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TWG INTERNATIONAL U.S. CORPORATION
Issuer
and
U.S. TRUST COMPANY OF TEXAS, N.A., as Trustee
INDENTURE
Dated as of March 31, 1998
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$17,000,000
12% Senior Secured Notes Due March 17, 2005
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TABLE OF CONTENTS
PAGE
ARTICLE 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.1 Certain Terms Defined . . . . . . . . . . . . . . . . . .
ARTICLE 2 ISSUE, EXECUTION, FORM AND REGISTRATION OF SECURITIES. . . . .
SECTION 2.1 Authentication and Delivery of Securities . . . . . . . .
SECTION 2.2 Execution of Securities . . . . . . . . . . . . . . . . .
SECTION 2.3 Certificate of Authentication . . . . . . . . . . . . . .
SECTION 2.4 Form, Denomination and Date of Securities; Payments of
Interest in Cash. . . . . . . . . . . . . . . . . . . . .
SECTION 2.5 Registration, Transfer and Exchange . . . . . . . . . . .
SECTION 2.6 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.7 Cancellation of Securities; Destruction Thereof . . . . .
SECTION 2.8 Temporary Securities. . . . . . . . . . . . . . . . . . .
ARTICLE 3 COVENANTS OF THE ISSUER . . . . . . . . . . . . . . . . . . . .
SECTION 3.1 Payment of Principal and Interest . . . . . . . . . . . .
SECTION 3.2 Offices for Payments, Etc.. . . . . . . . . . . . . . . .
SECTION 3.3 Appointment To Fill a Vacancy in Office of Trustee. . . .
SECTION 3.4 Paying Agents . . . . . . . . . . . . . . . . . . . . . .
SECTION 3.5 Officers' Certificates as to Default and as to
Compliance. . . . . . . . . . . . . . . . . . . . . . . .
SECTION 3.6 Mandatory Prepayment . . . . . . . . . . . . . . . . . . . . .
SECTION 3.7 Maintenance of Properties, Etc. . . . . . . . . . . . . .
SECTION 3.8 Indebtedness. . . . . . . . . . . . . . . . . . . . . . .
SECTION 3.9 Books . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 3.10 Limitation on Incurrence of Additional Indebtedness
for Issuer . . . . . . . . . . . . . . . . . . . . . . .
SECTION 3.11 Restrictions on Issuance of Stock
SECTION 3.12 Restrictions on Asset Sales. . . . . . . . . . . . . . .
SECTION 3.13 Distributions. . . . . . . . . . . . . . . . . . . . . .
SECTION 3.14 Limitation on Dividends and Other Payment Restrictions. .
Affecting Subsidiaries . . . . . . . . . . . . . . . . .
SECTION 3.15 Limitation on Investments. . . . . . . . . . . . . . . .
SECTION 3.16 Limitation on Liens. . . . . . . . . . . . . . . . . . .
SECTION 3.17 Transactions with Affiliates . . . . . . . . . . . . . .
SECTION 3.18 Change of Control. . . . . . . . . . . . . . . . . . . .
SECTION 3.19 Line of Business . . . . . . . . . . . . . . . . . . . .
SECTION 3.20 Payments for Consent . . . . . . . . . . . . . . . . . .
SECTION 3.21 Limitations on Sale and Leaseback Transaction. . . . . .
SECTION 3.22 Waiver of Stay, Extension or Usury Laws. . . . . . . . .
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SECTION 3.23 Security Interest. . . . . . . . . . . . . . . . . . . . . .
ARTICLE 4 SECURITYHOLDERS' LISTS AND REPORTS BY THE ISSUER AND
THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.1 Issuer To Furnish Trustee Information as to Names and
Addresses of Securityholders. . . . . . . . . . . . . . .
SECTION 4.2 Preservation and Disclosure of Securityholders' Lists . .
SECTION 4.3 Reports by the Issuer . . . . . . . . . . . . . . . . . .
SECTION 4.4 [Reserved]. . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE 5 REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT
OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 5.1 Event of Default Defined; Acceleration of Maturity;
Waiver of Default . . . . . . . . . . . . . . . . . . . .
SECTION 5.2 Collection of Indebtedness by Trustee; Trustee May Prove
Indebtedness. . . . . . . . . . . . . . . . . . . . . . .
SECTION 5.3 Application of Proceeds . . . . . . . . . . . . . . . . .
SECTION 5.4 Suits for Enforcement . . . . . . . . . . . . . . . . . .
SECTION 5.5 Restoration of Rights on Abandonment of Proceedings . . .
SECTION 5.6 Limitations on Suits by Securityholders . . . . . . . . .
SECTION 5.7 Unconditional Right of Securityholders To Institute
Certain Suits . . . . . . . . . . . . . . . . . . . . . .
SECTION 5.8 Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default . . . . . . . . . . . . . . . . . . . .
SECTION 5.9 Control by Securityholders. . . . . . . . . . . . . . . .
SECTION 5.10 Waiver of Past Defaults. . . . . . . . . . . . . . . . .
SECTION 5.11 Trustee to Give Notice of Default, But May Withhold in
Certain Circumstances. . . . . . . . . . . . . . . . . .
SECTION 5.12 Right of Court To Require Filing of Undertaking To Pay
Costs. . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE 6 CONCERNING THE TRUSTEE. . . . . . . . . . . . . . . . . . . . .
SECTION 6.1 Duties and Responsibilities of the Trustee; During
Default; Prior to Default. . . . . . . . . . . . . . . .
SECTION 6.2 Certain Rights of the Trustee. . . . . . . . . . . . . .
SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof. . . . . .
SECTION 6.4 Trustee and Agents May Hold Securities;
Collections, Etc.. . . . . . . . . . . . . . . . . . . .
SECTION 6.5 Moneys Held by Trustee . . . . . . . . . . . . . . . . .
SECTION 6.6 Compensation and Indemnification of Trustee and
Its Prior Claim. . . . . . . . . . . . . . . . . . . . .
SECTION 6.7 Right of Trustee to Rely on Officers'
Certificate, Etc.. . . . . . . . . . . . . . . . . . . .
SECTION 6.8 [Reserved] . . . . . . . . . . . . . . . . . . . . . . .
SECTION 6.9 Persons Eligible for Appointment as Trustee. . . . . . .
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SECTION 6.10 Resignation and Removal; Appointment of Successor
Trustee. . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 6.11 Acceptance of Appointment by Successor Trustee. . . . . .
SECTION 6.12 Merger, Conversion, Consolidation or Succession to
Business of Trustee . . . . . . . . . . . . . . . . . . .
SECTION 6.13 [Reserved] . . . . . . . . . . . . . . . . . . . . . . .
SECTION 6.14 Intervention in Litigation . . . . . . . . . . . . . . .
SECTION 6.15 Appointment of Co-Trustees . . . . . . . . . . . . . . .
SECTION 6.16 Effect of Death, Incapacity, etc.. . . . . . . . . . . .
ARTICLE 7 CONCERNING THE SECURITYHOLDERS . . . . . . . . . . . . . . . .
SECTION 7.1 Evidence of Action Taken by Securityholders. . . . . . .
SECTION 7.2 Proof of Execution of Instruments and of Holding of
Securities . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.3 Holders To Be Treated as Owners. . . . . . . . . . . . .
SECTION 7.4 Securities Owned by Issuer Deemed Not Outstanding. . . .
SECTION 7.5 Right of Revocation of Action Taken. . . . . . . . . . .
ARTICLE 8 SUPPLEMENTAL INDENTURES. . . . . . . . . . . . . . . . . . . .
SECTION 8.1 Supplemental Indentures Without Consent of
Securityholders. . . . . . . . . . . . . . . . . . . . .
SECTION 8.2 Supplemental Indentures with Consent of
Securityholders. . . . . . . . . . . . . . . . . . . . .
SECTION 8.3 Effect of Supplemental Indenture . . . . . . . . . . . .
SECTION 8.4 Documents To Be Given to Trustee . . . . . . . . . . . .
SECTION 8.5 Notation on Securities in Respect of Supplemental
Indentures . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE 9 NO CONSOLIDATION, MERGER, SALE OR CONVEYANCE . . . . . . . . .
ARTICLE 10 SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS . . . . . . . . . . . . . . . . . . . . . . .
SECTION 10.1 Satisfaction and Discharge of Indenture. . . . . . . . .
SECTION 10.2 Defeasance and Discharge of Indenture. . . . . . . . . .
SECTION 10.3 Defeasance of Certain Obligations. . . . . . . . . . . .
SECTION 10.4 Application by Trustee of Funds Deposited for Payment of
Securities . . . . . . . . . . . . . . . . . . . . . . .
SECTION 10.5 Repayment of Moneys Held by Paying Agent . . . . . . . .
SECTION 10.6 Return of Moneys Held by Trustee and Paying Agent
Unclaimed for One Year . . . . . . . . . . . . . . . . .
SECTION 10.7 Reinstatement. . . . . . . . . . . . . . . . . . . . . .
ARTICLE 11 MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . .
SECTION 11.1 Incorporators, Shareholders, Officers and Directors of
Issuer Exempt from Individual Liability. . . . . . . . .
SECTION 11.2 Provisions of Indenture for the Sole Benefit of Parties
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and Securityholders. . . . . . . . . . . . . . . . . . .
SECTION 11.3 Successors and Assigns of Issuer Bound by Indenture. . .
SECTION 11.4 Notices and Demands on Issuer, Trustee and
Securityholders. . . . . . . . . . . . . . . . . . . . .
SECTION 11.5 Compliance Certificates and Opinions of Counsel;
Statements To Be Contained Therein . . . . . . . . . . .
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays . . . .
SECTION 11.7 [Reserved]. . . . . . . . . . . . . . . . . . . . . . .
SECTION 11.8 New York Law To Govern
SECTION 11.9 Counterparts. . . . . . . . . . . . . . . . . . . . . .
SECTION 11.10 Effect of Headings. . . . . . . . . . . . . . . . . . .
SECTION 11.11 Waiver of Usurious Interest . . . . . . . . . . . . . .
SECTION 11.12 Authority to Act. . . . . . . . . . . . . . . . . . . .
ARTICLE 12 REDEMPTION OF SECURITIES . . . . . . . . . . . . . . . . . . .
SECTION 12.1 Right of Optional Redemption; Prices . . . . . . . . . .
SECTION 12.2 Notice of Redemption . . . . . . . . . . . . . . . . . .
SECTION 12.3 Payment of Securities Called for Redemption. . . . . . .
SECTION 12.4 Exclusion of Certain Securities from Eligibility for
Selection for Redemption . . . . . . . . . . . . . . . .
ARTICLE 13 Deleted
ARTICLE 14 SECURITY . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 14.1 Pledge and Security Interest . . . . . . . . . . . . . .
SECTION 14.2 Security for Obligation. . . . . . . . . . . . . . . . .
SECTION 14.3 Perfection of Security Interest. . . . . . . . . . . . .
SECTION 14.4 No Disposition of Collateral; Release of Lien of
Indenture. . . . . . . . . . . . . . . . . . . . . . . .
SECTION 14.5 Other Liens. . . . . . . . . . . . . . . . . . . . . . .
SECTION 14.6 Trustee Appointed Attorney-in-Fact . . . . . . . . . . .
SECTION 14.7 Return of Collateral . . . . . . . . . . . . . . . . . .
SECTION 14.8 Default Remedies . . . . . . . . . . . . . . . . . . . .
SECTION 14.9 Proceeds . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 14.10 Deficiency. . . . . . . . . . . . . . . . . . . . . . .
SECTION 14.11 Trustee's Duties. . . . . . . . . . . . . . . . . . . .
SECTION 14.12 Special Trustee Powers Due to Environmental Conditions
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-iv-
THIS INDENTURE, dated as of March 31, 1998 by and among TWG International
U.S. Corporation, a Nevada corporation (the "Issuer"), and U.S. Trust Company of
Texas, N.A., a national banking association, not in its individual capacity but
solely as trustee (the "Trustee"),
W I T N E S S E T H :
WHEREAS, the Issuer has duly authorized the issue of its 12% Senior
Secured Note Due March 17, 2005 (the "Securities"); and
WHEREAS, the Securities and the Trustee's certificate of authentication
shall be in substantially the following form:
[FORM OF FACE OF SECURITY]
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES ACT, AND MAY NOT BE TRANSFERRED WITHOUT
REGISTRATION UNDER SUCH ACTS OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER
THAT SUCH REGISTRATION IS NOT REQUIRED.
No. $
TWG INTERNATIONAL U.S. CORPORATION
12% Senior Secured Note Due March 17, 2005
Date: March 0000
Xxx Xxxx, Xxx Xxxx
TWG International U.S. Corporation, a Nevada corporation (the "Issuer"),
for value received hereby promises to pay to TWG Finance Corp. a Nevada
corporation, or registered assigns, the principal sum of $17,000,000 at the
Issuer's office or agency for said purpose, on March 17, 2005, in such coin or
currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts, and to pay interest
semi-annually on March 17 and September 17 (each an "Interest Payment Date") of
each year, commencing with September 17, 1998, on said principal sum in like
coin or currency at 12% simple interest per annum at said office or agency from
the most recent Interest Payment Date to which interest on the Securities has
been paid or duly provided for unless the date hereof is a date to which
interest on the Securities is paid or duly provided for, in which case from the
date of this Security, or unless no interest has been paid or duly provided for
on the Securities, in which case from the date of issuance. To the extent
lawful, the Issuer promises to pay interest on any
Page 1
interest payment due but unpaid on such unpaid principal amount at a rate of 17%
per annum compounded semi-annually.
The interest so payable on any Interest Payment Date will, except as
otherwise provided in the Indenture referred to on the reverse hereof, be paid
to the Person in whose name this Security is registered at the close of business
on March 17 or September 17 whether or not a Business Day (each an "Interest
Record Date") next preceding such Interest Payment Date, whether or not such day
is a Business Day; PROVIDED that interest may be paid, at the option of the
Issuer, by mailing a check therefor payable on the Interest Payment Date to the
registered Holder entitled thereto at his last address as it appears on the
Security register.
If interest on the Securities is in default, the Trustee shall, prior to
the payment of interest, establish a special record date (the "Special Record
Date") for such payment, which Special Record Date shall be not more than
fifteen (15) nor less than ten (10) days prior to the date of the proposed
payment. Payment of such defaulted interest shall then be made by check, as
provided herein and in the Indenture, mailed or remitted to the persons in whose
names the Securities are registered on the Special Record Date at the addresses
or accounts of such persons shown on the security register.
Interest on this Security will be calculated on the basis of a 360-day
year, consisting of twelve 30-day months.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof which further provisions shall for all purposes have
the same effect as if set forth in this place.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed under its corporate seal.
[Seal] TWG INTERNATIONAL U.S. CORPORATION
By:_____________________________________
Its:____________________________________
Page 2
[FORM OF REVERSE OF SECURITY]
TWG INTERNATIONAL U.S. CORPORATION
12% Senior Secured Note Due March 17, 2005
This Security is the duly authorized issue of a debt security of the
Issuer, with the principal amount of $17,000,000, issued pursuant to an
indenture dated as of March 31, 1998, (the "Indenture"), duly executed and
delivered by the Issuer to U.S. Trust Company of Texas, N.A., as Trustee (herein
called the "Trustee"). Reference is hereby made to the Indenture and all
indentures supplemental thereto for a description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the Trustee, the Issuer
and the Holders (the words "Holders" or "Holder" meaning the registered holders
or registered holder) of the Securities. The Securities are secured obligations
of the Issuer. Capitalized terms used in this Security and not defined herein
shall have the meaning set forth in the Indenture.
In case an Event of Default (as defined in the Indenture) shall have
occurred and be continuing, the principal and interest in respect of all of the
Securities then outstanding may be declared due and payable in the manner and
with the effect, and subject to the conditions, provided in the Indenture. The
Indenture provides that the Holders of 50% in aggregate principal amount of the
Securities then outstanding, by notice to the Trustee, may on behalf of the
Holders of all of the Securities, waive any existing Default or Event of Default
and its consequences under the Indenture except a continuing Default or Event of
Default in the payment of interest or premium on, or the principal of, the
Securities or in respect of a covenant or provision that cannot be modified or
amended without the consent of all Holders of the Securities. Any such consent
or waiver by the Holder of this Security (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such Holder and upon all future
Holders and owners of this Security and any Security which may be issued in
exchange or substitution therefor, whether or not any notation thereof is made
upon this Security or such other Securities.
The Indenture permits the Issuer and the Trustee, with the consent of the
Holders of not less than 50% in aggregate principal amount of the Securities at
the time outstanding, evidenced as in the Indenture provided, to execute
supplemental indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of any supplemental
indenture or modifying in any manner the rights of the Holders of the
Securities; PROVIDED that no such supplemental indenture shall, without the
consent of each Holder affected thereby (with respect to any Securities held by
a non-consenting Securityholder) (i) reduce the principal amount of Securities
whose Holders must consent to an amendment, supplement or waiver, (ii) reduce
the principal of or change the fixed maturity of any Security or alter the
provisions with respect to the redemption of the Securities, (iii) reduce the
rate of or change the time for payment of interest on any Security, (iv) waive a
Default or Event of Default
Page 3
in the payment of principal of or premium, if any, or interest on the Securities
(except a rescission of acceleration of the Securities by the Holders of at
least 50% in aggregate principal amount of the then outstanding Securities and a
waiver of the payment default that resulted from such acceleration), (v) make
any Security payable in money other than that stated in the Securities, (vi)
make any change in the provisions of the Indenture relating to waivers of past
Defaults or the rights of Holders of Securities to receive payments of principal
of or interest on the Securities, (vii) waive a redemption payment with respect
to any Security or (viii) make any change in the foregoing amendment and waiver
provisions.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligations of the Issuer, which are
absolute and unconditional, to pay the principal of and the interest on this
Security at the place, times, and rate, and in the currency, herein prescribed.
The Securities are issuable only as registered Securities without
coupons.
At the office or agency of the Issuer referred to on the face hereof and
in the manner and subject to the limitations provided in the Indenture,
Securities may be exchanged for a like aggregate principal amount of Securities
of other authorized denominations.
Upon due presentment for registration of transfer of this Security at the
above-mentioned office or agency of the Issuer, a new Security or Securities of
authorized denominations, for a like aggregate principal amount, will be issued
to the transferee as provided in the Indenture. No service charge shall be made
for any such transfer, but the Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto.
As provided in the Indenture, Issuer shall be required to make mandatory
prepayments equal to Excess Cash Flow until Obligations are fully defeased
pursuant to Section 10.2 or until one hundred percent (100%) of the principal
amount of the Securities, together with accrued and unpaid interest, is paid.
The Securities may also be redeemed by the Issuer, in whole, or in part, upon
mailing a notice of such redemption not less than 30 nor more than 60 days prior
to the date fixed for redemption to the Holders of Securities to be redeemed, at
a redemption price equal to 100% of the principal amount of the Securities
redeemed, together with accrued and unpaid interest to the date fixed for
redemption. If there is a Change of Control (as defined in the Indenture), the
Issuer shall be required to offer to purchase all outstanding Securities at a
purchase price equal to 100% of the principal amount thereof, plus accrued
unpaid interest, if any, through the date of such purchase.
Subject to payment by the Issuer of a sum sufficient to pay the amount
due upon redemption, interest on this Security shall cease to accrue upon the
date duly fixed for redemption of this Security.
Page 4
The Issuer, the Trustee and any authorized agent of the Issuer or the
Trustee may deem and treat the registered Holder hereof as the absolute owner of
this Security (whether or not this Security shall be overdue and notwithstanding
any notation of ownership or other writing hereon made by anyone other than the
Issuer or the Trustee or any authorized agent of the Issuer or the Trustee), for
the purpose of receiving payment of, or on account of, the principal hereof and
premium, if any, and subject to the provisions on the face hereof, interest
hereon and for all other purposes, and neither the Issuer nor the Trustee nor
any authorized agent of the Issuer or the Trustee shall be affected by any
notice to the contrary.
No recourse shall be had for the payment of the principal of, premium, if
any, or the interest on this Security, for any claim based hereon, or otherwise
in respect hereof, or based on or in respect of the Indenture or any indenture
supplemental thereto, against any incorporator, shareholder, officer, employee
or director, as such, past, present or future, of the Issuer or Trustee or of
any successor corporation, either directly or through the Issuer or any
successor corporation, whether by virtue of any constitution, statute or rule of
law or by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.
