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JAZZ CASINO COMPANY, L.L.C.
ISSUER,
JCC HOLDING COMPANY
GUARANTOR,
AND
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
TRUSTEE
--------------------
INDENTURE
Dated as of __________, 1998
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$187,500,000
Senior Subordinated Notes due 2009
With Contingent Payments
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CROSS-REFERENCE TABLE
TIA INDENTURE
SECTION SECTION
------- -------
310 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.10
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.8;
8.10;
13.2
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.11
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.11
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.3
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.3
313 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.6
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.6
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.6;
13.2
(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.6
314 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7;
5.8
13.2
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2;
8.2;
13.4
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2;
13.4
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1(c)
4.2
(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1(c)
4.2
(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.5
(f). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
315 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1(b)
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.5:
8.6;
13.2
TIA INDENTURE
SECTION SECTION
------- -------
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1(a)
(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8;
7.11;
8.1(c)
(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.13
316 (a)(last sentence) . . . . . . . . . . . . . . . . . . . . . . . 2.9
(a)(1)(A). . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(a)(1)(B). . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.12
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.7;
317 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
318 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.1
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N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture.
ii
TABLE OF CONTENTS
PAGE
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ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 INCORPORATION BY REFERENCE OF TIA. . . . . . . . . 31
SECTION 1.3 RULES OF CONSTRUCTION. . . . . . . . . . . . . . . 31
ARTICLE II
THE SECURITIES . . . . . . . . . 32
SECTION 2.1 FORM AND DATING. . . . . . . . . . . . . . . . . . 32
SECTION 2.2 EXECUTION AND AUTHENTICATION . . . . . . . . . . . 32
SECTION 2.3 REGISTRAR AND PAYING AGENT . . . . . . . . . . . . 34
SECTION 2.4 PAYING AGENT TO HOLD ASSETS IN TRUST . . . . . . . 34
SECTION 2.5 SECURITYHOLDER LISTS . . . . . . . . . . . . . . . 35
SECTION 2.6 TRANSFER AND EXCHANGE. . . . . . . . . . . . . . . 35
SECTION 2.7 REPLACEMENT SECURITIES . . . . . . . . . . . . . . 35
SECTION 2.8 OUTSTANDING SECURITIES . . . . . . . . . . . . . . 36
SECTION 2.9 TREASURY SECURITIES. . . . . . . . . . . . . . . . 36
SECTION 2.10 TEMPORARY SECURITIES . . . . . . . . . . . . . . . 36
