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JAZZ CASINO COMPANY, L.L.C.,
ISSUER,
JCC HOLDING COMPANY,
CP DEVELOPMENT, L.L.C.,
FP DEVELOPMENT, L.L.C. AND
JCC DEVELOPMENT COMPANY, L.L.C.,
GUARANTORS,
AND
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
TRUSTEE
------------------
INDENTURE
Dated as of October 30, 1998
------------------
$187,500,000
Senior Subordinated Notes due 2009
With Contingent Payments
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CROSS-REFERENCE TABLE
TIA INDENTURE
SECTION SECTION
------- ---------
310 (a)(1) ............................................................................ 8.10
(a)(2) ............................................................................ 8.10
(a)(3) ............................................................................ N.A.
(a)(4) ............................................................................ N.A.
(a)(5) ............................................................................ 8.10
(b) ............................................................................... 8.8;
8.10;
15.2
(c) ............................................................................... N.A.
311 (a) ............................................................................... 8.11
(b) ............................................................................... 8.11
(c) ............................................................................... N.A.
312 (a) ............................................................................... 2.5
(b) ............................................................................... 15.3.
(c) ............................................................................... 15.3.
313 (a) ............................................................................... 8.6
(b)(1) ............................................................................ N.A.
(b)(2) ............................................................................ 8.6
(c) ............................................................................... 8.6;
15.2.
(d) ............................................................................... 8.6
314 (a) ............................................................................... 5.7;
5.8;
15.2.
(b) ............................................................................... 4.2
(c)(1) ............................................................................ 2.2;
8.2;
15.4
(c)(2) ............................................................................ 8.2;
15.4.
(c)(3) ............................................................................ 4.1(c);
4.2
(d) ............................................................................... 4.1(c);
4.2
(e) ............................................................................... 15.5.
(f) ............................................................................... N.A.
315 (a) ............................................................................... 8.1(b)
(b) ............................................................................... 8.5;
8.6;
15.2.
(c) ............................................................................... 8.1(a)
i
TIA INDENTURE
SECTION SECTION
------- ---------
(d) ............................................................................... 2.8;
7.11;
8.1(c)
(e) ............................................................................... 7.13
316 (a)(last sentence) ................................................................ 2.9
(a)(1)(A) ......................................................................... 7.11
(a)(1)(B) ......................................................................... 7.12
(a)(2) ............................................................................ N.A.
(b) ............................................................................... 7.7
317 (a)(1) ............................................................................ 7.3
(a)(2) ............................................................................ 7.4
(b) ............................................................................... 2.4
318 (a) ............................................................................... 15.1.
--------------------
N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture.
ii
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE............................................................1
SECTION 1.1. Definitions.................................................................................1
SECTION 1.2. Incorporation by Reference of TIA..........................................................34
SECTION 1.3. Rules of Construction......................................................................34
ARTICLE II. THE SECURITIES......................................................................................35
SECTION 2.1. Form and Dating............................................................................35
SECTION 2.2. Execution and Authentication...............................................................35
SECTION 2.3. Registrar and Paying Agent.................................................................37
SECTION 2.4. Paying Agent to Hold Assets in Trust.......................................................37
SECTION 2.5. Securityholder Lists.......................................................................38
SECTION 2.6. Transfer and Exchange......................................................................38
SECTION 2.7. Replacement Securities.....................................................................38
SECTION 2.8. Outstanding Securities.....................................................................39
SECTION 2.9. Treasury Securities........................................................................39
SECTION 2.10. Temporary Securities......................................................................39
SECTION 2.11. Cancellation..............................................................................39
SECTION 2.12. Defaulted Interest........................................................................40
ARTICLE III. REDEMPTION.........................................................................................41
SECTION 3.1. Right of Redemption........................................................................41
SECTION 3.2. Redemption Pursuant to Applicable Laws.....................................................41
SECTION 3.3. Notices to Trustee.........................................................................41
SECTION 3.4. Notice of Redemption.......................................................................41
SECTION 3.5. Effect of Notice of Redemption.............................................................42
SECTION 3.6. Deposit of Redemption Price................................................................42
SECTION 3.7. Securities Redeemed in Part................................................................43
ARTICLE IV. SECURITY............................................................................................43
SECTION 4.1. Security Interest..........................................................................43
SECTION 4.2. Recording; Opinions of Counsel.............................................................43
SECTION 4.3. Disposition of Certain Collateral..........................................................44
SECTION 4.4. Net Cash Proceeds Account..................................................................46
SECTION 4.5. Certain Releases of Collateral.............................................................46
SECTION 4.6. Lien Subordination.........................................................................47
SECTION 4.7. Payment of Expenses........................................................................47
SECTION 4.8. Suits to Protect the Collateral............................................................47
SECTION 4.9. Trustee's Duties...........................................................................48
SECTION 4.10. Collateral Documents......................................................................48
iii
ARTICLE V. COVENANTS............................................................................................49
SECTION 5.1. Payment of Securities......................................................................49
SECTION 5.2. Maintenance of Office or Agency............................................................49
SECTION 5.3. Limitation on Restricted Payments..........................................................50
SECTION 5.4. Existence..................................................................................51
SECTION 5.5. Payment of Taxes and Other Claims..........................................................51
SECTION 5.6. Maintenance of Insurance...................................................................52
SECTION 5.7. Compliance Certificate; Notice of Default..................................................52
SECTION 5.8. Reports....................................................................................52
SECTION 5.9. Waiver of Stay, Extension or Usury Laws....................................................53
SECTION 5.10. Limitation on Transactions with Affiliates................................................53
SECTION 5.11. Limitation on Incurrence of Additional Indebtedness and Disqualified
Capital Stock...........................................................................54
SECTION 5.12. Limitation on Dividends and Other Payment Restrictions Affecting
Subsidiaries............................................................................57
SECTION 5.13. Limitation on Liens.......................................................................57
SECTION 5.14. Limitation on Sales of Assets and Subsidiary Stock; Event of Loss.........................58
SECTION 5.15. Construction..............................................................................62
SECTION 5.16. Limitation on Use of Certain Funds........................................................62
SECTION 5.17. Limitation on Status as Investment Company................................................63
SECTION 5.18. Restrictions on Sale and Issuance of Subsidiary Stock.....................................63
SECTION 5.19. Limitation on Payment of Management Fees..................................................63
SECTION 5.20. Listing of Securities.....................................................................65
SECTION 5.21. Compliance with Environmental Laws........................................................65
SECTION 5.22. Limitation on Layering Debt...............................................................66
SECTION 5.23. Certain Deferrals.........................................................................66
ARTICLE VI. SUCCESSORS..........................................................................................67
SECTION 6.1. Limitation on Merger, Sale or Consolidation................................................67
SECTION 6.2. Successor Substituted......................................................................68
ARTICLE VII. EVENTS OF DEFAULT AND REMEDIES.....................................................................68
SECTION 7.1. Events of Default..........................................................................68
SECTION 7.2. Acceleration of Maturity Date; Rescission and Annulment....................................70
SECTION 7.3. Collection of Indebtedness and Suits for Enforcement by Trustee............................72
SECTION 7.4. Trustee May File Proofs of Claim...........................................................72
SECTION 7.5. Trustee May Enforce Claims Without Possession of Securities................................73
SECTION 7.6. Priorities.................................................................................73
SECTION 7.7. Limitation on Suits........................................................................74
SECTION 7.8. Unconditional Right of Holders to Receive Principal and Interest...........................74
SECTION 7.9. Rights and Remedies Cumulative.............................................................74
iv
SECTION 7.10. Delay or Omission Not Waiver..............................................................75
SECTION 7.11. Control by Holders........................................................................75
SECTION 7.12. Waiver of Past Default....................................................................75
SECTION 7.13. Undertaking for Costs.....................................................................76
SECTION 7.14. Restoration of Rights and Remedies........................................................76
ARTICLE VIII. TRUSTEE...........................................................................................76
SECTION 8.1. Duties of Trustee..........................................................................76
SECTION 8.2. Rights of Trustee..........................................................................78
SECTION 8.3. Individual Rights of Trustee...............................................................78
SECTION 8.4. Trustee's Disclaimer.......................................................................79
SECTION 8.5. Notice of Default..........................................................................79
SECTION 8.6. Reports by Trustee to Holders..............................................................79
SECTION 8.7. Compensation and Indemnity.................................................................79
SECTION 8.8. Replacement of Trustee.....................................................................80
SECTION 8.9. Successor Trustee by Merger, Etc...........................................................81
SECTION 8.10. Eligibility; Disqualification.............................................................81
SECTION 8.11. Preferential Collection of Claims against Company.........................................82
ARTICLE IX. LEGAL DEFEASANCE AND COVENANT DEFEASANCE............................................................82
SECTION 9.1. Option to Effect Legal Defeasance or Covenant Defeasance...................................82
SECTION 9.2. Legal Defeasance and Discharge.............................................................82
SECTION 9.3. Covenant Defeasance........................................................................82
SECTION 9.4. Conditions to Legal or Covenant Defeasance.................................................83
SECTION 9.5. Deposited U.S. Legal Tender and U.S. Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions...................................................84
SECTION 9.6. Repayment to Company.......................................................................85
SECTION 9.7. Reinstatement..............................................................................85
ARTICLE X. AMENDMENTS, SUPPLEMENTS AND WAIVERS..................................................................86
SECTION 10.1. Supplemental Indentures Without Consent of Holders........................................86
SECTION 10.2. Amendments, Supplemental Indentures and Waivers with Consent of Holders...................86
SECTION 10.3. Compliance with TIA.......................................................................88
SECTION 10.4. Revocation and Effect of Consents.........................................................88
SECTION 10.5. Notation on or Exchange of Securities.....................................................89
SECTION 10.6. Trustee to Sign Amendments, Etc...........................................................89
SECTION 10.7. Consent to Certain Amendments of the Ground Lease; Trustee's Actions......................89
ARTICLE XI. RIGHT TO REQUIRE REPURCHASE.........................................................................90
SECTION 11.1. Repurchase of Securities at Option of the Holder Upon Change of Control...................90
v
ARTICLE XII. GUARANTY...........................................................................................92
SECTION 12.1. Guaranty..................................................................................92
SECTION 12.2. Parent Guaranty...........................................................................94
SECTION 12.3. Execution and Delivery of Guaranty........................................................95
SECTION 12.4. Future Subsidiary Guarantors..............................................................96
SECTION 12.5. Release of Guarantors.....................................................................96
SECTION 12.6. When the Guarantor May Merge, etc.........................................................97
SECTION 12.7. Certain Bankruptcy Events.................................................................98
ARTICLE XIII. SUBORDINATION OF SECURITIES.......................................................................98
SECTION 13.1. Securities Subordinated to Senior Debt....................................................98
SECTION 13.2. Securities Subordinated to Prior Payment of All Senior Debt on
Dissolution, Liquidation, Reorganization, etc. of the Company...........................98
SECTION 13.3. Holders of Securities to be Subrogated to Right of Holders of Senior Debt................100
SECTION 13.4. Obligations of the Company Unconditional.................................................100
SECTION 13.5. Company Not to Make Payments With Respect to Securities in Certain
Circumstances..........................................................................101
SECTION 13.6. Trustee Entitled to Assume Payments Not Prohibited in Absence of Notice..................102
SECTION 13.7. Application by Trustee of Monies Deposited With It.......................................103
SECTION 13.8. Subordination Rights Not Impaired by Acts or Omissions of Company or
Holders of Senior Debt.................................................................103
SECTION 13.9. Holders of Securities Authorize Trustee to Effectuate Subordination of
Securities.............................................................................104
SECTION 13.10. Right of Trustee to Hold Senior Debt; Preservation of Trustee's Rights.................105
SECTION 13.11. Article XIII Not to Prevent Events of Default..........................................105
SECTION 13.12. Trustee Not Fiduciary for Holders of Senior Debt.......................................105
SECTION 13.13. Trust Monies Not Subordinated..........................................................105
ARTICLE XIV. SUBORDINATION OF GUARANTY.........................................................................105
SECTION 14.1. Guaranty Subordinated to Guarantor Senior Debt...........................................105
SECTION 14.2. Guaranty Subordinated to Prior Payment of All Guarantor Senior Debt on
Dissolution, Liquidation, Reorganization, etc. of the Guarantor........................106
SECTION 14.3. Holders of Securities to be Subrogated to Right of Holders of Guarantor
Senior Debt............................................................................107
SECTION 14.4. Obligations of the Guarantor Unconditional...............................................108
SECTION 14.5. Guarantors Not to Make Payments in Respect of the Guaranties in Certain
Circumstances..........................................................................108
SECTION 14.6. Trustee Entitled to Assume Payments Not Prohibited in Absence of Notice..................109
SECTION 14.7. Application by Trustee of Monies Deposited With It.......................................109
vi
SECTION 14.8. Subordination Rights Not Impaired by Acts or Omissions of a Guarantor or
Holders of Guarantor Senior Debt..................................................109
SECTION 14.9. Holders of Securities Authorize Trustee to Effectuate Subordination of
Guaranties........................................................................111
SECTION 14.10. Right of Trustee to Hold Guarantor Senior Debt; Preservation of
Trustee's Rights..................................................................111
SECTION 14.11. Article XIV Not to Prevent Events of Default...........................................111
SECTION 14.12. Trustee Not Fiduciary for Holders of Guarantor Senior Debt.............................111
SECTION 14.13. Trust Monies Not Subordinated..........................................................112
ARTICLE XV. MISCELLANEOUS......................................................................................112
SECTION 15.1. TIA Controls.............................................................................112
SECTION 15.2. Notices 112..............................................................................112
SECTION 15.3. Communications by Holders with Other Holders.............................................113
SECTION 15.4. Certificate and Opinion as to Conditions Precedent.......................................113
SECTION 15.5. Statements Required in Certificate or Opinion............................................114
SECTION 15.6. Rules by Trustee, Paying Agent, Registrar................................................114
SECTION 15.7. Legal Holidays...........................................................................114
SECTION 15.8. Governing Law............................................................................114
SECTION 15.9. No Adverse Interpretation of Other Agreements............................................115
SECTION 15.10. No Recourse Against Others.............................................................115
SECTION 15.11. Successors.............................................................................116
SECTION 15.12. Duplicate Originals....................................................................116
SECTION 15.13. Severability...........................................................................116
SECTION 15.14. Table of Contents, Headings, Etc.......................................................116
SECTION 15.15. Gaming Laws............................................................................116
SECTION 15.16. Tax Treatment..........................................................................116
SECTION 15.17. Waivers and Releases...................................................................117
vii
INDENTURE, dated as of October 30, 1998, between Jazz Casino
Company, L.L.C., a Louisiana limited liability company ("JCC" or the "Company"),
as issuer, JCC Holding Company, a Delaware corporation ("JCC Holding"), CP
Development, L.L.C., a Louisiana limited liability company ("CP Development"),
FP Development, L.L.C., a Louisiana limited liability company ("FP
Development"), and JCC Development Company, L.L.C., a Louisiana limited
liability company ("JCC Development"), as guarantors, and Norwest Bank
Minnesota, National Association, 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
Company's Senior Subordinated Notes due 2009 with Contingent Payments:
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions.
-----------
"ACCELERATION NOTICE" shall have the meaning specified in
Section 7.2.
"ACCEPTANCE AMOUNT" shall have the meaning specified in
Section 5.14.
"ACCUMULATED AMOUNT" shall have the meaning specified in
Section 5.14.
"ACQUIRED ASSETS" means assets of any person existing at the
time such person becomes a Subsidiary of the Company or is merged or
consolidated into or with the Company or one of its Subsidiaries.
"ACQUIRED INDEBTEDNESS" means Indebtedness of any person
existing at the time such person becomes a Subsidiary of the Company or is
merged or consolidated into or with the Company or one of its Subsidiaries, and
not incurred in connection with or in anticipation of, such merger or
consolidation or of such person becoming a Subsidiary of the Company.
"ACQUISITION" means the purchase or other acquisition of any
person or substantially all the assets of any person by any other person,
whether by purchase, merger consolidation, or other transfer, and whether or not
for consideration.
"AFFILIATE" means (i) any person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any of the Guarantors, (ii) any spouse, immediate family member, or
other relative who has the same principal residence of any person described in
clause (i) above, and (iii) any trust in which any person described in clause
(i) or (ii) above has a beneficial interest. For purposes of this definition,
the term "control" means (a) 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, or (b) the beneficial
ownership of 10% or more of the voting Capital Stock of a person (on a fully
diluted basis) or of warrants or other rights to acquire such Capital Stock
(whether or
not presently exercisable). Notwithstanding the foregoing, Affiliate shall not
include wholly-owned Subsidiaries of the Company.
"AFFILIATE TRANSACTION" shall have the meaning specified in
Section 5.10.
"AGENT" means any Registrar, Paying Agent or co-Registrar.
"AGGREGATE AMOUNT" shall have the meaning specified in
Section 5.14.
"AGGREGATE CONTINGENT PAYMENTS" means the Contingent Payments
together with all payments in respect of the Contingent Notes.
"APPROVALS" means all approvals, licenses (including Gaming
Licenses), permits, authorizations, findings and other filings necessary under
applicable gaming laws.
"ASSET SALE" shall have the meaning specified in Section 5.14.
"ASSET SALE OFFER" shall have the meaning specified in
Section 5.14.
"ASSET SALE OFFER AMOUNT" shall have the meaning specified in
Section 5.14.
"ASSET SALE OFFER PERIOD" shall have the meaning specified in
Section 5.14.
"ASSET SALE OFFER PRICE" shall have the meaning specified in
Section 5.14.
"ASSET SALE PURCHASE DATE" shall have the meaning specified in
Section 5.14.
"ASSET SALE PUT DATE" shall have the meaning specified in
Section 5.14.
"AUTHORIZED REPRESENTATIVE" means, (i) with respect to any
person that is a corporation, or any person that has two or more Officers, any
Officer thereof, and (ii) with respect to any person that is a limited liability
company and that has fewer than two Officers, an Officer of the manager of such
liability company, and (iii) with respect to any person that is a partnership
and that has fewer than two Officers, an Officer of a general partner of such
partnership.
"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 the number of years from the date of determination to the
dates of each successive scheduled principal payment of such security or
instrument multiplied by the amount of each such principal payment by (ii) the
sum of all such principal payments.
"BANK AGENT" means Bankers Trust Company as Administrative
Agent (as defined in the Bank Credit Facilities), or any successor or
replacement Administrative Agent, under the Bank Credit Facilities.
2
"BANK CREDIT FACILITIES" means the Credit Agreement, dated as
of October 29, 1998 (the "Bank Credit Agreement"), among JCC, JCC Holding, the
Bank Lenders from time to time parties thereto, and Bankers Trust Company, as
administrative agent, together with the related documents thereto (including,
without limitation, any guaranty agreements and security documents), in each
case as such agreements may be amended (including any amendment and restatement
thereof), supplemented or modified from time to time, including any agreement
extending the maturity of, refinancing, replacing or otherwise restructuring
(including by way of adding Subsidiaries of JCC Holding or JCC as additional
borrowers or guarantors thereunder) all or a portion of the Indebtedness under
such agreement or any successor or replacement agreement and whether by the same
or any other agent, lender or group of lenders.
"BANK LENDERS" means the lenders from time to time party to
the Bank Credit Facilities.
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar
Federal, state or foreign law for the relief of debtors.
"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 (or, if such person is a limited
liability company, of the Manager) 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 are authorized or obligated by law or executive order to close.
"CAPITALIZED LEASE OBLIGATION" means obligations under a
lease, entered into on or after the Issue Date, that are required to be
capitalized for financial reporting purposes in accordance with GAAP, and the
amount of Indebtedness represented by such obligations shall be the capitalized
amount of such obligations, as determined in accordance with GAAP.
"CAPITAL STOCK" means, with respect to any person, any capital
stock of such person and shares, interests, participations or other ownership
interests (however designated) of any person and any rights (other than debt
securities convertible into capital stock), warrants and options to purchase any
of the foregoing, including (without limitation) each class of common stock and
preferred stock of such person if such person is a corporation and each general
and limited partnership interest of such person if such person is a partnership.
"CASH" means U.S. Legal Tender or U.S. Government Obligations.
"CASH EQUIVALENT" means (i) securities issued or directly and
fully guaranteed, or secured 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) and in each
3
case maturing within one year after the date of acquisition, (ii) time deposits
and certificates of deposit of any commercial bank having, or which is the
principal subsidiary of a bank holding company organized under the laws of the
United States, any State thereof, the District of Columbia or any foreign
jurisdiction having capital and surplus in excess of $250,000,000 and commercial
paper issued by others rated at least A-2 or the equivalent thereof by Standard
& Poor's Corporation or at least P-2 or the equivalent thereof by Xxxxx'x
Investors Service, Inc. and in each case maturing within one year after the date
of acquisition, (iii) repurchase obligations with a term of not more than 90
days collateralized by securities issued or directly and fully guaranteed, or
secured 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) entered into with any bank or other person meeting
the qualifications specified in clause (ii) above, and (iv) investments in money
market funds substantially all of whose assets are comprised of securities of
the types described in clauses (i) through (iii).
"CASINO" means the casino to be located at the site of the
former Rivergate Convention Center in New Orleans, Louisiana that is operated in
accordance with the Casino Operating Contract.
"CASINO COMPLETION DATE" means the Termination of Construction
Date (as defined in the Notes Completion Guarantee).
"CASINO OPENING DATE" means the date upon which the Company
first opens the Casino to the public and commences business.
"CASINO OPERATING CONTRACT" means the Amended and Renegotiated
Casino Operating Contract between Xxxxxx'x Jazz Company, the Company and the
State of Louisiana by and through the Louisiana Gaming Control Board, dated as
of October 30, 1998, as it may be amended or supplemented from time to time.
"CHANGE OF CONTROL" shall be deemed to have occurred if HET or
a direct or indirect Subsidiary of HET does not have the exclusive authority to
manage the Casino.
"CHANGE OF CONTROL OFFER" shall have the meaning specified in
Section 11.1.
"CHANGE OF CONTROL OFFER PERIOD" shall have the meaning
specified in Section 11.1.
"CHANGE OF CONTROL OFFER PRICE" shall have the meaning
specified in Section 11.1.
"CHANGE OF CONTROL PAYMENT DATE" shall have the meaning
specified in Section 11.1.
"CHANGE OF CONTROL PUT DATE" shall have the meaning specified
in Section 11.1.
"CITY" means the City of New Orleans, Louisiana.
4
"COLLATERAL" means the Property and assets of the Company and
the Guarantors which is now or hereafter subject to the Liens created by the
Collateral Documents.
"COLLATERAL AGENT" shall mean The Bank of New York as
collateral agent under the Collateral Documents.
"COLLATERAL DOCUMENTS" means the Security Agreement, the
Intellectual Property Security Documents, the Pledge Agreement , the Mortgages
and any other agreement executed by the Company and/or the Guarantors in favor
of the Collateral Agent for the benefit of the Secured Creditors purporting to
convey to the Collateral Agent for the benefit of the Secured Creditors a
security interest in Property, as the same may be amended from time to time.
"COMPANY" means the party named as such in this Indenture
until a successor replaces it pursuant to this Indenture and thereafter means
such successor.
"COMPANY REQUEST" means a written request of the Company or a
Guarantor, as the case may be, in the form of an Officers' Certificate.
"COMPLETION GUARANTEES" means (i) the Notes Completion
Guarantee (the "Notes Completion Guarantee"), dated as of October 30, 1998, by
HOC and HET in favor of the Trustee, as trustee, as it may be amended or
supplemented from time to time, (ii) the Bank Completion Guarantee, dated as of
October 29, 1998, by HOC and HET in favor of the Bank Agent, as agent, as it may
be amended or supplemented from time to time, (iii) the LGCB Completion
Guarantee, dated as of October 30, 1998, by HOC and HET in favor of the State of
Louisiana and the Regulating Authority, as it may be amended or supplemented
from time to time, and (iv) the RDC/City Completion Guarantee, dated as of
October 29, 1998, by HOC and HET in favor of the RDC and the City, as it may be
amended or supplemented from time to time.
"COMPLETION LOAN AGREEMENT" means the Amended and Restated
Completion Loan Agreement, dated as of October 30, 1998, among the Company, HOC
and HET, as it may be amended or supplemented from time to time.
"CONSOLIDATED CAPITAL EXPENDITURES" means, with respect to any
person for any period, the capital expenditures of such person and its
Consolidated Subsidiaries (determined in accordance with GAAP) for such period.
"CONSOLIDATED COVERAGE RATIO" of any person on any date of
determination (the "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
5
subsequent to the Reference Period and on or prior to the date of the
transaction 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, (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 Reference 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, (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
average rate in effect from the beginning of the Reference Period to 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 Rate Agreement
(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,
(v) there shall be excluded from Consolidated Fixed Charges any portion of such
Consolidated Fixed Charges related to any amount of Indebtedness that was
outstanding during the Reference Period but is not outstanding on the
Transaction Date, except for Consolidated Fixed Charges actually incurred with
respect to Indebtedness borrowed (as adjusted pursuant to clause (iv)) under a
revolving credit or similar arrangement to the extent the commitment thereunder
remains in effect on the Transaction Date and (vi) the Consolidated Fixed
Charges of such person attributable to interest on any Indebtedness under a
revolving credit facility computed on a pro forma basis shall be computed based
upon the average daily balance of such Indebtedness during the Reference Period.
"CONSOLIDATED EBITDA" means, with respect to any person, for
any period, the Consolidated Net Income of such person for such period adjusted
(A) to add thereto (to the extent deducted from net revenues in determining
Consolidated Net Income), without duplication, the sum of (i) Permitted Tax
Distributions and, if such person is not treated as a pass through entity for
federal income tax purposes, or any similar provision of state or local law,
income tax expense (whether or not payable during such period) of such person
and its Consolidated Subsidiaries, (ii) consolidated depreciation and
amortization expense, (iii) Consolidated Fixed Charges, (iv) Aggregate
Contingent Payments, whether paid or accrued, (v) Incentive Management Fees,
whether paid or accrued, (vi) amortization expense with respect to deferred
financing fees, (vii) pre-opening expenses, (viii) any extraordinary loss
reflected in the calculation of Consolidated Net Income, (ix) other non-cash
charges, and (x) solely for the purpose of calculating Contingent Payments, if
any, and Incentive Management Fees, if any, the proceeds, if any, from the
exercise of the HET Warrant, and (B) to subtract therefrom (i) any extraordinary
gain reflected in the calculation of Consolidated Net Income, (ii) any
Restricted Payments from the Company to the Parent Guarantor made pursuant to
clause (E) of the second paragraph of Section 5.3 and (iii) solely for the
purpose of calculating Contingent Payments, if any, and Incentive Management
Fees, if any, all revenues received by the Company pursuant to the Second Floor
Sublease.
6
"CONSOLIDATED FIXED CHARGES" of any person means, for any
period, the aggregate amount (without duplication) of (a) interest (excluding,
solely for purpose of this definition, Aggregate Contingent Payments and
Incentive Management Fees, whether paid or accrued) expensed or capitalized,
paid, accrued, or scheduled to be paid or accrued in accordance with GAAP
(except as set forth below and including, in accordance with the following
sentence, interest attributable to Capitalized Lease Obligations) during such
period in respect of all Indebtedness of such person and its Consolidated
Subsidiaries including the interest portion of all deferred payment obligations
calculated in accordance with GAAP, and excluding original issue discount and
non-cash interest payments or accruals on any Indebtedness, and all commissions,
discounts and other fees and charges owed with respect to bankers' acceptance
financings and currency and Interest Rate Agreements and (b) the amount of
dividends payable by such person or any of its Consolidated Subsidiaries in
respect of Disqualified Capital 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 the Company to be the rate
of interest implicit in such Capitalized Lease Obligation in accordance with
GAAP and (y) interest expense 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 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 which are either extraordinary (as
determined in accordance with GAAP) or are either unusual or nonrecurring
(including from the sale of assets outside of the ordinary course of business or
from the issuance or sale of 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 Consolidated Subsidiary of such person during such period, but not in excess
of such person's pro rata share of such person's net income for such period, (c)
the net income, if positive, of any person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition, and (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.
"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 or are required to be
consolidated for financial statement reporting purposes with the financial
statements of such person in accordance with GAAP.
"CONSOLIDATED TANGIBLE NET WORTH" of any person at any date
means, in the case of a partnership, the partners capital and, in the case of a
corporation, the aggregate of capital,
7
surplus and retained earnings of such person (plus, in the case of a
corporation, 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), (a) the amount of partners capital
(or capital, surplus and accrued but unpaid dividends, as the case may be),
attributable to any Disqualified Capital Stock, (b) all upward revaluations and
other write-ups in the book value of any asset of such person or a Consolidated
Subsidiary of such person subsequent to the Issue Date, (c) all investments in
Subsidiaries that are not Consolidated Subsidiaries and in persons that are not
Subsidiaries, (d) all unamortized debt discount and expense and unamortized
deferred charges and (e) goodwill and other intangible assets.
"CONTINGENT NOTES" means the Company's Senior Subordinated
Contingent Notes due 2009.
"CONTINGENT NOTES INDENTURE" means the Indenture, dated as of
October 30, 1998, among the Company, as obligor, JCC Holding, CP Development, FP
Development and JCC Development, as guarantors, and Norwest Bank Minnesota,
National Association, as trustee, in connection with the Contingent Notes.
"CONTINGENT PAYMENT ACCRUAL" means, at any time, the total
amount of Contingent Payments accrued and unpaid through and as of such time.
"CONTINGENT PAYMENT MEASUREMENT AMOUNT" shall mean, for any
period, an amount equal to (i) the Consolidated EBITDA of the Company for such
period, (ii) plus an amount equal to the cash distributions, if any, from CP
Development and FP Development to JCC Holding during such period, (iii) after
the date on which the second floor of the Casino is open to customers, if the
JCC Development Adjustment Amount is a positive number for such period, plus an
amount equal to the JCC Development Adjustment Amount for such period, or (b) if
the JCC Development Adjustment Amount is a negative number for such period, less
an amount equal to the absolute value of the JCC Development Adjustment Amount
for such period. If the Net Working Capital of either of CP Development or FP
Development is in excess of $1,000,000 on the last day of the Semiannual Period
for which the Contingent Payment Measurement Amount is being calculated, then
the amount of Net Working Capital in excess of $1,000,000 shall be deemed to
have been distributed by CP Development and/or FP Development, as applicable, to
JCC Holding for the purposes of calculating the Contingent Payment Measurement
Amount. Notwithstanding the foregoing, in no event (including, without
limitation, with respect to clause (ii) or the previous sentence of this
definition) shall the proceeds from the sale of assets be included in the
calculation of "Contingent Payment Measurement Amount." "JCC Development
Adjustment Amount" shall mean, for any period, an amount equal to (A) the
amount, if any, of the lease payments received by the Company from JCC
Development pursuant to the Second Floor Sublease during such period, less (B)
the amount, if any, of cash transferred (whether in the form of one or more
loans or equity contributions or otherwise (except payments for goods and
services)) (collectively, "JCC Advances") by the Company to JCC Development
during such period, plus (C) the amount, if
8
any, of cash transferred by JCC Development to the Company in respect of JCC
Advances during such period.
"CONTINGENT PAYMENT PERIOD" means collectively a First
Semiannual Period together with the next succeeding Second Semiannual Period.
"CONTINGENT PAYMENTS" means collectively the Initial First
Period Contingent Payments, the First Period Contingent Payments and the Second
Period Contingent Payments.
"CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES" means the 8%
Convertible Junior Subordinated Debentures due 2010 issued by the Company in
connection with the Plan of Reorganization.
"CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES INDENTURE" means
the Indenture, dated as of October 30, 1998, among the Company, as obligor, JCC
Holding, as guarantor, and Norwest Bank Minnesota, National Association, as
trustee, in connection with the Convertible Junior Subordinated Debentures.
"CP DEVELOPMENT" means CP Development, L.L.C., a Louisiana
limited liability company.
"CREDIT ENHANCEMENT FEE AGREEMENT" means the Credit
Enhancement Fee Agreement, dated as of October 30, 1998, between the Company and
HOC.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"DEFAULT" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
"DEFAULTED INTEREST" shall have the meaning specified in
Section 2.12.
"DESIGNATED SENIOR DEBT" means (i) so long as any Indebtedness
is outstanding in respect of the Tranche A Term Loans or the Revolving Loans,
such Indebtedness, and (ii) thereafter, any other Senior Debt (other than
Minimum Payment Guaranty Obligations) permitted under this Indenture the
principal amount of which is $15,000,000 or more.
"DEVELOPMENT COMPANIES" means collectively CP Development, FP
Development, JCC Development, all other wholly owned Subsidiaries of JCC Holding
(other than the Company and its Subsidiaries) and all other Subsidiaries of JCC
Holding (other than the Company and its Subsidiaries) that guarantee the Bank
Credit Facilities (for so long as such guarantees remain in effect).
"DEVELOPMENT COMPANIES GUARANTY" means the Guaranty of each of
the Development Companies.
9
"DISQUALIFIED CAPITAL STOCK" means (a) except as provided in
(b), with respect to any person, Capital Stock 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 Notes, and (b) with respect to any
Subsidiary of such person (including any Subsidiary of the Company), any Capital
Stock other than any Capital Stock with no preference, privileges, or redemption
or repayment provisions.
"ENVIRONMENTAL LAW" means any applicable Federal, state,
foreign or local statute, law, rule, regulation, ordinance, code, guideline,
written policy and rule of common law now or hereafter in effect and in each
case as amended, and any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent decree or judgment, to
the extent binding on the Company or any of its subsidiaries, relating to the
environment, employee health and safety or Hazardous Materials, including,
without limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as the same may be amended from time to time, 42 U.S.C.
Section 9601 ET SEQ.; the Resource Conservation and Recovery Act, as the same
may be amended from time to time, 42 U.S.C. Section 6901 ET SEQ.; the Federal
Water Pollution Control Act, 33 U.S.C. Section 1251 ET SEQ.; the Toxic
Substances Control Act, 15 U.S.C. Section 2601 ET SEQ.; the Clean Air Act, 42
U.S.C. Section 7401 ET SEQ.; the Safe Drinking Water Act, 42 U.S.C. Section 3803
ET SEQ.; the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 ET SEQ.; the
Emergency Planning and the Community Right-to-Know Act of 1986, 42 U.S.C.
Section 11001 ET SEQ., the Hazardous Material Transportation Act, 49 U.S.C.
Section 1801 ET SEQ. and the Occupational Safety and Health Act, 29 U.S.C.
Section 651 ET SEQ. (to the extent it regulates occupational exposure to
Hazardous Materials); and any state and local or foreign counterparts or
equivalents, in each case as amended from time to time.
"EVENT OF DEFAULT" shall have the meaning specified in
Section 7.1.
"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.
"FIRST PERIOD CONTINGENT PAYMENTS" means the amount payable in
the aggregate to the Holders of the Securities on the Interest Payment Date next
following a First Semiannual Period (except for the Initial First Period) in an
amount (which may be zero but not less than zero) equal to the product of (i)
37.5% of the aggregate Contingent Payment Measurement Amount for such First
Semiannual Period and the immediately preceding Second Semiannual Period in
excess of $65,000,000 and less than $85,000,000, and (ii) a fraction (A) the
numerator of which is the aggregate principal amount of Securities (including
Secondary Securities) outstanding on the close of business on the Record Date
corresponding to such Interest Payment
10
Date and (B) the denominator of which is the sum of (x) $187,500,000 and (y) the
total aggregate principal amount of Secondary Securities issued to Holders in
lieu of cash interest payments as of such Record Date.
"FIRST SEMIANNUAL PERIOD" shall mean each six month period
ending on March 31.