Customary abbreviations may be used in the name of a Securityholder 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).
This Security shall not be valid or obligatory until the certificate of
authentication hereon shall have been duly signed by an authorized signatory of
the Trustee acting under the Indenture.
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the within-mentioned
Indenture.
Dated:
U.S. Trust Company of Texas, N.A. , as Trustee
By:___________________________________________
Authorized Signatory
Page 5
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to:
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _________________________________________ agent to
transfer this Security on the books of Issuer. The agent may substitute another
to act for him.
If you want the Note certificate made out in another person's name, fill in the
form below:
________________________________________________________________________________
(insert other person's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type other person's name, address and zip code)
Date:_______________________________ _______________________________
Your Signature
_______________________________
Signature Guaranty
_______________________________
Notice: Signature must be
guaranteed by an
Page 6
"Eligible Guarantor
Institution" as defined by
Securities Exchange Act Rule
17Ad-15.
(Sign exactly as your name appears on the other side of this Security)
NOW, THEREFORE:
In consideration of the premises and the purchases of the Securities by
the Holders thereof, the Issuer and the Trustee mutually covenant and agree for
the equal and proportionate benefit of the respective Holders from time to time
of the Securities as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 CERTAIN TERMS DEFINED. The following terms (except as
otherwise expressly provided or unless the context otherwise clearly requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section 1.1. All other
terms used in this Indenture which are defined in the Trust Indenture Act of
1939, as amended, or the definitions of which in the Securities Act of 1933, as
amended, are referred to in the Trust Indenture Act of 1939 (except as herein
otherwise expressly provided or unless the context otherwise requires) have the
meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as in force at the date of this Indenture. The words "HEREIN,"
"HEREOF" and "HEREUNDER" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision. The terms defined in this Article include the plural as well as
the singular.
"ACCELERATION DATE" has the meaning specified in Section 5.1.
"ACCELERATION NOTICE" has the meaning specified in Section 5.1.
"ACQUIRED INDEBTEDNESS" means, Indebtedness of an entity, which entity is
acquired by Issuer or any of its Subsidiaries after the initial issuance of the
Securities.
"AFFILIATE" means any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with either of the
Issuer, including, without limitation, any senior officer, directors or Key
Employees of either of the Issuer. For purposes of this definition, the term
"control" means the power to direct the management and policies of a Person,
directly or through one or more intermediaries, whether through the ownership of
voting securities, by contract, or otherwise, PROVIDED, that, with respect to
ownership interests in the Issuer and its Subsidiaries a beneficial owner of 5%
or more of the total voting power normally entitled to vote
Page 7
in the election of directors, managers or trustees, as applicable, shall for
such purposes be deemed to constitute control. Affiliate shall not include the
initial Securityholders.
"AFFILIATE TRANSACTION" has the meaning specified in Section 3.17.
"APPLICANTS" has the meaning specified in Section 4.2.
"ASSET SALE" means the sale, lease, conveyance, disposition or other
transfer (including, without limitation, by eminent domain, condemnation or
similar governmental proceeding) of any property or assets of the Issuer or any
of its direct or indirect Subsidiaries (including a sale and leaseback
transaction or the issuance, sale or transfer of Capital Stock of a direct or
indirect Subsidiary except an acquisition of such Capital Stock by Issuer or its
direct or indirect Subsidiaries)).
"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 obtained by multiplying (x) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity in respect thereof, by (y) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount or liquidation preference, as applicable, of such security or instrument,
as the case may be.
"BOARD OF DIRECTORS" means the Board of Directors of the Issuer, or any
committee of such Board duly authorized to act hereunder.
"BUSINESS DAY" means a day which in the city (or in any of the cities, if
more than one) where amounts are payable in respect of the Securities, as
specified on the face of the form of Security recited above, or in the city in
which either the Corporate Trust Office of the Trustee or Operations office is
located, is neither a legal holiday nor a day on which banking institutions are
required or authorized by law or regulation to close.
"CAPITALIZED LEASE OBLIGATION" means rental obligations under a lease
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 EXPENDITURES" shall mean, for any period, expenditures
(including the aggregate amount of capital lease obligations incurred during
such period) made by TWG International or any of its direct or indirect
Subsidiaries to acquire or to construct fixed assets and equipment (including,
renewals, improvements and replacements, but excluding repairs in the ordinary
course) during such period computed in accordance with GAAP.
Page 8
"CAPITAL STOCK" means any and all shares, interests (including ownership
interests arising pursuant to association agreements under the laws of the Czech
Republic), participations, rights or other equivalents (however designated) or
corporate stock, whether common or preferred, including, without limitation,
partnership interests, membership interests in limited liability companies and
ownership interests in joint stock companies.
"CASH EQUIVALENT" means (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) or (ii) time deposits and
certificates of deposit and commercial paper issued by the parent corporation of
any domestic commercial bank of recognized standing having capital and surplus
in excess of $350 million 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.
"CHANGE OF CONTROL" means the occurrence of any of the following (without
the consent of not less than the Holders of 50% of the aggregate principal
amount of the Securities then Outstanding) (i) any sale, transfer, conveyance or
other disposition in one or a series of related transactions, of all or
substantially all of the assets of the Issuer and its Subsidiaries taken as a
whole or of TWG or TWG Finance to any "person" (as defined in Section 13(d)(3)
of the Exchange Act) or "group" (as defined in Section 13(d)(3)) of the Exchange
Act); (ii) the acquisition of beneficial ownership or the right to acquire
beneficial ownership pursuant to warrants, options or other rights to acquire,
by any "person" or "group" (each as defined above) of more than 35% of the
Capital Stock of TWG (other than Value Partners, Ltd. or Xxxxxx Tottenham and/or
an entity controlled by him); (iii) the adoption of a plan for the liquidation
or dissolution of TWG, TWG Finance or the Issuer; or (iv) TWG, TWG Finance or
the Issuer consolidates with, or merges with or into, another "person" (as
defined above).
"CHANGE OF CONTROL OFFER" has the meaning specified in Section 3.18.
"CHANGE OF CONTROL PAYMENT" has the meaning specified in Section 3.18.
"CHANGE OF CONTROL PAYMENT DATE" has the meaning specified in Section
3.18.
"COLLATERAL" has the meaning specified in Section 14.1.
"COLLATERAL AGREEMENTS" means any agreements including those executed by
the Issuer, 21st Century Resorts, a.s., LMJ Slots, s.r.o., LMJ Casino Rozvadov,
a.s., Atlantic Properties, s.r.o., Trans World Leasing Limited and Cyprus Entity
and/or such other Persons necessary to create a Security Interest in favor of
the Trustee and the Securityholders in the Collateral.
Page 9
"COMMISSION" means the U.S. Securities and Exchange Commission.
"CONSOLIDATED" means the consolidated results of the Issuer and its
Subsidiaries as determined in accordance with GAAP.
"CONSOLIDATED COVERAGE RATIO" of Issuer 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 Issuer 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 Issuer (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 Issuer's Consolidated Fixed Charges subsequent to the Transaction Date)
during the Reference Period; PROVIDED that for purposes of such calculation,
(i) acquisitions which occurred during the Reference Period or subsequent to
the Reference Period and on or prior to the Transaction Date shall be assumed
to have occurred on the first day of the Reference Period, (ii) transactions
giving rise to the need to calculate the Consolidated Coverage Ratio shall be
assumed to have occurred on the first day of the Reference Period, (iii) the
incurrence of any Indebtedness 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, and (iv) the Consolidated Fixed Charges of Issuer
attributable to interest on any Indebtedness bearing a floating interest 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.
"CONSOLIDATED EBITDA" means, with respect to Issuer, for any period,
the Consolidated Net Income of Issuer for such period adjusted to add thereto
(to the extent deducted from net revenues in determining Consolidated Net
Income), without duplication, the sum of (i) Consolidated income tax expense
(other than corporate income taxes paid in the Czech Republic), (ii)
Consolidated depreciation and amortization expense and provided further that
amortization of pre-opening expenses for the Czech Casinos may only be added
thereto in an aggregate amount up to $2,000,000 (including all such amounts
added in all previous periods) and (iii) Consolidated Fixed Charges.
"CONSOLIDATED FIXED CHARGES" of Issuer means, for any period, the
aggregate amount (without duplication and determined in each case in
accordance with GAAP) of interest (whether fixed or contingent) expensed or
capitalized, paid, accrued or scheduled to be paid or accrued (including, in
accordance with the following sentence, interest attributable to Capitalized
Lease Obligations) of Issuer and its Subsidiaries during such period,
including (i) original issue
Page 10
discount and non-cash interest payments or accruals on any Indebtedness, (ii)
the interest portion of all deferred payment obligations, and (iii) all
commissions, discounts and other fees and charges owed with respect to
bankers' acceptances and letters of credit, in each case to the extent
attributable to such period. For purposes of this definition, (x) interest on
a Capitalized Lease Obligation shall be deemed to accrue at an interest rate
reasonably determined by Issuer 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 of Issuer or a
Subsidiary of Issuer 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 Issuer for any
period, the net income (or loss) of Issuer and its Subsidiaries (determined
on a consolidated basis in accordance with GAAP) for such period, adjusted to
exclude (only to the extent included in computing such net income (or loss)
and without duplication): (a) all gains (but not losses) which are either
extraordinary (as determined in accordance with GAAP) or are nonrecurring
(including any gain from the sale or other disposition of assets outside the
ordinary course of business), (b) the net income or loss of any Person
acquired in a pooling of interests transaction for any period prior to the
date of such acquisition, and (c) the net income, if positive, of any of
Issuer's 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 Subsidiary.
"CORPORATE TRUST OFFICE" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date as of which this
Indenture is dated, located at 0000 Xxxx Xxxxxx, Xxxxxx, XX 00000-0000,
Attention: Corporate Trust Department.
"CYPRUS ENTITY" means an entity to be formed in Cyprus by TWG
International as a direct Subsidiary.
"DEFAULT" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"DEFAULT RATE" with respect to the Securities means 17% per annum
compounded semiannually, subject to the Maximum rate.
"EVENT OF DEFAULT" means any event or condition specified as such in
Section 5.1 which shall have continued for the period of time, if any,
therein designated.
"EXCESS CASH FLOW" means, for any period, Issuer's consolidated net
income for such period (as determined by GAAP) adjusted as follows (in each
case without duplication): PLUS (i)
Page 11
non-cash items which decrease consolidated net income, including, without
limitation, depreciation expense and amortization expense (including
amortization of deferred financing costs and original issue discounts), but
only to the extent included in computing such consolidated net income, PLUS
(ii) Undistributed Excess Cash Flow, MINUS (iii) the amount of Capital
Expenditures actually paid during such period, not to exceed $100,000 in any
Fiscal Year (provided that the amount of Capital Expenditures permitted for
the Fiscal Year in which the issuance of the Securities occurs shall be pro
rated based on the number of days remaining in such Fiscal Year, MINUS (iv)
the amount necessary to establish or maintain a working capital reserve,
provided that such amount to be subtracted from consolidated net income from
operations shall not exceed $100,000 in any Fiscal Year (provided further
that such amount retained for working capital purposes for the Fiscal Year in
which the issuance of the Securities occurs shall be pro rated based on the
number of days remaining in such Fiscal Year from and after the Issue Date),
MINUS (v) the amount necessary to establish or maintain a reserve for
acquisitions of assets or capital stock (or other similar ownership interest)
of local casinos located outside the United States and operations relating
thereto, provided that such amount to be subtracted from Consolidated Net
Income from operations shall not exceed $1,500,000 (less the amount by which
the Securities sold in the offering hereby exceeds $16,000,000) during the
period from the Issue Date through the date all principal, together with all
accrued and unpaid interest, is paid in full or is defeased pursuant to
Section 10.2.
"EXCESS PROCEEDS" shall have the meaning specified in Section 3.12.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FISCAL YEAR" means the annual accounting period adopted by each
Issuer, which shall initially be the annual accounting period ending December
31 of each year.
"GAAP" means United States of America generally accepted accounting
principles set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants
and statements and pronouncements of the Financial Accounting Standards Board
or in such other statements by such other entity as may be approved by a
significant segment of the accounting profession, as the same are in effect
on the Issue Date.
"GUARANTEE" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness, and "Guaranteed" has a correlative meaning.
"HOLDER," "SECURITYHOLDER" or any other similar term means the
registered holder of any Security.
"INCUR" OR "INCURRED" means to, directly or indirectly, create, incur,
issue, assume,
Page 12
guaranty or otherwise become liable with respect to.
"INCURRENCE DATE" has the meaning specified in Section 3.10.
"INDEBTEDNESS" means, with respect to any Person, without duplication,
any indebtedness of such Person, whether or not contingent, in respect of
borrowed money or evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in respect
thereof) or representing the balance deferred and unpaid of the purchase
price of any property (including pursuant to capital leases), except any such
balance that constitutes an accrued expense, trade payable or winnings
payable, if and to the extent any of the foregoing would appear as a
liability upon a balance sheet of such Person prepared in accordance with
GAAP, and also includes, to the extent not otherwise included, the Guarantee
of items that would be included within this definition and all Indebtedness
of others secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on any
asset or property (including, without limitation, leasehold interests and any
other tangible or intangible property) of such Person, whether or not such
Indebtedness is assumed by such Person or is not otherwise such Person's
legal liability, PROVIDED that if the obligations so secured have not been
assumed in full by such Person or are otherwise not such Person's legal
liability in full, the amount of such Indebtedness for the purposes of this
definition shall be limited to the lesser of the amount of such Indebtedness
secured by such Lien or the fair market value of the assets or property
securing such Lien. Notwithstanding the foregoing, the term "Indebtedness"
shall not include deferred compensation arrangements that are not evidenced
by bonds, notes, debentures or similar instruments.
"INDENTURE" means this instrument as originally executed and delivered
or, if amended or supplemented as herein provided, as so amended or
supplemented.
"INTEREST PAYMENT DATE" has the meaning specified in first paragraph
of Form of Security herein.
"INTEREST RECORD DATE" has the meaning specified in Section 2.4.
"INVESTMENT" by any Person in any other Person means (without
duplication) (a) the acquisition (whether by purchase, merger, consolidation
or otherwise) by such Person (whether for cash, property, services,
securities or otherwise) of capital stock, bonds, notes, debentures,
partnership or other ownership interests or other securities, including any
options or warrants, of such other Person or any agreement to make any such
acquisition; (b) the making by such Person of any deposit with, or advance,
loan or other extension of credit to, such other Person (including the
purchase of property from another Person subject to an understanding or
agreement, contingent or otherwise, to resell such property to such other
Person) or any commitment to make any such advance, loan or extension (but
excluding accounts receivable, gaming credits or
Page 13
deposits arising in the ordinary course of business); (c) 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; and (d) the making of any capital contribution by such Person to such
other Person.
"ISSUE DATE" means the date on which the Securities are originally
issued under this Indenture.
"ISSUER" means TWG International U.S. Corporation, a Nevada
corporation, and, subject to Article Nine, their successors and assigns, and
to the extent required by Sections 310 to 317 of the Trust Indenture Act of
1939, any other obligor on the Securities.
"JUNIOR INDEBTEDNESS" means any Indebtedness of the Issuer, whether
outstanding at the date hereof or incurred thereafter, that is subordinate in
right of payment, either pursuant to its terms or by operation of law, to the
Securities, which Indebtedness provides for a fixed date when the principal
thereof (disregarding any mandatory redemptions or pre-payments required in
respect thereof) is due and payable which is on or after the final maturity
of the Securities.
"KEY EMPLOYEE" means persons such as casino managers or sales and
marketing managers, who are not executive officers but who make or are
expected to make significant contributions to the business of the Issuer.
"LIEN" means, with respect to any asset, any mortgage, including
without limitation any multiple indebtedness mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease
in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"MAXIMUM RATE" has the meaning contained in Section 3.1.
"NET CASH PROCEEDS" means the aggregate cash proceeds received by the
Issuer or any of its Subsidiaries in respect of any Asset Sale, net of the
direct costs relating to such Asset Sale (including, without limitation,
title insurance fees and premiums, filing and recordation fees, permit fees,
landlord consent payments and other amounts required to be paid to transfer
the assets that are the subject of such Asset Sale, sales commissions and
legal, accounting and investment banking fees incurred in respect of such
Asset Sale) and any relocation expenses incurred as a result thereof, taxes
paid or payable as a result thereof (after taking into account any available
tax credits or deductions and any tax sharing arrangements), and amounts
required to be applied to the repayment of Indebtedness secured by a Lien on
the asset or assets that are the
Page 14
subject of such Asset Sale; PROVIDED FURTHER, HOWEVER, that if the agreement
or instrument governing such Asset Sale requires the transferor to maintain a
portion of the purchase price in escrow (whether as reserve for adjustment in
respect of the purchase price or otherwise) or to indemnify the transferee
for specified liabilities in a maximum stated amount for a stated period of
time, the portion of the cash consideration that is actually placed in escrow
or segregated and set aside by the transferor for such indemnification
obligation shall not be deemed to be Net Cash Proceeds until the escrow
terminates or the transferor ceases to segregate and set aside such funds, in
whole or in part, and then only to the extent of the proceeds released from
escrow to the transferor or that are no longer segregated and set aside by
the transferor.
"OBLIGATIONS" has the meaning specified in Section 14.2.
"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of
the Board of Directors or the President or any Vice President (whether or not
designated by a number or numbers or a word or words added before or after
the title "Vice President") and by the Treasurer or the Secretary or any
Assistant Treasurer or Secretary of the Issuer and delivered to the Trustee.
Each such certificate shall include the statements provided for in Section
11.5.
"OPERATIONS OFFICE" means with respect to the Trustee the office
maintained by the Trustee or an affiliate thereof for the payment of interest
and principal on the Securities.
"OPINION OF COUNSEL" means an opinion in writing signed by legal
counsel who may be an employee of or counsel to the Issuer or who may be
other counsel satisfactory to the Trustee. Each such opinion shall include
the statements provided for in Section 11.5, if and to the extent required
hereby.
"OUTSTANDING," when used with reference to Securities, means, subject
to the provisions of Sections 6.8 and 7.4, as of any particular time, all
Securities authenticated and delivered by the Trustee under this Indenture,
except:
(a) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or redemption
(i) of which moneys in the necessary amount shall have been deposited in
trust with the Trustee or with any paying agent (other than the Issuer) or
shall have been set aside, segregated and held in trust by the Issuer (if the
Issuer shall act as paying agent) or (ii) of which moneys and/or Government
Securities as contemplated by Section 10.2 in the necessary amount have been
theretofore deposited with the Trustee (or another trustee satisfying the
requirements of Section 6.9) in trust for the Holders of such Securities in
accordance with Section 10.2 and the conditions set forth therein have been
satisfied; PROVIDED that if such Securities are to be redeemed prior to the
Page 15
maturity thereof, notice of such redemption shall have been given as herein
provided, or provision satisfactory to the Trustee shall have been made for
giving such notice; and
(c) Securities in substitution for which other Securities shall have
been authenticated and delivered, or which shall have been paid, pursuant to
the terms of Section 2.6 (unless proof satisfactory to the Trustee is
presented that any of such Securities is held by a Person in whose hands such
Security is a legal, valid and binding obligation of the Issuer).
"PAYMENT DEFAULT" has the meaning specified in Section 5.1.
"PERMITTED INVESTMENT" means (a) any Investment in a Cash Equivalent,
and (b) an aggregate amount not to exceed $1,500,000 for the period
commencing on the Issue Date and concluding on the date one hundred percent
(100%) of all the principal amount of the Securities, together with accrued
and unpaid interest thereon, is paid in full or is defeased pursuant to
Section 10.2, to be used solely for the acquisition of casinos located
outside of the United States and operations related thereto; provided, that
(i) 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
acquisition and (ii) such acquired assets will be subject to a first priority
Lien for the benefit of the holders of the Securities pursuant to a security
agreement in form and substance satisfactory to the holders of a majority of
the aggregate outstanding principal amount of the Securities.
"PERMITTED REFINANCING" has the meaning specified in the definition of
Refinancing Indebtedness.
"PERSON" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"PRIMARY INDENTURE" means that certain Indenture dated as of March
31, 1998, pursuant to which the Issuer, TWG and TWG Finance Corporation are
issuers and the Trustee herein is the trustee, as to those certain
$17,000,000 12% Senior Secured Note Due March 17, 2008.
