i)
no Default or Event of Default is existing or will occur as a consequence
thereof and (ii) immediately after giving effect to such designation, on a pro
forma basis, Sun International could incur at least $1.00 of Indebtedness
pursuant to the Debt Incurrence Ratio in Section 4.10. Each such designation
shall be evidenced by filing with the Trustee a certified copy of the resolution
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing conditions.
"U.S. Government Obligations" means direct non-callable obligations
of, or noncallable obligations guaranteed by, the United States of America for
the payment of which obligation or guarantee the full faith and credit of the
United States of America is pledged.
"wholly owned Subsidiary" means a Subsidiary all the Equity
Interests of which are owned by Sun International or one or more wholly owned
Subsidiaries of Sun International, except for directors' qualifying shares.
Section 1.2 Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such
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:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture securityholder" means a Holder or a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Issuers and any
other obligor on the Securities.
21
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them thereby.
Section 1.3 Rules of Construction.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and words
in the plural include the singular;
(v) provisions apply to successive events and
transactions;
(vi) "herein," "hereof" and other words of similar
import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision; and
(vii) references to Sections or Articles means reference
to such Section or Article in this Indenture, unless stated otherwise.
ARTICLE II
THE SECURITIES
Section 2.1 Form and Dating.
The Securities and the Trustee's certificate of authentication, in
respect thereof, shall be substantially in the form of Exhibit A hereto which
Exhibit is part of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange rule or usage. The Issuers shall
approve the form of the Securities and any notation, legend or endorsement on
them. Any such notations, legends or endorsements not contained in the form of
Security attached as Exhibit A hereto shall be delivered in writing to the
Trustee. Each Security shall be dated the date of its authentication.
22
The terms and provisions contained in the form of Securities shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Issuers and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound
thereby.
Section 2.2 Execution and Authentication.
Two Officers shall sign, or one Officer shall sign and one Officer
shall attest to, the Securities for the Company by manual or facsimile
signature.
If an Officer whose signature is on a Security was an Officer at the
time of such execution but no longer holds that office at the time the Trustee
authenticates the Security, the Security shall be valid nevertheless and the
Issuers shall nevertheless be bound by the terms of the Securities and this
Indenture.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security, but
such signature shall be conclusive evidence that the Security has been
authenticated pursuant to the terms of this Indenture.
The Trustee shall authenticate the Original Notes for original issue
in the aggregate principal amount of up to $200,000,000 and shall authenticate
Series B Notes for original issue in the aggregate principal amount of up to
$200,000,000, in each case upon a written order of the Issuers in the form of an
Officers' Certificate; provided that such Series B Notes shall be issuable only
upon the valid surrender for cancellation of Original Notes of a like aggregate
principal amount in accordance with the Registration Rights Agreement. The
Officers' Certificate shall specify the amount of Securities to be authenticated
and the date on which the Securities are to be authenticated. The aggregate
principal amount of Securities outstanding at any time may not exceed
$200,000,000, except as provided in Section 2.7. Upon the written order of the
Issuers in the form of an Officers' Certificate, the Trustee shall authenticate
Securities in substitution of Securities originally issued to reflect any name
change of either of the Issuers.
The Trustee may appoint an authenticating agent acceptable to the
Issuers to authenticate Securities. Unless otherwise provided in the
appointment, an authenticating agent may authenticate Securities 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 Issuers, any Affiliate of the Issuers
or any of their respective Subsidiaries.
23
Securities shall be issuable only in registered form without coupons
in denominations of $1,000 and any integral multiple thereof.
Section 2.3 Registrar and Paying Agent.
The Issuers shall maintain an office or agency in the Borough of
Manhattan, The City of New York, where Securities may be presented for
registration of transfer or for exchange ("Registrar") and an office or agency
in the Borough of Manhattan, The City of New York where Securities may be
presented for payment ("Paying Agent") and an office or agency where notices and
demands to or upon the Issuers in respect of the Securities may be served. The
Issuers may act as Registrar or Paying Agent, except that, for the purposes of
Articles III, VIII, X and Section 4.13 neither Issuer nor any Affiliate thereof
shall act as Paying Agent. The Registrar shall keep a register of the Securities
and of their transfer and exchange. The Issuers may have one or more
co-Registrars and one or more additional Paying Agents. The term "Paying Agent"
includes any additional Paying Agent. The Issuers hereby initially appoint the
Trustee as Registrar and Paying Agent, and the Trustee hereby initially agrees
so to act.
The Issuers shall enter into an appropriate written agency agreement
with any Agent not a party to this Indenture, which agreement shall implement
the provisions of this Indenture that relate to such Agent. The Issuers shall
promptly notify the Trustee in writing of the name and address of any such
Agent. If the Issuers fail to maintain a Registrar or Paying Agent, the Trustee
shall act as such.
The Issuers initially appoint The Depository Trust Company ("DTC")
to act as Depository with respect to the Global Securities.
The Issuers initially appoint the Trustee to act as Securities
Custodian with respect to the Global Securities.
Section 2.4 Paying Agent to Hold Assets in Trust.
The Issuers shall require each Paying Agent other than the Trustee
to agree in writing that each Paying Agent shall hold in trust for the benefit
of Holders or the Trustee all assets held by the Paying Agent for the payment of
principal of, or interest (and Liquidated Damages, if any) on, the Securities
(whether such assets have been distributed to it by the Issuers or any other
obligor on the Securities), and shall notify the Trustee in writing of any
Default by the Issuers (or any other obligor on the Securities) in making any
such payment. If either Issuer or any Subsidiary thereof acts as Paying Agent,
it shall segregate such assets and hold them as a separate trust fund for
24
the benefit of the Holders or the Trustee. The Issuers at any time may require a
Paying Agent to distribute all assets held by it to the Trustee and account for
any assets disbursed and the Trustee may at any time during the continuance of
any payment Default, upon written request to a Paying Agent, require such Paying
Agent to distribute all assets held by it to the Trustee and to account for any
assets distributed. Upon distribution to the Trustee of all assets that shall
have been delivered by the Issuers to the Paying Agent, the Paying Agent (if
other than either of the Issuers) shall have no further liability for such
assets.
Section 2.5 Securityholder 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
Holders. If the Trustee is not the Registrar, the Issuers shall furnish to the
Trustee on or before the third Business Day preceding 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 reasonably may require of the names and
addresses of Holders. The Trustee, the Registrar and the Issuers shall provide a
current securityholder list to any Gaming Authority upon demand.
Section 2.6 Transfer and Exchange.
(a) When Definitive Securities are presented to the Registrar
or a co-Registrar with a request
(x) to register the transfer of such Definitive
Securities or
(y) to exchange such Definitive Securities for an
equal principal amount of Definitive Securities of
other authorized denominations,
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Securities surrendered for transfer or
exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Issuers and
the Registrar or co-Registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing; and
(ii) in the case of Transfer Restricted Securities that
are Definitive Securities, shall be accompanied by the following
additional information and documents, as applicable:
25
(A) If such Transfer Restricted Securities
are being delivered to the Registrar by a Holder for registration in
the name of such Holder, without transfer, a certification from such
Holder to that effect (in substantially the form set forth on the
reverse of the Security); or
(B) if such Transfer Restricted Security
is being transferred to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act) in accordance with
Rule 144A under the Securities Act, a certification to that effect
(in the form set forth on the reverse of the Security); or
(C) if such Transfer Restricted Security is
being transferred (i) pursuant to an exemption from registration in
accordance with Rule 144 or Regulation S under the Securities Act,
(ii) pursuant to an effective registration statement under the
Securities Act, (iii) to an "institutional accredited investor"
within the meaning of Rule 501(A)(1), (2), (3) or (7) under the
Securities Act that is acquiring the Security for its own account,
or for the account of such an institutional accredited investor, in
each case in a minimum principal amount of $100,000, not with a view
to or for offer or sale in connection with any distribution in
violation of the Securities Act or (iv) in reliance on another
exemption from the registration requirements of the Securities Act,
a certification to that effect (in the form set forth on the reverse
of the Security) and in the case of (iii) above a transferee letter
of representation in substantially the form set forth in the
Offering Memorandum and in the case of (i), (iii) and (iv) above, if
the Issuers or the Registrar so request, an Opinion of Counsel
reasonably acceptable to the Issuers and to the Registrar to the
effect that such transfer is in compliance with the Securities Act.
(b) Restrictions on Transfer of a Definitive Security for a
Beneficial Interest in a Global Security. A Definitive Security may not be
exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the Registrar
of a
26
Definitive Security, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Registrar, together with:
(i) if such Definitive Security is a Transfer Restricted
Security, a certification, substantially in the form set forth on the
reverse of the Security, that such Definitive Security is being
transferred to a "qualified institutional buyer" (as defined in Rule 144A
under the Securities Act) in accordance with Rule 144A under the
Securities Act; and
(ii) whether or not such Definitive Security is a
Transfer Restricted Security, written instructions directing the Registrar
to make, or to direct the Securities Custodian to make, an endorsement on
the Global Security to reflect an increase in the aggregate principal
amount of the Securities represented by the Global Security,
then the Registrar shall cancel such Definitive Security and cause, or direct
the Securities Custodian to cause, in accordance with the standing instructions
and procedures existing between the Depository and the Securities Custodian, the
aggregate principal amount of Securities represented by the Global Security to
be increased accordingly. If no Global Securities are then outstanding, the
Issuers shall issue and the Trustee shall authenticate a new Global Security in
the appropriate principal amount.
(c) Transfer and Exchange of Global Securities. The transfer
and exchange of Global Securities or beneficial interests therein shall be
effected through the Depository, in accordance with this Indenture (including
the restrictions on transfer set forth herein) and the procedures of the
Depository therefor.
(d) Transfer of a Beneficial Interest in a Global Security for
a Definitive Security.
(i) Any person having a beneficial interest in a Global
Security may upon request exchange such beneficial interest for a
Definitive Security. Upon receipt by the Trustee 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 Security and upon receipt by the Trustee of a written
order or such other form of instructions as is customary for the
Depository or the Person designated by the Depository as having such a
beneficial interest in a Transfer Restricted Security only, the following
addi-
27
tional 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 from such person to that effect
(in substantially the form set forth on the reverse of the
Security); or
(B) if such beneficial interest is being
transferred to a "qualified institutional buyer" (as defined in Rule
144A under the Securities Act) in accordance with Rule 144A under
the Securities Act, a certification to that effect from the
transferor (in the form set forth on the reverse of the Security);
or
(C) if such beneficial interest is being
transferred (i) pursuant to an exemption from registration in
accordance with Rule 144 or Regulation S under the Securities Act,
(ii) pursuant to an effective registration statement under the
Securities Act, (iii) to an "institutional accredited investor"
within the meaning of Rule 501(A)(1), (2), (3) or (7) under the
Securities Act that is acquiring the security for its own account,
or for the account of such an institutional accredited investor, in
each case in a minimum principal amount of $100,000, not with a view
to or for offer or sale in connection with distribution in violation
of the Securities Act or (iv) in reliance on another exemption from
the registration requirements of the Securities Act, a certification
to that effect from the transferee or transferor (in the form set
forth on the reverse of the Security) and in the case of (iii) above
a transferee letter of representation in substantially the form set
forth in the Offering Memorandum and in the case of (i), (iii) and
(iv) above, if the Issuers or the Registrar so requests, an Opinion
of Counsel reasonably acceptable to the Issuers and to the Registrar
to the effect that such transfer is in compliance with the
Securities Act,
28
then the Registrar or the Securities Custodian, at the direction of the Trustee,
will cause, in accordance with the standing instructions and procedures existing
between the Depository and the Securities Custodian, the aggregate principal
amount of the Global Security to be reduced and, following such reduction, the
Company will execute and the Trustee will authenticate and deliver to the
transferee a Definitive Security in the appropriate principal amount.
(ii) Definitive Securities issued in exchange for a
beneficial interest in a Global Security pursuant to this Section 2.6(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 Trustee. The Registrar shall
deliver such Definitive Securities to the persons in whose names such
Securities are so registered.
(e) Restrictions on Transfer and Exchange of Global
Securities. Notwithstanding any other provisions of this Indenture (other than
the provisions set forth in subsection (f) of this Section 2.6), a Global
Security 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 Securities in Absence of
Depository. If at any time:
(i) the Depository for the Securities notifies the
Issuers that the Depository is unwilling or unable to continue as
Depository for the Global Securities and a successor Depository for the
Global Securities is not appointed by the Issuers within 90 days after
delivery of such notice; or
(ii) the Issuers, in their sole discretion, notify the
Trustee in writing that they elect to cause the issuance of Definitive
Securities under this Indenture,
then the Issuers will execute, and the Trustee, upon receipt of an Officers'
Certificate requesting the authentication and delivery of Definitive Securities,
will authenticate and make available for delivery Definitive Securities, in an
aggregate principal amount equal to the principal amount of the Global
Securities, in exchange for such Global Securities.
29
(g) Legends. Each Security certificate evidencing the Global
Securities and the Definitive Securities (and all Securities issued in exchange
therefor or substitution thereof) shall bear a legend in substantially the
following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX
XXX XXXXXX XXXXXX SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY
BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE
SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUERS THAT
(A) SUCH SECURITY MAY BE 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 904 UNDER
THE SECURITIES ACT, (d) TO AN INSTITUTIONAL ACCREDITED INVESTOR
WITHIN THE MEANING OF RULE 501 (A)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT,
OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN
EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF
$100,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR
OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF
THE SECURITIES ACT, OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED IN
THE CASE OF (d) UPON DELIVERY OF A TRANSFEREE LETTER OF
REPRESENTATION AND IN THE CASE OF (b), (c) AND (e) UPON AN OPINION
OF COUNSEL IF THE ISSUERS OR REGISTRAR SO REQUEST), (2) TO THE
ISSUERS OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND,
IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF
ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION
AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE
RESALE RESTRICTIONS SET FORTH IN (A) ABOVE. THESE SECURI-
30
TIES MAY BE TRANSFERRED ONLY IN COMPLIANCE WITH
APPLICABLE GAMING LAWS."
(h) Cancellation and/or Adjustment of Global Security. At such
time as all beneficial interests in a Global Security have either been exchanged
for Definitive Securities, redeemed, repurchased or cancelled, such Global
Security shall be returned to or retained and cancelled by the Trustee. At any
time prior to such cancellation, if any beneficial interest in a Global Security
is exchanged for Definitive Securities, redeemed, repurchased or cancelled, the
principal amount of Securities represented by such Global Security shall be
reduced and an endorsement shall be made on such Global Security, by the Trustee
or the Securities Custodian, at the direction of the Trustee, to reflect such
reduction.
(i) Obligations with respect to Transfers and Exchanges of
Definitive Securities.
(i) To permit registrations of transfers and exchanges,
the Issuers shall execute and the Trustee shall authenticate Definitive
Securities and Global Securities at the Registrar's or co-Registrar's
request.
(ii) No service charge shall be made for any
registration of transfer or exchange, but the Issuers may require payment
of a sum sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith (other than any such
transfer taxes, assessments, or similar governmental charge payable upon
exchanges or transfers pursuant to Section 2.2, 2.10, 3.6, 4.13, 9.5 or
10.1).
(iii) Except for a redemption of Securities pursuant to
Section 3.2 or upon an order of any Gaming Authority, the Registrar or
co-Registrar shall not be required to register the transfer of or exchange
of (a) any Definitive Security selected for redemption in whole or in part
pursuant to Article III, except the unredeemed portion of any Definitive
Security being redeemed in part, or (b) any Security for a period
beginning 15 days before the mailing of a notice of an offer to repurchase
pursuant to Article XII or Section 4.13 hereof or a notice of redemption
of Securities pursuant to Article III hereof and ending at the close of
business on the day of such mailing.
(iv) The Trustee shall have no obligation or duty to
monitor, determine or inquire as to compliance with any restrictions on
transfer imposed under this Indenture or under applicable law with
31
respect to any transfer of any interest in any Security other than to
require delivery of such certificates and other documentation or evidence
as expressly required by, and to do so if and when expressly required by
the terms of, this Indenture, and to examine the same to determine
substantial compliance as to form with the express requirements hereof.
Section 2.7 Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if the
Holder of a Security claims and submits an affidavit or other evidence,
satisfactory to the Trustee, to the Trustee to the effect that the Security has
been lost, destroyed or wrongfully taken, the Issuers shall issue and the
Trustee shall authenticate a replacement Security if the Trustee's requirements
are met. If required by the Trustee or the Issuers, such Holder must provide an
indemnity bond or other indemnity, sufficient in the judgment of both the
Issuers and the Trustee, to protect the Issuers, the Trustee or any Agent from
any loss which any of them may suffer if a Security is replaced. The Issuers may
charge such Holder for their reasonable, out-of-pocket expenses in replacing a
Security.
Every replacement Security is an additional obligation of the
Issuers.
Section 2.8 Outstanding Securities.
Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee except those cancelled by it, those delivered
to it for cancellation, those reductions in the interest in a Global Security
effected by the Trustee hereunder and those described in this Section 2.8 as not
outstanding. A Security does not cease to be outstanding because the Issuers or
an Affiliate of the Issuers holds the Security, except as provided in Section
2.9.
If a Security is replaced pursuant to Section 2.7 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant to Section 2.7.
If on a Redemption Date or the Maturity Date the Paying Agent (other
than the Issuers or an Affiliate of the Issuers) holds cash sufficient to pay
all of the principal and interest (and Liquidated Damages, if any) due on the
Securities payable on that date and payment of the Securities called for
redemption is not otherwise prohibited, then on and after that date such
32
Securities cease to be outstanding and interest on them ceases to accrue.
Section 2.9 Treasury Securities.
In determining whether the Holders of the required principal amount
of Securities have concurred in any direction, amendment, supplement, waiver or
consent, Securities owned by the Issuers, any Guarantor and Affiliates of the
Issuers or of any Guarantor shall be disregarded, except that, for the purposes
of determining whether the Trustee shall be protected in relying on any such
direction, amendment, supplement, waiver or consent, only Securities that a
Trust Officer of the Trustee actually knows are so owned shall be disregarded.
Section 2.10 Temporary Securities.
Until definitive Securities are ready for delivery, the Issuers may
prepare, the Guarantors shall endorse and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Issuers reasonably and in
good faith consider appropriate for temporary Securities. Without unreasonable
delay, the Issuers shall prepare, the Guarantors shall endorse and the Trustee
shall authenticate definitive Securities in exchange for temporary Securities.
Until so exchanged, the temporary Securities shall in all respects be entitled
to the same benefits under this Indenture as permanent Securities authenticated
and delivered hereunder.
Section 2.11 Cancellation.
