EXHIBIT 4.7
EXECUTION COPY
ESCROW AND SECURITY AGREEMENT
THIS ESCROW AND SECURITY AGREEMENT (this "AGREEMENT"), dated as of January
29, 2004 (the "EFFECTIVE Date"), is by and among American Casino & Entertainment
Properties LLC, a Delaware limited liability company ("ACEP"), American Casino &
Entertainment Properties Finance Corp., a Delaware corporation (together with
ACEP, the "ISSUERS"), American Real Estate Holdings Limited Partnership, a
Delaware limited partnership ("PARENT"), Wilmington Trust Company, a Delaware
banking company, as the Trustee under the Indenture (as defined below) (in such
capacity, and together with its successors, substitutes or assignees, the
"TRUSTEE"), and Fleet National Bank, a national banking association organized
under the laws of the United States, in its capacities as escrow agent,
"securities intermediary" as defined in Section 8-102 of the Code and "bank" as
defined in Section 9-102 of the Code (in each such capacity, and together with
its successors, substitutes or assignees in each such capacity, the "ESCROW
AGENT"). Capitalized terms used herein and not otherwise defined have the
meanings assigned to them in the Indenture, dated as of the date hereof (as
amended, supplemented and otherwise modified from time to time, the
"INDENTURE"), by and between the Issuers and the Trustee. In addition, all
references herein to the "CODE" shall mean the Uniform Commercial Code as in
effect in the State of New York; provided, however, in the event that, by reason
of mandatory provisions of law, any or all of the perfection or priority of the
security interest in any Collateral (as defined below) is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of
New York, the term "Code" shall mean the Uniform Commercial Code as in effect in
such other jurisdiction for purposes of the provisions hereof relating to such
perfection or priority and for purposes of definitions related to such
provisions, and any reference to any section of the Code herein shall be a
reference to such section as it is modified and amended from time to time and to
any successor section.
RECITALS:
WHEREAS, the Issuers, Parent, and Bear, Xxxxxxx & Co. Inc. ("BEAR
XXXXXXX") have entered into a purchase agreement, dated as of January 15, 2004
(the "PURCHASE AGREEMENT"), pursuant to which the Issuers have agreed to issue
and sell to Bear Xxxxxxx, upon the terms set forth therein $215,000,000
aggregate principal amount of the Issuers' 7.85% Senior Secured Notes due 2012
(as amended, supplemented and exchanged from time to time, the "Notes");
WHEREAS, the Issuers and the Trustee have entered into the Indenture
pursuant to which the Issuers will issue $215,000,000 aggregate principal amount
of the Notes;
WHEREAS, the Issuers have agreed to place in escrow the Initial Escrow
Amount (as defined below), to be held pursuant to the terms of this Agreement;
WHEREAS, the Issuers have established an escrow account with the Escrow
Agent in the State of New York, number 9429364983, in the name of the Issuers
(the "ACCOUNT");
WHEREAS, the Issuers and the Trustee are entering into this Agreement with
the Escrow Agent to grant a first priority security interest to the Trustee for
the benefit of the holders of the Notes (the "SECURED Parties") in the Account
and all funds and financial assets contained therein and any and all proceeds of
the foregoing (collectively, the "COLLATERAL"), to provide for the
control of the Collateral, to perfect the security interest of the Trustee for
the benefit of the Secured Parties in the Collateral, and to establish the
conditions to releasing the Collateral, as more fully described in this
Agreement;
WHEREAS, attached hereto as Exhibit B-1 is a true, correct and executed
copy of that certain Contribution Agreement, dated as of January 5, 2004 (the
"CONTRIBUTION AGREEMENT"), by and among Parent, American Entertainment
Properties Corp., ACEP and Stratosphere Corporation ("STRATOSPHERE"); and
WHEREAS, attached hereto as Exhibit B-2 is a true, correct and executed
copy of that certain Membership Interest Purchase Agreement, dated as of January
5, 2004 (the "MEMBERSHIP PURCHASE AGREEMENT"), by and among ACEP, Starfire
Holding Corporation and Xxxx X. Icahn.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, the parties hereto agree as follows:
1. Initial Escrow Amount; Interest; Investment of Funds.
(a) Deposit of Initial Escrow Amount. On the date hereof, (i) Bear
Xxxxxxx, on behalf of the Issuers, shall initiate a wire transfer to the Account
in United States dollars of the net proceeds (the "NET PROCEEDS") from the sale
of the Notes in the amount of US$209,356,250.00 and (ii) Parent shall initiate
or cause to be initiated a wire transfer to the Account in United States dollars
of an amount so as to be, together with the Net Proceeds and any interest
accrued in the Account, sufficient to redeem, on the date that is thirty-two
(32) days after the date hereof, the Notes for cash at the Special Redemption
Price (as defined in the Indenture). As of the date hereof, the Issuers and the
Trustee agree that such amount shall be equal to US$7,143,972.22 (the aggregate
amounts referred to in clauses (i) and (ii) of the prior sentence shall be
referred to herein as the "INITIAL ESCROW AMOUNT").
(b) Interest Payments. On the date that is thirty (30) days after
the date hereof (the "INITIAL INTEREST PAYMENT DATE") and every thirty (30) days
thereafter or if any such date is not a Business Day, the immediately following
Business Day (such dates together with the Initial Interest Payment Date, each
an "ESCROW INTEREST PAYMENT DATE"), if the Escrow Break Date (as defined in
Section 10(a) hereof) will not occur by such Escrow Interest Payment Date, (i)
Parent shall make or cause to be made by each Escrow Interest Payment Date an
irrevocable deposit to the Account in United States dollars of an amount so as
to be sufficient to redeem, on the date that is thirty two (32) days after such
Escrow Interest Payment Date, the Notes for cash at the Special Redemption Price
(which amount shall be, for any 30-day period, $1,406,458.33, and for any day
$46,881.94), less any interest accrued in the Account since the immediately
preceding Escrow Interest Payment Date (each an "INTEREST PAYMENT") and (ii) a
duly authorized representative of each of the Issuers shall by such Escrow
Interest Payment Date deliver to the Escrow Agent and the Trustee a certificate
in the form attached hereto as Exhibit A-2 stating that (A) Parent has made the
irrevocable deposit described by the preceding clause (i) and (B) if the amounts
so deposited are invested in accordance with the Issuers' instructions, the
terms and conditions of Section 1(d)(i) with respect to the investment of funds
in the Account will upon deposit be met with respect to any funds deposited
pursuant to clause (i). Trustee shall provide to Parent and the Issuers a
written calculation of the amount of interest accrued in the Account
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since the immediately preceding Escrow Interest Payment Date through and
including the Escrow Interest Payment Date with respect to which such
calculation is made, which amount shall be provided by the Escrow Agent to the
Trustee, together with the amount of the Interest Payment to be deposited by
Parent not less than two Business Days prior to each such Escrow Interest
Payment Date, which calculation shall, absent manifest error, be binding on
Parent and the Issuers.
(c) Additional Payments. From time to time if the Trustee
determines that there are insufficient funds in the Account to pay the Special
Redemption Price by the next Escrow Interest Payment Date, the Trustee shall
notify the Issuers and the Escrow Agent, which notice shall set forth the amount
by which funds are insufficient and, in reasonable detail, the calculation of
such deficiency, and the Issuers shall within two Business Days after receipt of
notice from the Trustee, deposit such additional amounts to the Account. The
determination of the Trustee shall, absent manifest error, be binding on the
Issuers, and the Escrow Agent may conclusively rely on any such calculations.
(d) Investment of Funds in Account. Funds deposited in the Account
shall be invested and reinvested only upon the following terms and conditions:
(i) Acceptable Investments. Subject to clause (ii) below,
all funds deposited or held in the Account at any time shall be invested
in accordance with the written instructions of either of the Issuers from
time to time to the Escrow Agent only in one or more of the following:
(A) any obligations issued or guaranteed by the United
States government or any agency or instrumentality
thereof, in each case, maturing no later than the
next Escrow Interest Payment Date;
(B) investments in time deposit accounts, certificates
of deposit and money market deposits maturing by
the next Escrow Interest Payment Date provided
such investments are entitled to United States
federal deposit insurance for the full amount
thereof or issued by a bank or trust company that
is organized under the laws of the United States
of America or any State thereof having capital,
surplus and undivided profits aggregating in
excess of $500.0 million;
(C) repurchase obligations with a term of not later
than the next Escrow Interest Payment Date entered
into with a nationally recognized broker-dealer,
with respect to which the purchased securities are
obligations issued or guaranteed by the United
States government or any agency thereof, which
repurchase obligations shall be entered into
pursuant to written agreements; and
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(D) money market mutual funds which invest exclusively
in investments described in clauses (A), (B) and
(C) above, except that for purposes of this clause
(D), the underlying investments of any such funds
may have maturities later than the next Escrow
Interest Payment Date.