"PRINCIPAL" wherever used with reference to the Securities or any
Security or any portion thereof, shall be deemed to include the face amount
of the Security plus, when appropriate, the premium, if any.
"PROPERTY" of any Person means all types of real, personal, tangible,
intangible or mixed property owned by such Person whether or not included on
the most recent consolidated balance sheet of such Person in accordance with
GAAP.
Page 16
"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 Securities.
"REFINANCED INDEBTEDNESS" has the meaning specified in the definition of
Refinancing Indebtedness.
"REFINANCING INDEBTEDNESS" means Indebtedness issued in exchange for, or
the proceeds of which are used to extend, refinance, renew, replace or refund
any Indebtedness permitted to be incurred under the Indenture (the "Refinancing
Indebtedness"); PROVIDED, HOWEVER, that (i) the principal amount of such
Refinancing Indebtedness shall not exceed the principal or accreted amount (in
the case of any Indebtedness issued with original issue discount, as such) of
Indebtedness so extended, refinanced, renewed, replaced, substituted or refunded
(the "Refinanced Indebtedness"), (ii) the Refinancing Indebtedness shall rank in
right of payment relative to the Securities on terms at least as favorable to
the Holders of Securities as those contained in the documentation governing the
Refinanced Indebtedness ("Permitted Refinancing"), and (iii) the Refinancing
Indebtedness shall have a Average Life to Stated Maturity and a Stated Maturity
equal to or greater than the Average Life to Stated Maturity and Stated Maturity
of the Refinanced Indebtedness
"RELATED BUSINESS" means the local casino gaming business outside the
United States of America and other businesses necessary for, incident to,
connected with, arising out of, in support of or developed or operated to permit
or facilitate the conduct or pursuing of the local casino gaming business
outside the United States all as then customarily conducted in the local casino
gaming operations outside the United States.
"RESPONSIBLE OFFICER" when used with respect to the Trustee means any
officer in its Corporate Trust Office, or any other assistant officer of the
Trustee in its Corporate Trust Office customarily performing functions similar
to those performed by the Persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because of his
or her knowledge of and familiarity with the particular subject.
"RESTRICTED PAYMENT" means, (i) as to the Issuer, (a) any dividend
declared or paid to, or any distribution made for the benefit of, any holders
of the Issuer's Capital Stock, including TWG, (b) the purchase, redemption or
other acquisition or retirement for value of any Capital Stock of the Issuer
from any holders thereof, including TWG, (c) any purchase, redemption or
other acquisition or retirement for value by the Issuer or any of its
Subsidiaries, prior to a scheduled mandatory sinking fund payment date or
maturity date, of any Indebtedness of the Issuer or its Subsidiaries, and
(ii) as to TWG, (a) any dividend declared or paid to, or any distribution
made for the benefit of, any holders of TWG's Capital Stock as holders of
such Capital Stock and (b) the purchase, redemption or other acquisition or
retirement for value of any
Page 17
Capital Stock of TWG from any holders thereof as holders of such Capital Stock.
"RIGHT OF FIRST REFUSAL" has the meaning specified in Section 13.1
"SECURITY" or "SECURITIES" (except as otherwise provided in Section 6.8)
means any of the 12% Senior Secured Notes Due March 2005 authenticated and
delivered under this Indenture.
"SECURITY INTEREST" has the meaning specified in Section 14.1.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SUBSCRIPTION AGREEMENT" means the subscription agreement dated as of
March 16, 1998, by and among TWG, the Issuer, TWG Finance Corp. and the
Securityholders.
"SPECIAL RECORD DATE" has the meaning specified in paragraph 3 of the
Form of Securities herein.
"STATED MATURITY" means the date which all remaining unpaid principal and
interest of Indebtedness is due and payable pursuant to the terms of document(s)
evidencing such Indebtedness.
"SUBSIDIARY" means any corporation, association or other business entity
of which more than 50% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by any Person or one or more of the other
Subsidiaries of that Person or a combination thereof.
"TWG" means Trans World Gaming Corp., the parent of the Issuer.
"TRUSTEE" means the entity identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article Six, shall also
include any successor trustee.
"UNDISTRIBUTED EXCESS CASH FLOW" means, for any period, that portion
of the aggregate Excess Cash Flow from all prior periods which has not been
previously used to repay principal amounts of the Securities.
"WHOLLY OWNED SUBSIDIARY" means, with respect to any Person, a
Subsidiary of such Person, all of the outstanding shares of Capital Stock of
which (other than directors' qualifying shares) are at the time directly or
indirectly owned by such Person or by one or more Wholly-Owned Subsidiaries
of such Person or by such Person and one or more if its Wholly-Owned
Subsidiaries.
Page 18
"ZNOJMO PROPERTY" has the meaning specified in Section 14.5.
ARTICLE 2
ISSUE, EXECUTION, FORM AND
REGISTRATION OF SECURITIES
SECTION 2.1 AUTHENTICATION AND DELIVERY OF SECURITIES. Securities in
an aggregate principal amount not in excess of $17,000,000 (except as
otherwise provided in Section 2.6) may be executed by the Issuer and
delivered to the Trustee for authentication, and a responsible officer of the
Trustee shall thereupon authenticate and deliver said Securities to the
Issuer or upon the written order of the Issuer, signed by both (a) the
Chairman of the Board of Directors or any Vice Chairman of the Board of
Directors, or its President or any Vice President (whether or not designated
by a number or numbers or a word or words added before or after the title
"Vice President") and (b) by its Treasurer or Secretary or any Assistant
Treasurer or Secretary without any further action by the Issuer.
SECTION 2.2 EXECUTION OF SECURITIES. The Securities shall be signed
on behalf of the Issuer by both (a) its Chairman of the Board of Directors or
any Vice Chairman of the Board of Directors or its President or any Vice
President (whether or not designated by a number or numbers or a word or
words added before or after the title "Vice President") and (b) by its
Treasurer or any Assistant Treasurer or its Secretary or any Assistant
Secretary, under its corporate seal which may, but need not, be attested.
Such signatures may be the manual or facsimile signatures of the present or
any future such officers. The seal of the Issuer may be in the form of a
facsimile thereof and may be impressed, affixed, imprinted or otherwise
reproduced on the Securities. Typographical and other minor errors or defects
in any such reproduction of the seal or any such signature shall not affect
the validity or enforceability of any Security which has been duly
authenticated and delivered by the Trustee.
In case any such officer of the Issuer who shall have signed any of
the Securities shall cease to be such officer before the Security so signed
shall be authenticated and delivered by the Trustee or disposed of by the
Issuer, such Security nevertheless may be authenticated and delivered or
disposed of as though the Person who signed such Security had not ceased to
be such officer of the Issuer; and any Security may be signed on behalf of
the Issuer by such Persons as, at the actual date of the execution of such
Security, shall be the proper officers of the Issuer, although at the date of
the execution and delivery of this Indenture any such Person was not such
officer.
SECTION 2.3 CERTIFICATE OF AUTHENTICATION. Only such Securities as
shall bear thereon a certificate of authentication substantially in the form
hereinabove recited, executed
Page 19
by the Trustee by manual signature of one of its authorized signatories,
shall be entitled to the benefits of this Indenture or be valid or obligatory
for any purpose. Such certificate by the Trustee upon any Security executed
by the Issuer shall be conclusive evidence that the Security so authenticated
has been duly authenticated and delivered hereunder and that the Holder is
entitled to the benefits of this Indenture.
SECTION 2.4 FORM, DENOMINATION AND DATE OF SECURITIES; PAYMENTS OF
INTEREST IN CASH. The Securities and the Trustee's certificates of
authentication shall be substantially in the form recited above. The
Securities shall be issuable as registered securities without coupons and in
denominations provided for in the form of Security above recited. The
Securities shall be numbered, lettered, or otherwise distinguished in such
manner or in accordance with such plans as the officers of the Issuer
executing the same may determine with the approval of the Trustee.
Any of the Securities may be issued with appropriate insertions,
omissions, substitutions and variations, and may have imprinted or otherwise
reproduced thereon such legend or legends, not inconsistent with the provisions
of this Indenture, as may be required to comply with any law or with any rules
or regulations pursuant thereto, or with the rules of any securities market in
which the Securities are admitted to trading, or to conform to general usage.
Each Security shall be dated the date of its authentication, shall bear
interest from the applicable date and shall be payable on the dates specified on
the face of the form of Security recited above.
The Person in whose name any Security is registered at the close of
business on any Interest Record Date with respect to any Interest Payment
Date shall be entitled to receive the interest, if any, payable on such
Interest Payment Date notwithstanding any transfer or exchange of such
Security subsequent to the Interest Record Date and prior to such Interest
Payment Date, except if and to the extent the Issuer shall default in the
payment of the interest due on such Interest Payment Date, in which case such
defaulted interest shall be paid to the Persons in whose names outstanding
Securities are registered at the close of business on a subsequent record
date (which shall be not less than five Business Days prior to the date of
payment of such defaulted interest) established after arrangements for
payment reasonably satisfactory to the Trustee have been made by the Issuer
by notice given by mail by or on behalf of the Issuer to the Holders of
Securities not less than 15 days preceding such subsequent record date. The
term "Interest Record Date" as used with respect to any Interest Payment Date
(except a date for payment of defaulted interest) shall mean the 15th day of
the month next preceding the month in which such interest payment date falls,
whether or not such Interest Record Date is a Business Day.
SECTION 2.5 REGISTRATION, TRANSFER AND EXCHANGE. The Issuer xxxx
Xxxx 20
keep at each office or agency to be maintained for the purpose as provided in
Section 3.2 a register or registers in which, subject to such reasonable
regulations as it may prescribe, it will register, and will register the
transfer of, Securities as in this Article provided. Such register shall be in
written form in the English language or in any other form capable of being
converted into such form within a reasonable time. At all reasonable times such
register or registers shall be open for inspection by the Trustee.
Upon due presentation for registration of transfer of any Security at
each such office or agency, the Issuer shall execute and the Trustee shall
authenticate and deliver in the name of the transferee or transferees a new
Security or Securities in authorized denominations for a like aggregate
principal amount.
Any Security or Securities may be exchanged for a Security or Securities
in other authorized denominations, in an equal aggregate principal amount.
Securities to be exchanged shall be surrendered at each office or agency to be
maintained by the Issuer for the purpose as provided in Section 3.2, and the
Issuer shall execute and the Trustee shall authenticate and deliver in exchange
therefor the Security or Securities which the Securityholder making the exchange
shall be entitled to receive, bearing numbers not contemporaneously outstanding.
All Securities presented for registration of transfer, exchange,
redemption or payment shall (if so required by the Issuer or the Trustee) be
duly endorsed by, or be accompanied by a written instrument or instruments of
transfer in form satisfactory to the Issuer and the Trustee duly executed by,
the Holder or his attorney duly authorized in writing.
The Issuer may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any exchange or
registration of transfer of Securities, provided however, the Issuer shall be
responsible for all costs associated with perfection of the Security Interest in
Collateral as to the transferee and obtaining a search of title prior thereto.
No service charge shall be made for any such exchange or registration
transaction.
The Issuer shall not be required to exchange or register a transfer of
(a) any Securities for a period of 15 days next preceding the first mailing of
notice of redemption of Securities to be redeemed or (b) any Securities
selected, called or being called for redemption.
All Securities issued upon any transfer or exchange of Securities shall
be valid obligations of the Issuer, evidencing the same debt, and entitled to
the same benefits under this Indenture, as the Securities surrendered upon such
transfer or exchange.
SECTION 2.6 MUTILATED, DEFACED, DESTROYED, LOST AND STOLEN SECURITIES.
In case any temporary or definitive Security shall become mutilated, defaced or
Page 21
be apparently destroyed, lost or stolen, the Issuer in its discretion may
execute, and the Trustee shall authenticate and deliver, a new Security
bearing a number not contemporaneously outstanding, in exchange and
substitution for the mutilated or defaced Security, or in lieu of or in
substitution for the Security so apparently destroyed, lost or stolen. In
every case the applicant for a substitute Security shall furnish to the
Issuer and to the Trustee and any agent of the Issuer or the Trustee such
security or indemnity agreement or bond as may be reasonably required by them
to indemnify and defend and to save each of them harmless and, in every case
of destruction, loss or theft, evidence to their satisfaction of the apparent
destruction, loss or theft of such Security and of the ownership thereof.
Upon the issuance of any substitute Security, the Issuer and the
Trustee may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the reasonable fees and expenses of the Trustee)
connected therewith. In case any Security which has matured or is about to
mature shall become mutilated or defaced or be apparently destroyed, lost or
stolen, the Issuer may, instead of issuing a substitute Security, pay or
authorize the payment of the same with written direction to the Trustee
(without surrender thereof except in the case of a mutilated or defaced
Security), if the applicant for such payment shall furnish to the Issuer and
to the Trustee and any agent of the Issuer or the Trustee such security or
indemnity (including a bond) as any of them may reasonably require to save
each of them harmless and in every case of apparent destruction, loss or
theft the applicant shall also furnish to the Issuer and the Trustee and any
agent of the Issuer or the Trustee evidence to their reasonable satisfaction
of the apparent destruction, loss or theft of such Security and of the
ownership thereof.
Every substitute Security issued pursuant to the provisions of this
Section 2.6 by virtue of the fact that any Security is apparently destroyed,
lost or stolen shall constitute an additional contractual obligation of the
Issuer, whether or not the apparently destroyed, lost or stolen Security
shall be at any time enforceable by anyone and shall be entitled to all the
benefits of (but shall be subject to all the limitations of rights set forth
in) this Indenture equally and proportionately with any and all other
Securities duly authenticated and delivered hereunder.
SECTION 2.7 CANCELLATION OF SECURITIES; DISPOSITION THEREOF. All
Securities surrendered for payment, redemption, registration of transfer or
exchange, if surrendered to the Issuer or any agent of the Issuer or the
Trustee, shall be delivered to the Trustee for cancellation or, if
surrendered to the Trustee, shall be cancelled by it; and no Securities shall
be issued in lieu thereof except as expressly permitted by any of the
provisions of this Indenture. The Trustee shall dispose of cancelled
Securities held by it in accordance with its regulations and deliver a
certificate to the Issuer with respect to such disposition from time to time
upon written request. If the Issuer shall acquire any of the Securities,
such acquisition shall not operate as a redemption or satisfaction of the
Indebtedness represented by such Securities unless and until the same are
delivered to the Trustee for cancellation.
Page 22
SECTION 2.8 TEMPORARY SECURITIES. Pending the preparation of
definitive Securities, the Issuer may execute and the Trustee shall
authenticate and deliver temporary Securities (printed, lithographed,
typewritten or otherwise reproduced, in each case in form satisfactory to the
Trustee). Temporary Securities shall be issuable as registered securities
without coupons, of any authorized denomination, and substantially in the
form of the definitive Securities but with such omissions, insertions and
variations as may be appropriate for temporary Securities, all as may be
determined by the Issuer with the concurrence of the Trustee. Temporary
Securities may contain such reference to any provisions of this Indenture as
may be appropriate. Every temporary Security shall be executed by the Issuer
and be authenticated by the Trustee upon the same conditions and in
substantially the same manner, and with like effect, as the definitive
Securities. Without unreasonable delay the Issuer shall execute and shall
furnish, at its expenses, definitive Securities and thereupon temporary
Securities may be surrendered in exchange therefor without charge at each
office or agency to be maintained by the Issuer for the purpose pursuant to
Section 3.2, and the Trustee shall authenticate and deliver in exchange for
such temporary Securities a like aggregate principal amount of definitive
Securities of authorized denominations. Until so exchanged, the temporary
Securities shall be entitled to the same benefits under this Indenture as
definitive Securities. The Issuer shall not be obligated to issue definitive
Securities until it or the Trustee shall have received such temporary
Securities.
ARTICLE 3
COVENANTS OF THE ISSUER
SECTION 3.1 PAYMENT OF PRINCIPAL AND INTEREST. Issuer covenants and
agrees that it will duly and punctually pay or cause to be paid the principal
of, and interest on, each of the Securities at the place or places, at the
respective times and in the manner provided in the Securities. An
installment of principal or interest shall be considered paid on the date it
is due if the Trustee or Paying Agent holds on that date sums sufficient to
pay the installment. Anything herein or in the Securities to the contrary
notwithstanding, the obligation of the Issuer hereunder shall be subject to
the limitation that payments of interest to the Holder shall not be required
to the extent that the receipt of any such payment by such Holder would be
contrary to the provisions of law applicable to the Issuer which limit the
maximum rate of interest which may be charged or collected by the Holder
including as set forth in Section 11.11 (the "Maximum Rate").
SECTION 3.2 OFFICES FOR PAYMENTS, ETC. So long as any of the
Securities remain outstanding, the Issuer will maintain at such place in the
City of New York and at such other place, if any, as may be designated by the
Issuer, the following: (a) an office or agency where the Securities may be
presented for registration of transfer or for exchange as provided in
Page 23
this Indenture and (b) an office or agency where notices and demands to or
upon the Issuer in respect of the Securities or of this Indenture may be
served. The Issuer will initially maintain such offices or agencies with the
corporate secretary at the Issuer's principal place of business and the
Operations office of the Trustee in New York, New York. The Issuer will give
to the Trustee written notice of the location of any such office or agency
and of any change of location thereof. In case the Issuer shall fail to
maintain any such office or agency or shall fail to give such notice of the
location or of any change in the location thereof, presentations and demands
may be made and notices may be served at the Corporate Trust Office.
SECTION 3.3 APPOINTMENT TO FILL A VACANCY IN OFFICE OF TRUSTEE. The
Issuer, whenever necessary to avoid or fill a vacancy in the office of the
Trustee, will appoint, in the manner provided in Section 6.10, a Trustee, so
that there shall at all times be a Trustee hereunder.
SECTION 3.4 PAYING AGENTS. Whenever the Issuer shall appoint a
paying agent other than the Trustee or itself, it will cause such paying
agent to execute and deliver to the Trustee an instrument in which such agent
shall agree with the Trustee, subject to the provisions of this Section 3.4:
(a) that it will hold all sums received by it as such agent for the
payment of the principal of or interest on the Securities (whether such sums
have been paid to it by the Issuer or by any other obligor on the Securities) in
trust for the benefit of the Holders of the Securities or of the Trustee; and
(b) that it will give the Trustee notice of any failure by the Issuer
(or by any other obligor on the Securities) to make any payment of the principal
of or interest on the Securities when the same shall be due and payable.
The Issuer will, at least one Business Day prior to each due date of the
principal of or interest on the Securities, deposit with the paying agent a sum
which is in immediately available funds on the due date sufficient to pay such
principal or interest and (unless such paying agent is the Trustee) the Issuer
will promptly notify the Trustee of any failure to take such action.
If the Issuer shall act as its own paying agent, it will, on or before
each due date of the principal of or interest on the Securities, set aside,
segregate and hold in trust for the benefit of the Holders of the Securities a
sum sufficient to pay such principal or interest so becoming due. The Issuer,
or paying agent which is not the Trustee, will promptly notify the Trustee in
writing of any failure to take such action.
Notwithstanding anything in this Section 3.4 to the contrary, the Issuer
may at any time, for the purpose of obtaining a satisfaction and discharge of
this Indenture or for any other reason,
Page 24
pay or cause to be paid to the Trustee all sums held in trust by the Issuer or
any paying agent hereunder, as required by this Section 3.4, such sums to be
held by the Trustee upon the trusts herein contained.
Notwithstanding anything in this Section 3.4 to the contrary, the
agreement to hold sums in trust as provided in this Section 3.4 is subject to
the provisions of Sections 10.4 and 10.5.
The Issuer initially appoints the Trustee as paying agent.
SECTION 3.5 OFFICERS' CERTIFICATES AS TO DEFAULT AND AS TO COMPLIANCE.
The Issuer will, so long as any of the Securities are outstanding:
(a) deliver to the Trustee, forthwith upon becoming aware of any
default or defaults in the performance of any covenant, agreement or
condition contained in this Indenture (including notice of any event
which with the giving of notice, lapse of time or both would become an
Event of Default under Section 5.1 hereof), an Officers' Certificate
specifying such default or defaults; and
(b) deliver to the Trustee within 90 days after the end of each
Fiscal Year of the Issuer beginning with the Fiscal Year ending December
31, 1998, an Officers' Certificate, to the effect that:
(i) a diligent review of the activities of the Issuer
and its Subsidiaries during such year and of performance under
this Indenture has been made under such officers' supervision, and
(ii) to the best of such officers' knowledge, based on
such review, the Issuer has fulfilled all its obligations under
this Indenture throughout such year, or if there has been a
default in the fulfillment of any such obligation, specifying each
such default known to them and the nature and status thereof.