The Issuers at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent
(other than the Issuers or an Affiliate of the Company), and no one else, shall
cancel and, at the written direction of the Issuers, shall dispose of all
Securities surrendered for transfer, exchange, payment or cancellation in
accordance with its customary procedures. Subject to Section 2.7, the Issuers
may not issue new Securities to replace Securities it has paid or delivered to
the Trustee for cancellation. No Securities shall be authenticated in lieu of or
in exchange for any Securities cancelled as provided in this Section 2.11,
except as expressly permitted in the form of Securities and as permitted by this
Indenture.
33
Section 2.12 Defaulted Interest.
If the Issuers default in a payment of interest (and Liquidated
Damages, if any) on the Securities, the Issuers shall pay the defaulted interest
(and Liquidated Damages, if any), plus (to the extent lawful) interest on the
defaulted interest (and Liquidated Damages, if any), to the persons who are
Holders on a Record Date (or at the Issuers' option a subsequent special record
date) which date shall be the fifteenth day next preceding the date fixed by the
Issuers for the payment of defaulted interest, whether or not such day is a
Business Day, unless the Trustee fixes another record date. At least 15 days
before the subsequent special record date, the Issuers shall mail to each Holder
with a copy to the Trustee a notice that states the subsequent special record
date, the payment date and the amount of defaulted interest (and Liquidated
Damages, if any), and interest payable on such defaulted interest (and
Liquidated Damages), if any, to be paid.
Section 2.13 CUSIP Numbers.
The Issuers in issuing the Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Issuers will promptly notify
the Trustee of any change in the CUSIP numbers.
ARTICLE III
REDEMPTION
Section 3.1 Right of Redemption.
Redemption of Securities shall be made only in accordance with this
Article III. At their election, the Issuers may redeem the Securities in whole
or in part, at any time or from time to time on or after March 15, 2002, at the
Redemption Prices specified under the caption "Redemption," in the Form of Note
attached as Exhibit A hereto, plus accrued but unpaid interest (and Liquidated
Damages, if any) to the Redemption Date. Except as provided in this paragraph,
the next following paragraph, Section 3.2 and paragraph 5 of the Notes, the
Notes may not otherwise be redeemed at the option of the Company.
34
On or prior to March 15, 2000, upon a Public Equity Offering of
Ordinary Shares for cash of Sun International, up to $70 million aggregate
principal amount of the Securities may be redeemed at the option of the Issuers
with cash from the Net Cash Proceeds of such Public Equity Offering, at 109% of
the principal amount thereof (subject to the right of Holders of record on a
Record Date to receive interest due on an Interest Payment Date that is on or
prior to such Redemption Date), plus accrued but unpaid interest (and Liquidated
Damages, if any) to the date of redemption; provided, however, that immediately
following each such redemption not less than $130 million aggregate principal
amount of the Notes are outstanding, provided, further that such redemption
shall occur within 120 days of such Public Equity Offering.
The Notes may be redeemed at the option of the Issuers, in whole but
not in part, upon not less than 30 nor more than 60 days' notice given as
provided herein, at any time at a redemption price equal to the principal amount
thereof, plus accrued and unpaid interest, if any, thereon, plus Liquidated
Damages, if any, to the date fixed for redemption if, as a result of any change
in or amendment to the laws, treaties, rulings or regulations of The Bahamas, or
of any political subdivision or taxing authority thereof or therein, or any
change in the official position of the applicable taxing authority regarding the
application or interpretation of such laws, treaties, rulings or regulations
(including a holding judgment or order of a court of competent jurisdiction) or
any execution thereof or amendment thereto, which is enacted into law or
otherwise becomes effective after the Issue Date, either Issuer is or would be
required on the next succeeding Interest Payment Date to pay Additional Amounts
on the Notes as a result of the imposition of a Bahamian withholding tax and the
payment of such Additional Amounts cannot be avoided by the use of any
reasonable measures available to the Issuers which do not cause the Issuers to
incur any material costs. The Issuers shall also pay to holders on the
redemption date any Additional Amounts then due and which will become due as a
result of the redemption or would otherwise be payable.
Prior to the publication of any notice of redemption in accordance
with the foregoing, the Issuers shall deliver to the Trustee an Officers'
Certificate stating that (i) the payment of Additional Amounts cannot be avoided
by the use of any reasonable measures available to the Issuers which do not
cause the Issuers to incur any material costs and (ii) the Issuers are entitled
to effect such redemption based on the written, substantially unqualified
Opinion of Counsel, which counsel shall be reasonably acceptable to the Trustee,
and the Issuers have or will become obligated to pay Additional Amounts as a
result of such change or amendment. The notice, once delivered by the Issuers to
the Trustee, will be irrevocable.
35
Section 3.2 Redemption Pursuant to Gaming Laws.
If a Holder or a beneficial owner of a Note is required by any
Gaming Authority to be found suitable to hold the Notes, the Holder shall apply
for a finding of suitability within 30 days after a Gaming Authority request or
sooner if so required by such Gaming Authority. The applicant for a finding of
suitability must pay all costs of the investigation for such finding of
suitability. If a Holder or beneficial owner is required to be found suitable to
hold the Notes and is not found suitable by a Gaming Authority, the Holder
shall, to the extent required by applicable law, dispose of his Notes within 30
days or within that time prescribed by a Gaming Authority, whichever is earlier.
If the Holder fails to dispose of his Notes within such time period, the Issuers
may, at their option, redeem such Holder's Notes (a "Required Regulatory
Redemption") at, depending on applicable law, (i) the principal amount thereof,
together with accrued and unpaid interest (and Liquidated Damages, if any) to
the date of the finding of unsuitability by a Gaming Authority, (ii) the amount
that such Holder paid for the Notes, (iii) the fair market value of the Notes,
(iv) the lowest of clauses (i), (ii) and (iii), or (v) such other amount as may
be determined by the appropriate Gaming Authority.
Section 3.3 Notices to Trustee.
If the Issuers elect to redeem Securities pursuant to this Article
III, they shall notify the Trustee in writing of the date on which the Notes are
to be redeemed ("Redemption Date") and the principal amount of Securities to be
redeemed and whether they want the Trustee to give notice of redemption to the
Holders in the name of and at the expense of the Issuers.
If the Issuers elect to reduce the principal amount of Securities to
be redeemed pursuant to Paragraph 5 of the Securities by crediting against any
such redemption Securities it has not previously delivered to the Trustee for
cancellation, it shall so notify the Trustee of the amount of the reduction and
deliver such Securities with such notice.
The Issuers shall give each notice to the Trustee provided for in
this Section 3.3 at least 45 days (unless a shorter period is acceptable to the
Trustee) before the Redemption Date (unless a different notice period shall be
required by a Gaming Authority with respect to a Required Regulatory
Redemption).
Section 3.4 Selection of Securities to Be Redeemed.
If less than all of the Securities are to be redeemed pursuant to
Paragraph 5 thereof (except in the case of a Required Regulatory Redemption),
the Trustee shall select from among such
36
Securities to be redeemed pro rata or by lot or by such other method as the
Trustee shall determine to be fair and appropriate and in such manner as
complies with any applicable legal and stock exchange requirements.
The Trustee shall make the selection from the Securities outstanding
and not previously called for redemption and shall promptly notify the Issuers
in writing of the Securities selected for redemption and, in the case of any
Security selected for partial redemption, the principal amount thereof to be
redeemed. Securities in denominations of $1,000 may be redeemed only in whole.
The Trustee may select for redemption portions (equal to $1,000 or any integral
multiple thereof) of the principal of Securities that have denominations larger
than $1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption.
Section 3.5 Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption Date,
the Issuers shall mail a notice of redemption by first class mail, postage
prepaid, to each Holder whose Securities are to be redeemed (unless a different
notice period shall be required by any Gaming Authority). At the Issuers'
request, the Trustee shall give the notice of redemption in the Issuers' name
and at the Issuers' expense. Each notice for redemption shall identify the
Securities to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price, including the amount of
accrued but unpaid interest (and Liquidated Damages, if any) to be paid
upon such redemption;
(3) the name, address and telephone number of the
Paying Agent;
(4) that Securities called for redemption must be
surrendered to the Paying Agent at the address specified in such notice to
collect the Redemption Price;
(5) that, unless (a) the Issuers default in their
obligation to deposit cash with the Paying Agent in accordance with
Section 3.7 hereof, interest on Securities called for redemption ceases to
accrue on and after the Redemption Date and the only remaining right of
the Holders of such Securities is to receive payment of the Redemption
Price, including accrued but unpaid interest (and Liquidated Damages, if
37
any), upon surrender to the Paying Agent of the Securities called for
redemption and to be redeemed;
(6) if any Security is being redeemed in part,
the portion of the principal amount, equal to $1,000 or any integral
multiple thereof, of such Security to be redeemed and that, after the
Redemption Date, and upon surrender of such Security, a new Security or
Securities in aggregate principal amount equal to the unredeemed portion
thereof will be issued;
(7) if less than all the Securities are to be
redeemed, the identification of the particular Securities (or portion
thereof) to be redeemed, as well as the aggregate principal amount of such
Securities to be redeemed and the aggregate principal amount of Securities
to be outstanding after such partial redemption;
(8) the CUSIP number of the Securities to be
redeemed; and
(9) that the notice is being sent pursuant to this
Section 3.5 and pursuant to the optional redemption provisions of
Paragraph 5 of the Securities.
Section 3.6 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.5,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price, including accrued but unpaid interest (and
Liquidated Damages, if any). Upon surrender to the Trustee or Paying Agent, such
Securities called for redemption shall be paid at the Redemption Price,
including interest (and Liquidated Damages, if any), if any, accrued to and
unpaid on the Redemption Date; provided that if the Redemption Date is after a
regular Record Date and on or prior to the Interest Payment Date, the accrued
interest (and Liquidated Damages, if any) shall be payable to the Holder of the
redeemed Securities registered on the relevant Record Date; and provided,
further, that if a Redemption Date is a Legal Holiday, payment shall be made on
the next succeeding Business Day and no interest shall accrue for the period
from such Redemption Date to such succeeding Business Day.
Section 3.7 Deposit of Redemption Price.
On or before the Redemption Date, the Issuers shall deposit with the
Paying Agent (other than the Issuers or an Affiliate of either of the Issuers)
cash sufficient to pay the
38
Redemption Price of, including accrued but unpaid interest on (and Liquidated
Damages, if any), all Securities to be redeemed on such Redemption Date (other
than Securities or portions thereof called for redemption on that date that have
been delivered by the Issuers to the Trustee for cancellation). The Paying Agent
shall promptly return to the Issuers any cash so deposited which is not required
for that purpose upon the written request of the Issuers.
If the Issuers comply with the preceding paragraph and the other
provisions of this Article III and payment of the Securities called for
redemption is not otherwise prohibited, interest on the Securities to be
redeemed will cease to accrue on the applicable Redemption Date, whether or not
such Securities are presented for payment. Notwithstanding anything herein to
the contrary, if any Security surrendered for redemption in the manner provided
in the Securities shall not be so paid upon surrender for redemption because of
the failure of the Issuers to comply with the preceding paragraph and the other
provisions of this Article III, interest shall continue to accrue and be paid
from the Redemption Date until such payment is made on the unpaid principal,
and, to the extent lawful, on any interest not paid on such unpaid principal, in
each case at the rate and in the manner provided in Section 4.1 hereof and the
Securities.
Section 3.8 Securities Redeemed in Part.
Upon surrender of a Security that is to be redeemed in part, the
Issuers shall execute and the Trustee shall authenticate and deliver to the
Holder, without service charge, a new Security or Securities equal in principal
amount to the unredeemed portion of the Security surrendered.
ARTICLE IV
COVENANTS
Section 4.1 Payment of Securities.
The Issuers shall pay the principal of and interest (and Liquidated
Damages, if any) on the Securities on the dates and in the manner provided in
the Securities and this Indenture. An installment of principal of or interest
(and Liquidated Damages, if any) on the Securities shall be considered paid on
the date it is due if the Trustee or Paying Agent (other than the Issuers or an
Affiliate of either of the Issuers) holds for the benefit of the Holders, on or
before 10:00 a.m. New York City time on that date, cash deposited and designated
for and sufficient to pay the installment.
39
The Issuers shall pay interest on overdue principal and on overdue
installments of interest (and Liquidated Damages, if any) at the rate specified
in the Securities compounded semi-annually, to the extent lawful.
Section 4.2 Maintenance of Office or Agency.
The Issuers and the Guarantors shall maintain in the Borough of
Manhattan, The City of New York, an office or agency where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Issuers and the Guarantors in respect of the Securities and this Indenture
may be served. The Issuers and the Guarantors 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 Issuers and the Guarantors 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 address of the Trustee set forth in Section 13.2.
The Issuers and the Guarantors may also from time to time designate
one or more other offices or agencies where the Securities 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 Issuers and the Guarantors of their obligation to
maintain an office or agency in the Borough of Manhattan, The City of New York,
for such purposes. The Issuers and the Guarantors 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 Issuers and the Guarantors
hereby initially designate the principal corporate trust office of the Trustee
as such office.
Section 4.3 Limitation on Restricted Payments.
The Issuers and the Guarantors shall not, and shall not permit any
of their Subsidiaries to, individually or collectively, directly or indirectly,
make any Restricted Payment if, after giving effect to such Restricted Payment
on a pro forma basis, (i) a Default or an Event of Default shall have occurred
and be continuing, (ii) Sun International is not permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Debt Incurrence Ratio contained
in Section 4.10, or (iii) the aggregate amount of all Restricted Payments made
by Sun International and its Subsidiaries, including after giving effect to such
proposed Restricted Payment, from and after the Issue Date, would exceed the sum
of (a) 50% of the aggregate Consolidated Net Income of Sun International for the
period (taken as one accounting period) commencing January 1, 1996 to and
including the last
40
day of the fiscal quarter ended immediately prior to the date of each such
calculation (or, in the event Consolidated Net Income for such period is a
deficit, then minus 100% of such deficit) (not giving pro forma effect to the
Merger for periods prior to its consummation), plus (b) the aggregate Net Cash
Proceeds received by Sun International from the sale of its Qualified Capital
Stock (other than (i) to a Subsidiary of Sun International and (ii) to the
extent applied in connection with a Qualified Exchange) after the Issue Date,
plus (c) $50 million.
The immediately preceding paragraph, however, will not prohibit (x)
a Qualified Exchange, (y) the payment of any dividend on Capital Stock within 60
days after the date of its declaration if such dividend could have been made on
the date of such declaration in compliance with the foregoing provisions and (z)
the redemption or repurchase of any Capital Stock or Indebtedness of the Issuers
or their Subsidiaries (other than Capital Stock or Indebtedness held by SIIL,
its shareholders or Permitted Holders), if the holder or beneficial owner of
such Capital Stock or Indebtedness is required to be found suitable by any
Gaming Authority to own or vote any security and is found unsuitable by any such
Gaming Authority to so own or vote such security. The full amount of any
Restricted Payment made pursuant to the foregoing clauses (y) and (z) (but not
pursuant to clause (x)) of the immediately preceding sentence, however, will be
deducted in the calculation of the aggregate amount of Restricted Payments
available to be made referred to in clause (iii) of the immediately preceding
paragraph.
Section 4.4 Corporate Existence.
Subject to Article V, the Issuers and the Guarantors shall do or
cause to be done all things necessary to preserve and keep in full force and
effect their corporate existence and the corporate or other existence of each of
their Subsidiaries in accordance with the respective organizational documents of
each of them and the rights (charter and statutory) and corporate franchises of
the Issuers and the Guarantors and each of their Subsidiaries; provided,
however, that neither the Issuers nor any of the Guarantors shall be required to
preserve, with respect to itself, any right or franchise, and with respect to
any of their Subsidiaries, any such existence, right or franchise, if (a) the
Board of Directors of Sun International shall determine reasonably and in good
faith that the preservation thereof is no longer desirable in the conduct of the
business of the Issuers and (b) the loss thereof is not disadvantageous in any
material respect to the Holders.
Section 4.5 Payment of Taxes and Other Claims.
The Issuers and the Guarantors shall, and shall cause each of their
Subsidiaries to, pay or discharge or cause to be
41
paid or discharged, before the same shall become delinquent, (i) all taxes,
assessments and governmental charges (including withholding taxes and any
penalties, interest and additions to taxes) levied or imposed upon the Issuers,
any Guarantor or any of their Subsidiaries or properties and assets of the
Issuers, any Guarantor or any of their Subsidiaries and (ii) all lawful claims,
whether for labor, materials, supplies, services or anything else, which have
become due and payable and which by law have or may become a Lien upon the
property and assets of the Issuers, any Guarantor or any of their Subsidiaries;
provided, however, that neither the Issuers nor any Guarantor shall be required
to pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings and for which disputed amounts adequate
reserves have been established in accordance with GAAP.
Section 4.6 Compliance Certificate; Notice of Default.
(a) The Issuers shall deliver to the Trustee within 120 days
after the end of their fiscal year an Officers' Certificate, one of the signers
of which shall be the principal executive, financial or accounting officer of
the Issuers, complying (whether or not required) with Section 314(a)(4) of the
TIA and stating that a review of their activities and the activities of their
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Issuers have kept, observed, performed and fulfilled its obligations (without
regard to notice requirements or grace periods) under this Indenture and further
stating, as to each such Officer signing such certificate, whether or not the
signer knows of any failure by the Issuers, any Guarantor or any Subsidiary of
the Issuers or any Guarantor to comply with any conditions or covenants in this
Indenture and, if such signer does know of such a failure to comply, the
certificate shall describe such failure with particularity. The Officers'
Certificate shall also notify the Trustee should the relevant fiscal year end on
any date other than the current fiscal year end date.
(b) So long as not contrary to the then current recommendation
of the American Institute of Certified Public Accountants, the Issuers shall
deliver to the Trustee within 120 days after the end of each of their fiscal
years a written report of a firm of independent certified public accountants
with an established national reputation stating that in conducting their audit
for such fiscal year, nothing has come to their attention that caused them to
believe that the Issuers or any Subsidiary of the Issuers were not in compliance
with the provisions set forth in Section 4.3, 4.10 or 4.13 or Article X of this
Indenture.
(c) The Issuers shall, so long as any of the Securities are
outstanding, deliver to the Trustee, immediately
42
upon becoming aware of any Default or Event of Default under this Indenture, an
Officers' Certificate specifying such Default or Event of Default and what
action the Issuers are taking or propose to take with respect thereto. The
Trustee shall not be deemed to have knowledge of a Default or an Event of
Default unless one of its Trust Officers receives notice of the Default giving
rise thereto from the Issuers or any of the Holders.
Section 4.7 Reports.