The written instructions of the Issuers (or either of them) to the Escrow Agent
shall specify the particular investment to be made, shall state that such
investment is authorized to be made hereby, shall contain the certification
referred to in Section 1(d)(ii) and shall be executed by a duly authorized
representative of the Issuers. Such instructions shall be in the form attached
hereto as Exhibit A-5. The Escrow Agent shall promptly implement such
instructions. The Escrow Agent shall not be obligated in any way whatsoever to
make any independent inquiry with respect to the correctness or accuracy of the
Issuers' instructions delivered pursuant to this Section 1(d)(i).
(ii) Security Interest in Investments. The Issuers shall give
no instruction to the Escrow Agent regarding the investment of funds in
the Account unless the Issuers have first certified to the Trustee that,
prior to such investment being made, the Issuers have taken, or caused to
be taken, all actions necessary or desirable to cause the Trustee to have
a first priority perfected security interest in the applicable investment
for the benefit of the Secured Parties. The Issuers shall forward or cause
to be forwarded a copy of such certificate to the Escrow Agent. The Escrow
Agent shall be entitled to act upon such instruction without being
obligated to make any independent inquiry with respect to whether the
Issuers have complied with the provisions set out herein or that the
security has been perfected. In addition, notwithstanding the foregoing,
the Escrow Agent shall only invest in assets that the Escrow Agent is
capable of crediting to the Account and in which the Escrow Agent so
credits to the Account unless with respect to any asset not so credited
the Issuers provide the Trustee (with a copy to the Escrow Agent) an
opinion of counsel in form and substance satisfactory to the Trustee that
the Trustee will have a valid, perfected first priority security interest
in such investment.
(iii) Principal and Interest. All principal and interest
earned on funds invested pursuant to Section 1(d)(i) shall be deposited in
the Account as additional Collateral for the benefit of the Trustee and
the ratable benefit of the Secured Parties and shall be reinvested in
accordance with Section l(d)(i) hereof.
2. Release of Amounts in Account. The Escrow Agent shall hold all
amounts in the Account in escrow pursuant to this Agreement until authorized
hereunder to deliver any or all of such amounts to the Issuers in accordance
with the instructions received pursuant to Section 10(a) or Section 10(c) hereof
or to the Trustee in accordance with the instructions received pursuant to
Section 10(b), Section 10(d) or otherwise in accordance with this Agreement.
3. Certain Additional Agreements. The Issuers and the Trustee shall,
upon request by the Escrow Agent, execute and deliver to the Escrow Agent such
additional written instructions and certificates hereunder as may be reasonably
required by the Escrow Agent.
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4. Representations, Warranties and Agreements.
(a) Each of the Issuers, Parent and the Escrow Agent represents
and warrants that:
(i) this Agreement is the valid and legally binding
obligation of it, enforceable in accordance with its terms;
(ii) the Account has been established in the name of the
Issuers and the Issuers are the sole entitlement holders of the Account;
(iii) It shall not change the name or account number of the
Account without the prior written consent of the Trustee;
(iv) the Account is an account as to which financial assets
are or may be credited and is a securities account (within the meaning of
Section 8-501 of the Code);
(v) the Account has no financial assets that are registered
in the name of the Issuers, payable to its order, or specially endorsed to
it that have not been endorsed to the Escrow Agent or in blank; and
(vi) except for the claims and interests of the Trustee for
the benefit of the Secured Parties and the claims and interests of the
Issuers in the Account, it does not know of any claim to or interest in
the Account or in any financial asset (as defined in Section 8-102(a)(9)
of the Code) contained therein.
(b) The Escrow Agent covenants and agrees that:
(i) the Escrow Agent shall, subject to the terms of this
Agreement, treat the Issuers as entitled to exercise the rights that
comprise any financial asset credited to the Account;
(ii) all property delivered to the Escrow Agent for deposit
to the Account and, except as otherwise provided in Section 1(d)(ii)
hereof, all investments pursuant to Section 1(d)(i) hereof, will be
credited in the ordinary course of business to the Account and the Escrow
Agent will treat all property (including, without limitation, any
investment property, financial asset, security, instrument or cash) held
by it in, or credited to, the Account as financial assets (within the
meaning of Section 8-102(a)(9) of the Code);
(iii) all securities or other property underlying any
financial assets credited to the Account shall be registered in the name
of the Escrow Agent, indorsed to the Escrow Agent or indorsed in blank or
credited to another securities account maintained in the name of the
Escrow Agent; and
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(iv) in no case will any financial asset credited to the
Account be registered in the name of the Issuers, payable to the order of
the Issuers or specially indorsed to the Issuers except to the extent the
foregoing have been specially indorsed to the Escrow Agent or in blank.
