EXHIBIT 10.26
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COAST HOTELS AND CASINOS, INC.
ISSUER
$16,800,000
10 7/8 % First Mortgage Notes due 2001
COAST RESORTS, INC.
GUARANTOR
_______________________
INDENTURE
Dated as of November 21, 1997
________________________
FIRSTAR BANK OF MINNESOTA, N.A.
TRUSTEE
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Table of Contents
ARTICLE I.DEFINITIONS AND INCORPORATION BY REFERENCE...................... 1
Section 1.1 Definitions........................................... 1
Section 1.2 Other Definitions..................................... 20
Section 1.3 Incorporation By Reference of Trust Indenture Act..... 20
Section 1.4 Rules of Construction................................. 21
Section 1.5 Trust Indenture Act................................... 21
ARTICLE II.THE NOTES...................................................... 22
Section 2.1 Form and Dating....................................... 22
Section 2.2 Execution and Authentication.......................... 22
Section 2.3 Registrar and Paying Agent............................ 23
Section 2.4 Paying Agent to Hold Money in Trust................... 23
Section 2.5 Holder Lists.......................................... 24
Section 2.6 Transfer and Exchange................................. 24
Section 2.7 Replacement Notes..................................... 30
Section 2.8 Outstanding Notes..................................... 30
Section 2.9 Treasury Notes........................................ 31
Section 2.10 Temporary Notes....................................... 31
Section 2.11 Cancellation.......................................... 31
Section 2.12 Defaulted Interest.................................... 32
ARTICLE III.OFFERS TO PURCHASE OR REDEMPTION.............................. 32
Section 3.1 Notices to Trustee.................................... 32
Section 3.2 Selection of Notes to Be Redeemed..................... 32
Section 3.3 Notice of Redemption.................................. 33
Section 3.4 Effect of Notice of Redemption........................ 34
Section 3.5 Deposit of Redemption Price........................... 34
Section 3.6 Notes Redeemed in Part................................ 34
Section 3.7 Optional Redemption................................... 35
Section 3.8 Redemption Pursuant to Gaming Law..................... 35
Section 3.9 Mandatory Redemption.................................. 35
Section 3.10 Offer to Purchase By Application of Excess Proceeds... 36
ARTICLE IV. COVENANTS..................................................... 38
Section 4.1 Payment of Notes...................................... 38
Section 4.2 Maintenance of Office or Agency....................... 38
Section 4.3 SEC Reports........................................... 38
Section 4.4 Compliance Certificate................................ 39
Section 4.5 Taxes................................................. 40
Section 4.6 Stay, Extension and Usury Laws........................ 40
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Section 4.7 Restricted Payments....................................................... 40
Section 4.8 Dividend and Other Payment Restrictions Affecting Subsidiaries............ 42
Section 4.9 Incurrence of Indebtedness and Issuance of Preferred Stock................ 43
Section 4.10 Asset Sales............................................................... 46
Section 4.11 Transactions with Affiliates.............................................. 49
Section 4.12 Liens..................................................................... 49
Section 4.13 Line of Business.......................................................... 50
Section 4.14 Corporate Existence....................................................... 50
Section 4.15 Change of Control......................................................... 50
Section 4.16 Limitation on Issuances and Sales of Capital Stock of Wholly
Owned Subsidiaries....................................................... 52
Section 4.17 Subsidiary Guarantees..................................................... 52
Section 4.18 Maintenance of Insurance.................................................. 53
Section 4.19 Limitation on Status as Investment Company................................ 53
Section 4.20 Further Assurances........................................................ 53
Section 4.21 Limitations on Activities of Coast West................................... 53
Section 4.22 No Amendment to Subordination Provisions.................................. 54
Section 4.23 Limitations on Use of Proceeds............................................ 54
ARTICLE V.SUCCESSORS.......................................................................... 54
Section 5.1 Merger, Consolidation or Sale of Assets................................... 55
Section 5.2 Successor Corporation Substituted......................................... 55
ARTICLE VI.DEFAULTS AND REMEDIES.............................................................. 56
Section 6.1 Event of Default.......................................................... 56
Section 6.2 Acceleration.............................................................. 58
Section 6.3 Other Remedies............................................................ 59
Section 6.4 Waiver of Past Defaults................................................... 59
Section 6.5 Control by Majority....................................................... 59
Section 6.6 Limitation on Suits....................................................... 60
Section 6.7 Rights of Holders of Notes to Receive Payment............................. 60
Section 6.8 Collection Suit by Trustee................................................ 60
Section 6.9 Trustee May File Proofs of Claim.......................................... 61
Section 6.10 Priorities................................................................ 61
Section 6.11 Undertaking For Costs..................................................... 62
Section 6.12 Management of Casinos..................................................... 62
Section 6.13 Intercreditor Agreement................................................... 62
ARTICLE VII.TRUSTEE........................................................................... 62
Section 7.1 Duties of Trustee......................................................... 62
Section 7.2 Rights of Trustee......................................................... 64
Section 7.3 Individual Rights of Trustee.............................................. 64
Section 7.4 Trustee's Disclaimer...................................................... 65
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Section 7.5 Notice of Defaults...................................................... 65
Section 7.6 Reports by Trustee to Holders of the Notes.............................. 65
Section 7.7 Compensation and Indemnity.............................................. 66
Section 7.8 Replacement of Trustee.................................................. 67
Section 7.9 Successor Trustee by Merger, Etc........................................ 68
Section 7.10 Eligibility; Disqualification........................................... 69
Section 7.11 Preferential Collection of Claims Made Against Company.................. 69
ARTICLE XXXX.XXXXX DEFEASANCE AND COVENANT DEFEASANCE....................................... 69
Section 8.1 Legal Defeasance or Covenant Defeasance................................. 69
Section 8.2 Legal Defeasance and Discharge.......................................... 69
Section 8.3 Covenant Defeasance..................................................... 70
Section 8.4 Conditions to Legal or Covenant Defeasance.............................. 70
Section 8.5 Deposited Money and government Securities to be Held in Trust; Other
Miscellaneous Provisions................................................ 72
Section 8.6 Repayment to Company.................................................... 72
Section 8.7 Satisfaction and Discharge of Indenture................................. 73
Section 8.8 Reinstatement........................................................... 74
Section 8.9 Collateral.............................................................. 74
ARTICLE IX.AMENDMENT, SUPPLEMENT AND WAIVER................................................. 75
Section 9.1 Without Consent of Holders of Notes..................................... 75
Section 9.2 With Consent of Holders of Notes........................................ 76
Section 9.3 Compliance with Trust Indenture Act..................................... 77
Section 9.4 Revocation and Effect of Consents....................................... 78
Section 9.5 Notation on or Exchange of Notes........................................ 78
ARTICLE X.COLLATERAL AND SECURITY........................................................... 78
Section 10.1 Security................................................................ 78
Section 10.2 Recording and Opinions.................................................. 80
Section 10.3 Release of Collateral, Etc.............................................. 81
Section 10.4 Protection of the Trust Estate.......................................... 82
Section 10.5 Certificates of the Company............................................. 83
Section 10.6 Certificates of the Trustee............................................. 83
Authorization of Actions to be Taken by the Trustee Under The Security Documents........ 83
Section 10.8 Authorization of Receipt of Funds by The Trustee Under The Security
/Documents.............................................................. 84
Section 10.9 Termination of Security Interest........................................ 84
Section 10.10 Cooperation of Trustee.................................................. 85
Section 10.11 Collateral Agent........................................................ 85
ARTICLE XI.NOTE GUARANTEE................................................................... 85
Section 11.1 Note Guarantees......................................................... 85
Section 11.2 Execution and Delivery of Note Guarantee................................ 87
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Section 11.3 Limitation of Guarantor's Liability....................................... 88
Section 11.4 Guarantor May Consolidate, Etc., on Certain Terms......................... 88
Section 11.5 Releases of Note Guarantees............................................... 89
Section 11.6 "Trustee" to Include Paying Agent......................................... 89
ARTICLE XII.MISCELLANEOUS..................................................................... 89
Section 12.1 Trust Indenture Act Controls.............................................. 89
Section 12.2 Notice.................................................................... 90
Section 12.3 Communication by Holders of Notes with Other Holders of Notes............. 91
Section 12.4 Certificate and Opinion as to Conditions Precedent........................ 91
Section 12.5 Statements Required in Certificate or Opinion............................. 92
Section 12.6 Rules by Trustee and Agents............................................... 92
Section 12.7 No Personal Liability of Directors, Officers, Employees and Shareholders.. 92
Section 12.8 Governing Law............................................................. 92
Section 12.9 No Adverse Interpretation of Other Agreements............................. 93
Section 12.10 Successors................................................................ 93
Section 12.11 Severability.............................................................. 93
Section 12.12 Counterpart Originals..................................................... 93
Section 12.13 Table of Contents, Headings, Etc.......................................... 93
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EXHIBITS
Exhibit A. Form of Note.
Exhibit B. Form of 1996 Notes Intercreditor Agreement.
Exhibit C. Form of Note Guarantees.
Exhibit D. Form of Certificate of Transfer.
Exhibit E. Form of Coast Hotels Deed of Trust, Assignment
of Rents and Security Agreement.
Exhibit F. Form of Coast Resorts Pledge Agreement.
Exhibit G. Form of Coast Hotels Security Agreement.
Exhibit H. Form of Coast Hotels Unsecured Indemnity
Agreement.
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SCHEDULES
Schedule A Existing Indebtedness
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CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Sections
310(a)(1)................................................................. 7.10
(a)(2)................................................................. 7.10
(a)(3)................................................................. N.A.
(a)(4)................................................................. N.A.
(a)(5)................................................................. 7.10
(b).................................................................... 7.10
(c).................................................................... N.A.
311(a).................................................................... 7.11
(b).................................................................... 7.11
(c).................................................................... N.A.
312(a).................................................................... 2.05
(b).................................................................... 12.03
(c).................................................................... 12.03
313(a).................................................................... 7.06
(b)(1)................................................................. 10.03
(b)(2)................................................................. 7.07
(c).............................................................. 7.06; 12.02
(d).................................................................... 7.06
314(a).................................................................... 12.06
(b).................................................................... 10.02
(c)(1)................................................................. 12.04
(c)(2)................................................................. 12.04
(c)(3)................................................................. 12.04
(d)...................................................... 10.2;10.3;10.5;10.6
(e)................................................................ 10.2;12.5
(f).................................................................... N.A.
315(a).................................................................... 7.01
(b)............................................................... 7.05;12.02
(c).................................................................... 7.01
(d).................................................................... 7.01
(e).................................................................... 6.16
316(a)(last sentence)..................................................... 2.09
(a)(1)(A).............................................................. 6.10
(a)(1)(B).............................................................. 6.09
(a)(2)................................................................. N.A.
(b).................................................................... 6.12
(c).................................................................... 2.13
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317(a)(1)................................................... 6.13
(a)(2)................................................... 6.14
(b)...................................................... 2.04
318(a)......................................................12.01
(b)...................................................... N.A.
(c)......................................................12.01
N.A. means not applicable.
*This Cross-Reference Table is not part of this Indenture.
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INDENTURE dated as of November 21, 1997 among Coast Hotels and Casinos,
Inc., a Nevada corporation (the "Company"), the Guarantor (as defined below),
and Firstar Bank of Minnesota, N.A., as trustee (the "Trustee").
WHEREAS, the Company, the Guarantor and Firstar Bank of Minnesota, N.A., as
trustee (in such capacity, the "1996 Notes Trustee"), have entered into that
certain Indenture dated as of January 30, 1996 (the "1996 Indenture"), Section
4.09 of which Indenture permits the Company to incur and the Guarantor to
guarantee additional debt on a pari passu basis with the 13% First Mortgage
Notes due 2002 (the "1996 Notes") issued by the Company in the aggregate
principal amount of $175,000,000 under such Indenture.
WHEREAS, the Company has agreed to issue and the Guarantor has agreed to
guaranty $16,800,000 in aggregate principal amount of the Company's 10 7/8%
First Mortgage Notes due 2001 (the "Notes") pursuant to this Indenture with the
rights under such Notes to be on a pari passu basis with the 1996 Notes, and,
pursuant to the 1996 Indenture, the Trustee for the holders of the 1996 Notes
has agreed to enter into a Pari Passu Intercreditor Agreement with the Trustee.
NOW THEREFORE, the Company, the Guarantor and the Trustee agree as follows
for the benefit of each other and for the equal and ratable benefit of the
Holders of the Notes:
ARTICLE I.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section I.1 Definitions.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into such specified Person, including, without limitation,
Indebtedness incurred in connection with, or in contemplation of, such other
Person merging with or into such specified Person, and (ii) Indebtedness secured
by a Lien encumbering any asset acquired by such specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
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"Applicable Premium" means, with respect to a Note being redeemed, (a) the
present value on the date of redemption of all remaining required interest and
principal payments due on such Note, computed using a discount rate equal to the
Treasury Rate plus 50 basis points minus (b) the then outstanding principal
amount of such Note minus (c) accrued interest paid on the redemption date.
"Asset Sale" means (i) the sale, lease, conveyance, transfer or other
disposition of any assets (including, without limitation, by way of a sale and
leaseback) other than sales of inventory or the rental of hotel rooms in the
ordinary course of business (provided that the sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company and its
Subsidiaries taken as a whole shall be governed by Section 4.15 or Article 5
hereof and not by Section 4.10 hereof), and (ii) the issue or sale by the
Company or any of its Subsidiaries of Equity Interests of any of the Company's
Subsidiaries, in the case of either clause (i) or (ii), whether in a single
transaction or a series of related transactions (a) that have a fair market
value in excess of $500,000 or (b) for Net Proceeds in excess of $500,000.
Notwithstanding the foregoing, the following will not be deemed to be Asset
Sales: (i) a transfer of assets by the Company to a Subsidiary that is a
Guarantor or by a Subsidiary to the Company or to another Subsidiary that is a
Guarantor, (ii) an issuance of Equity Interests by a Wholly Owned Subsidiary to
the Company or to another Wholly Owned Subsidiary, (iii) a Restricted Payment
that is permitted by the covenant described in Section 4.7 herein and (iv) the
sale of a Restricted Investment.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state
law for the
relief of debtors.
"Barbary Coast" means the Barbary Coast Hotel and Casino.
"Barbary Coast Offer" has the meaning set forth in Section 4.10(b) of the
1996 Indenture.
"Barbary Coast Partnership" means Barbary Coast Hotel and Casino, a Nevada
general partnership.
"Barbary Coast Expansion" means any improvement of the Barbary Coast Hotel
and Casino that includes the construction of not less than 150 additional hotel
rooms.
"Board of Directors" means, as to any Person, the board of directors of
such Person, or
any authorized committee thereof or other equivalent governing body of such
Person.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized and reflected as a liability on the
balance sheet in accordance with GAAP.
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"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited) and (iv) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities issued
or directly and fully guaranteed or insured by the United States of America or
any agency or instrumentality thereof with a term not to exceed one year after
the day of acquisition, (iii) time deposits and certificates of deposit and
commercial paper issued by any domestic commercial bank or the parent
corporation of any domestic commercial bank of recognized standing having
capital and surplus in excess of $500.0 million and commercial paper issued by
others rated at least A-2 or the equivalent thereof by Standard & Poor's Ratings
Group or its successors or at least P-2 or the equivalent thereof by Xxxxx'x
Investors Service, Inc. or its successors and in each case maturing within one
year after the date of acquisition, (iv) investments in money market funds,
including funds offered by the Trustee or Affiliates of the Trustee,
substantially all of whose assets comprise securities of the types described in
clauses (ii) and (iii) above, and (v) repurchase obligations with a term of not
more than seven days for underlying securities of the types described in clauses
(ii) and (iii) above entered into with any financial institution meeting the
financial qualification specified in clause (iii) above.
"Casino" means any gaming establishment and other property or assets
directly ancillary thereto or used in connection therewith, including any
buildings, restaurants, hotels, theaters, parking facilities, retail shops,
land, golf courses and other recreation and entertainment facilities, vessels,
barges, ships and equipment.
"Change of Control" means the occurrence of any of the following: (i) the
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of Coast Resorts (except to the Company or a
Wholly-Owned Subsidiary of the Company) or the Company and its Subsidiaries
taken as a whole to any "person" (as such term is used in Section 13(d)(3) of
the Exchange Act) other than the Principals or their Related Parties (as defined
below), (ii) the adoption of a plan relating to the liquidation or dissolution
of Coast Resorts or the Company, (iii) the first day on which a majority of the
members of the Board of Directors of Coast Resorts and the Company are not
Continuing Directors, (iv) prior to the consummation of an IPO, the first day on
which (a) the Principals and their Related Parties in the aggregate become the
beneficial owners, directly or indirectly, of less than (1) 51% of the
outstanding voting stock of Coast Resorts as a result of the sale, transfer or
other disposition of voting stock of Coast Resorts or (2) 30% of the outstanding
voting stock of Coast Resorts if Coast Resorts has issued new shares of voting
stock after the date of this Indenture and the reduction in the percentage of
the outstanding voting stock of Coast Resorts beneficially owned by the
Principals and their Related
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Parties to less than 30% is solely the result of the issuance of new shares of
voting stock by Coast Resorts or (b) Xxxxxxx X. Xxxxxxx and his Related Parties
in the aggregate become the beneficial owners, directly or indirectly, of less
than (1) 29% of the outstanding voting stock of Coast Resorts as a result of the
sale, transfer or other disposition of voting stock of Coast Resorts or (2) 15%
of the outstanding voting stock of Coast Resorts if Coast Resorts has issued new
shares of voting stock after the date of this Indenture and the reduction in the
percentage of the outstanding voting stock of Coast Resorts beneficially owned
by Xxxxxxx X. Xxxxxxx and his Related Parties to less than 15% is solely the
result of the issuance of new shares of voting stock by Coast Resorts, (v)
following the consummation of an IPO, the consummation of any transaction
(including, without limitation, any merger or consolidation) the result of which
is that (a) any "person" (as defined above), other than the Principals and their
Related Parties, is or becomes the "beneficial owner" (as such term is defined
in Rule l3d-3 and Rule l3d-5 under the Exchange Act), directly or indirectly, of
more than 40% of the voting stock of Coast Resorts or (b) any "person" (as
defined above) is or becomes the "beneficial owner" (as defined above), directly
or indirectly, of more of the voting stock of Coast Resorts or the Company than
is at the time "beneficially owned" (as defined above) by the Principals and
their Related Parties in the aggregate, but, in the case of both clauses (a) and
(b) immediately above, excluding from the percentage of voting stock held by any
person consisting of a group the voting stock owned by the Principals and their
Related Parties who are deemed to be members of the group, provided that such
Principals and Related Parties beneficially own a majority of the total voting
stock of Coast Resorts held by such group, or (vi) the first day on which Coast
Resorts ceases to own 100% of the outstanding Equity Interests of the Company.
For purposes of this definition, any transfer of an equity interest of an entity
that was formed for the purpose of acquiring voting stock of the Company will be
deemed to be a transfer of such portion of such voting stock as corresponds to
the portion of the equity of such entity that has been so transferred. For
purposes of this definition, "voting stock" means, with respect to any Person,
any class of Capital Stock of such Person having ordinary voting power (not
depending upon the occurrence of any contingency) in the election of the Board
of Directors (or persons or a governing body performing similar functions) of
such Person.
"Coast Resorts" means Coast Resorts Inc., a Nevada corporation and the sole
shareholder
of the Company.
"Coast Resorts Common Stock" means the Common Stock, par value $.01 per
share, of
Coast Resorts.
"Coast West" means Coast West, Inc., a Nevada corporation, of which Coast
Resorts is the sole shareholder.
"Coast West Lease" means that certain Ground Lease Agreement dated as of
October 28, 1994 originally by and between 21 Stars, Ltd., a Nevada limited-
liability company, Barbary Coast Hotel and Casino, a Nevada general partnership,
Xxxxx Xxxxxxx, as successor Trustee of The Peccole 1982 Trust dated February 15,
1982, and the Xxxxxxx Xxxxx and Xxxxx Xxxx
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Peccole Family Limited Partnership, a Nevada limited partnership, as amended
through the date of this Indenture.
"Coast West Lease Payments" means payments of Basic Monthly Rent (as
defined in the Coast West Lease) and all other rent payable by Coast West
pursuant to the Coast West Lease.
"Collateral" means the Collateral (as defined in the Security Agreement),
all of the collateral granted by the Company to the Trustee pursuant to the
granting provisions A through Q in the Deed of Trust, and the Collateral (as
defined in the Stock Pledge Agreement), provided that Collateral shall not
include the Pledged Securities or any "Excluded Assets" as defined in any of the
foregoing documents.
"Company" means Coast Hotels and Casinos, Inc., a Nevada corporation, of
which Coast Resorts is the sole shareholder.
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus (i) an amount
equal to any extraordinary loss plus any net loss realized in connection with an
Asset Sale (to the extent such losses were deducted in computing such
Consolidated Net Income), plus (ii) provision for taxes based on income or
profits of such Person and its Subsidiaries for such period, to the extent that
such provision for taxes was included in computing such Consolidated Net Income,
plus (iii) consolidated interest expense of such Person and its Subsidiaries for
such period, whether paid or accrued and whether or not capitalized (including,
without limitation, amortization of original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease Obligations,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net payments (if any) pursuant
to Hedging Obligations), to the extent that any such expense was deducted in
computing such Consolidated Net Income, plus (iv) depreciation, amortization
(including amortization of goodwill and other intangibles but excluding
amortization of prepaid cash expenses that were paid in a prior period),
deferred rent and other non-cash charges (excluding any such non-cash charge
(other than deferred rent) to the extent that it represents an accrual of or
reserve for cash charges in any future period or amortization of a prepaid cash
expense that was paid in a prior period) of such Person and its Subsidiaries for
such period to the extent that such depreciation, amortization and other non-
cash charges were deducted in computing such Consolidated Net Income, in each
case, on a consolidated basis and determined in accordance with GAAP.
Notwithstanding the foregoing, the provision for taxes on the income or profits
of, and the depreciation and amortization and other non-cash charges of, a
Subsidiary of the referent Person shall be added to Consolidated Net Income to
compute Consolidated Cash Flow only to the extent (and in same proportion) that
the Net Income of such Subsidiary was included in calculating the Consolidated
Net Income of such Person and only if a corresponding amount would be permitted
at the date of determination to be dividended to such Person by such Subsidiary
without prior approval (that has not been obtained), pursuant to the terms of
its charter and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to that Subsidiary or
its
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shareholders.