Whether or not Sun International or SINA is subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, each of Sun
International and SINA shall deliver to the Trustee and to each Holder within 15
days after it is or would have been (if it were subject to such reporting
obligations) required to furnish such with the Commission, annual and quarterly
financial statements substantially equivalent to financial statements that would
have been included in reports filed with the Commission, if such entity were
subject to the requirements of Section 13 or 15(d) of the Exchange Act,
including, with respect to annual information only, a report thereon by the
Issuers' certified independent public accountants as such would be required in
such reports to the Commission, and, in each case, together with a management's
discussion and analysis of financial condition and results of operations which
would be so required and, to the extent permitted by the Exchange Act or the
Commission, file with the Commission the annual, quarterly and other reports
which it is or would have (if it were subject to such reporting obligations)
been required to file with the Commission. Delivery of such reports, information
and documents to the Trustee is for informational purposes only and the
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Issuers' compliance with any of their covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).
Section 4.8 Waiver of Stay, Extension or Usury Laws.
Each of the Issuers and each Guarantor covenants (to the extent that
it may lawfully do so) that it will not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law wherever enacted which would
prohibit or forgive the Issuers or any Guarantor from paying all or any portion
of the principal of or interest (and Liquidated Damages, if any) on the
Securities as contemplated herein, wherever enacted, now or at any time
hereafter in force, or which may affect the covenants or the performance of this
Indenture; and (to the extent that they may lawfully do so) each of the Issuers
and each Guarantor hereby expressly waives all benefit or advantage of any such
law insofar as such law applies to the Securi-
43
ties, and covenant that it shall not hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
Section 4.9 Limitation on Transactions with Affiliates.
None of the Issuers or any of their Subsidiaries will be permitted
on or after the Issue Date to enter into or suffer to exist any contract,
agreement, arrangement or transaction with any Affiliate (an "Affiliate
Transaction"), or any series of related Affiliate Transactions (other than
Exempted Affiliate Transactions) (i) unless it is determined that the terms of
such Affiliate Transaction are fair and reasonable to Sun International or such
Subsidiary, as applicable, and no less favorable to Sun International or such
Subsidiary, as applicable, than could have been obtained in an arm's length
transaction with a non-Affiliate and (ii) if involving consideration to either
party in excess of $2 million, unless such Affiliate Transaction(s) has been
approved by a majority of the members of the Board of Directors that are
disinterested in such transaction and (iii) if involving consideration to either
party in excess of $15 million, unless in addition to the foregoing Sun
International, prior to the consummation thereof, obtains a written favorable
opinion as to the fairness of such transaction to Sun International from a
financial point of view from an independent investment banking firm of national
reputation.
Section 4.10 Limitation on Incurrence of Additional Indebtedness and
Disqualified Capital Stock.
Except as set forth below in this covenant, the Issuers and the
Guarantors will not, and will not permit any of their Subsidiaries to,
individually or collectively, directly or indirectly, issue, assume, guaranty,
incur, become directly or indirectly liable with respect to (including as a
result of an Acquisition), or otherwise become responsible for, contingently or
otherwise (individually and collectively, to "incur" or, as appropriate, an
"incurrence"), any Indebtedness or any Disqualified Capital Stock (including
Acquired Indebtedness), except Permitted Indebtedness. Notwithstanding the
foregoing, if (i) no Event of Default shall have occurred and be continuing at
the time of, or would occur after giving effect on a pro forma basis to, such
incurrence of Indebtedness or Disqualified Capital Stock and (ii) on the date of
such incurrence (the "Incurrence Date"), the Consolidated Coverage Ratio of Sun
International for the Reference Period immediately preceding the Incurrence
Date, after giving effect on a pro forma basis to such incurrence of such
Indebtedness or Disqualified Capital Stock and, to the extent set forth in the
definition of Consolidated Coverage Ratio, the use of proceeds thereof, would be
at least 2.0 to l (the "Debt
44
Incurrence Ratio"), then the Issuers and the Guarantors may incur such
Indebtedness or Disqualified Capital Stock.
Acquired Indebtedness shall be deemed to have been incurred at the
time the person who incurred such Indebtedness becomes a Subsidiary of either of
the Issuers (including upon designation of any Unrestricted Subsidiary or other
person as a Subsidiary) or is merged with or into or consolidated with either of
the Issuers or a Subsidiary of either of the Issuers, as applicable.
Section 4.11 Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries.
The Issuers and the Guarantors will not, and will not permit any of
their Subsidiaries to, individually or collectively, directly or indirectly,
create, assume or suffer to exist any consensual restriction on the ability of
any Subsidiary of Sun International, SINA or such Guarantor to pay dividends or
make other distributions to or on behalf of, or to pay any obligation to or on
behalf of, or otherwise to transfer assets or property to or on behalf of, or
make or pay loans or advances to or on behalf of, Sun International, SINA, the
Guarantors or any Subsidiary of any of them, or to guaranty the Notes, except
(a) restrictions imposed by the Notes or herein, (b) restrictions imposed by
applicable law, (c) existing restrictions under the Credit Agreement, (d)
restrictions under any Acquired Indebtedness not incurred in violation of the
Indenture or any agreement relating to any property, asset, or business acquired
by Sun International or any of its Subsidiaries, which restrictions in each case
existed at the time of acquisition, were not put in place in connection with or
in anticipation of such acquisition and are not applicable to any person, other
than the person acquired, or to any property, asset or business, other than the
property, assets and business so acquired, (e) any such restriction or
requirement imposed by Indebtedness incurred under paragraph (a) of the
definition of "Permitted Indebtedness," provided such restriction or requirement
is no more restrictive than that imposed by the Credit Agreement as of the Issue
Date, (f) restrictions with respect solely to a Subsidiary of Sun International
imposed pursuant to a binding agreement that has been entered into for the sale
or disposition of all or substantially all of the Equity Interests or assets of
such Subsidiary, provided such restrictions apply solely to the Equity Interests
or assets of such Subsidiary that are being sold, (g) restrictions on transfer
contained in FF&E Indebtedness incurred pursuant to paragraph (c) of the
definition of "Permitted Indebtedness," provided such restrictions relate only
to the transfer of the property acquired with the proceeds of such FF&E
Indebtedness, and (h) in connection with and pursuant to Permitted Refinancings,
replacements of restrictions imposed pursuant to clauses (a), (c) or (d) of this
paragraph that are not more
45
restrictive than those being replaced and do not apply to any other person or
assets than those that would have been covered by the restrictions in the
Indebtedness so refinanced. Notwithstanding the foregoing, neither (a) customary
provisions restricting subletting or assignment of any lease, license or
contract entered into in the ordinary course of business, consistent with
industry practice, nor (b) Liens permitted under the terms of the Indenture
shall in and of themselves be considered a restriction on the ability of the
applicable Subsidiary to transfer such agreement or assets, as the case may be.
Section 4.12 Limitation on Liens Securing Indebtedness.
The Issuers and the Guarantors will not, and will not permit any of
their Subsidiaries to, individually or collectively, create, incur, assume or
suffer to exist any Lien of any kind, other than Permitted Liens, upon any of
their respective assets now owned or acquired on or after the date of the
Indenture or upon any income or profits therefrom securing any Indebtedness of
the Issuers, the Guarantors or any of their Subsidiaries other than Senior Debt,
unless the Issuers and Guarantors each provide, and cause their Subsidiaries to
provide, concurrently therewith, that the Notes are equally and ratably so
secured, provided that, if such Indebtedness is Subordinated Indebtedness, the
Lien securing such Subordinated Indebtedness shall be subordinate and junior to
the Lien securing the Notes with the same relative priority as such Subordinated
Indebtedness shall have with respect to the Notes.
Section 4.13 Limitation on Sale of Assets and Subsidiary Stock.
The Issuers and the Guarantors will not, and will not permit any of
their Subsidiaries to, individually or collectively, in one or a series of
related transactions, convey, sell, transfer, assign or otherwise dispose of,
directly or indirectly, any of its property, business or assets, including by
merger or consolidation (in the case of a Guarantor or a Subsidiary of Sun
International or SINA), and including any sale or other transfer or issuance of
any Equity Interests of any Subsidiary of Sun International or SINA, whether by
Sun International, SINA or a Subsidiary of either or through the issuance, sale
or transfer of Equity Interests by a Subsidiary of Sun International or SINA,
and including any sale and leaseback transaction (an "Asset Sale"), unless
(i)(a) within 360 days after the date of such Asset Sale, the Net Cash Proceeds
therefrom (the "Asset Sale Offer Amount") are applied to the optional redemption
of the Notes in accordance with the terms of the Indenture or to the repurchase
of the Notes pursuant to an irrevocable, unconditional cash offer (the "Asset
Sale Offer") to repurchase Notes at a purchase price of 100% of principal amount
(the "Asset Sale Offer
46
Price") together with accrued and unpaid interest and Liquidated Damages, if
any, to the date of payment, made within 330 days of such Asset Sale or (b)
within 330 days following such Asset Sale, the Asset Sale Offer Amount is (1)
invested in assets and property (other than notes, bonds, obligation and
securities) which in the good faith judgment of the Board will immediately
constitute or be a part of a Related Business of Sun International, SINA or such
Subsidiary (if it continues to be a Subsidiary) immediately following such
investment or (2) used to permanently reduce Senior Debt (provided that in the
case of a revolver or similar arrangement that makes credit available, such
commitment is so permanently reduced by such amount), (ii) no more than the
greater of (A) $20 million or (B) 15% of the total consideration for such Asset
Sale or series of related Asset Sales consists of consideration other than cash
or Cash Equivalents, provided however, that more than 15% of the total
consideration may consist of consideration other than cash or Cash Equivalents
if (A) the portion of such consideration that does not consist of cash or Cash
Equivalents consists of assets of a type ordinarily used in the operation of a
Related Business (including Capital Stock of a person that becomes a wholly
owned Subsidiary and that holds such assets) to be used by the Issuers or a
Subsidiary in the conduct of a Related Business, (B) the terms of such Asset
Sale have been approved by a majority of the members of the Board of Directors
of Sun International having no personal stake in such transaction, and (C) if
the value of the assets being disposed of by the Issuers or such Subsidiary in
such transaction (as determined in good faith by such members of the Board of
Directors) is at least $10 million, the Board of Directors of Sun International
has received a written opinion of a nationally recognized investment banking
firm to the effect that such Asset Sale is fair, from a financial point of view,
to Sun International and Sun International has delivered a copy of such opinion
to the Trustee, (iii) no Default or Event of Default shall have occurred and be
continuing at the time of, or would occur after giving effect, on a pro forma
basis, to, such Asset Sale, and (iv) if the value of the assets disposed of is
at least $5 million, the Board of Directors of Sun International determines in
good faith that Sun International or such Subsidiary, as applicable, receives
fair market value for such Asset Sale (as evidenced by a resolution of the Board
of Directors).
Notwithstanding the foregoing provisions of the prior paragraph:
(i) Sun International and its Subsidiaries may, in the
ordinary course of business, convey, sell, transfer, assign or otherwise
dispose of inventory acquired and held for resale in the ordinary course
of business;
47
(ii) Sun International and its Subsidiaries may convey, sell,
transfer, assign or otherwise dispose of assets pursuant to and in
accordance with Article V;
(iii) Sun International and its Subsidiaries may sell or
dispose of damaged, worn out or other obsolete property in the ordinary
course of business so long as such property is no longer necessary for the
proper conduct of the business of Sun International or such Subsidiary, as
applicable;
(iv) the Issuers and the Subsidiaries may convey, sell,
transfer, assign or otherwise dispose of assets to any Issuer or any of
their wholly owned Guarantors; and
(v) the Issuers may sell their Equity Interests in Sun France
and Non-Strategic Real Estate.
An Asset Sale Offer may be deferred until the accumulated Net Cash
Proceeds from Asset Sales not applied to the uses set forth in (i) above (the
"Excess Proceeds") exceeds $20 million and that each Asset Sale Offer shall
remain open for 20 Business Days following its commencement (the "Asset Sale
Offer Period"). Upon expiration of the Asset Sale Offer Period, the Issuers
shall apply the Asset Sale Offer Amount plus an amount equal to accrued and
unpaid interest and Liquidated Damages, if any, to the purchase of all Notes
properly tendered (on a pro rata basis if the Asset Sale Offer Amount is
insufficient to purchase all Notes so tendered) at the Asset Sale Offer Price
(together with accrued and unpaid interest and Liquidated Damages, if any). To
the extent that the aggregate amount of Notes tendered pursuant to an Asset Sale
Offer is less than the Asset Sale Offer Amount, the Issuers may use any
remaining Net Cash Proceeds for general corporate purposes as otherwise
permitted by the Indenture and following the consummation of each Asset Sale
Offer the Excess Proceeds amount shall be reset to zero. For purposes of (ii)
above, total consideration received means the total consideration received for
such Asset Sales minus the amount of (a) Senior Debt assumed by a transferee
which assumption permanently reduces the amount of Indebtedness outstanding on
the Issue Date or permitted pursuant to clause (a) or (c) of the definition of
Permitted Indebtedness (including that in the case of a revolver or similar
arrangement that makes credit available, such commitment is so reduced by such
amount), (b) FF&E Indebtedness secured solely by the assets sold and assumed by
a transferee and (c) property that within 30 days of such Asset Sale is
converted into Cash or Cash Equivalents).
All Net Cash Proceeds from an Event of Loss shall be invested, used
for prepayment of Senior Debt, or used to repurchase Notes, all within the
period and as otherwise provided
48
above in clauses (i)(a) or (i)(b) of the first paragraph of this covenant.
In addition to the foregoing, Sun International will not, and will
not permit any Subsidiary to, directly or indirectly make any Asset Sale of any
of the Equity Interests of any Subsidiary except (i) pursuant to an Asset Sale
of all the Equity Interests of such Subsidiary or (ii) pursuant to an Asset Sale
of shares of common stock with no preferences or special rights or privileges
and with no redemption or prepayment provisions, provided that after such sale
the Issuers or their Subsidiaries own at least 50.1% of the voting and economic
interests of the Capital Stock of such Subsidiary.
Notice of an Asset Sale Offer shall be sent, on or prior to the
commencement of the Asset Sale Offer, by first-class mail, by the Issuers to
each Holder at its registered address, with a copy to the Trustee. The Asset
Sale Offer shall remain open for at least 20 Business Days following its
commencement. The notice to the Holders shall contain all information,
instructions and materials required by applicable law or otherwise material to
such Holders' decision to tender Securities pursuant to the Asset Sale Offer.
The notice, which (to the extent consistent with this Indenture) shall govern
the terms of an Asset Sale Offer, shall state:
(1) that the Asset Sale Offer is being made
pursuant to such notice and this Section 4.13;
(2) the Asset Sale Offer Amount, the Asset Sale
Offer Price (including the amount of accrued but unpaid interest (and
Liquidated Damages, if any)), and the date of purchase;
(3) that any Security or portion thereof not
tendered or accepted for payment will continue to accrue interest if
interest is then accruing;
(4) that, unless the Issuers default in
depositing cash with the Paying Agent (which may not for purposes of this
Section 4.13, notwithstanding anything in this Indenture to the contrary,
be the Issuers or any Affiliate of either of the Issuers) in accordance
with the last paragraph of this clause (b), any Security, or portion
thereof, accepted for payment pursuant to the Asset Sale Offer shall cease
to accrue interest after the Asset Sale Purchase Date;
(5) that Holders electing to have a Security, or
portion thereof, purchased pursuant to an
49
Asset Sale Offer will be required to surrender their Security, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Security completed, to the Paying Agent (which may not for purposes of
this Section 4.13, notwithstanding any other provision of this Indenture,
be the Issuers or any Affiliate of either of the Issuers) at the address
specified in the notice;
(6) that Holders will be entitled to withdraw
their elections, in whole or in part, if the Paying Agent receives, prior
to the expiration of the Asset Sale Offer, a facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the
Securities the Holder is withdrawing and a statement containing a
facsimile signature and stating that such Holder is withdrawing his
election to have such principal amount of Securities purchased;
(7) that if Securities in a principal amount in
excess of the principal amount of Securities to be acquired pursuant to
the Asset Sale Offer are tendered and not withdrawn, the Issuers shall
purchase Securities on a pro rata basis (with such adjustments as may be
deemed appropriate by the Issuers so that only Securities in denominations
of $1,000 or integral multiples of $1,000 shall be acquired);
(8) that Holders whose Securities were purchased
only in part will be issued new Securities equal in principal amount to
the unpurchased portion of the Securities surrendered; and
(9) the circumstances and relevant facts regarding
such Asset Sales.
The Issuers agree that any Asset Sale Offer shall be made in
compliance with all applicable laws, rules, and regulations, including, if
applicable, Regulation 14E of the Exchange Act and the rules and regulations
thereunder and all other applicable Federal and state securities laws, and any
provisions of this Indenture which conflict with such laws shall be deemed to be
superseded by the provisions of such laws.
On or before the date of purchase, the Issuers shall (i) accept for
payment Securities or portions thereof properly tendered pursuant to the Asset
Sale Offer (on a pro rata basis if required pursuant to paragraph (7) above),
(ii) deposit with the Paying Agent cash sufficient to pay the Asset Sale Offer
Price for all Securities or portions thereof so accepted and (iii) deliver to
the Trustee Securities so accepted together with an
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Officers' Certificate setting forth the Securities or portions thereof being
purchased by the Issuers. The Paying Agent shall promptly mail or deliver to
Holders of Securities so accepted payment in an amount equal to the Asset Sale
Offer Price for such Securities, and the Trustee shall promptly authenticate and
mail or deliver to such Holders a new Security equal in principal amount to any
unpurchased portion of the Security surrendered. Any Securities not so accepted
shall be promptly mailed or delivered by the Issuers to the Holder thereof.
Section 4.14 Limitation on Layering Indebtedness.
The Issuers and the Guarantors will not, individually or
collectively, directly or indirectly, incur, or suffer to exist any Indebtedness
that is subordinate in right of payment to any other Indebtedness of either
Issuer or any Guarantor unless, by its terms, such Indebtedness is subordinate
in right of payment to, or ranks pari passu with, the Notes or the Guarantee, as
applicable.
Section 4.15 Limitation on Lines of Business.
None of the Issuers or any of their Subsidiaries shall directly or
indirectly engage to any substantial extent in any line or lines of business
activity other than that which, in the good faith judgment of the Board of
Directors of the Sun International, is a Related Business.
Section 4.16 Limitation on Status as Investment Company.
None of Sun International or any of its Subsidiaries shall become
required to be registered as an "investment company" (as that term is defined in
the Investment Company Act of 1940, as amended), or otherwise become subject to
regulation under the Investment Company Act.
Section 4.17 Future Subsidiary Guarantors.
The Issuers covenant and agree that they shall cause each person
that becomes a Subsidiary of either Issuer to execute a Guarantee in the form of
Exhibit B hereto and shall cause such Subsidiary to enter into a supplemental
indenture for the purpose of jointly and severally guaranteeing, irrevocably and
unconditionally, on a senior subordinated basis, the Issuers' obligations to pay
principal, premium and interest (and Liquidated Damages, if any) on the Notes.