"FIXED INTEREST" means interest, payable semi-annually on the
Interest Payment Dates in accordance with this Indenture, at a rate per annum
for the indicated periods:
October 30, 1998 through May 15, 1999............5.867%
May 16, 1999 through November 15, 1999.......5.927%
November 16, 1999 through May 15, 2000............5.987%
May 16, 2000 through November 15, 2000.......6.046%
November 16, 2000 through May 15, 2001............6.103%
May 16, 2001 through November 15, 2001.......6.159%
November 16, 2001 through May 15, 2003............6.214%
May 16, 2003 through November 15, 2009.......8.000%
"FORMULA RATE" means, with respect to any Note, one-half
percent per annum plus (a) the rate of interest per annum equal to the yield to
maturity of the United States Treasury Security having a maturity equal to the
Weighted Average Life to Maturity at such time of such Note, provided that if
there shall be more than one United States Treasury Security having a maturity
equal to the Weighted Average Life to Maturity of such Note, the Formula Rate
shall be equal to the average of the yields to maturity (expressed as a rate per
annum) of such United States Treasury Securities, or (b) if no United States
Treasury Security shall have a maturity equal to the Weighted Average Life to
Maturity of such Note, the rate of interest per annum to maturity (expressed as
a rate per annum) of the United States Treasury Security having a maturity as
close as possible to, but less than, the Weighted Average Life to Maturity of
such Note. For purposes of this definition, "United States Treasury Security"
means, at any time, each of the United States Treasury notes, bonds, three month
bills, six month bills and one year bills having the maturities and yields to
maturity as set forth in the then most recently published Federal Reserve Board
Statistical Release, provided (A) if, for any particular maturity set forth in
such Federal Reserve Board Statistical Release, more than one date is associated
therewith for which a yield to maturity is set forth, then the yield to maturity
for the most recent date associated with such maturity shall be used for
purposes of determining the Formula Rate and (B) if, for any particular maturity
and the most recent date associated therewith that is set forth in such Federal
Reserve Board Statistical Release, more than one yield to maturity is set forth
therein, then the average yield associated with such maturity and such date
shall be used for purposes of determining the Formula Rate. For purposes of this
definition, "Federal Reserve Board Statistical Release" means the weekly
Statistical Release H.15(519) of the Federal Reserve Board of Governors or any
successor or substitute publication.
"FP DEVELOPMENT" means FP Development, L.L.C., a Louisiana
limited liability company.
11
"GAAP" means United States generally accepted accounting
principles as in effect on the date of this Indenture.
"GAMING AUTHORITY" means any Governmental Authority with the
power to regulate gaming in any Gaming Jurisdiction, and the corresponding
Governmental Authorities with responsibility to interpret and enforce the laws
and regulations applicable to gaming in any Gaming Jurisdiction.
"GAMING JURISDICTION" shall mean any jurisdiction in which the
Company is licensed to conduct gaming activities.
"GAMING LICENSE" means every material license, material
franchise or other material authorization on the Issue Date or thereafter
required to own, lease, operate or otherwise conduct or manage a casino facility
in any state, local or other jurisdiction including, without limitation, any
applicable material liquor licenses, including, with respect to the Company (and
without limitation), the Casino Operating Contract.
"GENERAL DEVELOPMENT AGREEMENT" means the Amended and Restated
General Development Agreement among the Company, the RDC and the City, as
intervenor, dated as of October 29, 1998, as amended or supplemented from time
to time.
"GOVERNMENTAL AUTHORITY" means any agency, authority, board,
bureau, commission, department, office or instrumentality of any nature
whatsoever of the United States or foreign government, any state, province or
any city or other political subdivision and whether now or hereafter in
existence, or any officer or official thereof, and any maritime authority.
"GROSS REVENUES" shall have the meaning specified in the
Management Agreement as in effect on the date hereof.
"GROUND LEASE" means the Amended and Restated Ground Lease for
the site of the Casino among the Company, the RDC and the City, as intervenor,
dated as of October 29, 1998, as amended or supplemented from time to time.
"GUARANTOR SENIOR DEBT" means Indebtedness, including any
obligation for interest which would accrue but for any proceeding referred to in
Section 14.2 at the relevant contractual rate, whether or not an allowed claim
in any such proceeding, of the Guarantors in respect of the Tranche A Term Loans
or the Revolving Loans, and any refinancing (in whole or in part) of the Tranche
A Term Loans or the Revolving Loans (or any previous refinancing thereof) to the
extent the same does not increase the principal amount of Indebtedness
outstanding and available thereunder (except to the extent (i) accrued and
unpaid interest and/or other amounts owing with respect to the refinanced
indebtedness is refinanced and/or (ii) of the fees and expenses incurred in
connection with the refinancing indebtedness) or decrease the weighted-average
maturity thereof. To the extent (and only to the extent) that any refinancing
Indebtedness does not comply with the requirements of the preceding clause (i),
such non-compliant amounts shall not constitute Guarantor Senior Debt. It is
understood and agreed that if
12
any interest on outstanding Guarantor Senior Debt is deferred or capitalized,
any increased amounts resulting therefrom shall continue to constitute Guarantor
Senior Debt.
"GUARANTORS" means collectively the Parent Guarantor, the
Subsidiary Guarantors and the Development Companies.
"GUARANTY" shall have the meaning specified in Section 12.1.
"XXXXXX'X INVESTOR" means Xxxxxx'x Crescent City Investment
Company, a Nevada corporation, and its successors.
"XXXXXX'X MANAGEMENT COMPANY" means Xxxxxx'x New Orleans
Management Company, a Nevada corporation, and its successors.
"HAZARDOUS MATERIALS" means (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas; (b) any chemicals, materials or substances defined as or included in
the definition of "hazardous substances," "hazardous waste," "hazardous
materials," "extremely hazardous substances," "restricted hazardous waste,"
"toxic substances," "toxic pollutants," "contaminants," or "pollutants," or
words of similar import, under any applicable Environmental Law; and (c) any
other chemical, material or substance, exposure to which is prohibited, limited
or regulated by any governmental authority under Environmental Laws.
"HET" means Xxxxxx'x Entertainment, Inc., a Delaware
corporation, and its successors.
"HET/JCC AGREEMENT" means the HET/JCC Agreement, dated as of
October 30, 1998, among HET, HOC and the Company (and any substitute or
successor agreement), and any other documents entered into in connection with
(and to the extent relating directly to) such agreement, as amended, modified,
renewed, extended or replaced from time to time, pursuant to which HET and HOC
shall provide the Minimum Payment Guaranty for certain periods and subject to
certain terms and conditions set forth therein.
"HET LOAN GUARANTY" means the guarantees of HET and HOC
pursuant to that certain HET/HOC Guaranty and Loan Purchase Agreement, dated as
of October 29, 1998, among HET, HOC and Bankers Trust Company, as administrative
agent.
"HET WARRANT" means the warrants granted to Xxxxxx'x Investor
in connection with the Plan of Reorganization pursuant to that certain Warrant
Agreement, dated as of October 30, 1998, between JCC Holding and Xxxxxx'x
Investor, as it may be amended from time to time.
"HOC" means Xxxxxx'x Operating Company, Inc., a Delaware
corporation, and its successors.
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"HOLDER" or "SECURITYHOLDER" means the person in whose name a
Security is registered on the Registrar's books.
"HOLDER OF CONTINGENT NOTES" means the person in whose name a
Contingent Note is registered on the books of the registrar with respect to the
Contingent Notes.
"INCENTIVE MANAGEMENT FEES" shall have the meaning specified
in Section 5.19.
"INCUR" shall have the meaning specified in Section 5.11.
"INCURRENCE DATE" shall have the meaning specified in Section
5.11.
"INDEBTEDNESS" of any person means, without duplication, (a)
all liabilities and obligations, contingent or otherwise, of such 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), including
accrued and unpaid Aggregate Contingent Payments, (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
such as would constitute trade payables to trade creditors in the ordinary
course of business, if and to the extent any of the foregoing described in
clauses (i), (ii) and (iii) would appear as a liability on the balance sheet of
such Person, (iv) evidenced by bankers' acceptances or similar instruments
issued or accepted by banks, (v) for the payment of money relating to a
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 Rate Agreements and
foreign currency xxxxxx; (c) all liabilities 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; (d) all obligations to purchase, redeem or
acquire any Capital Stock; and (e) all obligations secured by a Lien to which
the property or assets (including, without limitation, leasehold interests and
any other tangible or intangible property rights) of such person are subject,
whether or not the obligations secured thereby shall have been assumed by or
shall otherwise be such person's legal liability, provided, that the amount of
such obligations shall be limited to the lesser of the fair market value of the
assets or property to which such Lien attaches and the amount of the obligation
so secured. In addition, "Indebtedness" of any person shall include Indebtedness
described in the foregoing clauses (a) (i), (ii) and (iii) that would not appear
as a liability on the balance sheet of such person if (l) such Indebtedness is
the obligation of a partnership or joint venture that is not a Subsidiary of
such person (a "Joint Venture"), (2) such person or a Subsidiary of such person
is a general partner of the Joint Venture (a "General Partner"), and (3) there
is recourse, by contract or operation of law, with respect to payment of such
obligation to property or assets of such person or a Subsidiary of such person;
then such Indebtedness shall be included in an amount not to exceed (x) the
greater of (A) the net assets of the General Partner, and (B) the amount of such
obligations to the extent that there is recourse, by contract or operation of
law, to the property or assets of such person or a Subsidiary of such person
(other than the General Partner) or (y) if less than the amounts determined
pursuant to clause (x) above, the actual amount of such Indebtedness that is
recourse to such person, if the Indebtedness is evidenced by a writing and is
for a determinable amount.
14
"INDEMNITY AGREEMENT" means the Amended and Restated
Construction Lien Indemnity Obligation Agreement, dated as of October 30, 1998,
between the Company and HOC.
"INDENTURE" means this Indenture, as amended or supplemented
from time to time in accordance with the terms hereof.
"Indenture Obligations" means the Obligations of the Company
and the Guarantors pursuant to this Indenture and the Securities (and any other
obligor hereunder or under the Securities) now or hereafter existing, to pay
principal of and interest (including Contingent Payments) on the Securities when
due and payable, whether on the Maturity Date or an Interest Payment Date, by
acceleration, Required Regulatory Redemption, acceptance of any Asset Sale
Offer, Change of Control Offer, or otherwise, and interest on the overdue
principal of, and (to the extent lawful) interest, if any, on, the Securities
and all other amounts due or to become due in connection with this Indenture,
the Securities and the Collateral Documents, including any and all extensions,
renewals or other modifications thereof, in whole or in part, and the
performance of all other obligations of the Company (and any other obligor
hereunder or under the Securities) and the Guarantors hereunder or under the
Securities, including all costs and expenses incurred by the Trustee or the
Holders in the collection or enforcement of any such obligations or realization
upon the Collateral or the security of any Collateral Documents.
"INITIAL FIRST PERIOD CONTINGENT PAYMENTS" means the amount
payable in the aggregate to the Holders of the Securities on the Interest
Payment Date next following the period ending on March 31, 1999 (the "Initial
First Period") in an amount (which may be zero but not less than zero) equal to
the product of (i) 75% of the Contingent Payment Measurement Amount for such
period in excess of $35,000,000 and less than $45,769,000, and (ii) a fraction
(A) the numerator of which is the aggregate principal amount of Securities
(including Secondary Securities) outstanding on the close of business on the
Record Date corresponding to such Interest Payment Date and (B) the denominator
of which is the sum of (x) $187,500,000, and (y) the total aggregate principal
amount of Secondary Securities issued to Holders in lieu of interest payments as
of such Record Date.
"INITIAL MINIMUM PAYMENT GUARANTORS" means HET and HOC.
"INSURANCE PROCEEDS" means the Company's and the Guarantors'
interest in and to (a) all proceeds which now or hereafter may be paid under any
insurance policies now or hereafter obtained by or on behalf of the Company or
any of the Guarantors in connection with the conversion of the Property subject
to the Collateral Documents into Cash, Cash Equivalents or liquidated claims,
together with the interest payable thereon and the right to collect and receive
the same, including, but without limiting the generality of the foregoing,
proceeds of casualty insurance, title insurance, business interruption insurance
and any other insurance now or hereafter maintained with respect to such
Property and (b) all amounts attributable to Events of Loss.
"INTELLECTUAL PROPERTY SECURITY DOCUMENTS" means the
Assignment of Security Interests in United States Trademarks and Patents and
the Assignment of Security Interest in
15
United States Copyrights, each substantially in the form annexed to the Security
Agreement and executed in favor of the Collateral Agent.
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement,
dated as of October 29, 1998, among HET and HOC, as initial Minimum Payment
Guarantors, the Bank Agent, the Trustee, the trustee under the Contingent Notes
Indenture, the Collateral Agent and the other parties named therein, as it may
be amended or supplemented from time to time.
"INTEREST PAYMENT DATE" means the stated due date, specified
in the Security, of an installment of interest on the Securities. The "First
Interest Payment Date" shall mean May 15, 1999. The "Second Interest Payment
Date" shall mean November 15, 1999. The "Third Interest Payment Date" shall mean
May 15, 2000. The "Fourth Interest Payment Date" shall mean November 15, 2000.
The "Fifth Interest Payment Date" shall mean May 15, 2001. The "Sixth Interest
Payment Date" shall mean November 15, 2001.
"INTEREST RATE AGREEMENT" means the obligations of any person
pursuant to any interest rate swap agreement, interest rate collar agreement or
other similar agreement or arrangement, in each case designed to protect such
person or any of its Subsidiaries against fluctuations in interest rates.
"INVESTMENT" by any person in any other person means (without
duplication): (a) the acquisition 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 or on behalf of, 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 arising in the ordinary course of business); (c)
other than (i) any guarantees of the Notes, (ii) any guarantees of the
Contingent Notes, (iii) any guarantees of the Bank Credit Facilities, (iv) any
guarantees of Interest Rate Agreements, (v) any guarantees of the Convertible
Junior Subordinated Debentures, and (vi) any guarantees of Indebtedness or other
liabilities of the Company or its Subsidiaries by the Guarantors, including,
without limitation, the Parent Guarantor, the Company or its Subsidiaries, 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; or (e) the designation by the Manager of the Company of a
Subsidiary to be an Unrestricted Subsidiary in accordance with the definition of
"UNRESTRICTED SUBSIDIARY." The Company shall be deemed to make an "Investment"
in an amount equal to the fair market value of the net assets of any Subsidiary,
at the time that such Subsidiary is designated an Unrestricted Subsidiary, and
any property transferred to an Unrestricted Subsidiary from the Company or one
of its Subsidiaries shall be deemed an Investment valued at its fair market
value at the time of such transfer, as determined by the Manager of the Company
in good faith. For purposes of such determination, the amount of outstanding
Investments shall be
16
reduced by the fair market value (determined by the Manager of the Company in
good faith) of the net assets of any Unrestricted Subsidiary upon its
designation as a Subsidiary.
"ISSUE DATE" means the date of first issuance of the Notes
under this Indenture.
"JCC DEVELOPMENT" means JCC Development Company, L.L.C., a
Louisiana limited liability company.
"LEASEHOLDS" of any person means all the right, title and
interest of such person as lessee or licensee in, to and under any lease.
"LEGAL HOLIDAY" shall have the meaning provided in Section
15.7.
"LIEN" means any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind, whether or not filed, recorded or otherwise
perfected under applicable law (including, without limitation, any conditional
sale or other title retention agreement, any lease in the nature thereof, any
option or other agreement to sell or give any security interest in and any
filing or other agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction).
"MAKE-WHOLE AMOUNT" with respect to the Notes shall consist of
a Primary Make-Whole Amount and a Secondary Make-Whole Amount.
"MANAGEMENT AGREEMENT" means the Second Amended and Restated
Management Agreement between the Company and Xxxxxx'x Management Company
relating to the management of the Casino dated as of October 29, 1998, as it may
be amended or supplemented from time to time.
"MANAGEMENT FEE" means "MANAGEMENT FEE" as defined by the
Management Agreement.
"MANAGEMENT FEE REIMBURSEMENT AGREEMENT" means the Management
Fee Reimbursement Agreement, dated as of October 30, 1998, among the Company,
HET and HOC.
"MANAGER" means (i) for so long as a person is a limited
liability company, the Manager of such limited liability company as set forth in
its Operating Agreement or, if such limited liability company's Operating
Agreement does not provide for a Manager, the member or members of such limited
liability company, and (ii) otherwise the Board of Directors of such person.
"MATURITY DATE" means, when used with respect to any Security,
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
Payment Date, an Asset Sale Purchase Date or by declaration of acceleration,
call for redemption or otherwise.
"MAXIMUM CONTINGENT PAYMENTS" means, for any Contingent
Payment Period, an amount equal to the product of (i) $15,000,000 and (ii) a
fraction (x) the numerator of which is
17
the aggregate principal amount of Securities (including Secondary Securities)
outstanding on the close of business on the Record Date corresponding to the
Interest Payment Date immediately following such Contingent Payment Period, and
(y) the denominator of which is the sum of (I) $187,500,000 and (II) the total
aggregate principal amount of Secondary Securities issued to Holders in lieu of
cash interest payments as of such Record Date.
"MINIMUM ACCUMULATION DATE" shall have the meaning specified
in Section 5.14.
"MINIMUM PAYMENT GUARANTOR" means the Initial Minimum Payment
Guarantors and any other successor or substitute entity or entities which
provides a Minimum Payment Guaranty.
"MINIMUM PAYMENT GUARANTY" means the Minimum Payment Guaranty
(as defined in the Casino Operating Contract) that the Casino Operating Contract
obligates the Company to cause to be provided to the State of Louisiana by and
through the Regulating Authority, as the same may be amended, supplemented or
modified from time to time, including any replacement or renewal thereof.
"MINIMUM PAYMENT GUARANTY DOCUMENTS" means each Minimum
Payment Guaranty and all agreements or documents (including, without limitation,
the HET/JCC Agreement) executed and delivered in connection therewith.
"MINIMUM PAYMENT GUARANTY OBLIGATIONS" shall have the meaning
specified in the Intercreditor Agreement.
"MORTGAGES" shall mean, collectively (i) the Act of Mortgage
and Collateral Assignment, dated as of October 29, 1998, by the Company, as
mortgagor, in favor of the Collateral Agent, as mortgagee for the benefit of the
Secured Creditors, (ii) the Act of Mortgage and Collateral Assignment, dated as
of October 29, 1998, by JCC Development, as mortgagor, in favor of the
Collateral Agent, as mortgagee for the benefit of the Secured Creditors, (iii)
the Act of Mortgage and Collateral Assignment, dated as of October 29, 1998, by
FP Development, as mortgagor, in favor of the Collateral Agent, as mortgagee,
for the benefit of the Secured Creditors, (iv) the Act of Mortgage and
Collateral Assignment, dated as of October 29, 1998, by CP Development, as
mortgagor, in favor of the Collateral Agent, as mortgagee for the benefit of the
Secured Creditors, and (v) any mortgage, deed of trust, assignment of leases or
rents or similar document executed and delivered at any time after the date
hereof by JCC Holding or any of its Subsidiaries to secure any obligations to
the Secured Creditors.
"NET CASH PROCEEDS" means the aggregate amount of U.S. Legal
Tender or Cash Equivalents received by the Company in the case of a sale of
Qualified Capital Stock and by the Company and its Subsidiaries in respect of an
Asset Sale, less, in each case, the sum of all fees, commissions and other
expenses incurred in connection with such sale of Qualified Capital Stock or
Asset Sale, and, in the case of an Asset Sale only, less (a) the amount
(estimated reasonably and in good faith by the Company) of income, franchise,
sales and other applicable taxes required to be paid by the Company or any of
its Subsidiaries in connection with such Asset Sale and (b) the aggregate amount
of U.S. Legal Tender or Cash Equivalents so received which is
18
used to retire (in whole or in part) any existing Indebtedness of the Company or
its Subsidiaries (owed to a person other than an Affiliate) which was secured by
the assets that were the subject of such Asset Sale and which was required to be
repaid (which repayment, in the case of a revolving credit arrangement or
multiple advance arrangement, reduces the commitment thereunder) in connection
with such Asset Sale.
"NET CASH PROCEEDS ACCOUNT" means the separate custodial
account established and maintained by the Company in the name of the Collateral
Agent for the benefit of the Secured Creditors pursuant to Section 4.4 and the
terms of the Security Agreement into which the Net Cash Proceeds from Asset
Sales and Insurance Proceeds are to be deposited.
"NET PROCEEDS" means the aggregate Net Cash Proceeds and fair
market value of property and assets (valued at the fair market value thereof at
the time of receipt in good faith by the Manager of the Company), other than
securities of the Company or any of its Subsidiaries, received by the Company
after payment of expenses, commissions, discounts and the like incurred in
connection therewith.
"NET WORKING CAPITAL" means, for any person as of any date,
the Current Assets of such person as of such date minus the Current Liabilities
of such person as of such date. Net Working Capital shall be determined in
accordance with GAAP. "Current Assets" means all cash, cash equivalents,
inventory and accounts receivable, calculated in accordance with GAAP. "Current
Liabilities" means all current liabilities calculated in accordance with GAAP.
"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 on such Indebtedness, and (ii) enforcement
of obligations on such Indebtedness is limited only to recourse against
interests in property and assets purchased with the proceeds of the incurrence
of such Indebtedness and as to which none of the Company, the Guarantors or any
of their Subsidiaries provides any credit support or is liable.
"NOTES." See "Securities."
"OBLIGATIONS" means all obligations for principal, premium,
interest, Contingent Payments, Make-Whole Amounts, penalties fees,
indemnifications, reimbursements (including, without limitation, reimbursement
obligations with respect to letters of credit and bankers' acceptances), damages
and other liabilities payable under the documentation governing, or otherwise
relating to, any Indebtedness. Without limiting the foregoing, the "Obligations"
in respect of Senior Debt and the Notes shall include all interest accruing
after the filing of any petition or proceeding of the type referenced in Section
13.2 or 14.2 with respect to the Company or any Guarantor at (i) with respect to
Senior Debt, the relevant contract rate provided in the documentation governing
the respective issue of Senior Debt, and (ii) with respect to the Notes, the
rate specified in the Security, in each case regardless of whether such interest
is an allowed claim in the relevant proceeding.
"OFFER TO PURCHASE" means any Change of Control Offer or Asset
Sale Offer.
19
"OFFER TO PURCHASE PRICE" means any Change of Control Offer
Price or Asset Sale Offer Price.
"OFFICER" means, with respect to any person, the Chairman of
the Board, the President, any Vice President, the Chief Financial Officer, the
Treasurer, the Controller, or the Secretary or Assistant Secretary of such
person.
"OFFICERS' CERTIFICATE" means, with respect to the Company or
any Guarantor, a certificate signed by any Authorized Representative of such
entity and otherwise complying with the requirements of Sections 15.4 (1) and
15.5.
"OPEN ACCESS PROGRAM" means the program required under the
General Development Agreement and the Ground Lease with respect to the
participation by minorities, women and disadvantaged persons and business
enterprises in developing, constructing and operating the Casino.
"OPINION OF COUNSEL" means a written opinion from legal
counsel to the Company (or any Guarantor, if applicable) reasonably acceptable
to the Trustee and which complies with the requirements of Sections 15.4 and
15.5. Unless otherwise required by this Indenture, the counsel may be in-house
counsel to the Company (or such Guarantor, if applicable).
"PARENT GUARANTOR" means JCC Holding.
"PARTIAL PERIOD CONTINGENT PAYMENTS" means (A) with respect to
a First Semiannual Period, the product of (i) the fraction, the numerator of
which is the number of days from the end of the previous Second Semiannual
Period to the date giving rise to such calculation and the denominator of which
is 180 (but in no event shall such fraction be greater than 1.0), and (ii) the
Contingent Payments for the prior First Semiannual Period, and (B) with respect
to a Second Semiannual Period, the product of (i) the fraction, the numerator of
which is the number of days from the end of the previous First Semiannual Period
to the date giving rise to such calculation and the denominator of which is 180
(but in no event shall such fraction be greater than 1.0), and (ii) the
Contingent Payments for the prior Second Semiannual Period.
"PAYING AGENT" shall have the meaning specified in Section
2.3.
"PERMITTED FF&E FINANCING" means Indebtedness which is
Non-recourse Indebtedness to the Company or any of its Subsidiaries or any of
their properties (other than as provided in this definition) that is incurred to
finance the acquisition or lease after the Casino Completion Date of newly
acquired or leased furniture, fixtures or equipment ("FF&E") and secured by a
Lien on such FF&E (which Lien, subject to certain limitations, shall be the only
Permitted Lien with respect to such FF&E and may be an exclusive Lien or senior,
PARI PASSU or junior to the rights of the Collateral Agent under the Collateral
Documents).
"PERMITTED GUARANTY" shall mean any guarantee of Permitted
Junior Securities (which Permitted Junior Securities constitute debt securities
issued by the Company in accordance with the definition thereof contained
herein), which guarantee is issued by a
20
Guarantor or any successor corporation pursuant to a plan of reorganization or
readjustment of such Guarantor or any successor corporation pursuant to a plan
of reorganization or readjustment of such Guarantor that is subordinated to the
payment of all then outstanding Guarantor Senior Debt at least to the same
extent that the Guarantee of such Guarantor is subordinated to the payment of
all Guarantor Senior Debt on the date of the original effectiveness of this
Indenture, so long as (i) the effect of the use of this defined term in the
subordination provisions contained in Article XIV is not to cause the Securities
(or any Guarantee thereof) to be treated as part of (a) the same class of claims
as any Senior Debt or Guarantor Senior Debt or (b) any class of claims pari
passu with, or senior to, the Senior Debt or Guarantor Senior Debt for any
payment or distribution in any case or proceeding or similar event relating to
the liquidation, insolvency, bankruptcy, dissolution, winding up or
reorganization of the Company or any Guarantor and (ii) to the extent any Senior
Debt or Guarantor Senior Debt outstanding on the date of consummation of any
such plan of reorganization or readjustment is not paid in full in cash on such
date, either (a) the holders of such Senior Debt or Guarantor Senior Debt not so
paid in full in cash have consented to the terms of such plan of reorganization
or readjustment or (b) such holders receive securities which constitute Senior
Debt and Guarantor Senior Debt and which have been determined by the relevant
court to constitute satisfaction in full in money or money's worth of any Senior
Debt (and any related Guarantor Senior Debt) not paid in full in cash.
"PERMITTED INDEBTEDNESS" means any of the following:
(a) the Company and any Subsidiary may incur Indebtedness
solely in respect of bankers' acceptances, letters of credit and
payment and performance bonds (to the extent that such incurrence does
not result in the incurrence of any obligation for the payment of
borrowed money of any person other than the Company or such
Subsidiary), all in the ordinary course of business, in amounts and for
the purposes customary in the Company's industry for gaming operations
similar to those of the Company; provided, that the aggregate principal
amount outstanding of such Indebtedness (including any Indebtedness
issued to refinance, refund or replace such Indebtedness) shall at no
time exceed $5,000,000;
(b) the Company may incur Indebtedness to any Subsidiary, and
any Subsidiary may incur Indebtedness to any other Subsidiary or to the
Company; PROVIDED, HOWEVER, that such obligations, in any case, shall
be subordinated to such entity's obligations pursuant to the Notes;
PROVIDED FURTHER that, in the case of Indebtedness of the Company to
any of its Subsidiaries, any disposition, pledge or transfer of any
such Indebtedness by the Subsidiary to a person (other than a
Subsidiary) shall be deemed to be an incurrence of such Indebtedness by
the Company not permitted by this clause (b);
(c) the Company and any of its Subsidiaries may incur
Indebtedness representing the balance deferred and unpaid of the
purchase price of any property or services used in the ordinary course
of their business that would constitute ordinarily a trade payable to
trade creditors; and
21
(d) the Company and any of its Subsidiaries may post a bond or
surety obligation (or incur an indemnity or similar obligation) in
order to prevent the impairment or loss of or to obtain the Casino
Operating Contract, to the extent required by applicable law and
consistent in character and amount with customary industry practice.
"PERMITTED JUNIOR SECURITIES" shall mean debt or equity
securities of the Company or any successor corporation issued pursuant to a plan
of reorganization or readjustment of the Company that are subordinated to the
payment of all then outstanding Senior Debt at least to the same extent that the
Securities are subordinated to the payment of all Senior Debt on the date of the
original effectiveness of this Indenture so long as (i) the effect of the use of
this defined term in the subordination provisions contained in Article XIII is
not to cause the Securities to be treated as part of (a) the same class of
claims as the Senior Debt or (b) any class of claims pari passu with, or senior
to, the Senior Debt for any payment or distribution in any case or proceeding or
similar event relating to the liquidation, insolvency, bankruptcy, dissolution,
winding up or reorganization of the Company and (ii) to the extent that any
Senior Debt outstanding on the date of consummation of any such plan of
reorganization or readjustment is not paid in full in cash on such date, either
(a) the holders of any such Senior Debt not so paid in full in cash have
consented to the terms of such plan of reorganization or readjustment or (b)
such holders receive securities which constitute Senior Debt (which are
guaranteed pursuant to guarantees constituting Guarantor Senior Debt of each
Guarantor) and which have been determined by the relevant court to constitute
satisfaction in full in money or money's worth of any Senior Debt (and any
related Guarantor Senior Debt) not paid in full in cash.
"PERMITTED LIENS" means any of the following:
(a) Liens for taxes, assessments or other governmental charges
not yet due or which are being contested in good faith and by
appropriate proceedings by the Company or a Subsidiary thereof if
adequate reserves with respect thereto are maintained on the books of
the Company or such Subsidiary, as the case may be, in accordance with
GAAP;
(b) statutory Liens of carriers, warehousemen, mechanics,
landlords, laborers, materialmen, repairmen or other like Liens arising
by operation of law in the ordinary course of business and consistent
with industry practices and Liens on deposits made to obtain the
release of such Liens if (i) the underlying obligations are not overdue
for a period of more than 60 days or (ii) such Liens are being
contested in good faith and by appropriate proceedings by the Company
or a Subsidiary thereof and adequate reserves with respect thereto are
maintained on the books of the Company or such Subsidiary, as the case
may be, in accordance with GAAP;
(c) easements, rights-of-way, zoning and similar restrictions
and other similar encumbrances or title defects incurred in the
ordinary course of business and consistent with industry practices
which, in the aggregate, are not substantial in amount, and which do
not in any case materially detract from the value of the property
subject thereto (as such property is used or proposed to be used by the
Company or such Subsidiary) or
22
interfere with the ordinary conduct of the business of the Company or
such Subsidiary; provided, that any such Liens are not incurred in
connection with any borrowing of money or any commitment to loan any
money or to extend any credit;
(d) Liens existing on the Issue Date;
(e) pledges or deposits made in the ordinary course of
business in connection with worker's compensation, unemployment
insurance and other types of social legislation;
(f) Liens created by this Indenture, the Contingent Notes
Indenture and the Collateral Documents (which Liens may also secure
certain other indebtedness and certain refinancings thereof on the
terms provided in the Collateral Documents and the Intercreditor
Agreement);
(g) Liens that secure Acquired Indebtedness or Liens on
Acquired Assets, provided, in each case, that such Liens do not secure
any other property or assets and were not put in place in connection
with or in anticipation of such acquisition, merger or consolidation;
(h) any judgment Lien unless it constitutes an Event of
Default;
(i) Liens to secure payment or performance bonds to the extent
permitted under clause (a) under the definition of "Permitted
Indebtedness;"
(j) Liens incurred in the ordinary course of business securing
Indebtedness under Interest Rate Agreements;
(k) leases or subleases granted to other persons in the
ordinary course of business not materially interfering with the conduct
of the business of the Company or any of its Subsidiaries or materially
detracting from the value of the relative assets of the Company or such
Subsidiary of the Company; and
(l) Liens arising from precautionary Uniform Commercial Code
financing statement filings regarding operating leases entered into by
the Company or any of its Subsidiaries in the ordinary course of
business.
"PERMITTED TAX DISTRIBUTIONS" means (i) for so long as the
Company is treated as a pass through entity for federal income tax purposes,
distributions to equity holders of the Company in an amount not to exceed the
Tax Amount for such period; (ii) for so long as the Company is treated as a
corporation for federal income tax purposes and for any taxable year of the
Company in which it joins in filing a consolidated federal income tax return
with JCC Holding, a payment (including any estimated tax payment based on any
estimated tax liability for such year) by the Company to the Parent Guarantor in
an amount not in excess of the lesser of (A) the separate return federal income
tax liability (if any) of the affiliated group (within the meaning of Section
1504 of the Internal Revenue Code of 1986, as amended) of which the
23
Company would be the parent (the "JCC Group") if it were not a member of another
affiliated group for that or any other taxable year, and (B) the actual tax
liability (if any) of the affiliated group of which the Company is actually a
member (the "Guarantor Group") for such year allocable to the JCC Group; (iii)
payment by the Company to the Parent Guarantor in an amount not in excess of the
separate return federal and state income tax liability (if any) of the Parent
Guarantor attributable to the aggregate items of income, gain, loss, deduction
or credit generated by the Development Companies; and (iv) payment by the
Company to the Parent Guarantor in an amount not in excess of any state or local
franchise tax (or any similar tax based on assets or capital) liability of the
Parent Guarantor (except to the extent that such liability is attributable to
the Parent Guarantor's investment in an entity other than the Company (or any
Subsidiaries thereof) or the Development Companies); provided, that for purposes
of clauses (i) through (iv), any such payment can be made by the Company no
earlier than the date on which the Parent Guarantor is required to make such tax
payment for such year to the appropriate taxing authority; and provided,
further, that for purposes of clause (ii)(B) the actual tax liability of the
Guarantor Group shall be computed without regard to any income, gain, loss,
deduction or credit generated by a corporation other than the Parent Guarantor,
the Company or a Subsidiary of the Company. In the event that the Parent
Guarantor and any member of the JCC Group join in filing any combined or
consolidated (or similar) state or local income or franchise tax returns, then
Permitted Tax Distributions shall include payments with respect to such state or
local income or franchise taxes determined in a manner as similar as possible to
that provided in clause (ii) of the preceding sentence for federal income taxes.
"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.
"PLAN OF REORGANIZATION" means the Third Amended Joint Plan of
Reorganization under Chapter 11 of the Bankruptcy Code, As Modified Through
October 13, 1998, filed with the United States Bankruptcy Court for the Eastern
District of Louisiana by Xxxxxx'x Jazz Company, Xxxxxx'x Jazz Finance Corp., and
Xxxxxx'x New Orleans Investment Company (including all exhibits and schedules
annexed thereto).
"PLANS" means all drawings, plans and specifications prepared
by or on behalf of the Company or one of its Subsidiaries, as the same may be
amended or supplemented from time to time in good faith, and, if required by
applicable law, submitted to and approved by the building or other relevant
department, which describe and show the Casino, or a Project Expansion, as the
case may be, and the labor and materials necessary for construction thereof.
"PLEDGE AGREEMENT" means the Pledge Agreement, dated October
30, 1998, executed by JCC Holding, the Company, CP Development, FP Development
and JCC Development in favor of, the Collateral Agent and the custodian named
therein for the benefit of the Secured Creditors, as the same may be amended or
supplemented from time to time.
"PRIMARY MAKE-WHOLE AMOUNT" shall mean, as of any date, the
greater of (a) zero and (b) the present value (using a discount rate equal to
the Formula Rate at such time) of the
24
remaining scheduled payments of principal and Fixed Interest (excluding the
Maximum Contingent Payments for the then current and all remaining Contingent
Payment Periods) payable in respect of the Notes minus the aggregate principal
amount of the Notes outstanding on such date.
"PRINCIPAL" or "PRINCIPAL" of any Indebtedness (including the
Securities) means the principal of such Indebtedness plus any applicable
premium, if any, on such Indebtedness.
"PROJECT COSTS" means, with respect to a Project Expansion,
the aggregate costs required to complete such Project Expansion, through the
Project Expansion Termination of Construction Date with respect to such Project
Expansion in accordance with the Plans therefor and applicable legal
requirements, as set forth in a statement submitted to, and receipted for by,
the Trustee, setting forth in reasonable detail all amounts theretofore expended
and any anticipated costs and expenses estimated to be incurred and reserves to
be established in connection with the construction and development of such
Project Expansion, including direct costs related thereto such as construction
management, architectural engineering and interior design fees, site work,
utility installations and hook-up fees, construction permits, certificates and
bonds, land and lease acquisition costs and the cost of furniture, fixtures,
furnishings, machinery and equipment (including gaming equipment), but excluding
the following: principal or interest payments on any Indebtedness (other than
interest on Indebtedness in respect of such Project Expansion which is required
to be capitalized in accordance with GAAP, which shall be included in
determining Project Costs).
"PROJECT EXPANSION" means any capital addition, improvement,
extension or repair, after the Casino Completion Date, to any of the Company's
properties.
