ESCROW DEPOSIT AGREEMENT
THIS AGREEMENT, dated as of the 3rd day of March, 1999 (the
"Agreement"), is by and among the Mohegan Tribal Gaming Authority
(the "Issuer") and First Union National Bank, as Defeasance Agent
(the "Defeasance Agent").
WHEREAS, the Issuer issued $90,000,000 in principal amount
of its Subordinated Notes (the "Notes") pursuant to a Note
Purchase Agreement by and between the Issuer and Sun
International Hotels Limited ("Sun International") dated as of
September 29, 1995 (the "Note Purchase Agreement"). All
capitalized terms used herein and not otherwise defined shall
have the meanings ascribed thereto in the Note Purchase
Agreement.
WHEREAS, $90,000,000 in principal amount of the Notes
remains outstanding, all of which are currently held by Sun
International and Waterford Gaming, LLC ("Waterford Gaming", and
together with Sun International the "Note Holders") in the
amounts set forth opposite their names on the signature pages
hereto.
WHEREAS, the Issuer has elected to provide for a Covenant
Defeasance of the Notes pursuant to Section 12.03 of the Note
Purchase Agreement and has delivered or will deliver to First
Union National Bank as Trustee for the Senior Secured Notes, a
certificate calling for the redemption of the Notes on January 1,
2000.
WHEREAS, Section 12.04(a) of the Note Purchase Agreement
provides that Issuer must irrevocably deposit with an agent,
which may be the Defeasance Agent, in trust, for the benefit of
the Note Holders, cash in United States dollars, non-callable
Government Securities, or a combination thereof, in such amounts
as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants as evidenced by a
certificate delivered to the Defeasance Agent, to pay the
principal of, premium, if any, and interest on the outstanding
Notes on the stated maturity date or on the applicable redemption
date, as the case may be and the Issuer must specify whether the
Notes are being defeased to maturity or to a particular
redemption date.
WHEREAS, the Issuer and the Note Holders have agreed that
the obligations of Section 12.04(a) of the Note Purchase
Agreement are satisfied by the deposit of sums pursuant to two
(2) side letters dated February 22, 1999 attached hereto ("Side
Letters").
WHEREAS, Defeasance Agent has agreed to accept, hold, and
disburse the funds deposited with it and the earnings thereon in
accordance with the terms of this Agreement and the Side Letters.
WHEREAS, in order to establish the escrow of funds for the
covenant defeasance of the Notes and to effect the provisions of
the Note Purchase Agreement and the Side Letters, the parties
hereto have entered into this Agreement.
STATEMENT OF AGREEMENT
NOW THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto, for themselves, their successors and assigns,
hereby agree as follows:
1. Definitions. The following terms shall have the
following meanings when used herein:
"Defeasance Funds" shall mean the funds deposited with
Defeasance Agent pursuant to this Agreement, together with any
interest and other income thereon, which funds shall include,
without limitation, the initial sum of One Hundred Forty Million
Three Hundred Thousand Dollars ($140,300,000).
"Redemption Date" shall mean January 1, 2000.
"Joint Written Direction" shall mean a written direction
executed by the Representatives and directing Defeasance Agent to
disburse all or a portion of the Defeasance Funds or to take or
refrain from taking an action pursuant to this Agreement.
"Representatives" shall mean authorized representatives of
the Issuer and the Note Holders.
2. Appointment of and Acceptance by Defeasance Agent. The
Issuer hereby appoints Defeasance Agent to serve as defeasance
agent hereunder. Defeasance Agent hereby accepts such appointment
and, upon receipt by wire transfer of the Defeasance Funds in
accordance with Section 3 below, agrees to hold, invest and
disburse the Defeasance Funds in accordance with this Agreement.