Section 4.18 Payment for Consent.
None of the Issuers or any of their Subsidiaries or Unrestricted
Subsidiaries shall, directly or indirectly, pay or
51
cause to be paid any consideration, whether by way of interest, fee or
otherwise, to any Holder of any Securities for, or as an inducement to, any
consent, waiver or amendment of any of the terms or provisions of the Indenture
or the Securities unless such consideration is offered to be paid or agreed to
be paid to all Holders of the Securities which so consent, waive or agree to
amend in the time frame set forth in the solicitation documents relating to such
consent, waiver or agreement, which solicitation documents must be mailed to all
Holders of the Securities prior to the expiration of the solicitation.
Section 4.19 Suspended Covenants.
During any period of time that (i) the Securities have Investment
Grade Status and (ii) no Default or Event of Default has occurred and is
continuing under the Indenture with respect to the Securities, the Issuers and
their Subsidiaries will not be subject to Section 4.3, 4.10 or 4.13
(collectively, the "Suspended Covenants"). In the event that the Issuers and
their Subsidiaries are not subject to the Suspended Covenants with respect to
the Securities for any period of time as a result of the preceding sentence and,
subsequently, either of the Rating Agencies withdraws its rating or assigns the
Securities a rating below the required Investment Grade Ratings, then the
Issuers and their Subsidiaries will thereafter again be subject to the Suspended
Covenants for the benefit of the Securities and compliance with Section 4.3 made
after the time of such withdrawal or assignment will be calculated in accordance
with the terms of Section 4.3 as if such covenant had been in effect during the
entire period of time from the Issue Date with respect to the Securities.
Section 4.20 Payment of Additional Amounts.
The Issuers will, subject to the limitations and exceptions set
forth below, pay to each Holder such amounts (the "Additional Amounts") as may
be necessary in order that every net payment or deemed payment of (i) principal,
premium, Liquidated Damages and interest, if any, with respect to a Note, or
(ii) net proceeds on the sale or exchange of a Note, each after deduction or
withholding for or on account of any taxes, duties, assessments or governmental
charges of whatever nature imposed or levied by or on behalf of the government
of The Bahamas or any authority thereof or therein having power to tax, will
result in the receipt by the Holders of the amounts that would have been
received by them had no such deduction or withholding been required; provided,
however, that no such Additional Amounts shall be payable in respect of any Note
for:
(1) any tax, duty, assessment, or other governmental charge which
would not have been imposed but for the fact that such Holder:
52
(a) is a resident, domiciliary or national of, or
engaged in business or maintains a permanent establishment or was
physically present in, The Bahamas or any political subdivision thereof or
therein or otherwise has some connection with The Bahamas other than the
mere ownership of, or receipt of payment under, such Note;
(b) presented such Note for payment in The Bahamas or
any political subdivision thereof or therein, unless such Note could not
have been presented for payment elsewhere; or
(c) presented such Note for payment more than 30 days
after the date on which the payment in respect of such Note became due and
payable or provided for, whichever is later, except to the extent that the
Holder would have been entitled to such Additional Amounts if it had
presented such Note for payment on any day within such period of 30 days;
(2) any estate, inheritance, gift, sales, transfer, or similar tax,
assessment or other governmental charge or any taxes, duties, assessments or
other governmental charges that are payable otherwise than by deduction or
withholding from payments on the Notes;
(3) any tax, duty, assessment, or other governmental charge imposed
on a Holder that is not the beneficial owner of a Note to the extent that the
beneficial owner would not have been entitled to the payment of Additional
Amounts had the beneficial owner directly held the Note; or
(4) any combination of items (1), (2) and (3).
Whenever there is mentioned herein in any context, the payment of
the principal of or any premium or interest on, or in respect of, any Note or
the net proceeds received on the sale or exchange of any Note, such mention
shall be deemed to include mention of the payment of Additional Amounts provided
for in the Indenture to the extent that, in such context, Additional Amounts
are, were or would be payable in respect thereof pursuant to the Indenture.
Without limiting a Holder's right to receive payment of Additional
Amounts, in the event that Additional Amounts actually paid with respect to the
Notes are based on rates of deduction or withholding of Bahamian taxes in excess
of the appropriate rate applicable to the Holder of such Notes and, as a result
thereof, such Holder of Notes is entitled to make a claim for a refund or credit
of such excess, then such Holder of Notes shall, by accepting the Notes and
receiving a payment of Additional Amounts, be deemed to have assigned and
transferred all right,
53
title and interest to any such claim for a refund or credit of such excess to
the Issuers. By making such assignment, the Holder of Notes makes no
representation or warranty that the Issuers will be entitled to receive such
claim for a refund or credit and incurs no other obligation with respect
thereto.
ARTICLE V
SUCCESSOR CORPORATION
Section 5.1 Limitation on Merger, Sale or Consolidation.
Neither of the Issuers will, directly or indirectly, consolidate
with or merge with or into another person or sell, lease, convey or transfer all
or substantially all of its assets (computed as to each Issuer on a consolidated
basis), whether in a single transaction or a series of related transactions, to
another Person or group of affiliated Persons or adopt a Plan of Liquidation,
unless (i) either (a) Sun International or SINA, as applicable, is the resulting
surviving or transferee entity (the "Successor Company") or (b) the Successor
Company or, in the case of a Plan of Liquidation, the entity which receives the
greatest value from such Plan of Liquidation is a corporation organized under
the laws of the Commonwealth of the Bahamas (in the case of Sun International
only) or the United States, any state thereof or the District of Columbia and
expressly assumes by supplemental indenture all of the obligations of Sun
International or SINA, as applicable, in connection with the Notes and the
Indenture; (ii) no Default or Event of Default shall exist or shall occur
immediately after giving effect on a pro forma basis to such transaction; (iii)
immediately after giving effect to such transaction on a pro forma basis, the
Consolidated Net Worth of the Successor Company or, in the case of a Plan of
Liquidation, the entity which receives the greatest value from such Plan of
Liquidation is at least equal to the Consolidated Net Worth of Sun International
or SINA, as applicable, immediately prior to such transaction; and (iv)
immediately after giving effect to such transaction on a pro forma basis, the
Successor Company or, in the case of a Plan of Liquidation, the entity which
receives the greatest value from such Plan of Liquidation would immediately
thereafter be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Debt Incurrence Ratio set forth in Section 4.10.
On or prior to the consummation of the proposed transaction, the
Company shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger, sale,
assignment, conveyance, transfer, lease or disposition and such supplemental
indenture executed in connection therewith comply with this Indenture. The
54
Trustee shall be entitled to conclusively rely upon such Officers' Certificate
and Opinion of Counsel.
For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise) of all or substantially all of the properties and assets of
one or more Subsidiaries, the interest of Sun International or SINA, as
applicable, in which constitutes all or substantially all of the properties and
assets of Sun International or SINA, as applicable, shall be deemed to be the
transfer of all or substantially all of the properties and assets of Sun
International, or SINA, as applicable.
Section 5.2 Successor Corporation Substituted.
Upon any consolidation or merger or any transfer of all or
substantially all of the assets of Sun International or SINA, as applicable, or
consummation of a Plan of Liquidation in accordance with the foregoing, the
successor corporation formed by such consolidation or into which Sun
International or SINA is merged or to which such transfer is made or, in the
case of a Plan of Liquidation, the entity which receives the greatest value from
such Plan of Liquidation shall succeed to, and be substituted for, and may
exercise every right and power of, Sun International or SINA, as applicable,
under the Indenture with the same effect as if such successor corporation had
been named therein as Sun International or SINA, as applicable, and Sun
International or SINA, as applicable, shall be released from the obligations
under the Notes and the Indenture except with respect to any obligations that
arise from, or are related to, such transaction.
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
Section 6.1 Events of Default.
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be caused voluntarily or involuntarily or effected, without limitation, by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) the failure by the Issuers to pay any
installment of interest or Liquidated Damages, if any, on the Securities
as and when the same becomes due and payable and the continuance of any
such failure for 30 days;
55
(2) the failure by the Issuers to pay all or any
part of the principal, or premium, if any, on the Securities when and as
the same becomes due and payable at maturity, redemption, by acceleration
or otherwise, whether or not prohibited by the subordination provisions of
the Indenture, including, without limitation, payment of the Change of
Control Purchase Price or the Asset Sale Offer Price, or otherwise;
(3) the failure by either of the Issuers or any of
their Subsidiaries otherwise to comply with Section 4.13 and Articles V
and X;
(4) (A) failure by either of the Issuers or any of
their Subsidiaries to observe or perform any other covenant or agreement
contained in Article IV (except as provided in clauses (1), (2) and (3)
above) and the continuance of such failure for a period of 30 days after
written notice is given to the Issuers by the Trustee or to the Issuers
and the Trustee by the Holders of at least 25% in aggregate principal
amount of the Securities outstanding, or (B) failure by either of the
Issuers or any of their Subsidiaries to observe or perform any other
covenant or agreement contained in the Securities or herein (except as
provided for in clauses (1), (2), (3) and (4)(A) above) and the
continuance of such failure for 60 days after written notice is given to
the Issuers by the Trustee or the Issuers and the Trustee by the Holders
of at least 25% in aggregate principal amount of Securities outstanding;
(5) a decree, judgment, or order by a court of
competent jurisdiction shall have been entered adjudicating either or both
of the Issuers or any of their Significant Subsidiaries as bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization of either or both of the Issuers or any of their
Significant Subsidiaries under any bankruptcy or similar law, and such
decree or order shall have continued undischarged and unstayed for a
period of 60 consecutive days; or a decree or order of a court of
competent jurisdiction, judgment appointing a receiver, liquidator,
trustee, or assignee in bankruptcy or insolvency for either or both of the
Issuers, any of their Significant Subsidiaries, or any substantial part of
the property of any such person, or for the winding up or liquidation of
the affairs of any such person, shall have been entered, and such decree,
judgment, or order shall have remained in force undischarged and unstayed
for a period of 60 days;
56
(6) either or both of the Issuers or any of their
Significant Subsidiaries shall institute proceedings to be adjudicated a
voluntary bankrupt, or shall consent to the filing of a bankruptcy
proceeding against it, or shall file a petition or answer or consent
seeking reorganization under any bankruptcy or similar law or similar
statute, or shall consent to the filing of any such petition, or shall
consent to the appointment of a Custodian, receiver, liquidator, trustee,
or assignee in bankruptcy or insolvency of it or any substantial part of
its assets or property, or shall make a general assignment for the benefit
of creditors, or shall admit in writing its inability to pay its debts as
they become due;
(7) a default in Indebtedness of either of the
Issuers or any of their Subsidiaries with an aggregate principal amount in
excess of $10 million (a) resulting from the failure to pay any principal
at final stated maturity or (b) as a result of which the maturity of such
Indebtedness has been accelerated prior to its stated maturity; and
(8) final unsatisfied judgments not covered by
insurance aggregating in excess of $10 million, at any one time rendered
against either of the Issuers or any of their Subsidiaries and either (a)
the commencement by any creditor of any enforcement proceeding upon any
such judgment that is not promptly stayed or (b) such judgment is not
stayed, bonded or discharged within 60 days.
Section 6.2 Acceleration of Maturity Date; Rescission and Annulment.
If an Event of Default occurs and is continuing (other than an Event
of Default specified in clauses (5) and (6), above, relating to either of the
Issuers or any of their Significant Subsidiaries), then in every such case,
unless the principal of all of the Securities shall have already become due and
payable, either the Trustee or the Holders of 25% in aggregate principal amount
of the Securities then outstanding, by notice in writing to the Issuers (and to
the Trustee if given by Holders) (an "Acceleration Notice"), may declare all
principal and premium, if any, determined as set forth below, and accrued and
unpaid interest and Liquidated Damages, if any, thereon to be due and payable
immediately; provided, however, that if any Senior Debt is outstanding pursuant
to the Credit Agreement, such acceleration shall not be effective until the
earlier of (x) the fifth Business Day after the giving to Sun International and
the Representative of such written notice, unless such Event of Default is cured
or waived prior to such date and (y) the date of accelera-
57
tion of any Senior Debt under the Credit Agreement. If an Event of Default
specified in clauses (5) and (6) above relating to either of the Issuers or any
of their Significant Subsidiaries occurs, all principal and accrued interest
thereon will be immediately due and payable on all outstanding Securities
without any declaration or other act on the part of Trustee or the Holders.
At any time after such a declaration of acceleration being made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article VI, the Holders of a
majority in aggregate principal amount of then outstanding Securities, by
written notice to the Issuers and the Trustee, may rescind, on behalf of all
Holders, any such declaration of acceleration if:
(1) the Issuers have paid or deposited with the Trustee
a sum sufficient to pay
(A) all overdue interest (and Liquidated
Damages, if any) on all Securities,
(B) the principal of (and premium, if any,
applicable to) any Securities which would become due
otherwise than by such declaration of acceleration, and
interest thereon at the rate borne by the Securities,
(C) to the extent that payment of such
interest is lawful, interest upon overdue interest (and
Liquidated Damages, if any) at the rate borne by the
Securities,
(D) all sums paid or advanced by the Trustee
hereunder and the compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel,
and
(2) all Events of Default, other than the non-payment of
amounts which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 6.12.
Notwithstanding the previous sentence of this Section 6.2, no waiver shall be
effective for any Event of Default or event which with notice or lapse of time
or both would be an Event of Default with respect to any covenant or provision
which cannot be modified or amended without the consent of the Holder of each
out-
58
standing Security, unless all such affected Holders agree, in writing, to waive
such Event of Default or other event. No such waiver shall cure or waive any
subsequent default or impair any right consequent thereon.
Section 6.3 Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Issuers covenant that if an Event of Default in payment of
principal, premium, or interest (and Liquidated Damages, if any) specified in
Section 6.1(1) or (2) occurs and is continuing, the Issuers shall, upon demand
of the Trustee, pay to it, for the benefit of the Holders of such Securities,
the whole amount then due and payable on such Securities for principal, premium
(if any) and interest (and Liquidated Damages, if any), and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal (and premium, if any) and on any overdue interest (and Liquidated
Damages, if any), at the rate borne by the Securities, and, in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses of
collection, including compensation to, and expenses, disbursements and advances
of the Trustee, its agents and counsel.
If the Issuers fail to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust in favor of the
Holders, may institute a judicial proceeding for the collection of the sums so
due and unpaid, may prosecute such proceeding to judgment or final decree and
may enforce the same against the Issuers or any other obligor upon the
Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Issuers or any other obligor
upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
Section 6.4 Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Issuers or any other obligor upon the
Securities or the property of the Issuers or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
59
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Issuers for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise to take any and
all actions under the TIA, including
(i) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest (and Liquidated
Damages, if any) owing and unpaid in respect of the Securities and
to file such 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 agent and counsel) and of the Holders
allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the
same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official 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 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 7.7.
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 Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 6.5 Trustee May Enforce Claims Without Possession of
Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust in favor of the Holders, and any
recovery of judgment shall, after provision for the payment of compensation to,
and expenses, disbursements and advances of the Trustee, its agents and counsel,
be for the ratable benefit of
60
the Holders of the Securities in respect of which such judgment has been
recovered.
Section 6.6 Priorities.
Subject to Article XII, any money collected by the Trustee pursuant
to this Article VI shall be applied in the following order, at the date or dates
fixed by the Trustee and, in case of the distribution of such money on account
of principal, premium (if any) or interest (and Liquidated Damages, if any),
upon presentation of the Securities and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
FIRST: To the Trustee in payment of all amounts due pursuant to
Section 7.7;
SECOND: To the Holders in payment of the amounts then due and unpaid
for principal of, premium (if any) and interest (and Liquidated Damages, if any)
on, the Securities in respect of which or for the benefit of which such money
has been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for principal,
premium (if any) and interest (and Liquidated Damages, if any), respectively;
and
THIRD: To whomsoever may be lawfully entitled thereto, the
remainder, if any.
Section 6.7 Limitation on Suits.
No Holder of any Security 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) such Holder has previously given written
notice to the Trustee of a continuing Event of
Default;
(B) the Holders of not less than 25% in
principal amount of then outstanding Securities shall
have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its
own name as Trustee hereunder;
(C) such Holder or Holders have offered to
the Trustee reasonable security or indemnity against the
costs, expenses and liabilities to be incurred or
61
reasonably probable to be incurred in compliance with
such request;
(D) the Trustee for 60 days after its
receipt of such notice, request and offer of indemnity
has failed to institute any such proceeding; and
(E) no direction inconsistent with such
written request has been given to the Trustee during
such 60-day period by the Holders of a majority in
principal amount of the outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
Section 6.8 Unconditional Right of Holders to Receive Principal,
Premium and Interest.
Notwithstanding any other provision of this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of, and premium (if any) and interest (and
Liquidated Damages, if any) on, such Security on the Maturity Dates or Interest
Payment Dates, as applicable, of such payments as expressed in such Security (in
the case of redemption, the Redemption Price on the Redemption Date; in the case
of a Change of Control, the Change of Control Purchase Price, on the Change of
Control Purchase Date; and in the case of an Asset Sale, the Asset Sale Offer
Price on the relevant purchase date); and to institute suit for the enforcement
of any such payment, and such rights shall not be impaired without the consent
of such Holder.
Section 6.9 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in Section 2.7, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or
62
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 6.10 Delay or Omission Not Waiver.
No delay or omission by the Trustee or by any Holder of any Security
to exercise any right or remedy arising upon any Event of Default shall impair
the exercise of any such right or remedy or constitute a waiver of any such
Event of Default. Every right and remedy given by this Article VI or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
Section 6.11 Control by Holders.
The Holder or Holders of a majority in aggregate principal amount of
then outstanding Securities shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred upon the Trustee, provided, that
(1) such direction shall not be in conflict with any
rule of law or with this Indenture,
(2) the Trustee shall not determine that the action so
directed would be unjustly prejudicial to the Holders not taking
part in such direction, and
(3) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction.
Section 6.12 Waiver of Past Default.
Subject to Section 6.8, the Holder or Holders of not less than a
majority in aggregate principal amount of the outstanding Securities may, by
written notice to the Trustee on behalf of all Holders, prior to the declaration
of the maturity of the Securities, waive any past default hereunder and its
consequences, except a default
(A) in the payment of the principal of,
premium, if any, or interest (and Liquidated Damages, if
any) on, any Security as specified in clauses (1) and
(2) of Section 6.1, or
(B) in respect of a covenant or provision
hereof which, under Article IX, cannot be modified or
amended
63
without the consent of the Holder of each outstanding
Security affected.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair the exercise of any right arising therefrom.