"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Subsidiaries for such
period, on a consolidated basis, determined in accordance with GAAP; provided
that (i) the Net Income (but not loss) of any Person that is not a Subsidiary or
that is accounted for by the equity method of accounting shall be included only
to the extent of the amount of dividends or distributions paid in cash to the
referent Person or a Wholly Owned Subsidiary thereof that is a Guarantor, (ii)
the Net Income of any Subsidiary shall be excluded to the extent that the
declaration or payment of dividends or similar distributions by that Subsidiary
of that Net Income is not at the date of determination permitted without any
prior governmental approval (which has not been obtained) or, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary or its shareholders, (iii) the Net Income of any
Person acquired in a pooling of interests transaction for any period prior to
the date of such acquisition shall be excluded and (iv) the cumulative effect of
a change in accounting principles shall be excluded.
"Consolidated Net Worth" means, with respect to any Person as of any date,
the sum of (i) the consolidated equity of the common shareholders of such Person
and its consolidated Subsidiaries as of such date plus (ii) the respective
amounts reported on such Person's balance sheet as of such date with respect to
any series of preferred stock (other than Disqualified Stock) less (x) all
write-ups (other than write-ups resulting from foreign currency translations and
writeups of tangible assets of a going concern business made within 12 months
after the acquisition of such business) subsequent to the date of this Indenture
in the book value of any asset owned by such Person or a consolidated Subsidiary
of such Person, (y) all investments as of such date in unconsolidated
Subsidiaries and in Persons that are not Subsidiaries (except, in each case,
Permitted Investments), and (z) all unamortized debt discount and expense and
unamortized deferred charges as of such date, all of the foregoing determined in
accordance with GAAP.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of the Company who (i) was a member of such Board of
Directors on the date of this Indenture or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board of Directors at the time of
such nomination or election.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 12.2 hereof or such other address as to which the
Trustee may give notice to the Company.
"Custodian" means any receiver, trustee, assignee, liquidator or similar
official under any Bankruptcy Law.
"Deed of Trust" means that certain Deed of Trust, Assignment of Rents and
Security
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Agreement among the Company, National Title Company, as trustee and the Trustee
substantially in the form attached hereto as Exhibit E.
"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.
"Definitive Notes" means Notes that are in the form of the Notes attached
hereto as Exhibit A, that do not include the information called for by footnotes
1 and 2 thereof.
"Depositary" means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.3 hereof as the
Depositary with respect to the Notes, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the Holder thereof, in whole or in part, on or prior to the date
that is 91 days after the date on which the Notes mature.
"Equipment Financing" means Indebtedness (including Capital Lease
Obligations) that is non-recourse to the assets of any Person other than the
Person incurring such Indebtedness, the proceeds of which are used solely to
finance the acquisition, construction or lease by the Company or any of its
Subsidiaries of furniture, fixtures or equipment ("FF&E") used in the ordinary
course of the operation of the business of the Company and its Subsidiaries and
secured by a Lien on such FF&E to secure the purchase price, construction cost
or lease thereof.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Event of Loss" means, with respect to any property or asset (tangible or
intangible, real or personal), any of the following: (i) any loss, destruction
or damage of such property or asset; (ii) any actual condemnation, seizure or
taking by exercise of the power of eminent domain or otherwise of such property
or asset, or confiscation of such property or asset or the requisition of the
use of such property or asset; or (iii) any settlement in lieu of clause (ii)
above, in the case of clause (i), (ii) or (iii), whether in a single event or a
series of related events, which results in Net Proceeds in excess of $500,000.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Indebtedness" means certain Indebtedness of the Company
outstanding on the date of this Indenture and described on Schedule A hereto.
-7-
"Federal Bankruptcy Code" means Title 11 United States Code or any similar
federal law for the relief of debtors.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person and its
Subsidiaries for such period to the Fixed Charges of such Person and its
Subsidiaries for such period. In the event that the Company or any of its
Subsidiaries incurs, assumes, Guarantees or redeems any Indebtedness (other than
revolving credit borrowings) or issues preferred stock subsequent to the
commencement of the period for which the Fixed Charge Coverage Ratio is being
calculated but prior to the date on which the event for which the calculation of
the Fixed Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed
Charge Coverage Ratio shall be calculated giving pro forma effect to such
incurrence, assumption, Guarantee or redemption of Indebtedness, or such
issuance or redemption of preferred stock, as if the same had occurred at the
beginning of the applicable reference period. For purposes of making the
computation referred to above, (i) acquisitions that have been made by the
Company or any of its Subsidiaries, including through mergers or consolidations
and including any related financing transactions, during the applicable
reference period or subsequent to such reference period and on or prior to the
Calculation Date shall be deemed to have occurred on the first day of the
applicable reference period, and (ii) the Consolidated Cash Flow attributable to
discontinued operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, shall be excluded, and
(iii) the Fixed Charges attributable to discontinued operations, as determined
in accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded, but only to the extent that the obligations
giving rise to such Fixed Charges will not be obligations of the referent Person
or any of its Subsidiaries following the Calculation Date, and (iv) the
consolidated interest expense attributable to interest on any proposed
Indebtedness bearing a floating interest rate shall be computed on a pro forma
basis as if the rate in effect on the date of computation had been the
applicable rate for the entire period.
"Fixed Charges" means, with respect to any Person for any period, the sum
of (i) the consolidated interest expense of such Person and its Subsidiaries for
such period, whether paid or accrued (including, without limitation,
amortization of original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, commissions,
discounts and other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net payments (if any) pursuant to Hedging
Obligations, but excluding any amortization of debt issuance cost to the extent
included in consolidated interest expense), and (ii) the consolidated interest
expense of such Person and its Subsidiaries that was capitalized during such
period, and (iii) any interest expense on Indebtedness of another Person that is
Guaranteed by such Person or one of its Subsidiaries or secured by a Lien on
assets of such Person or one of its Subsidiaries (whether or not such Guarantee
or Lien is called upon) and (iv) all cash dividend payments (and non-cash
dividend payments in the case of a Person that is a Subsidiary) on any series of
preferred stock of such Person, in each case, on a consolidated basis and in
accordance with GAAP.
-8-
"GAAP" means 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 have been approved by a significant segment of the accounting
profession, which are in effect on the date of this Indenture.
"Gaming Authority" means any agency, authority, board, bureau, commission,
department, office or instrumentality of any nature whatsoever of the United
States or foreign government, any state, province or any city or other political
subdivision, whether now or hereafter existing, or any officer or official
thereof, including without limitation, the Nevada Gaming Authorities.
"Gaming Laws" means the gaming laws of any jurisdiction or jurisdictions to
which the Company, any of its Subsidiaries or the Guarantor is, or may at any
time after the date of this Indenture be, subject.
"Gaming License" means every license, franchise or other authorization
required to own, lease, operate or otherwise conduct gaming activities of the
Company or any of its Subsidiaries, including without limitation, all such
licenses granted under the Nevada Gaming Control Act, and the regulations
promulgated pursuant thereto, and other applicable federal, state, foreign or
local laws.
"Global Notes" means a Note that contains the paragraph referred to in
footnote 1 and the additional schedule referred to in footnote 2 to the form of
the Note attached hereto as Exhibit A.
"Gold Coast" means the Gold Coast Hotel and Casino.
"Gold Coast Partnership" means Gold Coast Hotel and Casino, a Nevada
limited partnership.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
"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.
"Guarantor" means each of (i) Coast Resorts and (ii) any other Subsidiary
of the Company that executes a Guarantee in accordance with Section 4.17 hereof,
and their respective successors and assigns.
-9-
"Hedging Obligations" means, with respect to any Person, the obligations of
such Person under (i) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements and (ii) other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates.
"Holder" means a Person in whose name a Note is registered.
"Indebtedness" means, with respect to any Person, 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 banker's acceptances or
representing Capital Lease Obligations or the balance deferred and unpaid of the
purchase price of any property or representing any Hedging Obligations, except
any such balance that constitutes an accrued expense or trade payable, if and to
the extent any of the foregoing indebtedness (other than letters of credit and
Hedging Obligations) would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP, as well as all indebtedness of others
secured by a Lien on any asset of such Person (whether or not such indebtedness
is assumed by such Person) and, to the extent not otherwise included, the
Guarantee by such Person of any indebtedness of any other Person.
"Independent Directors" means any members of the Board of Directors of the
Company or Coast Resorts, as the case may be, other than Xxxxxxx X. Xxxxxxx,
Xxxx X. Xxxxxxx, Xxxxx Xxxxxx, Xxxxxx X. Xxxxxxx or Xxxx Xxxxxxx or their
Related Parties or any officer or other employee of the Company, Coast Resorts
or any Affiliate of Coast Resorts.
"Indenture" means this Indenture, as amended or supplemented from time to
time.
"Intercreditor Agreement" means any Intercreditor Agreement, substantially
in the form attached as Exhibit B to the 1996 Indenture, including the 1996
Notes Intercreditor Agreement.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities and all other items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP;
provided that an acquisition of assets, Equity Interests or other securities by
the Company for consideration consisting of common equity securities of the
Company shall not be deemed to be an Investment.
"IPO" means an initial public offering of Coast Resorts Common Stock which
results in net proceeds to Coast Resorts of at least $30.0 million.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in
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the City of New York or at a place of payment are authorized by law, regulation
or executive order to remain closed. If a payment date is a Legal Holiday at a
place of payment, payment may be made at that place on the next succeeding day
that is not a Legal Holiday, and no interest shall accrue for the intervening
period.
"Lien" means, with respect to any asset, any 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).
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or (b) the
disposition of any securities by such Person or any of its Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its Subsidiaries and
(ii) any extraordinary or nonrecurring gain (but not loss), together with any
related provision for taxes on such extraordinary or nonrecurring gain (but not
loss).
"Net Proceeds" means the aggregate cash proceeds received by the Company or
any of its Subsidiaries in respect of any Asset Sale or Event of Loss
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale or Event of
Loss and insurance proceeds), net of the direct costs relating to such Asset
Sale or Event of Loss (including, without limitation, legal, accounting and
investment banking fees, and sales commissions) 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), amounts required to be applied to the repayment of Indebtedness
(to the extent, in the case of revolving credit Indebtedness, such Indebtedness
is permanently reduced) secured by a Lien on the asset or assets that were the
subject of such Asset Sale and any reserve established by the Company or any of
its Subsidiaries in accordance with GAAP against any liabilities associated with
such Asset Sale and retained by the Company or any of its Subsidiaries, as the
case may be, after such Asset Sale.
"Nevada Gaming Authorities" means, without limitation, the Nevada Gaming
Commission, the Nevada State Gaming Control Board, the Xxxxx County Liquor and
Gaming Licensing Board and any other applicable governmental or administrative
state or local agency involved in the regulation of gaming and gaming activities
in the State of Nevada.
"Note Guarantee" means any Guarantee given by any Guarantor pursuant to the
terms of this Indenture.
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"Note Custodian" means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officer" means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary or any Vice President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the Company
or a Guarantor, as the case may be, by two Officers of the Company or a
Guarantor, as the case may be, one of whom must be the principal executive
officer, the principal financial officer, the treasurer or the principal
accounting officer of the Company or a Guarantor, as the case may be, that meets
the requirements set forth in Section 12.5 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 12.5 hereof.
The counsel may be an employee of or counsel to the Company, any Subsidiary of
the Company, any Guarantor or the Trustee.
"Operating" means, with respect to the Orleans Hotel and Casino, the first
time that (i) all Gaming Licenses have been granted and have not been revoked or
suspended, (ii) all Liens (other than the Liens created by the Security
Documents or Permitted Liens) related to the construction of the Orleans Hotel
and Casino have been paid or, if payment is not yet due or if such payment is
contested in good faith by the Company, sufficient funds remain in the Interest
Escrow Account and Construction Disbursement Account to discharge such Liens or
such Liens have been bonded with bonds in form and substance sufficient to
satisfy such Liens, (iii) the project manager and the architect of the Orleans
Hotel and Casino have delivered a certificate to the Trustee certifying that the
Orleans Hotel and Casino is complete in all material respects in accordance with
the Plans and Specifications therefor (taking into account any variations
therefrom contemplated by the definition of "Orleans Hotel and Casino") and all
applicable building laws, ordinances and regulations, (iv) the Orleans Hotel and
Casino is in a condition (including installation of furnishings, fixtures and
equipment) to receive guests in the ordinary course of business, (v) gaming and
other operations in accordance with applicable law are open to the general
public and are being conducted at the Orleans Hotel and Casino, (vi) a permanent
or temporary certificate of occupancy has been issued for the Orleans Hotel and
Casino by Xxxxx County, Nevada and (vii) a notice of completion of the Orleans
Hotel and Casino has been duly recorded.
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"Orleans Expansion" means any capital addition, improvement, extension or
repair to the Orleans Hotel and Casino.
"Orleans Hotel and Casino" means the Orleans Hotel and Casino located at
0000 Xxxx Xxxxxxxxx Xxxxxx in Las Vegas, Nevada.
"Pari Passu Collateral" means the Collateral, excluding the Rancho Road
Property after the release of such property from the Lien securing the
obligations under this Indenture and the Notes.
"Pari Passu Lien" means a Lien on the Pari Passu Collateral that ranks pari
passu with the Lien of the Trustee for the ratable benefit of the Holders
pursuant to an Intercreditor Agreement.
"Permitted Barbary Coast Expansion Indebtedness" means Indebtedness
incurred by the Company to finance the Project Costs of a Barbary Coast
Expansion the aggregate principal amount of which at any time outstanding,
together with any Permitted Refinancing Indebtedness applied to the refinancing
thereof, does not exceed the lesser of $10.0 million or 70% of the aggregate
Project Costs of such Barbary Coast Expansion.
"Permitted Investments" means (i) any Investments in the Company or in a
Subsidiary of the Company that is a Guarantor; (ii) any Investments in Cash
Equivalents; (iii) Investments by the Company or any Subsidiary of the Company
in a Person that are evidenced by Capital Stock, if as a result of such
Investment (a) such Person becomes a Subsidiary of the Company and a Guarantor
or (b) such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is liquidated into,
the Company or a Subsidiary of the Company that is a Guarantor; (iv) Restricted
Investments made as a result of the receipt of non-cash consideration from an
Asset Sale or other disposition of assets that was made in compliance with
Section 4.10 hereof; (v) Investments in Coast West that are evidenced by Capital
Stock that do not exceed $15.0 million at any time outstanding, provided that
such Investment complies with clause (i) of Section 4.11 hereof; and (vi)
Investments in the form of loans to Coast West solely for the purpose of
conducting the activities permitted by Section 4.21 hereof, which loans (a) are
evidenced by promissory notes that are Collateral for the Notes, (b) are due and
payable no later than one year prior to the final maturity of the 1996 Notes and
(c) do not exceed $8.0 million in aggregate principal amount at any time
outstanding, provided, however, that the aggregate amount of all such loans then
outstanding shall be due and payable prior to, or concurrently with, the release
of Coast West from its Guarantee and the related Security Documents.
"Permitted Liens" means (i) Pari Passu Liens on the Pari Passu Collateral
to secure Indebtedness permitted under clause (i), (iii), (x) or (vi) (to the
extent the Permitted Refinancing Indebtedness secured thereby refinances
Indebtedness permitted by any of the foregoing clauses) of the second paragraph
of Section 4.9 hereof; (ii) Liens in favor of the Company; (iii) Liens on
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property of a Person existing at the time such Person is merged into or
consolidated with the Company or any Subsidiary of the Company, or securing
Indebtedness of any Person existing at the time such Person becomes a Subsidiary
of the Company; provided that such Liens were in existence prior to the
contemplation of such merger or consolidation or such Person becoming a
Subsidiary and do not extend to any assets other than those of the Person merged
into or consolidated with the Company or such Subsidiary, as applicable; (iv)
Liens on property existing at the time of acquisition thereof by the Company or
any Subsidiary of the Company, or securing Indebtedness of any Person existing
at the time such Person becomes a Subsidiary of the Company, provided that such
Liens do not extend to or cover any other property or assets and were in
existence prior to the contemplation of such transaction; (v) Liens to secure
the performance of statutory obligations, surety or appeal bonds, performance
bonds or other obligations of a like nature incurred in the ordinary course of
business; (vi) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (ii) of the second paragraph of Section 4.9
hereof (and any Permitted Refinancing Indebtedness applied to the refinancing
thereof) covering only the assets acquired, improved or constructed with such
Indebtedness; (vii) Liens securing the 1996 Notes and the 1996 Indenture and
Liens existing on the date of this Indenture; (viii) Liens for taxes,
assessments or governmental charges or claims that are not yet delinquent or
that are being contested in good faith by appropriate proceedings promptly
instituted and diligently concluded, provided that any reserve or other
appropriate provision as shall be required in conformity with GAAP shall have
been made therefor; (ix) Liens incurred in the ordinary course of business of
the Company or any Subsidiary of the Company with respect to obligations that do
not exceed $5.0 million at any one time outstanding and that (a) are not
incurred in connection with the borrowing of money or the obtaining of advances
or credit (other than trade credit in the ordinary course of business) and (b)
do not in the aggregate materially detract from the value of the property or
materially impair the use thereof in the operation of business by the Company or
such Subsidiary; (x) Liens on Pari Passu Collateral to secure Permitted Orleans
Expansion Indebtedness and Permitted Refinancing Indebtedness that refinances
such Permitted Orleans Expansion Indebtedness; (xi) easements, rights of way,
zoning and similar restrictions and other similar encumbrances or title defects
incurred in the ordinary course of business and consistent with hotel-casino
industry practices that, in the aggregate, are not substantial in amount, and
that do not in any case materially detract from the value of the property
subject thereto (as such property is used by the Company or any of its
Subsidiaries) or interfere with the ordinary conduct of the business of the
Company or any of its Subsidiaries; (xii) Liens on the Rancho Road Property to
secure Indebtedness permitted by Section 4.9 hereof (and any Permitted
Refinancing Indebtedness applied to the refinancing thereof); (xiii) Liens
arising by reason of any judgment, decree or order of any court only to the
extent for an amount and for a period not resulting in an Event of Default with
respect thereto and so long as such Lien is being contested in good faith and is
adequately bonded, and any appropriate legal proceedings that may have been duly
initiated for the review of such judgment, decree or order shall not have been
finally and adversely terminated or the period within which such proceedings may
be initiated shall not have expired; (xiv) Liens of carriers, warehouse men,
mechanics, landlords, material men, repairmen or other like Liens arising by
operation of law in the ordinary course of business and consistent with industry
practices and Liens on deposits
-14-
made to obtain the release of such Liens if (a) the underlying obligations are
not overdue for a period of more than 60 days or (b) such liens are being
contested in good faith and by appropriate proceedings by the Company and
adequate reserves with respect thereto are maintained on the books of the
Company in accordance with GAAP and (c) the Company is in compliance with the
terms of the Security Documents applicable to such Liens and (d) with respect to
such Liens arising in connection with the Orleans Hotel and Casino, the Company
has obtained the title insurance endorsements required under the Disbursement
Agreement, (xv) the Lien of the Trustee under Section 7.7 hereof, and (xvi) to
the extent not permitted by clause (i) through (xv) hereof, "Permitted Liens" as
defined in the 1996 Indenture.
"Permitted Orleans Expansion Indebtedness" means Indebtedness incurred by
the Company to finance the Project Costs of an Orleans Expansion that is (i)
Indebtedness permitted under clause (ii) of the first paragraph of Section 4.9
hereof, and (ii) the aggregate principal amount of which does not exceed the
lesser of $30.0 million or 75% of the aggregate Project Costs of such Orleans
Expansion.
"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Subsidiaries issued in exchange for, or the net proceeds of which
are used to extend, refinance, renew, replace, defease or refund other
Indebtedness of the Company or any of its Subsidiaries; provided that: (i) the
principal amount of such Permitted Refinancing Indebtedness does not exceed the
principal amount of the Indebtedness so extended, refinanced, renewed, replaced,
defeased or refunded (plus the amount of reasonable expenses incurred in
connection therewith, including any prepayment premium or penalty payable
pursuant to the terms of such Indebtedness); (ii) such Permitted Refinancing
Indebtedness has a final maturity date equal to or later than the final maturity
date of, and has a Weighted Average Life to Maturity equal to or greater than
the Weighted Average Life to Maturity of, the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; (iii) if the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded is
subordinated in right of payment to the Notes, such Permitted Refinancing
Indebtedness has a final maturity date later than the final maturity date of,
and is subordinated in right of payment to, the Notes on terms at least as
favorable to the Holders of Notes as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; and (iv) such Indebtedness is incurred either by the
Company or by the Subsidiary who is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"Permitted Sundance Indebtedness" means Indebtedness incurred by the
Company in an aggregate principal amount not to exceed $70.0 million at any time
outstanding, the proceeds of which are used to pay the Project Costs of the
Sundance, provided that (a) such Indebtedness is pari passu in right of payment
to the Notes, (b) the Weighted Average Life to Maturity of such Indebtedness is
greater than the remaining Weighted Average Life to Maturity of the Notes and
the final maturity of such Indebtedness is not prior to the date on which the
Notes mature, (c) the aggregate principal amount of such Indebtedness at any
time outstanding does not exceed 70% of the aggregate Project Costs of the
Sundance, (d) the Fixed Charge Coverage Ratio of the
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Company for the Company's most recently ended two full fiscal quarters for which
internal financial statements are available immediately preceding the date on
which such additional Indebtedness is incurred would have been at least 1.75 to
1, determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been incurred at the
beginning of such two-quarter period, (e) the Company or any Wholly Owned
Subsidiary of the Company that is a Guarantor owns all of the assets comprising
the Sundance and (f) if the assets comprising the Sundance are owned by a Wholly
Owned Subsidiary of the Company, all proceeds of any such Indebtedness are
transferred to such Wholly Owned Subsidiary in the form of a direct loan
evidenced by a promissory note or notes.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.
"Pledged Securities" means the securities purchased by the Company with a
portion of the proceeds from the sale of the 1996 Notes.
"Principals" means Xxxxxxx X. Xxxxxxx, Xxxx X. Xxxxxxx, Xxxxx Xxxxxx and
Xxxxxxxx Xxxx.
"Project Costs" means, with respect to the development, construction and
opening of the Sundance, an Orleans Expansion or a Barbary Coast Expansion, as
the case may be, the aggregate costs required to complete such development,
construction and opening in accordance with the budget and the plans therefor
and applicable legal requirements, as set forth in an Officers' Certificate
submitted to the Trustee, setting forth in reasonable detail all amounts
theretofore expended in connection with such development, construction and
opening, including direct costs related thereto such as construction management,
architectural, engineering and interior design fees, site work, utility
installations and hook-up fees, construction permits, certificates and bonds,
land acquisition costs, costs of furniture, fixtures, furnishings, machinery and
equipment, non-construction supplies and pre-opening payroll, but excluding
principal or interest payments on any Indebtedness (other than interest which is
required to be capitalized in accordance with GAAP, which shall be included in
determining Project Costs).