SECTION 2.11 CANCELLATION . . . . . . . . . . . . . . . . . . . 37
SECTION 2.12 DEFAULTED INTEREST . . . . . . . . . . . . . . . . 37
ARTICLE III
REDEMPTION . . . . . . . . . . 38
SECTION 3.1 RIGHT OF REDEMPTION. . . . . . . . . . . . . . . . 38
SECTION 3.2 REDEMPTION PURSUANT TO APPLICABLE LAWS . . . . . . 38
SECTION 3.3 NOTICES TO TRUSTEE . . . . . . . . . . . . . . . . 39
SECTION 3.4 NOTICE OF REDEMPTION . . . . . . . . . . . . . . . 39
SECTION 3.5 EFFECT OF NOTICE OF REDEMPTION . . . . . . . . . . 40
SECTION 3.6 DEPOSIT OF REDEMPTION PRICE. . . . . . . . . . . . 40
SECTION 3.7 SECURITIES REDEEMED IN PART. . . . . . . . . . . . 40
ARTICLE IV
SECURITY. . . . . . . . . . . 40
SECTION 4.1 SECURITY INTEREST. . . . . . . . . . . . . . . . . 40
SECTION 4.2 RECORDING; OPINIONS OF COUNSEL . . . . . . . . . . 41
SECTION 4.3 DISPOSITION OF CERTAIN COLLATERAL. . . . . . . . . 42
iii
PAGE
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SECTION 4.4 NET CASH PROCEEDS ACCOUNT. . . . . . . . . . . . . 44
SECTION 4.5 CERTAIN RELEASES OF COLLATERAL . . . . . . . . . . 44
SECTION 4.6 LIEN SUBORDINATION.. . . . . . . . . . . . . . . . 45
SECTION 4.7 PAYMENT OF EXPENSES. . . . . . . . . . . . . . . . 45
SECTION 4.8 SUITS TO PROTECT THE COLLATERAL. . . . . . . . . . 46
SECTION 4.9 TRUSTEE'S DUTIES . . . . . . . . . . . . . . . . . 46
SECTION 4.10 COLLATERAL DOCUMENTS . . . . . . . . . . . . . . . 46
ARTICLE V
COVENANTS. . . . . . . . . . . 47
SECTION 5.1 PAYMENT OF SECURITIES. . . . . . . . . . . . . . . 47
SECTION 5.2 MAINTENANCE OF OFFICE OR AGENCY. . . . . . . . . . 47
SECTION 5.3 LIMITATION ON RESTRICTED PAYMENTS. . . . . . . . . 48
SECTION 5.4 EXISTENCE. . . . . . . . . . . . . . . . . . . . . 49
SECTION 5.5 PAYMENT OF TAXES AND OTHER CLAIMS. . . . . . . . . 49
SECTION 5.6 MAINTENANCE OF INSURANCE . . . . . . . . . . . . . 50
SECTION 5.7 COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT. . . . . 50
SECTION 5.8 REPORTS. . . . . . . . . . . . . . . . . . . . . . 51
SECTION 5.9 WAIVER OF STAY, EXTENSION OR USURY LAWS. . . . . . 51
SECTION 5.10 LIMITATION ON TRANSACTIONS WITH AFFILIATES . . . . 52
SECTION 5.11 LIMITATION ON INCURRENCE OF ADDITIONAL
INDEBTEDNESS AND DISQUALIFIED CAPITAL STOCK. . . 53
SECTION 5.12 LIMITATION ON DIVIDENDS AND OTHER PAYMENT
RESTRICTIONS AFFECTING SUBSIDIARIES. . . . . . . 55
SECTION 5.13 LIMITATION ON LIENS. . . . . . . . . . . . . . . . 56
SECTION 5.14 LIMITATION ON SALES OF ASSETS AND SUBSIDIARY
STOCK; EVENT OF LOSS . . . . . . . . . . . . . . 57
SECTION 5.15 CONSTRUCTION . . . . . . . . . . . . . . . . . . . 61
SECTION 5.16 LIMITATION ON USE OF CERTAIN FUNDS . . . . . . . . 61
SECTION 5.17 LIMITATION ON LINES OF BUSINESS. . . . . . . . . . 61
SECTION 5.18 LIMITATION ON STATUS AS INVESTMENT COMPANY . . . . 62
SECTION 5.19 RESTRICTIONS ON SALE AND ISSUANCE OF SUBSIDIARY
STOCK . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 5.20 LIMITATION ON PAYMENT OF MANAGEMENT FEES . . . . . 62
SECTION 5.21 LISTING OF SECURITIES. . . . . . . . . . . . . . . 63
SECTION 5.22 COMPLIANCE WITH ENVIRONMENTAL LAWS . . . . . . . . 63
SECTION 5.23 LIMITATION ON LAYERING DEBT. . . . . . . . . . . . 64
ARTICLE VI
SUCCESSORS . . . . . . . . . . 64
SECTION 6.1 LIMITATION ON MERGER, SALE OR CONSOLIDATION . . . . 64