(c) The Trustee represents and warrants that this Agreement is the
valid and legally binding obligation of the Trustee, enforceable in accordance
with its terms.
5. No Withdrawals by the Issuers. The Escrow Agent shall neither accept
nor comply with any order from either of the Issuers withdrawing any funds from
the Account nor deliver any such funds to the Issuers, except in accordance with
written instructions from the Trustee described in Section 10(a) or Section
10(c) hereof.
6. Grant of Security Interest; Perfection and Priority of Security
Interest.
(a) The Issuers hereby grant to the Trustee, for the benefit of
the Secured Parties, to secure all obligations and indebtedness of the Issuers
under the Notes, a first priority security interest in the Collateral. The
Escrow Agent hereby consents to such security interest and hereby waives and
releases all liens, encumbrances, claims and rights of set-off it may have
against the Collateral and agrees that it will not assert any such lien,
encumbrance, claim or right or the priority thereof against the Collateral.
(b) The Escrow Agent hereby agrees to comply with all entitlement
orders and instructions of the Trustee relating to the Account or any property
or assets credited thereto or other investments purchased with funds therein in
each case without further consent of the Issuers, the Parent or any other
person. The Trustee agrees not to give any such entitlement order or instruction
unless otherwise permitted to do so hereunder or under the Indenture, however,
the Escrow Agent shall comply with all entitlement orders and instructions of
the Trustee and shall have no responsibility to determine whether the Trustee is
permitted to issue such an order or instruction. The Escrow Agent will not agree
with any third party that it will comply with entitlement orders or instructions
concerning the Account or any such investment purchased with funds from the
Account originated by any third party without the prior written consent of the
Trustee. The Issuers represent and warrant that, except for the security
interest granted to the Trustee for the benefit of the Secured Parties hereby
and the terms of this Agreement, the Issuers own the Collateral free and clear
of any and all liens, encumbrances and claims of others.
(c) The Issuers and the Trustee hereby irrevocably instruct the
Escrow Agent to, and the Escrow Agent shall, (i) (A) maintain sole dominion and
control over the Collateral, for the benefit of the Trustee for the benefit of
the Secured Parties to the extent specifically required herein, (B) maintain, or
cause its agent within the State of New York to maintain, possession of all
certificated securities purchased hereunder, if any, that are physically
possessed by the Escrow Agent in order for the Trustee for the benefit of the
Secured Parties to enjoy a continuous perfected first priority security interest
therein under the laws of the State of New York (the Issuers hereby agreeing
that in the event any certificated securities are in the possession of the
Issuers or a third party, the Issuers shall undertake to deliver immediately all
such certificates to the Escrow Agent), (C) take all steps specified by the
Issuers pursuant to
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paragraph (a) above to cause the Trustee for the benefit of the Secured Parties
to enjoy a continuous perfected first priority security interest under the Code
and any applicable law of the State of New York in all Collateral consisting of
securities entitlements including all U.S. government securities purchased
hereunder that are not certificated, if any, and (D) maintain the Collateral
free and clear of all liens, encumbrances and claims against the Escrow Agent of
any nature now or hereafter existing; and (ii) promptly notify the Trustee and
the Issuers if the Escrow Agent receives written notice that any person other
than the Trustee has a lien, encumbrance or adverse claim upon any portion of
the Collateral. Notwithstanding any other provisions contained in this
Agreement, the Escrow Agent shall act solely as the Trustee's agent in
connection with its duties under this Section 6, and to the extent necessary to
perfect the security interest of the Trustee, it is understood and agreed that
the Escrow Agent shall be the agent hereunder of the Trustee not the Issuers.
The Escrow Agent shall not have any right to receive compensation from the
Trustee and shall have no authority to obligate the Trustee or to subordinate,
compromise or pledge its security interest hereunder. Accordingly, the Escrow
Agent is hereby directed to cooperate with the Trustee in the exercise of its
rights in the Collateral provided for herein.