SECTION 3.6 MANDATORY PREPAYMENT.
(a) Within forty-five (45) days of the end of the second and
fourth quarter of each Fiscal Year, the Issuer shall (a) repay an aggregate
principal amount of the Securities equal to the Excess Cash Flow for the
6-month period ending on the last day of such quarter, together with accrued and
unpaid interest on such principal amount to the date of repayment, and (b)
regardless of whether any repayment of principal is required under this Section,
provide each Securityholder with a written notice containing in reasonable
detail the Issuer's calculation of Excess Cash Flow. Notwithstanding the
preceding sentence, the Issuer shall not be required to repay any principal
under this Section unless Excess Cash Flow equals or exceeds the lesser of
Page 25
$250,000 or the aggregate principal amount of the Securities then
outstanding, in which case all Excess Cash Flow then outstanding shall be
used to repay principal in accordance with this Section. Any repayments of
principal required by this Section shall be paid on an equal and ratable
basis among the Securityholders in proportion, as nearly as practicable, to
the respective unpaid principal amounts of the Securities held by each
Securityholder. The reduction in the principal amount of the Securities
effected by repayments made under this Section may be made without
presentation of the Securities and shall be binding on all future
Securityholders. Securityholders shall make the appropriate notation on the
Securities to indicate the amount of any repayments under this Section.
(b) The prepayment will be made in the following manner. At
least 15 days prior to the date on which the Issuer proposes to make the
prepayment required by this Section 3.6, the Issuer shall give the
Trustee written notice of such prepayment, which notice shall state the
amount of the prepayment and the date the Issuer has selected that the
prepayment be made, which date may not be later than 45 days from the end
of the second and fourth quarters, as the case may be. The Trustee shall
not be required to send a notice of mandatory redemption to the Holders
with respect to such prepayment. At least one Business Day before the
mandatory prepayment, the Issuer will deposit with the Trustee (or other
paying agent) in immediately available funds the money to be used to
prepay the Securities. When the money to effect the mandatory prepayment
of the Securities is held by the Trustee for the purpose of effecting
such prepayment, interest on that portion of the Securities to be prepaid
shall cease to accrue on the reduction of principal on Securities made a
result of the prepayment, and such notations shall be binding on the
Securityholders and all future Securityholders, even if such holders do
not make such notations on the certificates representing such Securities.
The prepayments will be made by the Trustee in increments of $100.00.
Any Excess Cash Flow which does not meet this requirement will be
returned to the Issuer pursuant to its written instructions.
SECTION 3.7 MAINTENANCE OF PROPERTIES, ETC. The Issuer shall, and shall
cause each of its Subsidiaries to, maintain its material properties and assets
in working order and condition and make all necessary repairs, renewals,
replacements, additions, betterments and improvements thereto as permitted by
this Indenture, all as in the judgment of the Issuer may be necessary so that
the business carried on in connection therewith may be conducted in the usual
and customary manner.
The Issuer shall, and shall cause each of its Subsidiaries to, maintain
with insurers that the Issuer believes in good faith to be financially sound and
reputable such insurance as may be required by law and such other insurance, to
such extent and against such hazards and liabilities, as it in good faith
determines is customarily maintained by companies similarly situated with like
properties.
Page 26
The Issuer shall, and shall cause each of its Subsidiaries to, do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence, rights and franchises, except to the extent permitted by
this Indenture and except in such cases where the Board of Directors determines
in good faith that failure to do so would not have a material adverse effect on
the business, earnings, properties, assets, financial condition or results of
operation of the Issuer and its Subsidiaries. Nothing in this provision shall
prohibit Trans World Gaming Corp., the Issuer's parent, from terminating its
operations or its Subsidiaries' operations in the State of Louisiana, USA.
The Issuer shall, and shall cause each of its Subsidiaries to, comply in
all material respects with all statutes, laws, ordinances, or government rules
and regulations to which it is subject.
The Issuer shall, and shall cause each of its Subsidiaries to, pay prior
to delinquency all taxes, assessments and governmental levies except as
contested in good faith and by appropriate proceedings.
SECTION 3.8 INDEBTEDNESS. The Issuer will pay punctually and discharge
when due and payable any Indebtedness heretofore or hereafter incurred or
assumed by it and discharge, perform and observe the covenants, provisions and
conditions to be discharged, performed and observed on the part of the Issuer in
connection therewith, or in connection with any agreement or other instrument
relating thereto.
SECTION 3.9 BOOKS. Issuer will keep at all times proper books of record
and account in which full, true and correct entries will be made of its
transactions in accordance with Generally Accepted Accounting Principles.
SECTION 3.10 LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS FOR
ISSUER. Except as set forth below, Issuer will not, and will not permit any of
its Subsidiaries to, Incur any Indebtedness (including Acquired Indebtedness);
provided, however, that Issuer may Incur Indebtedness if, (i) no Default of this
Indenture 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 Indebtedness; (ii) on the date of such Incurrence (the "Incurrence Date"),
the Consolidated Coverage Ratio of Issuer for the Reference Period immediately
preceding the Incurrence Date, after giving effect on a PRO FORMA basis to such
incurrence of such Indebtedness and, to the extent set forth in the definition
of Consolidated Coverage Ratio, the use of proceeds thereof, would be at least
2.30 to 1; and (iii) such Indebtedness has an Average Life to Stated Maturity
that exceeds the remaining Average Life to Stated Maturity of the Securities and
has a Stated Maturity for its final scheduled principal payment later than the
Stated Maturity for the final scheduled principal payment of the
Page 27
Securities; (iv) such Indebtedness is subordinated in right of payment to the
prior payment in full of the Securities pursuant to a subordination agreement in
form and substance satisfactory to the holders of a majority of the aggregate
outstanding principal amount of the Securities; and (v) such Indebtedness is not
secured by the Collateral granted to the holders of the Securities.
Notwithstanding the foregoing:
(a) Issuer may incur Indebtedness evidenced by the Securities up to
the amounts specified therein as of the date thereof;
(b) Issuer may incur at or after the Issue Date additional
indebtedness consisting of:
(i) Indebtedness incurred to fund the construction of
Znojmo Casino, PROVIDED that such Indebtedness is non recourse to
Issuer or any of its Subsidiaries and no Lien securing such
Indebtedness shall extend to or convert any assets or properties
of Issuer other than the Znojmo Property and the improvements,
building equipment and fixtures located in or on the Znojmo
Property;
(ii) other purchase money Indebtedness incurred to
purchase personal property for the purpose of engaging in or
developing a Related Business, PROVIDED that the principal amount
of such Indebtedness in the aggregate outstanding at any time
(including any Indebtedness issued to refinance, replace or refund
such Indebtedness) shall not exceed $500,000 and no Lien securing
such Indebtedness shall extend to or cover any assets or
properties other than the assets or property acquired with such
purchase money Indebtedness and improvements thereon; and
(iii) Indebtedness for working capital purposes, PROVIDED
that the principal amount of such Indebtedness in the aggregate
outstanding at any time (including any Indebtedness, issued to
refinance, replace or refund such Indebtedness) shall be unsecured
and may not exceed $100,000.
(c) Issuer may incur Refinancing Indebtedness with respect to any
Indebtedness described in clauses (a) through (c), inclusive, of
this covenant so long as, in the case of secured Indebtedness used
to refinance, refund or replace secured Indebtedness, such
Refinancing Indebtedness is secured only by the assets that
secured the Indebtedness so refinanced and if such Indebtedness
being Refinanced was unsecured, the related Refinancing
Indebtedness shall be unsecured; and
(d) Issuer may incur Indebtedness to any of its Wholly Owned
Subsidiaries; PROVIDED, that such obligations shall be unsecured
and subordinated in all respects to
Page 28
Issuer's obligations pursuant to the Securities.
Indebtedness of any Person which is outstanding at the time such Person becomes
a Subsidiary of Issuer (including by designation) or is merged with or into or
consolidated with Issuer or a Subsidiary of Issuer shall be deemed to have been
Incurred at the time such Person becomes such a Subsidiary of Issuer or is
merged with or into or consolidated with Issuer or a Subsidiary of Issuer, as
applicable.
SECTION 3.11 RESTRICTIONS ON ISSUANCE OF STOCK. Issuer will not
permit any of its Subsidiaries to issue any additional Capital Stock and
agrees that the Capital Stock of its Subsidiaries pledged to the holders of
the Securities pursuant to the Collateral Agreements herein shall at all
times constitute 100% of its U.S. Subsidiaries, of Trans World Leasing
Limited and of the Cyprus Entity, 66% of 21st Century Resorts, a.s. and 100%
of the Capital Stock of any U.S. Subsidiary and of any foreign Subsidiary,
where such pledge shall not create a "deemed dividend", and 66% of the
Capital Stock of any foreign Subsidiary where a pledge of more than that
percentage would create a "deemed dividend". Furthermore, Issuer will not
permit any of its Subsidiaries to conduct any business through or otherwise
own any outstanding shares or interests of any class of Capital Stock of, any
other corporation, partnership, limited liability company or other Person,
other than a Wholly-Owned Subsidiary.
SECTION 3.12 RESTRICTIONS ON ASSET SALES.
(a) Issuer shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, make any Asset Sale, unless (i)
Issuer (or such Subsidiary, as the case may be) receives consideration at the
time of such Asset Sale at least equal to the fair market value of the shares
or assets sold or otherwise disposed of (such determination of fair market
value, in the case of an Asset Sale or a series of related Asset Sales
involving assets with an aggregate fair market value in excess of $250,000,
being evidenced by a resolution of the Board of Directors set forth in an
Officers' Certificate and an independent appraisal by an appraiser reasonably
acceptable to the holders of 50% of the outstanding principal amount of
Securities delivered to the Trustee), (ii) at least 85% of the consideration
therefor received by the Issuer or such Subsidiary is in the form of cash;
PROVIDED, HOWEVER, that the amount of (x) any liabilities (as shown on
Issuer's or such Subsidiary's most recent balance sheet or in the notes
thereto) of Issuer or any Subsidiary that are assumed by the transferee of
any such assets without any further recourse to Issuer or any Subsidiary,
including any Indebtedness of a Subsidiary whose stock is purchased by the
transferee, and (y) any notes or other securities received by Issuer or any
such Subsidiary from such transferee that are immediately converted by Issuer
or such Subsidiary into cash (to the extent of the cash received) shall be
deemed to be cash for purposes of this provision, and (iii) in the case of an
Asset Sale consisting of a sale by Issuer or any Subsidiary of Capital Stock
of any Subsidiary of Issuer, all of the Capital Stock of such Subsidiary that
is owned by Issuer or such Subsidiary must be sold.
Page 29
(b) No later than sixty (60) days after the receipt of Net Cash
Proceeds from any such Asset Sale, Issuer may apply such Net Cash Proceeds to
invest (including through capital expenditures) in properties and assets related
to the gambling industry, consistent with other current business activities of
Issuer, so long as the Securityholders are granted a first lien and security
interest in such assets and provided that such properties and assets are held by
Issuer or one or more of its Wholly Owned Subsidiaries. Any Net Cash Proceeds
that are not applied as permitted by the preceding sentence shall constitute
"Excess Proceeds." Excess Proceeds shall be paid to the Securityholders within
fifteen (15) days of becoming Excess Proceeds in the same manner as Excess Cash
Flow is paid in Section 3.6.
SECTION 3.13 DISTRIBUTIONS. The Issuer shall not declare or pay, or set
apart any funds for the payment of any Restricted Payment.
SECTION 3.14 LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES. The Issuer shall not permit any Subsidiary thereof
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any such Subsidiary to (a) pay dividends or make any other
distributions to Issuer or any Subsidiary thereof on its Capital Stock, (b)
pay any Indebtedness owed to Issuer or any Subsidiary thereof, (c) make loans
or advances to Issuer or any Subsidiary thereof, (d) transfer any of its
properties or assets to Issuer or any Subsidiary thereof, (e) grant liens or
security interests on the assets of Issuer or its Subsidiaries in favor of
the holders of the Securities or (f) Guarantee the Securities or any renewals
or refinancings thereof.
SECTION 3.15 LIMITATION ON INVESTMENTS. Issuer shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, make any Investments
other than Permitted Investments and except as provided in Section 3.12.
SECTION 3.16 LIMITATIONS ON LIENS. Issuer shall not, and shall not
permit any Subsidiary to, directly or indirectly create, incur, assume or suffer
to exist any Lien on any of their respective assets now owned or hereafter
acquired, or any income or profits therefrom or assign or convey any right to
receive income therefrom, except as provided in Section 3.10, Section 3.11 and
Section 3.12 and in Article 14.
SECTION 3.17 TRANSACTIONS WITH AFFILIATES.
(a) Except for transactions with Trans World Leasing Limited and the
Cyprus Entity, neither the Issuer nor any of its Subsidiaries shall directly or
indirectly, sell, lease, license, transfer, exchange, or otherwise dispose of
any of its properties, assets or services to, or purchase, lease, or license the
use of any property, assets or services from, or transfer funds to, or
Page 30
enter into any contract, agreement, understanding, loan, advance or Guarantee
with, to, or for the benefit of, any Affiliate (each of the foregoing, an
"Affiliate Transaction," whether constituting one transaction or a series of
related transactions), unless (a) such Affiliate Transaction is on terms that
are no less favorable to Issuer or the relevant Subsidiary than those that would
have been obtained in a comparable transaction by Issuer or such Subsidiary with
an unrelated person and (b) Issuer delivers to the Trustee (i) with respect to
any Affiliate Transaction involving aggregate payments in excess of $100,000, a
resolution of the Board of Directors of Issuer approved by a majority of the
disinterested members of the Board of Directors, certifying that such Affiliate
Transaction complies with clause (a) above, and (ii) with respect to any
Affiliate Transaction involving aggregate payments in excess of $250,000.00, an
opinion as to the fairness of such Affiliate Transaction to Issuer or such
Subsidiary from a financial point of view issued by an independent investment
banking firm of national standing.
(b) This Section does not limit, and shall not apply to, (i) the
payment of reasonable annual compensation to directors or executive officers
of the Issuer or any Restricted Subsidiary, (ii) transactions between Issuer
and its Subsidiaries or between Issuer's Subsidiaries.
SECTION 3.18 CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Holder of
Securities shall have the right to require the Issuer to repurchase all or
any part of such holder's Securities pursuant to the offer described below
(the "Change of Control Offer") at a purchase price equal to one hundred
percent (100%) of the aggregate principal amount thereof plus accrued and
unpaid interest, if any, to the date of purchase (the "Change of Control
Payment"). Within 30 days following receipt of any Change of Control Offer,
the Issuer shall mail a notice to each Holder stating: (1) that the Change of
Control Offer is being made pursuant to this Section and that all Securities
tendered will be accepted for payment; (2) the purchase price and the
purchase date, which shall be no earlier than 30 days nor later than 60 days
from the date such notice is mailed (the "Change of Control Payment Date");
(3) that any Security not tendered will continue to accrue interest in
accordance with its terms; (4) that, unless the Issuer defaults in the
payment of the Change of Control Payment, all Securities accepted for payment
pursuant to the Change of Control Offer shall cease to accrue interest after
the Change of Control Payment Date; (5) that Holders electing to have any
Securities purchased pursuant to a Change of Control Offer will be required
to surrender the Securities, with the form entitled "Option of Holder to
Elect Purchase", on the reverse of the Securities completed, to the paying
agent at the address specified in the notice prior to the close of business
on the third Business Day preceding the Change of Control Payment Date; (6)
that Holders will be entitled to withdraw their election if the paying agent
receives, not later than the close of business on the second Business Day
preceding the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of Securities delivered for purchase, and a statement that such Holder
is withdrawing his election to have such Securities purchased; and (7) that
Holders
Page 31
whose Securities are being purchased only in part will be issued new
Securities equal in principal amount to the unpurchased portion of the
Securities surrendered, which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof. The Issuer shall comply
with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations to the extent such laws and regulations are
applicable to the Change of Control Offer.
(b) On the Change of Control Payment Date, the Issuer will, to
the extent lawful, (1) accept for payment Securities or portions thereof validly
tendered pursuant to the Change of Control Offer, (2) deposit with the paying
agent an amount equal to the Change of Control Payment in respect of all
Securities or portions thereof so tendered, and (3) deliver or cause to be
delivered to the Trustee the Securities so accepted together with an Officers,
Certificate identifying the Securities or portions thereof tendered to the
Issuer. The paying agent will promptly mail to each Holder of Securities so
accepted payment in an amount equal to the purchase price for such Securities,
and the Trustee shall promptly authenticate and mail to each Holder a new
Security equal in principal amount to any unpurchased portion of the Securities
surrendered, if any; PROVIDED, HOWEVER, that each such new Security shall be in
a principal amount of $1,000 or an integral multiple thereof. The Issuer will
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
SECTION 3.19 LINE OF BUSINESS. The Issuer shall not, and shall not
permit any of its Subsidiaries to, engage in any business other than acquiring,
developing and operating local casinos outside the United States of America and
a Related Business (operated outside the United States of America).
SECTION 3.20 PAYMENTS FOR CONSENT. Issuer shall not, and shall not
permit any Subsidiary to, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder of
the Securities for or as an inducement to any consent, waiver or amendment of
any terms or provisions of the Securities unless such consideration is offered
to be paid or agreed to be paid to all Holders of the Securities which so
consent, waive or agree in the time frame set forth in solicitation documents
relating to such consent, waiver or agreement.
SECTION 3.21 LIMITATIONS ON SALE AND LEASEBACK TRANSACTIONS. Issuer
shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, enter into any sale and leaseback transaction, provided that Issuer
or any Subsidiaries may enter into a sale and leaseback transaction if (a)
Issuer or such Subsidiary could have incurred the Indebtedness relating to such
sale and leaseback transaction pursuant to Sections 3.10 and 3.11. hereof and
(b) the net proceeds of such sale and leaseback transaction are at least equal
to the fair market value of such property (such determination of fair market
value in the case of a sale and leaseback
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transaction, being evidenced by a resolution of the Board of Directors of Issuer
set forth in an Officers' Certificate delivered to the Trustee).
SECTION 3.22 WAIVER OF STAY, EXTENSION OR USURY LAWS. The Issuer
covenants (to the extent that it may lawfully do so) that it shall not at any
time insist upon, or plead, or in any manner whatsoever claim, and shall resist
any and all efforts to be compelled to take the benefit or advantage of, any
stay or extension law or any usury law or other law which would prohibit or
forgive the Issuer from paying all or any portion of the principal of or
interest 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 it may lawfully do so)
the Issuer hereby expressly waives all benefit or advantage of any such law and
covenants that it shall not hinder, delay or impede the execution of any power
herein granted to the Trustee but shall suffer and permit the execution of every
such power as though no such law had been enacted.
SECTION 3.23 SECURITY INTEREST. The Issuer shall, including, to the
extent necessary post-closing, execute, and shall cause such direct and indirect
Subsidiaries as are necessary to execute, such documents as are necessary to
grant the Trustee and the Holder a Security Interest in all assets of Trans
World Leasing Limited and the Cyprus Entity. Such documents shall be prepared,
executed, delivered and filed by no later than June 30, 1998, unless extended in
writing by a majority of the Holders of the securities under the Primary
Indenture. The Issuer shall reimburse all reasonable costs, including attorneys
fees incurred by such of the security holders and Trustee in preparing and
executing such documents.
ARTICLE 4
SECURITYHOLDERS' LISTS AND REPORTS
BY THE ISSUER AND THE TRUSTEE
SECTION 4.1 ISSUER TO FURNISH TRUSTEE INFORMATION AS TO NAMES AND
ADDRESSES OF SECURITYHOLDERS. The Issuer covenants and agrees that it will
furnish or cause to be furnished to the Trustee a list in such form as the
Trustee may reasonably require of the names and addresses of the Holders of the
Securities:
(a) semi-annually and not more than 15 days after each record
date for the payment of interest on the Securities, as hereinabove
specified, as of such record date; and
(b) at such other times as the Trustee may request in writing,
within 30 days after receipt by the Issuer of any such request as of a
date not more than 15 days prior to the
Page 33
time such information is furnished;
PROVIDED that if and so long as the Trustee shall be the Security registrar,
such list shall not be required to be furnished.