SECTION 6.2 SUCCESSOR SUBSTITUTED . . . . . . . . . . . . . . . 66
iv
PAGE
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ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES . . . . . 66
SECTION 7.1 EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . 66
SECTION 7.2 ACCELERATION OF MATURITY DATE; RESCISSION AND
ANNULMENT . . . . . . . . . . . . . . . . . . . . 69
SECTION 7.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR
ENFORCEMENT BY TRUSTEE . . . . . . . . . . . . . . 70
SECTION 7.4 TRUSTEE MAY FILE PROOFS OF CLAIM. . . . . . . . . . 71
SECTION 7.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION
OF SECURITIES . . . . . . . . . . . . . . . . . . 72
SECTION 7.6 PRIORITIES. . . . . . . . . . . . . . . . . . . . . 72
SECTION 7.7 LIMITATION ON SUITS . . . . . . . . . . . . . . . . 72
SECTION 7.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE
PRINCIPAL AND INTEREST . . . . . . . . . . . . . . 73
SECTION 7.9 RIGHTS AND REMEDIES CUMULATIVE. . . . . . . . . . . 73
SECTION 7.10 DELAY OR OMISSION NOT WAIVER. . . . . . . . . . . . 73
SECTION 7.11 CONTROL BY HOLDERS. . . . . . . . . . . . . . . . . 74
SECTION 7.12 WAIVER OF PAST DEFAULT. . . . . . . . . . . . . . . 74
SECTION 7.13 UNDERTAKING FOR COSTS . . . . . . . . . . . . . . . 74
SECTION 7.14 RESTORATION OF RIGHTS AND REMEDIES. . . . . . . . . 75
ARTICLE VIII
TRUSTEE . . . . . . . . . . . 75
SECTION 8.1 DUTIES OF TRUSTEE . . . . . . . . . . . . . . . . . 75
SECTION 8.2 RIGHTS OF TRUSTEE . . . . . . . . . . . . . . . . . 77
SECTION 8.3 INDIVIDUAL RIGHTS OF TRUSTEE. . . . . . . . . . . . 78
SECTION 8.4 TRUSTEE'S DISCLAIMER. . . . . . . . . . . . . . . . 78
SECTION 8.5 NOTICE OF DEFAULT . . . . . . . . . . . . . . . . . 78
SECTION 8.6 REPORTS BY TRUSTEE TO HOLDERS . . . . . . . . . . . 78
SECTION 8.7 COMPENSATION AND INDEMNITY. . . . . . . . . . . . . 79
SECTION 8.8 REPLACEMENT OF TRUSTEE. . . . . . . . . . . . . . . 80
SECTION 8.9 SUCCESSOR TRUSTEE BY MERGER, ETC. . . . . . . . . . 81
SECTION 8.10 ELIGIBILITY; DISQUALIFICATION . . . . . . . . . . . 81
SECTION 8.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST
COMPANY . . . . . . . . . . . . . . . . . . . . . 81
ARTICLE IX
LEGAL DEFEASANCE AND COVENANT DEFEASANCE. . . 81
SECTION 9.1 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT
DEFEASANCE . . . . . . . . . . . . . . . . . . . . 81
SECTION 9.2 LEGAL DEFEASANCE AND DISCHARGE. . . . . . . . . . . 81
SECTION 9.3 COVENANT DEFEASANCE . . . . . . . . . . . . . . . . 82
SECTION 9.4 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE. . . . . 82
v
PAGE
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SECTION 9.5 DEPOSITED U.S. LEGAL TENDER AND U.S. GOVERNMENT
OBLIGATIONS TO BE HELD IN TRUST; OTHER
MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . 84
SECTION 9.6 REPAYMENT TO COMPANY. . . . . . . . . . . . . . . . 84
SECTION 9.7 REINSTATEMENT . . . . . . . . . . . . . . . . . . . 85
ARTICLE X
AMENDMENTS, SUPPLEMENTS AND WAIVERS . . . . 85
SECTION 10.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
HOLDERS. . . . . . . . . . . . . . . . . . . . . 85
SECTION 10.2 AMENDMENTS, SUPPLEMENTAL INDENTURES AND
WAIVERS WITH CONSENT OF HOLDERS. . . . . . . . . 86
SECTION 10.3 COMPLIANCE WITH TIA. . . . . . . . . . . . . . . . 87
SECTION 10.4 REVOCATION AND EFFECT OF CONSENTS. . . . . . . . . 87