"PROJECT EXPANSION TERMINATION OF CONSTRUCTION DATE" means
that date by which (a) a temporary certificate of occupancy has been issued for
the Project Expansion by the building department and other relevant agencies;
(b) all required Approvals with respect to the Project Expansion have been
obtained by the Company and its Subsidiaries and their respective officers,
directors and equityholders; (c) a notice of completion has been duly recorded;
(d) all materialmen's claims, mechanics' liens or other liens or claims for
liens directly related to the Casino have been paid or satisfactory provisions
have been made for such payment, and the period of time for filing such claims
and liens has expired; (e) an Officers' Certificate has been delivered to the
Trustee certifying that the Project Expansion Termination of the Construction
Date has occurred; (f) a certificate has been delivered by the general
contractor and an architect engaged with respect to the Project Expansion to the
Trustee certifying that the Project Expansion has been substantially completed
in accordance with the Plans therefor and all applicable building laws,
ordinances and regulations; (g) the Project Expansion is in a condition
(including the installation of fixtures, furnishings and equipment) to receive
customers in the ordinary course of business; (h) the Project Expansion is open
for business to the general public. For purposes of the preceding sentence,
satisfactory provision for payment of claims, liens and claims for liens shall
be deemed to have been made if a bond, escrow or trust account for payment has
been established with an independent third party satisfactory to the Trustee in
an amount at least equal to the total of such outstanding claims, liens and
claims for liens.
25
"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.
"PURCHASE PRICE" means any Change of Control Offer Price or
Asset Sale Offer Price.
"QUALIFIED CAPITAL STOCK" means any Capital Stock of the
Company that is not Disqualified Capital Stock.
"QUALIFIED EXCHANGE" means any defeasance, redemption,
repurchase or other acquisition of (a) Capital Stock or Indebtedness of the
Company with the Net Proceeds received by the Company from the substantially
concurrent sale of Qualified Capital Stock or in exchange for Qualified Capital
Stock or (b) subordinated Indebtedness of the Company through the issuance of
new subordinated Indebtedness of the Company, provided that any new subordinated
Indebtedness (l) shall be in a principal amount that does not exceed the
principal amount (after deduction of reasonable and customary fees and expenses
incurred in connection with the refinancing) so refinanced (or, if the
subordinated Indebtedness being refinanced provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration thereof, then such lesser amount as of the date of determination),
plus the lesser of (x) the stated amount of any premium required to be paid in
connection with such a refinancing pursuant to the terms of the Indebtedness
being refinanced and (y) the amount of premium actually paid at such time to
refinance the Indebtedness; (2) has an Average Life greater than or equal to the
Average Life of the subordinated Indebtedness so refinanced; (3) has a stated
maturity for its final scheduled principal payment not sooner than the stated
maturity of the subordinated Indebtedness so refinanced; and (4) is expressly
subordinated in right of payment to the Notes pursuant to subordination
provisions that are at least as favorable to the holders of the Notes as those
relating to the subordinated Indebtedness so refinanced.
"RDC" means Rivergate Development Corporation, a Louisiana
public benefit corporation.
"REAL PROPERTY" of any person shall mean all the right, title
and interest of such person in and to land, improvements and fixtures, including
Leaseholds.
"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 applicable form of Security.
"REDEMPTION PRICE," when used with respect to any Security to
be redeemed, means the principal amount thereof, plus accrued and unpaid
interest (including due and unpaid Contingent Payments) to the Redemption Date
(or such lesser amount as may be required by applicable law or by order of any
Gaming Authority).
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"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 this Indenture; provided, that
the Consolidated Fixed Charges of such person, to the extent such person has
been in existence for a shorter period than four full fiscal quarters, shall be
computed on an annualized basis.
"REFINANCING" shall have the meaning set forth in the
definition of "Refinancing Indebtedness."
"REFINANCING INDEBTEDNESS" means Indebtedness or Disqualified
Capital Stock 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 (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 (a) any accrued and unpaid interest and/or
other amounts owing with respect to such Indebtedness which is included in the
Refinancing, and (b) 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 plus, in either case, the lesser of the amount of premium
actually paid at such time to refinance the Indebtedness and the stated amount
of any premium required to be paid in connection with such a Refinancing
pursuant to the terms of the Indebtedness being refinanced; PROVIDED, HOWEVER,
that (A) Refinancing Indebtedness of any Subsidiary of the Company shall only be
used to Refinance outstanding Indebtedness or Disqualified Capital Stock of such
Subsidiary, (B) 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, if applicable, to the rights of holders pursuant to the Notes than
was the Indebtedness or Disqualified Capital Stock to be refinanced and (C) such
Refinancing Indebtedness shall have no installment of principal (or redemption)
scheduled to come due earlier than the scheduled maturity of any installment of
principal (or redemption payment) of the Indebtedness (or Disqualified Capital
Stock) to be so refinanced which was scheduled to come due prior to the Stated
Maturity of the Notes.
"REGISTRAR" shall have the meaning specified in Section 2.3.
"REGULATING AUTHORITY" means the Louisiana Gaming Control
Board (or any successor thereto).
"REQUIRED REGULATORY REDEMPTION" means a redemption by the
Company, any Guarantor or any Subsidiary of the Company or any Guarantor of any
of such person's securities pursuant to, and in accordance with, any order of
any Governmental Authority with appropriate jurisdiction and authority relating
to a Gaming License held by the Company or an Affiliate of
27
the Company (including HET and any Affiliate of HET) or a wholly owned
Subsidiary of the Company, or to the extent necessary in the reasonable, good
faith judgment of the Board of Directors of HET, in the case of HET or one of
its affiliates, or the Manager of the Company, to prevent the loss, failure to
obtain or material impairment or to secure the reinstatement of, any such Gaming
License, where such redemption or acquisition is required because the holder or
beneficial owner of such security is required to be found suitable or to
otherwise qualify under any gaming laws and is not found suitable or so
qualified within a reasonable period of time. Without limiting the generality of
the foregoing, if the Company receives written notice from Xxxxxx'x Management
Company pursuant to Section 21.03 of the Management Agreement that Securities
have been transferred to a Non-Qualified Person (as defined in the Management
Agreement), the Company shall be entitled to redeem such Securities from such
Non-Qualified Person and such redemption shall be a Required Regulatory
Redemption.
"RESTRICTED FUNDS ACCOUNT" means a segregated bank account
under the control of the Company or a Subsidiary, the proceeds of which are
invested in cash or Cash Equivalents pending any use pursuant to Section 5.14.
"RESTRICTED INVESTMENT" means, in one or a series of related
transactions, any Investment other than in Cash Equivalents; provided, that the
extension of credit to customers of the Casino consistent with industry practice
in the ordinary course of business shall not be a Restricted Investment.
"RESTRICTED PAYMENT" means, with respect to any person, (a)
the declaration or payment of any dividend or other distribution in respect of
Capital Stock of such person, (b) any payment on account of the purchase,
redemption or other acquisition or retirement for value of Capital Stock of such
person or any Subsidiary of such person, (c) any purchase, redemption, or other
acquisition or retirement for value of, or any defeasance of, any subordinated
Indebtedness, directly or indirectly, by such person or a 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
(including any payment in respect of any amendment of the terms of any such
subordinated Indebtedness, which amendment is sought in connection with any such
acquisition of such Indebtedness or seeks to shorten any such due date), (d) any
Restricted Investment by such person, (e) any interest paid on Indebtedness
incurred in accordance with the provisions of clause (k) under Section 5.11, and
(f) any principal payments to HOC or HET (or any assignees thereof) pursuant to
the Subordinated Credit Facility, the Completion Loan Agreement, or the
Indemnity Agreement; provided, however, that the term "Restricted Payment" does
not include (i) any dividend, distribution or other payment on or with respect
to Capital Stock of an issuer to the extent payable solely in shares of
Qualified Capital Stock of such issuer; (ii) any dividend, distribution or other
payment to the Company, or to any of its directly or indirectly wholly owned
Subsidiaries, by the Company or any of its Subsidiaries; (iii) Investments in or
loans to the Company or any of its wholly owned Subsidiaries so long as all of
the Capital Stock of such Subsidiary has been pledged as collateral in favor of
the Collateral Agent for the benefit of the Secured Creditors; (iv) Investments
by the Company in a person, if as a result of such Investment (a) such person
becomes a wholly owned Subsidiary of the Company and all of the Capital Stock of
such person has been pledged as collateral in favor
28
of the Collateral Agent for the benefit of the Secured Creditors pursuant to the
Collateral Documents or (b) such person is merged, consolidated or amalgamated
with or into, or transfers or conveys substantially all of its assets to, or is
liquidated into, the Company or a wholly owned Subsidiary of the Company; (v)
payments of interest in respect of the Subordinated Credit Facility; (vi)
payments of interest in respect of the Completion Loan Agreement; (vii) payments
of interest in respect of the Indemnity Agreement; (viii) payments to the
Minimum Payment Guarantor in respect of Minimum Payment Guaranty Obligations;
(ix) payments in respect of any Slot Machine Lease; (x) payments pursuant to
Section 6.2(q) and/or Section 6.2(s) of the Plan of Reorganization (and payments
by the Company to the Parent Guarantor to the extent the Parent Guarantor uses
such payments to make payments pursuant to section 6.2(q) and/or Section 6.2(s)
of the Plan of Reorganization); (xi) payments in respect of a Required
Regulatory Redemption of any security of the Company (and payments by the
Company to the Parent Guarantor to the extent the Parent Guarantor uses such
payments to make payments in respect of a Required Regulatory Redemption of any
security of the Parent Guarantor); (xii) payments under or in respect of the
Credit Enhancement Fee Agreement and the Management Agreement (including,
without limitation, payments of all deferred and unpaid fees or amounts owing
under or in respect of any of the foregoing); (xiii) the conversion of
Convertible Junior Subordinated Debentures into shares of Capital Stock of the
Parent Guarantor in accordance with the terms of the Convertible Junior
Subordinated Debentures Indenture; and (xiv) any payments under or pursuant to
the Bank Credit Facilities.
"REVOLVING LOANS" means collectively the Revolving Loans, the
Swingline Loans and the Letters of Credit under the Bank Credit Facilities.
"SEC" means the Securities and Exchange Commission.
"SECOND FLOOR SUBLEASE" means the Second Floor Non-Gaming
Sublease, dated as of October 29, 1998, between the Company and JCC Development
relating to JCC Development's sublease of the second floor of the Casino.
"SECOND PERIOD CONTINGENT PAYMENTS" means the amount payable
in the aggregate to the Holders of the Securities on the Interest Payment Date
next following a Second Semiannual Period in an amount (which may be zero but
not less than zero) equal to (A) the product of (i) 75% of the aggregate
Contingent Payment Measurement Amount for such Second Semiannual Period and the
immediately preceding First Semiannual Period in excess of $65,000,000 and less
than $85,000,000, and (ii) a fraction (x) the numerator of which is the
aggregate principal amount of Securities (including Secondary Securities)
outstanding on the close of business on the Record Date corresponding to such
Interest Payment Date and (y) the denominator of which is the sum of (I)
$187,500,000 and (II) the total aggregate principal amount of Secondary
Securities issued to Holders in lieu of cash interest payments as of such Record
Date, less (B) the aggregate amount, if any, of First Period Contingent Payments
or Initial First Period Contingent Payments, as applicable, paid or accrued on
the immediately preceding Interest Payment Date.
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"SECOND SEMIANNUAL PERIOD" shall mean each six month period
ending on September 30.
"SECONDARY MAKE-WHOLE AMOUNT" shall mean, as of any date, the
present value (determined using a discount rate equal to the Formula Rate at
such time) of the aggregate Maximum Contingent Payments (other than accrued or
paid Contingent Payments) with respect to the then current Contingent Payment
Period and all future Contingent Payment Periods through Stated Maturity, less
the absolute value of any negative amount determined according to clause (b) of
the definition of "Primary Make-Whole Amount."
"SECONDARY SECURITIES" has the meaning set forth in Section
2.2.
"SECURED CREDITORS" means, collectively, the Minimum Payment
Guarantor, the Bank Agent and the Bank Lenders, the Trustee, the trustee under
the Contingent Notes Indenture, and other Bank Lenders (or affiliates thereof)
entering into Interest Rate Agreements with, or guaranteed by, the Company, so
long as such Bank Lender (or affiliate thereof) participates in the extension of
such Interest Rate Agreements, and their subsequent assigns, if any.
"SECURITIES" or "NOTES" means the Senior Subordinated Notes
due 2009, including any Secondary Securities issued as interest thereon, in each
case, issued under this Indenture, as the same may be amended or modified from
time to time in accordance with the terms hereof.
"SECURITIES ACT" means the Securities Act of 1933, as amended,
and the rules and regulations of the SEC promulgated thereunder.
"SECURITY AGREEMENT" means the Security Agreement, dated as of
October 29, 1998, executed by JCC Holding, the Company, CP Development, FP
Development and JCC Development in favor of the Collateral Agent for the benefit
of the Secured Creditors, as the same may be amended from time to time in
accordance with the terms thereof.
"SECURITY AGREEMENT (HOUSE BANK)" means the Security Agreement
(House Bank), dated as of October 30, 1998, executed by the Company in favor of
HET and HOC, as it may be amended from time to time in accordance with the terms
thereof.
"SECURITYHOLDER" See "HOLDER"
"SECURITY INTERESTS" means the Liens on the Collateral created
by the Collateral Documents in favor of the Collateral Agent for the benefit of
the Secured Creditors.
"SEMIANNUAL PERIOD" means either a First Semiannual Period or
a Second Semiannual Period, as applicable.
"SENIOR DEBT" means (i) Indebtedness, including any obligation
for interest which would accrue but for any proceeding referred to in Section
13.2 at the relevant contractual rate, whether or not an allowed claim in any
such proceeding, of the Company in respect of the Tranche A Term Loans, the
Revolving Loans, and any refinancing (in whole or in part) of the
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Tranche A Term Loans or the Revolving Loans (or any previous refinancing
thereof) to the extent the same does not increase the principal amount of
Indebtedness outstanding and available thereunder (except to the extent (a)
accrued and unpaid interest and/or other amounts owing with respect to the
refinanced indebtedness is refinanced and/or (b) of the fees and expenses
incurred in connection with the refinancing indebtedness) or decrease the
weighted-average maturity thereof, and (ii) the Minimum Payment Guaranty
Obligations and any refinancing thereof in accordance with Section 5.11(f). To
the extent (and only to the extent) that any refinancing Indebtedness does not
comply with the requirements of preceding clause (i), such non-compliant amounts
shall not constitute Senior Debt. It is understood and agreed that if any
interest on outstanding Senior Debt is deferred or capitalized, any increased
amounts resulting therefrom shall continue to constitute Senior Debt.
"SENIOR SUBORDINATED DEBT" means Indebtedness, including any
obligation for interest which would accrue but for any proceeding referred to in
Section 13.2 at the relevant contractual rate, whether or not an allowed claim
in any such proceeding, of the Company in respect of the Tranche B Term Loans
and any refinancing (in whole or in part) of such Indebtedness (or any previous
refinancing thereof) which do not increase the principal amount of Indebtedness
outstanding and available thereunder (except to the extent (i) accrued and
unpaid interest and/or other amounts owing with respect to the refinanced
indebtedness is refinanced and/or (ii) of the fees and expenses incurred in
connection with the refinancing indebtedness) or decrease the weighted-average
maturity thereof.
"SIGNIFICANT SUBSIDIARY" of a person means a Subsidiary of
such person which, together with its Consolidated Subsidiaries, has assets or
revenues equal to or greater than 10% of the assets or revenues, respectively,
of such person and its Subsidiaries on a consolidated basis.
"SLOT MACHINE LEASE" means an operating lease, if authorized
pursuant to the Company's annual operating plan, that the Company may enter into
after the date hereof with HET or a Subsidiary of HET pursuant to which the
Company may lease from HET or such Subsidiary no more than 1,100 slot machines
for use in the Casino on terms that are fair and reasonable to the Company and
at least as favorable as the terms which could be obtained by the Company in a
comparable transaction made on an arm's length basis with a person other than
HET or such Subsidiary. A Slot Machine Lease shall be deemed to be on terms
which are fair and reasonable to the Company and on terms which are at least as
favorable as the terms which could be obtained on an arm's length basis with
persons other than HET or such Subsidiary if such Slot Machine Lease (i) is
approved by a majority of the members of the Parent Guarantor's Board of
Directors (or, if the Company is a corporation, by the members of the Company's
Board of Directors) who are disinterested in the terms thereof and (ii) requires
the Company to make lease payments based on a value of such slot machines that
is equal to or less than the appraised value of such slot machines as set forth
in an appraisal of such slot machines by an appraisal firm of national
reputation.
"STATED MATURITY" means November 15, 2009.
31
"SUBORDINATED CREDIT FACILITY" means the Subordinated Loan
Agreement, dated as of October 30, 1998, among the Company, HET and HOC,
together with any related documents, as such agreement may be amended,
supplemented or modified from time to time.
"SUBORDINATED INDEBTEDNESS" means, with respect to any Notes,
Indebtedness of the Company that is subordinated in right of payment to such
Notes in any respect or has a stated maturity on or after the Stated Maturity of
such Notes.
"SUBORDINATED INDEBTEDNESS" means with respect to any Notes,
Indebtedness of the Company that is subordinated in right of payment to such
Notes in all respects and has no scheduled installment of principal due, by
redemption, sinking fund payment or otherwise, on or prior to the Stated
Maturity of such Notes.
"SUBORDINATION AGREEMENT" means that certain Manager
Subordination Agreement (Senior Subordinated Notes), dated as of October 30,
1998, by and among the Company, Xxxxxx'x Management and the Trustee.
"SUBSIDIARY" with respect to any person, means (i) a
corporation a majority of whose Capital Stock 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 or (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.
Notwithstanding the foregoing, an Unrestricted Subsidiary shall not be a
Subsidiary of the Company or any Guarantor.
"SUBSIDIARY GUARANTORS" means each existing or future
Subsidiary of the Company.
"TAX AMOUNT" means, with respect to any period, without
duplication, the amount of taxable income in respect of the income of the
Company of any member multiplied by the highest marginal combined federal, state
and local tax rates applicable to corporations for such period.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb) as in effect on the date of the execution of this
Indenture.
"TRANCHE A TERM LOANS" means, collectively, the Tranche A-1
Term Loan, the Tranche A-2 Term Loan and the Tranche A-3 Term Loan.
"TRANCHE A-1 TERM LOAN" means the Tranche A-1 Term Loans under
the Bank Credit Facilities.
"TRANCHE A-2 TERM LOAN" means the Tranche A-2 Term Loans under
the Bank Credit Facilities.
32
"TRANCHE A-3 TERM LOAN" means the Tranche A-3 Term Loans under
the Bank Credit Facilities.
"TRANCHE B TERM LOANS" means, collectively, the Tranche B-1
Term Loan and the Tranche B-2 Term Loan.
"TRANCHE B-1 TERM LOAN" means the Tranche B-1 Term Loans under
the Bank Credit Facilities.
"TRANCHE B-2 TERM LOAN" means the Tranche B-2 Term Loans under
the Bank Credit Facilities.
"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, secretary 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 the Company
that, at the time of determination, shall be an Unrestricted Subsidiary (as
designated by the Manager of the Company, as provided below). The Manager of the
Company may designate any person to be an Unrestricted Subsidiary if (a) no
Default or Event of Default is existing or will occur as a consequence thereof,
(b) immediately after giving effect to such designation, on a PRO FORMA basis,
the Company could incur at least $1.00 of additional Indebtedness pursuant to
paragraph (a) of Section 5.11 and (c) such Subsidiary does not own any Capital
Stock of, or own or hold any Lien on any property of, the Company or any other
Subsidiary. Any such designation also constitutes a Restricted Payment in an
amount equal to the net assets of such Subsidiary at the time of the designation
for purposes of Section 5.3. The Manager of the Company 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, the
Company could incur at least $1.00 of Indebtedness pursuant to paragraph (a) of
Section 5.11. 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.
33
"U.S. LEGAL TENDER" means such coin or currency of the United
States of America as at the time of payment is legal tender for the payment of
public and private debts.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, with respect to the
Notes, as of any date, the number of years obtained by dividing the then
Remaining Dollar-Years of the Notes by the aggregate outstanding principal
amount of the Notes. For purposes of this definition, "Remaining Dollar-Years"
as of any date, means the amount obtained by multiplying the aggregate
outstanding principal amount of the Notes as of such date by the number of years
(calculated at the nearest one-twelfth) which shall elapse between such date and
Stated Maturity.
"WHOLLY OWNED" with respect to a Subsidiary of any person
means (i) with respect to a Subsidiary that is a limited liability company or
similar entity, a Subsidiary whose Capital Stock is 99% or greater beneficially
owned by such person and (ii) with respect to a Subsidiary that is other than a
limited liability company or similar entity, a Subsidiary whose Capital Stock or
other equity interest is 100% (other than director's qualifying shares)
beneficially owned by such person.
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 Company and
any other obligor on the Securities.
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;
34
(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 is incorporated into and made a part of this
Indenture. The Securities may have notations, legends or endorsements required
by law, stock exchange rule or usage. The Company 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.
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 Company, the Guarantors and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
Any reference in this Indenture to "accrued interest" includes
the amount of unpaid Contingent Payments due and payable.
SECTION 2.2. EXECUTION AND AUTHENTICATION.
(a) The Securities shall be executed on behalf of the Company
by an Officer of the Company. The signature of any such Officer on the
Securities may be manual or facsimile.
(b) Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper Officers of the Company shall bind
the Company, notwithstanding that such individual or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities.
(c) 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.
35
(d) The Trustee shall authenticate Securities, excluding
Secondary Securities, for original issue in the aggregate principal amount of up
to $187,500,000 upon a written order of the Company in the form of an Officers'
Certificate. 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 $187,500,000, except for any Secondary Securities that may be issued
pursuant to this Section 2.2 and except as provided in Sections 2.7 and 2.8.
Upon the written order of the Company in the form of an Officers' Certificate,
the Trustee shall authenticate Securities in substitution of Securities
originally issued to reflect any name change of the Company.
(e) The Company shall pay Fixed Interest and Contingent
Payments from October 30, 1998 or from the most recent Interest Payment Date to
which Fixed Interest or Contingent Payments, as applicable, has been paid or
provided for. The Company may, on any of the First Interest Payment Date, the
Second Interest Payment Date, the Third Interest Payment Date, the Fourth
Interest Payment Date, the Fifth Interest Payment Date and the Sixth Interest
Payment Date, at its option and in its sole discretion, pay Fixed Interest in
additional Securities ("Secondary Securities") in lieu of the payment in whole
or in part of Fixed Interest in cash on the Securities as provided in paragraph
1 of the Securities; PROVIDED, HOWEVER, that if any Indebtedness is outstanding
under the Tranche A-1 Term Loan or the Tranche A-2 Term Loan on any of the First
Interest Payment Date, the Second Interest Payment Date, the Third Interest
Payment Date or the Fourth Interest Payment Date, the Company shall pay the
Fixed Interest due and payable on such Interest Payment Date in Secondary
Securities in lieu of the payment of such Fixed Interest in cash; PROVIDED,
FURTHER, HOWEVER, that on the Fifth Interest Payment Date and the Sixth Interest
Payment Date the Company shall not be entitled to pay Fixed Interest due and
payable on such Interest Payment Date in Secondary Securities in lieu of the
payment of such Fixed Interest in cash if on the last Business Day of the
corresponding Semiannual Period (i) the Company has no outstanding borrowings
under the Tranche A-1 Term Loan and the Tranche A-2 Term Loan, (ii) no Revolving
Loans are outstanding, and (iii) the Company has at least $20,000,000 of cash
and Cash Equivalents. In addition, if the Company's Consolidated EBITDA is less
than $28,500,000 for the twelve month period ending on the last day of the
Semiannual Period immediately preceding any Interest Payment Date occurring
after the Sixth Interest Payment Date, the Company shall pay the Fixed Interest
due and payable on such Interest Payment Date in Secondary Securities in lieu of
the payment of such Fixed Interest in cash. Any such Secondary Securities shall
be governed by this Indenture and shall be subject to the same terms (including
Stated Maturity and rates of interest from time to time payable thereon (but not
including the issuance date)) on all other Securities.
(f) The Company shall give written notice to the Trustee of
the amount of interest to be paid in Secondary Securities not less than five
Business Days prior to the applicable Interest Payment Date, and the Trustee or
an authenticating agent (upon written order of the Company signed by an
Authorized Representatives of the Company given not less than five nor more than
45 days prior to such Interest Payment Date) shall authenticate for original
issue (PRO RATA to each Holder of any Securities on the applicable Record Date)
Secondary Securities in an aggregate principal amount equal to the amount of
cash interest not paid on such Interest Payment Date. Each issuance of Secondary
Securities in lieu of the payment of Fixed
36
Interest in cash on the Securities shall be made PRO RATA with respect to the
outstanding Securities, and the Company shall have the right to aggregate
amounts of interest payable in the form of Secondary Securities to a Holder of
outstanding Securities and issue to such holder a single Secondary Security in
payment thereof. Secondary Securities may be denominated a separate series if
the Company deems it necessary to do so in order to comply with any law or other
applicable regulation or requirement, with appropriate distinguishing
designations.
(g) The Trustee may appoint an authenticating agent acceptable
to the Company 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 Company, any Affiliate of the Company
or any of its Subsidiaries.
(h) Securities shall be issuable only in registered form
without coupons in denominations of $1.00 and any integral multiple thereof;
PROVIDED, HOWEVER, that the Company may at its option pay cash in lieu of
issuing Secondary Securities in any denominations of less than $1.00.
SECTION 2.3. REGISTRAR AND PAYING AGENT. The
Company 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 Company in respect of the Securities may be served. The Company
may act as its own Registrar or Paying Agent, except that, for the purposes
of Articles III, IX, XI and Section 5.14, neither the Company, any Subsidiary
of the Company, nor any Affiliate of the Company shall act as Paying Agent.
The Registrar shall keep a register of the Securities and of their transfer
and exchange. The Company may have one or more co-Registrars and one or more
additional Paying Agents. The term "Paying Agent" includes any additional
Paying Agent. The Company hereby initially appoints the Trustee as Registrar
and Paying Agent, and the Trustee hereby initially agrees so to act until
such time as the Trustee has resigned or a successor has been appointed. The
Company may change any Registrar, Paying Agent or co-Registrar without notice
to any Holder.
The Company 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
Company shall promptly notify the Trustee in writing of the name and address of
any such Agent. If the Company fails to maintain a Registrar or Paying Agent,
the Trustee shall act as such.
SECTION 2.4. PAYING AGENT TO HOLD ASSETS IN TRUST.
The Company 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 and/or Secondary Securities held by the
Paying Agent for the payment of principal of, or interest on, the Securities,
and shall notify the Trustee in writing of any Default by the Company in
making any such payment. If the
37
Company or a Subsidiary of the Company acts as Paying Agent, it shall segregate
such assets and hold them as a separate trust fund for the benefit of the
Holders or the Trustee. The Company at any time may require a Paying Agent to
distribute all assets and/or Secondary Securities 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 and/or Secondary Securities
held by it to the Trustee and to account for any assets distributed. Upon
distribution to the Trustee of all assets and/or Secondary Securities that shall
have been delivered by the Company to the Paying Agent, the Paying Agent (if
other than the Company) shall have no further liability for such assets and/or
Secondary Securities.
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 Company 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 Company shall provide a current securityholder
list to any Gaming Authority upon demand.
SECTION 2.6. TRANSFER AND EXCHANGE. When Securities are
presented to the Registrar or a co-Registrar with a request to register the
transfer of such Securities or to exchange such Securities for an equal
principal amount of 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 Securities surrendered for transfer or exchange shall be duly endorsed
or accompanied by a written instrument of transfer in form reasonably
satisfactory to the Company and the Registrar or co-Registrar, duly executed by
the Holder thereof or his attorney duly authorized in writing. To permit
registrations of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Securities at the Registrar's or co-Registrar's
request. No service charge shall be made for any registration of transfer or
exchange, but the Company 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, 3.7, 5.14, 10.5, or 11.1).
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
Company shall issue and the Trustee shall authenticate a replacement Security if
the Trustee's requirements are met. If required by the Trustee or the Company,
such Holder must provide an indemnity bond or other indemnity, sufficient in the
judgment of both the Company and the Trustee, to protect the Company, the
Trustee or any Agent from any loss which any of them may suffer if a Security is
replaced. The Company may charge such Holder for its reasonable, out-of-pocket
expenses in replacing a Security.
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Every replacement Security is an additional obligation of the
Company and the Guarantors.
SECTION 2.8. OUTSTANDING SECURITIES. Securities outstanding at
any time are all the Securities that have been authenticated by the Trustee,
including Secondary Securities, except those canceled by it, those delivered to
it for cancellation and those described in this Section 2.8 as not outstanding.
A Security does not cease to be outstanding because the Company or an Affiliate
of the Company 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 Company or an Affiliate of the Company) holds U.S. Legal Tender
or U.S. Government Obligations sufficient to pay all of the principal and
interest (including Contingent Payments) 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 Securities cease to be outstanding
and interest (including Contingent Payments) on them ceases to accrue unless the
Company defaults in its obligations with respect thereto.
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
Company, any Guarantor and Affiliates of the Company, 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 the Trustee knows or has reason to know
are so owned shall be disregarded.
SECTION 2.10. TEMPORARY SECURITIES. Until definitive
Securities are ready for delivery, the Company may execute, and upon a written
order of the Company in the form of an Officer's Certificate, the Trustee shall
authenticate temporary Securities. Temporary Securities shall be substantially
in the form of definitive Securities but may have variations that the Company
reasonably and in good faith considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall execute, and upon written order of
the Company in the form of an Officer's Certificate, 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 Company 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 Company or an
39
Affiliate of the Company), and no one else, shall cancel and, at the written
direction of the Company, shall dispose of all Securities surrendered for
transfer, exchange, payment or cancellation. Subject to Section 2.7, the Company
may not issue new Securities to replace Securities they have paid or delivered
to the Trustee for cancellation. No Securities shall be authenticated in lieu of
or in exchange for any Securities canceled as provided in this Section 2.11,
except as expressly permitted in the form of Securities and as permitted by this
Indenture. If the Company shall acquire any of the Securities, such acquisition
shall not operate as a redemption or satisfaction of the obligations represented
by such Securities unless and until surrendered to the Trustee pursuant to this
Section 2.11.
SECTION 2.12. DEFAULTED INTEREST. Interest (including
Contingent Payments) on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the person in
whose name that Security (or one or more predecessor Securities) is registered
at the close of business on Record Date for such interest.
Any interest (including Contingent Payments) on any Security
which is payable, but is not punctually paid or duly provided for, on any
Interest Payment Date plus, to the extent lawful, any interest payable on the
defaulted interest (herein called "Defaulted Interest") shall forthwith cease to
be payable to the registered holder on the relevant Record Date, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any
Defaulted Interest to the persons in whose names the Securities (or
their respective predecessor Securities) are registered at the close of
business on a special record date for the payment of such Defaulted
Interest (a "Special Record Date"), which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each Security
and the date of the proposed payment, and at the same time the Company
shall deposit with the Trustee an amount of Cash equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such Cash when deposited to
be held in trust for the benefit of the persons entitled to such
Defaulted Interest as provided in this clause (1). Thereupon the
Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first-class postage
prepaid, to each Holder at his address as it appears in the Security
register not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been mailed as aforesaid, such
Defaulted Interest shall be paid to the persons in whose names the
Securities (or their respective predecessor Securities) are
40
registered on such Special Record Date and shall no longer be payable
pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be
listed, and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee of the proposed
payment pursuant to this clause, such manner shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon transfer of or in exchange for or
in lieu of any other Security shall carry the rights to interest (including
Contingent Payments) accrued and unpaid, and to accrue, which were carried by
such other Security.
ARTICLE III.
REDEMPTION
SECTION 3.1. RIGHT OF REDEMPTION. Except as provided in
Section 3.2 and paragraph 5 of the Notes, the Notes may not be redeemed prior to
maturity.
SECTION 3.2. REDEMPTION PURSUANT TO APPLICABLE LAWS.
Notwithstanding any other provision of this Indenture, the Notes shall be
redeemable in whole or in part, at any time pursuant to, and in accordance with,
a Required Regulatory Redemption. If the Company requires the redemption of any
Security pursuant to this Section 3.2, then the Redemption Price shall be the
principal amount thereof, plus accrued and unpaid interest to the date of
redemption (or such lesser amount as may be required by applicable law or by
order of any Gaming Authority). The Company shall tender the Redemption Price
(together with any accrued and unpaid interest) to the Trustee no less than 20
and no more than 60 days after the Company gives the Securityholder or owner of
a beneficial or voting interest written notice of redemption or such earlier
date as may be required by applicable law. The Company shall notify the Trustee
(a "Trustee Redemption Notice") of any disposition or redemption required under
this Section 3.2, and upon receipt of such notice, the Trustee shall not accord
any rights or privileges under this Indenture or any Security to any
Securityholder or owner of a beneficial or voting interest who is required to
dispose of any Security or tender it for redemption, except to pay the
Redemption Price upon tender of such Security.
SECTION 3.3. NOTICES TO TRUSTEE. If the Company is required to
redeem Securities pursuant to Section 3.2, the Company shall notify the Trustee
in writing of the aggregate principal amount of the Securities to be redeemed,
the Redemption Date and whether the Company would like the Trustee to give
notice of redemption to the Holders.
SECTION 3.4. NOTICE OF REDEMPTION. At least 20 days but not
more than 60 days before a Redemption Date, the Company shall mail a notice of
redemption by first class mail, postage prepaid, to each Holder whose Securities
are to be redeemed (unless a shorter notice period shall be required by
applicable law). At the Company's request, the Trustee shall
41
give the notice of redemption in the Company's name and at the Company's
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 and unpaid interest 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) if any Security is being redeemed in part, the
portion of the principal amount, equal to $1.00 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;
(6) 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;
(7) the CUSIP number of the Securities to be
redeemed;
(8) the circumstances pursuant to which the Required
Regulatory Redemption is being effected; and
(9) that the notice is being sent pursuant to this
Section 3.4 and Paragraph 5 of the Securities.
SECTION 3.5. EFFECT OF NOTICE OF REDEMPTION. Once notice of
redemption is mailed in accordance with Section 3.4, Securities called for
redemption become due and payable on the Redemption Date and at the Redemption
Price. Upon surrender to the Trustee or Paying Agent, such Securities called for
redemption shall be paid at the Redemption Price.
SECTION 3.6. DEPOSIT OF REDEMPTION PRICE. On or before the
Redemption Date, the Company shall deposit with the Paying Agent U.S. Legal
Tender sufficient to pay the Redemption Price of all Securities to be redeemed
on such Redemption Date. The Paying Agent shall promptly return to the Company
any U.S. Legal Tender so deposited which is not required for that purpose upon
the written request of the Company.
Interest (including Contingent Payments) on the Securities to
be redeemed will cease to accrue on the date on which the Trustee receives the
Trustee Redemption Notice, whether or not such Securities are presented for
payment.
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SECTION 3.7. SECURITIES REDEEMED IN PART. Upon surrender of a
Security that is to be redeemed in part, the Company 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.
SECURITY
SECTION 4.1. SECURITY INTEREST.
(a) In order to secure the prompt and complete payment and
performance in full of the Indenture Obligations, the Company, the Guarantors
and, as applicable, the Trustee, the other Secured Creditors and the Collateral
Agent for the benefit of the Secured Creditors have entered into this Indenture
and the Collateral Documents. Each Holder, by accepting a Security, agrees to
all of the terms and provisions of this Indenture, the Intercreditor Agreement
and the Collateral Documents, and the Trustee agrees to all of the terms and
provisions of this Indenture, the Intercreditor Agreement and the Collateral
Documents, as this Indenture, the Intercreditor Agreement and the Collateral
Documents may be amended from time to time pursuant to the provisions thereof
and hereof.
(b) The Collateral is to be held by the Collateral Agent for
the benefit of the Secured Creditors, subject to the terms of the Intercreditor
Agreement, the Collateral Documents and Section 4.6.
(c) The provisions of TIA Section 314(d), and the provisions
of TIA Section 314(c)(3) to the extent applicable by specific reference in this
Article IV, are hereby incorporated by reference herein as if set forth in their
entirety, except that, as set forth in Section 4.5, TIA Section 314(d) need not
be complied with in certain respects.
SECTION 4.2. RECORDING; OPINIONS OF COUNSEL.
(a) The Company represents that it has caused to be executed
and delivered, filed and recorded and covenants that it will promptly cause to
be executed and delivered, filed and recorded, all instruments and documents,
and has done and will do or will cause to be done all such acts and other
things, at the Company's expense, as are necessary to effect and maintain valid
and perfected security interests in the Collateral. The Company shall, as
promptly as practicable, cause to be executed and delivered, filed and recorded
all instruments and do all acts and other things as may be required by law to
perfect, maintain and protect the security interests under the Collateral
Documents and herein.