SECTION 4.2 PRESERVATION AND DISCLOSURE OF SECURITYHOLDERS' LISTS.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of
the Holders of Securities contained in the most recent list furnished to
it as provided in Section 4.1 or maintained by the Trustee in its
capacity as Security registrar, if so acting. The Trustee may destroy
any list furnished to it as provided in Section 4.1 upon receipt of a new
list so furnished.
(b) The registry of Holders shall be available for inspection by
any Holder or its duly authorized attorney or agent, under normal
conditions and upon reasonable notice.
SECTION 4.3 REPORTS BY THE ISSUER. The Issuer covenants:
(a) to cause TWG to file with the Commission, and within 15 days
after TWG files the same with the Commission, file with the Trustee, and
mail or furnish copies to the Trustee and cause the Trustee to mail to
the Holders at their addresses as set forth in the register of the
Securities, copies of the annual reports and of the information,
documents, and other reports (or copies of such portions of any of the
foregoing as the Commission may from time to time by rules and
regulations prescribe) which TWG may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act or
which TWG would be required to file with the Commission if the Issuer
then had a class of securities registered under the Exchange Act;
(b) As soon as available and in any event within forty-five
(45) days after the end of the first, second and third quarter of each
Fiscal Year, Issuer will deliver the consolidated unaudited balance sheet
of Issuer and its Subsidiaries as at the end of such quarter and the
related consolidated unaudited statements of income, stockholders equity
and cash flows for such quarter and for the portion of the Fiscal Year
ended with such quarter. The financial statements required hereunder
shall in each instance set forth in comparative form the corresponding
figures as at the end of the corresponding quarter of the preceding
Fiscal Year.
(c) As soon as available and in any event within ninety (90)
days after the end of each Fiscal Year, Issuer will deliver (i) the
consolidated balance sheet of Issuer and its Subsidiaries as at the end
of such year and the related consolidated statements of income,
Page 34
stockholders' equity and cash flows for such Fiscal Year; and (ii) a
report with respect to the financial statements from its independent
public accountants, which report shall be unqualified as to going concern
and scope of audit and shall state that (A) such consolidated financial
statements present fairly the consolidated financial position of the
Issuer and its Subsidiaries as of the dates indicated and the results of
the operations and cash flow for the periods indicated in conformity with
GAAP and (B) that the examination by such accountants in connection with
such consolidated financial statements has been made in accordance with
generally accepted auditing standards.
(d) As soon as available and in any event within fifteen (15)
days after the end of each calendar month, Issuer will deliver unaudited
statements of income for each of the casinos located in the Czech
Republic, including in Ceska Kubice, Rozvadov and Znojmo (once
operational) for such month and for the portion of the Fiscal Year ended
with such month. The financial statements required hereunder shall in
each instance set forth in comparative from the corresponding figures as
at the end of the corresponding month of the preceding Fiscal Year.
(e) As soon as available and in any event within seven (7) days
after the end of each calendar week, Issuer will deliver unaudited
statements of net win for each of the casinos located in the Czech
Republic, including Ceska, Rozvadov and Znojmo (once operational), for
such week.
(f) to cause TWG's annual report to its common stockholders and
any quarterly or other financial reports furnished to its common
stockholders generally to be filed with the Trustee and mailed, no later
than the date such materials are mailed or made available to TWG's
common stockholders to the Holders at their addresses as set forth in the
register of Securities;
(g) [reserved];
(h) If the Issuer is not subject to the requirements of such
Section 13 or 15(d) of the Exchange Act, the Issuer shall nevertheless
continue to cause the TWG annual and quarterly financial statements,
including any notes thereto (and with respect to annual reports, a copy
of an auditors' report by an accounting firm of established national
reputation) and a "Management's Discussion and Analysis of Financial
Condition and Results of Operations", comparable to that which would have
been required to appear in annual or quarterly reports filed under
Section 13 or 15(d) of the Exchange Act to be so filed with the SEC for
public availability and the Trustee to be mailed to the Holders within 90
days after the end of the Issuer's Fiscal Year and within 45 days after
the end of each of the first three quarters of each Fiscal Year. In
either case, the Issuer shall continue to furnish Holders of the
Securities with substantially the same quarterly and
Page 35
annual financial information with respect to the Issuer as provided in
the Issuer's consolidated financial statements, including the notes
thereto, for the year ended 1996; and
(i) The Issuer shall provide the Trustee with a sufficient number
of copies of all reports and other documents and information that the
Trustee may be required to deliver to the Holders of the Securities under
this Section 4.3.
SECTION 4.4 [Reserved].
ARTICLE 5
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 EVENT OF DEFAULT DEFINED; ACCELERATION OF MATURITY; WAIVER
OF DEFAULT. In case one or more of the following Events of Default (whatever
the reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected 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) shall have occurred and be continuing:
(a) default in the payment of any installment of interest on the
Securities as and when the same becomes due and payable, and the
continuance of such default for 15 calendar days; or
(b) default in the payment of all or any part of the principal on
the Securities as and when the same shall become due and payable either
at maturity, upon acceleration or redemption or otherwise; or
(c) failure on the part of the Issuer duly to observe or perform
any covenants or agreements on the part of the Issuer contained in the
Securities, in this Indenture, in the Subscription Agreement or any of
the Collateral Agreements and the continuance of such failure for a
period of 15 days after the date on which written notice specifying such
failure, stating that such notice is a "Notice of Event of Default"
hereunder and demanding that the Issuer remedy the same, is given to the
Issuer by the Trustee or to the Issuer and the Trustee by the Holders of
at least 25% in aggregate principal amount of the Securities at the time
outstanding; or
(d) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced
any Indebtedness for money
Page 36
borrowed by TWG, Issuer or any of the Subsidiaries of either (or the
payment of which is Guaranteed by any Issuer or any of its Subsidiaries),
which default is caused by a failure to pay due principal or interest on
such Indebtedness after any applicable grace period (a "Payment
Default"), and the principal amount of any such Indebtedness, together
with the principal amount of any other such Indebtedness under which
there has been and is continuing a Payment Default, aggregates $300,000
or more; or
(e) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by TWG, Issuer or any of the
Subsidiaries of either (or the payment of which is Guaranteed by the
Issuer or any of its Subsidiaries), which default results in the
acceleration of such Indebtedness prior to its express maturity and the
principal amount of any such Indebtedness, together with the principal
amount of any other such Indebtedness under which there has been and is
continuing a Payment Default or the maturity of which has been so
accelerated and not rescinded, aggregates $300,000 or more; or
(f) failure by TWG, Issuer or any of the Subsidiaries of either
to pay final judgments (other than any judgment as to which a reputable
insurance company has accepted coverage without a reservation of rights)
aggregating in excess of $300,000, which judgments are not stayed or
discharged within 15 days after their entry; or
(g) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of TWG, Issuer or any of the
Subsidiaries of either in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect,
or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of any Issuer or any of its
Subsidiaries or for any substantial part of the property of any Issuer or
any of its Subsidiaries or ordering the winding up or liquidation of the
affairs of any Issuer or any of its Subsidiaries and such decree or order
shall remain unstayed and in effect for a period of 15 consecutive days;
or
(h) TWG, the Issuer or any of the Subsidiaries of either shall
commence a voluntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or consent to the entry of
an order for relief in an involuntary case under any such law, or consent
to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of any
Issuer or any of its Subsidiaries or for any substantial part of the
property of any Issuer or any of its Subsidiaries, or any Issuer or any
of its Subsidiaries shall make any general assignment for the benefit of
creditors;
(i) loss by TWG, the Issuer or any Subsidiary of either of any
gambling license or
Page 37
the legal right to operate any gaming establishment related to the
Collateral including, without limitation, those necessary to the Ceska
Kubice, Rozvadov and Znojmo locations, which loss of license is not
remedied within ten (10) days (However, specifically excluding any
license in the State of Louisiana);
(j) indictment of any officer or Key Employee of any TWG, the
Issuer or any Subsidiary of either by any governmental authority;
(k) fraud by an officer or Key Employee of TWG, the Issuer or any
Subsidiary of either;
(l) TWG, the Issuer or any Subsidiary of either does not pay, or
shall be unable to pay, or shall admit in writing its inability to pay
its debts as such debts become due; or
(m) any event which, in the reasonable judgment of
Securityholders of 50% in principal amount of the Securities has a
material adverse effect on the condition, operations, prospects or
properties (financial or otherwise) of the Issuer or any of its
Subsidiaries, taken as a whole.
(n) any event or series of events within any one year period
which causes a reduction or may cause a reduction in the value of the
Collateral in excess of $ 300,000; or
(o) if all or any part of the Collateral shall be further
encumbered, hypothecated, mortgaged or made subject to any other lien or
security interest, except as otherwise provided herein then, and in each
and every such case (other than an Event of Default specified in clause
(g) or (h) above relating to the Issuer), unless the principal of all of
the Securities shall have already become due and payable, either the
Trustee or the Holders of not less than 50% in aggregate principal amount
of the Securities then outstanding hereunder, by notice in writing to the
Issuer (and to the Trustee if given by Securityholders) (the
"Acceleration Notice"), may declare all the Securities and the accrued
interest thereon to be due and payable immediately (the "Acceleration
Date"). If an Event of Default specified in clause (g) or (h) above
relating to the Issuer occurs, all the Securities and the accrued
interest thereon shall be immediately due and payable without any
declaration or other act on the part of the Trustee or any
Securityholder.
SECTION 5.2 COLLECTION OF INDEBTEDNESS BY TRUSTEE; TRUSTEE MAY PROVE
INDEBTEDNESS. The Issuer covenants that (a) in case default shall be made in
the payment of any installment of interest on any of the Securities when such
interest shall have become due and payable, and such default shall have
continued for a period of 15 days, or (b) in case default shall be made in the
payment of all or any part of the principal of any of the
Page 38
Securities when the same shall have become due and payable, whether upon
maturity or upon any redemption or by declaration or otherwise -- then upon
demand by the Trustee the Issuer will pay to the Trustee for the benefit of the
Holders of the Securities the whole amount that then shall have become due and
payable on all such Securities for principal or interest, as the case may be
(with interest to the date of such payment upon the overdue principal and, to
the extent that payment of such interest is enforceable under applicable law, on
overdue installments of interest at the Default 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 such amounts as shall be due the
Trustee and each predecessor Trustee under Section 6.6.
Until such demand is made by the Trustee, the Issuer may pay the
principal of and interest on the Securities to the registered Holders, whether
or not the Securities be overdue.
In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceeding at law or in
equity for the collection of the sums so due and unpaid including the
enforcement of its rights under the Collateral Agreements, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Issuer or other obligor upon the Securities
and collect in the manner provided by law out of the Property of the Issuer or
other obligor upon the Securities, wherever situated, the moneys adjudged or
decreed to be payable.
In case there shall be pending proceedings relative to the Issuer or any
other obligor upon the Securities under Title 11 of the United States Code or
any other applicable Federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or the property of the Issuer or such other
obligor, or in case of any judicial proceedings relative to the Issuer or other
obligor upon the Securities, or to the creditors or property of the Issuer or
such other obligor, 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
pursuant to the provisions of this Section 5.2, shall be entitled and empowered,
by intervention in such proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount of
principal and interest 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
reasonable compensation to the Trustee and each predecessor Trustee, and
their respective agents, attorneys and counsel, and for reimbursement of
all expenses and liabilities incurred, and all advances made, by the
Trustee and each predecessor Trustee, except as a result of negligence
or bad faith) and of the
Page 39
Securityholders allowed in any judicial proceedings relative to the
Issuer or other obligor upon the Securities, or to the creditors or
Property of the Issuer or such other obligor;
(b) unless prohibited by applicable law and regulations, to vote
on behalf of the Holders of the Securities in any election of a trustee
or a standby trustee in arrangement, reorganization, liquidation or other
bankruptcy or insolvency proceedings or Person performing similar
functions in comparable proceedings; and
(c) to collect and receive any moneys or other Property payable
or deliverable on any such claims, and to distribute all amounts received
with respect to the claims of the Securityholders and of the Trustee on
their behalf; and any trustee, receiver, or liquidator, custodian or
other similar official is hereby authorized by each of the
Securityholders to make payments to the Trustee, and, in the event that
the Trustee shall consent to the making of payments directly to the
Securityholders, to pay to the Trustee such amounts as shall be due the
Trustee, and each predecessor Trustee under Section 6.6.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Securityholder any plan or 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 Securityholder in
any such proceeding except, as aforesaid, to vote for the election of a trustee
in bankruptcy or similar Person.
All rights of action and of asserting claims under this Indenture, or
under any of the Securities, may be enforced by the Trustee without the
possession of any of the Securities or the production thereof on any trial or
other proceedings relative thereto, and any such action or proceedings
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Trustee, each predecessor
Trustee and their respective agents and attorneys, shall be for the ratable
benefit of the Holders of the Securities in respect of which such judgment has
been sought.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the Holders
of the Securities, and it shall not be necessary to make any Holders of the
Securities parties to any such proceedings.
SECTION 5.3 APPLICATION OF PROCEEDS. Any moneys collected by the
Trustee pursuant to this Article shall be applied in the following order at the
date or dates fixed by the Trustee:
Page 40
FIRST: To the payment of all amounts due the Trustee and each
predecessor Trustee under Section 6.6;
SECOND: In case the principal of the Securities shall not have become
and be then due and payable, to the payment of interest in default in the order
of the maturity of the installments of such interest, with interest (to the
extent that such interest has been collected by the Trustee) upon the overdue
installments of interest at the Default Rate borne by the Securities, such
payments to be made ratably to the Persons entitled thereto, without
discrimination or preference;
THIRD: In case the principal of the Securities shall have become and
shall be then due and payable, to the payment of the whole amount then owing and
unpaid upon all the Securities for principal and interest, with interest upon
the overdue principal, and (to the extent that such interest has been collected
by the Trustee) upon overdue installments of interest at the Default Rate borne
by the Securities; and in case such moneys shall be insufficient to pay in full
the whole amount so due and unpaid upon the Securities, then to the payment of
such principal and interest, without preference or priority of principal over
interest, or of interest over principal, or of any installment of interest over
any other installment of interest, or of any Security over any other Security,
ratably to the aggregate of such principal and accrued and unpaid interest; and
FOURTH: To the payment of the remainder, if any, to the Issuer or any
other Person lawfully entitled thereto.
Whenever moneys are to be applied pursuant to this Section 5.3,
such moneys shall be applied at such times, and from time to time, as the
Trustee shall determine, having due regard for the amount of such moneys
available for application, the likelihood of additional moneys becoming
available for such application in the future, and potential expenses relating
to the exercise of any remedy or right conferred on the Trustee by this
Indenture. Whenever the Trustee shall apply such moneys, it shall fix the
date (which shall be an Interest Payment Date unless it shall deem an earlier
date more suitable) upon which such application is to be made, and upon such
date interest on the amounts of principal to be paid on such date shall cease
to accrue. The Trustee shall give such notice as it may deem appropriate of
the deposit with it of any such moneys and of the fixing of any such date.
Whenever the principal of and interest on all Securities have been paid in
full under the provisions of this Section 5.3 and all expenses and charges of
the Trustee have been paid, any balance remaining in the Trust Estate shall
be paid as provided in Section 10.6 of this Indenture.
SECTION 5.4 SUITS FOR ENFORCEMENT. In case an Event of Default has
occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture or the Collateral Agreements by such appropriate judicial proceedings
as the Trustee shall deem most effectual to protect and enforce any of such
rights, either at law or in equity or in bankruptcy or otherwise, whether for
the
Page 41
specific enforcement of any covenant or agreement contained in this Indenture or
the Collateral Agreements or in aid of the exercise of any power granted in this
Indenture or the Collateral Agreements or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or the Collateral
Agreements or by law.
SECTION 5.5 RESTORATION OF RIGHTS ON ABANDONMENT OF PROCEEDINGS. In
case the Trustee shall have proceeded to enforce any right under this Indenture
and such proceedings shall have been discontinued or abandoned for any reason,
then and in every such case the Issuer and the Trustee shall be restored
respectively to their former positions and rights hereunder, and all rights,
remedies and powers of the Issuer, the Trustee and the Securityholders shall
continue as though no such proceedings had been taken.
SECTION 5.6 LIMITATIONS ON SUITS BY SECURITYHOLDERS. No Holder shall
have any right by virtue or by availing of any provision of this Indenture to
institute any action or proceeding at law or in equity or in bankruptcy or
otherwise upon or under or with respect to this Indenture, or for the
appointment of a trustee, receiver, liquidator, custodian or other similar
official or for any other remedy hereunder, unless such Holder previously shall
have given to the Trustee written notice of an Event of Default and of the
continuance thereof, as hereinbefore provided, and unless also the Holders of
not less than 25% in aggregate principal amount of the Securities then
outstanding shall have made written request upon the Trustee to institute such
action or proceeding in its own name as trustee hereunder and shall have offered
to the Trustee such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby and the Trustee for
30 days after its receipt of such notice, request and offer of indemnity shall
have failed to institute any such action or proceedings and no direction
inconsistent with such written request shall have been given to the Trustee
pursuant to Section 5.9; it being understood and intended, and being expressly
covenanted by the taker and Holder of every Security with every other taker and
Holder and the Trustee, that no one or more Holders of Securities shall have any
right in any manner whatever by virtue or by availing of any provision of this
Indenture to affect, disturb or prejudice the rights of any other Holder of
Securities, or to obtain or seek to obtain priority over or preference to any
other such Holder or to enforce any right under this Indenture, except in the
manner herein provided and for the equal, ratable and common benefit of all
Holders of Securities. For the protection and enforcement of the provisions of
this Section 5.6, each and every Securityholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
SECTION 5.7 UNCONDITIONAL RIGHT OF SECURITYHOLDERS TO INSTITUTE CERTAIN
SUITS. Notwithstanding any other provision in this Indenture and any provision
of any Security, the right of any Holder to receive payment of the principal of
and interest on such Security on or after the respective due dates expressed in
such Security, or to institute suit for the enforcement of any such payment on
or after such respective dates, shall not be impaired or affected without the
consent of such Holder.
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SECTION 5.8 POWERS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT WAIVER
OF DEFAULT. Except as provided in Section 2.6, no right or remedy herein or
under the Collateral Agreements conferred upon or reserved to the Trustee or to
the Securityholders 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 under the
Collateral Agreements or now or thereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder or
under the Collateral Agreements, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
No delay or omission of the Trustee or of any Holder to exercise any
right or power accruing upon any Event of Default occurring and continuing as
aforesaid shall impair any such right or power or shall be construed to be a
waiver of any such Event of Default or an acquiescence therein; and subject to
Section 5.6, every power and remedy given by this Indenture or under the
Collateral Agreements or by law to the Trustee or to the Securityholders may be
exercised from time to time, as often as shall be deemed expedient, by the
Trustee or by the Securityholders.
SECTION 5.9 CONTROL BY SECURITYHOLDERS. The Holders of 50% in aggregate
principal amount of the Securities at the time outstanding 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 on
the Trustee by this Indenture; PROVIDED that such direction shall not be
otherwise than in accordance with law and the provisions of this Indenture;
PROVIDED, FURTHER, that the Trustee is provided with reasonable indemnification
by the Holders prior to taking such action; and PROVIDED, FURTHER, that (subject
to the provisions of Section 6.1) the Trustee shall have the right to decline to
follow any such direction if the Trustee, being advised by counsel, shall
determine that the action or proceeding so directed may not lawfully be taken or
if the Trustee in good faith by its board of directors, the executive committee
or a trust committee of directors or Responsible Officers of the Trustee shall
determine that the action or proceeding so directed would involve the Trustee in
any financial or other liability or if the Trustee in good faith shall so
determine that the actions or forbearances specified in or pursuant to such
direction shall be unduly prejudicial to the interests of Holders of the
Securities not joining in the giving of said direction, it being understood that
(subject to Section 6.1) the Trustee shall have no duty to ascertain whether or
not such actions or forbearances are unduly prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction by Securityholders.