SECTION 10.5 NOTATION ON OR EXCHANGE OF SECURITIES. . . . . . . 88
SECTION 10.6 TRUSTEE TO SIGN AMENDMENTS, ETC. . . . . . . . . . 88
SECTION 10.7 CONSENT TO CERTAIN AMENDMENTS OF THE
GROUND LEASE; TRUSTEE'S ACTIONS. . . . . . . . . 89
ARTICLE XI
RIGHT TO REQUIRE REPURCHASE . . . . . . 89
SECTION 11.1 REPURCHASE OF SECURITIES AT OPTION OF
THE HOLDER UPON CHANGE OF CONTROL. . . . . . . . 89
ARTICLE XII
GUARANTY. . . . . . . . . . . 92
SECTION 12.1 GUARANTY . . . . . . . . . . . . . . . . . . . . . 92
SECTION 12.2 EXECUTION AND DELIVERY OF GUARANTY . . . . . . . . 93
SECTION 12.3 FUTURE SUBSIDIARY GUARANTORS . . . . . . . . . . . 94
SECTION 12.4 RELEASE OF GUARANTOR . . . . . . . . . . . . . . . 94
SECTION 12.5 WHEN THE GUARANTOR MAY MERGE, ETC. . . . . . . . . 95
SECTION 12.6 CERTAIN BANKRUPTCY EVENTS. . . . . . . . . . . . . 96
ARTICLE XIII
SUBORDINATION OF SECURITIES . . . . . . 96
SECTION 13.1 SECURITIES SUBORDINATED TO SENIOR DEBT . . . . . . 96
SECTION 13.2 SECURITIES SUBORDINATED TO PRIOR PAYMENT OF
ALL SENIOR DEBT ON DISSOLUTION, LIQUIDATION,
REORGANIZATION, ETC. OF THE COMPANY. . . . . . . 97
SECTION 13.3 HOLDERS OF SECURITIES TO BE SUBROGATED TO
RIGHT OF HOLDERS OF SENIOR DEBT. . . . . . . . . 98
vi
PAGE
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SECTION 13.4 OBLIGATIONS OF THE COMPANY UNCONDITIONAL . . . . . 99
SECTION 13.5 COMPANY NOT TO MAKE PAYMENTS WITH RESPECT
TO SECURITIES IN CERTAIN CIRCUMSTANCES . . . . . 99
SECTION 13.6 TRUSTEE ENTITLED TO ASSUME PAYMENTS NOT
PROHIBITED IN ABSENCE OF NOTICE . . . . . . . . . 101
SECTION 13.7 APPLICATION BY TRUSTEE OF MONIES DEPOSITED
WITH IT. . . . . . . . . . . . . . . . . . . . . 101
SECTION 13.8 SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS
OR OMISSIONS OF COMPANY OR HOLDERS OF
SENIOR DEBT . . . . . . . . . . . . . . . . . . . 102
SECTION 13.9 HOLDERS OF SECURITIES AUTHORIZE TRUSTEE TO
EFFECTUATE SUBORDINATION OF SECURITIES . . . . . 103
SECTION 13.10 RIGHT OF TRUSTEE TO HOLD SENIOR DEBT;
PRESERVATION OF TRUSTEE'S RIGHTS. . . . . . . . 103
SECTION 13.11 ARTICLE XIII NOT TO PREVENT EVENTS OF
DEFAULT . . . . . . . . . . . . . . . . . . . . 103
SECTION 13.12 TRUSTEE NOT FIDUCIARY FOR HOLDERS OF
SENIOR DEBT . . . . . . . . . . . . . . . . . . 104
SECTION 13.13 TRUST MONIES NOT SUBORDINATED . . . . . . . . . . 104
ARTICLE XIV
SUBORDINATION OF GUARANTEE . . . . . . 104
SECTION 14.1 GUARANTEE SUBORDINATED TO GUARANTOR SENIOR DEBT. . 104
SECTION 14.2 GUARANTEE SUBORDINATED TO PRIOR PAYMENT OF
ALL GUARANTOR SENIOR DEBT ON DISSOLUTION,
LIQUIDATION, REORGANIZATION, ETC. OF
THE GUARANTOR. . . . . . . . . . . . . . . . . . 105
SECTION 14.3 HOLDERS OF SECURITIES TO BE SUBROGATED TO
RIGHT OF HOLDERS OF GUARANTOR SENIOR DEBT. . . . 106
SECTION 14.4 OBLIGATIONS OF THE GUARANTOR UNCONDITIONAL . . . . 107
SECTION 14.5 GUARANTOR NOT TO MAKE PAYMENTS IN RESPECT
OF THE GUARANTY IN CERTAIN CIRCUMSTANCES . . . . 107
SECTION 14.6 TRUSTEE ENTITLED TO ASSUME PAYMENTS NOT
PROHIBITED IN ABSENCE OF NOTICE. . . . . . . . . 108
SECTION 14.7 APPLICATION BY TRUSTEE OF MONIES DEPOSITED
WITH IT. . . . . . . . . . . . . . . . . . . . . 108
SECTION 14.8 SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS
OR OMISSIONS OF A GUARANTOR OR HOLDERS
OF GUARANTOR SENIOR DEBT . . . . . . . . . . . . 109