The Issuers hereby appoint the Trustee as its attorney-in-fact with full
power of substitution, upon an Event of Default as defined in the Indenture, to
do any act that the Issuers are obligated hereby to do, and the Trustee may
exercise such rights as the Issuers might exercise with respect to the
Collateral and take any action in the Issuers' names to protect the security
interest granted to the Trustee for the benefit of the Secured Parties. Upon an
Event of Default and for so long as such Event of Default continues, the Trustee
may exercise its rights under the Indenture.
7. Statements, Confirmations and Notices of Adverse Claims. The Escrow
Agent will send copies of all statements, confirmations and other correspondence
concerning the Account simultaneously to the Issuers and the Trustee at the
addresses set forth in Section 11(f) of this Agreement.
8. Escrow Agent.
(a) The Escrow Agent shall have no duties or responsibilities,
including, without limitation, (i) a duty to review or interpret the Indenture
or (ii) a duty to act upon written instructions from the Issuers or the Trustee,
except those expressly set forth herein. Except for this Agreement and the
limited role of Escrow Agent as set out herein, the Escrow Agent is not a party
to, or bound by, any agreement that may be required under, evidenced by, or
arise out of the Indenture.
(b) If the Escrow Agent shall be uncertain as to its duties or
rights hereunder or shall receive instructions from the Issuers or the Trustee
with respect to the Account that, in its reasonable opinion, are in conflict
with any of the provisions of this Agreement, it shall be entitled to refrain
from taking any action until it shall be directed otherwise in writing by a
joint written instruction of the Issuers and the Trustee or by order of a court
of competent jurisdiction. The Escrow Agent shall be protected in acting upon
any notice, request, waiver, consent, receipt or other document reasonably
believed by the Escrow Agent to be signed by the proper party or
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parties and shall not be liable with respect to any action taken or omitted to
be taken by it in accordance with any instruction received by it hereunder.
(c) To the fullest extent permitted by applicable law, the Escrow
Agent, in its capacity as such, shall not be liable for any error or judgment or
for any act done or step taken or omitted by it in good faith or for any mistake
of fact or law, or for anything that it may do or refrain from doing in
connection herewith, except for its own fraud, willful misconduct or gross
negligence, and the Escrow Agent shall have no duties to anyone except the
Issuers and the Trustee and their respective successors and permitted assigns.
(d) The Escrow Agent may consult legal counsel in the event of any
dispute or question as to the construction of this Agreement or the Escrow
Agent's duties hereunder, and the Escrow Agent shall incur no liability and
shall be fully protected with respect to any action taken or omitted in good
faith in accordance with the advice of counsel.
(e) The Escrow Agent shall be fully protected in relying on the
signature of the representatives of the Issuers and the representative of the
Trustee executing this Agreement or any instruction, notice or direction
delivered pursuant to the terms of this Agreement without inquiry whether such
signatory is an authorized representative of the Issuers or the Trustee.
(f) In the event of any disagreement between the Issuers or the
Trustee, and/or any other person, resulting in adverse claims and demands being
made in connection with or for the Account, the Escrow Agent shall be entitled
at its option to refuse to comply with any such claim or demand, so long as such
disagreement shall continue, and in so doing the Escrow Agent shall not be or
become liable for damages or interest to the Issuers, Parent or the Trustee for
its failure or refusal to comply with such conflicting or adverse demands. The
Escrow Agent shall be entitled to continue so to refrain and refuse so to act
until all differences shall have been resolved by agreement and the Escrow Agent
shall have been notified thereof in writing signed by the Issuers and the
Trustee. In the event of such disagreement that continues for ninety days or
more, the Escrow Agent in its discretion may, but shall be under no obligation
to, file a suit in interpleader for the purpose of having the respective rights
of the claimants adjudicated and may deposit with the court all documents and
property held hereunder. The Issuers agree to pay all reasonable out-of-pocket
costs and expenses incurred by the Escrow Agent in such action, including
reasonable attorneys' fees and disbursements.
(g) To the fullest extent permitted by applicable law, the Escrow
Agent is hereby indemnified by the Issuers and Parent from all losses, costs and
expenses of any nature incurred by the Escrow Agent arising out of or in
connection with this Agreement or with the administration of its duties
hereunder, unless such losses, costs or expenses shall have been caused by the
Escrow Agent's fraud, willful misconduct or gross negligence. Such
indemnification shall survive the resignation or removal of the Escrow Agent and
the termination of this Agreement until extinguished by any applicable statute
of limitations.