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SECTION 5.10 WAIVER OF PAST DEFAULTS. The Holders of 50% in aggregate
principal amount of the Securities at the time outstanding, by notice to the
Issuer and the Trustee, may on behalf of all Holders, upon providing the Trustee
with reasonable indemnity with respect to any action that might be taken by the
Holders not so consenting, provide forbearances, waive any default or Event of
Default hereunder and its consequences under this Indenture including
acceleration, except a default in the payment of principal of or interest on any
of the Securities. In the case of any such waiver, the Issuer, the Trustee and
the Holders of the Securities shall be restored to their former positions and
rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
Upon any such waiver, such default shall cease to exist and be deemed to
have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured, and not to have occurred for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
SECTION 5.11 TRUSTEE TO GIVE NOTICE OF DEFAULT, BUT MAY WITHHOLD IN
CERTAIN CIRCUMSTANCES. The Trustee shall transmit to the Securityholders, as
the names and addresses of such Holders appear on the registry books, notice by
mail of all defaults actually known to a Responsible Officer of the Trustee,
such notice to be transmitted within 90 days after the occurrence thereof,
unless such defaults shall have been cured before the giving of such notice (the
term "default" or "defaults" for the purposes of this Section 5.11 being hereby
defined to mean any event or condition which is, or with notice or lapse of time
or both would become, an Event of Default); PROVIDED that, except in the case of
default in the payment of the principal of or interest on any of the Securities,
the Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of directors
and/or Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interests of the Securityholders.
SECTION 5.12 RIGHT OF COURT TO REQUIRE FILING OF UNDERTAKING TO PAY
COSTS. All parties to this Indenture agree, and each Holder 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 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 5.12 shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Securityholder or group of
Securityholders holding in the aggregate more than 25% in aggregate principal
amount of the Securities outstanding, or to any suit instituted by any
Securityholder for the enforcement of the payment of the principal of or
Page 44
interest on any Security on or after the due date expressed in such Security.
SECTION 5.13 EXCESS CASH FLOW. All references to payments of principal
and interest include Excess Cash Flow payments required by this Indenture.
ARTICLE 6
CONCERNING THE TRUSTEE
SECTION 6.1 DUTIES AND RESPONSIBILITIES OF THE TRUSTEE; DURING DEFAULT;
PRIOR TO DEFAULT. The Trustee, prior to the occurrence of an Event of Default
and after the curing or waiving of all Events of Default which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. In case an Event of Default has
occurred (which has not been cured or waived) 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 man would exercise or use under
the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct, except that:
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default which may have occurred:
(i) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture, and
the Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein,
upon any statements, certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but
in the case of any such statements, certificates or opinions which
by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the
same to determine whether or not they conform to the requirements
of this Indenture;
Page 45
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
the Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a 50% in principal amount of
the Securities at the time outstanding relating to 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,
under this Indenture;
(d) the Trustee shall not be charged with knowledge of an Event
of Default unless a Responsible Officer of the Trustee obtains written
notice of such default; and
(e) whether or not therein expressly so provided, every provision
of this Indenture relating to the conduct or affecting the liability of
or affording protection to the Trustee shall be subject to the provisions
of this Section 6.1.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial or
other liability in the performance of any of its duties or in the exercise of
any of its rights or powers, if repayment of such funds or adequate indemnity
against such liability is not assured to the reasonable satisfaction of the
Trustee.
SECTION 6.2 CERTAIN RIGHTS OF THE TRUSTEE. Subject to Section 6.1:
(a) the Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
Officers' Certificate or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond, debenture, note,
coupon, security or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Issuer
mentioned herein shall be sufficiently evidenced by an Officers'
Certificate (unless other evidence in respect thereof be herein
specifically prescribed), and any resolution of the Board of Directors
may be evidenced to the Trustee by a copy thereof certified by the
Secretary or an Assistant Secretary of the Issuer;
(c) the Trustee may consult with counsel and any advice or
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be
taken by it hereunder in good faith and in accordance with such advice or
Opinion of Counsel;
Page 46
(d) the Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Indenture at the request, order
or direction of any of the Securityholders pursuant to the provisions of
this Indenture, unless such Securityholders shall have offered to the
Trustee reasonable security and/or indemnity against the costs, expenses
and liabilities which might be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or within
the discretion, rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all Events of Default which may have
occurred, the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
appraisal, bond, debenture, note, coupon, security, or other paper or
document unless requested in writing so to do by the Holders of not less
than a majority in aggregate principal amount of the Securities then
outstanding; PROVIDED that if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by it
in the making of such investigation is, in the opinion of the Trustee,
not reasonably assured to the Trustee by the security afforded to it by
the terms of this Indenture, the Trustee may require reasonable indemnity
against such expenses or liabilities as a condition to proceeding; the
reasonable expenses of every such examination shall be paid by the Issuer
or, if paid by the Trustee or any predecessor trustee, shall be repaid by
the Issuer upon demand;
(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents
or attorneys, custodians or nominees not regularly in its employ and the
Trustee shall not be responsible for any misconduct or negligence on the
part of any such agent, attorney, custodian or nominee appointed with due
care by it hereunder; and
(h) the Trustee makes no representation as to the validity or
adequacy of this Indenture, the Collateral, or the Securities. It shall
not be accountable for the Issuer's use of the proceeds from the sale of
the Securities, and it shall not be responsible for any statement in the
Securities, other than its authentication. Except required by Section
14.6 of this Indenture, the Trustee shall not be responsible for any
recording, re-recording, filing or refiling of this Indenture or other
document to perfect the Trust Estate's security interest in the
Collateral. The Trustee shall not be bound to ascertain or inquire as to
the performance of the obligations of the Issuer under this Indenture or
the Collateral Agreements. The Trustee may nevertheless require the
Issuer to furnish information regarding performance of its obligations
hereunder and under the Collateral Agreements,
Page 47
but is not obligated to do so.
SECTION 6.3 TRUSTEE NOT RESPONSIBLE FOR RECITALS, DISPOSITION OF
SECURITIES OR APPLICATION OF PROCEEDS THEREOF. The recitals contained herein
and in the Securities, except the Trustee's certificates of authentication,
shall be taken as the statements of the Issuer, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representation as to the validity or sufficiency of this Indenture or of the
Securities. The Trustee shall not be accountable for the use or application by
the Issuer of any of the Securities or of the proceeds thereof. The Trustee
shall not be accountable or responsible for any information, statement or
recital in any prospectus, private offering memorandum or any other disclosure
material prepared or distributed in connection with the distribution of the
Securities.
SECTION 6.4 TRUSTEE AND AGENTS MAY HOLD SECURITIES; COLLECTIONS, ETC.
The Trustee or any agent of the Issuer or the Trustee, in its individual or any
other capacity, may become the owner or pledgee of Securities with the same
rights it would have if it were not the Trustee or such agent and, subject to
Sections 6.8 and 6.13, if operative, may otherwise deal with the Issuer and
receive, collect, hold and retain collections from the Issuer with the same
rights it would have if it were not the Trustee or such agent.
SECTION 6.5 MONEYS HELD BY TRUSTEE. Subject to the provisions of
Section 10.6 hereof, all moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the extent
required by mandatory provisions of law. Neither the Trustee nor any agent of
the Issuer or the Trustee shall be under any liability for interest on any
moneys received by it hereunder.
SECTION 6.6 COMPENSATION AND INDEMNIFICATION OF TRUSTEE AND ITS PRIOR
CLAIM. The Issuer covenants and agrees to pay to the Trustee from time to time,
and the Trustee shall be entitled to, reasonable compensation (which shall not
be limited by any provision of law in regard to the compensation of a trustee of
an express trust) and the Issuer covenants and agrees to pay or reimburse the
Trustee and each predecessor Trustee upon its request for all reasonable
expenses, (including, without limitation, expenses incurred in connection with
notices and other communications to Holders) disbursements and advances incurred
or made by or on behalf of it in accordance with any of the provisions of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its counsel and of all agents and other Persons not regularly
in its employ) except any such expense, disbursement or advance as may arise
from its negligence or bad faith. The Issuer also covenants to indemnify the
Trustee, and each predecessor trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of this
Indenture or the trusts hereunder and its
Page 48
duties hereunder, including the costs and expenses of defending itself
against or investigating any claim of liability in the premises. The
obligations of the Issuer under this Section 6.6 to compensate and indemnify
the Trustee and each predecessor trustee and to pay or reimburse the Trustee
and each predecessor trustee for expenses, disbursements and advances shall
constitute additional indebtedness hereunder and shall survive the
satisfaction and discharge of this Indenture. Such additional indebtedness
shall be a senior claim to that of the Securities upon all Property and funds
held or collected by the Trustee as such, except funds held in trust for the
benefit of the Holders of particular Securities, and the Securities are
hereby subordinated to such senior claim. The Trustee and Issuer shall enter
into a Fee Agreement acceptable to the Trustee and Issuer.
SECTION 6.7 RIGHT OF TRUSTEE TO RELY ON OFFICERS' CERTIFICATE, ETC.
Subject to Section 6.1, whenever in the administration of the trusts of this
Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of bad faith on the part of the
Trustee, be deemed to be conclusively proved and established by an Officers'
Certificate delivered to the Trustee, and such certificate, in the absence of
bad faith on the part of the Trustee, shall be full warrant and protection to
the Trustee for any action taken, suffered or omitted by it under the provisions
of this Indenture upon the faith thereof.
SECTION 6.8 [Reserved]
SECTION 6.9 PERSONS ELIGIBLE FOR APPOINTMENT AS TRUSTEE. The Trustee
hereunder shall at all times be a corporation organized and doing business under
the laws of the United States of America or of any State or territory or of the
District of Columbia having a combined capital and surplus of at least
$50,000,000 (or being a member of a bank holding system with such an aggregate
combined capital and surplus), and which is authorized under such laws to
exercise corporate trust powers and is subject to supervision or examination by
Federal, State, territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section 6.9, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. Neither the Issuer nor any
Person directly or indirectly controlling, controlled by or under common control
with the Issuer may serve as Trustee hereunder. In case at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section
6.9, the Trustee shall resign immediately in the manner and with the effect
specified in Section 6.10.
SECTION 6.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR TRUSTEE.
The Trustee may resign at any time by so notifying the Issuer in
Page 49
writing, such resignation to be effective upon the appointment of a successor
Trustee. The Holders of a majority in principal amount of the outstanding
Securities may remove the Trustee by so notifying the Trustee in writing and may
appoint a successor Trustee with the Issuer's consent which consent shall not be
unreasonably withheld. The Issuer may remove the Trustee if:
(a) the Trustee fails to comply with Section 6.8 or 6.9;
(b) the Trustee is adjudged a bankrupt or an insolvent;
(c) a receiver or other public officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason (the Trustee in such event being referred to herein as
the retiring Trustee), the Issuer shall promptly appoint a successor Trustee
that is reasonably acceptable to the Holders of a majority in principal amount
of the Securities. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the Securities may appoint a
successor Trustee to replace the successor Trustee appointed by the Issuer.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Issuer. Immediately after that, the retiring
Trustee shall transfer all property held by it as Trustee to the successor
Trustee (subject to the senior claim provided in Section 6.6 and upon being paid
the compensation due to it in Section 6.6), 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 Securityholder.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuer or the
Holders of at least 25% 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 6.8, 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 6.10,
the Issuer's obligations under Section 6.6 shall continue for the benefit of the
retiring Trustee.
Page 50
SECTION 6.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR TRUSTEE. Any
successor trustee appointed as provided in Section 6.10 shall execute and
deliver to the Issuer and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Issuer or of the successor trustee, the trustee ceasing to act shall upon
being paid the amounts due it under Section 6.6 pay over to the successor
trustee all moneys at the time held by it hereunder and shall execute and
deliver an instrument transferring to such successor trustee all such rights,
powers, duties and obligations. Upon request of any such successor trustee, the
Issuer shall execute any and all instruments in writing for more fully and
certainly vesting in and confirming to such successor trustee all such rights
and powers. Any trustee ceasing to act shall, nevertheless, retain a prior
claim upon all Property or funds held or collected by such trustee to secure any
amounts then due it pursuant to the provisions of Section 6.6.
No successor trustee shall accept appointment as provided in this Section
6.11 unless at the time of such acceptance such successor trustee shall be
qualified under the provisions of Section 6.8 and eligible under the provisions
of Section 6.9. No Trustee under this Indenture shall be personally liable for
any action or omission of any successor trustee.
SECTION 6.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS
OF TRUSTEE. Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to the corporate trust business of the Trustee, shall
be the successor of the Trustee hereunder, PROVIDED that such corporation shall
be qualified under the provisions of Section 6.8 and eligible under the
provisions of Section 6.9, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor Trustee and deliver such
Securities so authenticated; and, in case at that time any of the Securities
shall not have been authenticated, any successor to the Trustee may authenticate
such Securities either in the name of any predecessor hereunder or in the name
of the successor Trustee; and in all such cases such certificate shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee to authenticate Securities in the name of
any predecessor Trustee shall have; PROVIDED that the right to adopt the
certificate of authentication of any predecessor Trustee shall apply only to its
successor or successors by
Page 51
merger, conversion or consolidation.
SECTION 6.13 [Reserved].
SECTION 6.14 INTERVENTION IN LITIGATION. In any judicial proceedings
with respect to the Securities to which the Issuer is a party the Trustee may
intervene on behalf of Holders and shall, subject to Section 6.2 of this
Indenture, intervene if requested in writing by Holders owning not less than
fifty percent (50%) in aggregate principal amount of Securities then
Outstanding.
SECTION 6.15 APPOINTMENT OF CO-TRUSTEES. At any time or times, for
the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Collateral may at the time be located, the Issuer (and in
case of an Event of Default has occurred and is continuing, the Trustee)
shall have the power to appoint one or more persons approved by the Trustee
either to act as co-trustee or co-trustees jointly with the Trustee of all or
any part of the Collateral, or to act as separate trustee or separate
co-trustees of all or any part of the Collateral, and to vest in such person
or persons, in such capacity, such title to the Collateral or any part of it,
and/or such rights, powers, duties, trusts or obligations as the Issuer
and/or the Trustee may consider necessary or desirable subject to the
remaining provisions of this Section 6.15. Upon the request of the Trustee or
of Holder owning not less than fifty percent (50%) in aggregate principal
amount of Securities then Outstanding, the Issuer shall join with the Trustee
in the execution, delivery and performance of all instruments and agreements
necessary or proper to effect such appointment. If the Issuer shall not have
joined in such appointment within 30 days after the receipt by it of a
request so to do, or in case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment.
The Issuer shall execute, acknowledge and deliver all such instruments as may
be required by any such co-trustee or separate trustee for more fully
confirming such title, rights, powers, trusts, duties and obligations to such
co-trustee or separate trustee. Every co-trustee or separate trustee shall,
to the extent permitted by law or any applicable contract, be appointed
subject to the following terms, namely:
(i) all rights, powers, trusts, duties and obligations
conferred or imposed upon the trustees shall be conferred or imposed upon
and exercised or performed by the Trustee, or by the Trustee and such
co-trustee, or separate trustee, jointly, as shall be provided in the
instrument appointing such co-trustee or separate trustee, except to the
extent that, under the law of any jurisdiction in which any particular
act or acts are to be performed, the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such act or acts
shall be performed by such co-trustee or separate trustee;
(ii) any request in writing by the Trustee to any co-trustee or
separate trustee to take or to refrain from taking any action under this
Indenture shall be sufficient warrant
Page 52
for the taking, or the refraining from taking, of such action by such
co-trustee or separate trustee;
(iii) any co-trustee or separate trustee to the extent permitted
by law may delegate to the Trustee the exercise of any right, power,
trust, duty or obligation, discretionary or otherwise;
(iv) the Trustee at any time, by an instrument in writing, with
the concurrence of the Issuer evidenced by a resolution, may accept the
resignation of or remove any co-trustee or separate trustee appointed
under this Section 6.15, and, in case an Event of Default shall have
occurred and be continuing, the Trustee shall have power to accept the
resignation of, or remove, any such co-trustee or separate trustee
without the concurrence of the Issuer; upon the request of the Trustee,
the Issuer shall join with the Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to
effectuate such resignation or removal; a successor to any co-trustee or
separate trustee so resigned or removed may be appointed in the manner
provided in this Section 6.15;
(v) no trustee under this Indenture shall be personally liable
by reason of any act or omission of any co-trustee or separate trustee
under this Indenture.
(vi) any demand, request, direction, appointment, removal,
notice, consent, waiver or other action in writing executed by any Holder
and delivered to the Trustee shall be deemed to have been delivered to
each such co-trustee or separate trustee; and
(vii) any moneys, papers, securities or other items of personal
property received by any such co-trustee or separate trustee under this
Indenture shall forthwith, so far as may be permitted by law, be turned
over to the Trustee.
Upon the acceptance in writing of appointment by any such co-trustee or separate
trustee, it, she or he shall be vested with the pledge and assignment of the
Collateral and with such rights, powers, duties, trusts or obligations as shall
be specified in the instrument of appointment, jointly with the Trustee (except
insofar as local law makes it necessary for any such co-trustee or separate
trustee to act alone), subject to all the terms of this Indenture. Every such
acceptance shall be filed with the Trustee and the Issuer.
SECTION 6.16 EFFECT OF DEATH, INCAPACITY, RESIGNATION OR REMOVAL
OF CO-TRUSTEE OR SEPARATE TRUSTEE. In case any co-trustee or separate trustee
shall die, become incapable of acting, resign or be removed, the pledge and
assignment of the Collateral and all rights, powers, trusts, duties and
obligations of the co-trustee or separate trustee shall, so far as permitted by
law, vest in and be exercised by the Trustee unless and until a
Page 53
successor co-trustee or separate trustee shall be appointed in the same manner
as provided for with respect to the appointment of a successor Trustee pursuant
to Section 6.10 of this Indenture.
ARTICLE 7
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 EVIDENCE OF ACTION TAKEN BY SECURITYHOLDERS. Any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Securityholders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Securityholders in Person or by agent duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee. Proof of execution of any instrument or of a writing appointing any
such agent shall be sufficient for any purpose of this Indenture and (subject to
Sections 6.1 and 6.2) conclusive in favor of the Trustee and the Issuer if made
in the manner provided in this Article.
SECTION 7.2 PROOF OF EXECUTION OF INSTRUMENTS AND OF HOLDING OF
SECURITIES. Subject to Sections 6.1 and 6.2, the execution of any instrument by
a Securityholder or his agent or proxy may be proved in accordance with such
reasonable rules and regulations as may be prescribed by the Trustee or in such
manner as shall be satisfactory to the Trustee. The holdings of Securities
shall be proved by the Security register or by a certificate of the registrar
thereof.
SECTION 7.3 HOLDERS TO BE TREATED AS OWNERS. The Issuer, the Trustee
and any agent of the Issuer or the Trustee may deem and treat the Person in
whose name any Security shall be registered upon the Security register as the
absolute owner of such Security (whether or not such Security shall be
overdue and notwithstanding any notation of ownership or other writing
thereon) for the purpose of receiving payment of or on account of the
principal of and, subject to the provisions of this Indenture, interest on
such Security and for all other purposes; and neither the Issuer nor the
Trustee nor any agent of the Issuer or the Trustee shall be affected by any
notice to the contrary. All such payments so made to any such Person, or
upon his order, shall be valid, and, to the extent of the sum or sums so
paid, effectual to satisfy and discharge the liability for moneys payable
upon any such Security.
SECTION 7.4 SECURITIES OWNED BY ISSUER DEEMED NOT OUTSTANDING. In
determining whether the Holders of the requisite aggregate principal amount of
Securities have concurred in any direction, consent or waiver under this
Indenture, Securities which are owned by the Issuer or any other obligor on the
Securities or by any Person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Issuer or any
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other obligor on the Securities (other than any holder of Securities on the
Issuance Date) shall be disregarded and deemed not to be outstanding for the
purpose of any such determination, except that for the purpose of determining
whether the Trustee shall be protected in relying on any such direction,
consent or waiver only Securities which the Responsible Officer actually
knows are so owned shall be so disregarded. "Actual knowledge" means the
fact of knowing without a duty to investigate. Securities so owned which
have been pledged in good faith may be regarded as outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Issuer or any
other obligor upon the Securities or any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Issuer or any other obligor of the Securities. In case of a dispute as
to such right, the advice of counsel shall be full protection in respect of
any decision made by the Trustee in accordance with such advice. Upon
request of the Trustee, the Issuer shall furnish to the Trustee promptly an
Officers' Certificate listing and identifying all Securities, if any, known
by the Issuer to be owned or held by or for the account of any of the above
described Persons; and, subject to Section 6.1, the Trustee shall be entitled
to accept such Officers' Certificate as conclusive evidence of the facts
therein set forth.