SECTION 14.9 HOLDERS OF SECURITIES AUTHORIZE TRUSTEE
TO EFFECTUATE SUBORDINATION OF GUARANTY. . . . . 110
SECTION 14.10 RIGHT OF TRUSTEE TO HOLD GUARANTOR
SENIOR DEBT; PRESERVATION OF TRUSTEE'S
RIGHTS. . . . . . . . . . . . . . . . . . . . . 110
SECTION 14.11 ARTICLE XIV NOT TO PREVENT EVENTS OF
DEFAULT. . . . . . . . . . . . . . . . . . . . . 111
SECTION 14.12 TRUSTEE NOT FIDUCIARY FOR HOLDERS OF
GUARANTOR SENIOR DEBT. . . . . . . . . . . . . . 111
SECTION 14.13 TRUST MONIES NOT SUBORDINATED . . . . . . . . . . 111
ARTICLE XV
MISCELLANEOUS. . . . . . . . . . 111
vii
PAGE
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SECTION 15.1 TIA CONTROLS . . . . . . . . . . . . . . . . . . . 111
SECTION 15.2 NOTICES. . . . . . . . . . . . . . . . . . . . . . 112
SECTION 15.3 COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS . . . 113
SECTION 15.4 CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT . . . . . . . . . . . . . . . . . . . . 113
SECTION 15.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. . . 113
SECTION 15.6 RULES BY TRUSTEE, PAYING AGENT, REGISTRAR. . . . . 114
SECTION 15.7 LEGAL HOLIDAYS . . . . . . . . . . . . . . . . . . 114
SECTION 15.8 GOVERNING LAW. . . . . . . . . . . . . . . . . . . 114
SECTION 15.9 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. . . 114
SECTION 15.10 NO RECOURSE AGAINST OTHERS. . . . . . . . . . . . 115
SECTION 15.11 SUCCESSORS. . . . . . . . . . . . . . . . . . . . 115
SECTION 15.12 DUPLICATE ORIGINALS . . . . . . . . . . . . . . . 115
SECTION 15.13 SEVERABILITY. . . . . . . . . . . . . . . . . . . 115
SECTION 15.14 TABLE OF CONTENTS, HEADINGS, ETC. . . . . . . . . 116
SECTION 15.15 GAMING LAWS . . . . . . . . . . . . . . . . . . . 116
SECTION 15.16 TAX TREATMENT . . . . . . . . . . . . . . . . . . 116
SECTION 15.17 WAIVERS AND RELEASES. . . . . . . . . . . . . . . 116
viii
INDENTURE, dated as of ________, 1998, between Jazz Casino Company,
L.L.C., a Louisiana limited liability company ("JCC" or the "Company"), JCC
Holding Company, a Delaware corporation ("JCC Holding"), and Norwest Bank
Minnesota, National Association, as Trustee.
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Company's
Senior Subordinated Notes due 2009 with Contingent Payments.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 DEFINITIONS.
"ACCELERATION NOTICE" shall have the meaning specified in Section 7.2.
"ACCEPTANCE AMOUNT" shall have the meaning specified in Section 5.14.
"ACCUMULATED AMOUNT" shall have the meaning specified in Section 5.14.
"ACQUIRED ASSETS" means assets of any person existing at the time such
person becomes a Subsidiary of the Company or is merged or consolidated into or
with the Company or one of its Subsidiaries.
"ACQUIRED INDEBTEDNESS" means Indebtedness of any person existing at
the time such person becomes a Subsidiary of the Company or is merged or
consolidated into or with the Company or one of its Subsidiaries, and not
incurred in connection with or in anticipation of, such merger or consolidation
or of such person becoming a Subsidiary of the Company.
"ACQUISITION" means the purchase or other acquisition of any person or
substantially all the assets of any person by any other person, whether by
purchase, merger consolidation, or other transfer, and whether or not for
consideration.