3. Creation of Defeasance Funds. On March 3, 1999, Issuer
will transfer the sum of One Hundred Forty Million Three Hundred
Thousand Dollars ($140,300,000) to Defeasance Agent, by wire
transfer of immediately available funds, to the following
account:
First Union National Bank
Charlotte, North Carolina
ABA # [000000000]
Credit: D/5000000016439 Trust Ops
FFC: A/C #9572832469 Mohegan/Sun ESC
ATTN: CT-9750 Hartford
4. Disbursements of Defeasance Funds.
a. Joint Written Direction. Defeasance Agent shall
disburse Defeasance Funds, at any time and from
time to time, in accordance with a Joint Written
Direction of the Issuer and the Note Holders.
b. Redemption Date. On the Redemption Date,
Defeasance Agent shall apply the Defeasance Funds
to the redemption of the Notes in accordance with
and at the price set forth in the Side Letters
without any further instruction or direction, by
payment to the holders of the Notes as set forth
on the registration books of the Issuer on the
15th day immediately preceding the Redemption
Date. Any payment due on a date other than a
banking day shall be made on the next banking day.
Any balance of the Defeasance Funds remaining
after redemption of the Notes as aforesaid shall
be remitted by the Defeasance Agent to the Issuer.
5. Disbursement Into Court. If, at any time, there shall
exist any dispute between Issuer or Note Holders with respect to
the holding or disposition of any portion of the Defeasance Funds
or any other obligations of Defeasance Agent hereunder, or if at
any time Defeasance Agent is unable to determine, to Defeasance
Agent's sole satisfaction, the proper disposition of any portion
of the Defeasance Funds or Defeasance Agent's proper actions with
respect to its obligations hereunder, or if the Representatives
have not within 30 days of the furnishing by Defeasance Agent of
a notice of resignation pursuant to Section 7 hereof, appointed a
successor Defeasance Agent to act hereunder, then Defeasance
Agent may, in its sole discretion, take either or both of the
following actions:
a. suspend the performance of any of its obligations
(including without limitation any disbursement obligations) under
this Agreement until such dispute or uncertainty shall be
resolved to the sole satisfaction of Defeasance Agent or until a
successor Defeasance Agent shall have been appointed (as the case
may be); provided however, that Defeasance Agent shall continue
to invest the Defeasance Funds in accordance with Section 6
hereof; and/or
b. petition (by means of an interpleader action or any
other appropriate method) any court of competent jurisdiction in
any venue convenient to Defeasance Agent, for instructions with
respect to such dispute or uncertainty, and to the extent
required by law, pay into such court, for holding and disposition
in accordance with the instructions of such court, all funds held
by it in the Defeasance Funds, after deduction and payment to
Defeasance Agent of all fees and expenses (including court costs
and attorneys' fees) payable to, incurred by, or expected to be
incurred by Defeasance Agent in connection with the performance
of its duties and the exercise of its rights hereunder.
Defeasance Agent shall have no liability to Issuer, Note
Holders, their respective shareholders or any other person with
respect to any such suspension of performance or disbursement
into court, specifically including any liability or claimed
liability that may arise, or be alleged to have arisen, out of or
as a result of any delay in the disbursement of funds held in the
Defeasance Funds or any delay in or with respect to any other
action required or requested of Defeasance Agent.
6. Investment of Funds. Defeasance Agent shall invest the
Defeasancee Funds in the manner set forth in Schedule 1 attached
hereto. Each of the Issuer and the Note Holders agree that said
investments will provide sufficient funds to redeem the Notes in
full on the Redemption Date. In the event, for any reason that
it becomes necessary to reinvest any Defeasance Funds, Defeasance
Agent shall do so as the Representatives jointly shall direct;
provided, however, that no investment or reinvestment may be made
except in Government Securities, in accordance with the terms of
the Note Purchase Agreement.
If Defeasance Agent has not received a Joint Written
Direction at any time that an investment decision must be made,
Defeasance Agent shall invest the Defeasance Funds, or such
portion thereof as to which no Joint Written Direction has been
received, in overnight Government Securities. Each of the
foregoing investments shall be made in the name of Defeasance
Agent. Notwithstanding anything to the contrary contained
herein, Defeasance Agent may, without notice to the
Representatives, sell or liquidate any of the foregoing
investments at any time if the proceeds thereof are required for
any release of funds permitted or required hereunder, and
Defeasance Agent shall not be liable or responsible for any loss,
cost or penalty, resulting from any such sale or liquidation.