(b) The Company shall furnish to the Trustee, concurrently
with the execution and delivery of this Indenture and the Collateral Documents
and promptly after the execution and delivery of any amendment thereto or any
other instrument of further assurance, an Opinion(s) of Counsel stating that, in
the opinion of such counsel, subject to customary exclusions and exceptions
reasonably acceptable to the Trustee, either (i) this Indenture, the Collateral
43
Documents, any such amendment and all other instruments of further assurance
have been properly recorded, registered and filed and all such other action has
been taken to the extent necessary to make effective valid security interests
and to perfect the security interests intended to be created by this Indenture
and the Collateral Documents, and reciting the details of such action, or (ii)
no such action is necessary to effect and maintain in full force and effect the
validity and perfection of the security interests under the Collateral Documents
and hereunder.
(c) The Company shall furnish to the Trustee, on or prior to
October 30, of each year commencing in 1999, an Opinion(s) of Counsel, dated as
of such date, stating that, in the opinion of such counsel, subject to customary
exclusions and exceptions reasonably acceptable to the Trustee, either (A) all
such action has been taken with respect to the recording, registering, filing,
rerecording and refiling of this Indenture, all supplemental indentures, the
Collateral Documents, financing statements, continuation statements and all
other instruments of further assurance as is necessary to maintain the validity
and perfection of security interests under the Collateral Documents and
hereunder in full force and effect and reciting the details of such action, and
stating that all financing statements and continuation statements have been
executed and filed and such other actions taken that are necessary fully to
preserve and protect the rights of the Holders and the Trustee hereunder and
under the Collateral Documents, or (B) no such action is necessary to maintain
in full force and effect the validity and perfection of the security interests
under the Collateral Documents and hereunder.
SECTION 4.3. DISPOSITION OF CERTAIN COLLATERAL.
(a) The Company may, without requesting the release or consent
of the Trustee or the Collateral Agent, but otherwise subject to the
requirements of this Indenture:
(i) sell, assign, transfer, license or otherwise
dispose of, free from the security interests under the Collateral
Documents and hereunder, any machinery, equipment, or other personal
Property constituting Collateral that has become worn out, obsolete, or
unserviceable or is being upgraded, upon replacing the same with or
substituting for the same, machinery, equipment or other Property
constituting Collateral not necessarily of the same character but being
of at least equal fair value and at least equal utility to the Company
as the Property so disposed of, which Property shall without further
action become Collateral subject to the security interests under the
Collateral Documents and hereunder;
(ii) (A) in the ordinary course of the Company's
business and consistent with industry practices, sell, assign,
transfer, license or otherwise dispose of, free from the security
interests under the Collateral Documents and hereunder, inventory held
for resale that is at any time part of the Collateral, (B) in the
ordinary course of the Company's business and consistent with industry
practices, collect, liquidate, sell, factor or otherwise dispose of,
free from the security interests under the Collateral Documents and
hereunder, accounts receivable or notes receivable that are part of the
Collateral or (C) make ordinary course of business Cash payments
(including scheduled repayments of
44
Indebtedness permitted to be incurred hereby) from Cash that is at any
time part of the Collateral;
(iii) abandon, sell, assign, transfer, license or
otherwise dispose of, free from the security interests under the
Collateral Documents and hereunder, any personal property the use of
which is no longer necessary or desirable in the proper conduct of the
business of the Company and its Subsidiaries and the maintenance of its
earnings and is not material to the conduct of the business of the
Company and its Subsidiaries;
(iv) subject to the provisions of the Collateral
Documents pertaining to disposal of real property, sell, assign,
transfer, license or otherwise dispose of, free from the security
interests under the Collateral Documents and hereunder, any assets or
property in accordance with Section 5.14 (including, without
limitation, pursuant to the penultimate paragraph in Section 5.14(a));
provided that the Collateral Agent shall have a valid and perfected
security interest in all net proceeds that are not Net Cash Proceeds
from such disposition (except those fees, commissions and other
expenses and taxes deducted in the definition of "Net Cash Proceeds")
and in any assets or property acquired with the proceeds from such
disposition in the same priority as such assets or property so disposed
of; and
(v) sell, assign, transfer, license, release or
otherwise dispose of, free from the security interests under the
Collateral Documents, the Intercreditor Agreement and hereunder, any
Collateral as permitted by and pursuant to the express terms of any of
the Collateral Documents;
provided; however, that the Company may either (x) release from the leasehold
estate of the Ground Lease the surface rights with respect to a triangular piece
of land approximately 5,400 square feet in area which area is adjacent to
Poydras Street and Convention Center Boulevard and can be measured from the
corner of Poydras Street and Convention Center Boulevard moving along Poydras
Street approximately sixty-five feet and Convention Center Boulevard
approximately one hundred fifty-five feet (so long as no portion of the Casino
is constructed on such triangular piece of land) for the purpose of
reconfiguring the intersection of Convention Center Boulevard and Poydras
Street, or (y) grant, or consent to the grant of, a right of way, servitude or
other right of use over the aforesaid triangular piece of land (so long as no
portion of the Casino is constructed on such triangular piece) to the extent
necessary to reconfigure the intersection of Convention Center Boulevard and
Poydras Street, provided that the first priority lien of the Mortgages is
maintained (less and except a lien on that portion of the real property
underlying the aforesaid triangular piece to be released in the event of a
release or less and except a first priority lien on said triangular piece of
real property in the event of a grant of or consent to a right of way, servitude
or other right of use over said triangular piece of land). The Trustee agrees,
upon the reasonable request and at the sole expense of the Company, to promptly
execute, or cause the Collateral Agent to promptly execute such documentation as
may be necessary to effect any release, grant or consent permitted by this
subsection.
45
(b) Notwithstanding the provisions of subsection (a) above,
the Company shall not dispose of or transfer (by lease, assignment, license,
sale or otherwise) or pledge, mortgage or otherwise encumber Collateral pursuant
to the provisions of Section 4.3(a)(ii) or (iii) with a fair value of 10% or
more of the aggregate fair value of all Collateral then existing in any
transaction or any series of related transactions.
(c) In the event that the Company has sold, exchanged, or
otherwise disposed of or proposes to sell, exchange or otherwise dispose of any
portion of the Collateral which under the provisions of this Section 4.3 may be
sold, exchanged or otherwise disposed of by the Company without consent of the
Trustee or the Collateral Agent, and the Company requests the Trustee or the
Collateral Agent to furnish a written disclaimer, release or quitclaim of any
interest in such property under the Collateral Documents, the Trustee shall
execute such an instrument (or instruct the Collateral Agent to do so), prepared
by the Company, upon delivery to the Trustee of an Officers' Certificate by the
Company reciting the sale, exchange or other disposition made or proposed to be
made and describing in reasonable detail the property affected thereby, and
certifying that such property is property which by the provisions of this
Section 4.3 may be sold, exchanged or otherwise disposed of or dealt with by the
Company without any release or consent of the Trustee or the Holders. Each of
the Trustee and the Collateral Agent shall be authorized to conclusively rely on
such certification.
(d) Any disposition of Collateral made in compliance with the
provisions of this Section 4.3 shall be deemed not to impair the security
interests under the Collateral Documents and hereunder in contravention of the
provisions of this Indenture.
SECTION 4.4. NET CASH PROCEEDS ACCOUNT. All Cash received by
the Company or its subsidiaries as Net Cash Proceeds from an Asset Sale or as
Insurance Proceeds shall be deposited in the Net Cash Proceeds Account, in which
account there shall be, subject to the lien subordination provisions set forth
in the Intercreditor Agreement, the Collateral Documents and Section 4.6, a
perfected security interest in favor of the Collateral Agent for the benefit of
the Secured Creditors. The funds from time to time on deposit in the Net Cash
Proceeds Account may be disbursed from such account only for the purposes and in
the manner provided for in the Intercreditor Agreement, the Security Agreement,
the Bank Credit Facilities and this Indenture.
SECTION 4.5. CERTAIN RELEASES OF COLLATERAL. Subject to
applicable law, the release of any Collateral from Liens created by the
Collateral Documents or the release of, in whole or in part, the Liens created
by the Collateral Documents, will not be deemed to impair the Collateral
Documents in contravention of the provisions of this Indenture if and to the
extent the Collateral or Liens are released pursuant to, and in accordance with,
the Intercreditor Agreement and the applicable Collateral Documents or pursuant
to, and in accordance with, the terms hereof. To the extent applicable, without
limitation (except as provided in the last sentence of this paragraph), the
Company, the Guarantors and each obligor on the Securities shall cause TIA
Section 314(d), relating to the release of property or securities from the Liens
of the Collateral Documents, to be complied with. Any certificate or opinion
required by TIA Section 314(d) may be made by two Officers of the Company,
except in cases in which TIA Section 314(d) requires that such
46
certificate or opinion be made by an independent person. The Company shall not
be required under this Indenture to deliver to the Trustee any certificates or
opinions required to be delivered pursuant to Section 314(d) of the TIA in
connection with releases of Collateral in accordance with Section 4.3(a)(ii)
hereunder, unless TIA Section 314(d) would require such certificate or opinion
to be made by an independent person.
SECTION 4.6. LIEN SUBORDINATION.
(a) The Trustee and each Holder acknowledge that, as more
fully set forth in the Collateral Documents and the Intercreditor Agreement, the
rights of the Holders (and of the Trustee on their behalf) to receive proceeds
from the disposition of the Collateral is subordinated to the rights of holders
of Senior Debt to receive proceeds from the disposition of Collateral, and is
pari passu with the rights of the Holders of Contingent Notes and the rights of
holders of Senior Subordinated Debt to receive proceeds from the disposition of
Collateral.
(b) The priorities set forth in this Section 4.6 and the
Intercreditor Agreement are applicable irrespective of the order of creation,
attachment or perfection of any Liens or security interests or any priority that
might otherwise be available to any Secured Creditor under the applicable law.
(c) The priorities set forth in this Section 4.6 and in the
Intercreditor Agreement shall be as set forth herein notwithstanding any defects
in connection with the creation, perfection or priority of the Security
Interests. The Trustee and each Holder, by accepting a Security, agree not to
contest, or to bring (or voluntarily join in) any action or proceeding for the
purpose of contesting the validity, perfection or priority (as herein provided)
of, or seeking to avoid, any Security Interests, and provided further, that
nothing herein shall be deemed or construed to prevent the Minimum Payment
Guarantor or any Bank Lender from commencing an action or proceeding to assert
any right or claim it may have arising under or in connection with any
Collateral Documents.
(d) To the extent the priorities set forth in this Section 4.6
are inconsistent with the Intercreditor Agreement, the terms of the
Intercreditor Agreement shall control.
SECTION 4.7. PAYMENT OF EXPENSES. On demand of the Trustee,
the Company forthwith shall pay or satisfactorily provide for all reasonable
expenditures incurred by the Trustee and the Collateral Agent under this Article
IV, including the reasonable fees and expenses of counsel.
SECTION 4.8. SUITS TO PROTECT THE COLLATERAL. Subject to
Section 4.1 of this Indenture, the Intercreditor Agreement and to the provisions
of the Collateral Documents, the Trustee shall have power to institute and to
maintain such suits and proceedings as it may deem expedient to prevent any
impairment of the Collateral by any acts which may be unlawful or in violation
of the Collateral Documents or this Indenture, including the power to institute
and maintain suits or proceedings to restrain the enforcement of or compliance
with any legislative or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid or if the enforcement of, or compliance
with, such enactment, rule or order would impair the
47
security interests in contravention of this Indenture or be prejudicial to the
interests of the Holders or of the Trustee. The Trustee shall give notice to the
Company promptly following the institution of any such suit or proceeding.
SECTION 4.9. TRUSTEE'S DUTIES. The powers and duties conferred
upon the Trustee by this Article IV are solely to protect the security interests
and shall not impose any duty upon the Trustee to exercise any such powers and
duties, except as expressly provided in this Indenture or the TIA. The Trustee
shall be under no duty to the Company or any Guarantor whatsoever to make or
give any presentment, demand for performance, notice of nonperformance, protest,
notice of protest, notice of dishonor, or other notice or demand in connection
with any Collateral, or to take any steps necessary to preserve any rights
against prior parties except as expressly provided in this Indenture. The
Trustee shall not be liable to the Company or the Guarantors for failure to
collect or realize upon any or all of the Collateral, or for any delay in so
doing, nor shall the Trustee be under any duty to the Company or the Guarantors
to take any action whatsoever with regard thereto. The Trustee shall have no
duty to the Company or the Guarantors to comply with any recording, filing, or
other legal requirements necessary to establish or maintain the validity,
priority or enforceability of the security interests in, or the Trustee's rights
in or to, any of the Collateral.
SECTION 4.10. COLLATERAL DOCUMENTS. Notwithstanding any
provision of this Indenture, or the Collateral Documents, or any other documents
contemplated hereunder to the contrary:
(a) This Indenture and the Collateral Documents shall grant no
Liens, or any other security or other interests or right in or to (i) the Casino
Operating Contract, (ii) the House Bank (as defined in the Management
Agreement), and (iii) the Louisiana Gaming Gross Revenue Share Payments
(including the State's Interest in Daily Collections), as such terms are defined
in the Casino Operating Contract;
(b) The Casino Operating Contract and the Louisiana Gaming
Gross Revenue Share Payments (including the State's Interest in Daily
Collections), are not part of the Collateral and are not included within the
definition of Collateral;
(c) The Security Interests in favor of the Secured Creditors
(other than the Minimum Payment Guarantor) granted by the Collateral Documents
are subordinated to the Security Interests securing the Minimum Payment Guaranty
Obligations; and
(d) The Security Agreement (House Bank) (i) is not included
within the definition of Collateral Documents, and (ii) grants the Minimum
Payment Guarantor (but not the other Secured Creditors) a security interest in
the House Bank.
48
ARTICLE V.
COVENANTS
SECTION 5.1. PAYMENT OF SECURITIES.
(a) The Company shall duly and punctually pay the principal of
and interest (including Contingent Payments) on the Securities at the places, on
the dates and in the manner provided in the Securities and this Indenture. An
installment of principal of or interest (including Contingent Payments) on the
Securities shall be considered paid on the date it is due if the Trustee or
Paying Agent (other than the Company or an Affiliate of the Company) holds for
the benefit of the Holders, on or before 10:00 a.m. New York City time on that
date, U.S. Legal Tender and/or, to the extent permitted or required by Section
2.2, Secondary Securities, deposited and designated for and sufficient to pay
the installment, and has not received instructions from the Company not to make
such payment and is not otherwise prohibited from paying such principal,
interest or Secondary Securities to the Holders pursuant to this Indenture.
(b) If, on any Interest Payment Date, no Contingent Payments
are due and payable to Holders pursuant to the definition of Initial First
Period Contingent Payments, First Period Contingent Payments or Second Period
Contingent Payments, as applicable, no Contingent Payments shall be accrued or
paid on such Interest Payment Date. If and to the extent that, the Contingent
Payment Measurement Amount for any Contingent Payment Period is less than the
amount required to cause the Maximum Contingent Payments for such Contingent
Payment Period to become due, the difference between the amount of the
Contingent Payments actually paid or accrued, if any, and the amount of such
Maximum Contingent Payments with respect to such period will never be accrued or
paid.
(c) The Company shall pay interest (including post-petition
interest in any proceeding under any applicable Bankruptcy Law) on overdue
principal and on overdue installments of interest (including due and unpaid
Contingent Payments) at the rate of 8% per annum compounded semi-annually, to
the extent lawful.
SECTION 5.2. MAINTENANCE OF OFFICE OR AGENCY. The Company
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 Company in respect of the Securities and this
Indenture may be served. The Company shall give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
address of the Trustee set forth in Section 15.2.
The Company 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 Company of its obligation to maintain an office or
49
agency in the Borough of Manhattan, The City of New York, for such purposes. The
Company shall give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency. The Company hereby initially designates the Corporate Trust Office of
the Trustee as such office.
SECTION 5.3. LIMITATION ON RESTRICTED PAYMENTS. The Company
will not, and will not permit any of its Subsidiaries to, directly or
indirectly, make any Restricted Payment if, after giving effect thereto on a pro
forma basis, (l) a Default or an Event of Default shall have occurred and be
continuing, (2) immediately after giving effect to such Restricted Payment on a
pro forma basis, the Consolidated Coverage Ratio of the Company for the
Reference Period immediately preceding the Restricted Payment would be less than
2.0 to 1, (3) the aggregate amount of all Restricted Payments made by the
Company and its Subsidiaries, including after giving effect to such proposed
Restricted Payment, would exceed the sum of (a) 50% of the aggregate
Consolidated Net Income of the Company and its Consolidated Subsidiaries for the
period (taken as one accounting period) commencing on the first day of the first
full fiscal quarter commencing after the Casino Opening Date, to and including
the last 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), minus 100% of the amount of any
writedowns, writeoffs, or negative extraordinary charges (other than any related
to the Casino prior to the Casino Completion Date) not otherwise reflected in
Consolidated Net Income during such period, plus (b) the aggregate Net Cash
Proceeds (including the fair market value of non-cash proceeds, as determined in
good faith by the Manager of the Company) received by the Company as a capital
contribution or from the sale of its Qualified Capital Stock (other than to a
Subsidiary of the Company and other than in connection with a Qualified
Exchange) after the Casino Completion Date, or (4) during each of the two full
consecutive Contingent Payment Periods preceding the proposed Restricted
Payment, the Company has not paid (a) the Maximum Contingent Payments with
respect to each such Contingent Payment Period and (b) the Maximum Contingent
Payments (in this instance only, as defined in the Contingent Notes Indenture)
with respect to the Contingent Notes with respect to each such Contingent
Payment Period.
The foregoing clauses (1), (2), (3) and (4) of the immediately
preceding paragraph, however, will not prohibit (A) the payment of any dividend
on or redemption of Qualified Capital Stock within 60 days after the date of its
declaration or authorization, respectively, if such dividend or redemption could
have been made on the date of such declaration or authorization in compliance
with the foregoing provisions, (B) the redemption or distribution or other
Restricted Payment with respect to Capital Stock or Indebtedness pursuant to,
and in accordance with, any Required Regulatory Redemption effected in
accordance with this Indenture (including dividends and distributions to the
Parent Guarantor to permit the Parent Guarantor to effect a Required Regulatory
Redemption), (C) a Qualified Exchange, (D) dividends and distributions by the
Company to the Parent Guarantor in an amount equal to all Permitted Tax
Distributions, to the extent such are actually so applied by the Parent
Guarantor, (E) dividends and distributions (other than Permitted Tax
Distributions) by the Company to the Parent Guarantor to the extent necessary to
permit the Parent Guarantor to pay the Parent Guarantor's reasonable
professional fees and expenses in connection with complying
50
with its reporting obligations (including its obligations set forth in Section
5.8) and obligations to prepare and distribute business records, financial
statements or other documents to any lender or other persons having business
dealings with the Parent Guarantor or as may be required by law, the Parent
Guarantor's costs and related expenses in connection with the computation of
federal, state, local or foreign taxes and other governmental charges,
indemnification agreements, insurance premiums, surety bonds and insurance
brokers' fees, and the Parent Guarantor's expenses for directors', officers' and
employees' compensation and benefits, and any other administrative expenses
incurred in the ordinary course of business practices (all, in the case of this
clause (E) to be limited in an amount proportionate to the percentage of the
book value of the Parent Guarantor's assets which is fairly attributable, at the
time of such Restricted Payment, to the Company, its Subsidiaries and the
Development Companies), and (F) Restricted Investments by the Company in any of
the Development Companies, and Restricted Payments by the Company to the Parent
Guarantor to the extent the Parent Guarantor uses such Restricted Payment to
make an Investment in any of the Development Companies. The full amount of any
Restricted Payment made pursuant to either of clauses (A), (B) and (F) (but not
those made pursuant to clauses (C), (D) or (E)) will be deducted in the
calculation of the aggregate amount of Restricted Payments thereafter available
to be made pursuant to clause (3) of the immediately preceding paragraph.
In addition to, and notwithstanding anything to the contrary
in, the foregoing, the Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, make any Restricted Payment (other than
pursuant to clauses (B), (C), (D), (E) and (F) of the immediately preceding
paragraph) prior to the last day of the Company's first full fiscal quarter
during or prior to which the Casino Completion Date shall have occurred.
SECTION 5.4. EXISTENCE. Subject to Article VI and
Article XII, the Company and the Guarantors shall do or cause to be done all
things necessary to preserve and keep in full force and effect their
existence, rights (charter and statutory) and franchises in accordance with
the respective organizational documents of each of them; provided, however,
that neither the Company nor any Guarantor shall be required to preserve any
right or franchise if (a) the Manager shall determine reasonably and in good
faith that the preservation thereof is no longer desirable in the conduct of
the business of the Company or Subsidiary and (b) the loss thereof is not
disadvantageous in any material respect to the Holders.
SECTION 5.5. PAYMENT OF TAXES AND OTHER CLAIMS. The
Company and each of the Guarantors shall, and shall cause each of its
Subsidiaries to, pay or discharge or cause to be paid or discharged, before
the same shall become delinquent, (i) all material taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon the Company, any Guarantor or
any of their Subsidiaries or upon any of their material properties and assets
and (ii) all material 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 Company, any
Guarantor or any of their Subsidiaries; provided, however, that neither the
Company 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
51
faith by appropriate proceedings and for which adequate reserves have been
established in accordance with GAAP.
SECTION 5.6. MAINTENANCE OF INSURANCE. On the Issue Date, and
at all times thereafter, the Company and its Subsidiaries shall have in effect
customary comprehensive general liability, property and casualty and business
interruption insurance, shall have completion, payment or performance or similar
bonds in place for the Casino and shall cause the builders of the Casino to
maintain builder's risk coverage insurance, in each case on terms and in an
amount reasonably believed by the Company to be sufficient (taking into account,
among other factors, the creditworthiness of the insurer) to avoid a material
adverse change in the financial condition or results of operation of the Company
and its Subsidiaries, taken as a whole.
SECTION 5.7. COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT.
(a) The Company shall deliver to the Trustee, within 120 days
after the end of its fiscal year, an Officers' Certificate complying (whether or
not required) with Section 314(a)(4) of the TIA and stating that a review of its
activities and the activities of its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture, the Collateral Documents and the Bank Credit
Facilities and further stating, as to each such Officer signing such
certificate, whether or not the signer knows of any failure by the Company, any
Guarantor or any Subsidiary of the Company 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 Company shall
deliver to the Trustee within 120 days after the end of its fiscal year 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 of Company or any Subsidiary of the Company was not in compliance with the
provisions set forth in Section 5.3, 5.11, 5.14, or 5.19 of this Indenture.
(c) The Company shall, so long as any of the Securities are
outstanding, deliver to the Trustee, immediately upon becoming aware of any
Default or Event of Default under this Indenture, or an event of default under
the Bank Credit Facilities, an Officers' Certificate specifying such Default or
Event of Default under the Indenture, or event of default under the Bank Credit
Facilities, as applicable, and what action the Company is taking or proposes 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 or Event of Default giving rise thereto from the Company
or any of the Holders.
SECTION 5.8. REPORTS. Whether or not the Company or any
Guarantor is subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, the Company
52
and JCC Holding shall file (which filing may be on a consolidated basis) with
the SEC (to the extent permitted under the Exchange Act) on or prior to the date
they are or would have been required to file such with the SEC (the "Required
Filing Date"), annual and quarterly consolidated financial statements
substantially equivalent to financial statements that would have been included
in reports filed with the SEC if the Company or JCC Holding, as applicable, 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 such
reporting entity's certified independent public accountants as such would be
required in such reports to the SEC and, in each case, together with a
management's discussion and analysis of financial condition and results of
operations which would be so required. The Company and JCC Holding shall also
include in such reports the anticipated completion date of the Casino and, in
the case of quarterly reports, the Contingent Payments made, if any, the
Contingent Payment Accrual amount, if any, and the Company's Consolidated EBITDA
and the Contingent Payment Measurement Amount with respect to the most recently
ended fiscal quarter, and in the case of annual reports, the audited Contingent
Payments made, if any, the audited Contingent Payment Accrual amount, if any,
and audited Consolidated EBITDA and the Contingent Payment Measurement Amount
for the most recently ended fiscal year and for each of the Semiannual Periods
ending in such fiscal year. The Company and JCC Holding shall also file all
other reports and information that they are or would have been required with the
SEC prior to the Required Filing Date. The Company and JCC Holding will also
provide copies of such annual and quarterly reports to the Trustee within 30
days after the Required Filing Date; provided, that the Company and JCC Holding
shall not be in default of the provisions of this Section 5.8 for any failure to
file reports with the SEC solely by refusal by the SEC to accept the same for
filing, it being understood that in such event, such reports shall be delivered
to the Trustee as described herein as if they had been filed with the SEC.
SECTION 5.9. WAIVER OF STAY, EXTENSION OR USURY LAWS. The
Company and each Guarantor covenant (to the extent that they may lawfully do so)
that they 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
Company or each Guarantor from paying all or any portion of the principal of or
interest (including Contingent Payments) 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) the Company and each Guarantor hereby expressly
waive all benefit or advantage of any such law insofar as such law applies to
the Securities, and covenant that they 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 5.10. LIMITATION ON TRANSACTIONS WITH AFFILIATES.
Neither the Company nor any of its Subsidiaries will enter into any contract,
arrangement, understanding or transaction with an Affiliate (an "Affiliate
Transaction") except for (i) transactions evidenced by an Officers' Certificate
addressed and delivered to the Trustee stating that such Affiliate Transaction
is made in good faith and that the terms of such Affiliate Transaction are fair
and reasonable to the Company or such Subsidiary, as the case may be, and at
least as favorable as
53
the terms which could be obtained by the Company or such Subsidiary, as the case
may be, in a comparable transaction made on an arm's length basis with persons
who are not Affiliates; PROVIDED, HOWEVER, that any such transaction shall be
deemed to be on terms which are fair and reasonable to the Company or such
Subsidiary, as applicable, and on terms which are at least as favorable as the
terms which could be obtained on an arm's length basis with persons who are not
so affiliated, if such transaction is approved by a majority of the members of
the Manager's Board of Directors (or, if the Company is a corporation, by the
members of the Company's Board of Directors) who are disinterested in the terms
thereof; PROVIDED, FURTHER, HOWEVER, (a) that Affiliate Transactions during a
single fiscal year involving HET or any Subsidiary of HET shall not in the
aggregate involve consideration to either party in excess of a threshold to be
determined by the Manager's Board of Directors (or, if the Company is a
corporation, by the Company's Board of Directors) (including, without
limitation, any decisions regarding the exercise, waiver or modification of
rights or obligations, or the determination of fees with respect to project
development services, under the Management Agreement), unless such Affiliate
Transactions (y) have been approved by the Board of Directors of the Manager
(or, if the Company is a corporation, by the Company's Board of Directors) or
such Subsidiary, as applicable, in accordance with the applicable governance
documents of such entity, or (z) are pursuant to or in connection with
agreements or plans (including, without limitation, any business plans,
operating plans, financing plans or marketing plans) (I) approved by the Board
of Directors of the Manager (or, if the Company is a corporation, of the
Company) or such Subsidiary, as applicable, in accordance with the governance
documents of such entity, (II) approved by the Bankruptcy Court for the Eastern
District of Louisiana in connection with the Plan of Reorganization, or (III)
entered into by the Company prior to, on, or substantially concurrently with,
the Issue Date, and (b) that with respect to any Affiliate Transaction
(including any series of related transactions) involving consideration to either
party in excess of $2.5 million, the Company must, prior to the consummation
thereof, obtain a written favorable opinion as to the fairness of such
transaction to the Company or Subsidiary, as the case may be, from a financial
point of view from an independent investment banking firm of national
reputation, or (in the case of a real estate transaction) an independent
investment banking firm or a real estate appraisal firm of national reputation,
(ii) transactions solely between the Company and any wholly owned Subsidiaries
or solely among wholly owned Subsidiaries, (iii) transactions effected pursuant
to, and in accordance with the terms of, the Management Agreement, the
Management Fee Reimbursement Agreement, the Collateral Documents, the Security
Agreement (House Bank), the Completion Guarantees, the Completion Loan
Agreement, the Indemnity Agreement, the HET Loan Guaranty, the Credit
Enhancement Fee Agreement, the Minimum Payment Guaranty Documents, the HET/JCC
Agreement, the Second Floor Sublease, the Subordinated Credit Facility, a Slot
Machine Lease, and any payments under the Bank Credit Facilities, as such terms
in such agreements exist on the Issue Date or, in the case of the Bank Credit
Facilities, as they may be subsequently amended, modified, supplemented or
replaced, and (iv) Restricted Payments to the extent permitted by Section 5.3.
SECTION 5.11. LIMITATION ON INCURRENCE OF ADDITIONAL
INDEBTEDNESS AND DISQUALIFIED CAPITAL STOCK. Except as set forth below, the
Company will not, and the Company will not permit any of its Subsidiaries to,
directly or indirectly, issue, assume, guaranty, incur, become directly or
indirectly liable with respect to (including as a result of an acquisition,
merger
54
or consolidation), 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 from and after
the Issue Date. Notwithstanding the foregoing:
(a) the Company and its Subsidiaries may incur Subordinated
Indebtedness and Disqualified Capital Stock (i) if 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 incurrence of Subordinated
Indebtedness or Disqualified Capital Stock, (ii) in an aggregate principal
amount of up to $30 million if, on the date of such incurrence (the "Incurrence
Date"), the Consolidated Coverage Ratio of the Company for the Reference Period
immediately preceding the Incurrence Date, after giving effect on a PRO FORMA
basis to such incurrence of such Subordinated Indebtedness or Disqualified
Capital Stock, would be at least 2.5 to 1, and (iii) in an aggregate principal
amount of up to $50 million if, on the Incurrence Date, the Consolidated
Coverage Ratio of the Company for the Reference Period immediately preceding
such Incurrence Date, after giving effect on a PRO FORMA basis to such
incurrence of such Subordinated Indebtedness or Disqualified Capital Stock,
would be at least 3.0 to 1;
(b) the Company and its Subsidiaries may incur (i)
Indebtedness evidenced by the Notes (including the issuance of Secondary
Securities in lieu of cash interest payments pursuant to the terms of this
Indenture) and represented by this Indenture up to the amounts specified herein
and therein as of the date hereof and thereof and (ii) Indebtedness evidenced by
the Contingent Notes and represented by the Contingent Notes Indenture up to the
amounts specified therein as of the date thereof;
(c) the Company and any Subsidiary may incur Permitted FF&E
Financing in an aggregate principal amount of up to $25 million (the "FF&E
Basket") during the period from the Issue Date until the third anniversary of
the Casino Opening Date; on the third anniversary of the Casino Opening Date,
the FF&E Basket shall increase by $2,000,000; and the FF&E Basket shall increase
by an additional $2,000,000 on each subsequent anniversary of the Casino Opening
Date; provided, however, that in each case the aggregate amount of Indebtedness
incurred pursuant to this paragraph (c) (including any Indebtedness issued to
refinance, replace or refund such Indebtedness) with respect to each item of
FF&E shall not constitute more than 100% of the cost to the Company and such
Subsidiary of such item of FF&E so purchased or leased;
(d) the Company and any Subsidiary may incur Indebtedness the
proceeds of which are used for working capital pursuant to, or in respect of,
the Revolving Loans in an aggregate amount outstanding at any time (including
any Indebtedness issued to refinance, replace or refund such Indebtedness) not
to exceed $25 million;
(e) the Company and any Subsidiary may incur (i) Non-recourse
Indebtedness and (ii) up to $50 million in aggregate principal amount of
Subordinated Indebtedness, in each case in respect of the Project Cost of a
Project Expansion;
(f) the Company and any Subsidiary may incur Refinancing
Indebtedness with respect to any Indebtedness or Disqualified Capital Stock, as
applicable, described in
55
clauses (a) through (e), (h), (i), (o) and (p) of this covenant so long as, in
the case of Indebtedness used to refinance, refund, or replace Indebtedness in
clauses (c), (d) and (e), such Refinancing Indebtedness satisfies the applicable
requirements of such clauses;
(g) the Company and any Subsidiary may incur Permitted
Indebtedness;
(h) the Company and any Subsidiary may incur Indebtedness
pursuant to, or in respect of, (i) the Tranche A-1 Term Loans in an aggregate
principal amount outstanding at any time not to exceed $10,000,000, (ii) the
Tranche A-2 Term Loans in an aggregate principal amount outstanding at any time
not to exceed $20,000,000, (iii) the Tranche A-3 Term Loans in an aggregate
principal amount outstanding at any time not to exceed $30,000,000, (iv) the
Tranche B-1 Term Loans in an aggregate principal amount outstanding at any time
not to exceed $30,000,000, and (v) the Tranche B-2 Term Loans in an aggregate
principal amount outstanding at any time not to exceed $121,500,000 (in each
case, less the amount of any permanent reductions in the principal amounts
thereunder pursuant to Section 5.14);
(i) the Company and any of its Subsidiaries may incur
Indebtedness incurred pursuant to the Completion Guarantees (including without
limitation under the Completion Loan Agreement), the HET Loan Guaranty and the
Indemnity Agreement or arising as a result of any payment made thereunder;
(j) the Company and any Subsidiary may defer and accrue all
fees and all other amounts owing under the Management Agreement and the Credit
Enhancement Fee Agreement;
(k) the Company and any Subsidiary may incur Subordinated
Indebtedness to any of the stockholders of JCC Holding;
(l) the Company and its Subsidiaries may incur Indebtedness
under Interest Rate Agreements in the ordinary course of business;
(m) the Company and its Subsidiaries may incur Indebtedness
pursuant to, or in respect of, the Subordinated Credit Facility in an aggregate
principal amount outstanding at any time not to exceed $22,500,000 (excluding
accrued and unpaid interest);
(n) the Company and its Subsidiaries may incur Indebtedness
evidenced by (i) the Convertible Junior Subordinated Debentures in an aggregate
principal amount outstanding at any time not to exceed $27,500,000 and (ii)
additional Convertible Junior Subordinated Debentures in lieu of cash interest
payments thereon in accordance with the terms of the Convertible Junior
Subordinated Debentures Indenture;
(o) the Company and any Subsidiary may incur Indebtedness
pursuant to, or in connection with, any Minimum Payment Guaranty Documents or
Minimum Payment Guaranty Obligations; and
56
(p) the Company and any Subsidiary may incur Indebtedness
which constitutes Protective Advances (as defined in the Intercreditor
Agreement) in accordance with the terms of the Intercreditor Agreement.
Notwithstanding the other provisions of this covenant, neither
the Company nor any of its Subsidiaries may incur any Indebtedness or issue any
Disqualified Capital Stock pursuant to clause (a), (c) or (e) until the Casino
Completion Date shall have occurred in accordance with the terms of this
Indenture.
SECTION 5.12. LIMITATION ON DIVIDENDS AND OTHER PAYMENT
RESTRICTIONS AFFECTING SUBSIDIARIES. The Company will not, and will not permit
any of its Subsidiaries to, directly or indirectly, create, assume or suffer to
exist any consensual encumbrance or restriction on the ability of any of its
Subsidiaries to pay dividends or make other distributions to, or to pay any
obligation to, or to otherwise transfer assets or make or pay loans or advances
to, the Company except (a) restrictions imposed by the Bank Credit Facilities,
the Notes, the Contingent Notes, this Indenture, the Contingent Notes Indenture,
the Subordinated Credit Facility, the Convertible Junior Subordinated Debentures
(or the indenture in respect of the Convertible Junior Subordinated Debentures),
the Ground Lease, the General Development Agreement, the Casino Operating
Contract, the Completion Loan Agreement, the Indemnity Agreement, the HET Loan
Guaranty or the Minimum Payment Guaranty Documents, (b) reasonable and customary
provisions restricting subletting or assignment of any agreement entered into in
the ordinary course of business, consistent with industry practices, (c)
restrictions imposed by applicable law or as a result of regulatory action, (d)
restrictions under any Acquired Indebtedness or any agreement relating to any
property, asset, or business acquired by the Company or any of its Subsidiaries,
which restrictions 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 in each case, (e) any
such encumbrance or restriction in existence on the Issue Date and any such
other encumbrance or restriction no more restrictive than those in existence as
of the Issue Date, including, without limitation, those contained in the
agreements (as of the Issue Date) referred to in clause (a) of this Section
5.12, (f) any restrictions with respect solely to a Subsidiary of the Company
imposed pursuant to a binding agreement (subject only to reasonable and
customary closing conditions and termination provisions) which has been entered
into for the sale or disposition of all or substantially all of the Capital
Stock or assets of such Subsidiary, provided such restrictions apply solely to
the Capital Stock or assets of such Subsidiary to be sold, (g) restrictions on
the transfer of collateral (1) used to secure Indebtedness permitted to be
incurred by this Indenture or (2) encumbered by Liens permitted by this
Indenture and (h) restrictions incurred in connection with any asset sale for
the benefit of the purchaser of such assets.