(h) The Escrow Agent does not have any interest in the Collateral,
but is serving as escrow holder only and having only possession thereof. This
paragraph shall survive notwithstanding any termination of this Agreement or the
resignation of the Escrow Agent.
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(i) The Escrow Agent (and any successor Escrow Agent) may at any
time resign as such by giving written notice of its resignation to the parties
hereto at least thirty days prior to the date specified for such resignation to
take effect. The Escrow Agent may be removed at any time by act of the Trustee.
Upon the effective date of such resignation or removal of the Escrow Agent, all
funds in the Account shall be delivered by it to such successor Escrow Agent or
as otherwise shall be instructed in writing by the Issuers and the Trustee,
whereupon the Escrow Agent shall be discharged of and from any and all further
obligations arising in connection with this Agreement. If at that time the
Escrow Agent has not received such instruction, the Escrow Agent's sole
responsibility after that time shall be to safekeep the Account and all funds
contained therein until receipt of a designation of successor Escrow Agent, or a
joint written instruction as to disposition of the Account and all funds
contained therein by the Issuers and the Trustee or a final order of a court of
competent jurisdiction mandating disposition of the Account and all funds
contained therein. If the Escrow Agent is removed or resigns, the Trustee shall
promptly appoint a successor Escrow Agent. Any fees and outstanding costs due to
the Escrow Agent at the time of its resignation or removal shall be paid by the
Issuers or Parent forthwith upon request. Except for the payment of all accrued
but unpaid fees that might be owed to the Escrow Agent, the Escrow Agent is not
entitled to any further compensation upon its resignation or removal.
(j) The Escrow Agent hereby accepts its appointment and agrees to
act as Escrow Agent under the terms and conditions of this Agreement and
acknowledges receipt of the Initial Escrow Amount. The Issuers and Parent agree
to pay to the Escrow Agent as payment in full for its services hereunder
US$5,000.00 on the date hereof. The Issuers and Parent further agree to
reimburse the Escrow Agent for all reasonable out-of-pocket expenses,
disbursements and advances incurred or made by the Escrow Agent in connection
with this Agreement or in the performance of its duties hereunder (including
reasonable fees, out-of-pocket expenses and disbursements of its counsel)
forthwith upon written request. The obligations of the Issuers under the
preceding two sentences shall survive the resignation or removal of the Escrow
Agent and the termination of this Agreement until extinguished by any applicable
statute of limitations.
9. Trustee.
(a) The Trustee may conclusively rely upon any document believed
by it to be genuine and to have been signed or presented by the proper person.
The Trustee need not investigate any fact or matter stated in such document.
(b) The Trustee will not be liable for any action it takes or
omits to take in good faith in reliance on any certificate delivered to it in
accordance with the terms of this Agreement.
(c) The Trustee will not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Agreement.
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10. Disposition of Assets in the Account Upon Certain Events.
(a) Transfer of Escrow Funds Upon Delivery of Release Certificate.
If, on or prior to August 31, 2004 (the "ESCROW BREAK DATE"), the Issuers notify
the Trustee (with a copy to the Escrow Agent) that it will deliver to the
Trustee a copy of the Release Certificate attached hereto as Exhibit A duly
executed by an authorized representative of the Issuers (together with all
attachments and schedules thereto, the "RELEASE CERTIFICATE") within two
Business Days, and within such two Business Days and on or prior to the Escrow
Break Date the Issuers deliver the Release Certificate to the Trustee, upon
receipt of the Release Certificate, the Trustee shall deliver to the Escrow
Agent the Authorization to Release attached hereto as Exhibit A-1 (the
"AUTHORIZATION TO RELEASE") instructing the Escrow Agent to transfer, upon
receipt of such Authorization to Release, and the Escrow Agent agrees to
transfer upon receipt of such Authorization to Release, all of the funds in the
Account to such account(s) as the Issuers designate in writing (the "ISSUERS
ACCOUNT").
The Escrow Agent shall not be obligated to inquire whether the Release
Certificate has been issued to the Trustee and if so, whether it complies with
all the provisions as set out herein.
The delivery of the Release Certificate to the Trustee by the Issuers and
the delivery of the Authorization to Release to the Escrow Agent by the Trustee
shall be the only conditions precedent to the release of funds to the Issuers
Account. The delivery of the Release Certificate shall constitute a
representation and warranty by the Issuers to the Escrow Agent and the Trustee
of the truth and accuracy of the statements made therein.