Section 6.13 Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, 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,
suffered or omitted to be taken by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by such
party litigant; but the provisions of this Section 6.13 shall not apply to any
suit instituted by the Issuers, to any suit instituted by the Trustee, to any
suit instituted by any Holder, or group of Holders, holding in the aggregate
more than 10% in aggregate principal amount of the outstanding Securities, or to
any suit instituted by any Holder for enforcement of the payment of principal
of, or premium (if any) or interest (and Liquidated Damages, if any) on, any
Security on or after the Maturity Date of such Security.
Section 6.14 Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every case, subject to any
determination in such proceeding, the Issuers, the Guarantors, the Trustee and
the Holders shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee and
the Holders shall continue as though no such proceeding had been instituted.
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ARTICLE VII
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this
Indenture and covenants and agrees to perform the same, as herein expressed.
Section 7.1 Duties of Trustee.
(a) If a Default or 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 their exercise
as a prudent person would exercise or use under the circumstances in the conduct
of his own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
(1) The Trustee need perform only those duties as are
specifically set forth in this Indenture and no others, and no
covenants or obligations shall be implied in or read into this
Indenture which are adverse to the Trustee.
(2) In the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, in the case of any such certificates or
opinions which by any provision hereof are specifically required to
be furnished to the Trustee, 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 liability 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
subsection (b) of this Section 7.1.
(ii) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is proved
that the Trustee was grossly negligent in ascertaining the pertinent
facts.
(iii) The Trustee shall not be liable with respect to
any action it takes or omits to take in
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good faith in accordance with a direction received by it pursuant to
Section 6.12.
(d) The Trustee shall comply with any order or directive of a
Gaming Authority that the Trustee submit, at the expense of the Issuers, an
application for any license, finding of suitability or other approval pursuant
to any gaming law and will cooperate fully and completely in any proceeding
related to such application; provided, however, that in the event the Trustee in
its reasonable judgment determines that complying with such order or directive
would subject it or its officers or directors to unreasonable or onerous
requirements, the Trustee may, at its option, resign as Trustee in lieu of
complying with such order or directive; and provided, further, that no
resignation shall become effective until a successor Trustee is appointed and
delivers a written acceptance in accordance with Section 7.8 hereof.
(e) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or to take or omit to take any
action under this Indenture or at the request, order or direction of the Holders
or in the exercise of any of its rights or powers if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
(f) Every provision of this Indenture that in any way relates
to the Trustee is subject to subsections (a), (b), (c), (d) and (e) of this
Section 7.1.
(g) The Trustee shall not be liable for interest on any assets
received by it except as the Trustee may agree in writing with the Issuers.
Assets held in trust by the Trustee need not be segregated from other assets
except to the extent required by law.
Section 7.2 Rights of Trustee.
Subject to Section 7.1:
(a) The Trustee may conclusively rely on 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
consult with counsel of its selection and may require an Officers' Certificate
or an Opinion of Counsel, which shall conform to Sections 13.4 and 13.5. The
Trustee shall not
66
be liable for any action it takes or omits to take in good faith in reliance on
such certificate or opinion.
(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 which it believes to be authorized or within its
rights or powers.
(e) 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.
(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, order or
direction of any of the Holders, pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby.
(g) Except with respect to Section 4.1, the Trustee shall have
no duty to inquire as to the performance of the Issuers' covenants in Article IV
hereof. In addition, the Trustee shall not be deemed to have knowledge of any
Default or Event of Default except (i) any Event of Default occurring pursuant
to Sections 6.1(1), 6.1(2) and 4.1, or (ii) any Default or Event of Default of
which the Trustee shall have received written notification or obtained actual
knowledge.
Section 7.3 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Issuers, any
Guarantor, any of their respective Subsidiaries, or their respective Affiliates
with the same rights it would have if it were not Trustee. Any Agent may do the
same with like rights. However, the Trustee must comply with Sections 7.10 and
7.11.
Section 7.4 Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy
of this Indenture or the Securities and it shall not be accountable for the
Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement in
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the Securities (other than the Trustee's certificate of authentication) or for
the use or application of any funds received by a Paying Agent other than the
Trustee.
Section 7.5 Notice of Default.
If a Default or an Event of Default occurs and is continuing and if
it is actually known to the Trustee, the Trustee shall mail to each
Securityholder notice of the uncured Default or Event of Default within 90 days
after such Default or Event of Default occurs. Except in the case of a Default
or an Event of Default in payment of principal (or premium, if any) of, or
interest (and Liquidated Damages, if any) on, any Security (including the
payment of the Change of Control Purchase Price on the Change of Control
Purchase Date, the Redemption Price on the Redemption Date, and the Asset Sale
Offer Price on the relevant purchase date), the Trustee may withhold the notice
if and so long as a Trust Officer in good faith determines that withholding the
notice is in the interest of the Securityholders.
Section 7.6 Reports by Trustee to Holders.
If required by law, within 60 days after each January 31 beginning
with the January 31 following the date of this Indenture, the Trustee shall mail
to each Securityholder a brief report dated as of such January 31 that complies
with TIA ss. 313(a). If required by law, the Trustee also shall comply with TIA
xx.xx. 313(b) and 313(c).
The Issuers shall promptly notify the Trustee in writing if the
Securities become listed on any stock exchange or automatic quotation system.
A copy of each report at the time of its mailing to Securityholders
shall be mailed to the Issuers and filed with the SEC and each stock exchange,
if any, on which the Securities are listed.
Section 7.7 Compensation and Indemnity.
The Issuers shall pay to the Trustee from time to time such
compensation as shall be agreed in writing between the Issuers and the Trustee
for its services. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Issuers shall reimburse the
Trustee upon request for all reasonable disbursements, expenses and advances
incurred or made by it. Such expenses shall include the reasonable compensation,
disbursements, fees and expenses of the Trustee's agents, accountants, experts
and counsel.
The Issuers shall indemnify the Trustee (in its capacity as Trustee,
Registrar and Paying Agent) and each of its offi-
68
cers, directors, attorneys-in-fact and agents for, and hold it harmless against,
any claims, loss, damage, demand, fee, expense (including but not limited to
reasonable compensation, disbursements and expenses of the Trustee's agents and
counsel), loss or liability incurred by them without negligence or bad faith on
its part, arising out of or in connection with the acceptance or administration
of this trust and their rights or duties hereunder including the reasonable
costs and expenses of defending themselves against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The Trustee shall notify the Issuers promptly of any claim asserted
against the Trustee for which it may seek indemnity. The Issuers shall defend
the claim and the Trustee shall provide reasonable cooperation at the Issuers'
expense in the defense. The Trustee may have separate counsel and the Issuers
shall pay the reasonable fees and expenses of such counsel; provided, that the
Issuers will not be required to pay such fees and expenses if they assume the
Trustee's defense and there is no conflict of interest between the Issuers and
the Trustee in connection with such defense. The Issuers need not pay for any
settlement made without their written consent. The Issuers need not reimburse
any expense or indemnify against any loss or liability to the extent incurred by
the Trustee through its negligence, bad faith or willful misconduct.
To secure the Issuers' payment obligations in this Section 7.7, the
Trustee shall have a lien prior to the Securities on all assets held or
collected by the Trustee, in its capacity as Trustee, except assets held in
trust to pay principal and premium, if any, of or interest (and Liquidated
Damages, if any) on particular Securities.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.1(5) or (6) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The Issuers' obligations under this Section 7.7 and any lien arising
hereunder shall survive the resignation or removal of the Trustee, the discharge
of the Issuers' obligations pursuant to Article VIII of this Indenture and any
rejection or termination of this Indenture under any Bankruptcy Law.
Section 7.8 Replacement of Trustee.
The Trustee may resign by so notifying the Issuers in writing. The
Holder or Holders of a majority in principal amount of the outstanding
Securities may remove the Trustee by so notifying the Issuers and the Trustee in
writing and may appoint a successor trustee with the Issuers' consent. The
Issuers may remove the Trustee if:
69
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver, Custodian, or other public officer takes
charge of the Trustee or its property; or
(4) 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 Issuers shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holder or
Holders of a majority in principal amount of the Securities may appoint a
successor Trustee to replace the successor Trustee appointed by the Issuers.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers. Immediately after that
and provided that all sums owing to the Trustee provided for in Section 7.7 have
been paid, the retiring Trustee shall transfer all property held by it as
Trustee to the successor Trustee, subject to the lien provided in Section 7.7,
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. A successor Trustee shall mail notice of its
succession to each Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuers or the
Holder or Holders of at least 10% in principal amount of the outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.8, the Company's obligations under Section 7.7 shall continue for the benefit
of the retiring Trustee.
Section 7.9 Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts
into, or transfers all or substantially all of its corporate
70
trust business to, another corporation, the resulting, surviving or transferee
corporation without any further act shall, if such resulting, surviving or
transferee corporation is otherwise eligible hereunder, be the successor
Trustee.
Section 7.10 Eligibility; Disqualification.
The Trustee shall at all times satisfy the requirements of TIA ss.
310(a)(1) and TIA ss. 310(a)(5). The Trustee shall have a combined capital and
surplus of at least $25,000,000 as set forth in its most recent published annual
report of condition. The Trustee shall comply with TIA ss. 310(b).
Section 7.11 Preferential Collection of Claims against Issuers.
The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated.
ARTICLE VIII
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.1 Option to Effect Legal Defeasance or Covenant
Defeasance.
The Issuers may, at their option at any time, elect to have Section
8.2 or Section 8.3 applied to all outstanding Securities upon compliance with
the conditions set forth below in this Article VIII.
Section 8.2 Legal Defeasance and Discharge.
Upon the Issuers' exercise under Section 8.1 of the option
applicable to this Section 8.2, the Issuers and the Guarantors shall be deemed
to have been discharged from their respective obligations with respect to all
outstanding Securities on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, such Legal Defeasance means
that the Issuers shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Securities, which shall thereafter
be deemed to be "outstanding" only for the purposes of Section 8.5 and the other
Sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all their other obligations under such Securities and this Indenture
(and the Trustee, on demand of and at the expense of the Issuers, shall execute
proper instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (a) the
71
rights of Holders of outstanding Securities to receive solely from the trust
fund described in Section 9.4, and as more fully set forth in such section,
payments in respect of the principal of, premium, if any, and interest (and
Liquidated Damages, if any) on such Securities when such payments are due, (b)
the Issuers' obligations with respect to such Securities under Sections 2.4,
2.6, 2.7, 2.10 and 4.2, (c) the rights, powers, trusts, duties and immunities of
the Trustee hereunder and the Issuers' obligations in connection therewith and
(d) this Article VIII. Subject to compliance with this Article VIII, the Issuers
may exercise their option under this Section 8.2 notwithstanding the prior
exercise of their option under Section 8.3 with respect to the Securities.
Section 8.3 Covenant Defeasance.
Upon the Issuers' exercise under Section 8.1 of the option
applicable to this Section 8.3, the Issuers shall be released from their
obligations under the covenants contained in Sections 4.3, 4.6, 4.7, 4.9, 4.10,
4.11, 4.12, 4.13, 4.14, 4.15 and 4.16, Article V and Article X with respect to
the outstanding Securities on and after the date the conditions set forth below
are satisfied (hereinafter, "Covenant Defeasance"), and the Securities 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, such Covenant
Defeasance means that, with respect to the outstanding Securities, the Issuers
need not 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, but, except as specified above, the remainder of this
Indenture and such Securities shall be unaffected thereby. In addition, upon the
Company's exercise under Section 8.1 of the option applicable to this Section
8.3, Sections 6.1(3) through 6.1(8) shall not constitute Events of Default.
Section 8.4 Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either
Section 8.2 or Section 8.3 to the outstanding Securities:
(a) The Issuers shall irrevocably have deposited or caused to
be deposited with the Trustee (or another trustee satisfying the requirements of
Section 7.10 who shall agree to comply with the provisions of this Article VIII
applicable to it)
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as trust funds in trust for the purpose of making the following payments,
specifically pledged as security for, and dedicated solely to, the benefit of
the Holders of such Securities, (a) cash in an amount, or (b) U.S. Government
Obligations which through the scheduled payment of principal and interest in
respect thereof in accordance with their terms will provide, not later than one
day before the due date of any payment, cash in an amount, or (c) a combination
thereof, in such amounts, as in each case will be sufficient, in the opinion of
a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and discharge the
principal of, premium, if any, and interest (and Liquidated Damages, if any) on
the outstanding Securities on the stated maturity or on the applicable
redemption date, as the case may be, of such principal or installment of
principal, premium, if any, or interest (and Liquidated Damages, if any);
provided that the Trustee shall have been irrevocably instructed to apply such
cash and the proceeds of such U.S. Government Obligations to said payments with
respect to the Securities.
(b) In the case of an election under Section 8.2, the Issuers
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably satisfactory to the Trustee confirming that (i) the Issuers have
received from, or there has been published by, the Internal Revenue Service a
ruling or (ii) since the date hereof, there has been a change in the applicable
Federal income tax law, in either case to the effect that, and based thereon
such opinion shall confirm that, the Holders of the outstanding Securities will
not recognize income, gain or loss for Federal income tax purposes as a result
of such Legal Defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such Legal Defeasance has not occurred;
(c) In the case of an election under Section 8.3, the Issuers
shall have delivered to the Trustee an Opinion of Counsel in the United States
to the effect that the Holders of the outstanding Securities 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 in the same
amount, 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 with respect to the
Securities shall have occurred and be continuing on the date of such deposit or,
insofar as Section 7.1(5) or 7.1(6) is concerned, at any time in the period
ending on the 91st day after the date of such deposit (it being understood that
this condition shall not be deemed satisfied until the expiration of such
period);
73
(e) Such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under, this
Indenture or any other material agreement or instrument to which either of the
Issuers or any of their Subsidiaries is a party or by which either of the
Issuers or any of their Subsidiaries is bound;
(f) In the case of an election under either Section 8.2 or
8.3, the Issuers shall have delivered to the Trustee an Officers' Certificate
stating that the deposit made by the Issuers pursuant to its election under
Section 8.2 or 8.3 was not made by the Issuers with the intent of preferring the
Holders over other creditors of the Issuers or with the intent of defeating,
hindering, delaying or defrauding creditors of the Issuers or others;
(g) The Issuers shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel in the United States, each
stating that the conditions precedent provided for, in the case of the Officers'
Certificate, in subsections (a) through (f) of this Section 8.4 and, in the case
of the Opinion of Counsel, subsections (a) (with respect to the validity and
perfection of the security interest), (b), (c) and (e) of this Section 8.4 have
been complied with as contemplated by this Section 8.4.
Section 8.5 Deposited Cash and U.S. Government Obligations to Be
Held in Trust; Other Miscellaneous Provisions.
Subject to Section 8.6, all cash and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee (or other qualifying
trustee, collectively for purposes of this Section 8.5, the "Trustee") pursuant
to Section 8.4 in respect of the outstanding Securities shall be held in trust
and applied by the Trustee, in accordance with the provisions of such Securities
and this Indenture, to the payment, either directly or through any Paying Agent
as the Trustee may determine, to the Holders of such Securities of all sums due
and to become due thereon in respect of principal, premium, if any, and interest
(and Liquidated Damages, if any), but such money need not be segregated from
other funds except to the extent required by law.
The Issuers shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 8.4 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 outstanding Securities.
74
Section 8.6 Repayment to Issuers.
Anything in this Article VIII to the contrary notwithstanding, the
Trustee shall deliver or pay to the Issuers from time to time upon the request
of the Issuers any cash or U.S. Government Obligations held by it as provided in
Section 8.4 which, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereto delivered to the
Trustee (which may be the opinion delivered under Section 8.4(a)), are in excess
of the amount thereof which would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Issuers, in trust for the payment of the principal of, premium, if
any, or interest (and Liquidated Damages, if any) on any Security and remaining
unclaimed for two years after such principal, and premium, if any, or interest
(and Liquidated Damages, if any) has become due and payable shall be paid to the
Issuers on their request; and the Holder of such Security shall thereafter look
only to the Issuers for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money 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 Issuers 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 Issuers.
Section 8.7 Reinstatement.
If the Trustee or Paying Agent is unable to apply any cash or U.S.
Government Obligations in accordance with Section 8.2 or 8.3, 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
Issuers' obligations under this Indenture and the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to Section 8.2 or 8.3
until such time as the Trustee or Paying Agent is permitted to apply such money
in accordance with Section 8.2 and 8.3, as the case may be; provided, however,
that, if the Issuers make any payment of principal of, premium, if any, or
interest (and Liquidated Damages, if any) on any Security following the
reinstatement of its obligations, the Issuers shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the Cash held by
the Trustee or Paying Agent.
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ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1 Supplemental Indentures Without Consent of Holders.
Without the consent of any Holder, the Issuers or any Guarantor,
when authorized by Board Resolutions, and the Trustee, at any time and from time
to time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to cure any ambiguity, defect, or inconsistency, or
to make any other provisions with respect to matters or questions
arising under this Indenture which shall not be inconsistent with
the provisions of this Indenture, provided such action pursuant to
this clause (1) shall not adversely affect the interests of any
Holder in any respect;
(2) to add to the covenants of the Issuers for the
benefit of the Holders, or to surrender any right or power herein
conferred upon the Issuers or to make any other change that does not
adversely affect the rights of any Holder; provided, that the
Issuers have delivered to the Trustee an Opinion of Counsel stating
that such change does not adversely affect the rights of any Holder;
(3) to provide for additional Guarantors of the
Securities;
(4) to evidence the succession of another person to
either of the Issuers, and the assumption by any such successor of
the obligations of such Issuer, herein and in the Securities in
accordance with Article V; or
(5) to comply with the TIA.
Section 9.2 Amendments, Supplemental Indentures and Waivers with
Consent of Holders.
Subject to Section 6.8 and the last sentence of this paragraph, with
the consent of the Holders of not less than a majority in aggregate principal
amount of then outstanding Securities, by written act of said Holders delivered
to the Issuers and the Trustee, the Issuers and any Guarantor, when authorized
by Board Resolutions, and the Trustee may amend or supplement this Indenture or
the Securities or enter into an indenture or indentures supplemental hereto for
the purpose of
76
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or the Securities or of modifying in any manner the
rights of the Holders under the this Indenture or the Securities. Subject to
Section 6.8 and the last sentence of this paragraph, the Holder or Holders of a
majority, in principal amount of then outstanding Securities may waive
compliance by the Issuers or any Guarantor with any provision of this Indenture
or the Securities. Notwithstanding the foregoing provisions of this Section 9.2,
without the consent of each Holder affected thereby, no such amendment,
supplemental indenture or waiver shall:
(1) reduce the percentage of principal amount of
Securities whose Holders must consent to an amendment, supplement or
waiver of any provision of this Indenture or the Securities;
(2) reduce the rate or extend the time for payment of
interest (and Liquidated Damages, if any) on any Security;
(3) reduce the principal amount of any Security, or
reduce the Change of Control Purchase Price or the Asset Sale Offer
Price;
(4) change the Stated Maturity of any Security;
(5) alter the redemption provisions of Article III in a
manner adverse to any Holder;
(6) make any changes in the provisions concerning
waivers of Defaults or Events of Default by Holders of the
Securities (except to increase any percentage of Securities required
to consent to a waiver or to provide that certain other provisions
of the Indenture cannot be modified or waived without the consent of
the Holder of each outstanding Security affected thereby) or the
rights of Holders to recover the principal or premium of, interest
(and Liquidated Damages, if any) on, or redemption payment with
respect to, any Security;
(7) make any changes in Section 6.8, 6.12 or this third
sentence of this Section 9.2; or
(8) make the principal of, or the interest (and
Liquidated Damages, if any) on, any Security payable with anything
or at anywhere other than as provided for in this Indenture and the
Securities as in effect on the date hereof; or
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(9) make the Securities or Guarantees further
subordinated in right of payment to any extent or under any
circumstances to any other indebtedness.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Issuers shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Issuers to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture.