SECTION 5.13. LIMITATION ON LIENS. The Company will not, and
will not permit any of its Subsidiaries to, and the Parent Guarantor and the
Development Companies will not, directly or indirectly, create, incur, assume or
suffer to exist any Lien in or on any right, title or interest to any of their
respective properties or assets, except (a) Permitted Liens, (b) Liens in favor
of the Collateral Agent for the benefit of the Secured Creditors created by the
Collateral
57
Documents and the Intercreditor Agreement and any other future Liens in favor of
the Collateral Agent for the benefit of the Secured Creditors affecting other
Property of the Parent Guarantor, the Company, its Subsidiaries or the
Development Companies securing the Indebtedness described in the Intercreditor
Agreement or the Collateral Documents, (c) Liens incurred pursuant to Permitted
FF&E Financing incurred in accordance with the provisions of clause (c) under
Section 5.11, which Liens may be exclusive Liens on the acquired or leased FF&E,
(d) Liens in favor of the Collateral Agent, for the benefit of the Secured
Creditors to secure Indebtedness described in the Intercreditor Agreement or the
Collateral Documents, in Property used as a substitute Property in consideration
of the release of Property in which a Lien is granted pursuant to the Collateral
Documents or the Intercreditor Agreement, (e) Liens securing Subordinated Debt;
provided, that the instrument creating such Lien contains provisions expressly
subordinating such Subordinated Debt to the Notes and the Contingent Notes and
subordinating such Liens to the Liens securing the Notes and the Contingent
Notes and (f) a Lien on the House Bank (as defined in the Security Agreement
(House Bank)) in favor of the Minimum Payment Guarantor. Notwithstanding the
foregoing, Liens granted pursuant to clauses (b) and (d) above shall only be
released in accordance with the Intercreditor Agreement or the Collateral
Documents.
SECTION 5.14. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY
STOCK; EVENT OF LOSS.
(a) The Company and each of its Subsidiaries will not, in one
or a series of related transactions, convey, sell, transfer, assign or otherwise
suffer to dispose of, directly or indirectly, any of their property, business or
assets (other than the Capital Stock or other interests of an Unrestricted
Subsidiary), including without limitation upon any sale or other transfer or
issuance of any Capital Stock of any Subsidiary of the Company or any sale and
leaseback transaction, whether by the Company or a Subsidiary of the Company or
through the issuance, sale or transfer of Capital Stock by a Subsidiary of the
Company (an "Asset Sale"), unless (l) the Net Cash Proceeds from an Asset Sale
(the "Aggregate Amount") are (i) within 210 days after the date of such Asset
Sale applied (A) first, to amounts outstanding (and/or permanent reductions in
commitments) under, or in respect of, the Tranche A Term Loans with a permanent
reduction of the amounts available under, or in respect of, Tranche A Term
Loans, and to amounts outstanding (and/or permanent reductions in commitments)
under, or in respect of, the Tranche B Term Loans and/or the Revolving Loans,
with a permanent reduction of the amounts available under, or in respect of, the
Tranche B Term Loans and/or the Revolving Loans; PROVIDED, HOWEVER, that the
amount of Net Cash Proceeds applied to amounts outstanding (and/or permanent
reductions in commitments) under, or in respect of, the Tranche B Term Loans
and/or the Revolving Loans pursuant to this clause (A) shall in no event exceed
$12,500,000; and (B) second, to the extent not applied (or required to be
applied) pursuant to clause (A), (I) to the repurchase of the Notes pursuant to
an irrevocable, unconditional offer (the "Asset Sale Offer") to repurchase the
Notes at the Asset Sale Offer Price made within 180 days of such Asset Sale, and
(II) to amounts outstanding (and/or permanent reductions in commitments) under,
or in respect of, Revolving Loans and Senior Subordinated Debt with a permanent
reduction of the amounts available under, or in respect of, Revolving Loans and
Senior Subordinated Debt (with the portion of the Aggregate Amount to be applied
to the repurchase of the Notes pursuant to the
58
Asset Sale Offer (the "Asset Sale Offer Amount") being equal to the Aggregate
Amount (less that portion of the Aggregate Amount applied as provided in clause
(i)(A) above and clause (ii) below) multiplied by a fraction, the numerator of
which is the aggregate principal amount of the Notes then outstanding (less an
amount equal to the Accumulated Amount at such time, determined prior to any
increase thereto as a result of the respective Asset Sale) and the denominator
of which is the aggregate principal amount of Notes then outstanding (less an
amount equal to the Accumulated Amount at such time, determined prior to any
increase thereto as a result of the respective Asset Sale) plus the principal
amount of Indebtedness then outstanding and amounts available under, or in
respect of, Revolving Loans and Senior Subordinated Debt and/or (ii) the
Aggregate Amount (less that portion of the Aggregate Amount applied as provided
in clause (i) above) is reinvested by the Company to make replacements,
improvements or additions to existing properties or new properties and such
reinvestment is made or committed to be made (such commitment to be established
by (A) the purchase of a new property, the ground-breaking or the commencement
of construction, in each case within 180 days of such Asset Sale or (B) promptly
placing the Net Cash Proceeds in a Restricted Funds Account, provided that such
Net Cash Proceeds are invested as aforesaid in existing properties or new
properties within three years of being placed in such Restricted Funds Account)
within 180 days of such Asset Sale, (2) at least 75% of the consideration for
such conveyance, sale, transfer or other disposition or issuance (treating for
this purpose as U.S. Legal Tender or Cash Equivalents (A) property that promptly
after such Asset Sale is converted into U.S. Legal Tender or Cash Equivalents
and (B) any liabilities that are assumed by the transferee in such Asset Sale)
consists of U.S. Legal Tender or Cash Equivalents, (3) 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, (4) the Manager
of the Company determines in good faith that the Company or such Subsidiary, as
applicable, receives fair market value for such Asset Sale and (5) no Minimum
Payment Guaranty Obligations are due and unpaid. For purposes of this covenant
and subject to the provisions hereof as to the amount so received and the
application of the proceeds thereof, the receipt by the Company of proceeds due
to an Event of Loss shall constitute an Asset Sale.
Notwithstanding the foregoing provisions of the prior
paragraph:
(i) the Company and its Subsidiaries may in the
ordinary course of business for the casino industry, convey, sell,
lease, transfer, assign, or otherwise dispose of assets acquired and
held for resale in the ordinary course of business;
(ii) the Company and its Subsidiaries may convey,
sell or dispose of, lease, transfer or otherwise dispose of assets
pursuant to and in accordance with the limitation on mergers, sales or
consolidations provisions in the Indenture;
(iii) the Company 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 the Company or such Subsidiary as
applicable;
59
(iv) the Company and its Subsidiaries may convey,
sell, transfer, assign or otherwise dispose of assets to the Company or
any of its wholly owned Subsidiaries; and
(v) the Company may enter into, and comply with its
obligations under, the Second Floor Sublease.
The term "Asset Sale" shall not include (and this covenant
shall not apply to) any single sale of assets or series of related sales of
assets, or Event of Loss, at any time while the Notes are outstanding to the
extent the Net Proceeds therefrom do not exceed $15,000,000, and any
dispositions as described in the immediately preceding paragraph.
The Company shall accumulate all Net Cash Proceeds from Asset
Sales (to be maintained in the Net Cash Proceeds Account in which, subject to
the lien subordination provisions set forth in the Intercreditor Agreement, the
Collateral Documents and Section 4.6, the Collateral Agent shall have a
perfected security interest on behalf of the Secured Creditors), and the
aggregate amount of such accumulated Net Cash Proceeds not used for the purposes
permitted by this Section 5.14(a) and within the time provided by this Section
5.14(a) shall be referred to as the "Accumulated Amount."
(b) For the purposes of this Section 5.14, "Minimum
Accumulation Date" means each date on which the Accumulated Amount exceeds
$15,000,000. Not later than 10 Business Days after each Minimum Accumulation
Date, the Company shall apply such Accumulated Amount to amounts outstanding
(and/or permanent reductions in commitments) under, or in respect of,
Indebtedness described in clause (1)(i)(A) of Section 5.14(a) with a permanent
reduction of the amounts available under or in respect of, such Indebtedness. To
the extent that there are no amounts outstanding, and there are no amounts
available under, or in respect of, Indebtedness described in clause (1)(i)(A) of
Section 5.14(a), at such time, the Company shall commence an Asset Sale Offer to
the Holders to purchase, on a PRO RATA basis, for U.S. Legal Tender Securities
having a principal amount equal to the Asset Sale Offer Amount, at a purchase
price (the "Asset Sale Offer Price") equal to 100% of principal amount, plus
accrued but unpaid interest (including Contingent Payments) to, and including,
the date (the "Asset Sale Purchase Date") the Securities tendered are purchased
and paid for in accordance with this Section 5.14. Notice of an Asset Sale Offer
shall be sent, not later than 20 Business Days prior to the close of business on
the Asset Sale Put Date (as defined below), by first-class mail, by the Company
to each Holder at its registered address, with a copy to the Trustee. 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 the Asset Sale
Offer, shall state:
(1) that the Asset Sale Offer is being made
pursuant to such notice and this Section 5.14;
(2) the Asset Sale Offer Amount, the
Accumulated Amount, the Asset Sale Offer Price (including the
amount of accrued and unpaid interest), the Asset Sale Put
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Date, and the "Asset Sale Purchase Date," which Asset Sale
Purchase Date shall be on or prior to 30 Business Days (or
later, if required by law) following the date the Accumulated
Amount was greater than $15,000,000;
(3) that any Security or portion thereof not
tendered or accepted for payment will continue to accrue
interest (including Contingent Payments) if interest is then
accruing;
(4) that, unless the Company defaults in
depositing U.S. Legal Tender with the Paying Agent (which may
not for purposes of this Section 5.14, notwithstanding
anything in this Indenture to the contrary, be the Company or
any Affiliate of the Company) 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 (including Contingent Payments) after
the Asset Sale Purchase Date;
(5) that Holders electing to have a
Security, or portion thereof, purchased pursuant to an 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 5.14, notwithstanding any
other provision of this Indenture, be the Company or any
Affiliate of the Company) at the address specified in the
notice prior to the close of business on the third Business
Day prior to the Asset Sale Purchase Date (the "Asset Sale Put
Date");
(6) that Holders will be entitled to
withdraw their elections, in whole or in part, if the Paying
Agent (which may not for purposes of this Section 5.14,
notwithstanding any other provision of this Indenture, be the
Company or any Affiliate of the Company) receives, up to the
close of business on the Asset Sale Put Date, a telegram,
telex, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of the Securities the
Holder is withdrawing and a statement 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 Company shall purchase Securities on a PRO RATA
basis (with such adjustments as may be deemed appropriate by
the Company so that only Securities in denominations of $1.00
or integral multiples of $1.00 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.
Any such Asset Sale Offer shall comply with all applicable
provisions of Federal and state laws, including those regulating tender offers,
if applicable, and any provisions of this
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Indenture that conflict with such laws shall be deemed to be superseded by the
provisions of such laws.
No later than 12:00 noon New York City time on an Asset Sale
Purchase Date, the Company 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
U.S. Legal Tender 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 Officers' Certificate setting forth the
Securities or portions thereof being purchased by the Company. 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 Company to the Holder thereof.
(a) Notwithstanding the foregoing, if the amount required to
acquire all Securities tendered by Holders pursuant to the Asset Sale Offer (the
"Acceptance Amount") shall be less than the Asset Sale Offer Amount, the excess
of the Asset Sale Offer Amount over the Acceptance Amount may be used by the
Company for general corporate purposes without regard to the restrictions set
forth in this Section 5.14, unless otherwise restricted by the other provisions
of this Indenture. Upon consummation of any Asset Sale Offer made in accordance
with the terms of Section 5.14(b), the Accumulated Amount as of the Minimum
Accumulation Date shall be reduced to zero and accumulations thereof shall be
deemed to recommence from the day next following such Minimum Accumulation Date,
and all Liens in such Accumulated Amount created pursuant to Section 5.14(a)
shall be released.
SECTION 5.15. CONSTRUCTION. The Company shall cause
construction of the Casino to be prosecuted with diligence and continuity in a
good and workmanlike manner in accordance with the Plans, subject to Force
Majeure (as defined in the General Development Agreement).
SECTION 5.16. LIMITATION ON USE OF CERTAIN FUNDS. The Company
will use (i) borrowings under the Tranche A Term Loans, the Tranche B Term Loans
and the Subordinated Credit Facility, (ii) proceeds from the Convertible Junior
Subordinated Debentures, and (iii) any equity contributions it received in
connection with the consummation of the Plan of Reorganization, (a) to pay all
regularly scheduled payments of, interest on, fees and other amounts (other than
principal payments) until the regularly scheduled date of repayment occurs with
respect thereto as provided in the Bank Credit Facilities) due and payable
pursuant to the Bank Credit Facilities, (b) to pay all regularly scheduled
payments of Fixed Interest and Contingent Payments due and payable on the Notes
and Contingent Payments (in this instance only, as defined in the Contingent
Notes Indenture) due and payable on the Contingent Notes, (c) to pay all Minimum
Payment Guaranty Obligations, (d) to pay all amounts, including without
limitation, all fees and payments of interest due and payable on the
Subordinated Credit Facility, the Completion Loan Agreement, the Convertible
Junior Subordinated Debentures and the
62
Indemnity Agreement, (e) to pay all costs of construction and development of the
Casino (including, without limitation, the costs set forth in the Pre-Opening
Budget attached to the Management Agreement as Exhibit H, including, without
limitation, costs related to construction management, architectural engineering
and interior design, site work, utility installations and hook-up fees,
construction permits, certificates and bonds, furniture, fixtures, furnishings,
machinery and equipment (including gaming equipment)), (f) to pay all amounts
owing under the Ground Lease, the General Development Agreement, the Casino
Operating Contract and any other agreement entered into in connection with the
construction or development of the Casino, as well as all amounts owing to the
City, the State of Louisiana, the Regulating Authority, the RDC or any other
governmental authority, agency, board, subdivision or special purpose
corporation thereof, (g) to pay amounts due and owing under the Management
Agreement, (h) to pay Credit Enhancement Fees (as defined in the Credit
Enhancement Fee Agreement), (i) for the repurchase of any securities of the
Company, any Guarantor or any Subsidiary thereof, including the Notes, pursuant
to a Required Regulatory Redemption, (j) for repurchases of Notes pursuant to an
Offer to Purchase, (k) to pay costs and expenses (including the costs and
expenses of the Parent Guarantor) in connection with complying with its
reporting obligations (including its obligations set forth in Section 5.8) and
obligations to prepare and distribute business records, financial statements or
other documents to any lender or other persons having business dealings with the
Company or as may be required by law, the computation of federal states, local
or foreign taxes and other governmental charges, indemnification agreements,
insurance premiums, surety bonds and insurance brokers' fees, directors',
officers' and employees' compensation and benefits, and any other administrative
expenses incurred in the ordinary course of business, and (l) after the Casino
Opening Date, for general corporate purposes.
SECTION 5.17. LIMITATION ON STATUS AS INVESTMENT COMPANY. The
Company will not, and will not permit any of its Subsidiaries to, be required to
register as an "investment company" (as that term is defined in the Investment
Company Act of 1940, as amended), or otherwise be subject to regulation under
the Investment Company Act.
SECTION 5.18. RESTRICTIONS ON SALE AND ISSUANCE OF SUBSIDIARY
STOCK. The Company will not sell, and will not permit any of its Subsidiaries
to issue or sell, any shares of Disqualified Capital Stock of any Subsidiary to
any person other than the Company or a wholly owned Subsidiary of the Company.
SECTION 5.19. LIMITATION ON PAYMENT OF MANAGEMENT FEES.
(a) The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, pay to any stockholder of the Company
or any of such stockholder's Affiliates, Management Fees in the aggregate (for
all such stockholders and Affiliates) in excess of 3% of Gross Revenues of the
Casino ("Base Management Fees"); PROVIDED, HOWEVER, that if Consolidated EBITDA
of the Company exceeds $40,000,000 in any First Semiannual Period, additional
Management Fees ("Incentive Management Fees") may be paid for such First
Semiannual Period up to an amount equal to 7% of Consolidated EBITDA for such
First Semiannual Period in excess of $40,000,000; and if Consolidated EBITDA of
the Company exceeds an aggregate of $75,000,000 for a Second Semiannual Period
and the immediately
63
preceding First Semiannual Period, Incentive Management Fees may be paid for
such Second Semiannual Period up to an amount equal to (a) 7% of the aggregated
Consolidated EBITDA for such First Semiannual Period and Second Semiannual
Period in excess of $75,000,000, less (b) an amount equal to the Incentive
Management Fees, if any, paid with respect to the immediately preceding First
Semiannual Period. Incentive Management Fees with respect to a Semiannual Period
may be made no earlier than the next Business Day following the date on which
all accrued interest (including Contingent Payments) has been paid for all
periods through such Semiannual Period; PROVIDED FURTHER, HOWEVER, that the
Management Agreement shall provide that Xxxxxx'x Management Company shall refund
to the Company any Incentive Management Fees paid by the Company to Xxxxxx'x
Management Company in respect of such First Semiannual Period if Consolidated
EBITDA of the Company does not exceed an aggregate of $75,000,000 for such First
Semiannual Period and immediately succeeding Second Semiannual Period. No Base
Management Fees may be paid, and no Incentive Management Fees may be accrued or
paid, during or with respect to any period in which the Company is in default
with respect to interest (including Contingent Payments) or principal payments
on the Notes; Base Management Fees accrued during such period may be paid in the
event that such default is cured.
(b) Notwithstanding subsection (a) above:
(i) if (A) the Company pays Fixed Interest in
Secondary Securities in lieu of paying Fixed Interest in cash on any of
the First Interest Payment Date, the Second Interest Payment Date, the
Third Interest Payment Date, the Fourth Interest Payment Date, the
Fifth Interest Payment Date and the Sixth Interest Payment Date, and
(B) the Company has achieved negative cash flow (other than cash flow
deficiencies resulting from payments of principal or interest in
respect of the Tranche A-1 Term Loans or the Tranche A-2 Term Loans)
for the Semiannual Period corresponding to such Interest Payment Date
(excluding capital expenditures (but including the Company's
contributions to the Capital Replacement Fund, as defined in and
pursuant to Section 7.07 of the Management Agreement as in effect on
the Issue Date) as a use of cash and excluding financings as a source
of cash), Base Management Fees shall be deferred for such Semiannual
Period to the extent of such negative cash flow; to the extent Xxxxxx'x
Management Company received Base Management Fees for such Semiannual
Period that are required to be deferred pursuant to this Section
5.19(b)(i), the Company shall cause Xxxxxx'x Management Company to
return such Base Management Fees to the Company and such Base
Management Fees shall upon such return be deemed to be deferred for
such Semiannual Period;
(ii) if the Company pays Fixed Interest in Secondary
Securities in lieu of paying Fixed Interest in cash on any of the Third
Interest Payment Date, the Fourth Interest Payment Date, the Fifth
Interest Payment Date and the Sixth Interest Payment Date, Incentive
Management Fees shall be deferred for the Semiannual Period
corresponding to such Interest Payment Date; to the extent Xxxxxx'x
Management Company received Incentive Management Fees for such
Semiannual Period, the Company shall cause Xxxxxx'x Management Company
to return such Incentive
64
Management Fees to the Company and such Incentive Management Fees shall
upon such return be deemed to be deferred for such Semiannual Period;
(iii) if the Company's Consolidated EBITDA is less
than $28,500,000 for the twelve month period ending on the last day of
the Semiannual Period immediately preceding any Interest Payment Date
occurring after the Sixth Interest Payment Date, Base Management Fees
shall be deferred for the Semiannual Period corresponding to such
Interest Payment Date; to the extent Xxxxxx'x Management Company
received Base Management Fees for such Semiannual Period, the Company
shall cause Xxxxxx'x Management Company to return such Base Management
Fees to the Company and such Base Management Fees shall upon such
return be deemed to be deferred for such Semiannual Period; and
(iv) at such time as, and to the extent that,
Consolidated EBITDA exceeds $65,000,000 for any First Semiannual Period
and the immediately following Second Semiannual Period, the Company
may, after the payment of any amounts owing under the Bank Credit
Facilities for such period, pay all deferred Base Management Fees (pro
rata with any due and unpaid fees owing by the Company under the
Minimum Payment Guaranty Documents); and at such time as, and to the
extent that, Consolidated EBITDA exceeds $75,000,000 for any First
Semiannual Period and the immediately following Second Semiannual
Period, the Company may, after the payment of any amounts owing under
the Bank Credit Facilities for such period, and after the payment of
all deferred Base Management Fees and all accrued and unpaid fees owing
by the Company under the Minimum Payment Guaranty Documents, pay all
deferred Incentive Management Fees.
SECTION 5.20. LISTING OF SECURITIES. The Company covenants and
agrees that it will, as promptly as practicable, use its best efforts to list
the Notes on such securities exchanges or quotation systems as may be
required from time to time, by written order, regulation or otherwise, in
order for the Holders to maintain their suitability under Louisiana gaming
laws or regulations.
SECTION 5.21. COMPLIANCE WITH ENVIRONMENTAL LAWS.
(a) The Company and each of the Guarantors will comply, in all material
respects with all Environmental Laws applicable to the ownership or use of its
Real Property now or hereafter owned or operated by the Company or any of the
Guarantors, will within a reasonable time-period pay or cause to be paid all
costs and expenses incurred in connection with such compliance and will keep or
cause to be kept all such Real Property free and clear of any Liens imposed
pursuant to such Environmental Laws, except as could not reasonably be expected
to have a material adverse effect, singly or in the aggregate, on the
properties, business, results of operations, financial condition, business
affairs or prospects of the Company (a "Material Adverse Effect"). Except as
could not reasonably be expected to have a Material Adverse Effect, neither the
Company nor any Guarantor will generate, use, treat, store, release or dispose
of, or permit the generation, use, treatment, storage, release or disposal of
Hazardous Materials on any
65
Real Property now or hereafter owned or operated by the Company or any
Guarantor, or transport or permit the transportation of Hazardous Materials to
or from any such Real Property except for Hazardous Materials used or stored at
any such Real Properties in material compliance with all applicable
Environmental Laws and reasonably required in connection with the operation, use
and maintenance of any such Real Property.
(b) At the written request of the Trustee or the Holders of a
majority in aggregate principal amount of the Securities at the time
outstanding, which request shall specify in reasonable detail the basis
therefor, at any time and from time to time, the Company will provide, at its
expense, an environmental site assessment report concerning any Real Property
now or hereafter owned or operated by the Company or any Guarantor, prepared by
an environmental consulting firm approved by the Trustee, indicating the
presence or absence of Hazardous Materials and the potential cost of any removal
or remedial action in connection with any Hazardous Materials on such Real
Property; PROVIDED that such request may be made only if (i) there has occurred
and is continuing an Event of Default, (ii) the Trustee or the Holders of a
majority in aggregate principal amount of the Securities at the time outstanding
reasonably believe that the Company or any such Guarantor or any such Real
Property is not in material compliance with any Environmental Law, or (iii)
circumstances exist that reasonably could be expected to form the basis of a
material Environmental Claim against the Company or any such Guarantor or any
such Real Property. If the Company fails to provide the same within 90 days
after such request was made, the Trustee may order the same, and the Company and
any such Guarantor shall grant and hereby grants to the Trustee and the Holders
and their agents access to such Real Property and specifically grants the
Trustee and the Holders an irrevocable non-exclusive license, subject to the
rights of tenants, to undertake such an assessment, all at the Company's
expense.
SECTION 5.22. LIMITATION ON LAYERING DEBT. Neither the Company, the
Parent Guarantor, nor any Subsidiary Guarantor may create, incur, assume or
suffer to exist any Indebtedness, except for Senior Subordinated Debt and
Indebtedness evidenced by the Contingent Notes, that is subordinate in right of
payment to any other Indebtedness of the Company or such Guarantor, as
applicable, unless, by its terms or the terms of the instrument creating or
evidencing it, such Indebtedness is subordinate in right of payment to (i) in
the case of the Company, the Securities, (ii) in the case of the Subsidiary
Guarantors, the Guaranty, and (iii) in the case of the Parent Guarantor, the
Parent Guaranties.
SECTION 5.23. CERTAIN DEFERRALS. The Company shall, if required by the
terms of the Completion Loan Agreement, defer its payment obligations thereunder
in accordance with the Completion Loan Agreement as in effect on the Issue Date.
The Company shall, if required under the terms of the Credit Enhancement Fee
Agreement, defer the payment of its fees owing thereunder in accordance with the
terms of the Credit Enhancement Fee Agreement as in effect on the Issue Date.
The Company shall, if required by the terms of the Subordinated Credit Facility,
defer payments of interest thereunder in accordance with the terms of the
Subordinated Credit Facility as in effect on the Issue Date.
ARTICLE VI.
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SUCCESSORS
SECTION 6.1. LIMITATION ON MERGER, SALE OR CONSOLIDATION. The Company
shall not consolidate with or merge with or into another person or, directly or
indirectly, sell, lease or convey all or substantially all of its assets
(computed on a consolidated basis, including, without limitation, as set forth
in the last paragraph of this Section 6.1), whether in a single transaction or a
series of related transactions, to another person or group of affiliated
persons, unless:
(i) either (a) the Company is the continuing entity
or (b) the resulting, surviving or transferee entity is a corporation
or partnership organized under the laws of the United States, any state
thereof or the District of Columbia (provided that at all times at
least one obligor with respect to the Securities is such a corporation)
and expressly assumes by supplemental indenture all of the obligations
of the Company in connection with the Securities, this Indenture and
the Collateral Documents;
(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 Tangible Net Worth
of the consolidated surviving or transferee entity is at least equal to
the Consolidated Tangible Net Worth of the Company immediately prior to
such transaction;
(iv) other than in the case of a transaction solely
between the Company and any wholly owned Subsidiary of the Company or
solely between wholly owned Subsidiaries of the Company, immediately
after giving effect to such transaction on a PRO FORMA basis, the
consolidated surviving or transferee entity would immediately
thereafter be permitted to incur at least $1.00 of additional
Indebtedness pursuant to clause (a) under Section 5.11; and
(v) such transaction will not result in the loss of
any Gaming License relating to the Company.
For purposes of this Section 6.1, the Consolidated Coverage
Ratio shall be determined on a PRO FORMA consolidated basis (giving pro forma
effect to the transaction and any related incurrence of Indebtedness or
Disqualified Capital Stock).
For purposes of the first sentence of this Section 6.1, the
sale, lease, conveyance or transfer of all or substantially all of the
properties and assets of one or more Subsidiaries of the Company, which
properties and assets, if held by the Company instead of such Subsidiaries,
would constitute all or substantially all of the properties and assets of the
Company on a consolidated basis, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company.
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Notwithstanding the foregoing, the Company is permitted to
reorganize as a corporation in accordance with the procedures established in the
Indenture, PROVIDED that the Company shall have delivered to the Trustee an
opinion of counsel reasonably acceptable to the Trustee confirming that such
reorganization is not adverse to Holders of the Notes (it being recognized that
such reorganization shall not be deemed adverse to the Holders of the Notes
solely because (i) of the accrual of deferred tax liabilities resulting from
such reorganization or (ii) the successor or surviving corporation (a) is
subject to income tax as a corporate entity or (b) is considered to be an
"includible corporation" of an affiliated group of corporations within the
meaning of the Internal Revenue Code of 1986, as amended, or any similar state
or local law).
SECTION 6.2. SUCCESSOR SUBSTITUTED. Upon any consolidation or merger
or any sale, lease, conveyance or transfer of all or substantially all of the
assets of the Company in accordance with Section 6.1, the successor entity
formed by such consolidation or into which the Company is merged or to which
such sale, lease, conveyance or transfer is made, shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
the Notes, this Indenture and the Collateral Documents with the same effect as
if such successor corporation had been named therein as the Company, and the
Company will be released from its obligations under this Indenture, the
Collateral Documents and the Notes, except as to any obligations that arise from
or as a result of such transaction.
ARTICLE VII.
EVENTS OF DEFAULT AND REMEDIES
SECTION 7.1. 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 Company to pay any installment
of interest on the Notes as and when due and payable and the
continuance of any such failure for 30 days;
(2) the failure by the Company to pay all or any part
of the principal, or premium, if any, on the Notes when and as the same
become due and payable at maturity, redemption, by acceleration or
otherwise, including, without limitation, failure to pay any Offer to
Purchase Price, or otherwise;
(3) except as provided in clauses (1) or (2) of this
Section 7.1, failure of the Company or any Subsidiary of the Company to
comply with any provision of Section 5.10, 5.15, 5.16, 5.18, 5.19 or
6.1 or Article XI, which failure continues for 30 days;
(4) except as otherwise provided herein, the failure
by the Company or any Guarantor to observe or perform any other
covenant or agreement contained in the
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Notes or the Indenture and the continuance of such failure for a period
of 30 days after written notice is given to the Company by the Trustee
or to the Company and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding;
(5) the filing by the Parent Guarantor, the Company
or any Significant Subsidiary of the Company (in each case, a "Debtor")
of a petition commencing a voluntary case under section 301 of title 11
of the United States Code, or the commencement by a Debtor of a case or
proceeding under any other Bankruptcy Law seeking the adjustment,
restructuring, or discharge of the debts of such Debtor, or the
liquidation of such Debtor, including without limitation the making by
a Debtor of an assignment for the benefit of creditors; or the taking
of any corporate action by a Debtor in furtherance of or to facilitate,
conditionally or otherwise, any of the foregoing;
(6) the filing against a Debtor of a petition
commencing an involuntary case under section 303 of title 11 of the
United States Code, with respect to which case (a) such Debtor consents
or fails to timely object to the entry of, or fails to seeks the stay
and dismissal of, an order of relief, (b) an order for relief is
entered and is pending and unstayed on the 60th day after the filing of
the petition commencing such case, or if stayed, such stay is
subsequently lifted so that such order for relief is given full force
and effect, or (c) no order for relief is entered, but the court in
which such petition was filed has not entered an order dismissing such
petition by the 60th day after the filing thereof; or the commencement
under any other Bankruptcy Law of a case or proceeding against a Debtor
seeking the adjustment, restructuring, or discharge of the debts of
such Debtor, or the liquidation of such Debtor, which case or
proceeding is pending without having been dismissed on the 60th day
after the commencement thereof;
(7) the entry by a court of competent jurisdiction or
by the Regulating Authority of a judgment, decree or order appointing a
receiver, liquidator, trustee, custodian or assignee of a Debtor or of
the property of a Debtor, or directing the winding up or liquidation of
the affairs or property of a Debtor, and (a) such Debtor consents or
fails to timely object to the entry of, or fails to seek the stay and
dismissal of, such judgment, decree, or order, or (b) such judgment,
decree or order is in full force and effect and is not stayed on the
60th day after the entry thereof, or, if stayed, such stay is
thereafter lifted so that such judgment, decree or order is given full
force and effect;
(8) a default in the payment of principal, premium or
interest when due at final maturity or an acceleration for any other
reason of the maturity of any Indebtedness (other than Non-recourse
Indebtedness) of the Company or any Significant Subsidiary with an
aggregate principal amount in excess of $15,000,000, including, without
limitation, the Bank Credit Facilities at such times as the aggregate
principal amount of Indebtedness thereunder exceeds $15,000,000;
PROVIDED that an Event of Default shall not be deemed to occur with
respect to the failure to make such payment at final maturity or the
acceleration of the maturity of Indebtedness of the Company or any
Significant Subsidiary if such acceleration shall be rescinded;
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(9) final unsatisfied judgments not covered by
insurance (other than with respect to Non-recourse Indebtedness)
aggregating in excess of $15,000,000, at any one time rendered against
the Company or any Significant Subsidiary of the Company and not
stayed, bonded or discharged within 60 days;
(10) the loss of the legal right of the Company to
operate slot machines at the Casino for gaming activities and such loss
continuing for more than 90 days;
(11) a failure to comply with the provisions of the
Collateral Documents and the continuance of such failure to comply for
a period of 30 days after written notice is given to the Company by the
Trustee or to the Company and the Trustee by the Holders of at least
25% in aggregate principal amount of the Notes outstanding, provided
that if such failure to comply materially and adversely affects (1) the
Collateral, (2) the priority or perfection of the security interests
purported to be created with respect to any material portion of the
Collateral or (3) the rights and remedies of the Collateral Agent, the
Trustee or the respective secured creditors in respect of any material
portion of the Collateral, then the failure to comply need only
continue after the applicable cure period specified in the applicable
Collateral Document;
(12) [Intentionally deleted]
(13) any Collateral Document fails to become or
ceases to be in full force and effect (other than in accordance with
its terms or the terms hereof) or ceases (once effective) to create in
favor of the Collateral Agent, with respect to any material amount of
Collateral, a valid and perfected Lien on the Collateral (except to the
extent a valid and perfected Lien on the Collateral is not required at
such time under the terms of the Collateral Documents) to be covered
thereby (unless a prior or exclusive Lien is specifically permitted by
this Indenture);
(14) the failure of the Casino Completion Date to
have occurred by 30 days following the date on which an event of
default entitling the City to terminate the Ground Lease has occurred
under the Ground Lease as a result of the failure to complete the
Casino;
(15) an "Event of Default" (as defined in the Ground
Lease) has occurred; and
(16) an "Event of Default" (as defined in the
Contingent Notes Indenture) has occurred.
SECTION 7.2. ACCELERATION OF MATURITY DATE; RESCISSION AND ANNULMENT.
If an Event of Default (other than an Event of Default specified in Section
7.1(5), (6) or (7) with respect to the Company), occurs and is continuing, then,
and 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 not less
then 25% in aggregate principal amount of then outstanding Securities, by a
notice in writing to the Company and the Guarantors (and to the Trustee if given
by Holders)
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(an "Acceleration Notice"), may declare all of the principal of the Securities,
determined as set forth below, together with accrued interest thereon, to be due
and payable immediately. If an Event of Default specified in Section 7.1(5), (6)
or (7) occurs with respect to the Company, (i) all principal of, premium
applicable to, and accrued interest on, the Securities, and (ii) the Make-Whole
Amount, shall be immediately due and payable on all outstanding Securities
without any declaration or other act on the part of the Trustee or the Holders;
PROVIDED, HOWEVER, that (A) the Primary Make-Whole Amount shall be subordinated
in right of payment to all Senior Debt and shall rank PARI PASSU with all Senior
Subordinated Debt including, without limitation, all Senior Subordinated Debt to
which HET has succeeded to the rights of the lenders thereunder and (B) the
Secondary Make-Whole Amount shall be subordinate to all Senior Debt and all
Senior Subordinated Debt including, without limitation, all Senior Subordinated
Debt to which HET has succeeded to the rights of the lenders thereunder. The
Primary Make-Whole Amount shall be subordinated to Senior Debt in accordance
with the terms of Article XIII.
The Secondary Make-Whole Amount shall be subordinated to all
Senior Debt and all Senior Subordinated Debt on the terms provided in Article
XIII (for this purpose, treating all Senior Subordinated Debt as if same were
Senior Debt), except that no payments whatsoever may be made with respect to the
Secondary Make-Whole Amount unless and until all Senior Debt and all Senior
Subordinated Debt has been repaid in full in cash.
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 VII, the Holders
of a majority in aggregate principal amount of then outstanding Securities, by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences and may waive, on behalf of all Holders, an
Event of Default or an event which with notice or lapse of time or both would
become an Event of Default if:
(1) the Company has paid or deposited with the Trustee a sum sufficient
to pay
(A) all overdue interest (including Contingent Payments) on
all Securities,
(B) 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 (including Contingent Payments) 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
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(2) all Events of Default, other than the nonpayment
of amounts which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 7.12.