With respect to any funds received by Defeasance Agent for
deposit into the Defeasance Funds or any Joint Written Direction
received by Defeasance Agent with respect to investment of any
funds in the Defeasance Funds after ten o'clock, a.m., Hartford,
Connecticut, time, Defeasance Agent shall not be required to
invest such funds or to effect such investment instruction until
the next day upon which banks in Hartford, Connecticut are open
for business.
7. Resignation and Removal of Defeasance Agent.
Defeasance Agent may resign from the performance of its duties
hereunder at any time by giving ten (10) days' prior written
notice to the Representatives or may be removed, with or without
cause, by the Representatives, acting jointly by furnishing a
Joint Written Direction to Defeasance Agent, at any time by the
giving of ten (10) days' prior written notice to Defeasance
Agent. Such resignation or removal shall take effect upon the
appointment of a successor Defeasance Agent as provided herein
below. Upon any such notice of resignation or removal, the
Representatives jointly shall appoint a successor Defeasance
Agent hereunder, which shall be a commercial bank, trust company
or other financial institution with a combined capital and
surplus in excess of $10,000,000. Upon the acceptance in writing
of any appointment as Defeasance Agent hereunder by a successor
Defeasance Agent, such successor Defeasance Agent shall thereupon
succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Defeasance Agent, and the
retiring Defeasance Agent, shall be discharged from its duties
and obligations under this Agreement, but shall not be discharged
from any liability for actions taken as Defeasance Agent
hereunder prior to such succession. After any retiring
Defeasance Agent's resignation or removal, the provisions of this
Agreement shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Defeasance Agent under
this Agreement. The retiring Defeasance Agent shall transmit all
records pertaining to the Defeasance Funds and shall pay all
funds held by it in the Defeasance Funds to the successor
Defeasance Agent, after making copies of such records as the
retiring Defeasance Agent deems advisable and after deduction and
payment to the retiring Defeasance Agent of all fees and expenses
(including court costs and attorneys' fees) payable to, incurred
by, or expected to be incurred by the retiring Defeasance Agent
in connection with the performance of its duties and the exercise
of its rights hereunder.
8. Liability of Defeasance Agent.
a. Defeasance Agent shall have no liability or obligation
with respect to the Defeasance Funds except for Defeasance
Agent's willful misconduct or gross negligence. Defeasance
Agent's sole responsibility shall be for the safekeeping,
investment, and disbursement of the Defeasance Funds in
accordance with the terms of this Agreement. Defeasance Agent
shall have no implied duties or obligations and shall not be
charged with knowledge or notice of any fact or circumstance not
specifically set forth herein. Defeasance Agent may rely upon any
instrument, not only as to its due execution, validity and
effectiveness, but also as to the truth and accuracy of any
information contained therein, which Defeasance Agent shall in
good faith believe to be genuine, to have been signed or
presented by the person or parties purporting to sign the same
and to conform to the provisions of this Agreement. In no event
shall Defeasance Agent be liable for incidental, indirect,
special, consequential or punitive damages. Defeasance Agent
shall not be obligated to take any legal action or commence any
proceeding in connection with the Defeasance Funds, any account
in which Defeasance Funds are deposited, this Agreement or the
Note Purchase Agreement, or to appear in, prosecute or defend any
such legal action or proceeding. Defeasance Agent may consult
legal counsel selected by it in the event of any dispute or
question as to the construction of any of the provisions hereof
or of any other agreement or of its duties hereunder, or relating
to any dispute involving any party hereto, and shall incur no
liability and shall be fully indemnified from any liability
whatsoever in acting in accordance with the opinion or
instruction of such counsel. Issuer and Note Holders, jointly
and severally, shall promptly pay, upon demand, the reasonable
fees and expenses of any such counsel.