After an amendment, supplement or waiver under this Section 9.2 or
9.4 becomes effective, it shall bind each Holder.
In connection with any amendment, supplement or waiver under this
Article IX, the Issuers 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 9.3 Compliance with TIA.
Every amendment, waiver or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
Section 9.4 Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is not
made on any Security. However, any such Holder or subsequent Holder may revoke
the consent as to his Security or portion of his Security by written notice to
the Issuers or the person designated by the Issuers as the person to whom
consents should be sent if such revocation is received by the Issuers or such
person before the date on which the Trustee receives an Officers' Certificate
certifying that the Holders of the requisite principal amount of Securities have
consented (and not theretofore revoked such consent) to the amendment,
supplement or waiver.
The Issuers may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be the date so fixed by the
Issuers notwithstanding
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the provisions of the TIA. If a record date is fixed, then notwithstanding the
last sentence of the immediately preceding paragraph, those persons who were
Holders at such record date, and only those persons (or their duly designated
proxies), shall be entitled to revoke any consent previously given, whether or
not such persons continue to be Holders after such record date. No such consent
shall be valid or effective for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder, unless it makes a change described in any of clauses
(1) through (9) of Section 9.2, in which case, the amendment, supplement or
waiver shall bind only each Holder of a Security who has consented to it and
every subsequent Holder of a Security or portion of a Security that evidences
the same debt as the consenting Holder's Security; provided, that any such
waiver shall not impair or affect the right of any Holder to receive payment of
principal and premium of and interest (and Liquidated Damages, if any) on a
Security, on or after the respective dates set for such amounts to become due
and payable expressed in such Security, or to bring suit for the enforcement of
any such payment on or after such respective dates.
Section 9.5 Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee or require the Holder to put an appropriate notation on the
Security. The Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if the Issuers or
the Trustee so determines, the Issuers in exchange for the Security shall issue,
the Guarantors shall endorse and the Trustee shall authenticate a new Security
that reflects the changed terms. Any failure to make the appropriate notation or
to issue a new Security shall not affect the validity of such amendment,
supplement or waiver.
Section 9.6 Trustee to Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article IX, provided, that the Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Officers' Certificate and Opinion of Counsel
stating that the execution of any amendment, supplement or waiver authorized
pursuant to this Article IX is authorized or permitted by this Indenture.
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ARTICLE X
RIGHT TO REQUIRE REPURCHASE
Section 10.1 Repurchase of Securities at Option of the Holder upon
Change of Control.
(a) In the event that a Change of Control Triggering Event
occurs, each Holder of Securities shall have the right, at such Holder's option,
subject to the terms and conditions of this Indenture, to require the Issuers to
repurchase all or any part of such Holder's Notes (provided, that the principal
amount of such Notes at maturity must be $1,000 or an integral multiple thereof)
on the date that is no later than 45 Business Days after the occurrence of such
Change of Control Triggering Event (the "Change of Control Purchase Date"), at a
cash price equal to 101% of the principal amount thereof (the "Change of Control
Purchase Price"), plus accrued but unpaid interest (and Liquidated Damages), if
any, to the Change of Control Purchase Date.
(b) In the event that, pursuant to this Section 10.1, the
Issuers shall be required to commence an offer to purchase Notes (a "Change of
Control Offer"), the Issuers shall follow the procedures set forth in this
Section 10.1 as follows:
(1) the Change of Control Offer shall commence within 20
Business Days following the Change of Control Triggering Event;
(2) the Change of Control Offer shall remain open for at
least 20 Business Days;
(3) within 5 Business Days following the expiration of
a Change of Control Offer, the Issuers shall purchase all of the
tendered Securities at the Change of Control Purchase Price, plus
accrued interest (and Liquidated Damages, if any);
(4) if the Change of Control Purchase Date is on or
after an interest payment record date and on or before the related
interest payment date, any accrued interest (and Liquidated Damages,
if any) will be paid to the Person in whose name a Security is
registered at the close of business on such record date, and no
additional interest will be payable to Securityholders who tender
Securities pursuant to the Change of Control Offer;
(5) the Issuers shall use their best efforts to provide
the Trustee with notice of the
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Change of Control Offer at least 5 Business Days before the commencement
of any Change of Control Offer; and
(6) on or before the commencement of any Change of
Control Offer, the Issuers or the Trustee (upon the request and at
the expense of the Issuers) shall send, by first-class mail, a
notice to each of the Securityholders, which (to the extent
consistent with this Indenture) shall govern the terms of the Change
of Control Offer and shall state:
(i) that the Change of Control Offer is being made
pursuant to this Section 10.1 and that all Securities, or portions
thereof, tendered will be accepted for payment;
(ii) the Change of Control Purchase Price (including the
amount of accrued but unpaid interest (and Liquidated Damages, if
any)) and the Change of Control Purchase Date;
(iii) that any Security, or portion thereof, not
tendered or accepted for payment will continue to accrue interest;
(iv) that, unless the Issuers default in depositing cash
with the Paying Agent in accordance with the last paragraph of this
subsection (b), or such payment is prevented for any reason, any
Security, or portion thereof, accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest after the
Change of Control Purchase Date;
(v) that Holders electing to have a Security, or portion
thereof, purchased pursuant to a Change of Control Offer will be
required to surrender the Security, with the form entitled "Option
of Holder to Elect Purchase" on the reverse of the Security
completed, to the Paying Agent (which may not for purposes of this
Section 10.1, notwithstanding anything in this Indenture to the
contrary, be the Issuers or any Affiliate of either of the Issuers)
at the address specified in the notice prior to the expiration of
the Change of Control Offer;
(vi) that Holders will be entitled to withdraw their
election, in whole or in part, if the Paying Agent receives, prior
to the expiration of the Change of Control Offer, a facsimile
transmission or letter setting forth the name of
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the Holder, the principal amount of the Securities the Holder is
withdrawing and a statement containing a facsimile signature and
stating that such Holder is withdrawing his election to have such
principal amount of Securities purchased; and
(vii) a brief description of the events resulting in
such Change of Control Triggering Event.
Any such Change of Control Offer shall comply with any and all
applicable provisions of Federal and state laws, including those regulating
tender offers, if applicable, and any provisions of this Indenture which
conflict with such laws shall be deemed to be superseded by the provisions of
such laws.
On or before the Change of Control Purchase Date, the Issuers shall
(i) accept for payment Securities or portions thereof properly tendered pursuant
to the Change of Control Offer prior to the expiration of the Change of Control
Offer, (ii) deposit with the Paying Agent cash sufficient to pay the Change of
Control Purchase Price (including accrued and unpaid interest (and Liquidated
Damages, if any)) of all Securities so tendered and (iii) deliver to the Trustee
Securities so accepted together with an Officers' Certificate listing the
Securities or portions thereof being purchased by the Issuers. The Paying Agent
shall promptly pay to the Holders of Securities so accepted payment in an amount
equal to the Change of Control Purchase Price (plus accrued and unpaid interest
(and Liquidated Damages, if any)), and the Trustee shall promptly authenticate
and mail or deliver to such Holders a new Security equal in principal amount to
any unpurchased portion of the Security surrendered.
ARTICLE XI
GUARANTEES
Section 11.1 Guarantees.
(a) In consideration of good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, each of the Guarantors
hereby irrevocably and unconditionally guarantees, jointly and severally, on a
senior subordinated basis (the "Guarantee") to each Holder of a Security
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, irrespective of the validity and enforceability of this Indenture,
the Securities or the obligations of the Issuers under this Indenture or the
Securities, that: (w) the principal and premium (if any) of and interest (and
Liquidated Damages, if any) on the Securities will be paid in full when due,
whether at the maturity or interest payment date, by accel-
82
eration, call for redemption, upon an Change of Control Offer, an Asset Sale
Offer or otherwise; (x) all other obligations of the Issuers to the Holders or
the Trustee under this Indenture or the Securities will be promptly paid in full
or performed, all in accordance with the terms of this Indenture and the
Securities; and (y) in case of any extension of time of payment or renewal of
any Securities or any of such other obligations, they will be paid in full when
due or performed in accordance with the terms of the extension or renewal,
whether at maturity, by acceleration, call for redemption, upon an Offer to
Purchase or otherwise. Failing payment when due of any amount so guaranteed for
whatever reason, each Guarantor shall be obligated to pay the same before
failure so to pay becomes an Event of Default.
(b) Each Guarantor hereby agrees that its obligations with
regard to this Guarantee shall be unconditional, irrespective of the validity,
regularity or enforceability of the Securities or this Indenture, the absence of
any action to enforce the same, the recovery of any judgment against the
Issuers, any action to enforce the same or any other circumstances that 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 Issuers,
the any right to require a proceeding first against the Issuers or right to
require the prior disposition of the assets of the Issuers to meet its
obligations, protest, notice and all demands whatsoever and covenants that this
Guarantee will not be discharged except by complete performance of the
obligations contained in the Securities and this Indenture.
(c) If any Holder or the Trustee is required by any court or
otherwise to return to either the Issuers or any Guarantor, or any Custodian,
Trustee, or similar official acting in relation to either the Issuers or such
Guarantor, any amount paid by either the Issuers or such Guarantor to the
Trustee or such Holder, this Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect. Each Guarantor agrees that it will
not be entitled to any right of subrogation in relation to the Holders in
respect of any obligations guaranteed hereby until payment in full of all
obligations guaranteed hereby. Each Guarantor further agrees that, as between
such Guarantor, on the one hand, and the Holders and the Trustee, on the other
hand, (i) the maturity of the obligations guaranteed hereby may be accelerated
as provided in Section 6.2 for the purposes of this Guarantee, notwithstanding
any stay, injunction or other prohibition preventing such acceleration as to the
Issuers of the obligations guaranteed hereby, and (ii) in the event of any
declaration of acceleration of those obligations as provided in Section 6.2,
those obligations (whether or not due and payable) will forthwith become due and
payable by each of the Guarantors for the purpose of this Guarantee.
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(d) Each Guarantor and by its acceptance of a Security issued
hereunder each Holder hereby confirms that it is the intention of all such
parties that the guarantee by such Guarantor set forth in Section 11.1(a) not
constitute a fraudulent transfer or conveyance for purpose of any 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 its guarantee set forth in Section 11.1(a) shall be limited to
the maximum amount as will, after giving effect to all other contingent and
fixed liabilities of such Guarantor and after giving effect to any collections
from or payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under its Guarantee or pursuant to the
following paragraph of this Section 11.1(d), result in the obligations of such
Guarantor under such guarantee not constituting such a fraudulent transfer or
conveyance.
Each Guarantor that makes any payment or distribution under Section
11.1(a) shall be entitled to a contribution from each other Guarantor equal to
its Pro Rata amount of such payment or distribution so long as the exercise of
such right does not impair the rights of the Holders under the Guarantees. For
purposes of the foregoing, the "Pro Rata amount" of any Guarantor means the
percentage of the net assets of all Guarantors held by such Guarantor,
determined in accordance with GAAP.
Section 11.2 Execution and Delivery of Guarantee.
To evidence its Guarantee set forth in Section 11.1, each Guarantor
agrees that a notation of such Guarantee substantially in the form annexed
hereto as Exhibit B shall be endorsed on each Security authenticated and
delivered by the Trustee and that this Indenture shall be executed on behalf of
such Guarantor by two Officers or an Officer and an Assistant Secretary by
manual or facsimile signature.
Each Guarantor agrees that its Guarantee set forth in Section 11.1
shall remain in full force and effect and apply to all the Securities
notwithstanding any failure to endorse on each Security a notation of such
Guarantee.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security on which a Guarantee
is endorsed, the Guarantee shall be valid nevertheless.
The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the Guarantee
set forth in this Indenture on behalf of each Guarantor.
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Section 11.3 Certain Bankruptcy Events.
Each Guarantor hereby covenants and agrees that in the event of the
insolvency, bankruptcy, dissolution, liquidation or reorganization of either of
the Issuers, such Guarantor shall not file (or join in any filing of), or
otherwise seek to participate in the filing of, any motion or request seeking to
stay or to prohibit (even temporarily) execution on the Guarantee and hereby
waives and agrees not to take the benefit of any such stay of execution, whether
under Section 362 or 105 of the United States Bankruptcy Code or otherwise.
Section 11.4 Limitation on Merger, Consolidation, Etc. of
Guarantors.
No Guarantor shall consolidate or merge with or into (whether or not
such Guarantor is the surviving person) another person unless (i) subject to the
provisions of the following paragraph, 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
reasonably satisfactory to the Trustee, pursuant to which such person shall
unconditionally guarantee, on a senior subordinated basis, all of such
Guarantor's obligations under such Guarantor's guarantee and the Indenture on
the terms set forth in the Indenture; and (ii) immediately before and
immediately after giving effect to such transaction on a pro forma basis, no
Default or Event of Default shall have occurred or be continuing.
Notwithstanding the foregoing, upon the sale or disposition (whether
by merger, stock purchase, asset sale or otherwise) of a Guarantor or all or
substantially all of its assets to an entity which is not a Subsidiary or the
designation of a Subsidiary as an Unrestricted Subsidiary, which transaction is
otherwise in compliance with the Indenture (including, without limitation, the
provisions of Section 4.13), such Guarantor will be deemed released from its
obligations under its Guarantee of the Notes; provided, however, that any such
termination shall occur only to the extent that all obligations of such
Guarantor under all of its guarantees of, and under all of its pledges of assets
or other security interests which secure, any Indebtedness of either Issuer or
any of their Subsidiaries shall also terminate upon such release, sale or
transfer.
Section 11.5 Future Guarantors.
Upon the acquisition by the Issuers or any Guarantor of the Capital
Stock of any person, if, as a result of such acquisition, such Person becomes a
Subsidiary, such Subsidiary shall fully and unconditionally guarantee on a
senior subordinated basis the obligations of the Issuers with respect to payment
and
85
performance of the Securities and the other obligations of the Issuers under
this Indenture to the same extent that such obligations are guaranteed by the
other Guarantors pursuant to Section 11.1; and, within 60 days of the date of
such occurrence, such Subsidiary shall execute and deliver to the Trustee a
supplemental indenture making such Subsidiary a party to this Indenture.
ARTICLE XII
SUBORDINATION
Section 12.1 Securities Subordinated to Senior Debt.
The Issuers, the Guarantors and each Holder, by its acceptance of
Securities, agree that (a) the payment of the principal of and interest on the
Securities and (b) any other payment in respect of the Securities, including on
account of the acquisition or redemption of the Securities by the Issuers or the
Guarantors (including, without limitation, pursuant to Section 4.13 or 10.1) is
subordinated, to the extent and in the manner provided in this Article XII, to
the prior payment in full in Cash or Cash Equivalents of all Senior Debt of the
Issuers and the Guarantors, and that these subordination provisions are for the
benefit of the holders of Senior Debt.
This Article XII shall constitute a continuing offer to all Persons
who, in reliance upon such provisions, become holders of, or continue to hold,
Senior Debt, and such provisions are made for the benefit of the holders of
Senior Debt, and such holders are made obligees hereunder and any one or more of
them may enforce such provisions.
Section 12.2 No Payment on Securities in Certain Circumstances.
(a) No payment of any kind or character from any source may be
made by or on behalf of the Issuers or a Guarantor, as applicable, on account of
the principal of, premium, if any, or interest or Liquidated Damages or
Additional Amounts on the Securities (including any repurchases of Securities
and rescission payments), or on account of the redemption provisions of the
Securities, for cash or property (other than from the trust described in Article
VIII), (i) upon the maturity of any Senior Debt of the Issuers or such Guarantor
by lapse of time, acceleration (unless waived) or otherwise, unless and until
all principal of, premium, if any, the interest on and any fee or other amount
due in respect of such Senior Debt are first paid in full in cash or Cash
Equivalents or otherwise to the extent holders accept satisfaction of amounts
due by settlement in other than cash or Cash Equivalents, or (ii) in the event
of default in the payment of any principal of, premium, if any, or interest on
or any fee
86
or other amount due in respect of Senior Debt of the Issuers or such Guarantor
when it becomes due and payable, whether at maturity or at a date fixed for
prepayment or by declaration or otherwise (a "Payment Default"), unless and
until such Payment Default has been cured or waived or otherwise has ceased to
exist.
(b) Upon (i) the happening of an event of default (other than
a Payment Default) that permits the holders of Senior Debt to declare such
Senior Debt to be due and payable and (ii) written notice of such event of
default given to the Trustee by the Representative under the Credit Agreement or
the holders of an aggregate of at least $25 million principal amount outstanding
of any other Senior Debt or their representative (a "Payment Blockage Notice"),
then, unless and until such event of default has been cured or waived or
otherwise has ceased to exist, no payment (by set-off or otherwise) may be made
by or on behalf of the Issuers or any Guarantor which is an obligor under such
Senior Debt on account of the principal of, premium, if any or interest or
Liquidated Damages or Additional Amounts on the Securities, including any
repurchases of Securities and rescission payments, or on account of the
redemption provisions of the Securities, other than payments from the trust
described in Article VIII; provided, however, that so long as the Credit
Agreement is in effect, a Payment Blockage Notice may only be given by the
Representative under the Credit Agreement unless otherwise agreed in writing by
the requisite lenders under the Credit Agreement. Notwithstanding the
immediately preceding sentence, unless the Senior Debt in respect of which such
event of default exists has been declared due and payable in its entirety within
179 days after the Payment Blockage Notice is delivered as set forth above (the
"Payment Blockage Period") (and such declaration has not been rescinded or
waived), at the end of the Payment Blockage Period, the Issuers and the
Guarantors shall be required to pay, unless a Payment Default has then occurred
and is continuing, all sums not paid to the Holders of the Notes during the
Payment Blockage Period due to the foregoing prohibitions and to resume all
other payments as and when due on the Notes. Any number of Payment Blockage
Notices may be given; provided, however, that (i) not more than one Payment
Blockage Notice shall be given within a period of any 360 consecutive days, and
(ii) no default that existed upon the date of such Payment Blockage Notice or
the commencement of such Payment Blockage Period (whether or not such event of
default is on the same issue of Senior Debt) shall be made the basis for the
commencement of any other Payment Blockage Period, unless such event of default
shall have been cured or waived for a period of not less than 90 days.