(b) Special Mandatory Redemption. If the Escrow Agent has not
received (i) a duly executed Authorization to Release on or prior to the Escrow
Break Date, (ii) a duly executed Escrow Payment Certificate in the form of
Exhibit A-2 on or prior to the applicable Escrow Interest Payment Date (or the
applicable Interest Payment has not been irrevocably deposited to the Account by
such Escrow Interest Payment Date) or (iii) the requested funds have not been
irrevocably deposited into the Account within two Business Days of receipt of
any notice from the Trustee pursuant to Section 1(c), it shall and is hereby
irrevocably authorized to wire transfer all funds in the Account to the Paying
Agent by the next Business Day. If, at any time, the Escrow Agent has received a
certificate in the form attached hereto as Exhibit A-3 executed by an officer of
each of the Issuers (an "OFFICER'S CERTIFICATE") certifying that the Issuers
have made a good faith determination that the Issuers will be unable to deliver
the Release Certificate to the Trustee by the Escrow Break Date, the Escrow
Agent shall, and is hereby irrevocably authorized to, wire transfer on the next
Business Day following receipt of the Officer's Certificate all funds in the
Account to the Paying Agent. Any wire transfer made to the Paying Agent pursuant
to this Section 10(b) shall be made to:
Wilmington Trust Company
Wilmington, DE
ABA No. 000000000
Acct No. 64999-0
Acct Name: American Casino & Entertainment Properties LLC
Attn: Xxxx Xxxxx
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(c) Release of Remaining Funds in Account. Upon such date as all
funds have been released from the Account in accordance with Section 10(b)
hereof and all fees and expenses of the Escrow Agent pursuant to this Agreement
have been paid, upon receipt of a request by the Issuers to the Trustee, the
Trustee shall transfer, or instruct the Escrow Agent to transfer, by wire
transfer of immediately available funds any funds in excess of the funds
sufficient to redeem the Notes in accordance with Section 3.09 of the Indenture
to an account designated by the Issuers in writing.
(d) Release Upon an Interest Payment Date. In addition to
disbursing amounts held in escrow pursuant to this Section 10, one Business Day
after receipt of written notice from the Trustee in the form attached hereto as
Exhibit A-4 of the amount of interest and premium, if any, to be paid by the
Issuers on an Interest Payment Date (as defined in the Indenture) pursuant to
the terms of the Indenture and the Notes, the Escrow Agent shall release by wire
transfer United States dollars to an account designated by the Trustee in such
notice in an amount equal to the amount of interest and premium, if any, payable
on such Interest Payment Date as specified in such notice; provided that the
Trustee shall not be entitled to release any amounts under this Section 10(d)
more than two Business Days before such Interest Payment Date.
11. Miscellaneous.
(a) Entirety. This Agreement and (with respect to the Issuers and
the Trustee only) the Indenture represent the entire agreement of the parties
hereto with respect to the subject matter herein, and supersede all prior
agreements and understandings, oral or written, if any, including any
correspondence relating thereto or the transactions contemplated herein.
(b) Waivers, Amendments, Etc. Except as expressly provided hereby,
the terms of this Agreement may be waived, altered, amended, modified, changed,
discharged or terminated only by an instrument in writing duly executed by each
of the parties hereto, subject to compliance with the provisions of the
Indenture.
(c) Severability. If any provision hereof is illegal, invalid or
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) the
illegality, invalidity or unenforceability of any provision in any jurisdiction
shall not affect the illegality, validity or enforceability of such provision in
any other jurisdiction.
(d) Successors. This Agreement shall be binding upon the Issuers,
their successors and assigns and shall inure, together with the rights and
remedies hereunder, to the benefit of the Issuers and their successors and
assigns, the Escrow Agent and its successors and assigns and the Trustee and its
successors and assigns for the benefit of the Secured Parties.
(e) Rules of Construction. In this Agreement, words in the
singular number include the plural, and in the plural include the singular;
words of the masculine gender include the feminine and the neuter, and when the
sense so indicates words of the neuter gender may refer to any gender; and, the
word "or" is disjunctive but not exclusive. The captions and section
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numbers appearing in this Agreement are inserted only as a matter of
convenience. They do not define, limit or describe the scope or intent of the
provisions of this Agreement.