"ADMINISTRATIVE SERVICES AGREEMENT" means any Administrative Services
Agreement entered into between HOC and JCC after the date hereof relating to the
performance of certain administrative services.
"AFFILIATE" means (i) any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any
of the Guarantors, (ii) any spouse, immediate family member, or other relative
who has the same principal residence of any person described in clause (i)
above, and (iii) any trust in which any person described in clause (i) or (ii)
above has a beneficial interest. For purposes of this definition, the term
"control" means (a) the power to direct the management and policies of a person,
directly or through one or more intermediaries, whether through the ownership of
voting securities, by contract, or otherwise, or (b) the beneficial ownership of
10% or more of any
class of voting Capital Stock of a person (on a fully diluted basis) or of
warrants or other rights to acquire such class of Capital Stock (whether or not
presently exercisable). Notwithstanding the foregoing, Affiliate shall not
include wholly-owned Subsidiaries of the Company.
"AFFILIATE TRANSACTION" shall have the meaning specified in Section
5.10.
"AGENT" means any Registrar, Paying Agent or co-Registrar.
"AGGREGATE AMOUNT" shall have the meaning specified in Section 5.14.
"AGGREGATE CONTINGENT PAYMENTS" means the Contingent Payments together
with all payments in respect of the Contingent Notes.
"APPROVALS" means all approvals, licenses (including Gaming Licenses),
permits, authorizations, findings and other filings necessary under applicable
gaming laws.
"ASSET SALE" shall have the meaning specified in Section 5.14.
"ASSET SALE OFFER" shall have the meaning specified in Section 5.14.
"ASSET SALE OFFER AMOUNT" shall have the meaning specified in Section
5.14.
"ASSET SALE OFFER PERIOD" shall have the meaning specified in Section
5.14.
"ASSET SALE OFFER PRICE" shall have the meaning specified in Section
5.14.
"ASSET SALE PURCHASE DATE" shall have the meaning specified in Section
5.14.
"ASSET SALE PUT DATE" shall have the meaning specified in Section
5.14.
"AVERAGE LIFE" means, as of the date of determination, with respect to
any security or instrument, the quotient obtained by dividing (i) the sum of the
products of the number of years from the date of determination to the dates of
each successive scheduled principal payment of such security or instrument
multiplied by the amount of each such principal payment by (ii) the sum of all
such principal payments.
"BANK AGENT" means Bankers Trust Company or any successor or
replacement Administrative Agent (as defined in the Bank Credit Agreement) under
the Bank Credit Facilities.
"BANK CREDIT FACILITIES" means the Credit Agreement, dated as of
_________, 1998 (the "Bank Credit Agreement"), among JCC, JCC Holding, the Bank
Lenders from time to time parties thereto, and Bankers Trust Company, as
administrative agent, together with the related documents thereto (including,
without limitation, any guaranty agreements
2
and security documents), in each case as such agreements may be amended
(including any amendment and restatement thereof), supplemented or modified from
time to time, including any agreement extending the maturity of, refinancing,
replacing or otherwise restructuring (including by way of adding Subsidiaries of
JCC as additional borrowers or guarantors thereunder) all or a portion of the
Indebtedness under such agreement or any successor or replacement agreement and
whether by the same or any other agent, lender or group of lenders.
"BANK LENDERS" means the lenders from time to time party to the Bank
Credit Facilities.
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
"BANK SECURITY INTERESTS" means the Liens on the Collateral created by
the Collateral Documents for the benefit of the Bank Lenders.
"BOARD OF DIRECTORS" means, with respect to any person, the Board of
Directors of such person or any committee of the Board of Directors of such
person authorized, with respect to any particular matter, to exercise the power
of the Board of Directors of such person.
"BOARD RESOLUTION" means, with respect to any person, a duly adopted
resolution of the Board of Directors (or, if such person is a limited liability
company, of the Manager) of such person.
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York, New York
are authorized or obligated by law or executive order to close.
"CAPITALIZED LEASE OBLIGATION" means obligations under a lease,
entered into on or after the Issue Date, that are required to be capitalized for
financial reporting purposes in accordance with GAAP, and the amount of
Indebtedness represented by such obligations shall be the capitalized amount of
such obligations, as determined in accordance with GAAP.