(c) In furtherance of the provisions of Section 12.1, in the
event that, notwithstanding the foregoing provisions of this Section 12.2 or the
provisions of Section 12.3, any
87
payment or distribution of assets (other than from the trust described in
Article VIII and, in the case of Section 12.3, Junior Securities) shall be
received by the Trustee or the Holders at a time when such payment or
distribution is prohibited by such provisions, such payment or distribution
shall be held in trust for the benefit of the holders of such Senior Debt, and
shall be paid or delivered by the Trustee or such Holders, as the case may be,
to the holders of such Senior Debt remaining unpaid or unprovided for or to
their representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any of such Senior Debt
may have been issued, ratably according to the aggregate principal amounts
remaining unpaid on account of such Senior Debt held or represented by each, for
application to the payment of all such Senior Debt remaining unpaid, to the
extent necessary to pay all such Senior Debt in full in cash or Cash Equivalents
or otherwise to the extent holders accept satisfaction of amounts due by
settlement in other than cash or Cash Equivalents after giving effect to any
concurrent payment or distribution to the holders of such Senior Debt.
Section 12.3 Securities Subordinated to Prior Payment of All Senior
Debt on Dissolution, Liquidation or Reorganization.
Upon any distribution of assets of either Issuer or any Guarantor
upon any dissolution, winding up, total or partial liquidation or reorganization
of either Issuer or a Guarantor, whether voluntary or involuntary, in
bankruptcy, insolvency, receivership or a similar proceeding or upon assignment
for the benefit of creditors or any marshalling of assets or liabilities:
(a) the holders of all Senior Debt of such Issuer or such
Guarantor, as applicable, will first be entitled to receive payment on account
of all principal of, premium, if any, interest on and fees and other amounts
payable in respect of such Senior Debt in full in cash or Cash Equivalents or
otherwise to the extent holders accept satisfaction of amounts due by settlement
in other than cash or Cash Equivalents before the Holders are entitled to
receive any payment on account of principal of, premium, if any, and interest
and Liquidated Damages or Additional Amounts on the Securities, including any
repurchase of Securities and rescission payments, or on account of the
redemption provisions of the Securities, other than Junior Securities or from
the trust described in Article VIII; and
(b) any payment or distribution of assets of such Issuer or
such Guarantor of any kind or character from any source, whether in cash,
property or securities (other than Junior Securities or from the trust described
in Article VIII) to which the Holders or the Trustee on behalf of the Holders
would be entitled (by set-off or otherwise), except for the provisions of
Article VIII, will be paid by the liquidating trustee or agent
88
or other person making such a payment or distribution directly to the holders of
such Senior Debt or their representative to the extent necessary to make payment
in full in cash or Cash Equivalents on all such Senior Debt remaining unpaid,
after giving effect to any concurrent payment or distribution to the holders of
such Senior Debt.
Section 12.4 Securityholders to Be Subrogated to Rights of Holders
of Senior Debt.
Subject to the payment in full in Cash or Cash Equivalents of all
Senior Debt of the Issuers and the Guarantors as provided herein, the Holders of
Securities shall be subrogated to the rights of the holders of such Senior Debt
to receive payments or distributions of assets of the Issuers and the Guarantors
applicable to the Senior Debt until all amounts owing on the Securities shall be
paid in full, and for the purpose of such subrogation no such payments or
distributions to the holders of such Senior Debt by or on behalf of the Issuers
or the Guarantors, or by or on behalf of the Holders by virtue of this Article
XII, which otherwise would have been made to the Holders shall, as between the
Issuers and Guarantors and the Holders, be deemed to be payment by the Issuers
or Guarantors or on account of such Senior Debt, it being understood that the
provisions of this Article XII are and are intended solely for the purpose of
defining the relative rights of the Holders, on the one hand, and the holders of
such Senior Debt, on the other hand.
If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this Article XII shall have been
applied, pursuant to the provisions of this Article XII, to the payment of
amounts payable under Senior Debt of the Issuers or the Guarantors, then the
Holders shall be entitled to receive from the holders of such Senior Debt any
payments or distributions received by such holders of Senior Debt in excess of
the amount sufficient to pay all amounts payable under or in respect of such
Senior Debt in full in Cash or Cash Equivalents.
Section 12.5 Obligations of the Issuers Unconditional.
Nothing contained in this Article XII or elsewhere in this Indenture
or in the Securities is intended to or shall impair, as between the Issuers and
Guarantors and the Holders, the obligation of each such Person, which is
absolute and unconditional, to pay to the Holders the principal of, premium, if
any, and interest and Liquidated Damages on the Securities as and when the same
shall become due and payable in accordance with their terms, or is intended to
or shall affect the relative rights of the Holders and creditors of the Issuers
and the Guarantors other than the holders of the Senior Debt, nor shall anything
herein or therein prevent the Trustee or any Holder from
89
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article XII and under
the proviso to Section 6.2, of the holders of Senior Debt in respect of cash,
property or securities of the Issuers or the Guarantors received upon the
exercise of any such remedy or otherwise. Notwithstanding anything to the
contrary in this Article XII or elsewhere in this Indenture or in the
Securities, upon any distribution of assets of the Issuers referred to in this
Article XII, the Trustee, subject to the provisions of Sections 6.1 and 6.2, and
the Holders shall be entitled to rely upon any order or decree made by any court
of competent jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending, or a certificate of the liquidating
Trustee or agent or other Person making any distribution to the Trustee or to
the Holders for the purpose of ascertaining the Persons entitled to participate
in such distribution, the holders of the Senior Debt and other Indebtedness of
the Issuers and the Guarantors, 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 so long as such court has been apprised of the
provisions of, or the order, decree or certificate makes reference to, the
provisions of this Article XII. Nothing in this Section 12.5 shall apply to the
claims of, or payments to, the Trustee under or pursuant to Section 6.7.
Section 12.6 Trustee Entitled to Assume Payments Not Prohibited in
Absence of Notice.
The Trustee shall not at any time be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or by
the Trustee unless and until a Trust Officer of the Trustee or any Paying Agent
shall have received, no later than two Business Days prior to such payment,
written notice thereof from the Issuers or from one or more holders of Senior
Debt or from any representative therefor and, prior to the receipt of any such
written notice, the Trustee, subject to the provisions of Sections 7.1 and 7.2,
shall be entitled in all respects conclusively to assume that no such fact
exists. The Issuers shall give prompt written notice to the Trustee of any fact
actually known to the Issuers which would prohibit the making of any payment to
or by the Trustee in respect of the Securities.
Section 12.7 Application by Trustee of Assets Deposited with It.
Amounts deposited in trust with the Trustee pursuant to and in
accordance with Article VIII shall be for the sole benefit of Securityholders
and, to the extent allocated for the payment of Securities, shall not be subject
to the subordination provisions of this Article XII. Otherwise, any deposit of
assets with
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the Trustee or any Paying Agent (whether or not in trust) for the payment of
principal of or interest on any Securities shall be subject to the provisions of
Sections 12.1, 12.2, 12.3 and 12.4; provided that, if prior to two Business Days
preceding the date on which by the terms of this Indenture any such assets may
become distributable for any purpose (including without limitation, the payment
of either principal of or interest on any Security) the Trustee or such Paying
Agent shall not have received with respect to such assets the written notice
provided for in Section 12.6, then the Trustee or such Paying Agent shall have
full power and authority to receive such assets and to apply the same to the
purpose for which they were received, and shall not be affected by any notice to
the contrary which may be received by it on or after such date.
Section 12.8 Subordination Rights Not Impaired by Acts or Omissions
of the Issuers, Guarantors or Holders of Senior Debt, Etc.; Modifications.
No right of any present or future holders of any Senior Debt to
enforce subordination provisions contained in this Article XII shall at any time
in any way be prejudiced or impaired by any act or failure to act on the part of
the Issuers, the Guarantors or by any act or failure to act, in good faith, by
any such holder, or by any noncompliance by the Issuers or the Guarantors with
the terms of this Indenture, regardless of any knowledge thereof which any such
holder may have or be otherwise charged with. The holders of Senior Debt may
extend, renew, modify or amend the terms of the Senior Debt or any security
therefor and release, sell or exchange such security and otherwise deal freely
with the Issuers and the Guarantors, all without affecting the liabilities and
obligations of the parties to this Indenture or the Holders. The subordination
provisions are solely for the benefit of the holders from time to time of Senior
Debt and may not be rescinded, cancelled, amended or modified in any way other
than any amendment or modification that would not adversely affect the rights of
any holder of Senior Debt or any amendment or modification that is consented to
by each holder of Senior Debt that would be affected thereby. The subordination
provisions of this Article XII shall continue to be effective or be reinstated,
as the case may be, if at any time payment and performance of the Senior Debt
is, pursuant to applicable law, avoided, recovered or rescinded or must
otherwise be restored or returned by any holder of Senior Debt, whether as a
"voidable preference," "fraudulent conveyance," "fraudulent transfer," or
otherwise, all as though such payment or performance had not been made.
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Section 12.9 Securityholders Authorize Trustee to Effectuate
Subordination of Securities.
Each Holder of the Securities by his acceptance thereof authorizes
and expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provisions contained in
this Article XII and to protect the rights of the Holders pursuant to this
Indenture, and appoints the Trustee his attorney-in-fact for such purpose,
including, in the event of any dissolution, winding up, liquidation or
reorganization of the Issuers or any Guarantor (whether in bankruptcy,
insolvency or receivership proceedings or upon an assignment for the benefit of
creditors or any other marshalling of assets and liabilities of the Issuers and
the Guarantors) the immediate filing of a claim for the unpaid balance of his
Securities in the form required in said proceedings and cause said claim to be
approved. If the Trustee does not file a proper claim or proof of debt in the
form required in such proceeding prior to 30 days before the expiration of the
time to file such claim or claims, then the holders of the Senior Debt or their
representative are or is hereby authorized to have the right to file and are or
is hereby authorized to file an appropriate claim for and on behalf of the
Holders of said Securities. Nothing herein contained shall be deemed to
authorize the Trustee or the holders of Senior Debt or their representative to
authorize or consent to or accept or adopt on behalf of any Securityholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee or
the holders of Senior Debt or their representative to vote in respect of the
claim of any Securityholder in any such proceeding.
Section 12.10 Right of Trustee to Hold Senior Debt.
The Trustee shall be entitled to all of the rights set forth in this
Article XII in respect of any Senior Debt at any time held by it to the same
extent as any other holder of Senior Debt, and nothing in this Indenture shall
be construed to deprive the Trustee of any of its rights as such holder.
Section 12.11 Article XII Not to Prevent Events of Default.
The failure to make a payment on account of principal of, premium,
if any, or interest on the Securities by reason of any provision of this Article
XII shall not be construed as preventing the occurrence of a Default or an Event
of Default under Section 7.1 or in any way limit the rights of the Trustee or
any Holder to pursue any other rights or remedies with respect to the
Securities.
92
Section 12.12 No Fiduciary Duty of Trustee to Holders of Senior
Debt.
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 (other than for its
willful misconduct or negligence) if it shall in good faith mistakenly pay over
or distribute to the Holders of Securities or the Issuers or Guarantors or any
other Person, cash, property or securities to which any holders of Senior Debt
shall be entitled by virtue of this Article XII or otherwise. The Trustee
undertakes to perform or to observe only such of the covenants and obligations
as are specifically set forth in this Article XII, and no implied covenants or
obligations with respect to such holders of Senior Debt shall be implied in this
Indenture against the Trustee. Nothing in this Section 12.12 shall affect the
obligation of any other such Person to hold such payment for the benefit of, and
to pay such payment over to, the holders of Senior Debt or their representative.
In the event of any conflict between the fiduciary duty of the Trustee to the
Holders of Securities and its duty to the holders of Senior Debt, the Trustee is
expressly authorized to resolve such conflict in favor of the Holders.
ARTICLE XIII
MISCELLANEOUS
Section 13.1 TIA Controls.
If any provision of this Indenture limits, qualifies, or conflicts
with the duties imposed by operation of the TIA, the imposed duties, upon
qualification of this Indenture under the TIA, shall control.
Section 13.2 Notices.
Any notices or other communications to the Issuers, the Guarantors
or the Trustee required or permitted hereunder shall be in writing, and shall be
sufficiently given if made by hand delivery, by telecopier or registered or
certified mail, postage prepaid, return receipt requested, addressed as follows:
if to the Issuers or any Guarantor:
Sun International Hotels Limited
Coral Towers
Paradise Island, Bahamas
Attention: General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
93
if to the Trustee:
The Bank of New York
000 Xxxxxxx Xx,Xxxxx 00 X
Xxx Xxxx, Xxx Xxxx
Attention: Corporate Trust Administration
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
The Issuers, the Guarantors or the Trustee by notice to each other
party may designate additional or different addresses as shall be furnished in
writing by such party. Any notice or communication to the Issuers, the
Guarantors or the Trustee shall be deemed to have been given or made as of the
date so delivered, if personally delivered; when receipt is acknowledged, if
telecopied; and 5 Business Days after mailing if sent by registered or certified
mail, postage prepaid (except that a notice of change of address shall not be
deemed to have been given until actually received by the addressee).
Any notice or communication mailed to a Securityholder shall be
mailed to him by first class mail or other equivalent means at his address as it
appears on the registration books of the Registrar and shall be sufficiently
given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
Section 13.3 Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Issuers, the Guarantors, the Trustee, the Registrar and any
other person shall have the protection of TIA ss. 312(c).
Section 13.4 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Issuers to the Trustee to
take any action under this Indenture, the Issuers shall furnish to the Trustee:
(1) an Officers' Certificate (in form and substance
reasonably satisfactory to the Trustee) stating that, in the opinion
of the signers, all conditions precedent, if any, provided for in
this
94
Indenture relating to the proposed action have been complied with;
and
(2) an Opinion of Counsel (in form and substance
reasonably satisfactory to the Trustee) stating that, in the opinion
of such counsel, all such conditions precedent have been complied
with.
Section 13.5 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate
or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person,
he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of
each such person, such condition or covenant has been complied with;
provided, however, that with respect to matters of fact an Opinion
of Counsel may rely on an Officers' Certificate or certificates of
public officials.
Section 13.6 Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or
at a meeting of Securityholders. The Paying Agent or Registrar
may make reasonable rules for its functions.
Section 13.7 Legal Holidays.
A "Legal Holiday" used with respect to a particular place of payment
is a Saturday, a Sunday or a day on which banking institutions in New York, New
York are not required to be open. If a payment date is a Legal Holiday in New
York, New York, payment may be made at such place on the next succeeding
95
day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
Section 13.8 Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. THE ISSUERS AND EACH GUARANTOR HEREBY
IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN
THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN
THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE AND THE SECURITIES,
AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. THE ISSUERS AND EACH
GUARANTOR IRREVOCABLY WAIVE, TO THE FULLEST EXTENT THEY MAY EFFECTIVELY DO SO
UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION WHICH THEY MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF THE TRUSTEE OR ANY SECURITYHOLDER TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST THE ISSUERS OR ANY GUARANTOR IN ANY OTHER
JURISDICTION.
Section 13.9 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of any of the Issuers, the Guarantors or any of their
Subsidiaries. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
Section 13.10 No Recourse Against Others.
A director, officer, employee, stockholder or incorporator, as such,
of the Issuers or the Guarantors shall not have any liability for any
obligations of the Issuers or the Guarantors under the Securities or this
Indenture. Each Securityholder by accepting a Security waives and releases all
such liability. Such waiver and release are part of the consideration for the
issuance of the Securities.
Section 13.11 Successors.
All agreements of the Issuers and the Guarantors in this Indenture
and the Securities shall bind their successors.
96
All agreements of the Trustee in this Indenture shall bind its successor.
Section 13.12 Duplicate Originals.
All parties may sign any number of copies or counterparts of this
Indenture. Each signed copy or counterpart shall be an original, but all of them
together shall represent the same agreement.
Section 13.13 Severability.
In case any one or more of the provisions in this Indenture or in
the Securities shall be held invalid, illegal or unenforceable, in any respect
for any reason, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions shall not in any way be
affected or impaired thereby, it being intended that all of the provisions
hereof shall be enforceable to the full extent permitted by law.
Section 13.14 Table of Contents, Headings, Etc.
The Table of Contents, Cross-Reference Table and headings of the
Articles and the Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
97
SIGNATURE
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first written above.
SUN INTERNATIONAL HOTELS LIMITED
By: ____________________________________
Name:
Title:
SUN INTERNATIONAL NORTH AMERICA, INC.
By: ____________________________________
Name:
Title:
THE BANK OF NEW YORK, as Trustee
By: ____________________________________
Name:
Title:
GUARANTORS:
SUN INTERNATIONAL BAHAMAS LIMITED
By: ____________________________________
Name:
Title:
PARADISE ISLAND LIMITED
By: ____________________________________
Name:
Title:
ISLAND HOTEL COMPANY LIMITED
By: ____________________________________
Name:
Title:
PARADISE BEACH INN LIMITED
By: ____________________________________
Name:
Title:
PARADISE ENTERPRISES LIMITED
By: ____________________________________
Name:
Title:
PARADISE ACQUISITIONS LIMITED
By: ____________________________________
Name:
Title:
SUN INTERNATIONAL MANAGEMENT LIMITED
By: ____________________________________
Name:
Title:
SUN COVE, LTD.
By: ____________________________________
Name:
Title:
RESORTS INTERNATIONAL HOTEL, INC.
By: ____________________________________
Name:
Title:
GGRI, INC.
By: ____________________________________
Name:
Title:
Exhibit A
[FORM OF NOTE]
SUN INTERNATIONAL HOTELS LIMITED
SUN INTERNATIONAL NORTH AMERICA, INC.
9% SENIOR SUBORDINATED NOTES
DUE 2007
Unless and until it is exchanged in whole or in part for Securities
in definitive form, this Security 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 Issuers or their 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 requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or such other entity as is 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 (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX
XXX XXXXXX XXXXXX SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY
BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE
SECURITY
----------
(1) This paragraph should only be added if the Security is issued in global
form.