(b) The Defeasance Agent is authorized, in its sole
discretion, to comply with orders issued or process entered by
any court with respect to the Defeasance Funds, without
determination by the Defeasance Agent of such court's
jurisdiction in the matter. If any portion of the Defeasance
Funds is at any time attached, garnished or levied upon under any
court order, or in case the payment, assignment, transfer,
conveyance or delivery of any such property shall be stayed or
enjoined by any court order, or in case any order, judgment or
decree shall be made or entered by any court affecting such
property or any part thereof, then and in any such event, the
Defeasance Agent is authorized, in its sole discretion, to rely
upon and comply with any such order, writ, judgment or decree
which it is advised by legal counsel selected by it is binding
upon it without the need for appeal or other action; and if the
Defeasance Agent complies with any such order, writ, judgment or
decree, it shall not be liable to any of the parties hereto or to
any other person or entity by reason of such compliance even
though such order, writ, judgment or decree may be subsequently
reversed, modified, annulled, set aside or vacated.
9. Indemnification of Defeasance Agent. From and at all
times after the date of this Agreement, Issuer, shall, to the
fullest extent permitted by law and to the extent provided
herein, indemnify and hold harmless Defeasance Agent and each
director, officer, employee, attorney, agent and affiliate of
Defeasance Agent (collectively, the "Indemnified Parties")
against any and all actions, claims (whether or not valid),
losses, damages, liabilities, costs and expenses of any kind or
nature whatsoever (including without limitation reasonable
attorneys' fees, costs and expenses) incurred by or asserted
against any of the Indemnified Parties from and after the date
hereof, whether direct, indirect or consequential, as a result of
or arising from or in any way to any demand, suit, action or
proceeding (including any inquiry or investigation) by any
person, including without limitation Issuer or Note Holders,
whether threatened or initiated, asserting a claim for any legal
or equitable against any person under any statute or regulation,
including, but not limited to, any federal or state securities
laws, or under any common law or equitable cause or otherwise,
arising from or in connection with the negotiation, preparation,
execution, performance or failure of performance of this
Agreement or any transactions contemplated herein, whether or not
any such Indemnified Party is a party to any such action,
proceeding, suit or the target of any such inquiry or
investigation; provided, however, that no Indemnified Party shall
have the right to be indemnified hereunder for any liability
finally determined by a court of competent jurisdiction, subject
to no further appeal, to have resulted solely from the gross
negligence or willful misconduct of such Indemnified Party. If
any such action or claim shall be brought or asserted against any
Indemnified Party, such Indemnified Party shall promptly notify
Issuer and Note Holders in writing, and Issuer and Note Holders
shall assume the defense thereof, including the employment of
counsel and the payment of all expenses. Such Indemnified Party
shall, in its sole discretion, have the right to employ separate
counsel (who may be selected by such Indemnified Party in its
sole discretion) in any such action and to participate in the
defense thereof, and the fees and expenses of such counsel shall
be paid by such Indemnified Party, except that Issuer shall be
required to pay such fees and expenses if (a) Issuer agrees to
pay such fees and expenses, or (b) Issuer shall fail to assume
the defense of such action or proceeding or shall fail, in the
sole discretion of such Indemnified Party, to employ counsel
satisfactory to the Indemnified Party in any such action or
proceeding, (c) Issuer or Note Holders is the plaintiff in any
such action or proceeding or (d) the named parties to any such
action or proceeding (including any potential parties) include
both Indemnified Party and Issuer, and Indemnified Party shall
have been advised by counsel that there may be one or more legal
defenses available to it which are different from or additional
to those available to Issuer. Issuer shall be jointly and
severally liable to pay fees and expenses of counsel pursuant to
the preceding sentence, except that any obligation to pay under
clause (a) shall apply only to the party so agreeing. All such
fees and expenses payable by Issuer pursuant to the foregoing
sentence shall be paid from time to time as incurred, both in
advance of and after the final disposition of such action or
claim. All of the foregoing losses, damages, costs and expenses
of the Indemnified Parties shall be payable by Issuer upon demand
by such Indemnified Party. The obligations of Issuer under this
Section 9 shall survive any termination of this Agreement, and
the resignation or removal of Defeasance Agent shall be
independent of any obligation of the Defeasance Agent.