"Rancho Road Property" means the approximately 29 acres of raw land owned
by the Company on the date of this Indenture located at 0000 Xxxx Xxxxx Xxxxxx,
Xxxxx Xxx Xxxxx, Xxxxxx.
"Related Party" with respect to any Principal means (i) any spouse,
sibling, parent or lineal descendant of such Principal or any spouse of any such
sibling or lineal descendant or (ii) any trust, corporation, partnership or
other entity, the beneficiaries, shareholders, partners, owners or Persons
beneficially holding an 80% or more controlling interest of which consist of
such Principal and/or such other Persons referred to in the immediately
preceding clause (i).
"Responsible Officer" means with respect to the Trustee, any officer within
the Corporate
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Trust Administration of the Trustee (or any successor group of the Trustee) or
any other officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of his knowledge of and familiarity with the
particular subject.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Security Agreement" means that certain Security Agreement executed by the
Company in favor of Trustee in substantially the form attached hereto as Exhibit
G.
"Security Documents" means, subject to Section 10.3 hereof, collectively,
the Deed of Trust, UCC-1s, the Security Agreement, the Stock Pledge Agreement,
the Unsecured Indemnity Agreement, executed by the Company in favor of the
Trustee attached as Exhibit H hereto, or any other agreements, instruments,
financing statements or other documents that evidence, set forth or limit the
Lien of the Trustee in the Collateral and all other documents, filings and
agreements to be executed by the Company on the date of this Indenture in favor
of the Trustee in order to provide the Trustee with a first lien (subject to
Permitted Liens and except to the extent not required pursuant to Section
10.1(c) hereof) on substantially all of the assets of the Company and the
Guarantor as security for the obligations under the Notes.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Shareholder Related Party" with respect to any shareholder of Coast
Resorts means (i) any spouse, sibling, parent or lineal descendant of such
shareholder or any spouse of any such sibling or lineal descendant or (ii) any
trust, corporation, partnership or other entity, the beneficiaries,
shareholders, partners, owners or Persons beneficially holding an 80% or more
controlling interest of which consist of such shareholder and/or such other
Persons referred to in the immediately preceding clause (i).
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Act, as such Regulation is in effect on the date of this
Indenture.
"Stock Pledge Agreement" means that certain Stock Pledge Agreement executed
by Coast Resorts, Inc. in favor of the Trustee in substantially the form
attached hereto as Exhibit F.
"Subordinated Notes" means those certain promissory notes issued by Gold
Coast Hotel and Casino, a Nevada limited partnership, in an aggregate principal
amount not to exceed $2.0 million, as in effect on the date of this Indenture
which Subordinated Notes became the obligations of the Company pursuant to the
Reorganization as described in the Offering
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Memorandum.
"Subsidiary" means, with respect to any Person, (i) 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 such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"Sundance" means the project to develop, construct and operate the Sundance
Hotel and Casino at the corner of Rampart Boulevard and Alta Drive in northwest
Las Vegas.
"Tax Sharing Agreement" means that certain Tax Sharing Agreement by and
among Coast Resorts, Coast West and the Company dated January 1, 1996 as in
effect on the date of this Indenture.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb)
as in effect on the date on which this Indenture is qualified under the TIA.
"Transfer Restricted Securities" means securities that bear or are required
to bear the first legend set forth in Section 2.6 hereof.
"Treasury Rate" means the yield to maturity at the time of computation of
United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15(519) which
has become publicly available at least two Business Days prior to the date fixed
for redemption (or, if such Statistical Release is no longer published, any
publicly available source of similar market date)) most nearly equal to the then
remaining term to November 1, 2001; provided, however, that if the then
remaining term to November 1, 2001 is not equal to the constant maturity of a
United States Treasury security for which a weekly average yield is given, the
Treasury Rate shall be obtained by linear interpolation (calculated to the
nearest one-twelfth of a year) from the weekly average yields of United States
Treasury securities for which such yields are given, except that if the then
remaining term to November 1, 2001 is less than one year, the weekly average
yield on actually traded United States Treasury securities adjusted to a
constant maturity of one year shall be used.
"Trustee" means the party named as such above until a successor replaces it
in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.
"UCC-1s" means those financing statements and fixture filings filed by the
Company or any Guarantor, in connection with any of the Security Documents.
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"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) 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 (b) 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 of such Indebtedness.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
all of the outstanding Capital Stock or other ownership interests of which
(other than directors' qualifying shares) shall at the time be owned by such
Person or by one or more Wholly Owned Subsidiaries of such Person or by such
Person and one or more Wholly Owned Subsidiaries of such Person.
Section I.2 Other Definitions.
DEFINED IN
TERM SECTION
"Affiliate Transaction"................ 4.11
"Asset Sale Offer"..................... 4.10(b)
"Barbary Coast Mandatory Sale Offer"... 4.10(e)
"Benefitted Party"..................... 11.1(b)
"Change of Control Offer".............. 4.15
"Change of Control Payment"............ 4.15
"Change of Control Payment Date"....... 4.15(b)
"Covenant Defeasance".................. 8.3
"Disqualified Holder".................. 3.8
"DTC".................................. 2.3
"Event of Default"..................... 6.1
"Excess Proceeds"...................... 4.10(b)
"incur"................................ 4.9
"Legal Defeasance"..................... 8.2
"Note Guarantee"....................... 11.1
"Notes"................................ Recitals
"Offer Amount"......................... 3.10(b)
"Offer Period"......................... 3.10(b)
"Offer to Purchase".................... 3.10(a)
"Pari Passu Debt"...................... 4.9
"Pari Passu Debtholder"................ 4.9
"Paying Agent"......................... 2.3
"Payment Default"...................... 6.1(v)
"Purchase Date"........................ 3.10(b)
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"Registrar"............................ 2.3
"Restricted Payments".................. 4.7
"SEC Reports".......................... 4.3
"1996 Indenture"....................... Recitals
"1996 Note Intercreditor Agreement".... 6.13
"1996 Notes"........................... Recitals
"1996 Notes Trustee" Recitals
"10 7/8% Barbary Coast Offer".......... 4.10(b)
Section I.3 Incorporation By Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes and the Note Guarantees;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means the Company, the Guarantor, if any, and any
successor obligor upon the Notes or any Note Guarantee, as the case may be.
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them.
Section I.4 Rules of Construction.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
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(iv) words in the singular include the plural, and in the plural
include the singular;
(v) provisions apply to successive events and transactions; and
(vi) references to sections of or rules under the Securities Act
shall be deemed to include substitute, replacement of successor sections or
rules adopted by the SEC from time to time.
Section I.5 Trust Indenture Act.
Notwithstanding anything herein to the contrary, the Company and the
Guarantor shall not be required to comply with the TIA, unless and until this
Indenture is otherwise subject thereto pursuant to the terms of the TIA.
ARTICLE II.
THE NOTES
Section II.1 Form and Dating.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto. The Note Guarantees shall be
substantially in the form of Exhibit C hereto. The Notes may have notations,
legends or endorsements required by law, stock exchange rule or usage. Each
Note shall be dated the date of its authentication. The Notes shall be in
denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall constitute, and are
hereby expressly made, a part of this Indenture and the Company, the Guarantor
and the Trustee, by their execution and delivery of this Indenture, expressly
agree to such terms and provisions and to be bound thereby.
Notes issued in global form shall be substantially in the form of Exhibit A
attached hereto (including the text referred to in footnotes 1 and 2 thereto).
Notes issued in definitive form shall be substantially in the form of Exhibit A
attached hereto (but without including the text referred to in footnotes 1 and 2
thereto). Each Global Note shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent the
aggregate amount of outstanding Notes from time to time endorsed thereon and
that the aggregate amount of outstanding Notes represented thereby may from time
to time be reduced or increased, as appropriate, to reflect exchanges and
redemptions. Any endorsement of a Global Note to reflect the amount of any
increase or decrease in the amount of outstanding Notes represented thereby
shall be made by the Trustee or the Note Custodian, at the direction of the
Trustee, in accordance with instructions given by the Holder thereof as required
by Section 2.6 hereof.
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Section II.2 Execution and Authentication.
Two Officers shall sign the Notes for the Company by manual or facsimile
signature. The Company's seal shall be reproduced on the Notes and may be in
facsimile form.
If an Officer whose signature is on a Note no longer holds that office at
the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature of
the Trustee. The signature shall be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by two
Officers, authenticate Notes for original issue up to the aggregate principal
amount stated in paragraph 4 of the Notes. The aggregate principal amount of
Notes outstanding at any time may not exceed such amount except as provided in
Section 2.7 hereof.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Notes. An authenticating agent may authenticate Notes whenever
the Trustee may do so. Each reference in this Indenture to authentication by
the Trustee includes authentication by such agent. An authenticating agent has
the same rights as an Agent to deal with the Company or an Affiliate of the
Company.
Section II.3 Registrar and Paying Agent.
The Company shall maintain an office or agency where Notes may be presented
for registration of transfer or for exchange ("Registrar") and an office or
agency where Notes may be presented for payment ("Paying Agent"). The Registrar
shall keep a register of the Notes and of their transfer and exchange. The
Company may appoint one or more co-registrars and one or more additional paying
agents. The term "Registrar" includes any co-registrar and the term "Paying
Agent" includes any additional paying agent. The Company may change any Paying
Agent or Registrar without notice to any Holder. The Company shall notify the
Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depositary Trust Company ("DTC") to act
as Depositary with respect to any Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Notes.
Section II.4 Paying Agent to Hold Money in Trust.
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The Company shall require each Paying Agent other than the Trustee to agree
in writing that the Paying Agent will hold in trust for the benefit of Holders
or the Trustee all money held by the Paying Agent for the payment of principal
or premium, if any, or interest on the Notes, and will notify the Trustee of any
default by the Company or any Guarantor in making any such payment. While any
such default continues, the Trustee may require a Paying Agent to pay all money
held by it to the Trustee. The Company at any time may require A Paying Agent
to pay all money held by it to the Trustee. Upon payment over to the Trustee,
the Paying Agent (if other than the Company or a Subsidiary) shall have no
further liability for the money. If the Company or a Subsidiary acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit of
the Holders all money held by it as Paying Agent. Upon any bankruptcy or
reorganization proceedings relating to the Company or any Guarantor, the Trustee
shall serve as Paying Agent for the Notes.
Section II.5 Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and, subject to Section 1.5, shall otherwise comply with TIA (S)
312(a). If the Trustee is not the Registrar, the Company or the Guarantor shall
furnish to the Trustee at least seven Business Days before each interest payment
date and at such other times as the Trustee may request in writing, a list in
such form and as of such date as the Trustee may reasonably require of the names
and addresses of the Holders of Notes and, subject to Section 1.5, the Company
and the Guarantor shall otherwise comply with TIA (S) 312(a).
Section II.6 Transfer and Exchange.
(a) Transfer and Exchange of Definitive Notes. When Definitive Notes are
presented by a Holder to the Registrar with a request:
(x) to register the transfer of the Definitive Notes; or
(y) to exchange such Definitive Notes for an equal principal amount
of Definitive Notes of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met; provided, however, that the
Definitive Notes presented or surrendered for register of transfer or exchange:
(i) shall be duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder
or by his attorney, duly authorized in writing; and
(ii) in the case of a Definitive Note that is a Transfer Restricted
Security, such
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request shall be accompanied by the following additional information and
documents, as applicable:
(A) if such Transfer Restricted Security is being delivered to
the Registrar by a Holder for registration in the name of such Holder,
without transfer, a certification to that effect from such Holder (in
substantially the form of Exhibit D hereto); or
(B) if such Transfer Restricted Security is being transferred to
a "qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities Act
or pursuant to an exemption from registration in accordance with Rule
144 or Rule 904 under the Securities Act or pursuant to an effective
registration statement under the Securities Act, a certification to
that effect from such Holder (in substantially the form of Exhibit D
hereto); or
(C) if such Transfer Restricted Security is being transferred in
reliance on another exemption from the registration requirements of
the Securities Act, a certification to that effect from such Holder
(in substantially the form of Exhibit D hereto) and an Opinion of
Counsel from such Holder or the transferee reasonably acceptable to
the Company and to the Registrar to the effect that such transfer is
in compliance with the Securities Act.
(b) Transfer of a Definitive Note for a Beneficial Interest in a Global
Note. A Definitive Note may not be exchanged for a beneficial interest in a
Global Note except upon satisfaction of the requirements set forth below. Upon
receipt by the Trustee of a Definitive Note, duly endorsed or accompanied by
appropriate instruments of transfer, in form satisfactory to the Trustee,
together with:
(i) if such Definitive Note is a Transfer Restricted Security, and
(A) if such Definitive Note is being exchanged for a beneficial
interest in the name of such Holder, without transfer, a certification
to that effect from such Holder (in substantially the form of Exhibit
D hereto);
(B) such Definitive Note is being transferred by such Holder to
a "qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities Act
or pursuant to an exemption from registration in accordance with Rule
144 or Rule 904 under the Securities Act or pursuant to an effective
registration statement under the Securities Act, a certification from
the Holder thereof (in substantially the form of Exhibit D hereto) to
that effect; or
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(C) such Definitive Security is being transferred in reliance on
another exemption from the registration requirements of the Securities
Act, a certification to that effect from such Holder (in substantially
the form of Exhibit D hereto) and an Opinion of Counsel from such
Holder or the transferee reasonably acceptable to the Company and to
the Registrar to the effect that such transfer is in compliance with
the Securities Act; and
(ii) whether or not such Definitive Note is a Transfer Restricted
Security, written instructions from the Holder thereof directing the
Trustee to make, or to direct the Note Custodian to make, an endorsement on
the Global Note to reflect an increase in the aggregate principal amount of
the Notes represented by the Global Note,
in which case the Trustee shall cancel such Definitive Note in accordance with
Section 2.11 hereof and cause, or direct the Note Custodian to cause, in
accordance with the standing instructions and procedures existing between the
Depositary and the Note Custodian, the aggregate principal amount of Notes
represented by the Global Note to be increased accordingly. If no Global Notes
are then outstanding, the Company shall issue and, upon receipt of an
authentication order in accordance with Section 2.2 hereof, the Trustee shall
authenticate a new Global Note in the appropriate principal amount.
(c) Transfer and Exchange of Global Notes. The transfer and exchange of
Global Notes or beneficial interests therein shall be effected through the
Depositary, in accordance with this Indenture and the procedures of the
Depositary therefor, which shall include restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act.
(d) Transfer of a Beneficial Interest in a Global Note for a Definitive
Note.
(i) Any Person having a beneficial interest in a Global Note may upon
request exchange such beneficial interest for a Definitive Note. Upon
receipt by the Trustee of written instructions or such other form of
instructions as is customary for the Depositary, from the Depositary or its
nominee on behalf of any Person having a beneficial interest in a Global
Note, and, in the case of a Transfer Restricted Security, the following
additional information and documents (all of which may be submitted by
facsimile):
(A) if such beneficial interest is being transferred to the
Person designated by the Depositary as being the beneficial owner, a
certification to that effect from such Person (in substantially the
form of Exhibit D hereto); or
(B) if such beneficial interest is being transferred to a
"qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities Act
or pursuant to an exemption from registration in accordance with Rule
144 or Rule 904 under the Securities Act or pursuant to an effective
registration statement under the Securities Act, a
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certification to that effect from the transferor (in substantially the
form of Exhibit D hereto); or
(C) if such beneficial interest is being transferred in reliance
on another exemption from the registration requirements of the
Securities Act, a certification to that effect from the transferor (in
substantially the form of Exhibit D hereto) and an Opinion of Counsel
from the transferee or transferor reasonably acceptable to the Company
and to the Registrar to the effect that such transfer is in compliance
with the Securities Act,
in which case the Trustee or the Note Custodian, at the direction of the
Trustee, shall, in accordance with the standing instructions and procedures
existing between the Depositary and the Note Custodian, cause the aggregate
principal amount of Global Notes to be reduced accordingly and, following such
reduction, the Company shall execute and, the Trustee shall authenticate and
deliver to the transferee a Definitive Note in the appropriate principal amount.
(ii) Definitive Notes issued in exchange for a beneficial interest in
a Global Note pursuant to this Section 2.6(d) shall be registered in such
names and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Definitive Notes to
the Persons in whose names such Notes are so registered.
(e) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provision of this Indenture (other than the provisions
set forth in subsection (f) of this Section 2.6), a Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary.
(f) Authentication of Definitive Notes in Absence of Depositary. If at
any time:
(i) the Depositary for the Notes notifies the Company that the
Depositary is unwilling or unable to continue as Depositary for the Global
Notes and a successor Depositary for the Global Notes is not appointed by
the Company within 90 days after delivery of such notice; or
(ii) the Company, at its sole discretion, notifies the Trustee in
writing that it elects to cause the issuance of Definitive Notes under this
Indenture,
then the Company shall execute, and the Trustee shall, upon receipt of an
authentication order in accordance with Section 2.2 hereof, authenticate and
deliver, Definitive Notes in an aggregate principal amount equal to the
principal amount of the Global Notes in exchange for such Global Notes.
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(g) Legends.
(i) Except as permitted by the following paragraph (ii), each Note
certificate evidencing Global Notes and Definitive Notes (and all Notes
issued in exchange therefor or substitution thereof) shall bear legends in
substantially the following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX XXXXXX
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND THE SECURITY EVIDENCED
HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE
SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE ACT PROVIDED BY RULE 144A
THEREUNDER OR ANOTHER EXEMPTION FROM THE REQUIREMENTS OF THE ACT. THE HOLDER OF
THE SECURITY EVIDENCED HEREBY, BY PURCHASING THIS SECURITY, AGREES FOR THE
BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (1) (a) INSIDE THE UNITED STATES TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
OR IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT OR IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY OR ANY GUARANTOR
SO REQUESTS), (b) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 904 UNDER THE ACT OR, (c) TO THE COMPANY OR (d)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND, (2) IN EACH
CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER WILL BE REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global Note)
pursuant to Rule 144 under
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the Securities Act or pursuant to an effective registration statement under
the Securities Act:
(A) in the case of any Transfer Restricted Security that is a
Definitive Note, the Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security for a Definitive Note that
does not bear the first legend set forth in (i) above and rescind any
restriction on the transfer of such Transfer Restricted Security; and
(B) in the case of any Transfer Restricted Security represented
by a Global Note, such Transfer Restricted Security shall not be
required to bear the first legend set forth in (i) above, but shall
continue to be subject to the provisions of Section 2.6(c) hereof;
provided, however, that with respect to any request for an exchange of
a Transfer Restricted Security that is represented by a Global Note
for a Definitive Note that does not bear the first legend set forth in
(i) above, which request is made in reliance upon Rule 144, the Holder
thereof shall certify in writing to the Registrar that such request is
being made pursuant to Rule 144 (such certification to be
substantially in the form of Exhibit D hereto).
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in Global Notes have been exchanged for Definitive Notes,
redeemed, repurchased or canceled, all Global Notes shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for Definitive Notes, redeemed, repurchased or canceled, the
principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note, by the Trustee
or the Notes Custodian, at the direction of the Trustee, to reflect such
reduction.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Definitive Notes and
Global Notes at the Registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant
to Sections 3.7, 4.10, 4.15 and 9.5 hereof).
(iii) The Registrar shall not be required to register the transfer of
or exchange any Note selected for redemption in whole or in part, except
the unredeemed portion of any Note being redeemed in part.
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(iv) All Definitive Notes and Global Notes issued upon any
registration of transfer or exchange of Definitive Notes or Global Notes
shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Definitive
Notes or Global Notes surrendered upon such registration of transfer or
exchange.
(v) The Company shall not be required:
(A) to issue, to register the transfer of or to exchange Notes
during a period beginning at the opening of business 15 days before
the day of any selection of Notes for purchase or redemption under
Section 3.2 hereof and ending at the close of business on the day of
selection; or
(B) to register the transfer of or to exchange any Note so
selected for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part; or
(C) to register the transfer of or to exchange a Note between a
record date and the next succeeding interest payment date.
(vi) Prior to due presentment for the registration of a transfer of
any Note, the Trustee, any Agent, the Company and the Guarantor may deem
and treat the Person in whose name any Note is registered as the absolute
owner of such Note for the purpose of receiving payment of principal of and
interest on such Notes, and for all other purposes whatsoever, whether or
not this Note is overdue, and neither the Trustee, any Agent nor the
Company shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Definitive Notes and Global
Notes in accordance with the provisions of Section 2.2 hereof.
Section II.7 Replacement Notes.
If any mutilated Note is surrendered to the Trustee, or the Company and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Company shall issue and the Trustee, upon the written order of
the Company signed by two Officers of the Company, shall authenticate a
replacement Note if the Trustee's requirements are met. If required by the
Trustee or the Company, an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Note is replaced. The Company may charge for its
expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and shall
be entitled
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to all of the benefits of this Indenture equally and proportionately with all
other Notes duly issued hereunder.
Section II.8 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation,
those reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions hereof, and those described in this Section as
not outstanding. Except as set forth in Section 2.9 hereof, a Note does not
cease to be outstanding because the Company or an Affiliate of the Company holds
the Note.
If a Note is replaced pursuant to Section 2.7 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section 4.1
hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) holds, on a redemption date or maturity date, money sufficient
to pay Notes payable on that date, then on and after that date such Notes shall
be deemed to be no longer outstanding and shall cease to accrue interest.
Section II.9 Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, any Guarantor or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any
Guarantor, shall be considered as though not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Notes that a Trustee knows are so owned
shall be so disregarded.
Section II.10 Temporary Notes.
Until definitive Notes are ready for delivery, the Company may prepare and
the Trustee shall authenticate temporary Notes upon a written order of the
Company signed by two Officers of the Company. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall
prepare and the Trustee shall authenticate definitive Notes in exchange for
temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of this
Indenture.
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Section II.11 Cancellation.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
canceled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all canceled Notes shall be delivered
to the Company. The Company may not issue new Notes to replace Notes that it
has paid or that have been delivered to the Trustee for cancellation.
Section II.12 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it shall pay
the defaulted interest in any lawful manner plus, to the extent lawful, interest
payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.1 hereof. The Company shall notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company shall fix or cause to be fixed each such
special record date and payment date, provided that no such special record date
shall be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or,
upon the written request of the Company, the Trustee in the name and at the
expense of the Company) shall mail or cause to be mailed to Holders a notice
that states the special record date, the related payment date and the amount of
such interest to be paid.