Notwithstanding the previous sentence of this Section 7.2, no rescission,
amendment or 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 outstanding Security, unless all such affected
Holders agree, in writing, to rescind such acceleration or waive such Event of
Default or event. No such waiver shall cure or waive any subsequent default or
impair any right consequent thereon.
SECTION 7.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR
ENFORCEMENT BY TRUSTEE. The Company covenants that if an Event of Default in
payment of principal, premium, or interest (including Contingent Payments)
specified in Section 7.1(1) and (2) occurs and is continuing, the Company 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 and interest (including Contingent Payments), and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and on any overdue interest (including Contingent Payments), 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 Company fails 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 Company 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 Company 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 7.4. 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 Company or any other obligor upon the Securities or
the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of the Securities 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 Company
for the payment of overdue principal or interest (including
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Contingent Payments)) 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 interest (including Contingent Payments) 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 8.7.
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 7.5. 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 the Holders of the Securities in respect of which
such judgment has been recovered.
SECTION 7.6. PRIORITIES. Subject to the Intercreditor
Agreement, Section 4.6, Article XIII and Article XIV, any money collected by the
Trustee pursuant to this Article VII 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 or interest (including Contingent Payments), 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 8.7:
SECOND: To the Holders in payment of the amounts then due and
unpaid for principal of and interest (including Contingent Payments) on, the
Securities in respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority
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of any kind, according to the amounts due and payable on such Securities for
principal and interest (including Contingent Payments), respectively; and
THIRD: To whomsoever may be lawfully entitled thereto, the
remainder, if any.
SECTION 7.7. 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 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 7.8. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE
PRINCIPAL 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 interest (including
Contingent Payments) on, such Security on the Maturity Dates of such payments as
expressed in such Security (in the case of Required Regulatory Redemption, the
Redemption Price on the applicable Redemption Date, in the case of the Change of
Control Offer Price, on the applicable Change of Control Purchase Date, and in
the case of the Offer Price on the Asset Sale 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 7.9. RIGHTS AND REMEDIES CUMULATIVE. Except as
otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen
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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 otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 7.10. 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 VII 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 7.11. CONTROL BY HOLDERS. Subject to the terms of the
Intercreditor Agreement with respect to actions taken under the Collateral
Documents, 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 7.12. WAIVER OF PAST DEFAULT. Subject to Section 7.8,
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 acceleration 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 (including Contingent Payments) on, any Security as
specified in clauses (1) and (2) of Section 7.1, or
(B) in respect of a covenant or provision hereof
which, under Article X, cannot be modified or amended 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
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such waiver shall extend to any subsequent or other default or impair the
exercise of any right arising therefrom.
SECTION 7.13. UNDERTAKING FOR COSTS. All parties to this
Indenture agree, and each Holder of any Security by its 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,
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 7.13 shall not apply to any suit instituted by the
Company, 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 (including Contingent Payments) on, any Security on or after the
Maturity Date of such Security.
SECTION 7.14. 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 Company, 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.
ARTICLE VIII.
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 8.1. 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.
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(2) In the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee 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:
(1) This paragraph does not limit the effect of
paragraph (b) of this Section 8.1.
(2) The Trustee shall comply with any order or
directive of a Gaming Authority that the Trustee submit 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 8.8 hereof.
(3) 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 negligent in ascertaining the pertinent facts.
(4) The Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 7.11.
(d) 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.
(e) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b), (c), (d) and (f) of this
Section 8.1.
(f) The Trustee shall not be liable for interest on any assets
received by it except as the Trustee may agree in writing with the Company.
Assets held in trust by the Trustee need not be segregated from other assets
except to the extent required by law.
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SECTION 8.2. RIGHTS OF TRUSTEE. Subject to Section 8.1:
(a) The Trustee may 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 and may require an Officers' Certificate or an Opinion of
Counsel, which shall conform to Sections 15.4 and 15.5. The Trustee shall not 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 conferred upon it by this Indenture or the TIA.
(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 5.1, the Trustee shall have
no duty to inquire as to the performance of the Company's covenants in Article
V. 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 7.1(1), 7.1(2) and 5.1, or (ii) any Default or Event of Default of
which the Trustee shall have received written notification or obtained actual
knowledge.
(h) Unless otherwise specifically provided for in this
Indenture, any demand, request, direction or notice from the Company shall be
sufficient if signed by an Authorized Representative of the Company.
SECTION 8.3. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its
individual or any other capacity may become the owner or pledgee of any of the
Securities, may make loans to, accept deposits from, and perform services for
the Company or its Affiliates, and may otherwise deal with the Company, any
Guarantor, any of their respective Subsidiaries, or their respective Affiliates
with the same rights it would have if it were not Trustee; PROVIDED, HOWEVER,
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that the Trustee shall use reasonable good faith efforts so that it at no time
becomes a Bank Lender; PROVIDED, FURTHER, that the foregoing proviso shall in no
event operate to prevent the Trustee from acquiring all or any portion of the
equity interests in any other person which itself is a Bank Lender (and as a
result of which the Trustee could become a Bank Lender). Any Agent may do the
same with like rights. However, the Trustee must comply with Sections 8.10 and
8.11.
SECTION 8.4. 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 responsible for any statement in the Securities,
other than the Trustee's certificate of authentication, or the use or
application of any funds received by a Paying Agent other than the Trustee.
SECTION 8.5. NOTICE OF DEFAULT. If a Default or an Event of
Default occurs and is continuing and if it is 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 of, or
interest (including Contingent Payments) on, any Security (including the payment
of the Change of Control Offer Price on the Change of Control Purchase Date, the
Redemption Price on the Redemption Date and the Asset Sale Offer Amount on the
Asset Sale Purchase Date, as the case may be), 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 8.6. REPORTS BY TRUSTEE TO HOLDERS. If required by
law, within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, the Trustee shall mail to each Securityholder a brief
report dated as of such May 15 that complies with TIA Section 313(a). If
required by law, the Trustee also shall comply with TIA Sections 313(b) and
313(c).
The Company 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 Company and filed with the SEC and each
stock exchange, if any, on which the Securities are listed.
SECTION 8.7. COMPENSATION AND INDEMNITY. The Company shall pay
to the Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable disbursements, expenses and advances incurred or made
by it. Such expenses shall include the reasonable compensation, disbursements
and expenses of the Trustee's agents, accountants, experts and counsel.
The Company shall indemnify the Trustee (in its capacity as
Trustee) and each of its officers, directors, attorneys-in-fact and agents for,
and hold it harmless against, any claim, demand, 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
79
negligence, bad faith or willful misconduct on its part, arising out of or in
connection with (a) the 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 and (b) the actual or alleged presence of
Hazardous Materials in the air, surface water or groundwater or on the surface
or subsurface of any real property owned, leased or at any time operated by the
Company or any of its Subsidiaries, the release, generation, storage,
transportation, handling or disposal of Hazardous Materials at any location,
whether or not owned or operated by the Company or any of its Subsidiaries, the
non-compliance of any real property with foreign, federal, state and local laws,
regulations, and ordinances (including applicable permits thereunder) applicable
to any real property, or any environmental claim relating in any way to the
Company or any of its Subsidiaries, their operations, or any real property
owned, leased or at any time operated by the Company or any of its Subsidiaries,
including, in each case, without limitation, the reasonable fees and
disbursements of counsel and other consultants incurred in connection with any
such investigation, litigation, or other proceeding (but excluding any losses,
liabilities, claims, damages or expenses to the extent incurred by reason of the
gross negligence or willful misconduct of the person to be indemnified). The
Trustee shall notify the Company promptly of any claim asserted against the
Trustee for which it may seek indemnity. The Company shall defend the claim and
the Trustee shall provide reasonable cooperation at the Company's expense in the
defense. The Trustee may have separate counsel and the Company shall pay the
reasonable fees and expenses of such counsel; provided, that the Company will
not be required to pay such fees and expenses if it assumes the Trustee's
defense and there is no conflict of interest between the Company and the Trustee
in connection with such defense. The Company need not pay for any settlement
made without its written consent. The Company 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 Company's payment obligations in this Section
8.7, 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 of or interest (including Contingent Payments) on
particular Securities.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 7.1(5), (6) or (7) occurs, the expenses
and the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The Company's obligations under this Section 8.7 and any lien
arising hereunder shall survive the resignation or removal of the Trustee, the
discharge of the Company's obligations pursuant to Article IX and any rejection
or termination of this Indenture under any Bankruptcy Law.
SECTION 8.8. REPLACEMENT OF TRUSTEE. The Trustee may resign by
so notifying the Company in writing. The Holder or Holders of a majority in
principal amount of the outstanding Securities may remove the Trustee by so
notifying the Company and the Trustee
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in writing and may appoint a successor trustee with the Company's consent. The
Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 8.10;
(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 Company 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
Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that
and provided that all sums owing to the Trustee provided for in Section 8.7 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 8.7,
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
Company 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 8.10, 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 8.8, the Company's obligations under Section 8.7 shall continue for the
benefit of the retiring Trustee.
SECTION 8.9. SUCCESSOR TRUSTEE BY MERGER, ETC. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate 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 8.10. ELIGIBILITY; DISQUALIFICATION. The Trustee
shall at all times satisfy the requirements of TIA Section 310(a)(1) and TIA
Section 310(a)(5). The Trustee shall have a
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combined capital and surplus of at least $100,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
Section 310(b).
SECTION 8.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST
COMPANY. The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE IX.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 9.1. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT
DEFEASANCE. The Company may elect to have either Section 9.2 or 9.3 be applied
to all outstanding Securities upon compliance with the conditions set forth
below in this Article IX.
SECTION 9.2. LEGAL DEFEASANCE AND DISCHARGE. Upon the
Company's exercise under Section 9.1 of the option applicable to this Section
9.2, the Company shall be deemed to have been discharged from their 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 Company 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 9.5 and the other Sections of this Indenture referred to in (a) and (b)
below, and to have satisfied all its other obligations under such Securities and
this Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following which shall survive until otherwise terminated or discharged
hereunder: (a) the 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 (including Contingent Payments) on such Securities when such payments
are due, (b) the Company's obligations with respect to such Securities under
Sections 2.4, 2.6, 2.7, 2.10, 5.2 and 5.4, (c) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and the Company's obligations in
connection therewith, and (d) this Article IX. Subject to compliance with this
Article IX, the Company may exercise its option under this Section 9.2
notwithstanding the prior exercise of its option under Section 9.3 with respect
to the Securities.
SECTION 9.3. COVENANT DEFEASANCE. Upon the Company's exercise
under Section 9.1 of the option applicable to this Section 9.3, the Company
shall be released from its obligations under the covenants contained in Sections
5.3, 5.6, 5.7, 5.8, 5.10, 5.11, 5.12, 5.13, 5.14, 5.15, 5.16, 5.18, 5.19, 5.20,
5.21 and 5.22 and Article VI 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"
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for all other purposes hereunder. For this purpose, such Covenant Defeasance
means that, with respect to the outstanding Securities, the Company 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 9.1 of the option applicable to this Section 9.3,
Sections 7.1(3), 7.1(4) and 7.1(8), 7.1(9), 7.1(10), 7.1(11), 7.1(13), 7.1(14),
7.1(15) and 7.1(16) shall not constitute Events of Default.
SECTION 9.4. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE. The
following shall be the conditions to the application of either Section 9.2 or
Section 9.3 to the outstanding Securities:
(a) (1) The Company shall irrevocably have deposited or caused
to be deposited with the Trustee (or another trustee satisfying the requirements
of Section 8.10 who shall agree to comply with the provisions of this Article IX
applicable to it) 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, (i) U.S. Legal Tender in an
amount, or (ii) 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, U.S. Legal
Tender in an amount, or (iii) a combination thereof, in such amounts, as 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 and which shall be applied by the Trustee (or
other qualifying trustee) to pay and discharge the principal of and interest
(including Maximum Contingent Payments for the current and all future Contingent
Payment Periods) 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 or interest (including Contingent Payments); PROVIDED that the
Trustee shall have been irrevocably instructed to apply such U.S. Legal Tender
or the proceeds of such U.S. Government Obligations to said payments with
respect to the Securities and (2) the Holders must have a valid and perfected
exclusive security interest in such trust;
(b) In the case of an election under Section 9.2, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably satisfactory to the Trustee confirming that (i) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (ii) since the Issue Date, 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 (assuming that the Maximum Contingent
Payments had been made for the current and all future Contingent Payment
Periods);
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(c) In the case of an election under Section 9.3, the Company
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 on the same
amounts, in the same manner and at the same times as would have been the case if
such Covenant Defeasance had not occurred (assuming that the Maximum Contingent
Payments had been made for the current and all future Contingent Payment
Periods);
(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,
in so far as Section 7.1(5), 7.1(6) or 7.1(7) 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);
(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 (including, without
limitation, the Bank Credit Facilities) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;
(f) In the case of an election under either Section 9.2 or
9.3, the Company shall have delivered to the Trustee an Officers' Certificate
stating that the deposit made by the Company pursuant to its election under
Section 9.2 or 9.3, as applicable, was not made by the Company with the intent
of preferring the Holders over other creditors of the Company or with the intent
of defeating, hindering, delaying or defrauding creditors of the Company or
others; and
(g) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel in the United States, each
stating that all conditions precedent provided for relating to either the Legal
Defeasance under Section 9.2 or the Covenant Defeasance under Section 9.3 (as
the case may be) have been complied with as contemplated by this Section 9.4.
SECTION 9.5. DEPOSITED U.S. LEGAL TENDER AND U.S. GOVERNMENT
OBLIGATIONS TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS. Subject to
Section 9.6, all money and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee, collectively
for purposes of this Section 9.5, the "Trustee") pursuant to Section 9.4 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
(including Contingent Payments), but such money need not be segregated from
other funds except to the extent required by law.
The Company agrees to pay and indemnify the Trustee against
any tax, fee or other charge imposed on or assessed against the U.S. Legal
Tender or U.S. Government Obligations deposited pursuant to Section 9.4 or the
principal and interest received in respect
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thereof other than any such tax, fee or other charge which by law is for the
account of the Holders of the outstanding Securities.
Anything in this Article IX to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon the
request of the Company any U.S. Legal Tender or U.S. Government Obligations held
by it as provided in Section 9.4 which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 9.4(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.
SECTION 9.6. REPAYMENT TO COMPANY. Any money deposited with
the Trustee or any Paying Agent, or then held by the Company, in trust for the
payment of the principal of or interest (including Contingent Payments) on any
Security and remaining unclaimed for two years after such principal or interest
has become due and payable shall be paid to the Company on its request; and the
Holder of such Security shall thereafter look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the NEW YORK TIMES and THE
WALL STREET JOURNAL (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining will be repaid to the Company.
SECTION 9.7. REINSTATEMENT. If the Trustee or Paying Agent is
unable to apply any U.S. Legal Tender or U.S. Government Obligations in
accordance with Section 9.2 or 9.3, 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 Company's obligations under
this Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 9.2 or 9.3 until such time as the
Trustee or Paying Agent is permitted to apply such money in accordance with
Section 9.2 and 9.3, as the case may be; PROVIDED, HOWEVER, that, if the Company
makes any payment of principal of or interest (including Contingent Payments) on
any Security following the reinstatement of its obligations, the Company shall
be subrogated to the rights of the Holders of such Securities to receive such
payment from the money held by the Trustee or Paying Agent.
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ARTICLE X.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
HOLDERS. Without the consent of any Holder, the Company and 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, or may amend,
modify or supplement the Securities, this Indenture, the Intercreditor
Agreement, or any of the Collateral Documents, in form satisfactory to the
Trustee and the Company, 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 Company for the
benefit of the Holders, or to surrender any right or power herein
conferred upon the Company or to make any other change that does not
adversely affect the rights of any Holder; PROVIDED, that the Company
has 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 collateral for or
additional Guarantors of the Securities;
(4) to provide for uncertificated Securities in
addition to or in place of certificated Securities;
(5) to evidence the succession of another person to
the Company, and the assumption by any such successor of the
obligations of the Company, herein and in the Securities in accordance
with Article VI; or
(6) to comply with the TIA.
SECTION 10.2. AMENDMENTS, SUPPLEMENTAL INDENTURES AND WAIVERS
WITH CONSENT OF HOLDERS. Subject to Section 7.8 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 Company and the Trustee, the Company and any
Guarantor, when authorized by Board Resolutions, and the Trustee may amend or
supplement any of the Collateral Documents, the Intercreditor Agreement, this
Indenture or the Securities or enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of any of the Collateral
Documents, the Intercreditor Agreement, this Indenture or the Securities or of
modifying in any manner the rights of the Holders under any of the Collateral
Documents, the Intercreditor Agreement, this Indenture or the Securities.
Subject to Section 7.8
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and the last sentence of this paragraph, the Holder or Holders of a majority in
aggregate principal amount of then outstanding Securities may waive compliance
by the Company or any Guarantor with any provision of any of the Collateral
Documents, the Intercreditor Agreement, this Indenture or the Securities.
Notwithstanding the foregoing provisions of this Section 10.2, no such
amendment, supplemental indenture or waiver shall, without the consent of the
Holder of each outstanding Security affected thereby:
(1) change the Stated Maturity of, or the Change of
Control Offer Period or the Asset Sale Offer Period on, any Security;
(2) reduce the principal amount of any Security;
(3) reduce the rate or extend the time for payment of
interest (including Contingent Payments) on any Security;
(4) make the principal of, or the interest (including
Contingent Payments) on, any Security payable with anything or in any
manner other than as provided for in this Indenture and the Securities
as in effect on the Issue Date;
(5) make any changes in Section 7.8 or this third
sentence of this Section 10.2 (except, in the case of this third
sentence, to add any additional provision of this Indenture to this
sentence);
(6) reduce any Purchase Price;
(7) alter the redemption provisions of Article III or
the Securities in a manner adverse to any Holder;
(8) make any changes in the provisions concerning
waivers of Defaults or Events of Default by Holders of the Securities
or change 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 (except to increase any
required percentage) or make any changes in the provisions concerning
the rights of Holders to recover the principal of, interest (including
Contingent Payments) on, or redemption payment with respect to, any
Security; or
(9) make the Securities subordinated in right of
payment to any extent or under any circumstances (except as permitted
by this Indenture) 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 Company shall mail to the Holders affected thereby a
notice briefly describing the
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amendment, supplement or waiver. Any failure of the Company to mail such notice,
or any defect therein, shall not, however, in any way impair or affect the
validity of any such supplemental indenture or waiver.
After an amendment, supplement or waiver under this Section
10.2 or 10.4 becomes effective, it shall bind each Holder, subject to the
limitations set forth above.
In connection with any amendment, supplement or waiver under
this Article X, the Company may, but shall not be obligated to, offer to any
Holder who consents to such amendment, supplement or waiver, or to all Holders,
consideration for such Holder's consent to such amendment, supplement or waiver.
SECTION 10.3. COMPLIANCE WITH TIA. Every amendment, waiver or
supplement of this Indenture or the Securities shall comply with the TIA as then
in effect.
SECTION 10.4. 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 Company or the person
designated by the Company as the person to whom consents should be sent if such
revocation is received by the Company 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 Company 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 Company notwithstanding 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 10.2, 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 (or a portion of the same) debt as the consenting Holder's
Security with respect to which a consent was given; 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 (including Contingent Payments) 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.
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SECTION 10.5. 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 Company or the Trustee so determine, the
Company 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 10.6. TRUSTEE TO SIGN AMENDMENTS, ETC. The Trustee
shall execute any amendment, supplement or waiver authorized pursuant to this
Article X, 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 Opinion of Counsel
stating that the execution of any amendment, supplement or waiver authorized
pursuant to this Article X is authorized or permitted by this Indenture.
SECTION 10.7. CONSENT TO CERTAIN AMENDMENTS OF THE GROUND
LEASE; TRUSTEE'S ACTIONS. To the extent required under the Ground Lease, the
Collateral Agent and the Trustee, on behalf of the Holders, hereby waive their
right to consent or shall be authorized to waive its consent, as the case may
be, to any future amendment, modification or change of such Ground Lease, and
any and all other leases now or hereafter subject to the Mortgages, provided
that:
(a) such amendment, modification or change would not (i) have
a material adverse effect on the Collateral, (ii) have a material
adverse effect on the rights of the Holders or the Collateral Agent
under the Ground Lease or such other lease, as the case may be; or
(iii) materially increase the payment obligations under the Ground
Lease, or such other lease, as the case may be; and
(b) contemporaneously with the execution of such amendment,
modification or change, the Collateral Agent shall receive, at no cost
to the Holders or the Collateral Agent, an endorsement to the
mortgagee's title insurance policy insuring the Mortgages, assuring (i)
that such amendment does not impair or invalidate the lien of the
Mortgages and (ii) that such amendment does not affect the coverage
afforded by the above-referenced title insurance policy.
Except as set forth above, the Trustee may request the consent
and approval of the Holders as a condition to giving any consent or approval
under the Ground Lease, or any other lease or the Casino Operating Contract and
shall have no responsibility or liability for failing to give any such consent
or approval absent direction from the Holders.
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ARTICLE XI.
RIGHT TO REQUIRE REPURCHASE
SECTION 11.1. REPURCHASE OF SECURITIES AT OPTION OF THE HOLDER
UPON CHANGE OF CONTROL.
(a) In the event that a Change of Control (the date on which
such event occur being referred to as the "Change of Control Date") occurs, each
Holder of Securities shall have the right, at such Holder's option, subject to
the terms and conditions hereof, to require the Company to repurchase all or any
part of such Holder's Notes (provided, that the principal amount of such Notes
at maturity must be $1.00 or an integral multiple thereof) on the date that is
no later than 30 Business Days after the occurrence of such Change of Control
(the "Change of Control Payment Date"), at a cash price (the "Change of Control
Offer Price") equal to 101% of the principal amount thereof, plus accrued and
unpaid interest, if any, to the Change of Control Payment Date.
(b) In the event that, pursuant to this Section 11.1, the
Company shall be required to commence an offer to purchase Notes (a "Change of
Control Offer"), the Company shall follow the procedures set forth in this
Section 11.1 as follows:
(1) the Change of Control Offer shall commence within
10 Business Days following the Change of Control Date;
(2) the Change of Control Offer shall remain open for
20 Business Days and no longer, except to the extent that a longer
period is required by applicable law (the "Change of Control Offer
Period");
(3) within 5 Business Days following the expiration
of a Change of Control Offer (and in any event not later than 35
Business Days following the Change of Control Date), the Company shall
purchase all of the tendered Securities at the Change of Control Offer
Price together with accrued interest to the Change of Control Payment
Date;
(4) if the Change of Control Payment Date is on or
after an interest payment record date and on or before the related
interest payment date, any accrued interest 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 (including Contingent Payments)
will be payable to Securityholders who tender Securities pursuant to
the Change of Control Offer and who are paid on the Change of Control
Payment Date;
(5) the Company shall provide the Trustee with notice
of the Change of Control Offer at least 5 Business Days before the
commencement of any Change of Control Offer; and
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(6) on or before the commencement of any Change of
Control Offer, the Company or the Trustee (upon the request and at the
expense of the Company) 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 11.1;
(ii) the Change of Control Offer Price (including the
amount of accrued and unpaid interest), the Change of Control
Payment Date and the Change of Control Put Date (as defined
below);
(iii) that any Security or portion thereof not
tendered or accepted for payment will continue to accrue
interest (including Contingent Payments);
(iv) that, unless (a) the Company defaults in
depositing U.S. Legal Tender with the Paying Agent (which may
not for purposes of this Section 11.1, notwithstanding
anything in this Indenture to the contrary, be the Company or
any Affiliate of the Company) in accordance with the last
paragraph of this clause (b) or (b) such Change of Control
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 (including Contingent
Payments) after the Change of Control Payment 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 11.1, notwithstanding
anything in this Indenture to the contrary, be the Company or
any Affiliate of the Company) at the address specified in the
notice prior to the close of business on the fifth Business
Day prior to the Change of Control Payment Date (the "Change
of Control Put Date");
(vi) that Holders will be entitled to withdraw their
elections, in whole or in part, if the Paying Agent (which,
for purposes of this Section 11.1, notwithstanding any other
provision of this Indenture, may not be the Company or an
Affiliate of the Company) receives, up to the close of
business on the Change of Control Put Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Securities the Holder is
withdrawing and a statement 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.
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No later than 12:00 noon, New York City Time, on a Change of
Control Payment Date, the Company shall (i) accept for payment Securities or
portions thereof properly tendered pursuant to the Change of Control Offer prior
to the close of business on the Final Change of Control Put Date, (ii)
irrevocably deposit with the Paying Agent U.S. Legal Tender sufficient to pay
the Change of Control Offer Price (including accrued and unpaid interest) 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 Company. The Paying Agent shall on the Change of
Control Payment Date pay to the Holders of Securities so accepted an amount
equal to the Change of Control Offer Price (including accrued and unpaid
interest), 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 Company to the Holder thereof.
ARTICLE XII.
GUARANTY
SECTION 12.1. GUARANTY.
(a) In consideration of good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and subject to Article
III, Article XIV and subsection (d) below, each of the Guarantors hereby
irrevocably and unconditionally guarantees (the "Guaranty") 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 Company under this Indenture
or the Securities, that: (w) the principal and premium (if any) of and interest
(including Contingent Payments to the extent due and payable hereunder) on the
Securities will be paid in full when due, whether at the maturity or Interest
Payment Date, by acceleration, Required Regulatory Redemption, upon a Change of
Control, Offer to Purchase, or otherwise; (x) all other obligations of the
Company 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, Required Regulatory
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 Guaranty 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, any delays in obtaining or realizing upon or
failures to obtain or realize upon collateral, the recovery of any judgment
against the Company, 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
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Guarantor hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of insolvency or bankruptcy of the Company, any
right to require a proceeding first against the Company or right to require the
prior disposition of the assets of the Company to meet its obligations, protest,
notice and all demands whatsoever and covenants that this Guaranty 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 Company or any Guarantor, or any Custodian,
Trustee, or similar official acting in relation to the Company or such
Guarantor, any amount paid by the Company or such Guarantor to the Trustee or
such Holder, this Guaranty, 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 the principal of, premium, if any, and
interest (including Contingent Payments to the extent due and payable hereunder)
on all Securities issued hereunder shall have been paid in full. 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 7.2 for the purposes
of this Guaranty, notwithstanding any stay, injunction or other prohibition
preventing such acceleration as to the Company of the obligations guaranteed
hereby, and (ii) in the event of any declaration of acceleration of those
obligations as provided in Section 7.2, those obligations (whether or not due
and payable) will forthwith become due and payable by each of the Guarantors for
the purpose of this Guaranty.
(d) It is the intention of each Guarantor and the Company that
the obligations of each Guarantor hereunder shall be, but not in excess of, the
maximum amount permitted by applicable law. Accordingly, if the obligations in
respect of the Guaranty would be annulled, avoided or subordinated to the
creditors of the Guarantor by a court of competent jurisdiction in a proceeding
actually pending before such court as a result of a determination both that such
Guaranty was made without fair consideration and, immediately after giving
effect thereto, or at the time that any demand is made thereupon, such Guarantor
was insolvent or unable to pay its debts as they mature or left with an
unreasonably small capital, then the obligations of such Guarantor under such
Guaranty shall be reduced by such an amount, if any, that would result in the
avoidance of such annulment, avoidance or subordination; PROVIDED, HOWEVER, that
any reduction pursuant to this paragraph shall be made in the smallest amount as
is necessary to reach such result. For purposes of this paragraph, "fair
consideration," "insolvency," "unable to pay its debts as they mature,"
"unreasonably small capital" and the effective times of reductions, if any,
required by this paragraph shall be determined in accordance with applicable
law.
(e) Each Guarantor shall be subrogated to all rights of the
Holders against the Company under the Securities, this Indenture or the
Collateral Documents in respect of any amounts paid by such Guarantor pursuant
to the provisions of such Guaranty or this Indenture; provided, however, that
the Guarantor shall not be entitled to enforce or to receive any payments
arising out of, or based upon, such right of subrogation until the principal of,
premium, if any, and interest (including Contingent Payments to the extent due
and payable hereunder) on all Securities issued hereunder shall have been paid
in full.
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SECTION 12.2. PARENT GUARANTY.
(a) In consideration of good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and subject to Article
III, Article XIV and subsection (d) below, the Parent Guarantor hereby
irrevocably and unconditionally guarantees (the "Parent Guaranty" and, together
with the Guaranty of the Parent Guarantor, the "Parent Guaranties") to each
holder of a Development Companies Guaranty and to the Trustee and its successors
and assigns, irrespective of the validity and enforceability of the Development
Companies Guaranty or the obligations of any of the Development Companies under
the Development Companies Guaranty, that all obligations of each of the
Development Companies to the Holders or the Trustee under the Guaranty will be
promptly paid in full or performed, all in accordance with the terms of the
Development Companies Guaranty.
(b) The Parent Guarantor hereby agrees that its obligations
with regard to this Parent Guaranty shall be unconditional, irrespective of the
validity, regularity or enforceability of the Development Companies Guaranty or
this Indenture, the absence of any action to enforce the same, any delays in
obtaining or realizing upon or failures to obtain or realize upon collateral,
the recovery of any judgment against any Development Company, any action to
enforce the same or any other circumstances that might otherwise constitute a
legal or equitable discharge or defense of any Development Company under the
Development Companies Guaranty. The Parent Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of any Development Company, any right to require a
proceeding first against any Development Company or right to require the prior
disposition of the assets of any Development Company to meet its obligations,
protest, notice and all demands whatsoever and covenants that this Parent
Guaranty will not be discharged except by complete performance of the
obligations of the Development Companies under the Development Companies
Guaranty.
(c) If any Holder or the Trustee is required by any court or
otherwise to return to any Development Company, or any Custodian, Trustee, or
similar official acting in relation to such Development Company, any amount paid
by such Development Company to the Trustee or such Holder, this Parent Guaranty,
to the extent theretofore discharged, shall be reinstated in full force and
effect. The Parent 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 the principal of, premium, if any, and interest (including
Contingent Payments to the extent due and payable hereunder) on all Securities
issued hereunder shall have been paid in full. The Parent Guarantor further
agrees that, as between such Development Company, 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 7.2 for the purposes
of this Parent Guaranty, notwithstanding any stay, injunction or other
prohibition preventing such acceleration as to any Development Company of the
obligations guaranteed hereby, and (ii) in the event of any declaration of
acceleration of those obligations as provided in section 7.2, those obligations
(whether or not due and payable) will forthwith become due and payable by the
Parent Guarantor for the purpose of this Parent Guaranty.
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(d) It is the intention of the Parent Guarantor and the
Development Companies that the obligations of the Parent Guarantor hereunder
shall be, but not in excess of, the maximum amount permitted by applicable law.
Accordingly, if the obligations in respect of the Parent Guaranty would be
annulled, avoided or subordinated to the creditors of the Parent Guarantor by a
court of competent jurisdiction in a proceeding actually pending before such
court as a result of a determination both that the Parent Guaranty was made
without fair consideration and, immediately after giving effect thereto, or at
the time that any demand is made thereupon, the Parent Guarantor was insolvent
or unable to pay its debts as they mature or left with an unreasonably small
capital, then the obligations of the Parent Guarantor under the Parent Guaranty
shall be reduced by such an amount, if any, that would result in the avoidance
of such annulment, avoidance or subordination; PROVIDED, HOWEVER, that any
reduction pursuant to this paragraph shall be made in the smallest amount as is
necessary to reach such result. For purposes of this paragraph, "fair
consideration," "insolvency," "unable to pay its debts as they mature,"
"unreasonably small capital" and the effective times of reductions, if any,
required by this paragraph shall be determined in accordance with applicable
law.
(e) The Parent Guarantor shall be subrogated to all rights of
the Holders against the Development Companies under the Development Companies
Guaranty in respect of any amounts paid by the Parent Guarantor pursuant to the
provisions of the Parent Guaranty; provided, however, that the Parent Guarantor
shall not be entitled to enforce or to receive any payments arising out of, or
based upon, such right of subrogation until the principal of, premium, if any,
and interest (including Contingent Payments to the extent due and payable
hereunder) on all Securities issued hereunder shall have been paid in full.
SECTION 12.3. EXECUTION AND DELIVERY OF GUARANTY.
(a) To evidence its Guaranty set forth in Section 12.1, each
Guarantor agrees that a notation referencing such Guaranty shall be set forth on
the Security.
Each Guarantor agrees that its Guaranty set forth in Section
12.1 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
Guaranty.
The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the Guaranty
set forth in this Indenture on behalf of each Guarantor.
(b) To evidence the Parent Guaranty set forth in Section 12.2,
the Parent Guarantor agrees that a notation referencing such Parent Guaranty
shall be set forth on the Security.
The Parent Guarantor agrees that the Parent Guaranty set forth
in Section 12.2 shall remain in full force and effect and apply to each
Development Companies Guaranty notwithstanding any failure to endorse on each
Development Company Guaranty a notation of such Parent Guaranty.
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The delivery of any Security shall constitute due delivery of
the Parent Guaranty set forth in this Indenture on behalf of the Parent
Guarantor.
SECTION 12.4. FUTURE SUBSIDIARY GUARANTORS. The Company shall
cause each person that is or becomes a Subsidiary of the Company after the Issue
Date to execute an Indenture supplemental hereto for the purpose of adding such
Subsidiary as a Guarantor hereunder.
SECTION 12.5. RELEASE OF GUARANTORS.
(a) The Parent Guarantor shall be released from all of its
obligations under the Parent Guaranties and under this Indenture if:
(i) (A) the Company or the Parent Guarantor has
transferred all or substantially all of its properties and assets to
any Person (whether by sale, merger or consolidation or otherwise), or
has merged into or consolidated with another Person, pursuant to a
transaction in compliance with this Indenture;
(B) the corporation to whom all or
substantially all of the properties and assets of the Company
or the Parent Guarantor are transferred, or whom the Company
or the Parent Guarantor has merged into or consolidated with,
has expressly assumed, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to
the Trustee, all the obligations of the Parent Guarantor under
the Parent Guaranties and this Indenture;
(C) immediately before and immediately after
giving effect to such transaction, no Event of Default, and no
event or condition which, after notice or lapse of time or
both, would become an Event of Default, shall have occurred
and be continuing; and
(D) the Parent Guarantor has delivered to
the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger or
transfer and such supplemental indenture comply with this
Section 12.5 and that all conditions precedent herein provided
for relating to such transaction have been complied with; or
(ii) the Company ceases for any reason to be a
"wholly owned subsidiary" (as such term is defined in Rule 1-02(aa) of
the Regulation S-X promulgated by the Commission) of the Parent
Guarantor.
(b) In the event (a) of a sale or other disposition of all of
the assets of any Subsidiary Guarantor or Development Company, by way of merger,
consolidation or otherwise, or a sale or other disposition of all of the capital
stock (or membership interests) of any Subsidiary Guarantor or Development
Company, or (b) that the Company designates a Subsidiary Guarantor to be an
Unrestricted Subsidiary, or such Guarantor ceases to be a Subsidiary of the
Company, then such Guarantor (in the event of a sale or other disposition, by
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way of such a merger, consolidation or otherwise, of all of the capital stock of
such Guarantor or any such designation) or the entity acquiring the property (in
the event of a sale or other disposition of all of the assets of such Guarantor)
shall be released and relieved of any obligations under its Guaranty. In the
case of a sale, assignment, lease, transfer, conveyance or other disposition of
all or substantially all of the assets of Subsidiary Guarantor or Development
Company, upon the assumption provided in Section 12.6, such Subsidiary Guarantor
or Development Company shall be discharged from all further liability and
obligation under this Indenture. Upon delivery by the Company to the Trustee of
an Officers' Certificate to the effect of the foregoing, the Trustee shall
execute any documents reasonably required in order to evidence the release of
any Subsidiary Guarantor or Development Company from its obligations under the
Guaranty.
(c) Upon any assumption of the Guaranty or Parent Guaranty by
any Person pursuant to this Section, such Person may exercise every right and
power of a Guarantor under this Indenture with the same effect as if such
successor corporation had been named as a Guarantor herein, and all the
obligations of the released Guarantor under the Guaranty and/or Parent Guaranty,
as applicable, and the Indenture shall terminate.
(d) In the event that a Development Company is released by the
Bank Agent from such Development Company's obligations in respect of its
guarantee of the Bank Credit Facilities, such Development Company shall be
released and relieved of its obligations under its Guaranty and shall be
discharged of all further liability and obligation under this Indenture.