A-1
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUERS THAT (A) SUCH
SECURITY MAY BE 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 904 UNDER THE
SECURITIES ACT, (d) TO AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN
THE MEANING OF RULE 501 (A)(1), (2), (3) OR (7) UNDER THE SECURITIES
ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE
IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $100,000, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN
CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT,
OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED IN THE CASE OF (d)
UPON DELIVERY OF A TRANSFEREE LETTER OF REPRESENTATION AND IN THE
CASE OF (b), (c) AND (e) UPON AN OPINION OF COUNSEL IF THE ISSUERS
OR REGISTRAR SO REQUEST), (2) TO THE ISSUERS OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL,
AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM
IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET
FORTH IN (A) ABOVE. THESE SECURITIES MAY BE TRANSFERRED ONLY IN
COMPLIANCE WITH APPLICABLE GAMING LAWS.
If a Holder or a beneficial owner of a Note is required by any Gaming Authority
to be found suitable, the Holder shall apply for a finding of suitability within
30 days after a Gaming Authority request or sooner if so required by such Gaming
Authority. The applicant for a finding of suitability must pay all costs of the
investigation for such finding of suitability. If a Holder or beneficial
A-2
owner is required to be found suitable and is not found suitable by a Gaming
Authority, the Holder shall, to the extent required by applicable law, dispose
of his Notes within 30 days or within that time prescribed by a Gaming
Authority, whichever is earlier. If the Holder fails to dispose of his Notes
within such time period, the Issuers may, at their option, redeem such Holder's
Notes at, depending on applicable law, (i) the principal amount thereof,
together with accrued and unpaid interest (and Liquidated Damages, if any) to
the date of the finding of unsuitability by a Gaming Authority, (ii) the amount
that such Holder paid for the Notes, (iii) the fair market value of the Notes,
(iv) the lowest of clauses (i), (ii) and (iii), or (v) such other amount as may
be determined by the appropriate Gaming Authority.
A-3
CUSIP NO.______
No. $
Sun International Hotels Limited, an international business company
organized under the laws of the Commonwealth of The Bahamas ("Sun
International"), and Sun International North America, Inc., a Delaware
corporation and a wholly owned subsidiary of Sun International ("SINA" and,
together with Sun International, the "Issuers," which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promise, jointly and severally, to pay to _____, or registered
assigns, the principal sum of _____ Dollars, on March 15, 2007.
Interest Payment Dates: March 15 and September 15.
Record Dates: March 1 and September 1.
Reference is made to the further provisions of this Security on the
reverse side, which will, for all purposes, have the same effect as if set forth
at this place.
A-4
IN WITNESS WHEREOF, the Issuers have caused this Instrument to be
duly executed under its corporate seal.
SUN INTERNATIONAL HOTELS LIMITED
By: ____________________________________
Name:
Title:
Attest: _______________
SUN INTERNATIONAL NORTH AMERICA, INC.
By: ____________________________________
Name:
Title:
Attest: _______________
A-5
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the within-mentioned
Indenture.
Dated:
THE BANK OF NEW YORK,
As Trustee
By: ____________________________________
Authorized Signatory
A-6
SUN INTERNATIONAL HOTELS LIMITED
SUN INTERNATIONAL NORTH AMERICA, INC.
9% SENIOR SUBORDINATED NOTES
DUE 2007
1. Interest.
Sun International Hotels Limited, an international business company
organized under the laws of the Commonwealth of The Bahamas ("Sun
International"), and Sun International North America, Inc., a Delaware
corporation and a wholly owned subsidiary of Sun International ("SINA" and,
together with Sun International, the "Issuers"), jointly and severally, promise
to pay interest on the principal amount of this Security at a rate of 9% per
annum. To the extent it is lawful, the Issuers promise to pay interest on any
interest payment due but unpaid on such principal amount at a rate of 9% per
annum compounded semi-annually.
The Issuers will pay interest semi-annually on March 15 and
September 15 of each year (each, an "Interest Payment Date"), commencing
September 15, 1997. Interest on the Securities will accrue from the most recent
date to which interest has been paid on the Securities pursuant to the Indenture
or, if no interest has been paid, from March 10, 1997. Interest will be computed
on the basis of a 360-day year consisting of twelve 30-day months.
2. Method of Payment.
The Issuers shall pay interest (and Liquidated Damages, if any) on
the Securities (except defaulted interest) to the persons who are the registered
Holders at the close of business on the Record Date immediately preceding the
Interest Payment Date. Holders must surrender Securities to a Paying Agent to
collect principal payments. Except as provided below, the Issuers shall pay
principal and interest (and Liquidated Damages, if any) in such coin or currency
of the United States of America as at the time of payment shall be legal tender
for payment of public and private debts ("Cash"). The Securities will be payable
as to principal, premium and interest (and Liquidated Damages, if any) at the
office or agency of the Issuers maintained for such purpose within the City and
State of New York or, at the option of the Issuers, payment of principal,
premium and interest (and Liquidated Damages, if any) may be made by check
mailed to the Holders at their addresses set forth in the register of Holders,
and provided that payment by wire transfer of immediately available funds will
be required with respect to principal of and interest (and Liquidated Damages,
if any)
A-7
and premium on all Global Securities and all other Securities the Holders of
which shall have provided written wire transfer instructions to the Issuers and
the Paying Agent.
3. Paying Agent and Registrar.
Initially, The Bank of New York (the "Trustee") will act as Paying
Agent and Registrar. The Issuers may change any Paying Agent, Registrar or
Co-registrar without notice to the Holders. The Issuers or any of their
respective Subsidiaries may, subject to certain exceptions, act as Paying Agent,
Registrar or Co-registrar.
4. Indenture.
The Issuers issued the Securities under an Indenture, dated March
10, 1997 (the "Indenture"), among the Issuers, the Guarantors named therein and
the Trustee. Capitalized terms herein are used as defined in the Indenture
unless otherwise defined herein. The terms of the Securities include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act, as in effect on the date of the Indenture. The Securities
are subject to all such terms, and Holders of Securities are referred to the
Indenture and said Act for a statement of them. The Securities are senior
subordinated obligations of the Issuers limited in aggregate principal amount to
$200,000,000.
5. Redemption.
Except as provided in this Paragraph 5 or as provided in Section 3.2
of the Indenture, the Issuers shall not have the right to redeem any Securities.
The Securities are redeemable in whole or from time to time in part at any time
on or after March 15, 2002, at the option of the Issuers, at the Redemption
Price (expressed as a percentage of principal amount) set forth below, if
redeemed during the 12-month period commencing March 15 of each of the years
indicated below, in each case (subject to the right of Holders of record on the
Record Date to receive interest due on an Interest Payment Date that is on or
prior to such Redemption Date), plus any accrued but unpaid interest (and
Liquidated Damages, if any) to the Redemption Date.
Year Redemption Price
---- ----------------
2002................................... 104.50%
2003................................... 103.00%
2004................................... 101.50%
2005 and thereafter.................... 100.00%
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On or prior to March 15, 2000, upon a Public Equity Offering of
Ordinary Shares for cash of Sun International, up to $70 million aggregate
principal amount of the Securities may be redeemed at the option of the Issuers
with cash from the Net Cash Proceeds of such Public Equity Offering, at 109% of
the principal amount thereof (subject to the right of Holders of record on a
Record Date to receive interest due on an Interest Payment Date that is on or
prior to such Redemption Date), plus accrued but unpaid interest (and Liquidated
Damages, if any) to the date of redemption; provided, however, that immediately
following each such redemption not less than $130 million aggregate principal
amount of the Notes are outstanding, provided, further that such redemption
shall occur within 120 days of such Public Equity Offering.
The Notes may be redeemed at the option of the Issuers, in whole but
not in part, upon not less than 30 nor more than 60 days' notice given as
provided herein, at any time at a redemption price equal to the principal amount
thereof, plus accrued and unpaid interest, if any, thereon, plus Liquidated
Damages, if any, to the date fixed for redemption if, as a result of any change
in or amendment to the laws, treaties, rulings or regulations of The Bahamas, or
of any political subdivision or taxing authority thereof or therein, or any
change in the official position of the applicable taxing authority regarding the
application or interpretation of such laws, treaties, rulings or regulations
(including a holding judgment or order of a court of competent jurisdiction) or
any execution thereof or amendment thereto, which is enacted into law or
otherwise becomes effective after the Issue Date, either Issuer is or would be
required on the next succeeding Interest Payment Date to pay Additional Amounts
on the Notes as a result of the imposition of a Bahamian withholding tax and the
payment of such Additional Amounts cannot be avoided by the use of any
reasonable measures available to the Issuers which do not cause the Issuers to
incur any material costs. The Issuers shall also pay to holders on the
redemption date any Additional Amounts then due and which will become due as a
result of the redemption would otherwise be payable.
If a Holder or a beneficial owner of a Note is required by any
Gaming Authority to be found suitable, the Holder shall apply for a finding of
suitability within 30 days after a Gaming Authority request or sooner if so
required by such Gaming Authority. The applicant for a finding of suitability
must pay all costs of the investigation for such finding of suitability. If a
Holder or beneficial owner is required to be found suitable and is not found
suitable by a Gaming Authority, the Holder shall, to the extent required by
applicable law, dispose of his Notes within 30 days or within that time
prescribed by a Gaming Authority, whichever
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is earlier. If the Holder fails to dispose of his Notes within such time period,
the Issuers may, at their option, redeem such Holder's Notes at, depending on
applicable law, (i) the principal amount thereof, together with accrued and
unpaid interest (and Liquidated Damages, if any) to the date of the finding of
unsuitability by a Gaming Authority, (ii) the amount that such Holder paid for
the Notes, (iii) the fair market value of the Notes, (iv) the lowest of clauses
(i), (ii) and (iii), or (v) such other amount as may be determined by the
appropriate Gaming Authority.
Any redemption of the Notes shall comply with Article III of the
Indenture.
6. Notice of Redemption.
Except as required by a Gaming Authority with respect to a
redemption provided for in Section 3.2 of the Indenture, notice of redemption
will be mailed by first class mail at least 30 days but not more than 60 days
before the Redemption Date (unless a shorter notice shall be required by any
Governmental Authority) to each Holder of Securities to be redeemed at his
registered address. Securities in denominations larger than $1,000 may be
redeemed in part.
Except as set forth in the Indenture, from and after any Redemption
Date, if monies for the redemption of the Securities called for redemption shall
have been deposited with the Paying Agent on such Redemption Date, the
Securities called for redemption will cease to bear interest and the only right
of the Holders of such Securities will be to receive payment of the Redemption
Price, plus any accrued but unpaid interest (and Liquidated Damages, if any) to
the Redemption Date.
7. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder may register
the transfer of, or exchange Securities in accordance with, the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not register the transfer
of or exchange any Securities selected for redemption.
8. Persons Deemed Owners.
The registered Holder of a Security may be treated as the owner of
it for all purposes.
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9. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee and the Paying Agent(s) will pay the money back to
the Issuers at their written request. After that, all liability of the Trustee
and such Paying Agent(s) with respect to such money shall cease.
10. Discharge Prior to Redemption or Maturity.
If the Issuer at any time deposit into an irrevocable trust with the
Trustee Cash or U.S. Government Obligations sufficient to pay the principal of
and interest (and Liquidated Damages, if any) on the Securities to redemption or
maturity and comply with the other provisions of the Indenture relating thereto,
the Issuers will be discharged from certain provisions of the Indenture and the
Securities (including the financial covenants, but excluding its obligation to
pay the principal of and interest (and Liquidated Damages, if any) on the
Securities).
11. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities may
be amended or supplemented with the written consent of the Holders of a majority
in aggregate principal amount of the Securities then outstanding, and any
existing Default or Event of Default or compliance with any provision may be
waived with the consent of the Holders of a majority in aggregate principal
amount of the Securities then outstanding. Without notice to or consent of any
Holder, the parties thereto may amend or supplement the Indenture or the
Securities to, among other things, cure any ambiguity, defect or inconsistency,
comply with the TIA or make any other change that does not adversely affect the
rights of any Holder of a Security.
12. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of the
Issuers and their respective Subsidiaries to, among other things, incur
additional Indebtedness and Disqualified Capital Stock, make payments in respect
of its Capital Stock, enter into transactions with Affiliates, incur Liens,
merge or consolidate with any other person and sell, lease, transfer or
otherwise dispose of substantially all of its properties or assets. The
limitations are subject to a number of important qualifications and exceptions.
The Issuers must annually report to the Trustee on compliance with such
limitations.
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13. Change of Control.
In the event there shall occur any Change of Control Triggering
Event, each Holder of Securities shall have the right, at such Holder's option
but subject to the limitations and conditions set forth in the Indenture, to
require the Issuers to purchase on the Change of Control Purchase Date in the
manner specified in the Indenture, all or any part (in integral multiples of
$1,000) of such Holder's Securities at a cash price equal to 101% of the
principal amount thereof, together with accrued but unpaid interest (and
Liquidated Damages, if any) to and including the Change of Control Purchase
Date.
14. Certain Asset Sales.
The Indenture imposes certain limitations on the ability of the
Issuers to sell assets. In the event the proceeds from a permitted Asset Sale
exceed certain amounts, as specified in the Indenture, the Issuers generally
will be required either to reinvest the proceeds of such Asset Sale in its
business, use such proceeds to retire debt, or to make an asset sale offer to
purchase a certain amount of each Holder's Securities at 100% of the principal
amount thereof, plus accrued interest, if any, to the purchase date, as more
fully set forth in the Indenture.
15. Gaming Laws.
The rights of the Holder of this Security and any owner of any
beneficial interest in this Security are subject to various gaming laws and the
jurisdiction and requirements of the Gaming Authorities and the further
limitations and requirements set forth in the Indenture.
16. Ranking.
Payment of principal, premium, if any, and interest on the
Securities is subordinated, in the manner and to the extent set forth in the
Indenture, to the prior payment in full of all Senior Debt.
17. Successors.
When a successor assumes all the obligations of its predecessor
under the Securities and the Indenture, the predecessor will be released from
those obligations.
18. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate
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principal amount of Securities then outstanding may declare all the Securities
to be due and payable immediately in the manner and with the effect provided in
the Indenture. Holders of Securities may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the Securities.
Subject to certain limitations, Holders of a majority in aggregate principal
amount of the Securities then outstanding may direct the Trustee in its exercise
of any trust or power.
19. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Issuers or their respective Affiliates, and may otherwise deal with the Issuers
or their Affiliates as if it were not the Trustee.
20. No Recourse Against Others.
No direct or indirect stockholder, director, officer or employee, as
such, past, present or future of the Issuers or any successor corporation shall
have any personal liability in respect of the obligations of the Issuers under
the Securities or the Indenture by reason of his status as such stockholder,
director, officer or employee. Each Holder of a Security by accepting a Security
waives and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Securities.
21. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on the other side of this
Security.
22. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security 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).
23. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Issuers will cause CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities.
No
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representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
24. Governing Law.
The Indenture and the Securities shall be governed by and construed
in accordance with the internal laws of the State of New York.
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[FORM OF ASSIGNMENT]
I or we assign this Security to
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code of assignee)
Please insert Social Security or other identifying number of
assignee _________________
and irrevocably appoint ___________ agent to transfer this Security on the books
of the Issuers. The agent may substitute another to act for him.
Dated: __________ Signed: _____________________________________________________
________________________________________________________________________
(Sign exactly as your name appears on the other side of
this Security)
Signature guarantee: ____________________________________
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Issuers
pursuant to Section 4.13 or Article X of the Indenture, check the appropriate
box:
|_| Section 4.13
|_| Article X
If you want to elect to have only part of this Security purchased by
the Issuers pursuant to the Indenture, state the principal amount you want to
have purchased:
$___________
Date: ________________ Signature: _____________________________________________
(Sign exactly as your name appears on the other side of this Security)
Signature guarantee: ____________________________________
A-16
SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITIES(2)
The following exchanges of a part of this Global Security for
Definitive Securities have been made:
Signature of
Amount of Amount of Principal Amount authorized
decrease in increase in of this Global signatory of
Principal Amount Principal Amount Security following Trustee or
of this Global of this Global such decrease (or Securities
Date of Exchange Security Security increase) Custodian
----------------------------------------------------------------------------------------
----------
(2) This schedule should only be added if the Security is issued in global
form.
A-17
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF
SECURITIES(3)
Re: 9% SENIOR SUBORDINATED NOTES DUE 2007 OF SUN INTERNATIONAL HOTELS LIMITED
AND SUN INTERNATIONAL NORTH AMERICA, INC.
This Certificate relates to $______ principal amount of Securities held
in(4) |_| 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 Security held by the Depository a Security or
Securities in definitive, registered form of authorized denominations and an
aggregate principal amount equal to its beneficial interest in such Global
Security (or the portion thereof indicated above); or
|_| has requested the Trustee by written order to exchange or register the
transfer of a Security or Securities.
In connection with such request and in respect of each such
Security, the Transferor does hereby certify that Transferor is familiar with
the Indenture relating to the above-captioned Securities and as provided in
Section 2.6 of such Indenture, the transfer of this Security does not require
registration under the Securities Act (as defined below) because:(5)
|_| Such Security is being acquired for the Transferor's own account, without
transfer (in satisfaction of Section 2.6(a)(ii)(A) or Section 2.6(d)(i)(A) of
the Indenture).
|_| Such Security 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
----------
(3) The following should be included only for Original Notes.
(4) Check applicable box.
A-18
on Rule 144A (in satisfaction of Section 2.6(a)(ii)(B) or Section 2.6(d)(i)(B)
of the Indenture).
|_| Such Security is being transferred in accordance with (i) Rule 144 or
Regulation S under the Securities Act, (ii) pursuant to an effective
registration statement under the Securities Act, (iii) to an "institutional
accredited investor" within the meaning of Rule 501(A)(1), (2), (3) or (7) under
the Securities Act that is acquiring the Security for its own account, or for
the account of such an institutional accredited investor, in each case in a
minimum principal amount of $100,000, not with a view to or for offer or sale in
connection with any distribution in violation of the Securities Act or (iv) in
reliance on another exemption from registration under the Securities Act (in
satisfaction of Section 2.6(a)(ii)(C) or Section 2.6(d)(i)(C) of the Indenture).
To effect such transfer, the Registrar or the Issuers may require delivery of an
Opinion of Counsel and in case of a transfer pursuant to clause (iii) above,
will require a transferee letter of representation.
______________________________________
[INSERT NAME OF TRANSFEROR]
By: __________________________________
Dated:___________________
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EXHIBIT B
FORM OF GUARANTEE
For value received, __________________, a _______________
corporation, hereby irrevocably, unconditionally guarantees on a senior
subordinated basis to the Holder of the Security upon which this Guarantee is
endorsed the due and punctual payment, as set forth in the Indenture pursuant to
which such Security and this Guarantee were issued, of the principal of, premium
(if any) and interest (and Liquidated Damages, if any) on such Security when and
as the same shall become due and payable for any reason according to the terms
of such Security and Article XI of the Indenture. The Guarantee of the Security
upon which this Guarantee is endorsed will not become effective until the
Trustee signs the certificate of authentication on such Security.
______________________________________
By: __________________________________
Attest: ______________________________
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