ARTICLE III.
OFFERS TO PURCHASE OR REDEMPTION
Section III.1 Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional redemption
provisions
of Section 3.7 hereof, it shall furnish to the Trustee, at least 35 days but not
more than 60 days before a redemption date, an Officers' Certificate setting
forth (i) the Section of this Indenture pursuant to which the redemption shall
occur, (ii) the redemption date, (iii) the principal amount of Notes to be
redeemed and (iv) the redemption price.
Section III.2 Selection of Notes to Be Redeemed.
If less than all of the Notes are to be redeemed at any time, the Trustee
shall select the Notes to be redeemed among the Holders of the Notes in
compliance with the requirements of the principal national securities exchange,
if any, on which the Notes are listed or, if the Notes are not so listed, on a
pro rata basis, by lot or by such other method as the Trustee shall deem
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fair and appropriate (and in such manner as complies with applicable legal
requirements).
In the event of partial redemption by lot, the particular Notes to be
redeemed shall be selected, unless otherwise provided herein, not less than 30
nor more than 60 days prior to the redemption date by the Trustee from the
outstanding Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
Section III.3 Notice of Redemption.
(a) Subject to the provisions of Section 3.9 hereof, at least 30 days but
not more than 60 days before a redemption date, the Company shall mail or cause
to be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address.
(b) The notice shall identify the Notes to be redeemed and shall state:
(i) the redemption date;
(ii) the redemption price;
(iii) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption
date upon surrender of such Note, a new Note or Notes in principal amount
equal to the unredeemed portion shall be issued upon cancellation of the
original Note;
(iv) the name and address of the Paying Agent;
(v) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(vi) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the redemption date;
(vii) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
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(viii) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on
the Notes.
(c) At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
Section III.4 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.3 hereof,
Notes called for redemption become irrevocably due and payable on the redemption
date at the redemption price. A notice of redemption may not be conditional.
Section III.5 Deposit of Redemption Price.
On or prior to the redemption date, the Company shall deposit with the
Trustee or with the Paying Agent money sufficient to pay the redemption price
of, and accrued and unpaid interest on, all Notes to be redeemed on that date.
The Trustee or the Paying Agent shall promptly return to the Company any money
deposited with the Trustee or the Paying Agent by the Company in excess of the
amounts necessary to pay the redemption price of, and accrued and unpaid
interest on, all Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph, on
and after the redemption date, interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after
an interest record date but on or prior to the related interest payment date,
then any accrued and unpaid interest shall be paid to the Person in whose name
such Note was registered at the close of business on such record date. If any
Note called for redemption shall not be so paid upon surrender for redemption
because of the failure of the Company to comply with the preceding paragraph,
interest shall be paid on the unpaid principal, from the redemption date until
such principal is paid, and to the extent lawful on any interest not paid on
such unpaid principal, in each case at the rate provided in the Notes and in
Section 4.1 hereof.
Section III.6 Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Company shall issue
and, upon the Company's written request, the Trustee shall authenticate for the
Holder at the expense of the Company a new Note equal in principal amount to the
unredeemed portion of the Note surrendered.
Section III.7 Optional Redemption.
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(a) At any time on or prior to November 1, 2001, the Company may redeem
the Notes, in whole but not in part, at a redemption price equal to the
principal amount thereof plus the Applicable Premium plus accrued and unpaid
interest, if any, thereon to the redemption date. The Company may not redeem
Notes pursuant to this paragraph if it has made an offer to repurchase Notes
with respect to a Change of Control pursuant to Section 4.15.
(b) Any redemption pursuant to this Section 3.7 shall be made pursuant to
the provisions of Sections 3.1 through 3.6 hereof.
Section III.8 Redemption Pursuant to Gaming Law.
(a) Notwithstanding any other provision of this Article 3, if any Gaming
Authority requires that a Holder or beneficial owner of Notes must be licensed,
qualified or found suitable under any applicable Gaming Law and the Holder or
beneficial owner fails to apply for a license, qualification or a finding of
suitability within 30 days after being requested to do so by the Gaming
Authority (or such shorter period required by applicable law), or if such Holder
or such beneficial owner is not so licensed, qualified or found suitable (a
"Disqualified Holder"), the Company shall have the right, at its option, (i) to
require such Disqualified Holder to dispose of such Disqualified Holder's Notes
within 30 days of receipt of such notice of such finding by the applicable
Gaming Authority or such earlier date as may be ordered by such Gaming Authority
or (ii) to call for the redemption of the Notes of such Disqualified Holder at a
price equal to 100% of the principal amount thereof, plus accrued and unpaid
interest, if any, thereon to the date of redemption or such earlier date as may
be required by such Gaming Authority or applicable Gaming Laws, which may be
less than 30 days following the notice of redemption, if so ordered by such
Gaming Authority or required by applicable Gaming Laws. Immediately upon a
determination of unsuitability, the Disqualified Holder shall have no further
rights whatsoever with respect to the Notes (i) to exercise, directly or
indirectly through any trustee, nominee or any other Person or entity, any right
conferred by the Notes and (ii) to receive any interest or any other
distribution or payment with respect to the Notes or any remuneration in any
form from the Company for services rendered or otherwise, except the redemption
price of the Notes. Under this Indenture and the Security Documents, the
Company is not required to pay or reimburse any Holder or beneficial owner of
Notes who is required to apply for such license, qualification or finding of
suitability for the costs of the licensure or investigation for such
qualification or finding of suitability.
(b) In connection with any redemption pursuant to this Section 3.8, and
except as may be required by a Gaming Authority, the Company shall be required
to comply with Sections 3.1 through 3.6 hereof.
Section III.9 Mandatory Redemption.
Except as set forth under Sections 4.10 and 4.15 hereof, the Company shall
not be
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required to make mandatory redemptions or sinking fund payments with respect to
the Notes.
Section III.10 Offer to Purchase By Application of Excess Proceeds.
(a) In the event that, pursuant to Section 4.10 hereof, the Company shall
be required to commence an offer to all Holders to purchase Notes (an "Offer to
Purchase"), it shall follow the procedures specified below.
(b) The Offer to Purchase shall remain open for a period of 20 Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law (the "Offer Period"). No later than
five Business Days after the termination of the Offer Period (the "Purchase
Date"), the Company shall purchase the principal amount of Notes required to be
purchased pursuant to Section 4.10 hereof (the "Offer Amount") or, if less than
the Offer Amount has been tendered, all Notes tendered in response to the Offer
to Purchase. Payment for any Notes so purchased shall be made in the same
manner as interest payments are made.
(c) If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest shall
be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Offer to Purchase.
(d) Upon the commencement of an Offer to Purchase, the Company shall send,
by first class mail, a notice to the Trustee and each of the Holders, with a
copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Offer to
Purchase. The Offer to Purchase shall be made to all Holders. The notice,
which shall govern the terms of the Offer to Purchase, shall state:
(i) that the Offer to Purchase is being made pursuant to this
Section 3.10 and Section 4.10 hereof and the length of time the Offer to
Purchase shall remain open;
(ii) the Offer Amount, the purchase price and the Purchase Date;
(iii) that any Note not properly tendered or accepted for payment
shall remain outstanding and continue to accrue interest;
(iv) that, unless the Company defaults in making such payment, all
Notes accepted for payment pursuant to the Offer to Purchase shall cease to
accrue interest after the Purchase Date;
(v) that Holders electing to have a Note purchased pursuant to an
Offer to Purchase shall be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, or transfer by book-entry
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transfer, to the Company, a Depositary, if appointed by the Company, or a
Paying Agent at the address specified in the notice prior to the close of
business on the second Business Day preceding the Purchase Date;
(vi) that Holders shall be entitled to withdraw their tendered Notes
and their election to require the Company to purchase the Notes if the
Company, the Depositary or the Paying Agent, as the case may be, receives,
not later than the expiration of the Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of Notes tendered for purchase, and a statement that such
Holder is withdrawing his tendered Notes and his election to have such
Notes purchased;
(vii) that, if the aggregate principal amount of Notes surrendered
(or transferred by book-entry transfer) by Holders exceeds the Offer
Amount, the Trustee shall select the Notes to be purchased in compliance
with the requirements of the principal national securities exchange, if
any, on which the Notes are listed, or, if the Notes are not so listed, on
a pro rata basis (with such adjustments as may be deemed appropriate by the
Trustee so that only Notes in denominations of $1,000, or integral
multiples thereof, shall be purchased); and
(viii) that Holders whose Notes are being purchased only in part
shall be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered (or transferred by book-entry transfer).
(e) On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Notes or portions thereof tendered pursuant to the Offer to
Purchase, or if less than the Offer Amount has been tendered, all Notes
tendered, and shall deliver to the Trustee an Officers' Certificate stating that
such Notes or portions thereof were accepted for payment by the Company in
accordance with the terms of this Section 3.10. The Company, the Depositary or
the Paying Agent, as the case may be, shall promptly (but in any case not later
than five days after the Purchase Date) mail or deliver to each tendering Holder
an amount equal to the purchase price of the Notes tendered by such Holder and
accepted by the Company for purchase, and the Company shall promptly issue a new
Note, and the Trustee, upon written request from the Company shall authenticate
and mail or deliver such new Note to such Holder, in a principal amount equal to
any unpurchased portion of the Note surrendered. Any Note not so accepted shall
be promptly mailed or delivered by the Company to the Holder thereof. The
Company shall publicly announce the results of the Offer to Purchase on the
Purchase Date.
ARTICLE IV.
COVENANTS
Section IV.1 Payment of Notes.
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(a) The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 12:00 noon Eastern time on the due date money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due.
(b) The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
the then applicable interest rate on the Notes to the extent lawful; it shall
pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace period) at the same rate to the extent lawful.
Section IV.2 Maintenance of Office or Agency.
(a) The Company shall maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company or the Guarantor in respect of the Notes and this Indenture may
be served. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
(b) The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company shall give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
(c) The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 2.3.
Section IV.3 SEC Reports.
(a) Whether or not required by the rules and regulations of the SEC, so
long as any Notes and the 1996 Notes are outstanding, Coast Resorts shall
furnish to the Holders of Notes all annual and quarterly reports and the
information, documents, and other reports required to be filed with the SEC
pursuant to Section 13(a) or 15(d) of the Exchange Act ("SEC Reports") if Coast
Resorts were required to file SEC Reports and, whether or not required by the
rules and
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regulations of the SEC, Coast Resorts shall file a copy of all such information
and reports with the SEC for public availability (unless the SEC will not accept
such a filing).
(b) For so long as any Notes remain outstanding, the Company and Coast
Resorts shall furnish to the Holders of Notes, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
Section IV.4 Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 90 days after the end
of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Company and its Subsidiaries during the preceding fiscal year
has been made under the supervision of the signing Officers of the Company with
a view to determining whether the Company and each obligor on the Notes and this
Indenture is in compliance with this Indenture and each Security Document and
further stating, as to each such Officer signing such certificate, that to the
best of his or her knowledge the Company and each such obligor is in compliance
with each and every covenant contained in this Indenture and each Security
Document and is not in default in the performance or observance of any of the
terms, provisions or conditions of this Indenture or any Security Document (or,
if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he or she may have knowledge and what
action the Company or such obligor, as the case may be, is taking or proposes to
take with respect thereto) and that to the best of his or her knowledge no event
has occurred and remains in existence by reason of which payments on account of
the principal of or interest, if any, on the Notes is prohibited or if such
event has occurred, a description of the event and what action the Company or
such obligor, as the case may be, is taking or proposes to take with respect
thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.3(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company is in violation
of any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are outstanding, deliver
to the Trustee, forthwith upon any Officer becoming aware of any Default or
Event of Default or any event of default under any document, instrument or
agreement representing Indebtedness of the Company, an Officers' Certificate
specifying such Default or Event of Default and what action the Company is
taking or proposes to take with respect thereto.
Section IV.5 Taxes.
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The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.
Section IV.6 Stay, Extension and Usury Laws.
Each of the Company and the Guarantor covenants (to the extent that it may
lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and each of the
Company and the Guarantor (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not, by resort to any such law, 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 has been enacted.
Section IV.7 Restricted Payments.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly: (i) declare or pay any dividend or make any distribution
on account of the Company's or any of its Subsidiaries' Equity Interests
(including, without limitation, any payment in connection with any merger or
consolidation involving the Company) or to the direct holders of the Company's
Equity Interests in any capacity (other than dividends or distributions payable
in Equity Interests (other than Disqualified Stock) of the Company or dividends
or distributions payable to the Company or any Subsidiary of the Company that is
a Guarantor); (ii) purchase, redeem or otherwise acquire or retire for value any
Equity Interests of the Company (other than any such Equity Interests owned by
the Company or any Subsidiary of the Company that is a Guarantor); (iii) make
any principal payment on, or purchase, redeem, defease or otherwise acquire or
retire for value any Indebtedness of the Company that is subordinated to the
Notes; or (iv) make any Restricted Investment (all such payments and other
actions set forth in clauses (i) through (iv) above being collectively referred
to as "Restricted Payments"), unless, at the time of and after giving effect to
such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be continuing or
would occur as a consequence thereof; and
(b) the Company shall, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made at
the beginning of the applicable four-quarter period, have been permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in clause (i) of the first paragraph of Section
4.9 hereof; and
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(c) such Restricted Payment, together with the aggregate of all other
Restricted Payments made by the Company and its Subsidiaries after the date of
the 1996 Indenture (excluding Restricted Payments permitted by clauses (r), (s),
(t), (v), (w), (y) and (z) of the next succeeding paragraph), is less than the
sum of (i) 50% of the Consolidated Net Income of the Company for the period
(taken as one accounting period) from the beginning of the first calendar
quarter of 1997 to the end of the Company's most recently ended fiscal quarter
for which internal financial statements are available at the time of such
Restricted Payment (or, if such Consolidated Net Income for such period is a
deficit, less 100% of such deficit), plus (ii) 100% of the aggregate net cash
proceeds received by the Company from capital contributions from Coast Resorts
or the issue or sale since the date of this Indenture of Equity Interests of the
Company or of debt securities of the Company that have been converted into such
Equity Interests (other than Equity Interests (or convertible debt securities)
sold to any Subsidiary of the Company and other than Disqualified Stock or debt
securities that have been converted into Disqualified Stock), plus (iii) to the
extent that any Restricted Investment that was made after the date of this
Indenture is sold for cash or otherwise liquidated or repaid for cash, the
lesser of (A) the cash return of capital with respect to such Restricted
Investment (less the cost of disposition, if any) and (B) the initial amount of
such Restricted Investment, plus (iv) to the extent not included in Consolidated
Net Income of the Company, 100% of the cash distributions or the amount of the
cash principal and interest payments received since the date of this Indenture
by the Company or any Subsidiary from any Person other than any Subsidiary in
respect of any Restricted Investment until the entire amount of such Restricted
Investment has been received and, thereafter, 50% of such cash distributions or
cash principal and interest received by the Company or such Subsidiary from such
Person in respect of such Restricted Investment.
If no Default or Event of Default has occurred and is continuing, or would
occur as a consequence thereof, the foregoing provisions shall not prohibit (q)
the redemption or repurchase (and the payment of dividends by the Company to
Coast Resorts to fund any redemption or repurchase by Coast Resorts) of any debt
or equity securities of the Company or any Guarantor required by, and in
accordance with, any order of any Gaming Authority issued because the holder or
beneficial owner of such security has failed to qualify or to be found suitable
or otherwise eligible under any Gaming Law to remain a holder of such security,
provided that the Company has used its best efforts to effect a disposition of
such securities to a third-party and has been unable to do so; (r) dividends or
other payments (and the payment of dividends by the Company to Coast Resorts to
fund any such payments) to the former partners of the Gold Coast Partnership and
the Barbary Coast Partnership in an aggregate amount not to exceed $1.5 million
to pay income tax liability incurred as such partners and assessed after the
date of the 1996 Indenture; (s) payments to Coast Resorts required to be paid
pursuant to the Tax Sharing Agreement; (t) dividends or other payments to Coast
Resorts in an aggregate amount not to exceed $500,000 per fiscal year to pay
accounting, legal, corporate reporting and other administrative expenses of
Coast Resorts in the ordinary course of business; (u) the payment of any
dividend within 60 days after the date of declaration thereof, if at said date
of declaration such payment would have complied with the provisions of this
Indenture; (v) the redemption,
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repurchase, retirement or other acquisition of any Equity Interests of the
Company in exchange for, or out of the proceeds of, the substantially concurrent
sale (other than to a Subsidiary of the Company) of other Equity Interests of
the Company (other than any Disqualified Stock), provided that the amount of any
such net cash proceeds that are utilized for any such redemption, repurchase,
retirement or other acquisition shall be excluded from clause (c) (ii) of the
preceding paragraph; (w) the defeasance, redemption, repurchase, acquisition or
retirement of subordinated Indebtedness with the net cash proceeds from an
incurrence of Permitted Refinancing Indebtedness or the substantially concurrent
sale (other than to a Subsidiary of the Company) of Equity Interests of the
Company (other than Disqualified Stock), provided that the amount of any such
net cash proceeds that are utilized for any such redemption, repurchase,
retirement or other acquisition shall be excluded from clause (c) (ii) of the
preceding paragraph; (x) the payment of Restricted Payments in an aggregate
amount not to exceed $3.0 million; (y) the exchange of Subordinated Notes for
Coast Resorts Common Stock; and (z) Investments in Hedging Obligations with
respect to Indebtedness otherwise permissible under this Indenture.
The amount of all Restricted Payments (other than cash) shall be the fair
market value (evidenced in the case of a Restricted Payment with a fair market
value in excess of $ 1.0 million by a resolution of the Board of Directors of
the Company set forth in an Officers' Certificate delivered to the Trustee) on
the date of the Restricted Payment of the asset(s) proposed to be transferred by
the Company or such Subsidiary, as the case may be, pursuant to the Restricted
Payment.
Section IV.8 Dividend and Other Payment Restrictions Affecting
Subsidiaries.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Subsidiary to:
(i) (a) pay dividends or make any other distributions to the Company or any of
its Subsidiaries (1) on its Capital Stock or (2) with respect to any other
interest or participation in, or measured by, its profits, or (b) pay any
Indebtedness owed to the Company or any of its Subsidiaries; (ii) make loans or
advances to the Company or any of its Subsidiaries; (iii) transfer any of its
properties or assets to the Company or any of its Subsidiaries; (iv) grant Liens
in favor of the Holders of the Notes under the Security Documents; or (v)
guaranty the Notes or any renewals or refinancings thereof, except for such
encumbrances or restrictions existing under or by reason of (A) Existing
Indebtedness as in effect on the date of this Indenture; (B) this Indenture and
the Notes; (C) applicable law; (D) any instrument of a Person acquired by the
Company or any of its Subsidiaries as in effect at the time of such acquisition
(except to the extent such Indebtedness was incurred in connection with or in
contemplation of such acquisition), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other than
the Person, or the property or assets of the Person, so acquired, provided that
the Consolidated Cash Flow of such Person is not taken into account in
determining whether such acquisition was permitted by the terms of this
Indenture; (E) by reason of customary restrictions on subletting or non-
assignment provisions in leases entered into in the ordinary course of business;
(F) Permitted Refinancing Indebtedness,
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provided that the restrictions contained in the agreements governing such
Permitted Refinancing Indebtedness are no more restrictive than those contained
in the agreements governing the Indebtedness being refinanced; (G) any
restrictions with respect to Capital Stock or assets, as the case may be, of a
Subsidiary of the Company imposed pursuant to an agreement that has been entered
into for the sale or disposition of all of the Capital Stock or all or
substantially all of the assets of such Subsidiary; (H) encumbrances and
restrictions no more restrictive than those contained in this Indenture and the
Collateral Documents arising in connection with Indebtedness permitted under
Section 4.9 hereof that is secured by a Pari Passu Lien; and (I) replacements of
restrictions imposed pursuant to clauses (A) through (H) that are no more
restrictive than those being replaced.
Section IV.9 Incurrence of Indebtedness and Issuance of Preferred Stock.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guaranty or otherwise
become directly or indirectly liable, contingently or otherwise (collectively,
"incur"), with respect to any Indebtedness (including Acquired Debt), and the
Company shall not issue any Disqualified Stock and shall not permit any of its
Subsidiaries to issue any shares of preferred stock; provided, however, that so
long as no Default has occurred and is continuing:
(i) the Company may incur or otherwise become directly or indirectly
liable for Indebtedness (including Acquired Debt) (and a Subsidiary of the
Company that is a Guarantor may guarantee on a subordinated basis such
Indebtedness) and the Company may issue shares of Disqualified Stock if (a)
such Indebtedness is expressly subordinated in right of payment to the
Notes, (b) the Fixed Charge Coverage Ratio of the Company for the Company's
most recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date on which such
additional Indebtedness is incurred or such Disqualified Stock is issued
would have been at least 2.0 to 1, determined on a pro forma basis
(including a pro forma application of the net proceeds therefrom), as if
the additional Indebtedness had been incurred, or the Disqualified Stock
had been issued, as the case may be, at the beginning of such four quarter
period, (c) the Weighted Average Life to Maturity of such Indebtedness or
Disqualified Stock is greater than the remaining Weighted Average Life to
Maturity of the Notes, and (d) the final maturity of such Indebtedness or
Disqualified Stock is not prior to the date on which the Notes mature; and
(ii) the Company may incur or otherwise become directly or indirectly
liable for Indebtedness (including Acquired Debt) (and a Subsidiary of the
Company that is a Guarantor may guarantee on a pari passu basis such
Indebtedness) if (a) such Indebtedness is unsecured and pari passu in right
of payment to the Notes, (b) the Fixed Charge Coverage Ratio of the Company
for the Company's most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the date
on which such additional Indebtedness is incurred would have been at least
2.25
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to 1, determined on a pro forma basis (including a pro forma application of
the net proceeds therefrom), as if the additional Indebtedness had been
incurred at the beginning of such four-quarter period, (c) the Weighted
Average Life to Maturity of such Indebtedness is greater than the remaining
Weighted Average Life to Maturity of the Notes, and (d) the final maturity
of such Indebtedness is not prior to the date on which the Notes mature.