SECTION 12.6. WHEN THE GUARANTOR MAY MERGE, ETC. A Guarantor
shall not consolidate with or merge with or into any other Person or, directly
or indirectly, sell, lease or convey all or substantially all of its assets
(computed on a consolidated basis), whether in a single transaction or a series
of related transactions, to another Person, unless:
(a) either the Company or a Guarantor shall be the continuing
person, or the Person (if other than the Company or a Guarantor) formed
by such consolidation or into which the Guarantor is merged or to which
the assets of the Guarantor are transferred shall be a corporation
organized and validly existing under the laws of the United States or
any State thereof or the District of Columbia and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to
the Trustee, in form satisfactory to the Trustee, all the obligations
of such Guarantor under the Guaranty and/or Parent Guaranty, as
applicable, and this Indenture;
(b) immediately after giving effect to such transaction, no
Event of Default, and no event or condition which, after notice or
lapse of time or both, would become an Event of Default, shall have
occurred and be continuing; and
(c) the Guarantor has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, sale, conveyance or lease and such supplemental
indenture comply with this Section and that all conditions precedent
herein provided for relating to such transaction have been complied
with.
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Upon any consolidation or merger, or any sale, conveyance or
lease of all or substantially all of the assets of a Guarantor, in accordance
with this Section, the successor corporation formed by such consolidation or
into which the Guarantor is merged or to which such transfer is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Guarantor under this Indenture with the same effect as if such successor
corporation had been named as a Guarantor herein, and all the obligations of the
predecessor Guarantor hereunder and under the Guaranty and/or Parent Guaranty,
as applicable, and the Indenture shall terminate.
SECTION 12.7. CERTAIN BANKRUPTCY EVENTS. Each Guarantor
hereby covenants and agrees that in the event of the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Company, 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 Guaranty or the Parent Guaranty 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.
ARTICLE XIII.
SUBORDINATION OF SECURITIES
SECTION 13.1. SECURITIES SUBORDINATED TO SENIOR DEBT. The
Company, for itself, its successors and assigns, covenants and agrees, and each
Holder of any Securities, by his or its acceptance thereof, likewise covenants
and agrees, that the indebtedness evidenced by the Securities (and any renewals
or extensions thereof), including the principal of, premium, if any, and
interest (including Contingent Payments and any Make-Whole Amount) thereon and
any interest payable on such interest (including Contingent Payments and any
Make-Whole Amount), and requirements that the Company make repurchases or
redemptions shall be subordinate and subject in right of payment, to the extent
and in the manner hereinafter set forth, to the prior payment in full in cash or
Cash Equivalents of all Obligations in respect of Senior Debt, and that each
holder of Senior Debt whether now outstanding or hereafter created, incurred,
assumed or guaranteed shall be deemed to have acquired Senior Debt in reliance
upon the covenants and provisions contained in this Indenture and the
Securities.
SECTION 13.2. SECURITIES SUBORDINATED TO PRIOR PAYMENT OF ALL
SENIOR DEBT ON DISSOLUTION, LIQUIDATION, REORGANIZATION, ETC. OF THE COMPANY.
Upon any payment or distribution of the assets of the Company of any kind or
character, whether in cash, property or securities (including any Collateral at
any time securing the Securities) to creditors upon any dissolution, winding-up,
total or partial liquidation, reorganization, or recapitalization or
readjustment of the Company or its property or securities (whether voluntary or
involuntary, or in bankruptcy, insolvency, reorganization, liquidation, or
receivership proceedings, or upon an assignment for the benefit of creditors, or
any other marshalling of the assets and liabilities of the Company or
otherwise), then in such event,
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(i) all holders of Senior Debt shall first be
entitled to receive payment in full, in cash or Cash Equivalents, of
all Obligations in respect of Senior Debt before any payment is made on
account of Obligations, including, without limitation, the principal,
premium, if any, or interest (including Contingent Payments and any
Make-Whole Amount), in respect of the Securities or in respect of any
Offer to Purchase Price;
(ii) any payment or distribution of assets of the
Company, of any kind or character, whether in cash, property or
securities (other than, to the extent issued in exchange for the
Securities, Permitted Junior Securities), to which the Holders, or the
Trustee on behalf of the Holders, would be entitled except for the
provisions of this Article XIII, shall be paid or delivered by any
debtor or other person making such payment or distribution, directly to
the holders of the Senior Debt or 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 amounts
remaining unpaid on account of the Senior Debt held or represented by
each, for application to payment of all Obligations in respect of
Senior Debt remaining unpaid, to the extent necessary to pay all
Obligations in respect of Senior Debt in full, in cash or Cash
Equivalents, after giving effect to any concurrent payment or
distribution to the holders of such Senior Debt; and
(iii) in the event that, notwithstanding the
foregoing provisions of this Section 13.2, any payment or distribution
of assets of the Company, whether in cash, property or securities
(other than, to the extent issued in exchange for the Securities,
Permitted Junior Securities), shall be received by the Trustee or the
Holders before all Obligations in respect of Senior Debt are paid in
full, in cash or Cash Equivalents, such payment or distribution
(subject to the provisions of Sections 13.6 and 13.7) shall be held in
trust for the benefit of, and shall be immediately paid or delivered by
the Trustee or such Holders, as the case may be, to the holders of
Senior Debt remaining unpaid or unprovided for, or 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 amounts
remaining unpaid on account of the Obligations in respect of Senior
Debt held or represented by each, for application to the payment of all
Obligations in respect of Senior Debt remaining unpaid, to the extent
necessary to pay all Obligations in respect of Senior Debt in full in
cash or Cash Equivalents, after giving effect to any concurrent payment
or distribution to the holders of such Senior Debt.
Without limiting the foregoing, the Company shall give prompt
written notice to the Trustee and any Paying Agent of any action or plan of
dissolution, winding-up, liquidation or reorganization of the Company or any
other facts known to it which would cause a payment to violate this Article
XIII.
Upon any payment or distribution of assets of the Company
referred to in this Article XIII, the Trustee, subject to the provisions of
Section 8.1 and Section 8.2, and the Holders shall be entitled to rely upon any
order or decree made by any court of competent
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jurisdiction in which such dissolution, winding-up, liquidation or
reorganization proceeding is 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 Company, the amount thereof payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
XIII.
SECTION 13.3. HOLDERS OF SECURITIES TO BE SUBROGATED TO RIGHT
OF HOLDERS OF SENIOR DEBT. Subject to the payment in full of all Obligations in
respect of Senior Debt in cash or Cash Equivalents, the Holders of the
Securities shall be subrogated (equally and ratably with the holders of all
Senior Subordinated Debt) to the rights of the holders of Senior Debt to receive
payments or distributions of assets of the Company applicable to the Senior Debt
until the principal of, premium, if any, and interest (including Contingent
Payments) on, the Securities, including the Change of Control Offer Price, if
applicable, shall be paid in full, and for purposes of such subrogation, no
payments or distributions to the holders of Senior Debt of assets, whether in
cash, property or securities, distributable to the holders of Senior Debt under
the provisions hereof to which the Holders would be entitled except for the
provisions of this Article XIII, and no payment over pursuant to the provisions
of this Article XIII to the holders of Senior Debt by the Holders shall, as
between the Company, its creditors (other than the holders of Senior Debt) and
the Holders, be deemed to be a payment by the Company to or on account of Senior
Debt, it being understood that the provisions of this Article XIII are, and are
intended, solely for the purpose of defining the relative rights of the Holders,
on the one hand, and the holders of Senior Debt, on the other hand.
SECTION 13.4. OBLIGATIONS OF THE COMPANY UNCONDITIONAL.
Nothing contained in this Article XIII or elsewhere in this Indenture or in any
Security (but subject to the provisions of Section 3.2) is intended to or shall
impair or affect, as between the Company, its creditors (other than the holders
of Senior Debt) and the Holders, the obligation of the Company, which is
absolute and unconditional, to pay to the Holders the principal of, premium, if
any, and interest (including Contingent Payments) on, the Securities, and the
Change of Control Offer Price, if applicable, as and when the same shall become
due and payable in accordance with their terms, or to affect the relative rights
of the Holders and creditors of the Company other than the holders of Senior
Debt, nor shall anything herein or therein prevent or limit the Trustee or any
Holder from exercising all remedies otherwise permitted by applicable law upon
the happening of an Event of Default hereunder, subject to the provisions of
Article VII hereof and to the rights, if any, under this Article XIII of the
holders of Senior Debt in respect of assets, whether in cash, property or
securities, of the Company received upon the exercise of any such remedy.
Nothing contained in this Article XIII or elsewhere in this Indenture or in the
Securities, shall, except during the pendency of any dissolution, winding-up,
total or partial liquidation, reorganization, recapitalization or readjustment
of the Company or its securities (whether voluntary or involuntary, or in
bankruptcy, insolvency, reorganization, liquidation or receivership proceedings,
or upon an assignment for the benefit of creditors, or any other marshalling of
assets and liabilities of the Company or otherwise), affect the obligation of
the Company to make, or prevent the Company from making, at any time (except
under the circumstances described in Section 13.5 hereof), payment of principal
of, premium, if any, or interest (including
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Contingent Payments) on, the Securities, or the Change of Control Offer Price,
if applicable, in respect of any Securities.
SECTION 13.5. COMPANY NOT TO MAKE PAYMENTS WITH RESPECT TO
SECURITIES IN CERTAIN CIRCUMSTANCES.
(a) Upon the maturity of any Senior Debt by lapse of time,
acceleration or otherwise, all principal thereof and interest thereon and all
other Obligations in respect thereof shall first be paid in full in cash or Cash
Equivalents, or such payment duly provided for, and, in the case of Senior Debt
in respect of letters of credit to the extent they have not been drawn upon, be
fully secured by cash collateral, before any payment is made on account of
Obligations, including, without limitation, principal of, premium, if any, or
interest (including Contingent Payments and any Make-Whole Amount), in respect
of the Securities in cash or property or to acquire or repurchase any of the
Securities.
(b) Upon the happening of a default or an event of default (as
such term is used in the documentation governing Senior Debt) in respect of the
payment of any Obligations in respect of Senior Debt, then, unless and until
such default or event of default shall have been cured or waived by the holders
of such Senior Debt or shall have ceased to exist, no payment shall be made by
or on behalf of the Company with respect to Obligations (except in the form of
Secondary Securities in accordance with the provisions of this Indenture),
including, without limitation, the principal of, premium, if any, or interest
(including Contingent Payments and any Make-Whole Amount), in respect of the
Securities in cash or property or to acquire or repurchase any of the
Securities.
(c) Upon the happening of a default or an event of default
with respect to any Senior Debt (as such terms are used in the documentation
governing Senior Debt), other than a default in payment of the principal of,
premium, if any, or interest on the Senior Debt, or if an event of default would
result upon any payment with respect to the Securities, upon written notice,
which notice shall specify that such notice constitutes a payment blockage
notice pursuant to and for purposes of, this Section 13.5(c), of the default
given to the Company and the Trustee by the (i) holders of Designated Senior
Debt representing a majority of the principal amount thereof or their
representative, or (ii) the Minimum Payment Guarantor, then, unless and until
such default or event of default has been cured or waived or otherwise has
ceased to exist, no payment may be made by or on behalf of the Company with
respect to Obligations, including, without limitation, the principal of,
premium, if any, or interest (including Contingent Payments and any Make-Whole
Amount), in respect of the Securities in cash or property, or to acquire or
repurchase any of the Securities for cash or property. Notwithstanding the
foregoing, unless the Designated Senior Debt or Minimum Payment Guaranty
Obligations in respect of which such default or event of default exists has been
declared due and payable in its entirety, in the case of a default, within 30
days and, in the case of an event of default, within 180 days after the date
written notice of such default or event of default is delivered as set forth
above (the "Payment Blockage Period"), and such declaration has not been
rescinded, the Company is required (subject to the provisions of Section 13.2
and Sections 13.5(a) and (b), to the extent then applicable) then to pay all
sums not paid to the Holders of the Securities during the Payment
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Blockage Period due to the foregoing prohibitions and to resume all other
payments as and when due on the Securities. Any number of such notices may be
given; PROVIDED, HOWEVER, that (i) during any 360 consecutive days, the
aggregate of all Payment Blockage Periods shall not exceed 180 days, (ii) there
shall be a period of at least 180 consecutive days during each continuous
360-day period when no Payment Blockage Period is in effect, and (iii) any
default or event of default that resulted in the commencement of a 180-day
period may not be the basis for the commencement of any other 180-day period;
PROVIDED, HOWEVER, that (a) a default or event of default that resulted in the
commencement of a 180-day period may be the basis for the commencement of
another 180-day period if such default or event of default was cured or waived
for at least 90 days, (b) for the purpose of this clause (iii), separate
breaches of the same covenant shall be deemed to give rise to separate defaults
or events of default, and (c) for purposes of this clause (iii), any breach of a
financial covenant for a subsequent period shall be deemed to give rise to a
separate default or event of default.
In the event that, notwithstanding the foregoing provisions of
this Section 13.5, any payment or distribution of assets of the Company, whether
in cash, property or securities, shall be received by the Trustee or the Holders
at a time when such payment or distribution should not have been made because of
this Section 13.5, such payment or distribution (subject to the provisions of
Sections 13.6 and 13.7) shall be held in trust for the benefit of the holders
of, and shall be paid or delivered by the Trustee or such Holders, as the case
may be, to the holders of the Senior Debt remaining unpaid or unprovided for or
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 amounts remaining
unpaid on account of the Senior Debt held or represented by each, for
application to the payment of all Obligations in respect of Senior Debt
remaining unpaid, to the extent necessary to pay all Obligations in respect of
Senior Debt in full, in cash or Cash Equivalents, after giving effect to any
concurrent payment or distribution to the holders of such Obligations in respect
of Senior Debt.
SECTION 13.6. 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 the Trustee shall have
received written notice thereof at its Corporate Trust Office from the Company
or any Guarantor or from one or more holders of Senior Debt or from any
representative thereof or trustee therefor, and, prior to the receipt of any
such written notice, the Trustee, subject to the provisions of Sections 8.1 and
8.2 hereof, shall be entitled to assume conclusively that no such facts exist,
and shall be fully protected in making any such payment in any such event.
The Trustee shall be entitled to rely on the delivery to it of
a written notice by a Person representing himself or itself to be a holder of
Senior Debt (or a trustee on behalf of such holder) to establish that such
notice has been given by a holder of Senior Debt or a trustee on behalf of any
such holder. In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of
Senior Debt to participate in any payment or distribution pursuant to this
Article XIII, the Trustee may request
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such Person to furnish evidence to the reasonable satisfaction of the Trustee as
to the amount of Senior Debt held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article XIII, and, if
such evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 13.7. APPLICATION BY TRUSTEE OF MONIES DEPOSITED WITH
IT. Any deposit of monies by the Company with the Trustee or any Paying Agent
(whether or not in trust) for the payment of the principal of, premium, if any,
or interest (including Contingent Payments and any Make-Whole Amount) on, any
Securities or Offer to Purchase Price in respect of any Securities shall be
subject to the provisions of Sections 13.1, 13.2, 13.3 and 13.5 hereof, except
that, if prior to the opening of business on the second Business Day next prior
to the date on which, by the terms of this Indenture, any such monies may become
payable for any purpose (including, without limitation, the payment of principal
of, premium, if any, or interest (including Contingent Payments and any
Make-Whole Amount) on, or Offer to Purchase Price in respect of, any Security)
the Trustee shall not have received with respect to such monies the notice
provided for in Section 13.6, then the Trustee shall have the full power and
authority to receive such monies and to apply such monies 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; without, however,
limiting any rights that holders of Senior Debt may have to recover any such
payments from the Holders in accordance with the provisions of this Article
XIII.
SECTION 13.8. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR
OMISSIONS OF COMPANY OR HOLDERS OF SENIOR DEBT. No right of any present or
future holder of any Senior Debt to enforce subordination, as herein provided,
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Company or by any act or failure to act, in good faith,
by any such holder, or by any non-compliance by the Company with the terms,
provisions and covenants of this Indenture, the Securities, or any other
agreement or instrument regardless of any knowledge thereof any such holder may
have or be otherwise charged with.
Each Holder of any Securities, by his acceptance thereof,
undertakes and agrees for the benefit of each holder of Senior Debt to execute,
verify, deliver and file any proofs of claim, consents, assignments or other
instruments that any holder of Senior Debt may at any time require in order to
prove and realize upon any rights or claims pertaining to the Securities and to
effectuate the full benefit of the subordination contained in this Article XIII,
and upon failure of any Holder of any Security so to do, any such holder of
Senior Debt (or a trustee or representative on its behalf) shall be deemed to be
irrevocably appointed the agent and attorney-in-fact of the Holder of such
Security to execute, verify, deliver and file any such proofs of claim,
consents, assignments or other instrument.
Subject to the definition of Senior Debt and without limiting
the effect of the first paragraph of this Section 13.8, any holder of Senior
Debt may at any time and from time to time without the consent of or notice to
any Holder, without impairing or releasing any of the rights of any such holder
of Senior Debt hereunder, upon or without any terms or conditions and in whole
or in part:
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(1) change the manner, place or terms of payment, or
change or extend the time of payment of or increase the amount of,
renew or alter, any Senior Debt or any other liability of the Company
to such holder, any security therefor, or any liability incurred
directly or indirectly in respect thereof, and the provisions hereof
shall apply to the Senior Debt of such holder as so changed, extended,
renewed or altered;
(2) sell, exchange, release, surrender, realize upon
or otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or however
securing, any Senior Debt or any other liability of the Company to such
holder or any other liabilities incurred directly or indirectly in
respect thereof or hereof, or any offset against it;
(3) exercise or refrain from exercising any rights or
remedies against the Company or others or otherwise act or refrain from
acting or for any reason fail to file, record or otherwise perfect any
security interest in or lien on any property of the Company or any
other Person;
(4) settle or compromise any Senior Debt or any other
liability of the Company to such holder or any security therefor, or
any liability incurred directly or indirectly in respect thereof or
hereof, and may subordinate the payment of all or any part thereof to
the payment of any liability (whether due or not) of the Company to
creditors of the Company other than such holder; and
(5) apply any sums by whomsoever paid and however
realized to any liability or liabilities of the Company to such holder
(other than in respect of the Securities or any liability or
liabilities which rank PARI PASSU or junior in right of payment to the
Securities) regardless of what liability or liabilities of the Company
to such holder remain unpaid.
SECTION 13.9. HOLDERS OF SECURITIES AUTHORIZE TRUSTEE TO
EFFECTUATE SUBORDINATION OF SECURITIES. Without purporting to limit the
authority of the Trustee as may be appropriate in other circumstances, each
Holder by his or its acceptance thereof irrevocably authorizes and expressly
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article XIII and
appoints the Trustee his attorney-in-fact for such purpose, including, in the
event of any dissolution, winding-up or liquidation or reorganization under
Bankruptcy Law of the Company (whether in bankruptcy, insolvency or receivership
proceedings or otherwise), the timely filing of a claim for the unpaid balance
of its or his Securities in the form required in such proceedings and the
causing of such claim to be approved. If the Trustee does not file a claim or
proof of debt substantially in the form required in such proceeding at least one
day before the expiration of the time to file such claims or proofs, then any of
the holders of Senior Debt have the right to file such proof of claim or debt on
behalf of the Holders, and to take any action with respect to such proof of
claim or debt permitted to be taken by the holders of Senior Debt pursuant to
this Indenture, the Securities or by law; PROVIDED, HOWEVER, that no such action
by holders of Senior
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Debt shall in any way limit or affect the rights of the Holders or the Trustee
hereunder or under the Securities or applicable law.
SECTION 13.10. RIGHT OF TRUSTEE TO HOLD SENIOR DEBT;
PRESERVATION OF TRUSTEE'S RIGHTS. Subject to Section 8.3, the Trustee, in its
individual capacity, shall be entitled to all of the rights set forth in this
Article Thirteen 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.
Nothing in this Article XIII shall apply to claims of, or payment to, the
Trustee under or pursuant to Section 8.7.
SECTION 13.11. ARTICLE XIII NOT TO PREVENT EVENTS OF DEFAULT.
The failure to make a payment on account of principal of, premium, if any, or
interest (including Contingent Payments) on, the Securities, the Change of
Control Offer Price in respect of the Securities, by reason by any provision in
this Article XIII shall not be construed as preventing the occurrence of an
Event of Default under Section 7.1 hereof.
SECTION 13.12. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR
DEBT. The provisions of this Indenture are not intended to create, nor shall
they create, any trust or fiduciary relationship between the Trustee and the
holders of Senior Debt, nor shall any implied covenants or obligations with
respect to holders of Senior Debt (other than those expressly set forth herein)
be read into this Indenture against the Trustee. Accordingly, notwithstanding
any provision of this Article XIII to the contrary, the Trustee shall not be
liable to any such holders if it shall, in good faith, inadvertently pay over or
distribute to Holders or the Company or any other person monies or assets to
which any holders of Senior Debt shall be entitled by virtue of this Article
XIII or otherwise.
SECTION 13.13. TRUST MONIES NOT SUBORDINATED. Notwithstanding
anything contained herein to the contrary and subject to the prior satisfaction
of all of the conditions set forth in Article IX, payments from money held in
trust under Article IX by the Trustee for the payment of principal of, premium,
if any, or interest (including Contingent Payments) on, the Securities, or
Change of Control Purchase Price in respect of the Securities shall not be
subordinated to the prior payment of any Senior Debt of the Company or subject
to the restrictions set forth in this Article Thirteen and none of the Holders
shall be obligated to pay over any such amount to the Company or any holder of
Senior Debt of the Company or any other creditor of the Company, in each case so
long as (and only so long as) at the time the respective amounts were deposited
pursuant to Article IX, such amounts would have been permitted to be paid
directly in respect of Obligations, including without limitation, principal of,
premium, if any, and interest (including Contingent Payments), in respect of the
Securities in accordance with the provisions (other than this Section 13.13) of
this Article XIII.
ARTICLE XIV.
SUBORDINATION OF GUARANTY
SECTION 14.1. GUARANTY SUBORDINATED TO GUARANTOR SENIOR DEBT.
Each Guarantor, for itself, its successors and assigns, covenants and agrees,
and each Holder of any
105
Securities, by his or its acceptance thereof, likewise covenants and agrees,
that payments by such Guarantor in respect of the Guaranty and/or the Parent
Guaranty, as applicable (the "Guaranties"), shall be subordinate and subject in
right of payment, to the extent and in the manner hereinafter set forth, to the
prior payment in full, in cash or Cash Equivalents, of all Obligations in
respect of Guarantor Senior Debt, and that each holder of Guarantor Senior Debt
whether now outstanding or hereafter created, incurred, assumed or guaranteed
shall be deemed to have acquired Guarantor Senior Debt in reliance upon the
covenants and provisions contained in this Indenture and the Securities. For
purposes of this Article XIV, "payment in respect of the Guaranties" means any
payment made by or on behalf of a Guarantor in respect of the Guaranties,
including, but not limited to, any payment on account of the principal of,
premium, if any, or interest (including Contingent Payments and any Make-Whole
Amount) on the Securities in cash or property or to acquire or repurchase any of
the Securities.
SECTION 14.2. GUARANTY SUBORDINATED TO PRIOR PAYMENT OF ALL
GUARANTOR SENIOR DEBT ON DISSOLUTION, LIQUIDATION, REORGANIZATION, ETC. OF THE
GUARANTOR. Upon any payment or distribution of the assets of any Guarantor of
any kind or character, whether in cash, property or securities (including any
Collateral at any time securing the Securities) to creditors upon any
dissolution, or winding-up, or total or partial liquidation, or reorganization,
or recapitalization or readjustment of such Guarantor or its property or
securities (whether voluntary or involuntary, or in bankruptcy, insolvency,
reorganization, liquidation, or receivership proceedings, or upon an assignment
for the benefit of creditors, or any other marshalling of the assets and
liabilities of such Guarantor or otherwise), then in such event,
(i) the holders of all Guarantor Senior Debt shall
first be entitled to receive payment in full, in cash or Cash
Equivalents, before any payment of Obligations in respect of the
Guaranties are made;
(ii) any payment or distribution of assets of any
Guarantor of any kind or character, whether in cash, property or
securities (other than, to the extent issued in connection with an
issuance of Permitted Junior Securities, such Permitted Junior
Securities may be guaranteed, on a subordinated basis, by one or more
Permitted Guaranties), to which the Holders, or the Trustee on behalf
of the Holders, would be entitled except for the provisions of this
Article XIV, shall be paid or delivered by any debtor or other person
making such payment or distribution, directly to the holders of the
Guarantor Senior Debt or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any
instruments evidencing any of such Guarantor Senior Debt may have been
issued, ratably according to the aggregate amounts remaining unpaid on
account of the Guarantor Senior Debt held or represented by each, for
application to payment of all Obligations in respect of Guarantor
Senior Debt remaining unpaid, to the extent necessary to pay all
Obligations in respect of Guarantor Senior Debt in full, in cash or
Cash Equivalents, after giving effect to any concurrent payment or
distribution to the holders of such Guarantor Senior Debt; and
(iii) in the event that, notwithstanding the
foregoing provisions of this Section 14.2, any payment or distribution
of assets of any Guarantor of any kind or
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character, whether in cash, property or securities (other than, to
the extent issued in connection with an issuance of Permitted Junior
Securities, such Permitted Junior Securities may be guaranteed, on a
subordinated basis, by one or more Permitted Guaranties), shall be
received by the Trustee or the Holders before all Obligations in
respect of Guarantor Senior Debt are paid in full, in cash or Cash
Equivalents, such payment or distribution (subject to the provisions
of Sections 14.6 and 14.7) shall be held in trust for the benefit
of, and shall be immediately paid or delivered by the Trustee or
such Holders, as the case may be, to the holders of Guarantor Senior
Debt remaining unpaid or unprovided for, or their representative or
representatives, or to the trustee or trustees under any indenture
pursuant to which any instruments evidencing any of such Guarantor
Senior Debt may have been issued, ratably according to the aggregate
amounts remaining unpaid on account of the Obligations in respect of
Guarantor Senior Debt held or represented by each, for application
to the payment of all Obligations in respect of Guarantor Senior
Debt remaining unpaid, to the extent necessary to pay all
Obligations in respect of Guarantor Senior Debt in full, in cash or
Cash Equivalents, after giving effect to any concurrent payment or
distribution to the holders of such Guarantor Senior Debt.
Without limiting the foregoing, each Guarantor shall give
prompt notice to the Trustee and any Paying Agent of any dissolution,
winding-up, liquidation or reorganization of such Guarantor or any other facts
known to it which would cause a payment to violate this Article XIV.
Upon any payment or distribution of assets of any Guarantor
referred to in this Article XIV, the Trustee, subject to the provisions of
Section 8.1 and Section 8.2, 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 proceeding is 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
Guarantor Senior Debt and other Debt of such Guarantor, the amount thereof
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article XIV.
SECTION 14.3. HOLDERS OF SECURITIES TO BE SUBROGATED TO RIGHT
OF HOLDERS OF GUARANTOR SENIOR DEBT. Subject to the payment in full of all
Obligations in respect of Guarantor Senior Debt in cash or Cash Equivalents, the
Holders of the Securities shall be subrogated (equally and ratably with the
holders of all Indebtedness of the Guarantor that, by its terms, ranks pari
passu with the Guaranties) to the rights of the holders of Guarantor Senior Debt
to receive payments or distributions of assets of each Guarantor applicable to
the Guarantor Senior Debt until the principal of, premium, if any, and interest
(including Contingent Payments) on, the Securities, including the Offer to
Purchase Price, if any, shall be paid in full, and for purposes of such
subrogation, no payments or distributions to the holders of Guarantor Senior
Debt of assets, whether in cash, property or securities, distributable to the
holders of Guarantor Senior Debt under the provisions hereof to which the
Holders would be entitled except for the provisions of this Article XIV, and no
payment over pursuant to the provisions of this Article XIV to the holders of
Guarantor Senior Debt by the Holders shall, as between such Guarantor, its
creditors
107
(other than the holders of Guarantor Senior Debt) and the Holders, be deemed to
be a payment by such Guarantor to or on account of Guarantor Senior Debt, it
being understood that the provisions of this Article XIV are, and are intended,
solely for the purpose of defining the relative rights of the Holders, on the
one hand, and the holders of Guarantor Senior Debt, on the other hand.
SECTION 14.4. OBLIGATIONS OF THE GUARANTOR UNCONDITIONAL.
Nothing contained in this Article XIV or elsewhere in this Indenture or in any
Security (but subject to the provisions of Section 3.2) is intended to or shall
impair or affect, as between each Guarantor, its creditors (other than the
holders of Guarantor Senior Debt) and the Holders, the obligation of such
Guarantor under the Guaranties, or to affect the relative rights of the Holders
and creditors of such Guarantor, other than the holders of Guarantor Senior
Debt, nor shall anything herein or therein prevent or limit the Trustee or any
Holder from exercising all remedies otherwise permitted by applicable law upon
the happening of an Event of Default hereunder, subject to the provisions of
Article VII hereof and to the rights, if any, under this Article XIV of the
holders of Guarantor Senior Debt in respect of assets, whether in cash, property
or securities, of the Guarantor, received upon the exercise of any such remedy.
Nothing contained in this Article XIV or elsewhere in this Indenture or in the
Securities, shall, except during the pendency of any dissolution, winding-up,
total or partial liquidation, reorganization, recapitalization or readjustment
of such Guarantor or its securities (whether voluntary or involuntary, or in
bankruptcy, insolvency, reorganization, liquidation or receivership proceedings,
or upon an assignment for the benefit of creditors, or any other marshalling of
assets and liabilities of the Guarantor or otherwise), affect the obligation of
such Guarantor to make, or prevent such Guarantor from making, at any time
(except under the circumstances described in Section 14.5 hereof), any payment
in respect of the Guaranties.
SECTION 14.5. GUARANTORS NOT TO MAKE PAYMENTS IN RESPECT OF
THE GUARANTIES IN CERTAIN CIRCUMSTANCES.
(a) Upon the maturity of any Guarantor Senior Debt by lapse of
time, acceleration or otherwise, all principal thereof and interest thereon and
all other Obligations in respect thereof shall first be paid in full in cash or
Cash Equivalents, or such payment duly provided for, and, in the case of
Guarantor Senior Debt in respect of letters of credit to the extent they have
not been drawn upon, be fully secured by cash collateral, before any payment on
account of Obligations in respect of the Guaranties are made.
(b) Upon the happening of a default or an event of default (as
such term is used in such instrument) in respect of the payment of any Guarantor
Senior Debt, then, unless and until such default shall have been cured or waived
by the holders of such Guarantor Senior Debt or shall have ceased to exist, no
payment in respect of the Guaranties shall be made.
(c) No payment in respect of the Guaranties may be made during
any Payment Blockage Period. Notwithstanding the foregoing, unless the
Designated Senior Debt or Guarantor Senior Debt in respect of which such default
or event of default exists has been declared due and payable in its entirety
during the Payment Blockage Period, and such
108
declaration has not been rescinded, the Guarantors are required (subject to the
provisions of Section 14.2 and Sections 14.5(a) and (b), to the extent then
applicable) then to pay all sums not paid to the Holders of the Securities
during the Payment Blockage Period due to the foregoing prohibitions and to
resume all other payments as and when due on the Securities.
SECTION 14.6. 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 the Trustee shall have
received written notice thereof at its Corporate Trust Office from the Company
or any Guarantor or from one or more holders of Guarantor Senior Debt or from
any representative thereof or trustee therefor, and, prior to the receipt of any
such written notice, the Trustee, subject to the provisions of Sections 8.1 and
8.2 hereof, shall be entitled to assume conclusively that no such facts exist,
and shall be fully protected in making any such payment in any such event.
The Trustee shall be entitled to rely on the delivery to it of
a written notice by a Person representing himself or itself to be a holder of
Guarantor Senior Debt (or a trustee on behalf of such holder) to establish that
such notice has been given by a holder of Guarantor Senior Debt or a trustee on
behalf of any such holder. In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any Person
as a holder of Guarantor Senior Debt to participate in any payment or
distribution pursuant to this Article XIV, the Trustee may request such Person
to furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of Guarantor Senior Debt held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article XIV, and, if
such evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 14.7. APPLICATION BY TRUSTEE OF MONIES DEPOSITED WITH
IT. Any deposit of monies by any Guarantor with the Trustee or any Paying Agent
(whether or not in trust) for any payment in respect of the Guaranties shall be
subject to the provisions of Sections 14.1, 14.2, 14.3 and 14.5 hereof except
that, if prior to the opening of business on the second Business Day next prior
to the date on which, by the terms of this Indenture, any such monies may become
payable for any purpose (including, without limitation, the payment of principal
of, or premium (if any) or interest (including Contingent Payments and any
Make-Whole Amount) on, or the Offer to Purchase Price in respect of, any
Security) the Trustee shall not have received with respect to such monies the
notice provided for in Section 14.6, then the Trustee shall have the full power
and authority to receive such monies and to apply such monies 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; without, however,
limiting any rights that holders of Guarantor Senior Debt may have to recover
any such payments from the Holders in accordance with the provisions of this
Article XIV.
SECTION 14.8. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR
OMISSIONS OF A GUARANTOR OR HOLDERS OF GUARANTOR SENIOR DEBT. No right of any
present or future holder of any
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Guarantor Senior Debt to enforce subordination, as herein provided, shall at any
time in any way be prejudiced or impaired by any act or failure to act on the
part of any Guarantor or by any act or failure to act, in good faith, by any
such holder, or by any non-compliance by such Guarantor with the terms,
provisions and covenants of this Indenture, the Securities, or any other
agreement or instrument regardless of any knowledge thereof any such holder may
have or be otherwise charged with.
Each Holder of any Securities, by his acceptance thereof,
undertakes and agrees for the benefit of each holder of Guarantor Senior Debt to
execute, verify, deliver and file any proofs of claim, consents, assignments or
other instruments that any holder of Guarantor Senior Debt may at any time
require in order to prove and realize upon any rights or claims pertaining to
the Guaranties and to effectuate the full benefit of the subordination contained
in this Article XIV; and upon failure of any Holder of any Security so to do,
any such holder of Guarantor Senior Debt (or a trustee or representative on its
behalf) shall be deemed to be irrevocably appointed the agent and
attorney-in-fact of the Holder of such Security to execute, verify, deliver and
file any such proofs of claim, consents, assignments or other instrument.
Subject to the definition of Guarantor Senior Debt and without
limiting the effect of the first paragraph of this Section 14.8, any holder of
Guarantor Senior Debt may at any time and from time to time without the consent
of or notice to any Holder, without impairing or releasing any of the rights of
any such holder of Guarantor Senior Debt hereunder, upon or without any terms or
conditions and in whole or in part:
(1) change the manner, place or terms of payment, or
change or extend the time of payment of or increase the amount of,
renew or alter, any Guarantor Senior Debt or any other liability of the
Guarantors to such holder, any security therefor, or any liability
incurred directly or indirectly in respect thereof, and the provisions
hereof shall apply to the Guarantor Senior Debt of such holder as so
changed, extended, renewed or altered;
(2) sell, exchange, release, surrender, realize upon
or otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or however
securing, any Guarantor Senior Debt or any other liability of the
Guarantors to such holder or any other liabilities incurred directly or
indirectly in respect thereof or hereof, or any offset against it;
(3) exercise or refrain from exercising any rights or
remedies against the Guarantors or others or otherwise act or refrain
from acting or for any reason fail to file, record or otherwise perfect
any security interest in or lien on any property of the Guarantors or
any other Person;
(4) settle or compromise any Guarantor Senior Debt or
any other liability of the Company to such holder or any security
therefor, or any liability incurred directly or indirectly in respect
thereof or hereof, and may subordinate the payment of all or any part
thereof to the payment of any liability (whether due or not) of the
Guarantors to creditors of the Guarantors other than such holder; and
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(5) apply any sums by whomsoever paid and however
realized to any liability or liabilities of the Guarantors to such
holder (other than in respect of the Guaranties or any liability or
liabilities which rank pari passu or junior in right of payment to the
Guaranties) regardless of what liability or liabilities of the
Guarantors to such holder remain unpaid.