SECTION 7.5 RIGHT OF REVOCATION OF ACTION TAKEN. At any time prior
to (but not after) the evidencing to the Trustee, as provided in Section 7.1,
of the taking of any action by the Holders of the percentage in aggregate
principal amount of the Securities specified in this Indenture in connection
with such action, any Holder of a Security the serial number of which is
shown by the evidence to be included among the serial numbers of the
Securities the Holders of which have consented to such action may, by filing
written notice at the Corporate Trust Office and upon proof of holding as
provided in this Article, revoke such action so far as concerns such
Security. Except as aforesaid, any such action taken by the Holder of any
Security shall be conclusive and binding upon such Holder and upon all future
Holders and owners of such Security and of any Securities issued in exchange
or substitution therefor, irrespective of whether or not any notation in
regard thereto is made upon any such Security. Any action taken by the
Holders of the percentage in aggregate principal amount of the Securities
specified in this Indenture in connection with such action shall be
conclusively binding upon the Issuer, the Trustee and the Holders of all the
Securities.
ARTICLE 8
SUPPLEMENTAL INDENTURES
SECTION 8.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF SECURITYHOLDERS.
The Issuer, when authorized by a resolution of its Board of Directors, and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:
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(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(c) to provide for the assumption of the Issuer's obligations
hereunder to the Holders in the case of a merger or consolidation
pursuant to Article Nine hereof; or
(d) to make any change that would provide any additional rights
or benefits to the Holders or that does not adversely affect the legal
rights hereunder of any Holder.
The Trustee is hereby authorized to join in the execution of any such
supplemental indenture, to make any further appropriate agreements and
stipulations which may be therein contained and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property thereunder, but the
Trustee shall not be obligated to enter into any such supplemental indenture
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section
8.1 may be executed without the consent of the Holders of any of the Securities
at the time outstanding, notwithstanding any of the provisions of Section 8.2.
SECTION 8.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF SECURITYHOLDERS.
With the consent (evidenced as provided in Article Seven) of the Holders of not
less than a majority in aggregate principal amount of the Securities at the time
outstanding (including consents obtained in connection with a tender offer or
exchange offer for the Securities), the Issuer, when authorized by a resolution
of the Board of Directors, and the Trustee may, from time to time and at any
time, 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 this Indenture or of any supplemental indenture or of modifying in
any manner the rights of the Holders of the Securities; PROVIDED that no such
supplemental indenture shall, without the consent of each Holder affected
thereby (with respect to any Securities held by a non-consenting
Securityholder), (i) reduce the principal amount of Securities whose Holders
must consent to an amendment, supplement or waiver, (ii) reduce the principal of
or change the fixed maturity of any Security or alter the provisions with
respect to the redemption of the Securities, (iii) reduce the rate of or change
the time for payment of interest on any Security, (iv) waive a Default or Event
of Default in the payment of principal of or premium, if any, or interest on the
Securities (except a rescission of acceleration of the Securities by the Holders
of at least a majority in aggregate principal amount of the then outstanding
Securities and a waiver of the payment default that resulted from such
acceleration), (v) make
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any Security payable in money other than that stated in the Securities, (vi)
make any change in the provisions of the Indenture relating to waivers of
past Defaults or the rights of Holders of Securities to receive payments of
principal of or interest on the Securities, (vii) waive a redemption payment
with respect to any Security or (viii) make any change in the foregoing
amendment and waiver provisions.
The Issuer may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any indenture
supplemental hereto. If a record date is fixed, then those Persons who were
Holders at such record date (or their duly designated proxies), and only those
Persons, shall be entitled to consent to such supplemental indenture or 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.
Upon the request of the Issuer accompanied by a copy of a resolution of
the Board of Directors certified by the Secretary or an Assistant Secretary of
the Issuer authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of the required
Securityholders and other documents, if any, required by Section 7.1, the
Trustee shall join with the Issuer in the execution of such supplemental
indenture unless such supplemental indenture affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion, but shall not be obligated to, enter into such
supplemental indenture.
It shall not be necessary for the consent of the Securityholders under
this Section 8.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section 8.2, the
Issuer shall mail a notice thereof by first-class mail to the Holders of
Securities at their addresses as they shall appear on the registry books of the
Issuer, setting forth in general terms the substance of such supplemental
indenture. Any failure of the Issuer to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such supplemental indenture.
SECTION 8.3 EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and be deemed to be modified and amended in accordance therewith and the
respective rights, limitations of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Issuer and the Holders of Securities
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and
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conditions of this Indenture for any and all purposes.
SECTION 8.4 DOCUMENTS TO BE GIVEN TO TRUSTEE. In connection with the
execution and delivery of any supplemental indenture pursuant to this Article
Eight, the Trustee shall receive an Officers' Certificate and an Opinion of
Counsel and, subject to the provisions of Sections 6.1 and 6.2, may rely thereon
as conclusive evidence that any such supplemental indenture complies with the
applicable provisions of this Indenture. The Opinion of Counsel delivered
pursuant to this Section 8.4 shall include a statement that the execution,
delivery and performance of such supplemental indenture by the Issuer shall not
result in a breach or violation of, or constitute a default under, this
Indenture. Subject to Section 6.1, the Trustee may conclusively rely on an
Opinion of Counsel with respect to the effect a supplemental indenture will have
on a Holder under Section 8.1(d).
SECTION 8.5 NOTATION ON SECURITIES IN RESPECT OF SUPPLEMENTAL
INDENTURES. Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to the provisions of this Article may bear a
notation in form approved by the Trustee as to any matter provided for by such
supplemental indenture or as to any action taken at any such meeting. If the
Issuer or the Trustee shall so determine, new Securities so modified as to
conform, in the opinion of the Trustee and the Board of Directors, to any
modification of this Indenture contained in any such supplemental indenture may
be prepared and executed by the Issuer, authenticated by the Trustee and
delivered in exchange for the Securities then outstanding.
ARTICLE 9
NO CONSOLIDATION, MERGER, SALE OR CONVEYANCE
The Issuer shall not consolidate with, or merge with or into (whether or
not such Issuer is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets as an entirety in one or more related transactions to, another
corporation, person or entity. For purposes of this Article 9, the transfer (by
lease, assignment, sale or otherwise), in a single transaction or series of
transactions), of all or substantially all of the properties or assets of one or
more Subsidiaries of the Issuer, the Capital Stock of which constitutes all or
substantially all of the properties and assets of the Issuer, shall be deemed to
be the transfer of all or substantially all of the properties and assets of the
Issuer. Nothing herein shall prohibit TWG or Trans World Gaming of Louisiana,
Inc. from selling or otherwise disposing of assets (other than any interest in
Issuer) to satisfy claims of the holders of those certain 12% Secured
Convertible Senior Bonds due 1999.
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ARTICLE 10
SATISFACTION AND DISCHARGE
OF INDENTURE; UNCLAIMED MONEYS
SECTION 10.1 SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture
shall cease to be of further effect as to all outstanding Securities (except
as to (A) rights of registration of transfer and exchange, and the Issuer's
right of optional redemption, (B) substitution of apparently mutilated,
defaced, destroyed, lost or stolen Securities, (C) rights of Holders to
receive payments of principal thereof and interest thereon, (D) the rights,
obligations and immunities of the Trustee hereunder and (E) the rights of the
Securityholders as beneficiaries hereof with respect to the property so
deposited with the Trustee under the provisions of this Section 10.1) when
(a) all outstanding Securities, except lost, stolen or destroyed Securities
which shall have been replaced, as provided in Section 2.6, or paid have been
delivered to the Trustee for cancellation or (b) the Issuer shall have paid
or caused to be paid the principal of and interest on the Securities
outstanding hereunder, as and when the same shall have become due and
payable, or (c) (i) the Securities not theretofore delivered to the Trustee
for cancellation shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for redemption
under arrangements satisfactory to the Trustee upon the giving of notice of
redemption, and (ii) the Issuer shall have irrevocably deposited or caused to
be deposited with the Trustee, as trust funds, (A) money in an amount or (B)
Government Securities which through the payment of interest and principal
will provide, no later than one day before the due date of payments in
respect of the Securities, money in an amount or (C) a combination thereof,
any one of options (A), (B) or (C) being 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 the principal
of and interest on the outstanding Securities to the date of maturity or
redemption, as the case may be. The Trustee, on demand of the Issuer
accompanied by an Officers' Certificate and an Opinion of Counsel and at the
cost and expense of the Issuer, shall execute proper instruments
acknowledging such satisfaction of and discharging this Indenture. The
Issuer agrees to reimburse the Trustee for any costs or expenses (including
the reasonable fees of its counsel) there after reasonably and properly
incurred, to compensate the Trustee for any services thereafter reasonably
and properly rendered by the Trustee in connection with this Indenture or the
Securities and to indemnify the trust referred to in Section 10.2(a) for any
tax liability and pay any expenses of such trust not otherwise provided for
pursuant to such Section.
SECTION 10.2 DEFEASANCE AND DISCHARGE OF INDENTURE. The Issuer shall be
deemed to have paid and discharged the entire Indebtedness on all the
outstanding Securities on the date of the deposit referred to in subparagraph
(a) hereof, and the provisions of this Indenture, as it relates to such
outstanding Securities, shall no longer be in effect (and the Trustee, at the
expense of the Issuer, shall execute proper instruments acknowledging the same),
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except as to: (1) rights of registration of transfer and exchange, and the
Issuer's right of optional redemption, (2) substitution of apparently mutilated,
defaced, destroyed, lost or stolen Securities, (3) rights of Holders to receive
payments of principal thereof and interest thereon, (4) the rights, obligations
and immunities of the Trustee hereunder and (5) the rights of the
Securityholders as beneficiaries hereof with respect to the property so
deposited with the Trustee payable to all or any of them; PROVIDED that all of
the following conditions shall have been satisfied:
(a) the Issuer has deposited or caused to be irrevocably
deposited with the Trustee (or another trustee satisfying the
requirements of Section 6.9) as trust funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of the Securities, (i) money in an amount or (ii) Government
Securities which through the payment of interest and principal in respect
thereof in accordance with their terms will provide not later than one
day before the due date of any payment referred to below money in an
amount, or (iii) a combination thereof, any one of options (i), (ii) or
(iii) being 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 without
consideration of the reinvestment of such interest and after payment of
all federal, state and local taxes or other charges and assessments in
respect thereof payable by the Trustee, the principal of and each
installment of principal and interest on the outstanding Securities as of
the maturity date of such principal or installment of interest;
(b) [reserved];
(c) such deposit shall not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Issuer is a party or by which it is bound;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit;
(e) the Issuer has delivered to the Trustee an Opinion of Counsel
to the effect that (i) the Holders of the Securities shall not recognize
income, gain or loss for Federal income tax purposes as a result of such
deposits, defeasance and discharge and will be subject to Federal income
tax on the same amount and in the same manner and at the same times as
would have been the case if such deposit, defeasance and discharge had
not occurred, (ii) the creation of the trust will not violate the
Investment Company Act of 1940, as amended, and (iii) Holders of the
Securities will have a valid, first priority lien on the trust funds; and
(f) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion
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of Counsel, each stating that all conditions precedent provided for
relating to the defeasance contemplated by this provision have been
complied with.
SECTION 10.3 DEFEASANCE OF CERTAIN OBLIGATIONS. The Issuer may omit to
comply with any term, provision or condition set forth in Sections 3.5 to 3.13
inclusive, and will not be subject to the Events of Default described under
clauses (d), (e) and (f) of Section 5.1 hereof, with respect to the Securities,
if all of the following conditions have been satisfied:
(a) the Issuer has deposited or caused to be irrevocably
deposited with the Trustee (or another trustee satisfying the
requirements of Section 6.9) as trust funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of the Securities, (i) money in an amount, or (ii) Government
Securities which through the payment of interest and principal in respect
thereof in accordance with their terms will provide not later than one
day before the due date of any payment referred to below money in an
amount, or (iii) a combination thereof, any one of options (i), (ii) or
(iii) being 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 without
consideration of the reinvestment of such interest and after payment of
all federal, state and local taxes or other charges and assessments in
respect thereof payable by the Trustee, the principal of and each
installment of principal and interest on the outstanding Securities on
the maturity date of such principal or installment of principal or
interest;
(b) [reserved];
(c) such deposit shall not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Issuer is a party or by which it is bound;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit;
(e) the Issuer has delivered to the Trustee an Opinion of Counsel
to the effect that (i) the Holders of the Securities shall not recognize
income, gain or loss for Federal income tax purposes as a result of such
deposit and defeasance of certain obligations and will be subject to
Federal income tax on the same amount and in the same manner and at the
same times as would have been the case if such deposit and defeasance had
not occurred, (ii) the creation of the trust will not violate the
Investment Company Act of 1940, as amended, and (iii) Holders of the
Securities will have a valid, first-priority lien on the trust funds; and
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(f) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the defeasance contemplated by
this Section 10.3 have been complied with.
SECTION 10.4 APPLICATION BY TRUSTEE OF FUNDS DEPOSITED FOR PAYMENT OF
SECURITIES. Subject to Section 10.6, all moneys and Governmental Securities
deposited with the Trustee pursuant to Sections 10.1, 10.2 and 10.3 shall be
held in trust and applied by it to the payment, either directly or through any
paying agent (including the Issuer acting as paying agent), to the Holders of
the particular Securities for the payment or redemption of which such moneys
have been deposited with the Trustee, of all sums due and to become due thereon
for principal and interest; but such money and Government Securities need not be
segregated from other funds except to the extent required by law.
SECTION 10.5 REPAYMENT OF MONEYS HELD BY PAYING AGENT. In connection
with the satisfaction and discharge of this Indenture all moneys and Government
Securities then held by any paying agent under the provisions of this Indenture
shall, upon demand of the Issuer, be repaid to the Issuer or paid to the Trustee
and thereupon such paying agent shall be released from all further liability
with respect to such moneys and Government Securities.
SECTION 10.6 RETURN OF MONEYS HELD BY TRUSTEE AND PAYING AGENT UNCLAIMED
FOR ONE YEAR. Any moneys and Government Securities deposited with or paid to
the Trustee or any paying agent for the payment of the principal of or interest
on any Security and not applied but remaining unclaimed for one year after the
date upon which such principal or interest shall have become due and payable
shall, upon the written request of the Issuer and unless otherwise required by
mandatory provisions of applicable escheat or abandoned or unclaimed property
law, be repaid to the Issuer by the Trustee or such paying agent, and the Holder
of such Security shall, unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property laws, thereafter look only
to the Issuer for any payment which such Holder may be entitled to collect, and
all liability of the Trustee or any paying agent with respect to such moneys and
Government Securities shall thereupon cease; PROVIDED, HOWEVER, that the Trustee
or such paying agent before being required to make any such repayments may, at
the expense of the Issuer, cause to be published once, in a newspaper published
in the English language, customarily published on each Business Day and of
general circulation in the Borough of Manhattan, the City of New York, 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 publication, any unclaimed
balance of such money then remaining will be repaid to the Issuer. In the event
any Securities are not presented for payment when due, either at maturity or at
the date fixed for redemption thereof or otherwise, if funds sufficient to pay
such Securities shall have been made available to the Trustee or Paying Agent
for the benefit of the Holders thereof, all liability of the Issuer to the
Holders for payment of such Securities
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shall terminate and be completely discharged. The Trustee shall hold such
segregated funds, without liability for interest thereon, for the benefit of the
Holders, who shall thereafter be restricted exclusively to such funds for the
satisfaction of any claim of whatever nature on their part under this Indenture
or relating to such Securities.
SECTION 10.7 REINSTATEMENT. If the Trustee or paying agent is unable to
apply any moneys or Government Securities in accordance with this Article Ten by
reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Issuer's obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to this Article Ten until such time as the Trustee or paying agent is
permitted to apply all such moneys or Government Securities in accordance with
this Article; PROVIDED, HOWEVER, that if the Issuer has made any payment of
principal of or interest on any Securities because of the reinstatement of its
obligations, the Issuer shall be subrogated to the rights of the Holders of such
Securities to receive such payment from the moneys or Government Securities held
by the Trustee or paying agent.
ARTICLE 11
MISCELLANEOUS PROVISIONS
SECTION 11.1 INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS OF
ISSUER EXEMPT FROM INDIVIDUAL LIABILITY. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture, or in any
Security, or because of any indebtedness evidenced thereby, shall be had against
any incorporator, as such, or against any past, present or future stockholder,
officer, employee, director, or creditor, as such, of the Issuer or the Trustee
or any subsidiary of the Issuer or any successor of the Issuer or the Trustee or
any such subsidiary, whether directly or through the Issuer or any subsidiary of
the Issuer or any successor of the Issuer or any such subsidiary, under any rule
of law, statute or constitutional provision or by the enforcement of any
assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of the
Securities by the Holders thereof and as part of the consideration for the issue
of the Securities.
SECTION 11.2 PROVISIONS OF INDENTURE FOR THE SOLE BENEFIT OF PARTIES AND
SECURITYHOLDERS. Nothing in this Indenture or in the Securities, express or
implied, shall give or be construed to give to any Person, firm or corporation,
other than the parties hereto and their successors and the Holders of the
Securities, any legal or equitable right, remedy or claim under this Indenture
or under any covenant or provision herein contained.
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SECTION 11.3 SUCCESSORS AND ASSIGNS OF ISSUER BOUND BY INDENTURE. All
the covenants, stipulations, promises and agreements in this Indenture contained
by or on behalf of the Issuer shall bind its successors and assigns, whether so
expressed or not.
SECTION 11.4 NOTICES AND DEMANDS ON ISSUER, TRUSTEE AND SECURITYHOLDERS.
Any notice or demand which by any provision of this Indenture is required or
permitted to be given or served by the Trustee or by the Holders of Securities
to or on the Issuer shall be given or served by (i) delivery in Person, (ii)
telecopy (confirmed by copy sent by first-class mail) or (iii) certified or
registered mail, return receipt requested (except as otherwise specifically
provided herein), in each case addressed (until another address of the Issuer is
filed by the Issuer with the Trustee) to Trans World Gaming Corp., Xxx Xxxx
Xxxxx, Xxxxx 0000, Xxx Xxxx, XX 00000, Attention: President (Telecopy No.:
(000) 000-0000). Any notice, direction, request or demand by the Issuer or any
Securityholder to or upon the Trustee shall be deemed to have been sufficiently
given or made, for all purposes, if given or served by one of the methods
described in the first sentence of this Section 11.4, addressed to the Corporate
Trust Office (Telecopy No.: 212-754-1303).
Where this Indenture provides for notice to Holders, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid, to each Holder entitled thereto, at his
last address as it appears in the Security register. Any notice which is
delivered, telecopied (and confirmed by mail) or mailed in the manner herein
provided shall be conclusively presumed to have been given, whether or not the
addressee receives such notice. In any case where notice to Holders is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular mail
service, it shall be impracticable to mail notice or confirm by mail telecopy
notice to the Issuer and Securityholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.
SECTION 11.5 COMPLIANCE CERTIFICATES AND OPINIONS OF COUNSEL; STATEMENTS
TO BE CONTAINED THEREIN. Upon an application or demand by the Issuer to the
Trustee to take any action under any of the provisions of this Indenture, the
Issuer shall furnish to the Trustee (i) an Officers' Certificate stating that
all conditions precedent provided for
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in this Indenture relating to the proposed action have been complied with and
(ii) an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent have been complied with and (iii) if appropriate, an
Accountants' Certificate stating that in the opinion of such accountants all
such conditions precedent have been complied with, except that in the case of
any such application or demand as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or demand, no additional certificate or opinion need be
furnished.
Each certificate or opinion provided for in this Indenture and delivered
to the Trustee with respect to compliance with a condition or covenant provided
for in this Indenture shall include (a) a statement that the Person making such
certificate or opinion has read such covenant or condition, (b) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based, (c) a statement that, in the opinion of such Person, he 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 (d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of
or representations by counsel, unless such officer knows that the certificate or
opinion or representations with respect to the matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous, or in
the exercise of reasonable care should know that the same are erroneous. Any
certificate, statement or opinion of counsel may be based, insofar as it relates
to factual matters and information which is in the possession of the Issuer,
upon the certificate, statement or opinion of or representations by an officer
or officers of the Issuer, unless such counsel knows that the certificate,
statement or opinion or representations with respect to the matters upon which
his certificate, statement or opinion may be based as aforesaid are erroneous,
or in the exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of an officer of the Issuer or of
counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public accountants
filed with the Trustee shall contain a statement that such firm is independent.