So long as no Default has occurred and is continuing, the foregoing
provisions shall not apply to:
(i) working capital Indebtedness and letters of credit of the Company
(and any Guarantee thereof by a Subsidiary of the Company that is a Guarantor)
and Indebtedness represented by standby letters of credit or performance,
surety, appeal or other similar bonds on terms customary in the hotel-casino
industry, in each case to the extent incurred in the ordinary course of
business, in an aggregate principal amount at any time outstanding (with letters
of credit being deemed to have a principal amount equal to the maximum potential
liability of the Company and its Subsidiaries thereunder) not to exceed
(including the amount of any Permitted Refinancing Indebtedness applied to the
refinancing thereof) $20.0 million;
(ii) Indebtedness of the Company represented by Equipment Financing
(or as otherwise described below in this clause (ii)) incurred by the Company;
provided that the aggregate principal amount of Indebtedness outstanding at any
time pursuant to this clause (ii) shall not exceed (including the amount of any
Permitted Refinancing Indebtedness applied to the refinancing thereof) $30.0
million; provided, further, that following the date on which the Orleans is
Operating, up to $10.0 million of such Indebtedness may be used for the purpose
of purchasing or constructing improvements on the following real property used
in the business of the Company: (a) the parcel of real property leased by the
Company from Nevada Power Company on the date of the 1996 Indenture and (b) real
property not included in the Collateral as of the date of this Indenture, so
long as in any such case the Trustee, for the benefit of the Holders, is granted
a lien in such real property and improvements subordinate only to the lien of
such Indebtedness secured by such real property and improvements;
(iii) Permitted Sundance Indebtedness of the Company (and any
Guarantee thereof by a Subsidiary of the Company that is a Guarantor);
(iv) Existing Indebtedness;
(v) Indebtedness of the Company and the Guarantor represented by the
Notes, the 1996 Notes and the respective Guarantees thereof;
(vi) Permitted Refinancing Indebtedness of the Company in exchange
for, or the net proceeds of which are used to extend, refinance, renew, replace,
defease or refund Indebtedness that was permitted to be incurred pursuant to the
first paragraph of this covenant or
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by clauses (i), (ii), (iii), (iv), (v), (x) or this clause (vi) of this
paragraph;
(vii) intercompany Indebtedness between or among the Company and any
of its Wholly Owned Subsidiaries that is a Guarantor; provided, however, that
(i) any subsequent issuance or transfer of Equity Interests that results in any
such Indebtedness being held by a Person other than a Wholly Owned Subsidiary
that is a Guarantor and (ii) any sale or other transfer of any such Indebtedness
to a Person that is not either the Company or a Wholly Owned Subsidiary that is
a Guarantor shall be deemed, in each case, to constitute an incurrence of such
Indebtedness by the Company or such Subsidiary, as the case may be;
(viii) Indebtedness of the Company that is owed to any shareholder of
Coast Resorts or any Shareholder Related Party in an aggregate principal amount
at any time outstanding not to exceed $3.0 million; provided, however, that such
Indebtedness is expressly subordinated in right of payment to the Notes, the
Weighted Average Life to Maturity of such Indebtedness is greater than the
remaining Weighted Average Life to Maturity of the Notes and the final maturity
of such Indebtedness is not prior to the date on which the Notes mature;
(ix) Hedging Obligations of the Company with respect to any floating
rate
Indebtedness that is permitted by the terms of this Indenture to be outstanding;
(x) Permitted Barbary Coast Expansion Indebtedness of the Company (and
any Guarantee thereof by a Subsidiary of the Company that is a Guarantor)
incurred after the Orleans Hotel and Casino has become Operating; and
(xi) bond or surety obligations posted by the Company or any
Subsidiary of the Company in order to prevent the loss or material impairment of
or to obtain a Gaming License or as otherwise required by an order of any Gaming
Authority to the extent required by applicable law and consistent in character
and amount with customary industry practice.
If the Company or any Subsidiary of the Company incurs any Indebtedness
that may be secured by a Pari Passu Lien on the Pari Passu Collateral (a "Pari
Passu Debt"), upon the request of the Company, the Trustee is authorized to
enter into an intercreditor agreement with the holder or holders of such pari
passu Indebtedness (the "Pari Passu Debtholder") in substantially the form
thereof attached to the 1996 Indenture.
Section IV.10 Asset Sales.
(a) The Company shall not, and shall not permit any of its Subsidiaries to
consummate an Asset Sale unless (i) no Default or Event of Default exists or is
continuing immediately prior to or after giving effect to such Asset Sale; (ii)
the Company (or the Subsidiary, as the case may be) receives consideration at
the time of such Asset Sale at least equal to the fair market value (evidenced
by a resolution of the Board of Directors of the Company set forth in an
Officers' Certificate delivered to the Trustee) of the assets or Equity
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Interests issued or sold or otherwise disposed of and (iii) at least 80% of the
consideration therefor received by the Company or such Subsidiary is in the form
of Cash Equivalents; provided that each of (x) the amount of any liabilities (as
shown on the Company's or such Subsidiary's most recent balance sheet or in the
notes thereto) of the Company or any Subsidiary (other than liabilities that are
by their terms subordinated to the Notes or any Guarantee thereof) that are
assumed by the transferee of any such assets, (y) the amount of any notes or
other obligations received by the Company or any such Subsidiary from such
transferee that are immediately converted by the Company or such Subsidiary into
cash or as to which the Company or such Subsidiary has received at or prior to
the consummation of the Asset Sale a commitment from a nationally recognized
investment, merchant or commercial bank to convert into cash within 90 days of
the consummation of such Asset Sale unless not actually converted into cash
within such 90-day period (to the extent of the cash received or receivable
pursuant to any such commitment) and (z) an amount equal to the fair market
value (evidenced by a resolution of the Board of Directors of the Company set
forth in an Officers' Certificate delivered to the Trustee) of operating assets
to be used or useful in any business in which the Company or any Subsidiary is
permitted to engage pursuant to Section 4.13 hereof with respect to which the
Trustee has received a first priority fully perfected security interest (subject
to Permitted Liens and except to the extent not required pursuant to Section
10.01(c) hereof) will be deemed to be Cash Equivalents for purposes of this
provision. For purposes of the following paragraph and clause (iii) of this
paragraph, an Event of Loss suffered by the Company or any of its Subsidiaries
shall constitute an Asset Sale and the Company will be required to apply the Net
Proceeds from such Event of Loss as set forth below.
(b) Within 270 days after the receipt of any Net Proceeds from an Asset
Sale (including Net Proceeds from an Event of Loss, but excluding any Net
Proceeds from an Asset Sale of the Barbary Coast pursuant to Section 4.10(e)
hereof), the Company or any of its Subsidiaries may (i) apply an amount equal to
such Net Proceeds to the making of a capital expenditure or the acquisition of
other tangible assets, in each case, that is used or useful in any business in
which the Company or the relevant Subsidiary is permitted to be engaged pursuant
to Section 4.13 hereof, upon consummation of which the Trustee shall have
received a first priority fully perfected security interest (subject to
Permitted Liens and except to the extent not required pursuant to Section
10.1(c) hereof) in the property or assets acquired by the Company or its
Subsidiaries in connection therewith, (ii) contractually commit to apply such
Net Proceeds (within 540 days after the receipt thereof) to the payment of the
costs of construction or real property improvements of property used or useful
in any business in which the Company or the relevant Subsidiary is permitted to
be engaged pursuant to Section 4.13 hereof with respect to which the Trustee
shall have received a first priority fully perfected security interest (subject
to Permitted Liens and except to the extent not required pursuant to Section
10.1(c) hereof), or (iii) deem such Net Proceeds to have been applied to the
extent of any capital expenditure or acquisition made within 90 days preceding
the date of the Asset Sale of other tangible assets, in each case, that are used
or useful in any business in which the Company or the relevant Subsidiary is
permitted to be engaged pursuant to Section 4.13 hereof; provided, however, that
(a) any Net Proceeds from an Asset Sale of the Rancho Road Property may be used
by the
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Company for general corporate purposes at any time, and (b) if upon consummation
of an Asset Sale of all or substantially all of the assets used in the business
of the Barbary Coast the Company is required to make a Barbary Coast Offer under
the 1996 Indenture, to the extent that a portion of the 50% of the Net Proceeds
from such Asset Sale required to be used to make the Barbary Coast Offer remain
after making the Barbary Coast Offer pursuant to the 1996 Indenture, such
remaining portion of the Net Proceeds shall be used by the Company to make an
offer to all Holders of Notes to purchase Notes (the "10 7/8% Barbary Coast
Offer") in an amount equal to the maximum principal amount of Notes that may be
purchased with such remaining proceeds, at a price in cash equal to 105% of the
principal amount thereof, plus accrued and unpaid interest thereon to the date
of repurchase, in accordance with the procedures set forth in Section 3.10
hereof. Any portion of the Net Proceeds from such Asset Sale remaining after the
purchase of Notes pursuant to the 10 7/8% Barbary Coast Offer may be used by the
Company for general corporate purposes. Pending the final application (which,
for purposes of clause (ii) of the first sentence of this Section 4.10(b) shall
be deemed to occur upon payment of such Net Proceeds pursuant to the contractual
commitment referred to therein) of any such Net Proceeds (other than Net
Proceeds to be applied pursuant to the first proviso contained in the first
sentence of this Section 4.10(b)), the Company will invest such Net Proceeds in
Cash Equivalents held in an account in which the Trustee shall have a first
priority security interest (subject to Permitted Liens) for the benefit of the
Holders of Notes and the 1996 Notes and, if the Asset Sale or Event of Loss
relates to Pari Passu Collateral, the holders of any Indebtedness secured by
such Collateral on a pari passu basis with the Notes. Any Net Proceeds from
Asset Sales that are not applied, deemed applied or invested as provided in the
first sentence of this Section 4.10(b) (other than Net Proceeds from an Asset
Sale of the Rancho Road Property or the balance of the Net Proceeds from a sale
of all or substantially all of the assets used in the business of the Barbary
Coast not used to repurchase Notes, as contemplated in this Section 4.10(b))
will be deemed to constitute "Excess Proceeds." When the aggregate amount of
Excess Proceeds exceeds $5.0 million, the Company shall (i) make an offer to all
Holders of Notes to purchase Notes, and (ii) prepay, purchase or redeem (or make
an offer to do so) any other Indebtedness of the Company (including the 1996
Notes) ranking on a parity with the Notes and secured on a pari passu basis by
any Pari Passu Collateral from time to time outstanding with provisions
requiring the Company to prepay, purchase or redeem such Indebtedness with the
proceeds from any asset sales (or offer to do so), pro rata in proportion to the
respective principal amounts of the Notes and such other Indebtedness required
to be prepaid, purchased or redeemed or tendered pursuant to such offer (an
"Asset Sale Offer"), in an amount equal to the maximum principal amount of Notes
and such other Indebtedness that may be prepaid, purchased or redeemed out of
the Excess Proceeds, at a price in cash equal to 100% of the principal amount
thereof (or such higher price as may be provided with respect to such other
Indebtedness), plus accrued and unpaid interest, if any, thereon to the date of
repurchase, in accordance with the procedures set forth in Section 3.10 hereof.
To the extent that the aggregate amount of Notes and such other Indebtedness
tendered, prepaid, purchased or redeemed pursuant to an Asset Sale Offer is less
than the Excess Proceeds, the Company may use any remaining Excess Proceeds for
general corporate purposes. If the aggregate principal amount of Notes and such
other Indebtedness surrendered by holders thereof or required to be prepaid,
purchased or redeemed
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exceeds the amount of Excess Proceeds, the Trustee shall select the Notes to be
purchased in compliance with the requirements of the principal national
securities exchange, if any, on which the Notes are listed, or, if the Notes are
not so listed, on a pro rata basis (with such adjustments as may be deemed
appropriate by the Trustee so that only Notes in denominations of $1,000, or
integral multiples thereof, shall be purchased). Upon completion of such Asset
Sale Offer, the amount of Excess Proceeds shall be reset at zero.
(c) Notwithstanding the foregoing, the Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, make any Asset Sale
of any of the Capital Stock of a Subsidiary except pursuant to an Asset Sale of
all of the Capital Stock of such Subsidiary.
(d) For so long as Coast West is a Subsidiary of Coast Resorts and is a
Guarantor, Coast Resorts shall be prohibited from selling any Capital Stock of
Coast West.
(e) If, on the twentieth day of the month following the first month in
which the Orleans Hotel and Casino has been Operating for 18 months, the Fixed
Charge Coverage Ratio of the Company for the Company's most recently ended four
full fiscal quarters for which internal financial statements are available is
less than 1.5 to 1, the Company shall consummate an Asset Sale of the Barbary
Coast within one year thereafter which Asset Sale shall comply with Section
4.10(a) hereof. Upon consummation of such Asset Sale of the Barbary Coast, the
Company shall make an offer to all holders of 1996 Notes to purchase 1996 Notes
(the "Barbary Coast Mandatory Sale Offer") in an amount equal to the maximum
principal amount of 1996 Notes that may be purchased with the Net Proceeds from
such Asset Sale at a price in cash equal to 101% of the principal amount
thereof, plus accrued and unpaid interest and liquidated damages, if any,
thereon to the date of repurchase, in accordance with the procedures set forth
in Section 3.10 of the 1996 Indenture. To the extent that the aggregate amount
of 1996 Notes purchased pursuant to the Barbary Coast Mandatory Sale Offer is
less than the Net Proceeds from such Asset Sale, the Company shall make an offer
to all Holders of Notes to repurchase Notes (the "10 7/8% Barbary Coast
Mandatory Sale Offer") in an amount equal to the maximum principal amount of
Notes that may be purchased with any remaining Net Proceeds from such Asset Sale
remaining after the Barbary Coast Mandatory Sale Offer, at a price in cash equal
to 101% of the principal amount thereof, plus accrued and unpaid interest
thereon to the date of repurchase, in accordance with the procedures set forth
in Section 3.10 hereof. To the extent that the aggregate amount of Notes
purchased pursuant to the 10 7/8% Barbary Coast Mandatory Sale Offer is less
than the Net Proceeds from such Asset Sale remaining after the Barbary Coast
Mandatory Sale Offer, the Company may use any such remaining Net Proceeds for
general corporate purposes.
(f) The Company shall comply with the requirements of Rule l4e-1
promulgated under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of the Notes as a result of an Asset Sale.
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Section IV.11 Transactions with Affiliates.
The Company shall not, and shall not permit any of its Subsidiaries to,
sell, lease, transfer or otherwise dispose of any of its properties or assets
to, or purchase any property or assets from, or enter into or make any contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each of the foregoing, an "Affiliate Transaction"), unless:
(i) such Affiliate Transaction is on terms that are no less favorable to the
Company or the relevant Subsidiary than those that would have been obtained in a
comparable transaction by the Company or such Subsidiary with an unrelated
Person or, if such transaction is not one which by its nature could be obtained
from such an unrelated Person, is on fair and reasonable terms and was
negotiated in good faith and (ii) the Company delivers to the Trustee (a) with
respect to any Affiliate Transaction involving aggregate consideration in excess
of $1.0 million, a resolution of the Board of Directors of the Company set forth
in an Officers' Certificate certifying that such Affiliate Transaction complies
with clause (i) above and that such Affiliate Transaction has been approved by a
majority of (1) the disinterested members of the Board of Directors of the
Company and (2) the Independent Directors and (b) with respect to any Affiliate
Transaction involving aggregate consideration in excess of $7.5 million, an
opinion as to the fairness to the Company or such Subsidiary of such Affiliate
Transaction from a financial point of view issued by an investment banking firm
of national standing; provided that (w) any employment or related agreement or
arrangement entered into by the Company or any of its Subsidiaries in the
ordinary course of business on terms customary in the hotel-casino industry, (x)
transactions between or among the Company and/or its Subsidiaries, (y)
transactions permitted by Section 4.07 hereof, and (z) customary directors' fees
and indemnities, in each case, shall not be deemed Affiliate Transactions.
Section IV.12 Liens.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly create, incur, assume or suffer to exist any Lien on any
asset now owned or hereafter acquired, or any income or profits therefrom, or
assign or convey any right to receive income therefrom, except Permitted Liens.
Section IV.13 Line of Business.
The Company shall not, and shall not permit any of its Subsidiaries to,
engage in any business other than the gaming and hotel businesses and such
business activities as are incidental or related thereto.
Section IV.14 Corporate Existence.
Subject to Article 5, Article 11 and Section 4.10 hereof, as the case may
be, the Company and the Guarantor shall do or cause to be done all things
necessary to preserve and keep in full force and effect (i) its corporate
existence, and the corporate, partnership or other existence of
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each of its Subsidiaries, in accordance with the respective organizational
documents (as the same may be amended from time to time) of the Company, any
such Guarantor or any such Subsidiary and (ii) the rights (charter and
statutory), licenses and franchises of the Company, the Guarantor and their
respective Subsidiaries; provided, however, that the Company and the Guarantor
shall not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any of their respective
Subsidiaries, if the Board of Directors of the Company shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company, the Guarantor and their Subsidiaries, taken as a whole, and that
the loss thereof is not adverse in any material respect to the Holders of the
Notes.
Section IV.15 Change of Control.
Upon the occurrence of a Change of Control, the Company shall make an offer
(the "Change of Control Offer") to each Holder of Notes to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of such Holder's Notes at
an offer price in cash equal to 101% of the aggregate principal amount thereof
plus accrued and unpaid interest thereon to the date of purchase (the "Change of
Control Payment").
Within 20 days following any Change of Control, the Company shall mail (or
cause the Trustee to mail) a notice to each Holder stating:
(a) that the Change of Control Offer is being made pursuant to this Section
4.15 and that all Notes tendered shall be accepted for payment;
(b) the purchase price and the purchase date, which shall be no later than
30 Business Days from the date such notice is mailed (the "Change of Control
Payment Date");
(c) that any Note not tendered or accepted for payment shall continue to
accrue interest;
(d) that, unless the Company defaults in making the Change of Control
Payment, any Note accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest after the Change of Control Payment Date;
(e) that Holders whose Notes are being purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered, which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof;
(f) that Holders electing to have a Note purchased pursuant to a Change of
Control Offer shall be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, or
transfer by book entry transfer, to the Company, a Depositary, if appointed by
the Company, or a Paying Agent at the address specified in the notice prior to
the close of business on the second Business Day preceding the Change of
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Control Payment Date;
(g) that Holders shall be entitled to withdraw their election if the
Company, the Depositary or the Paying Agent, as the case may be, receives, not
later than the close of business on the 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 Notes the Holder
delivered for purchase and a statement that such Holder is withdrawing his
election to have such Note purchased; and
(h) the circumstances and relevant facts regarding such Change of Control
(including, but not limited to, information with respect to pro forma historical
financial information after giving effect to such Change of Control, information
regarding the Person or Persons acquiring control and such Person's or Persons'
business plans going forward) and any other information that would be material
to a decision as to whether to tender a Note pursuant to the Change of Control
Offer.
The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change of Control.
On the Change of Control Payment Date, the Company shall, to the extent
lawful, (i) accept for payment all Notes or portions thereof properly tendered
pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent an
amount equal to the Change of Control Payment in respect of all Notes or
portions thereof so tendered and (iii) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail to each Holder of Notes so
tendered the Change of Control Payment for such Notes, and the Trustee shall
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided that each such new Note shall be in a
principal amount of $1,000 or an integral multiple thereof. The Company shall
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
Section IV.16 Limitation on Issuances and Sales of Capital Stock of Wholly
Owned Subsidiaries.
The Company (i) shall not, and shall not permit any Wholly Owned Subsidiary
of the Company to, transfer, convey, sell, lease or otherwise dispose of any
Capital Stock of any Wholly Owned Subsidiary of the Company to any Person (other
than the Company or a Wholly Owned Subsidiary of the Company), unless (a) such
transfer, conveyance, sale, lease or other disposition is of all the Capital
Stock of such Wholly Owned Subsidiary and (b) the Net Proceeds from such
transfer, conveyance, sale, lease or other disposition are applied in accordance
with
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Section 4.10 hereof, and (ii) shall not permit any Wholly Owned Subsidiary of
the Company to issue any of its Equity Interests (other than, if necessary,
shares of its Capital Stock constituting directors' qualifying shares) to any
Person other than to the Company or a Wholly Owned Subsidiary of the Company.
Section IV.17 Subsidiary Guarantees.
If (i) the Company or any of its Subsidiaries shall, after the date of this
Indenture, transfer or cause to be transferred, in one or a series of
transactions (whether or not related), any assets, businesses, divisions, real
property or equipment having an aggregate fair market value (as determined in
good faith by the Board of Directors of the Company) in excess of $250,000 to
any Subsidiary that is not a Guarantor, or if the Company or any of its
Subsidiaries shall acquire another Subsidiary having total assets with an
aggregate fair market value (as determined in good faith by the Board of
Directors of the Company) in excess of $250,000, or (ii) the Company elects to
cause any Subsidiary of the Company that is not a Guarantor to become a
Guarantor, then such transferee or Subsidiary shall execute a supplemental
indenture in form and substance substantially satisfactory to Trustee, providing
for the Guarantee of the Obligations under the Notes, this Indenture and the
Security Documents on the terms set forth therein, and deliver to the Trustee an
Opinion of Counsel, in form reasonably satisfactory to the Trustee, that such
supplemental indenture and supplemental Security Documents, if any, have been
duly executed and delivered and are the valid, binding and enforceable
Obligations of such Subsidiary; provided, however, that the aggregate fair
market value (as determined in good faith by the Board of Directors of the
Company) of the assets of Subsidiaries of the Company that is not a Guarantor
shall not at any time exceed $1.0 million.
Section IV.18 Maintenance of Insurance.
On the date of this Indenture, and at all times hereafter, the Company and
each of its Subsidiaries shall have in effect customary comprehensive general
liability, property and casualty and business interruption insurance, in each
case on such terms and in such amounts as are customarily carried by similar
businesses and in any event which are no less favorable to the Company and its
Subsidiaries than those in effect on the date of this Indenture.
Section IV.19 Limitation on Status as Investment Company.
None of the Company or any of its Subsidiaries shall become subject to
registration as an "investment company" (as that term is defined in the
Investment Company Act of 1940, as amended), or otherwise become subject to
regulation under the Investment Company Act of 1940.
Section IV.20 Further Assurances.
The Company shall (and shall cause each of its Subsidiaries to) execute,
acknowledge,
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deliver, record, re-record, file, re-file, register and re-register, any and all
such further acts, deeds, conveyances, security agreements, mortgages,
assignments, estoppel certificates, financing statements and continuations
thereof, termination statement, notices of assignment, transfers, certificates,
assurances and other instruments as may be required from time to time in order
(i) to carry out more effectively the purposes of the Security Documents, (ii)
to subject to the Liens created by any of the Security Documents any of the
properties, rights or interests required to be encumbered thereby, (iii) to
perfect and maintain the validity, effectiveness and priority of any of the
Security Documents and the Liens intended to be created thereby, and (iv) to
better assure, convey, grant, assign, transfer, preserve, protect and confirm to
the Trustee any of the rights granted or nor or hereafter intended by the
parties thereto to be granted to the Trustee or under any other instrument
executed in connection therewith or granted to the Company under the Security
Documents or under any other instrument executed in connection therewith.