SECTION 14.9. HOLDERS OF SECURITIES AUTHORIZE TRUSTEE TO
EFFECTUATE SUBORDINATION OF GUARANTIES. Without purporting to limit the
authority of the Trustee as may be appropriate in other circumstances, each
Holder by his or its acceptance thereof irrevocably authorizes and expressly
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article XIV and
appoints the Trustee his attorney-in-fact for such purpose, including, in the
event of any dissolution, winding-up or liquidation or reorganization under
Bankruptcy Law of any Guarantor (whether in bankruptcy, insolvency or
receivership proceedings or otherwise), the timely filing of a claim for the
unpaid balance of its or his Securities in the form required in such proceedings
and the causing of such claim to be approved. If the Trustee does not file a
claim or proof of debt substantially in the form required in such proceeding at
least one day before the expiration of the time to file such claims or proofs,
then any of the holders of Guarantor Senior Debt have the right to file such
proof of claim or debt on behalf of the Holders, and to take any action with
respect to such proof of claim or debt permitted to be taken by the holders of
Guarantor Senior Debt pursuant to this Indenture, the Securities or by law;
PROVIDED, HOWEVER, that no such action by holders of Guarantor Senior Debt shall
in any way limit or affect the rights of the Holders or the Trustee hereunder or
under the Guaranties or applicable law.
SECTION 14.10. RIGHT OF TRUSTEE TO HOLD GUARANTOR SENIOR DEBT;
PRESERVATION OF TRUSTEE'S RIGHTS. Subject to Section 8.3, the Trustee, in its
individual capacity, shall be entitled to all of the rights set forth in this
Article XIV in respect of any Guarantor Senior Debt at any time held by it to
the same extent as any other holder of Guarantor Senior Debt, and nothing in
this Indenture shall be construed to deprive the Trustee of any of its rights as
such holder. Nothing in this Article XIV shall apply to claims of, or payment
to, the Trustee under or pursuant to Section 8.7.
SECTION 14.11. ARTICLE XIV NOT TO PREVENT EVENTS OF DEFAULT.
The failure to make a payment in respect of the Guaranties, by reason by any
provision in this Article XIV shall not be construed as preventing the
occurrence of an Event of Default under Section 7.1 hereof.
SECTION 14.12. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF GUARANTOR
SENIOR DEBT. The provisions of this Indenture are not intended to create, nor
shall they create, any trust or fiduciary relationship between the Trustee and
the holders of Guarantor Senior Debt, nor shall any implied covenants or
obligations with respect to holders of Guarantor Senior Debt (other than those
expressly set forth herein) be read into this Indenture against the Trustee.
Accordingly, notwithstanding any provision of this Article XIV to the contrary,
the Trustee shall not be liable to any such holders if it shall, in good faith,
inadvertently pay over or distribute to Holders or the Guarantor or any other
person monies or assets to which any holders of Guarantor Senior Debt shall be
entitled by virtue of this Article or otherwise.
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SECTION 14.13. TRUST MONIES NOT SUBORDINATED. Notwithstanding
anything contained herein to the contrary and subject to the prior satisfaction
of all of the conditions set forth in Article IX, payments from money held in
trust under Article IX by the Trustee for any payment in respect of the
Guaranties shall not be subordinated to the prior payment of any Guarantor
Senior Debt or subject to the restrictions set forth in this Article XIV and
none of the Holders shall be obligated to pay over any such amount to the
Guarantors or any holder of Guarantor Senior Debt or any other creditor of the
Company, in each case so long as (and only so long as) at the time the
respective amounts were deposited pursuant to Article IX, such amounts would
have been permitted to be paid directly in respect of the Guaranties in
accordance with the provisions (other than this Section 14.13) of this Article
XIV.
ARTICLE XV.
MISCELLANEOUS
SECTION 15.1. 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 15.2. NOTICES. Any notices or other communications to
the Company, any Guarantor or the Trustee required or permitted hereunder shall
be in writing, and shall be sufficiently given if made by hand delivery, by
telex, by telecopier or registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
if to the Company or any Subsidiary Guarantor:
000 Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Corporate Secretary
if to the Parent Guarantor or any Development Company:
000 Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Corporate Secretary
if to the Trustee:
Norwest Bank Minnesota, National Association
Norwest Center
6th and Marquette
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Corporate Trust Department
The Company, 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
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notice or communication to the Company, any Guarantor or the Trustee shall be
deemed to have been given or made as of the date so delivered, if personally
delivered; when answered back, if telexed; when receipt is acknowledged, if
telecopied; and five 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.
In addition to any other notices required or permitted to be
given pursuant to this Indenture, the Trustee shall, promptly after its delivery
of any written notice to the Company (x) which specifically states that an Event
of Default is in existence or (y) pursuant to the first paragraph of Section 7.2
(or promptly after its receipt of any such notice delivered to it by the
Holders), send to the Regulating Authority (at the address set forth below) a
copy of such written notice; provided, however, that any failure or delay in
giving any such notice shall not affect or impair the validity of said notice or
any action taken pursuant thereto (or otherwise pursuant to this Indenture, any
Collateral Document or the Intercreditor Agreement) and shall give rise to no
liability (monetary or otherwise) on the part of the Trustee or any Secured
Creditor to any Holder, the Regulating Authority or any other Person. All
notices to the Regulating Authority pursuant to this paragraph shall be mailed
(or sent by reputable courier) to the Regulating Authority at the following
address (or such other address as the Regulating Authority provides to the
Trustee from time to time for its receipt of notices pursuant to this
paragraph):
Louisiana Gaming Control Board
0000 Xxxxxxxxxx Xxxxxx Xxxx.
Xxxxx 000
Xxxxx Xxxxx, XX 00000
Attention: Chairman
SECTION 15.3. COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Guarantors, the Trustee, the Registrar and any
other person shall have the protection of TIA Section 312(c).
SECTION 15.4. CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT. Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate (in form and substance
reasonably satisfactory to the Trustee) stating that, in the opinion of
the signers, all conditions
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precedent, if any, provided for in this 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 15.5. 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 15.6. 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 15.7. 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 day that is not a Legal Holiday, and no
interest (including Contingent Payments) shall accrue for the intervening
period.
SECTION 15.8. GOVERNING LAW. THIS INDENTURE AND THE
SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE 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 COMPANY AND
THE GUARANTORS 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 XXX XXXX XX
000
XXX XXXX 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 COMPANY AND THE GUARANTORS IRREVOCABLY WAIVE, TO THE
FULLEST EXTENT THEY MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, 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 COMPANY IN ANY OTHER
JURISDICTION.
SECTION 15.9. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company, the Guarantors or any of their Subsidiaries. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 15.10. NO RECOURSE AGAINST OTHERS. A direct or
indirect stockholder, incorporator, member, director, officer, partner,
employee, as such, of the Company or the Guarantors or any affiliate of either
(including, without limitation, Xxxxxx'x Investor, Xxxxxx'x Management Company,
HET and HOC, but excluding the Company and the Guarantors themselves) shall not
have any liability for any obligations of the Company or the Guarantors under
the Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations; provided, however, that nothing contained in this
Section 15.10 shall (i) impair the validity of the Indebtedness evidenced by
this Indenture or the Securities, (ii) prevent the taking of any action
permitted by law against the Company or the assets of the Company or the
proceeds of such assets, (iii) in any way affect or impair the right of the
Collateral Agent, the Trustee or any Holder to take any action permitted by law
to realize upon any of the Collateral or any other security which may secure the
Company's or the Guarantors' obligations, or (iv) be construed to limit in any
respect the validity and enforceability of (x) the Notes Completion Guarantee or
the obligations of HET or HOC thereunder or (y) the Subordination Agreement or
the obligations thereunder of the parties thereto. Notwithstanding the
foregoing, nothing in this Section 15.10 shall be deemed to release the Company
or any officer of the Company from liability under this Indenture, the Notes or
any of the Collateral Documents for its fraudulent actions, intentional material
misrepresentations, gross negligence or willful misconduct or for any of its
obligations or liabilities under any agreement, document, instrument or
certificate executed by such person in its individual capacity in connection
with the transactions contemplated by this Indenture, the Notes and the
Collateral Documents. 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.
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SECTION 15.11. SUCCESSORS. All agreements of the Company and
the Guarantors in this Indenture and the Securities shall bind their successors.
All agreements of the Trustee in this Indenture shall bind its successor.
SECTION 15.12. 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 15.13. 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 15.14. 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.
SECTION 15.15. GAMING LAWS. This Indenture, the Collateral
Documents, the Securities and the Security Interests are and shall remain
subject to the Louisiana Economic Development and Gaming Corporation Act, La.
R.S. 27:1 ET SEQ., La. R.S. 27:201 ET SEQ. and the rules and regulations
thereunder as the same may be amended from time to time (collectively, the
"Gaming Regulations"), and in particular, without limitation, the exercise of
remedies under the Collateral Documents with respect to the Collateral will be
subject to the Gaming Regulations. The Company represents and warrants that all
requisite approvals under the Gaming Regulations have been obtained for the
execution and issuance of this Indenture, the Collateral Documents, the
Securities and the security interests thereunder.
SECTION 15.16. TAX TREATMENT. The Company, each Guarantor, and
each Holder of a Security by acceptance of a Security, agree to (i) treat a
Security as evidence of indebtedness for federal, state and local income tax
purposes; (ii) treat all Contingent Payments with respect to the Security as
"contingent" and not as either "remote or incidental" for purposes of Treasury
Regulation Section 1.1275-4(a)(1) and (5); (iii) use a discount rate with
respect to the non-contingent component of a Security for purposes of Treasury
Regulation Sections 1.1275-4(c) and 1.1274-2(c) & (g) such that the issue price
of such component will be equal to 100% of the original principal amount of such
component; and (iv) treat all Contingent Payments as consisting of principal and
interest such that each payment of principal is accompanied by a payment of
interest at 12% per annum (compounded semi-annually) such that the test rate for
the Securities for purposes of Treasury Regulation Section 1.1275-4(c)(4)(ii)(A)
will be 12% per annum (compounded semi-annually).
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SECTION 15.17. WAIVERS AND RELEASES.
(a) NO ASSURANCES
(i) As a condition to the effectiveness of the
confirmation of the Plan of Reorganization, the Initial Minimum Payment
Guarantors have entered into the HET/JCC Agreement in favor of the Regulating
Authority. The HET/JCC Agreement provides that the Initial Minimum Payment
Guarantors will provide the Minimum Payment Guaranty required under the Casino
Operating Contract for the Fiscal Years (as defined in the Casino Operating
Contract) ending March 31, 1999 and March 31, 2000, renewable for the four
Fiscal Years thereafter through March 31, 2004, subject to termination or
non-renewal in accordance with the terms of the HET/JCC Agreement. As a
prerequisite to maintaining the effectiveness of the Casino Operating
Contract, the Casino Operating Contract requires that the Company annually
provide the Minimum Payment Guaranty to the Regulating Authority. In entering
into the HET/JCC Agreement, the Initial Minimum Payment Guarantors have no
obligation to provide a Minimum Payment Guaranty for the entire term of the
Casino Operating Contract, but rather have agreed only to provide a Minimum
Payment Guaranty for the period and on terms and conditions specified therein.
The Initial Minimum Payment Guarantors have expressly informed the Trustee on
behalf of the Holders that the Initial Minimum Payment Guarantors have not
agreed to renew the HET/JCC Agreement beyond March 31, 2004, or in any prior
year where the Initial Minimum Payment Guarantors' obligation to furnish a
Minimum Payment Guaranty does not renew by the express terms of Section 1(b)
of the HET/JCC Agreement. The Initial Minimum Payment Guarantors have informed
the Trustee on behalf of the Holders that any decision the Initial Minimum
Payment Guarantors make concerning whether to renew any Minimum Payment
Guaranty or the HET/JCC Agreement will be made in the Initial Minimum Payment
Guarantors' sole discretion, acting only in their best interests. The Trustee
on behalf of the Holders hereby acknowledges that (A) the Initial Minimum
Payment Guarantors are not obligated to, and have not given any assurances to
the Trustee that the Initial Minimum Payment Guarantors will, renew the
HET/JCC Agreement beyond March 31, 2004, or renew any Minimum Payment Guaranty
for any earlier Fiscal Year in which the Initial Minimum Payment Guarantors'
obligation to furnish a Minimum Payment Guaranty does not renew under the
express terms of Section 1(b) thereof, (B) the Initial Minimum Payment
Guarantors have the right to make any such renewal decision by considering
only their best interests, and (C) the Initial Minimum Payment Guarantors need
not consider the interests of any other parties in making any such renewal
decision, notwithstanding that the Initial Minimum Payment Guarantors are
involved in a number of capacities in respect of the Company.
(ii) The Trustee and the Holders hereby agree that
the Initial Minimum Payment Guarantors, by entering into the HET/JCC Agreement
or providing a Minimum Payment Guaranty or otherwise, are not now, and in the
past have not, made any assurances or guarantees concerning the financial
results of the Casino, nor are or have the Initial Minimum Payment Guarantors
made any assurances or guarantees that the Casino will be financially
successful or will perform as projected in the projections and/or feasibility
studies included in the Disclosure Statement distributed in connection with
the Plan of Reorganization confirmation process.
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(iii) The Trustee and the Holders hereby agree and
acknowledge that any future representation, warranty, assurance or other
guaranty by the Initial Minimum Payment Guarantors or any of their
subsidiaries or other affiliates to the Trustee or the Holders concerning the
renewal of any Minimum Payment Guaranty or the HET/JCC Agreement, the
operation of the Casino, the financial results of the Casino, or any other
matter concerning the Casino or the Plan of Reorganization shall only be
effective if set forth in writing and properly executed by the party to be
charged.
(b) RELEASES
(i) The Trustee and the Holders hereby release and
waive and agree not to bring any Claims against the Initial Minimum Payment
Guarantors, whether a known Claim or an Unknown Claim, that may arise in any
way, in whole or in part, out of (A) the Initial Minimum Payment Guarantors'
decision either to renew or not renew any Minimum Payment Guaranty or the
HET/JCC Agreement, (B) the Initial Minimum Payment Guarantors acting in their
own best interests in connection with the execution, renewal or failure to renew
any Minimum Payment Guaranty or the HET/JCC Agreement, and/or (C) any alleged
assurance or guarantee by the Initial Minimum Payment Guarantors concerning the
operation of the Casino, the financial results of the Casino or any other matter
concerning the Casino or the Plan of Reorganization, unless such Claim is based
on a writing (but in any event cannot be based on the HET/JCC Agreement or any
Minimum Payment Guaranty) properly executed by the party against whom such a
claim is being made.
(ii) The Trustee and the Holders also hereby
specifically waive any rights each might have under Louisiana Civil Code Article
3083 and all other applicable or similar laws to this same or similar effect as
the matters described in Section 15.17(b)(i) hereof, including but not limited
to, any purported right to challenge the validity or seek rescission of, or to
vitiate, the releases set forth above in Section 15.17(b)(i) hereof on the
ground that any information was kept concealed from it and agrees that no remedy
shall be available for any such alleged non-disclosure, and that the right to
rescind the above release on any such ground is hereby expressly waived.
(c) DEFINITIONS. For the purposes of Sections 15.17(b)(i) and
(ii) hereof:
(i) "Claim" or "Claims" shall mean any action or
actions, cause or causes of action, in law or equity, suits, debts, liens,
liabilities, claims, demands, damages, punitive damages, losses, costs or
expenses, and/or reasonable attorneys' fees of any nature whatsoever.
(ii) "Initial Minimum Payment Guarantors" shall
include HET, HOC, Xxxxxx'x New Orleans Investment Company, Xxxxxx'x Crescent
City Investment Company, Xxxxxx'x New Orleans Management Company, their
successors and assigns, and all direct or indirect subsidiaries, and each of
their parents, subsidiaries, officers, directors, corporate representatives,
employees, agents, lawyers and accountants and all persons acting or claiming
through, under or in concert with any of them.
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(iii) "Unknown Claim" or "Unknown Claims" means any
and all Claims, including without limitation, any Claim which any of the parties
hereto does not know or even suspect to exist in his, her, or its favor at the
time of the giving of the releases and waivers set forth in Section 15.17 hereof
which, if known by him, her or it might have affected his, her or its decision
regarding the releases and waivers. Each of the parties acknowledges that he,
she or it might hereafter discover facts in addition to or different from those
which he, she, or its now knows or believes to be true with respect to the
matters herein released and waived, but each shall be deemed to have fully,
finally and forever released any and all Claims.
(d) NO THIRD PARTY BENEFICIARIES. The Trustee and the Holders
hereby acknowledge that each Minimum Payment Guaranty and the HET/JCC Agreement
provide that there shall be no third party beneficiaries thereof. The Trustee
and the Holders also hereby agree that each shall not claim or assert it is a
third party beneficiary or possesses any derivative claims under any Minimum
Payment Guaranty or the HET/JCC Agreement.
(e) DISCLOSURE. The Trustee on behalf of the Holders hereby
acknowledges that the Initial Minimum Payment Guarantors have informed it (i)
not to infer or assume that the Initial Minimum Payment Guarantors will renew
any Minimum Payment Guaranty or the HET/JCC Agreement; (ii) that the Initial
Minimum Payment Guarantors will consider only their own best interests in
determining whether to renew any Minimum Payment Guaranty or the HET/JCC
Agreement; (iii) that the Initial Minimum Payment Guarantors are involved in a
number of different capacities in connection with the reorganization of Xxxxxx'x
Jazz Company, the governance of the Company and JCC Holding, and the operation
of the Casino; and (iv) that there can be no assurance that the Casino will
perform as set forth in the projections and/or feasibility study set forth in
the Disclosure Statement circulated in connection with the Plan of
Reorganization.
(f) AMENDMENT OF OBLIGATIONS. Each Minimum Payment Guaranty
provided under the HET/JCC Agreement is provided on the express condition that
the Company shall not amend or modify the Casino Operating Contract in any way
to increase the obligations under any Minimum Payment Guaranty or adversely
affect the Initial Minimum Payment Guarantors without the prior written
agreement of the Initial Minimum Payment Guarantors, and any such amendment or
modification shall have no force or effect in respect of the Initial Minimum
Payment Guarantors or any Minimum Payment Guaranty provided thereby.
(SIGNATURE PAGE FOLLOWS)
119
SIGNATURE
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed as of the date first written above.
JAZZ CASINO COMPANY, L.L.C.
a Louisiana limited liability company
By: /s/ L. Xxxxxxx Xxxxxx
-----------------------------------------
Name: L. Xxxxxxx Xxxxxx
Title: Vice President-Finance, Secretary
and Treasurer
JCC HOLDING COMPANY,
a Delaware corporation
By: /s/ L. Xxxxxxx Xxxxxx
-----------------------------------------
Name: L. Xxxxxxx Xxxxxx
Title: Vice President-Finance, Secretary
and Treasurer
CP DEVELOPMENT, L.L.C.,
a Louisiana limited liability company
By: /s/ L. Xxxxxxx Xxxxxx
-----------------------------------------
Name: L. Xxxxxxx Xxxxxx
Title: Vice President-Finance, Secretary
and Treasurer
S-1
FP DEVELOPMENT, L.L.C.,
a Louisiana limited liability company
By: /s/ L. Xxxxxxx Xxxxxx
-----------------------------------------
Name: L. Xxxxxxx Xxxxxx
Title: Vice President-Finance, Secretary
and Treasurer
JCC DEVELOPMENT COMPANY, L.L.C.,
a Louisiana limited liability company
By: /s/ L. Xxxxxxx Xxxxxx
-----------------------------------------
Name: L. Xxxxxxx Xxxxxx
Title: Vice President-Finance, Secretary
and Treasurer
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Vice President
S-2
Exhibit A
[FORM OF NOTE]
JAZZ CASINO COMPANY, L.L.C.
SENIOR SUBORDINATED NOTE
DUE 2009 WITH CONTINGENT PAYMENTS
No. $
Jazz Casino Company, L.L.C., a Louisiana limited liability
company (hereinafter called the "Company," which term includes any successor
entity under the Indenture hereinafter referred to), for value received, hereby
promises to pay to ____________________________, or registered assigns, the
principal sum of ____________________ Dollars, on November 15, 2009.
Interest Payment Dates: May 15 and November 15. The first
Interest Payment Date is May 15, 1999.
Record Dates: May 1 and November 1. The first Record Date is
May 1, 1999.
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-1
IN WITNESS WHEREOF, the Company has caused this Instrument to
be duly executed.
Dated:
JAZZ CASINO COMPANY, L.L.C.
By:
-----------------------------------------
President
A-2
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities described in the
within-mentioned Indenture.
--------------------------------------------
Norwest Bank Minnesota,
National Association, as Trustee
By:
-----------------------------------------
Authorized Signatory
Dated:
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JAZZ CASINO COMPANY, L.L.C.
SENIOR SUBORDINATED NOTES
DUE 2009 WITH CONTINGENT PAYMENTS
THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN THE INTERCREDITOR
AGREEMENT (AS DEFINED IN THE INDENTURE), WHICH INTERCREDITOR AGREEMENT, AMONG
OTHER THINGS, ESTABLISHES CERTAIN RIGHTS WITH RESPECT TO THE SECURITY FOR THIS
NOTE AND THE SHARING OF PROCEEDS THEREOF WITH CERTAIN OTHER SECURED CREDITORS.
COPIES OF SUCH INTERCREDITOR AGREEMENT WILL BE FURNISHED TO ANY HOLDER OF THIS
NOTE UPON REQUEST TO THE COMPANY.
1. INTEREST.
Jazz Casino Company, L.L.C., a Louisiana limited liability
company (the "Company"), promises to pay Fixed Interest on the principal amount
of this Security, plus the Contingent Payments, from October 30, 1998 or from
the most recent Interest Payment Date to which Fixed Interest or Contingent
Payments, as applicable, has been paid or provided for. "Fixed Interest" means
interest, payable semi-annually on the Interest Payment Dates in accordance with
this Indenture, at a rate per annum of, for the indicated periods:
October 30, 1998 through May 15, 1999..........5.867%
May 16, 1999 through November 15, 1999....5.927%
November 16, 1999 through May 15, 2000..........5.987%
May 16, 2000 through November 15, 2000.....6.046%
November 16, 2000 through May 15, 2001..........6.103%
May 16, 2001 through November 15, 2001.....6.159%
November 16, 2001 through May 15, 2003..........6.214%
May 16, 2003 through November 15, 2009.....8.000%
The Company may, on any of the First Interest Payment Date, the Second Interest
Payment Date, the Third Interest Payment Date, the Fourth Interest Payment Date,
the Fifth Interest Payment Date and the Sixth Interest Payment Date, at its
option and in its sole discretion, pay Fixed Interest in additional Securities
("Secondary Securities") in lieu of the payment in whole or in part of Fixed
Interest in cash on the Securities; PROVIDED, HOWEVER, that if any Indebtedness
is outstanding under the Tranche A-1 Term Loan or the Tranche A-2 Term Loan on
any of the First Interest Payment Date, the Second Interest Payment Date, the
Third Interest Payment Date or the Fourth Interest Payment Date, the Company
shall pay the Fixed Interest due and payable on such
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Interest Payment Date in Secondary Securities in lieu of the payment of such
Fixed Interest in cash; PROVIDED, FURTHER, HOWEVER, that on the Fifth Interest
Payment Date and the Sixth Interest Payment Date the Company shall not be
entitled to pay Fixed Interest due and payable on such Interest Payment Date in
Secondary Securities in lieu of the payment of such Fixed Interest in cash if on
the last Business Date of the corresponding Semiannual Period (i) the Company
has no outstanding borrowings under the Tranche A-1 Term Loan and the Tranche
A-2 Term Loan, (ii) no Revolving Loans are outstanding, and (iii) the Company
has at least $20,000,000 of cash and Cash Equivalents. In addition, if the
Company's Consolidated EBITDA is less than $28,500,000 for the twelve month
period ending on the last day of the Semiannual Period immediately preceding any
Interest Payment Date occurring after the Sixth Interest Payment Date, the
Company shall pay the Fixed Interest due and payable on such Interest Payment
Date in Secondary Securities in lieu of the payment of such Fixed Interest in
cash. If, pursuant to this paragraph, the Company issues Secondary Securities in
lieu of cash payment, in whole or in part, of Fixed Interest, it shall give
notice to the Trustee not less than five Business Days prior to the applicable
Interest Payment Date, and shall instruct the Trustee (upon written order of the
Company signed by an Officer of the Company given not less than five nor more
than 45 days prior to such Interest Payment Date) to authenticate Secondary
Securities, dated such Interest Payment Date, in a principal amount equal to the
amount of Fixed Interest not paid in cash in respect of this Security on such
Interest Payment Date. Each issuance of Secondary Securities in lieu of cash
payments of Fixed Interest on the Securities shall be made PRO RATA with respect
to the outstanding Securities. Any such Secondary Securities shall be governed
by the Indenture and shall be subject to the same terms (including the maturity
date and the rate of interest from time to time payable thereon) as this
Security (except, as the case may be, with respect to the title, issuance date
and aggregate principal amount). The term Securities shall include the Secondary
Securities that may be issued under the Indenture.
Interest on this Security will be payable semiannually on May
15 and November 15, commencing May 15, 1999, to the person in whose name this
Security is registered at the close of business on May 1 or November 1,
preceding such Interest Payment Date (each, a "Record Date"). Interest on this
Security will be computed on the basis of a 360-day year, consisting of twelve
30-day months.
In addition to regular semiannual payments of Fixed Interest,
the Company will pay on each Interest Payment Date to the Holder of this
Security at the close of business on the immediately preceding Record Date such
Holder's PRO RATA amount of Contingent Payments, if any are due and payable in
accordance with the terms of this Security and the Indenture.
Any reference in this Security to "accrued interest" includes
the amount of unpaid Contingent Payments due and payable. For purposes of
determining accrued Contingent Payments due and payable per $1.00 principal
amount of Notes with respect to a Semiannual Period prior to the completion of
such period, such Contingent Payments due and payable per $1.00 principal amount
of Notes shall be equal to the Partial Period Contingent Payments. To the extent
it is lawful, the Company promises to pay interest on any interest payment due
but unpaid (including any due and unpaid Contingent Payments) on such principal
amount at a rate of 8% per annum compounded semi-annually.
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2. METHOD OF PAYMENT.
The Company shall pay interest (including Contingent Payments)
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
Company shall pay principal and interest 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 ("U.S. Legal Tender") (or, pursuant to Paragraph 1
hereof, in Secondary Securities). However, the Company may pay principal and
interest by wire transfer of Federal funds, or interest by its check payable in
such U.S. Legal Tender (or, pursuant to Paragraph 1 hereof, in Secondary
Securities). The Company may deliver any such interest payment to the Paying
Agent or the Company may mail any such interest payment to a Holder at the
Holder's registered address. Notwithstanding the preceding two sentences, in the
case of Securities of which The Depository Trust Company or its nominee is the
Holder, such payments must be made by wire transfer of Federal funds (or,
pursuant to Paragraph 1 hereof, in Secondary Securities).
3. PAYING AGENT AND REGISTRAR.
Initially, Norwest Bank Minnesota, National Association (the
"Trustee") will act as Paying Agent and Registrar. The Company may change any
Paying Agent, Registrar or Co-registrar without notice to the Holders. The
Company or any of its Subsidiaries may, subject to certain exceptions, act as
Paying Agent, Registrar or Co-registrar.
4. INDENTURE.
The Company issued the Securities under an Indenture, dated as
of October 30, 1998 (the "Indenture"), among the Company, JCC Holding, CP
Development, FP Development, JCC Development 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 secured obligations of the Company limited in
aggregate principal amount to $187,500,000, except for Secondary Securities and
except as otherwise provided in the Indenture.
5. REDEMPTION.
The Securities may not be redeemed, except that the Securities
may be redeemed at any time pursuant to, and in accordance with, any order of
any Governmental Authority with appropriate jurisdiction and authority relating
to a Gaming License held by the Company or an Affiliate or wholly owned
Subsidiary of the Company, or to the extent necessary in the reasonable, good
faith judgment of the Board of Directors of Xxxxxx'x Entertainment, Inc.
("HET"), in the case of HET or one of its affiliates, or the Manager of the
Company, to prevent the loss, failure to obtain or material impairment or to
secure the reinstatement of, any such Gaming License, where such redemption or
acquisition is required because the Holder or
A-6
beneficial owner of such Security is required to be found suitable or to
otherwise qualify under any gaming laws and is not found suitable or so
qualified within a reasonable period of time. In such event, the Redemption
Price shall be the principal amount thereof, plus accrued and unpaid interest to
the Redemption Date (or such lesser amount as may be required by applicable law
or by order of any Gaming Authority).
Any redemption of the Notes shall comply with Article III of
the Indenture.
6. NOTICE OF REDEMPTION.
Notice of redemption will be mailed by first class mail at
least 20 days but not more than 60 days before the Redemption Date (unless a
shorter notice period shall be required by applicable laws or by order of any
Gaming Authority) to each Holder of Securities to be redeemed at his registered
address. Securities 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 (other than the
Company or an Affiliate thereof) on such Redemption Date, the Securities called
for redemption will cease to bear interest (including Contingent Payments) and
the only right of the Holders of such Securities will be to receive payment of
the Redemption Price, including any accrued and unpaid interest to the
Redemption Date.
7. DENOMINATIONS; TRANSFER; EXCHANGE.
The Securities are in registered form, without coupons, in
denominations of $1.00 and integral multiples of $1.00. 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.
9. UNCLAIMED MONEY.
If money for the payment of principal or interest (including
Contingent Payments) remains unclaimed for two years, the Trustee and the Paying
Agent(s) will pay the money back to the Company at its written request. After
that, all liability of the Trustee and such Paying Agent(s) with respect to such
money shall cease.
10. LEGAL DEFEASANCE OR COVENANT DEFEASANCE PRIOR TO REDEMPTION OR MATURITY.
If the Company at any time irrevocably deposits with the
Trustee, in trust, for the benefit of the Holders, U.S. Legal Tender, U.S.
Government Obligations or a combination
A-7
thereof in such amounts as will be sufficient in the opinion of a nationally
recognized firm of independent public accountants selected by the Trustee, to
pay and discharge the principal of and interest (including Maximum Contingent
Payments) on the Securities maturity and comply with the other provisions of the
Indenture relating thereto, the Company may elect to have the obligations of the
Company and the Guarantors discharged (in which case the Indenture would cease
to be of further effect, except as to certain limited obligations and to the
rights of Holders to receive payments when due) or to be discharged from certain
provisions of the Indenture and the Securities (including the financial
covenants, but excluding the obligation to pay the principal of and interest
(including Contingent Payments) 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, the
Collateral Documents, the Intercreditor Agreement or the Securities to, among
other things, cure any ambiguity, defect or inconsistency, provide for
uncertificated Securities in addition to or in place of certificated Securities,
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 Company and its 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, sell
assets, 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 Company must annually report to the Trustee on compliance with such
limitations.
13. CHANGE OF CONTROL.
In the event there shall occur any Change of Control, 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
Company to purchase on the Change of Control Payment Date in the manner
specified in the Indenture, all or any part (in integral multiples of $1.00) of
such Holder's Securities at a Change of Control Offer Price equal to 101% of the
principal amount thereof, together with accrued and unpaid interest, if any, to
the Change of Control Payment Date.
A-8
14. SECURITY.
In order to secure the obligations under the Indenture, the
Company, the Guarantors and the Trustee or the Collateral Agent have entered
into the Collateral Documents in order to create security interests in certain
assets and properties of the Company. As more fully set forth in the Collateral
Documents and Section 4.6 of the Indenture, the rights of the Holders (and the
Trustee on their behalf) to receive proceeds from the disposition of such assets
and properties are subordinated to security interests in such assets and
properties in favor of other secured creditors, and rank pari passu with
security interests in such assets and properties in favor of other secured
creditors.
15. SALE OF ASSETS.
The Indenture imposes certain limitations on the ability of
the Company and its Subsidiaries to sell assets. In the event the proceeds from
a permitted Asset Sale exceed certain amounts, as specified in the Indenture,
the Company will be required (in accordance with Section 5.14 of the Indenture)
either to reinvest the proceeds of such Asset Sale in its business or to repay
certain indebtedness and, to the extent that no amounts of such indebtedness are
outstanding, and no amounts of such indebtedness are available, to repay certain
other indebtedness and to make an offer to purchase each Holder's Securities at
100% of the principal amount thereof, together with accrued and unpaid interest,
if any, to the purchase date.
16. GAMING LAWS.
The rights of the Holder of this Security and any owner of any
beneficial interest in this Security are subject to the gaming laws, regulations
and the jurisdiction and requirements of the Gaming Authorities and the further
limitations and requirements set forth in the Indenture.
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 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. The
Trustee may withhold from Holders of Securities notice of any continuing Default
or Event of Default (except a Default in payment of principal or interest
(including Contingent Payments)), if it determines that withholding notice is in
their interest.
A-9
19. TRUSTEE DEALINGS WITH THE COMPANY.
The Trustee under the Indenture, in its individual or any
other capacity, may become the owner or pledgee of any of the Securities, make
loans to, accept deposits from, and perform services for the Company or its
Affiliates, and may otherwise deal with the Company, the Guarantors or their
respective Affiliates with the same rights it would have if it were not the
Trustee; PROVIDED, HOWEVER, that the Trustee shall use reasonable good faith
efforts so that it at no time becomes a Bank Lender; PROVIDED, FURTHER, that the
foregoing proviso shall in no event operate to prevent the Trustee from
acquiring all or any portion of the equity interests in any other person which
itself is a Bank Lender (and as a result of which the Trustee could become a
Bank Lender).
20. NO RECOURSE AGAINST OTHERS.
An incorporator, director, officer, employee, stockholder or
member, as such, of the Company or any Guarantor or any affiliate thereof
(including, without limitation, Xxxxxx'x Investor, Xxxxxx'x Management Company,
HET and HOC, but excluding the Company and Guarantors themselves) shall not have
any liability for any obligation of the Company or the Guarantors under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations, subject to certain exceptions set forth in the
Indenture. 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. SUBORDINATION.
The Notes are subordinated to Senior Debt to the extent
provided in the Indenture. The Company agrees, and each Holder by accepting a
Note agrees, to such subordination and authorizes the Trustee to give it effect.
22. 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.
23. 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).
24. CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company will cause CUSIP numbers
to be printed on the Securities as a convenience to the Holders of the
Securities. No representation is made as to the
A-10
accuracy of such numbers as printed on the Securities and reliance may be placed
only on the other identification numbers printed hereon.
25. TAX TREATMENT.
The Company, each Guarantor, and each Holder of a Security by
acceptance of a Security, agree to (i) treat a Security as evidence of
indebtedness for federal, state and local income tax purposes; (ii) treat all
Contingent Payments with respect to the Security as "contingent" and not as
either "remote or incidental" for purposes of Treasury Regulation Section
1.1275-4(a)(1) and (5); (iii) use a discount rate with respect to the
non-contingent component of a Security for purposes of Treasury Regulation
Sections 1.1275-4(c) and 1.1274-2(c) & (g) such that the issue price of such
component will be equal to 100% of the original principal amount of such
component; and (iv) treat all Contingent Payments as consisting of principal and
interest such that each payment of principal is accompanied by a payment of
interest at 12% per annum (compounded semi-annually) such that the test rate for
the Securities for purposes of Treasury Regulation Section 1.1275-4(c)(4)(ii)(A)
will be 12% per annum (compounded semi-annually).
26. SUBORDINATED GUARANTY.
For value received and pursuant to and in accordance with the
terms of the Indenture, each of JCC Holding, CP Development, FP Development, and
JCC Development has unconditionally guaranteed on a subordinated basis as
provided in Article XIV of the Indenture (the "Guaranty") to each Holder of a
Security and the Trustee the due and punctual payment of the principal of,
premium (if any), and interest (including Contingent Payments) on, such Security
when and as the same shall become due and payable for any reason in accordance
with the terms of such Security and the Indenture. For value received and
pursuant to and in accordance with the terms of the Indenture, JCC Holding has
unconditionally guaranteed, on a subordinated basis as set forth in Article XIV
of the Indenture, to each holder of a Guaranty that the obligations of each of
CP Development, FP Development and JCC Development under the Guaranty will be
promptly paid in full or performed in accordance with the terms of the Guaranty
and the Indenture. The guarantors may be released from their respective
guaranties in accordance with the terms of the Indenture.
A-11
[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 Company. 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 should be made by a guarantor institution participating in
the Securities Transfer Agents Medallion Program or in such other guarantee
program acceptable to the Trustee.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to any of the following provisions of the Indenture, check the
appropriate box:
/ / Section 5.14; / / Article XI.
If you want to elect to have only part of this Security purchased by the Company
pursuant to the Indenture, state the principal amount you want to be purchased:
$
----------------------
Date: Signature:
------------------------------- ---------------------------
(Sign exactly as your name appears on the other side of this Security)
A-13