(f) Notices. All notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by facsimile) delivered to
the intended recipient at the address below or, as to any party, at such other
address as shall be designated by such party in a notice to the other party.
Except as otherwise provided in this Agreement, all such communications shall be
deemed to have been duly given when transmitted by facsimile (receipt of which
is confirmed) or personally delivered (including by reputable overnight courier)
or, in the case of a mailed (certified or registered, return receipt requested)
notice, upon receipt, in each case given or addressed as aforesaid.
If to the Issuers:
American Casino & Entertainment Properties LLC
American Casino & Entertainment Properties Finance Corp.
0000 Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attention: President
Attention: Chief Financial Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Xxxxx Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Parent:
American Real Estate Holdings Limited Partnership
000 Xxxxx Xxxxxxx Xxxx
Xx. Xxxxx, XX 00000
Attention: Xxxx Xxxxxxxxxx
Telephone:(000) 000-0000
Facsimile: (000) 000-0000
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With a copy to:
Xxxxx Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Trustee:
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Xx.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Wilmington Trust Company
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and a copy to:
Xxxxxx, Xxxxxx-Xxxxxxx, Colt & Mosle LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Escrow Agent:
Fleet National Bank
NY EH 30903N
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Attention: Xxxxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
13
With a copy to:
Morrison, Cohen, Singer & Xxxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
The Issuers, the Trustee or the Escrow Agent by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
(g) Tax Reporting. The Issuers shall be responsible for reporting
all items of income, gain, expense and loss recognized in the Account.
(h) Further Assurances. At any time and from time to time, upon
the request of the Issuers, Trustee or the Escrow Agent and at the sole expense
of the Issuers, the parties will promptly and duly execute and deliver such
further instruments and documents and take such further actions as may
reasonably be requested for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted.
(i) Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart. It shall not be necessary in making proof of this
Agreement to produce or account for more than one such counterpart. Signatures
of the parties transmitted by facsimile or other electronic means shall be
deemed to be their original signatures for all purposes.
(j) Governing Law; Submission to Jurisdiction; Venue. (a) SUBJECT
TO COMPLIANCE WITH APPLICABLE NEVADA GAMING LAWS, THIS AGREEMENT AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO PRINCIPLES OF CONFLICTS OF LAW. REGARDLESS OF ANY PROVISION IN THIS OR
ANY OTHER AGREEMENT, FOR PURPOSES OF THE CODE, WITH RESPECT TO THE ACCOUNT NEW
YORK SHALL BE DEEMED TO BE THE ESCROW AGENT'S JURISDICTION (WITHIN THE MEANING
OF SECTIONS 8-110 AND 9-304 OF THE CODE). Any legal action or proceeding with
respect to this Agreement or transactions contemplated hereby shall, except as
set out in the following sentence, be brought in the courts of the State of New
York located in the Borough of Manhattan, The City of New York, or of the United
States for the Southern District of New York. Nothing herein shall affect the
right of the Escrow Agent or the Trustee to serve process in any other manner
permitted by law or to commence legal proceedings or to otherwise proceed
against the Issuers or Parent in any other jurisdiction.
(k) Consent to Jurisdiction; Service of Process. The Issuers and
Parent each hereby irrevocably: (1) submits to the non-exclusive jurisdiction of
any United States Federal or
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New York State court located in the Borough of Manhattan, The City of New York
in connection with any suit, action or proceeding arising out of, or relating to
this Agreement or any transaction contemplated thereby; and (2) designates and
appoints CT Corporation System, whose offices are currently located at 000
Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, as its authorized agent for receipt of
service of process in any such suit, action or proceeding.
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IN WITNESS WHEREOF, the parties hereto have caused this Escrow and
Security Agreement to be duly executed as of the day and year first above
written.
AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
By: American Entertainment Properties Corp., its sole member
By:______________________________________
Name: Xxxxxxx Xxxxx
Title: President
AMERICAN CASINO & ENTERTAINMENT PROPERTIES FINANCE CORP.
By: ______________________________________
Name: Xxxxxxx Xxxxx
Title: President
AMERICAN REAL ESTATE HOLDINGS LIMITED PARTNERSHIP
By: American Property Investors, Inc., its general partner
By: _____________________________________
Name: Xxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
WILMINGTON TRUST COMPANY,
as Trustee
By: ______________________________________
Name: ______________________________________
Title: ______________________________________
FLEET NATIONAL BANK,
as Escrow Agent
By: ______________________________________
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
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