Section IV.21 Limitations on Activities of Coast West.
Prior to Coast West becoming a Wholly Owned Subsidiary of the Company, the
Guarantor shall cause Coast West to make all Coast West Lease Payments on a
timely basis and shall cause Coast West not to conduct any business or
investment activities whatsoever (including without limitation, issuing any
Equity Interests, making any Investments, incurring any Indebtedness or making
any payments or taking any actions which, if made or taken by the Company, would
constitute Restricted Payments) other than (a) to be the tenant under the Coast
West Lease and to do all things necessary or incident thereto, including without
limitation, making the Coast West Lease Payments and to do or cause to be done
all things necessary to protect the property subject to the Coast West Lease and
to preserve its rights therein, (b) to issue and pay the promissory notes, if
any, described in clause (vi) of the definition of "Permitted Investments," (c)
activities related to the planning and future development of the Sundance,
including without limitation (1) the conduct of feasibility, engineering,
environmental and other studies relating to the Sundance and (2) the negotiation
of licenses, permits, financing commitments, architect's, construction and other
contracts and other documents and matters relating to the development, planning
and construction of the Sundance, (d) to be a Guarantor (as defined in the 1996
Indenture) of the 1996 Notes pursuant to the 1996 Indenture and to do all things
necessary thereto, including without limitation to comply with its obligations
under the Security Documents (as defined in the 1996 Indenture) and (e)
activities incidental or related to any of the foregoing, including without
limitation (1) the payment of taxes, wages, fees and accounts payable, (2) the
receipt of funds from Coast Resorts in the form of capital contributions, (3)
the investment of funds in Cash Equivalents pending application to any of the
foregoing, and (4) the preparation of financial statements and other reports.
Section IV.22 No Amendment to Subordination Provisions.
Without the consent of each Holder of Notes outstanding, the Company shall
not amend, modify or alter the Subordinated Notes in any way that shall (i)
increase the rate of or change the time for payment of interest on any
Subordinated Notes, (ii) increase the principal of, advance
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the final maturity date of or shorten the Weighted Average Life to Maturity of
any Subordinated Notes, (iii) alter the prepayment provisions or add provisions
requiring the Company to redeem or offer to purchase such Subordinated Notes or
(iv) amend the provisions of the third paragraph of the Subordinated Notes
(which relates to subordination) or the provisions of the Subordination
Agreements by and between Gold Coast Partnership and each holder of Subordinated
Notes.
Section IV.23 Limitations on Use of Proceeds.
The Company shall cause the net proceeds from the sale of the Notes to be
used for working capital purposes.
Section IV.24 Payments for Consent.
Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to (i) any holder of any 1996 Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of the 1996 Indenture or the 1996 Notes, or (ii) any Holder of any Notes for or
as an inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Notes, unless any such consideration paid or
caused to be paid pursuant to clauses (i) or (ii) above is offered to be paid or
agreed to be paid to all Holders of the Notes.
ARTICLE V.
SUCCESSORS
Section V.1 Merger, Consolidation or Sale of Assets.
The Company shall not consolidate or merge with or into (whether or not the
Company is the surviving corporation), or sell, assign, transfer, lease, convey
or otherwise dispose of all or substantially all of its properties or assets in
one or more related transactions, to another corporation, Person or entity
unless (i) the Company is the surviving corporation or the entity or the Person
formed by or surviving any such consolidation or merger (if other than the
Company) or to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made is a corporation organized or existing under
the laws of the United States, any state thereof or the District of Columbia;
(ii) the entity or Person formed by or surviving any such consolidation or
merger (if other than the Company) or the entity or Person to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made assumes all the obligations of the Company under the Notes, this Indenture
and the Security Documents pursuant to a supplemental indenture or other
documents or instruments in a form reasonably satisfactory to the Trustee; (iii)
immediately prior to or after such transaction no Default or Event of Default
exists; and (iv) the Company or the entity or Person formed by or surviving any
such consolidation or merger (if other than the Company), or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made (A) shall have Consolidated Net Worth immediately after the transaction
equal to or greater than the Consolidated Net Worth of
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the Company immediately preceding the transaction and (B) shall, at the time of
such transaction and after giving pro forma effect thereto as if such
transaction had occurred at the beginning of the applicable four-quarter period,
be permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in clause (i) of the first paragraph
of Section 4.09 hereof.
Section V.2 Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the assets of the
Company in accordance with Section 5.1 hereof, the successor corporation formed
by such consolidation or into or with which the Company is merged or to which
such sale, assignment, transfer, lease, conveyance or other disposition is made
shall succeed to, and be substituted for (so that from and after the date of
such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor Person and not to the Company), and may exercise every right and
power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; provided, however, that
(i) the Company has delivered to the Trustee an Officers' Certificate and
Opinion of Counsel, subject to customary assumptions and exclusions, stating
that the proposed transaction complies with this Indenture and (ii) such
successor Person shall have been issued, or have a consolidated Subsidiary that
has been issued, Gaming Licenses to operate the acquired casino operations and
entities substantially in the manner and scope operated prior to such
transaction, which Gaming Licenses are in full force and effect; provided
further, however, that the predecessor Company shall not be relieved from the
obligation to pay the principal of and interest on the Notes except in the case
of a sale of all of the Company's assets that meets the requirements of Section
5.1 hereof.
ARTICLE VI.
DEFAULTS AND REMEDIES
Section VI.1 Event of Default.
An Event of Default occurs if:
(i) the Company defaults in the payment when due of interest on the
Notes and such default continues for a period of 30 days;
(ii) the Company defaults in the payment when due of principal of or
premium, if any, on the Notes when the same becomes due and payable at
maturity, upon redemption (including in connection with an offer to
purchase) or otherwise;
(iii) the Company fails to comply with any of the provisions of
Sections 4.7, 4.9, 4.10, 4.12, 4.15 or 4.23 or 5.1 hereof;
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(iv) the Company fails to comply with any of its other agreements or
covenants in, or provisions of, this Indenture or the Notes for the period
and after the notice specified below;
(v) a default occurs 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 the Company or any of its Subsidiaries
(or the payment of which is guaranteed by the Company or any of its
Subsidiaries) whether such Indebtedness or Guarantee now exists, or is
created after the date of this Indenture, which default (a) is caused by a
failure, to pay principal of or premium, if any, or interest on such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "Payment Default") or (b)
results in the acceleration of such Indebtedness prior to its express
maturity and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under
which there has been a Payment Default or the maturity of which has been so
accelerated, aggregates $5.0 million or more;
(vi) except as permitted herein, any Note Guarantee shall be held in
any judicial proceeding to be unenforceable or invalid or shall cease for
any reason to be in full force and effect or any Guarantor, or any Person
acting on behalf of any Guarantor, shall deny or disaffirm its obligations
under its Note Guarantee;
(vii) a final judgment or final judgments for the payment of money
are entered by a court or courts of competent jurisdiction against the
Company or any of its Significant Subsidiaries or any group of Subsidiaries
that, taken as a whole, would constitute a Significant Subsidiary and such
judgment or judgments are not paid, discharged or stayed for a period of 60
days; provided that the aggregate of all such judgments exceeds $5.0
million;
(viii) the Company or any Guarantor breaches any material
representation or warranty set forth in the Security Documents, or, subject
to the grace periods set forth in the applicable Security Documents, the
Company or any Guarantor defaults in the performance of any covenant set
forth in the Security Documents and, if no grace periods are set forth
therein, 45 days (minus one day for every day the Company knowingly fails
to give any notice required pursuant to Section 4.4(c) hereof with respect
to such default) shall have expired from the date that the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes
shall have given notice thereof to the Company or the relevant Guarantor or
the Company or any Guarantor repudiates its obligations under the Security
Documents or the Security Documents become unenforceable against the
Company or any Guarantor for any reason except pursuant to Section 10.3
hereof;
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(ix) the Company or any of its Significant Subsidiaries or any group
of Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary, pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in
an involuntary case,
(C) consents to the appointment of a Custodian of it or for
all or substantially all of its property,
(D) makes a general assignment for the benefit of its creditors,
or
(E) generally is not paying its debts as they become due; or
(x) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary or for all or substantially
all of the property of the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary; or
(C) orders the liquidation of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive
days; or
(xi) there is any revocation, termination, suspension or other
cessation of effectiveness of any Gaming License which results in the
cessation or suspension of gaming operations at any of the Gold Coast,
Barbary Coast or Orleans Hotel and Casino (following its commencement of
operations) for a period of more than 90 consecutive days.
A Default under clause (iv) is not an Event of Default until the Trustee
notifies the Company, or the Holders of at least 25% in principal amount of the
then outstanding Notes
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notify the Company and the Trustee, of the Default and the Company does not cure
the Default within 45 days after receipt of the notice. The notice must specify
the Default, demand that it be remedied and state that the notice is a "Notice
of Default."
Section VI.2 Acceleration.
(a) If any Event of Default (other than an Event of Default specified in
clause (ix) or (x) of Section 6.1 hereof with respect to the Company or any of
its Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary), occurs and is continuing, the
Trustee or the Holders of at least 40% in principal amount of the then
outstanding Notes may declare the principal, premium, if any, interest and any
other monetary obligations on all of the Notes to be due and payable
immediately. Upon any such declaration, the principal, premium, if any,
interest and any other monetary obligations on the Notes shall be due and
payable immediately. Notwithstanding the foregoing, if an Event of Default
specified in clause (ix) or (x) of Section 6.1 hereof occurs with respect to the
Company or any of its Significant Subsidiaries or any group of Subsidiaries
that, taken as a whole, would constitute a Significant Subsidiary of the
Company, the principal, premium, if any, interest any other monetary obligations
on all of the outstanding Notes shall be due and payable immediately without
further action or notice. The Holders of a majority in aggregate principal
amount of the then outstanding Notes by written notice to the Trustee may on
behalf of all of the Holders rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default (except nonpayment of principal, interest or premium that has
become due solely because of the acceleration) have been cured or waived.
(b) Notwithstanding paragraph (a) of this Section 6.2, the Trustee shall
have no obligation to accelerate the Notes if in the best judgment of the
Trustee acceleration is not in the best interest of the Holders of the Notes.
Section VI.3 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal, premium, if any, and
interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
Section VI.4 Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of the
then outstanding
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Notes by notice to the Trustee may on behalf of the Holders of all of the Notes
waive an existing Default or Event of Default and its consequences hereunder,
except a continuing Default or Event of Default in the payment of the principal
of, premium, if any, or interest on, the Notes (including in connection with an
offer to purchase) (provided, however, that the Holders of a majority in
aggregate principal amount of the then outstanding Notes may rescind an
acceleration and its consequences, including any related payment default that
resulted from such acceleration). Upon any such waiver, such Default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to have
been cured for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereon.
Section VI.5 Control by Majority.
Holders of a majority in principal amount of the then outstanding Notes may
direct the time, method and place of conducting any proceeding for exercising
any remedy available to the Trustee or exercising any trust or power conferred
on it, including the exercise of any remedy under the Security Documents.
However, the Trustee may refuse to follow any direction that conflicts with law
or this Indenture that the Trustee determines may be unduly prejudicial to the
rights of other Holders of Notes or that may involve the Trustee in personal
liability.
Section VI.6 Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this Indenture or
the Notes only
(i) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default or the Trustee receives such notice from the
Company;
(ii) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(iii) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee
against any loss, liability or expense;
(iv) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(v) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request; provided, however, that the foregoing
provision does not effect the right of a Holder to xxx for enforcement of
any overdue payment thereon.
A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note.
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Section VI.7 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and interest on the
Note, on or after the respective due dates expressed in the Note (including in
connection with an offer to purchase), or to bring 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.
Section VI.8 Collection Suit by Trustee.
If an Event of Default specified in clause (i) or (ii) of Section 6.1
hereof occurs and is continuing, the Trustee is authorized to recover judgment
in its own name and as trustee of an express trust against the Company or any
Guarantor for the whole amount of principal of, premium and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
Section VI.9 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes, including the Guarantor), its creditors or
its property and shall be entitled and empowered to collect, receive and
distribute any money or other property payable or deliverable on any such claims
and any custodian in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.7 hereof. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.7 hereof out of the estate in any such proceeding, shall be denied for
any reason, payment of the same shall be secured by a Lien on, and shall be paid
out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.
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Section VI.10 Priorities.
If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.7 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes for
principal, premium and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for principal,
premium and interest, respectively; and
Third: to the Company or to such party as a court of competent jurisdiction
shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section VI.11 Undertaking For Costs.
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 or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder of
a Note pursuant to Section 6.7 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
Section VI.12 Management of Casinos.
Notwithstanding any provision of this Article 6 to the contrary, following
an Event of Default that permits the taking of possession of any Casino that
constitutes Collateral by the Trustee or the appointment of a receiver of either
the Collateral or any part thereof pursuant to the Deed of Trust, or after such
taking of possession or such appointment, the Trustee or any such receiver shall
be authorized, in addition to the rights and powers of the Trustee and such
receiver set forth elsewhere in this Indenture and the Security Documents, to
retain one or more experienced operators of Casinos to manage such Casino on
behalf of the Holders of Notes; provided, however, that any such operator shall
have all necessary legal qualifications, including all Gaming Licenses to manage
such Casino.
Section VI.13 Intercreditor Agreement.
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Notwithstanding anything herein to the contrary, all rights and remedies of
the Holders of the Notes under this Article VI (including the application of
proceeds pursuant to Section 6.10) are expressly subject to the terms and
conditions of the Intercreditor Agreement with the trustee for the holders of
the 1996 Notes, which shall be substantially in the form of Exhibit B-1 (the
"1996 Note Intercreditor Agreement"), as well as any other Intercreditor
Agreement that may be entered into after the date hereof.
ARTICLE VII.
TRUSTEE
Section VII.1 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
the Security Documents, and use the same degree of care, and skill in its
exercise, as of a prudent person, would exercise or use under the circumstances
in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Security Documents and the
Trustee need perform only those duties that are specifically set forth in
this Indenture and the Security Documents and no others, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture and the
Security Documents. However, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the requirements
of this Indenture and the Security Documents.
(c) The Trustee may not be relieved from liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) this paragraph (c) does not limit the effect of paragraph (b) of
this Section 7.1;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
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(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.5 hereof.
(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b) and (c) of this Section 7.1.
(e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company or the Guarantor.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
(g) Except with respect to Section 4.1 hereof, the Trustee shall have no
duty to inquire as to the performance of the Company's covenants in Article Four
hereof. In addition, the Trustee shall not be deemed to have knowledge of any
Default or Event of Default except (i) any Event of Default occurring pursuant
to clause (i) or (ii) of Section 6.1 hereof or (ii) any Default of Event of
Default of which the Trustee shall have received written notification or
obtained actual knowledge.
Section VII.2 Rights of Trustee.
(a) The Trustee may conclusively rely upon any document believed by it to
be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in-
reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
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(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company or any Guarantor shall be
sufficient if signed by an Officer of the Company or such Guarantor.
(f) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction.
Section VII.3 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Company or any Affiliate of the
Company with the same rights it would have if it were not Trustee. However, in
the event that the Trustee acquires any conflicting interest it must eliminate
such conflict within 90 days, apply to the SEC for permission to continue as
trustee or resign. Any Agent may do the same with like rights and duties. The
Trustee is also subject to Sections 7.10 and 7.11 hereof.
Section VII.4 Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
Section VII.5 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mad to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium, if any, or
interest on any Note, the Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders of the Notes.
Section VII.6 Reports by Trustee to Holders of the Notes.
(a) Subject to Section 1.5, to the extent required by the TIA, on each May
15 beginning with the May 15 following the date of this Indenture, and for so
long as Notes remain outstanding, the Trustee shall mail to the Holders of the
Notes a brief report dated as of such
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reporting date that complies with TIA (S) 313(a) (but if no event described in
TIA (S) 313(a) has occurred within the twelve months preceding the reporting
date, no report need be transmitted). The Trustee also shall comply with TIA (S)
313(b)(2). The Trustee shall also transmit by mail all reports as required by
TIA (S) 313(c).
(b) Subject to Section 1.5, to the extent required by the TIA, a copy of
each report at the time of its mailing to the Holders of Notes shall be mailed
to the Company and filed with the SEC and each stock exchange on which the Notes
are listed in accordance with TIA (S) 313(d). The Company shall promptly notify
the Trustee when the Notes are listed on any stock exchange.
(c) At the expense of the Company, the Trustee or, if the Trustee is not
the Registrar, the Registrar, shall report the names of record holders of the
Notes to any Gaming Authority when requested to do so by the Company.
(d) At the express direction of the Company and at the Company's expense,
the Trustee shall provide any Gaming Authority with:
(i) copies of all notices, reports and other written communications
which the Trustee gives to Holders;
(ii) a list of all of the Holders promptly after the original issuance
of the Notes and periodically thereafter if the Company so directs;
(iii) notice of any Default under this Indenture, any acceleration of
the Indebtedness evidenced hereby, the institution of any legal actions or
proceedings before any court or governmental authority in respect of a
Default or Event of Default hereunder;
(iv) notice of the removal or resignation of the Trustee within five
Business Days of the effectiveness thereof;
(v) notice of any transfer or assignment of rights under this
Indenture or the Note Guarantees known to the Trustee within five Business
Days thereof; and
(vi) a copy of any amendment to the Notes or this Indenture within
five Business Days of the effectiveness thereof;
(e) To the extent requested by the Company and at the Company's expense,
the Trustee shall cooperate with any Gaming Authority in order to provide such
Gaming Authority with the information and documentation requested and as
otherwise required by applicable law.
Section VII.7 Compensation and Indemnity.
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(a) The Company shall reimburse the Trustee promptly upon request for all
reasonable disbursements, advances and expenses incurred or made by it in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee's agents and
counsel.
(b) The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, including the
costs and expenses of enforcing this Indenture against the Company (including
this Section 7.7) and defending itself against any claim (whether asserted by
the Company or any Holder or any other person) or liability in connection with
the exercise or performance of any of its powers or duties hereunder, except to
the extent any such loss, liability or expense may be attributable to its
negligence or bad faith. The Trustee shall notify the Company promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify the
Company shall not relieve the Company of its obligations hereunder. The Company
shall defend the claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Company shall pay the reasonable fees
and expenses of such counsel. The Company need not pay for any settlement made
without its consent, which consent shall not be unreasonably withheld.
(c) The obligations of the Company under this Section 7.7 shall survive the
satisfaction and discharge of this Indenture.
(d) To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.
(e) When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(ix) or (x) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
(f) The Trustee shall comply with the provisions of TIA (S) 313(b)(2) to
the extent applicable.
Section VII.8 Replacement of Trustee.
(a) A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment and taking of office as provided in this Section 7.8.
(b) The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of a majority
in principal amount of
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the then outstanding Notes may remove the Trustee by so notifying the Trustee
and the Company in writing. The Company may remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10 hereof;
(ii) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief
is entered with respect to the Trustee under any Bankruptcy Law;
(iii) a Custodian or public officer takes charge of the Trustee or
its property; or
(iv) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall. promptly appoint a
successor Trustee. For up to one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
(d) If any Gaming Authority requires a Trustee to be approved, licensed or
qualified and the Trustee fails or declines to do so, such approval, license or
qualification shall be obtained upon the request of, and at the expense of, the
Company unless the Trustee declines to do so, or, if the Trustee's relationship
with either the Company or the Guarantor may, in the Company's discretion,
jeopardize any material gaming license or franchise or right or approval granted
thereto, the Trustee shall resign, and, in addition, the Trustee may at its
option resign if the Trustee in its sole discretion determines not to be so
approved, licensed or qualified.
(e) If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the then outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(f) If the Trustee, after written request by any Holder of a Note who has
been a Holder of a Note for at least six months, fails to comply with Section
7.10 hereof, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
(g) A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, 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. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, provided
all sums owing to the Trustee hereunder have been paid and subject to the Lien
provided for in Section 7.7 hereof. Notwithstanding
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replacement of the Trustee pursuant to this Section 7.8, the Company's
obligations under Section 7.7 hereof shall continue for the benefit of the
retiring Trustee.
Section VII.9 Successor Trustee by Merger, Etc.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Trustee;
provided such corporation shall be otherwise eligible and qualified under this
Article.
Section VII.10 Eligibility; Disqualification.
(a) There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $50 million
as set forth in its most recent published annual report of condition.
(b) Subject to Section 1.5, (i) this Indenture shall always have a Trustee
who satisfies the requirements of TIA (S) 310(a)(1), (2) and (5), and (ii) the
Trustee is subject to TIA (S) 310(b).
Section VII.11 Preferential Collection of Claims Made Against Company.
Subject to Section 1.5, (i) the Trustee is subject to TIA (S) 311 (a),
excluding any creditor relationship listed in TIA (S) 311 (b), and (ii) a
Trustee who has resigned or been removed shall be subject to TIA (S) 311 (a) to
the extent indicated therein.
ARTICLE VIII.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section VIII.1 Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate delivered to the Trustee, at
any time, elect to have either Section 8.2 or 8.3 hereof be applied to all
outstanding Notes upon compliance with the conditions set forth below in this
Article 8.
Section VIII.2 Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.2, the Company and the Guarantor shall, subject to
the satisfaction of the conditions set forth in Section 8.4 hereof, be deemed to
have been discharged from their respective obligations with respect to all
outstanding Notes and any Note Guarantees on the date the conditions set forth
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below are satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal
Defeasance means that the Company shall be deemed to have paid and discharged
the entire Indebtedness represented by the outstanding Notes, which shall
thereafter be deemed to be "outstanding" only for the purposes of Section 8.5
hereof and the other Sections of this Indenture referred to in clauses (i) and
(ii) below, and to have satisfied all its other obligations under such Notes and
this Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following provisions, which shall survive until otherwise terminated or
discharged hereunder: (i) the rights of Holders of outstanding Notes to receive
solely out of the trust fund described in Section 8.4 hereof, and as more fully
set forth in such Section, payments in respect of the principal of, premium and
interest on such Notes when such payments are due, (ii) the Company's and any
Guarantor's obligations with respect to the Notes under Article 2 and Section
4.2 hereof, (iii) the rights, powers, trusts, duties and immunities of the
Trustee hereunder, and the Company's obligations in connection therewith and
(iv) this Article 8. Subject to compliance with this Article 8, the Company may
exercise its option under this Section 8.2 notwithstanding the prior exercise of
its option under Section 8.3 hereof.