10. Fees and Expenses of Defeasance Agent. Issuer shall
compensate Defeasance Agent for its services hereunder in
accordance with Schedule A attached hereto and, in addition,
shall reimburse Defeasance Agent for all of its reasonable
out-of-pocket expenses, including attorneys' fees, travel
expenses, telephone and facsimile transmission costs, postage
(including express mail and overnight delivery charges), copying
charges and the like. All of the compensation and reimbursement
obligations set forth in this Section 10 shall be payable by
Issuer upon demand by Defeasance Agent. The obligations of
Issuer under this Section 10 shall survive any termination of
this Agreement and the resignation or removal of Defeasance
Agent.
11. Representations and Warranties.
a. Issuer makes the following representations and
warranties to Defeasance Agent:
(i) Issuer is duly established and validly existing as an
instrumentality of the Mohegan Tribe of Indians of Connecticut,
and has full power and authority to execute and deliver this
Agreement and to perform its obligations hereunder,
(ii) This Agreement has been duly and validly authorized,
executed and delivered by the Issuer, and constitutes a valid and
binding agreement of Issuer, enforceable in accordance with its
terms.
(iii) The execution, delivery, and performance by Issuer of
this Agreement is in accordance with the Note Purchase Agreement
and will not violate, conflict with, or cause a default under the
governing instruments of Issuer, any applicable law or
regulation, any court order or administrative ruling or decree to
which Issuer is a party or any of its property is subject, or any
agreement, contract, indenture, or other binding arrangement,
including without limitation the Note Purchase Agreement, to
which Issuer is a party or any of its property is subject.
(iv) Xxxxxx Xxxxxx and each of the other officers of the
Management Board of the Issuer has been duly appointed to act as
the representative of Issuer hereunder and has full power and
authority to execute, deliver, and perform this Agreement, to
execute and deliver any Joint Written Direction, to amend, modify
or waive any provision of this Agreement and to take any and all
other actions under this Agreement, all without further consent
or direction from, or notice to, Issuer or any other party.
(v) No party other than the parties hereto have, or shall
have, any lien, claim or security interest in the Defeasance
Funds or any part thereof. No financing statement under the
Uniform Commercial Code is on file in any jurisdiction claiming a
security interest in or describing (whether specifically or
generally) the Defeasance Funds or any part thereof.
(vi) All of the representations and warranties of Issuer
contained herein are true and complete as of the date hereof and
will be true and complete at the time of any disbursement from
the Defeasance Funds.
(vii) The Note Holders are the holders of Notes, in the
amounts set forth on the signature pages hereto, and the
registration books maintained by the Issuer pursuant to Section
10.04 of the Note Purchase Agreement reflect that fact.
12. Consent to Jurisdiction and Venue. In the event that
any party hereto commences a lawsuit or other proceeding relating
to or arising from this Agreement, the parties hereto agree that
the state courts of the State of Connecticut shall have
jurisdiction over any such proceeding. The parties hereto waive
any objection to such venue. The parties hereto consent to and
agree to submit to the jurisdiction of any of the courts
specified herein and agree to accept service or process to vest
personal jurisdiction over them in any of these courts.
13. Notice. All notices and other communications hereunder
she be in writing and shall be deemed to have been validly
served, given or delivered five (5) days after deposit in the
United States mails, by certified mail with return receipt
requested and postage prepaid, when delivered personally, one (1)
day after delivery to any overnight courier, or when transmitted
by facsimile transmission facilities, and addressed to the party
to be notified as follows:
If to Issuer at: Mohegan Tribal Gaming Authority
Xxx Xxxxxxx Xxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxxxxxx 00000
ATTENTION: Xxxxxx Xxxxxx, Chairman
Facsimile Number (000) 000-0000
With a copy to: ATTENTION: Xxxxxxx Xxxxxxxx, Chief
Financial Officer
Facsimile Number: (000) 000-0000
If to Note Holders at: a) Sun International Hotels Limited
Executive Xxxxxxx, Xxxxx Xxxxxx
XX Xxx X-0000, Xxxxxxxx Xxxxxx
Nassau, The Bahamas
ATTENTION: Xxxxxxx Xxxxx, Esq.