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SECTION 11.6 PAYMENTS DUE ON SATURDAYS, SUNDAYS AND HOLIDAYS. If the
date of maturity of interest on or principal of the Securities or the date
fixed for redemption of any Security shall not be a Business Day, then
payment of interest or principal need not be made on such date, but may be
made on the next succeeding Business Day with the same force and effect as if
made on the date of maturity or the date fixed for redemption, and no
interest shall accrue for the period after such date.
SECTION 11.7 [Reserved].
SECTION 11.8 APPLICABLE LAW. NEW YORK LAW TO GOVERN. THIS INDENTURE
AND EACH SECURITY SHALL BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE
OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
(OTHER THAN CHOICE OF LAW RULES) OF SAID STATE. THE ISSUER HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW
YORK STATE COURT SITTING IN NEW YORK CITY IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS INDENTURE OR THE SECURITIES AND THE ISSUER HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN ANY SUCH UNITED STATES FEDERAL OR NEW YORK STATE
COURT. THE ISSUER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH ACTION OR PROCEEDINGS IN SUCH RESPECTIVE JURISDICTIONS. THE ISSUER
IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR
PROCEEDING BROUGHT IN ANY COURT IN OR OF THE STATE OF NEW YORK BY THE DELIVERY
OF COPIES OF SUCH PROCESS TO THE ISSUER, AT ITS ADDRESS SPECIFIED IN SECTION
11.4 HEREOF OR BY CERTIFIED MAIL DIRECT TO SUCH ADDRESS.
WHENEVER POSSIBLE EACH PROVISION OF THIS INDENTURE SHALL BE INTERPRETED IN
SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER APPLICABLE LAW, BUT IF ANY
PROVISION OF THIS INDENTURE SHALL BE 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 INDENTURE. WHENEVER IN THIS NOTE REFERENCE IS MADE
TO THE ISSUER OR A HOLDER, SUCH REFERENCE SHALL BE DEEMED TO INCLUDE, AS
APPLICABLE, A REFERENCE TO THEIR
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RESPECTIVE SUCCESSORS AND ASSIGNS. THE PROVISIONS OF THIS INDENTURE SHALL BE
BINDING UPON AND SHALL INURE TO THE BENEFIT OF SUCH SUCCESSOR AND ASSIGNS. THE
ISSUER'S SUCCESSORS AND ASSIGNS SHALL INCLUDE, WITHOUT LIMITATION, A RECEIVER,
TRUSTEE OR DEBTOR IN POSSESSION FOR THE ISSUER.
SECTION 11.9 COUNTERPARTS. This Indenture may be executed in any number
of counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
SECTION 11.10 EFFECT OF HEADINGS. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
SECTION 11.11 WAIVER OF USURIOUS INTEREST. All agreements between
Issuer and Holders, whether now existing or hereafter arising and whether
written or oral, are hereby limited so that in no contingency, whether by reason
of demand or acceleration of the final maturity date of the Securities or
otherwise, shall the interest contracted for, charged, received, paid or agreed
to be paid to Holders exceed the maximum amount permissible under the laws of
the State of New York (hereinafter the "Applicable Law"). If, from any
circumstance whatsoever, interest would otherwise be payable to the Holders in
excess of the maximum amount permissible under Applicable Law, the interest
payable to the Holders shall be reduced to the maximum amount permissible under
Applicable Law, and if from any circumstance the Holders shall ever receive
anything of value deemed interest by the Applicable Law in excess of the maximum
amount permissible under the Applicable Law, an amount equal to the excessive
interest shall be applied to the reduction of the principal hereof and not to
the payment of interest, or if such excessive amount of interest exceeds the
unpaid principal balance of principal hereof, such excess shall be refunded to
Issuer. All interest paid or agreed to be paid to the Holders shall, to the
extent permitted by the Applicable Law, be amortized, prorated, allocated and
spread throughout the full period (including any renewal or extension) until
payment in full of the principal so that the interest hereon for such full
period shall not exceed the maximum amount permissible under the Applicable Law.
The Holders expressly disavow any intent to contract for, charge or receive
interest in an amount which exceeds the maximum amount permissible under the
Applicable Law. This paragraph shall control agreements between the Issuer and
the Holders.
SECTION 11.12 Authority to Act. The Issuer and the Trustee acknowledges
that each is subject to Section 3.27 of the Primary Indenture.
ARTICLE 12
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REDEMPTION OF SECURITIES
SECTION 12.1 RIGHT OF OPTIONAL REDEMPTION; PRICES. Subject to the terms
and conditions of this Indenture, the Issuer at its option may redeem all or any
portion of, the Securities upon payment of the amount of principal redeemed
together with accrued and unpaid interest to the date fixed for redemption
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date). To exercise this
option to redeem the Securities, the Issuer shall give the Trustee written
notice thereof not less than 30 but not more than 60 days prior to the
redemption date selected by the Issuer and specified in such notice. The
redemption price shall be equal to unpaid principal and accrued and unpaid
interest to the date fixed for redemption. If less than all of the Securities
are to be redeemed, then the Issuer shall specify the principal amount of
Securities to be redeemed.
If less than all of the Outstanding Securities are to be called for
redemption, Securities or portions thereof to be redeemed shall be selected by
the Trustee on a reasonably proportionate basis, in minimum amounts of $100.00,
according to the principal amounts of Securities Outstanding.
SECTION 12.2 NOTICE OF REDEMPTION. Notice of redemption to the Holders
of Securities to be redeemed as a whole shall be given by mailing notice of such
redemption by first-class mail, postage prepaid, at least 30 and not more than
60 days prior to the date fixed for redemption to such Holders of Securities at
their last addresses as they shall appear upon the registry books. Any notice
which is mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder receives the notice.
Failure to give notice by mail, or any defect in the notice to the Holder of any
Security designated for redemption as a whole or in part, shall not affect the
validity of the proceedings for the redemption of any other Security.
The notice of redemption to each such Holder shall specify the principal
amount of each Security held by such Holder to be redeemed, the date fixed for
redemption, the redemption price, the place or places of payment, that payment
will be made upon presentation and surrender of such Securities, that interest
accrued to the date fixed for redemption to the extent provided in
Section 12.1 will be paid as specified in said notice, that on and after said
date interest thereon will cease to accrue.
The notice of redemption of Securities to be redeemed shall be given by
the Issuer or, at the Issuer's request, by the Trustee in the name and at the
expense of the Issuer. The Issuer shall notify the Trustee of such redemption
at least 15 days prior to the date the notice of redemption is to be sent to the
Holders and shall specify in such notice whether the Trustee is to give such
notice.
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At least one Business Day prior to the redemption date specified in the
notice of redemption given as provided in this Section 12.2, the Issuer will
deposit with the Trustee or with one or more paying agents (or, if the Issuer is
acting as paying agent, set aside, segregate and hold in trust as provided in
Section 3.4) in immediately available funds an amount of money sufficient to
redeem in immediately available funds on the redemption date all the Securities
so called for redemption at the appropriate redemption price, together with
accrued interest to the date fixed for redemption to the extent provided in
Section 12.1.
SECTION 12.3 PAYMENT OF SECURITIES CALLED FOR REDEMPTION. If notice of
redemption has been given as above provided, the Securities shall become due and
payable on the date and at the place stated in such notice at the applicable
redemption price, together with interest accrued to the date fixed for
redemption, and on and after said date (unless the Issuer shall default in the
payment of such Securities at the redemption price, together with interest
accrued to said date to the extent provided in Section 12.1) interest on the
Securities or portions of Securities so called for redemption shall cease to
accrue and, except as provided in Sections 6.5 and 10.6, such Securities shall
cease from and after the date fixed for redemption to be entitled to any benefit
or security under this Indenture, and the Holders thereof shall have no right in
respect of such Securities except the right to receive the redemption price
thereof and unpaid interest to the date fixed for redemption to the extent
provided in Section 12.1. On presentation and surrender of such Securities at a
place of payment specified in said notice, said Securities shall be paid and
redeemed by the Issuer at the applicable redemption price, together with
interest accrued thereon to the date fixed for redemption; PROVIDED that any
semi-annual payment of interest becoming due on the date fixed for redemption
shall be payable to the Holders of such Securities registered as such on the
relevant record date subject to the terms and provisions of Section 2.4 hereof.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal shall, until paid or duly provided for,
bear interest from the date fixed for redemption at the rate borne by the
Security.
SECTION 12.4 EXCLUSION OF CERTAIN SECURITIES FROM ELIGIBILITY FOR
SELECTION FOR REDEMPTION. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and certificate
number in an Officer's Certificate and delivered to the Trustee at least 40 days
prior to the last date on which notice of redemption may be given as being owned
of record and beneficially by, and not pledged or hypothecated by, (a) the
Issuer or (b) an entity specifically identified in such written statement as
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Issuer (other than a holder of the Securities on the
Issuance Date).
SECTION 12.5. PARTIAL REDEMPTION OF SECURITIES. In case of a partial
redemption of Securities, upon presentation and surrender of such Security by
the Holder thereof
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or its attorney duly authorized in writing (with due endorsement by, or a
written instrument of transfer in form satisfactory to the Trustee), the Trustee
shall authenticate and deliver to or upon the order of such Holder, without
change there for, for the unredeemed portion of the principal amount of the
Security or Securities so surrendered, a Security or Securities, at the option
of such Holder, of like tenor. The Trustee shall cancel the Securities
surrendered.
ARTICLE 13
[Reserved]
ARTICLE 14
SECURITY
SECTION 14.1 PLEDGE AND SECURITY INTEREST. "Collateral" means all of
the assets of the Cyprus Entity and Trans World Leasing Limited, a 66 percent
(66%) interest in all of the Capital Stock of 21st Century Resorts, a.s., a
100 per cent (100%) interest in all of the Capital Stock of Trans World
Leasing Limited and the Cyprus Entity, and, as to all other direct
Subsidiaries of the Issuer, whether in existence at the time of the closing
of this Indenture or thereafter formed, reconstituted or otherwise acquired
in any manner, whether or not named herein, a 66 per cent (66%) interest in
any such entity where a pledge of Capital Stock of a greater percentage would
create "deemed dividend" for U.S. tax purposes and 100 per cent (100%)
interest in the Capital Stock where the pledge will not create such a "deemed
dividend", as well as a pledge of all assets of any Subsidiary when such a
pledge will not create a "deemed dividend. All references herein to the
"Security Interest" and to the "Lien of this Indenture" shall be deemed to
mean and refer to the Liens granted to the Trustee and the Holders pursuant
to the terms of the Collateral Agreements.
SECTION 14.2 SECURITY FOR OBLIGATION. The Security Interest secures
among other things the payment and performance of all obligations of the Issuer
now or hereafter existing under the Securities, the Collateral Agreements or
this Indenture, including without limitation the prompt payment when due
(whether by acceleration or otherwise) of the principal of or interest on the
Securities (all such obligations of the Issuer being herein called the
"Obligations").
SECTION 14.3 PERFECTION OF SECURITY INTEREST.
(a) The Issuer shall cause this Indenture, the Collateral
Agreements, financing
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statements, continuation statements, notifications of secured
transactions and other instruments with respect to the Collateral to be
promptly executed, recorded, registered and filed and to be kept
recorded, registered and filed in such manner and in such places as may
be required by law, and take all such other actions as may be required,
including delivery of possession of certificates evidencing the capital
stock of the Issuer's direct Subsidiaries to the Trustee, and shall pay
all taxes and fees incidental thereto.
(b) Because the Issuer cannot ascertain as of the date of
execution of this Indenture the exact documents which the appropriate
governmental authorities in the Czech Republic, Gibraltar and Cyprus may
require for perfection of the Security Interest, the Issuer agrees, at
its cost, to the preparation, execution and filing of any additional
documents necessary to grant and perfect the Security Interest. Because
certain of the entities to be pledged are not yet direct Subsidiaries of
the Issuer or may not yet exist, the Issuer agrees, at its cost
(including reimbursement of costs and expenses incurred by the Trustee
and counsel for the Securityholders), post-closing, to take all steps
necessary to cause those entities to become direct Subsidiaries of the
Issuers (to the extent permissible by applicable law or regulation and so
long as no gambling licenses or other tangible or intangible rights are
jeopardized) and to grant a Security Interest in compliance with Section
3.11 in the sole discretion of the Issuer or to otherwise be created and
to grant and perfect the Security Interest as to a 66 percent (66%)
interest in such entities.
SECTION 14.4 NO DISPOSITION OF COLLATERAL; RELEASE OF LIEN OF INDENTURE.
Neither Issuer nor any Subsidiary thereof may sell or otherwise dispose of
Collateral, including the Capital Stock of or an interest in any of its direct
and indirect Subsidiaries, except pursuant to Section 3.12.
SECTION 14.5 OTHER LIENS. The Issuer will not create or permit to exist
any Lien upon or with respect to any of the Collateral, or upon (a) any of the
real or personal property of such named entities, (b) or in any of the real or
personal property of any current or future direct or indirect Subsidiary of
Issuer, except for any Lien permitted by the terms hereof or of the Collateral
Agreements.
SECTION 14.6 TRUSTEE APPOINTED ATTORNEY-IN-FACT. The Trustee shall take
any action required or permitted to be taken by the Trustee under the Collateral
Agreements if directed in writing to do so by the Holders of at least 50% in
aggregate principal amount of the Securities then outstanding; provided,
however, that no action shall be taken which, in the Opinion of Counsel, impairs
the enforceability, priority or perfection of the Lien of this Indenture as to
the Collateral then subject thereto, unless directed by all Holders.
SECTION 14.7 RETURN OF COLLATERAL. Upon the payment in full of the
obligations or upon satisfaction and discharge of this Indenture in accordance
with Article 10
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(and the Trustee receiving written confirmation thereof satisfactory to the
Trustee), the Trustee, subject to the terms of the Collateral Agreements, shall
forthwith take all necessary action to return any Collateral in the Trustee's
possession to the Issuer or its Subsidiaries, as the case may be, and release
the Liens thereon and Security Interests therein.
SECTION 14.8 DEFAULT REMEDIES. The Trustee shall have the rights set
forth in the Collateral Agreements to exercise the remedies to realize upon the
Collateral set forth in the Collateral Agreements.
SECTION 14.9 PROCEEDS. The proceeds of any sale or other disposition of
the Collateral received by the Trustee pursuant to the terms of the Collateral
Agreements shall be applied by the Trustee:
First: to the payment of the costs and expenses of such sale,
including a reasonable compensation to the Trustee, and its agents,
attorneys and counsel, and of all charges, expenses, liabilities and
advances incurred or made by the Trustee under this Indenture;
Second: to the reimbursement of the Trustee for any sum advanced
by the Trustee to the Issuer in order to preserve the Collateral together
with interest at the rate charged publicly announced by Citibank, N.A.
from time to time in New York, New York as its reference rate; and
Third: as provided in Section 5.3.
SECTION 14.10 DEFICIENCY. The Issuer shall remain liable for any
unfulfilled obligations, together with interest thereon, in accordance with and
subject to the provisions of the Securities and this Indenture.
SECTION 14.11 TRUSTEE'S DUTIES. The powers conferred upon the Trustee
by this Article 14 are solely to protect its interest and the interest of the
Holders in the Collateral and shall not impose any duty upon the Trustee to
exercise any such powers except as expressly provided in this Indenture or in
the Collateral Agreements. The Trustee shall be under no duty to the Issuer
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 the Obligations, or to take any
steps necessary to preserve any rights against prior parties except as expressly
provided in this Indenture or in the Collateral Agreements. The Trustee shall
not be liable to the Issuer for failure to collect or realize upon any or all of
the obligations or Collateral, or for any delay in so doing, nor shall the
Trustee be under any duty to the Issuer to take any action whatsoever with
regard thereto. The Trustee shall have no duty to the Issuer to comply with any
recording, filing, or other legal requirements necessary
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to establish or maintain the validity, priority or enforceability of, or the
Trustee's rights in or to, any of the Collateral.
SECTION 14.12 SPECIAL TRUSTEE POWERS DUE TO ENVIRONMENTAL CONDITIONS.
The Trustee shall have the power to settle or compromise at any time any and all
claims against the Trust Estate or the Trustee (either in its corporate
capacity, or in the personal capacity of the individuals serving as trust
officers on behalf of the Trustee), which may be asserted by any governmental
body or private party involving the alleged violation of any applicable
Environmental Laws affecting the Collateral or any other property held in trust
with respect to or in connection with the Collateral. Notwithstanding any
provision in this subparagraph to the contrary, the Trustee may not settle or
compromise any claim against the Trust Estate or the Trustee which may result in
any liability being asserted against Issuer without Issuer having had a
reasonable opportunity to resolve the alleged violation, which reasonable
opportunity shall not exceed 60 days from the date on which Issuer shall have
been notified of such alleged violation by a governmental body or a private
party; provided, however, in the event that Issuer shall be in default under the
Indenture or under the Collateral Agreements, then it shall have none of the
rights afforded to it in this paragraph.
The Trustee shall not be personally liable to the Holders or any other
Person for any decrease in value of the Collateral by reason of the Trustee's
compliance with any Applicable Environmental Laws (as defined in the Collateral
Agreements), specifically including any reporting requirement under such law.
Neither the acceptance by the Trustee of property nor failure by the Trustee to
inspect property shall be deemed to create any inference as to whether or not
there is or may be any liability under any applicable Environmental Laws with
respect to such property.
Notwithstanding anything in this Indenture or the Collateral Agreements
to the contrary, the Trustee shall not be required to initiate foreclosure
proceedings with respect to the Collateral, and shall not otherwise be required
to acquire possession of, or take other action with respect to the Collateral
which could cause the Trustee to be considered an "owner" or "operator" within
the meaning of the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended from time to time, or any other law dealing
with the environmental matters or hazardous substances, unless the Trustee has
sufficient comfort, based on previous determinations by experts on which it can
rely, including environmental report, that:
(a) there are no circumstances present at the Collateral relating
to the use, management or disposal of any hazardous substances, hazardous
materials, hazardous wastes or petroleum-based materials for which
investigation, testing, monitoring, contaminant, clean up or remedial
action could be required under any environmental laws, or that if any
such materials are present for which such action could be required, that
it would be nevertheless in the best economic interest of the Trustee and
the Holders
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to take such actions with respect to the Collateral;
(b) if the Trustee has determined that it would be in the best
economic interest of the Trustee and the Holders, the Trustee must be
satisfied that they will suffer no unreimbursed liabilities and will be
adequately reimbursed for all liabilities, expenses and costs from
available funds in Trustee's possession and control; and
(c) if the Trustee has determined that it would be in the best
economic interest of the Trustee and the Holders to take any such action
and its aforementioned liabilities, expenses and costs are adequately
reimbursed, the Trustee has so notified the Holders and has not received,
within 30 days of such notification, instructions from owners of fifty
percent (50%) or more in principal amount of the then outstanding
Securities directing it not to take such action.
If the foregoing conditions are not satisfied and the Trustee is not willing
to waive such conditions and initiate foreclosure proceedings, then the
Trustee shall take such actions as are reasonably necessary or appropriate in
order to facilitate the appointment of a co-trustee, being a person or entity
designated by the Holders of a majority in principal amount of the Securities
then outstanding and to assign to such person or entity (subject, however, to
the trusts created pursuant to the Indenture) the beneficial interest under
the Collateral Agreements which secures the obligations under the Indenture,
for the limited purpose of conducting a foreclosure of such Collateral
Agreements and receiving and holding any title to real property obtained as a
result of such foreclosure. Persons or entities appointed as co-trustees or
agents of the Trustee pursuant to this Section shall not be required to meet
the criteria of Section 6.9 of this Indenture, or any ther criteria, in order
to serve as such.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and, where appropriate, their respective corporate seals to be
hereunto affixed and attested, all as of March 31, 1998.
[CORPORATE SEAL] TWG INTERNATIONAL U.S. CORPORATION
Attest: By:
By: --------------------------------
------------------------- By:
--------------------------------
U.S. TRUST COMPANY OF TEXAS, N.A., as Trustee
By:
--------------------------------
(Name and Title)
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