Section VIII.3 Covenant Defeasance.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.3, the Company and the Guarantor shall, subject to
the satisfaction of the conditions set forth in Section 8.4 hereof, be released
from their obligations under the covenants contained in Sections 4.3(a), 4.4,
4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17, 4.18, 4.19, 4.20, 4.21,
4.22, 4.23, 4.24, and Article 5 hereof with respect to the outstanding Notes and
Note Guarantees on and after the date the conditions set forth below are
satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall thereafter
be deemed not "outstanding" for the purposes of any direction, waiver, consent
or declaration or act of Holders of the Notes (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes shall not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding Notes,
the Company and the Guarantor may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section 6.1
hereof, but, except as specified above, the remainder of this Indenture and such
Notes and Note Guarantees shall be unaffected thereby. In addition, upon the
Company's exercise under Section 8.1 hereof of the option applicable to this
Section 8.3, subject to the satisfaction of the conditions set forth in Section
8.4 hereof, clauses (iii), (iv) (v), (vii), (viii), (xi) and (xii) of Section
6.1 hereof shall not constitute Events of Default.
Section VIII.4 Conditions to Legal or Covenant Defeasance.
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(a) The following shall be the conditions to the application of either
Section 8.2 or 8.3 hereof to the outstanding Notes:
(i) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders of the Notes, cash in United States dollars,
non-callable Government Securities, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants, to pay the principal of, premium,
if any, and interest, due on the outstanding Notes on the stated date for
the payment thereof or on the applicable redemption date, as the case may
be, and the Company must specify whether the Notes are being defeased to
maturity or to a particular redemption date.
(ii) in the case of an election under Section 8.2 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that (A) the Company
has received from, or there has been published by, the United States
Internal Revenue Service a ruling or (B) since the date of this Indenture,
there has been a change in the applicable U.S. federal income tax law, in
either case to the effect that, and based thereon such Opinion of Counsel
shall confirm, that the Holders of the outstanding Notes will not recognize
income, gain or loss for U.S. federal income tax purposes as a result of
such Legal Defeasance and will be subject to U.S. federal income tax on the
same amounts, in the same manner and at the same times as would have been
the case if such Legal Defeasance had not occurred;
(iii) in the case of an election under Section 8.3 hereof, the
Company shall. have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that the
Holders of the outstanding Notes will not recognize income, gain or loss
for U.S. federal income tax purposes as a result of such Covenant
Defeasance and will be subject to such tax on the same amounts, in the same
manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(iv) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the incurrence of Indebtedness, all or a portion of
the proceeds of which will be used to defease the Notes pursuant to this
Article 8 concurrently with such incurrence) or insofar as Sections 6.1(ix)
or 6.1(x) hereof is concerned, at any time in the period ending on the 91st
day after the date of deposit;
(v) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any material
agreement or instrument (other than this Indenture) to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
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(vi) the Company shall have delivered to the Trustee an Opinion of
Counsel in the United States to the effect that after the 91st day
following the deposit, the trust funds will not be subject to the effect of
any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally;
(vii) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company or
with the intent of defeating, hindering, delaying or defrauding any
creditors of the Company or others; and
(viii) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel in the United States each stating
that all conditions precedent provided for or relating to the Legal
Defeasance or the Covenant Defeasance have been complied with.
Section VIII.5 Deposited Money and government Securities to be Held in
Trust; Other Miscellaneous Provisions.
(a) Subject to Section 8.6 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.5, the
"Trustee") pursuant to Section 8.4 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent required
by law.
(b) The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.4 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
(c) Anything in this Article 8 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 8.4 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.4(a) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section VIII.6 Repayment to Company.
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Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of, premium, if any, or
interest on any Note and remaining unclaimed for two years after such principal,
premium, if any, or interest has become due and payable shall be paid to the
Company on its request or (if then held by the Company) shall be discharged from
such trust; and the Holder of such Note shall thereafter, as an unsecured
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in The
New York Times and The Wall Street Journal (national edition), notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining shall be repaid to the Company.
Section VIII.7 Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except that the
Company's obligations under Sections 2.2 through 2.7, 4.1, 4.6, 7.7, 7.8, 8.6
and 8.8 hereof, the Guarantor's obligations under Sections 4.6 and 11.1 and the
Trustee's and the Paying Agents obligations under Section 8.8 shall survive
until the Notes are no longer outstanding, after which only such obligations
under Sections 7.7, 8.6 and 8.8 shall survive) and the Trustee, on demand of and
at the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(a) either
(i) all Notes theretofore authenticated and delivered (other than (A)
Notes that have been destroyed, lost or stolen and that have been replaced
or paid as provided in Section 2.6 or 2.7 hereof and (B) Notes for whose
payment money has theretofore been deposited with the Trustee, as provided
in Section 4.1) have been delivered to the Trustee for cancellation; or
(ii) all such Notes not theretofore delivered to the Trustee for
cancellation
(A) have become due and payable, or
(B) will become due and payable at their final maturity within 45
days, or
(C) are to be called for redemption within 45 days under
arrangements satisfactory to the Trustee for the giving of notice or
redemption by the Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of clause (ii)(A), (ii)(B) or (ii)(C) above, has
deposited or caused to
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be deposited with the Trustee in trust for such purpose, together with a
statement by the Company that such deposit is irrevocable, an amount of such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts sufficient to pay and
discharge the entire indebtedness on such Notes not theretofore delivered to the
Trustee for cancellation, for principal (and premium, if any) and interest to
the date of such deposit (in the case of Notes that have become due and payable)
or to the final maturity or redemption date, as the case may be;
(b) the Company and the Guarantor has paid or caused to be paid all other
sums payable hereunder by it;
(c) the Company and the Guarantor 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 satisfaction and discharge of this Indenture
have been complied with; and
(d) the Company and each Guarantor has complied with Section 314(c) of the
Trust Indenture Act in connection with such satisfaction and discharge.
Section VIII.8 Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States dollars
or noncallable Government Securities in accordance with Section 8.2, 8.3 or 8.7
hereof, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's and the Guarantor obligations under this
Indenture and the Notes and Note Guarantees shall be revived and reinstated as
though no deposit had occurred pursuant to Section 8.2, 8.3 or 8.7 hereof until
such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.2, 8.3 or 8.7 hereof, as the case may be; provided,
however, that, if the Company and the Guarantor make any payment of principal
of, premium, if any, or interest on any Note following the reinstatement of its
obligations, the Company and the Guarantor shall be subrogated to the rights of
the Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.
Section VIII.9 Collateral.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to either Section 8.2 or 8.3 or the satisfaction and discharge of
this Indenture under Section 8.7 hereof, the Collateral, except the funds in the
trust fund described in Section 8.4 or 8.7, as applicable, hereof, shall be
released pursuant to Section 10.3 hereof.
ARTICLE IX.
AMENDMENT, SUPPLEMENT AND WAIVER
Section IX.1 Without Consent of Holders of Notes.
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(a) Notwithstanding Section 9.2 hereof, without the consent of any Holder
of Notes, the Company and the Trustee together may amend or supplement this
Indenture, the Notes, the Note Guarantees or the Security Documents:
(i) to cure any ambiguity, defect or inconsistency;
(ii) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(iii) to provide for the assumption of the Company's or any
Guarantor's obligations to the Holders of the Notes in the case of a merger
or consolidation pursuant to Article 5 or Article 11 hereof, as the case
may be;
(iv) to make any change that would provide any additional rights or
benefits to the Holders of the Notes (including providing for additional
Note Guarantees pursuant to this Indenture) or that does not adversely
affect the legal rights hereunder of any such Holder of Notes;
(v) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(vi) to make any change to any provision of this Indenture, the Notes,
the Note Guarantees or the Security Documents, if and to the extent the
same change is made to the corresponding provision of the 1996 Indenture or
the 1996 Notes, or the Note Guarantees (as defined in the 1996 Indenture)
or Security Documents (as defined in the 1996 Indenture); or
(vii) to enter into additional or supplemental Security Documents.
(b) Upon the request of the Company accompanied by a resolution of the
Board of Directors of the Company and the Guarantor authorizing the execution of
any such amended or supplemental Indenture, Notes, Note Guarantees or Security
Documents, and upon receipt by the Trustee of the documents described in Section
7.2 hereof, the Trustee shall join with the Company and the Guarantor in the
execution of any amended or supplemental Indenture, Notes, Note Guarantees or
Security Documents authorized or permitted by the terms of this Indenture and to
make any further appropriate agreements and stipulations that may be therein
contained, but the Trustee shall not be obligated to enter into such amended or
supplemental Indenture, Notes, Note Guarantees or Security Documents that
affects its own rights, duties or immunities under this Indenture or otherwise.
Section IX.2 With Consent of Holders of Notes.
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(a) Except as provided below in this Section 9.2 or elsewhere in this
Indenture, the Company and the Trustee may amend or supplement this Indenture
(including Sections 3.10, 4.10 and 4.15 hereof) the Notes, the Note Guarantees
or the Security Documents with the consent of the Holders of at least a majority
in principal amount of the Notes then outstanding (including consents obtained
in connection with a tender offer or exchange offer for Notes) and, subject to
Sections 6.4 and 6.7 hereof, any existing Default or Event of Default (other
than a Default or Event of Default in the payment of the principal of, premium
or interest on the Notes, except a payment default resulting from an
acceleration that has been rescinded) or compliance with any provision of this
Indenture, the Notes, the Note Guarantees or the Security Documents may be
waived with the consent of the Holders of a majority in principal amount of the
then outstanding Notes (including consents obtained in connection with a tender
offer or exchange offer for Notes).
(b) Upon the request of the Company accompanied by a resolution of the
Board of Directors of the Company and the Guarantor authorizing the execution of
any such amended or supplemental Indenture, Notes, Note Guarantees or Security
Documents, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.2 hereof, the Trustee shall
join with the Company and the Guarantor in the execution of such amended or
supplemental Indenture, Notes, Note Guarantees or Security Documents, unless
such amended or supplemental Indenture, Notes, Note Guarantees or Security
Documents affects the Trustee's own rights, duties or immunities under this
Indenture, the Notes, the Note Guarantees, the Security Documents or otherwise,
in which case the Trustee may in its discretion, but shall not be obligated to,
enter into such amended or supplemental Indenture, Notes, Note Guarantees or
Security Documents.
(c) It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
(d) After an amendment, supplement or waiver under this Section 9.2 becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture, Notes, Note Guarantees or Security Documents or waiver.
(e) Notwithstanding any other provision of this Section 9.2, without the
consent of each Holder affected, an amendment or waiver may not (with respect to
any Notes held by a nonconsenting Holder of Notes):
(i) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
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(ii) reduce the principal of or change the fixed maturity of any Note
or alter or waive any of the provisions with respect to the redemption of
the Notes (other than Sections 3.10, 4.10 and 4.15 hereof);
(iii) reduce the rate of or change the time for payment of interest,
including default interest, on any Note;
(iv) waive a Default or Event of Default in the payment of principal
of, premium or interest on the Notes (except a rescission of acceleration
of the Notes by the Holders of at least a majority in aggregate principal
amount of the Notes then outstanding and a waiver of the payment default
that resulted from such acceleration);
(v) make any Note payable in money other than that stated in the
Notes;
(vi) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive
payments of principal of or premium, if any, or interest on the Notes;
(vii) waive a redemption payment with respect to any Note (other
than payments required by Sections 4.10 and 4.15 hereof);
(viii) release all or substantially all of the Collateral from the
Lien of this Indenture or the Security Documents (except in accordance with
Article 10 hereof or the Security Documents); or
(ix) make any change in Section 6.4 or Section 6.7 hereof or in the
foregoing amendment and waiver provisions.
Section IX.3 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture, the Notes, the Note
Guarantees and the Security Documents shall be set forth in an amended or
supplemental Indenture, Note, Note Guarantee or Security Document that complies
with the TIA as then in effect, if applicable. This Indenture shall be
construed to comply in every respect with the TIA.
Section IX.4 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to it
by a Holder of a Note is a continuing consent by the Holder of a Note and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note, even if notation of the consent is not made on any
Note. However, any such Holder of a Note or subsequent Holder of a Note may
revoke the consent as to its Note if the Trustee receives written
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notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section IX.5 Notation on or Exchange of Notes.
(a) The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
(accompanied by a notation of the Note Guarantee duly endorsed by the Guarantor)
that reflect the amendment, supplement or waiver.
(b) Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
Section IX.6 Trustee to Sign Amendments, Etc.
The Trustee shall sign any amended or supplemental Indenture, Note, Note
Guarantee or Security Document, if necessary, authorized pursuant to this
Article 9 if the amendment or supplement does not adversely affect the rights,
duties, liabilities or immunities of the Trustee. The Company or any Guarantor
may not sign an amended or supplemental Indenture, Note, Note Guarantee or
Security Document until its Board of Directors approves it. In executing any
amended or supplemental indenture, Note, Note Guarantee or Collateral Document,
if necessary, the Trustee shall be entitled to receive and (subject to Section
7.1) shall be fully protected in relying upon, an Officer's Certificate and an
Opinion of Counsel stating that the execution of such amended or supplemental
indenture, Note, Note Guarantee or Security Document is authorized or permitted
by this Indenture and that all conditions precedent have been complied with.
ARTICLE X.
COLLATERAL AND SECURITY
Section X.1 Security.
(a) The due and punctual payment of the principal of, premium and interest
on all of the Notes when and as the same shall be due and payable, whether on an
interest payment date, at maturity, by acceleration, repurchase, redemption or
otherwise, and interest on the overdue principal of, premium and (to the extent
permitted by law) interest on the Notes and performance of all other obligations
of the Company and the Guarantor to the Holders of Notes or the Trustee under
this Indenture and the Notes and the Note Guarantees, according to the terms
hereunder or thereunder, shall be ratably secured by a Lien on the Collateral
owned by the Company and each Note Guarantee similarly shall be secured as
provided in the Security Documents that the Company and the Guarantor have
entered into simultaneously with the execution of this Indenture for the benefit
of the Holders of Notes.
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(b) Each Holder of Notes, by its acceptance thereof, consents and agrees to
the terms of the Security Documents (including, without limitation, the
provisions providing for foreclosure and release of Collateral) and the
Intercreditor Agreement as the same may be in effect or may be amended from time
to time in accordance with its terms and authorizes and directs the Trustee to
enter into the Security Documents and to perform its obligations and exercise
its rights thereunder in accordance therewith. The Company and the Guarantor
shall deliver to the Trustee copies of all documents executed pursuant to this
Indenture and the Security Documents and shall do or cause to be done all such
acts and things as may be necessary or proper, or as may be required by the
provisions of the Security Documents to assure and confirm to the Trustee the
security interest in the Collateral and Guarantee Collateral contemplated
hereby, by the Security Documents or any part thereof, as from time to time
constituted, so as to render the same available for the security and benefit of
this Indenture and of the Notes and the Note Guarantees secured hereby,
according to the intent and purposes herein expressed.
(c) The Company shall take, or shall cause its Subsidiaries to take, upon
request of the Trustee, any and all actions reasonably required to cause the
Security Documents to create and maintain, as security for the Obligations of
the Company or the Guarantor hereunder, valid and enforceable perfected first
priority Liens in and on all the Collateral in favor of the Trustee for the
benefit of the Holders, subject to Permitted Liens. Notwithstanding the
foregoing or anything to the contrary in the Security Documents, nothing in this
Indenture or the Security Documents shall require the Company or Guarantor to do
(or cause to be done) any of the following: (i) create or perfect Liens in any
of the "Excluded Assets," as defined in any of the Security Documents, or any
other assets otherwise excluded from the Collateral pursuant to the terms of the
Security Documents, or (ii) perfect Liens in any of the following: (A) any
personal property a security interest in which must be perfected by the delivery
thereof to the Trustee, if delivery thereof is not required by the Security
Agreement, (B) any automobiles or other assets subject to a certificate of title
or registration, except as required by the Security Documents and (C) any
deposit accounts.
(d) The Net Proceeds of all Asset Sales (including all Events of Loss) of
assets constituting Collateral, as well as Excess Proceeds, shall be promptly
and without any commingling deposited with the 1996 Notes Trustee subject to a
Lien in favor of the Trustee for the benefit of the Holders of the Notes unless
and until applied as permitted under Section 4.10 hereof. The Trustee shall
release its Lien on any Excess Proceeds, that remain after making an offer to
purchase the Notes in compliance with Section 4.10 hereof. Amounts so paid to
the Trustee shall be invested or released in accordance with the provisions of
this Indenture.
(e) The Trustee may appoint one or more collateral agents, who may be
delegated any one or more of the duties or rights of the Trustee under the
Security Documents or that are specified in any of the Security Documents.
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Section X.2 Recording and Opinions.
(a) The Company and the Guarantor shall cause the applicable Security
Documents including the Deed of Trust and any financing statements, all
amendments or supplements to each of the foregoing and any other similar
security documents as necessary, to be registered, recorded and filed and/or re-
recorded, re-filed and renewed in such manner and in such place or places, if
any, as may be required by law or reasonably requested by the Trustee in order
fully to preserve and protect (i) the Liens securing the obligations under the
Notes and the Note Guarantees pursuant to the Security Documents and (ii) the
Lien of the Guarantor securing (for the benefit of the Holders of Notes) the
Notes and the Note Guarantees and to effectuate and preserve the security of the
Holders of Notes and all rights of the Trustee.
(b) To the extent required by the TIA and subject to Section 1.5, the
Company, the Guarantor and any other obligor shall furnish to the Trustee:
(i) promptly after the execution and delivery of this Indenture, and
promptly after the execution and delivery of any other instrument of
further assurance or amendment, an Opinion of Counsel in the United States
either (i) stating that in the opinion of such counsel, this Indenture, the
Deed of Trust and other applicable Security Documents and all other
instruments of further assurance or amendment have been properly recorded,
registered and filed to the extent necessary to make effective the Lien
intended to be created by such Security Documents and reciting the details
of such action or referring to prior Opinions of Counsel in which such
details are given, and stating that, as to such Security Documents and such
other instruments such recording, registering and filing are the only
recordings, registerings and filings necessary to give notice thereof and
further stating that all financing statements and continuation statements
have been executed and filed that are necessary fully to perfect the Liens
intended to be created by the Security Documents, or (ii) stating that, in
the opinion of such counsel, no such action is necessary to make any other
Lien created under any of the Security Documents effective as intended by
such Security Documents; and
(ii) On January 30, in each year beginning with the year 1998, an
Opinion of Counsel, dated as of such date, either (A) stating that, in the
opinion of such counsel, such action has been taken with respect to the
recording, registering, filing, re-recording, re-registering and re-filing
of this Indenture and all supplemental indentures, financing statements,
continuation statements or other instruments of further assurance as is
necessary to maintain the Lien of this Indenture and the Security Documents
until the next Opinion of Counsel is required to be rendered pursuant to
this paragraph and reciting the details of such action or referring to
prior Opinions of Counsel in which such details are given, and stating that
all financing statements and continuation statements have been executed and
filed that are necessary fully to perfect the Liens intended to be created
by the Security Documents or (B) stating that in the opinion of such
counsel, no such action is necessary to maintain such Lien, until the next
Opinion of Counsel is required to be
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rendered pursuant to this paragraph.
(c) Subject to Section 1.5, the Company shall furnish to the Trustee the
certificates or opinions, as the case may be, required by TIA (S) 314(d). Such
certificates or opinions shall be subject to the terms of TIA (S) 314(e).
Section X.3 Release of Collateral, Etc.
(a) Subject to paragraphs (b), (c) and (d) of this Section 10.3, Collateral
may be released from the Lien and security interest created by this Indenture
and the Security Documents at any time or from time to time upon the request of
the Company pursuant to an Officers' Certificate certifying that all terms for
release and conditions precedent hereunder and under any applicable Security
Document have been met and specifying (i) the identity of the Collateral to be
released and (ii) the provision of this Indenture or the Security Document that
authorizes such release. The Trustee shall release (at the sole cost and
expense of the Company) (i) the Capital Stock of Coast West and the assets of
Coast West (including the Coast West Lease) in the event that Coast Resorts or
Coast West elects to effect such a release and repays to the Company in cash the
aggregate amount of any Indebtedness owed to the Company by Coast West as of the
date of such release, (ii) Equipment included in clause (iv) of the definition
of Excluded Assets set forth in the Security Agreement and the Rancho Road
Property in the event that the Company elects to effect such a release in
connection with the incurrence of additional Indebtedness secured by such assets
in accordance with the provisions of this Indenture; including, without
limitation, the requirement that the net proceeds from such transaction, if any,
are or will be applied in accordance with this Indenture and that no Default or
Event of Default has occurred and is continuing or would occur immediately
following such release; (iii) Collateral that is condemned, seized or taken by
the power of eminent domain or otherwise confiscated pursuant to an Event of
Loss; provided that the Net Proceeds, if any, from such Event of Loss are or
will be applied in accordance with Section 4.10 hereof; (iv) Collateral that may
be released with the consent of Holders pursuant to Article 9 hereof; (v) all
Collateral (except as provided in Article 8 hereof and, in particular, the funds
in the trust fund described in Section 8.4 or 8.7 hereof) upon discharge or
defeasance of this Indenture in accordance with Article 8 hereof; (vi) all
Collateral upon the payment in full of all obligations of the Company with
respect to the Notes; (vii) the assets and Capital Stock and related Collateral
of a Guarantor whose Note Guarantee is released pursuant to Section 11.5 hereof;
(viii) Collateral that is being sold, leased, conveyed or otherwise disposed of,
provided the Net Proceeds, if any, from such disposition are applied in
accordance with Section 4.10, to the extent required thereby; and (ix) in
connection with the transfer of the Capital Stock of Coast West from Coast
Resorts to the Company, the Capital Stock of Coast West and the certificates
representing such Capital Stock registered in the name of Coast Resorts upon
delivery to the Trustee of certificates representing such Capital Stock
registered in the name of the Company. Upon receipt of such Officers'
Certificate the Trustee shall execute, deliver or acknowledge any necessary or
proper instruments of termination, satisfaction or release to evidence the
release of any Collateral permitted to be released pursuant to this Indenture or
the Security Documents.
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(b) No Collateral shall be released from the Lien and security interest
created by the Security Documents pursuant to the provisions of the Security
Documents unless there shall have been delivered to the Trustee the certificate
required by this Section 10.3.
(c) The Trustee may release Collateral from the Lien and security interest
created by this Indenture and the Security Documents upon the sale or
disposition of Collateral pursuant to the Trustee's powers, rights and duties
with respect to remedies provided under any of the Security Documents.