Facsimile Number: (000) 000-0000
b) Waterford Gaming, L.L.C.
000 Xxxxxxxx Xxxxxxxx
XX Xxx 000
Xxxxxxxxx, Xxxxxxxxxxx 00000
ATTENTION: Xxx Xxxxxx
Facsimile Number. (000) 000-0000
If to Defeasance Agent: First Union National Bank,
as Defeasance Agent
Corporate Trust Operations
00 Xxxxx Xxxxx Xxxxxx
0xx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
ATTENTION: W. Xxxxxxx Xxxxxx
Facsimile Number: (000) 000-0000
or to such other address as each party may designate for itself
by like notice.
14. Amendment or Waiver. This Agreement may be changed,
waived, discharged or terminated only by a writing signed by the
Representatives and Defeasance Agent. No delay or omission by
any party in exercising any right with respect hereto shall
operate as a waiver. A waiver on any one occasion shall not be
construed as a bar to, or waiver of, any right or remedy on any
future occasion.
15. Severability. To the extent any provision of this
Agreement is prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
16. Governing Law. This Agreement shall be construed and
interpreted in accordance with the internal laws of the State of
Connecticut without giving effect to the conflict of laws
principles thereof.
17. Entire Agreement. This Agreement constitutes the
entire agreement between the parties relating to the holding,
investment and disbursement of the Defeasance Funds and sets
forth in their entirety the obligations and duties of Defeasance
Agent with respect to the Defeasance Funds.
18. Binding Effect. All of the terms of this Agreement, as
amended from time to time, shall be binding upon, inure to the
benefit of and be enforceable by the respective heirs, successors
and assigns of Issuer, Note Holders, the Representatives and
Defeasance Agent.
19. Execution in Counterparts. This Agreement and any
Joint Written Direction may be executed in two or more
counterparts, which when so executed shall constitute one and the
same agreement or direction.
20. Termination. Upon the first to occur of the
disbursement of all amounts in the Defeasance Funds pursuant to
Joint Written Directions or the disbursement of all amounts in
the Defeasance Funds into court pursuant to Section 5 hereof,
this Agreement shall terminate and Defeasance Agent shall have no
further obligation or liability whatsoever with respect to this
Agreement or the Defeasance Funds.
21. Dealings. The Defeasance Agent and any stockholder,
director, officer or employee of the Defeasance Agent may buy,
sell, and deal in any of the securities of the Issuer or Note
Holders and become pecuniary interested in any transaction in
which the Issuer or Note Holders may be interested, and contract
and lend money to the Issuer or Note Holders and otherwise act as
fully and freely as though it were not Defeasance Agent under
this Agreement. Nothing herein shall preclude the Defeasance
Agent from acting in any other capacity for the Issuer or Note
Holders or for any other entity.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed under seal as of the date first above
written.
Defeasance Agent: Issuer:
FIRST UNION NATIONAL BANK Mohegan Tribal Gaming
Authority An instrumentality
of the Nation
By:________________________ By:_______________________
The undersigned acknowledge that the Authority has entered into
the foregoing and confirms the principal amounts of the Notes
held by each.
Amount: 15% Notes CG Notes Sun International Hotels
$ 850,000 $ 7,000,000
19,150,000 15,000,000
$20,000,000 10,000,000
5,000,000
8,000,000
$ 45,000,000
SUN INTERNATIONAL HOTELS LIMITED
A Bahaminan Corporation
By:_____________________________
Name:
Title:
Amount: 15% Notes CG Notes
$ 850,000 2,500,000
19,150,000 2,500,000
$ 20,000,000 $5,000,000
WATERFORD GAMING LLC
A Delaware limited liability company
By:__________________________________
Name:
Title:
SCHEDULE 1
INVESTMENT OF DEFEASANCE FUNDS