(d) The release of any Collateral from the terms of this Indenture and the
Security Documents shall not be deemed to impair the security under this
Indenture in contravention of the provisions hereof if and to the extent the
Collateral is released pursuant to the terms hereof. To the extent applicable,
the Company shall cause TIA (S) 313(b), relating to reports, and TIA (S) 314(d),
relating to the release of property or securities from the Lien and security
interest of the Security Documents and relating to the substitution therefor of
any property or securities to be subjected to the Lien and security interest of
the Security Documents to be complied with. Any certificate or opinion required
by TIA (S) 314(d) may be made by an Officer of the Company except in cases where
TIA (S) 314(d) requires that such certificate or opinion be made by an
independent Person, which Person shall be an independent engineer, appraiser or
other expert selected or approved by the Trustee in the exercise of reasonable
care.
Section X.4 Protection of the Trust Estate.
Upon the prior written notice to the Company and the Guarantor, the Trustee
shall have the power (i) to institute and maintain such suits and proceedings as
it may deem expedient, to prevent any impairment of the Collateral under any of
the Security Documents; and (ii) to enforce the obligations of the Company, the
Guarantor or any Subsidiary under this Indenture or the Security Documents, to
institute and maintain such suits and proceedings as may be expedient to prevent
any impairment of the Collateral under the Security Documents; including the
power to institute and maintain suits or proceedings to restrain the enforcement
of or compliance with any legislative or other governmental enactment, rule or
order that may be unconstitutional or otherwise invalid if the enforcement of,
or compliance with, such enactment, rule or order would impair any Collateral or
be prejudicial to the interests of the Holders of Notes or the Trustee, to the
extent permitted thereunder.
Section X.5 Certificates of the Company.
Subject to Section 1.5, the Company shall furnish to the Trustee, prior to
each proposed release of Collateral pursuant to the Security Documents (i) all
documents required by TIA (S) 314(d) and (ii) an Opinion of Counsel in the
United States, to the effect that, such accompanying documents constitute all
documents required by TIA (S) 314(d). The Trustee may, to the extent permitted
by Sections 7.1 and 7.2 hereof, accept as conclusive evidence of compliance with
the
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foregoing provisions the appropriate statements contained in such documents and
such Opinion of Counsel.
Section X.6 Certificates of the Trustee.
Subject to Section 1.5, in the event that the Company wishes to release
Collateral in accordance with the Security Documents and has delivered the
certificates and documents required by the Security Documents and Sections 10.3
and 10.4 hereof, the Trustee shall determine whether it has received all
documentation required by TIA (S) 314(d) in connection with such release and,
based on such determination and the Opinion of Counsel delivered pursuant to
clause (ii) of Section 10.05 hereof, shall deliver a certificate to the Company
setting forth such determination.
Section X.7 Authorization of Actions to be Taken by the Trustee Under The
Security Documents.
Subject to the provisions of Sections 7.1 and 7.2 hereof, the Trustee may,
in its sole discretion and without the consent of the Holders of Notes, direct,
on behalf of the Holders of Notes, the Collateral Agent to, take all actions it
deems necessary or appropriate in order to (i) enforce any of the terms of the
Security Documents and (ii) collect and receive any and all amounts payable in
respect of the Obligations of the Company hereunder. The Trustee shall have
power to institute and maintain such suits and proceedings as it may deem
expedient to prevent any impairment of the Collateral by any acts that may be
unlawful or in violation of the Security Documents or this Indenture, and such
suits and proceedings as the Trustee may deem expedient to preserve or protect
its interests and the interests of the Holders of Notes in the Collateral
(including power to institute and maintain suits or proceedings to restrain the
enforcement of or compliance with any legislative or other governmental
enactment, rule or order that may be unconstitutional or otherwise invalid if
the enforcement of, or compliance with, such enactment, rule or order would
impair the security interest hereunder or be prejudicial to the interests of the
Holders of Notes or of the Trustee).
Section X.8 Authorization of Receipt of Funds by The Trustee Under The
Security / Documents.
(a) Upon an Event of Default and so long as such Event of Default
continues, the Trustee may exercise in respect of the Collateral, in addition to
the other rights and remedies provided for herein, in the Security Documents or
otherwise available to it, all of the rights and remedies of a secured party
under the Uniform Commercial Code or other applicable law, and the Trustee may
also upon obtaining possession of the Collateral as set forth herein, without
notice to the Company, except as specified below, sell the Collateral or any
part thereof in one or more parcels at public or private sale, at any exchange,
broker's board or at any of the Trustee's offices or elsewhere, for cash, on
credit or for future delivery, and upon such other terms as the Trustee may deem
commercially reasonable. The Company acknowledges and agrees that any such
private sale may result in prices and other terms less favorable to the seller
than if such a
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sale were a public sale. The Company agrees that, to the extent notice of sale
shall be required by law, at least 10 days' notice to the Company of the time
and place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Trustee shall not be
obligated to make any sale regardless of notice of sale having been given. The
Trustee may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned.
(b) Any cash that is Collateral held by the Trustee and all cash proceeds
received by the Trustee in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral shall be applied (unless
otherwise provided for in the Security Documents and after payment of any and
all amounts payable to the Trustee pursuant to the Indenture), as the Trustee
shall determine or as the Holders of the Notes shall direct pursuant to Section
6.5 hereof, (i) against the obligations for the ratable benefit of the Holders
of the Notes, (ii) to maintain, repair or otherwise protect the Collateral or
(iii) to take such other action to protect the other rights of the Holders of
the Notes or to take any other appropriate action or remedy for the benefit of
the Holders of the Notes. Any surplus of such cash or cash proceeds held by the
Trustee and remaining after payment in full of all the obligations shall be paid
over to the Company or to whomsoever may be lawfully entitled to receive such
surplus or as a court of competent jurisdiction may direct.
Section X.9 Termination of Security Interest.
Without limiting Section 10.3, upon the payment in full of all Obligations
of the Company under this Indenture and the Notes, or upon Legal Defeasance or
Covenant Defeasance, the Trustee shall, at the request of the Company, deliver a
certificate to the Trustee stating that such Obligations have been paid in full,
and instruct the Trustee to release the Liens pursuant to this Indenture and the
Security Documents.
Section X.10 Cooperation of Trustee.
In the event the Company or the Guarantor pledges or grants a security
interest in additional Collateral, the Trustee shall cooperate with the Company
or such Guarantor in reasonably and promptly agreeing to the form of, and
executing as required, any instruments or documents necessary to make effective
the security interest in the Collateral to be so substituted or pledged. To the
extent practicable, the terms of any security agreement or other instrument or
document necessitated by any such substitution or pledge shall be comparable to
the provisions of the existing Security Documents. Subject to, and in
accordance with the requirements of this Article 10 and the terms of the
Security Documents, in the event that the Company or any Guarantor engages in
any transaction pursuant to Section 10.3 hereof, the Trustee shall cooperate
with the Company or such Guarantor in order to facilitate such transaction in
accordance with any reasonable time schedule proposed by the Company, including
by delivering and releasing the Collateral in a prompt and reasonable manner.
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Section X.11 Collateral Agent.
The Trustee may, from time to time, appoint one or more Collateral Agents
hereunder. Each of such Collateral Agents may be delegated any one or more of
the duties or rights of the Trustee hereunder or under the Security Documents or
that are specified in any Security Documents, including without limitation, the
right to hold any Collateral in the name of, registered to, or in the physical
possession of, such Collateral Agent, for the rateable benefit of the Holders of
the Notes. Each such Collateral Agent shall have such rights and duties as may
be specified in an agreement between the Trustee and such Collateral Agent. The
Trustee and any Collateral Agent shall be authorized hereunder to give any
acknowledgment reasonably requested by any party under the Intercreditor
Agreement to confirm the rights and obligations of the parties under the
Intercreditor Agreement.
ARTICLE XI.
NOTE GUARANTEES
Section XI.1 Note Guarantees.
(a) Each of the Guarantors, jointly and severally, hereby unconditionally
guarantees, on a senior secured basis (such guarantee being a "Note Guarantee"),
to each Holder of a Note authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, irrespective of the validity or
enforceability of this Indenture, the Notes or the Obligations of the Company
under this Indenture or the Notes, that: (i) the principal of, premium, if any,
and interest on the Notes shall be paid in full when due, whether at the
maturity or interest payment or mandatory redemption date, by acceleration, call
for redemption or otherwise, and interest on the overdue principal, premium and
(to the extent permitted by law) interest, if any, of the Notes and all other
Obligations of the Company to the Holders or the Trustee under this Indenture or
the Notes shall be promptly paid in full or performed, all in accordance with
the terms of this Indenture and the Notes; and (ii) in case of any extension of
time of payment or renewal of any Notes or any of such other obligations, they
shall be paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at maturity, by acceleration, redemption or
otherwise. Failing payment when due of any amount so guaranteed or failing
performance of any other Obligation of the Company to the Holders, for whatever
reason, Guarantor shall be jointly and severally obligated to pay, or to perform
or to cause the performance of, the same immediately, whether or not such
failure to pay or perform has become an Event of Default that could cause
acceleration pursuant to Section 6.2 hereof. An Event of Default under this
Indenture or the Notes shall constitute an event of default under this Note
Guarantee, and shall entitle the Holders of Notes to accelerate the Obligations
of each Guarantor hereunder in the same manner and to the same extent as the
Obligations of the Company.
(b) Each Guarantor hereby agrees that its obligations with regard to each
Note Guarantee shall be unconditional, irrespective of the validity or
enforceability of the Notes or this
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Indenture, the absence of any action to enforce the same, any waiver or consent
by any Holder of Notes with respect to any provision hereof or thereof, the
recovery of any judgment against the Company or any other obligor with respect
to this Indenture, the Notes or the Obligations of the Company under this
Indenture or the Notes, any action to enforce the same or any other
circumstances that might otherwise constitute a legal or equitable discharge or
defense of a Guarantor. Each Guarantor, to the extent permitted by law, hereby
waives and relinquishes all claims, rights and remedies accorded by applicable
law to guarantors and agrees not to assert or take advantage of any such claims,
rights or remedies, including but not limited to: (i) any right to require the
Trustee, the Holders or the Company (each, a "Benefitted Party") to proceed
against the Company or any other Person or to proceed against or exhaust any
security held by a Benefitted Party at any time or to pursue any other remedy in
any Benefitted Party's power before proceeding against such Guarantor; (ii) the
defense of the statute of limitations in any action hereunder or in any action
for the collection of any Indebtedness or the performance of any obligation
hereby guaranteed; (iii) any defense that may arise by reason of the incapacity,
lack Of authority, death or disability of any other Person or the failure of a
Benefitted Party to file or enforce a claim against the estate (in
administration, bankruptcy or any other proceeding) of any other Person; (iv)
diligence, presentment, demand, protest and notice of any kind including but not
limited to notice of the existence, creation or incurring of any new or
additional Indebtedness or obligation or of any action or non-action on the part
of such Guarantor, the Company, any Benefitted Party, any creditor of such
Guarantor, the Company or on the part of any other Person whomsoever in
connection with any Indebtedness or Obligations hereby guaranteed; (v) any
defense based upon an election of remedies by a Benefitted Party, including but
not limited to an election to proceed against such Guarantor for reimbursement;
(vi) any defense based upon any statute or rule of law that provides that the
obligation of a surety must be neither larger in amount nor in other respects
more burdensome than that of the principal; (vii) any defense arising because of
a Benefitted Party's election, in any proceeding instituted under the Federal
Bankruptcy Code, of the application of Section 1111(b)(2) of the Federal
Bankruptcy Code; or (viii) any defense based on any borrowing or grant of a
security interest under Section 364 of the Federal Bankruptcy Code. Each
Guarantor hereby covenants that its Note Guarantee will not be discharged except
by complete performance of the obligations contained in the Notes and this
Indenture or as otherwise expressly provided herein.
(c) If any Holder or the Trustee is required by any court or otherwise to
return to either the Company or any Guarantor, or any custodian, trustee, or
similar official acting in relation to either the Company or such Guarantor, any
amount paid by the Company or such Guarantor to the Trustee or such Holder, the
applicable Note Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each Guarantor agrees that it will not be
entitled to any right of subrogation in relation to the Holders in respect of
any obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby.
(d) Each Guarantor further agrees that, as between such Guarantor, on the
one hand, and the Holders and the Trustee, on the other hand, (i) the maturity
of the Obligations guaranteed hereby may be accelerated as provided in Article 6
hereof for the purposes of this Note
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Guarantee, notwithstanding any stay, injunction or other prohibition preventing
such acceleration as to the Company or any other obligor on the Notes of the
obligations guaranteed hereby and (ii) in the event of any declaration of
acceleration of those obligations as provided in Article 6 hereof, those
obligations (whether or not due and payable) shall forthwith become due and
payable by such Guarantor for the purpose of this Note Guarantee.
Section XI.2 Execution and Delivery of Note Guarantee.
To evidence the Note Guarantees set forth in Section 11.1 hereof, each
Guarantor agrees that a notation of the Note Guarantees substantially in the
form included in Exhibit C shall be endorsed on each Note authenticated and
delivered by the Trustee and that this Indenture shall be executed on behalf of
the Guarantor by the Chairman of the Board, any Vice Chairman, the President or
one of the Vice Presidents of the Guarantor, under a facsimile of its seal
reproduced on this Indenture and attested to by an Officer other than the
Officer executing this Indenture.
Each Guarantor agrees that the Note Guarantees set forth in this Article 11
shall remain in full force and effect and apply to all the Notes notwithstanding
any failure to endorse on each Note a notation of the Note Guarantees.
If an Officer whose facsimile signature is on a Note no longer holds that
office at the time the Trustee authenticates the Note on which the Note
Guarantees are endorsed, the Note Guarantees shall be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of the Note Guarantees set forth in
this Indenture, on behalf of the Guarantors.
Section XI.3 Limitation of Guarantor's Liability.
Each Guarantor, and by its acceptance hereof, each Holder, hereby confirms
that it is its intention that the Note Guarantee by such Guarantor not
constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy
Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act
or any similar federal or state law to the extent applicable to the Note
Guarantees. To effectuate the foregoing intention, each such Holder hereby
irrevocably agrees that the obligation of such Guarantor under the Note
Guarantees under this Article 11 shall be limited to the maximum amount as will,
after giving effect to such maximum amount and all other liabilities of such
Guarantor that are relevant under such laws, and after giving effect to any
collections from, rights to receive contribution from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under this Article 11, result in the obligations of such Guarantor in
respect of such maximum amount not constituting a fraudulent conveyance. Each
beneficiary under the Note Guarantees, by accepting the benefits hereof,
confirms its intention that, in the event of a bankruptcy, reorganization or
other similar proceeding of the Company or any Guarantor in which concurrent
claims are made
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upon any Guarantor hereunder, to the extent such claims will not be fully
satisfied, each such claimant with a valid claim against the Company shall be
entitled to a ratable share of all payments by such Guarantor in respect of such
concurrent claims.
Section XI.4 Guarantor May Consolidate, Etc., on Certain Terms.
(a) Except as set forth in Article 4 or 5 hereof, no Guarantor shall
consolidate with or merge with or into (whether or not such Guarantor is the
surviving Person) another Person whether or not affiliated with such Guarantor
unless (i) subject to the provisions of Section 11.5 hereof the Person formed by
or surviving any such consolidation or merger (if other than such Guarantor)
assumes, pursuant to a supplemental indenture and appropriate Security Documents
in form and substance reasonably satisfactory to the Trustee, all the
Obligations of such Guarantor under the Notes, the Indenture and the Security
Documents; (ii) immediately after giving effect to such transaction, no Default
or Event of Default exists; (iii) such Guarantor, or any Person formed by or
surviving any such consolidation or merger, (A) would have Consolidated Net
Worth (immediately after giving effect to such transaction) equal to or greater
than the Consolidated Net Worth of such Guarantor immediately preceding the
transaction and (B) except with respect to consolidations or mergers between
Guarantors, would have a Fixed Charge Coverage Ratio (immediately after giving
effect to such transaction) no lower than the Fixed Charge Coverage Ratio of
such Guarantor immediately preceding the transaction; and (iv) such transaction
will not result in the loss or suspension or material impairment of any material
Gaming License. Such successor corporation thereupon may cause to be signed the
Note Guarantees to be endorsed upon all of the Notes issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee. The Note Guarantees so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Note Guarantees theretofore
and thereafter issued in accordance with the terms of this Indenture as though
the Note Guarantees had been issued at the date of the execution hereof.
(b) The Trustee, subject to the provisions of Section 11.5 hereof, shall be
entitled to receive an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any such consolidation, merger, sale or conveyance, and
any such assumption of Obligations, comply with the provisions of this Section
11.4. Such certificate and opinion shall comply with the provisions of Section
12.5.
Section XI.5 Releases of Note Guarantees.
In the event of a sale or other disposition of any Guarantor, by way of
merger or consolidation, or a sale or other disposition of all of the Capital
Stock of any Guarantor, then such Guarantor (in the event of a sale or other
disposition, by way of such a merger, consolidation or otherwise, of all of the
Capital Stock of such Guarantor) shall be released and relieved of any
Obligations under its Note Guarantee; provided that (i) immediately after giving
effect to such transaction, no Default or Event of Default shall have occurred
and be continuing or would occur as a consequence thereof and (ii) the Net
Proceeds of such sale or other
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disposition are applied in accordance with the applicable provisions of this
Indenture. Upon delivery by the Company to the Trustee of an Officers'
Certificate and Opinion of Counsel, to the effect that such sale or other
disposition was made by the Company in accordance with the provisions of this
Indenture, including without limitation Section 4.10 hereof, the Trustee shall
execute any documents reasonably required in order to evidence the release of
any such Guarantor from its obligations under its Note Guarantee. Any Guarantor
not released from its obligations under its Note Guarantee shall remain liable
for the full amount of principal of, premium, if any, and interest on the Notes
and for the other Obligations of any Guarantor under this Indenture as provided
in this Article 11. Nothing herein shall relieve the Company from its
obligations to apply the proceeds of an Asset Sale as provided in Section 4.10
hereof.
Section XI.6 "Trustee" to Include Paying Agent.
In case at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article 11 shall in such case (unless the context shall otherwise
require) be construed as extending to and including such Paying Agent within its
meaning as fully and for all intents and purposes as if such Paying Agent were
named in this Article 11 in place of the Trustee.
ARTICLE XII.
MISCELLANEOUS
Section XII.1 Trust Indenture Act Controls.
Subject to Section 1.5, if any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by TIA (S) 318(c), the imposed
duties shall control.
Section XII.2 Notice.
(a) Any notice or communication by the Company, any Guarantor or the
Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telex, telecopier or overnight air courier guaranteeing next day delivery, to
the others' address:
If to the Company or the Guarantor:
Coast Hotels and Casinos, Inc.
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Corporate Secretary
With a copy to:
-00-
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxx Xxxxxxx
and
Xxxxxxx, Xxxxx & Xxxxxx
000 Xxxx Xxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxxx
If to the Trustee:
Firstar Bank of Minnesota, N.A.
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Corporate Trust Department
(b) The Company, the Guarantor or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
(c) All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next-day delivery.
(d) Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Subject to Section 1.5, any notice or communication shall
also be so mailed to any Person described in TIA (S) 313(c), to the extent
required by the TIA. Failure to mail a notice or communication to a Holder or
any defect in it shall not affect its sufficiency with respect to other Holders.
(e) If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
(f) If the Company or a Guarantor mails a notice or communication to
Holders, it
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shall mail a copy to the Trustee and each Agent at the same time.
Section XII.3 Communication by Holders of Notes with Other Holders of
Notes.
Subject to Section 1.5, Holders may communicate pursuant to TIA (S) 312(b)
with other Holders with respect to their rights under this Indenture or the
Notes. Subject to Section 1.5, the Company, the Guarantor, the Trustee, the
Registrar and anyone else shall have the protection of TIA (S) 312(c).
Section XII.4 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company or any Guarantor to the
Trustee to take any action under this Indenture, the Company or such Guarantor,
as the case may be, shall furnish to the Trustee:
(i) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 12.5 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(ii) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 12.5 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
Section XII.5 Statements Required in Certificate or Opinion.
Subject to Section 1.5, each Certificate or opinion with respect to
compliance with a condition or covenant provided for in this Indenture (other
than a certificate provided pursuant to TIA (S) 314(a)(4)) shall comply with the
provisions of TIA (S) 314(e) and shall include:
(i) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(ii) 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;
(iii) a statement that, in the opinion of such Person, he or she 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 satisfied; and
(iv) a statement as to whether or not, in the opinion of such Person,
such
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condition or covenant has been satisfied.
Section XII.6 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section XII.7 No Personal Liability of Directors, Officers, Employees and
Shareholders.
No director, officer, employee, incorporator or shareholder of the Company,
any Subsidiary of the Company or any Guarantor, as such, shall have any
liability for any Obligations of the Company, any Subsidiary of the Company or
any Guarantor under the Notes, any Note Guarantee, this Indenture, the Security
Documents, as applicable, or for any claim based on, in respect of, or by reason
of such Obligations or their creation. Each Holder of Notes by accepting a Note
waives and releases all such liability. Such waiver and release are part of the
consideration for issuance of the Notes and the Note Guarantees.
Section XII.8 Governing Law.
THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
THE CHOICE OF LAW RULES THEREOF.
Section XII.9 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section XII.10 Successors.
All agreements of the Company and the Guarantor in this Indenture, the
Notes and the Note Guarantees, as applicable, shall bind their respective
successors. All agreements of the Trustee in this Indenture shall bind its
successors.
Section XII.11 Severability.
In case any provision in this Indenture, in the Notes or in the Note
Guarantees shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
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Section XII.12 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
Section XII.13 Table of Contents, Headings, Etc.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part of this Indenture and shall in no way
modify or restrict any of the terms or provisions hereof.
Signature pages follow
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SIGNATURES
Dated as of November 21, 1997 COAST HOTELS AND CASINOS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
Attest:
/s/ Xxxx Xxxxxxx
----------------------------
Xxxx Xxxxxxx
Vice President - Finance and
Assistant Secretary
Dated as of November 21, 1997
COAST RESORTS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
Attest:
/s/ Xxxx Xxxxxxx
----------------------------
Xxxx Xxxxxxx
Vice President - Finance and
Assistant Secretary
Dated as of November 21, 0000
XXXXXXX XXXX XX XXXXXXXXX, N.A.
as Trustee
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By: /s/ Xxxxx Xxxxxx, III
----------------------------------
Name: Xxxxx Xxxxxx, III
Title: Vice President
Attest:
______________________________
Name:
Title:
Dated as of November 21, 1997
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