"CAPITAL STOCK" means, with respect to any person, any capital stock
of such person and shares, interests, participations or other ownership
interests (however designated) of any person and any rights (other than debt
securities convertible into corporate stock), warrants and options to purchase
any of the foregoing, including (without limitation) each class of common stock
and preferred stock of such person if such person is a corporation and each
general and limited partnership interest of such person if such person is a
partnership.
"CASH" means U.S. Legal Tender or U.S. Government Obligations.
3
"CASH EQUIVALENT" means (i) securities issued or directly and fully
guaranteed, or secured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) and in each case maturing
within one year after the date of acquisition, (ii) time deposits and
certificates of deposit of any commercial bank having, or which is the principal
subsidiary of a bank holding company organized under the laws of the United
States, any State thereof, the District of Columbia or any foreign jurisdiction
having capital and surplus in excess of $250,000,000 and commercial paper issued
by others rated at least A-2 or the equivalent thereof by Standard & Poor's
Corporation or at least P-2 or the equivalent thereof by Xxxxx'x Investors
Service, Inc. and in each case maturing within one year after the date of
acquisition, (iii) repurchase obligations with a term of not more than 90 days
collateralized by securities issued or directly and fully guaranteed, or secured
by the United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of America is
pledged in support thereof) entered into with any bank or other person meeting
the qualifications specified in clause (ii) above, and (iv) investments in money
market funds substantially all of whose assets are comprised of securities of
the types described in clauses (i) through (iii).
"CASINO" means the Xxxxxx'x Casino New Orleans to be located at the
site of the former Rivergate Convention Center in New Orleans, Louisiana that is
operated in accordance with the Casino Operating Contract.
"CASINO COMPLETION DATE" means the Termination of Construction Date
(as defined in the Notes Completion Guarantee).
"CASINO OPENING DATE" means the date upon which Xxxxxx'x Management
Company first opens the Casino to the public and commences business.
"CASINO OPERATING CONTRACT" means the modified Casino Operating
Contract between the Company and the Louisiana Gaming Control Board, dated as of
________, 1998, as it may be amended or supplemented from time to time.
"CHANGE OF CONTROL" shall be deemed to have occurred if HET or a
direct or indirect Subsidiary of HET does not have the exclusive authority to
manage the Casino.
"CHANGE OF CONTROL OFFER" shall have the meaning specified in Section
11.1.
"CHANGE OF CONTROL OFFER PERIOD" shall have the meaning specified in
Section 11.1.
"CHANGE OF CONTROL OFFER PRICE" shall have the meaning specified in
Section 11.1.
"CHANGE OF CONTROL PAYMENT DATE" shall have the meaning specified in
Section 11.1.
4
"CHANGE OF CONTROL PUT DATE" shall have the meaning specified in
Section 11.1.
"CITY" means the City of New Orleans, Louisiana.
"COLLATERAL" means the Property and assets of the Company which is now
or hereafter subject to the Liens created by the Collateral Documents.
"COLLATERAL AGENT" shall have the meaning set forth under the
definition of "Security Agreement."
"COLLATERAL DOCUMENTS" or "MORTGAGE" means the Security Agreement, the
Intellectual Property Security Documents and the Pledge Agreement and any other
agreement purporting to convey to the Collateral Agent or the Trustee for the
benefit of the Holders, a security interest in Property pursuant to the
requirements of this Indenture executed by the Company in favor of the
Collateral Agent or the Trustee for the benefit of the Holders, as the same may
be amended from time to time.
"COMPANY" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means such
successor.
"COMPANY REQUEST" means a written request of the Company or a
Guarantor, as the case may be, in the form of an Officers' Certificate.
"COMPLETION GUARANTEES" means (i) the Notes Completion Guarantee (the
"Notes Completion Guarantee"), dated as of _______, 1998, by HOC and HET in
favor of the Trustee, as trustee, as it may be amended or supplemented from time
to time, (ii) the Bank Completion Guarantee, dated as of _______, 1998, by HOC
and HET in favor the Bank Agent, as agent, as it may be amended or supplemented
from time to time, (iii) the LGCB Completion Guarantee, dated as of _______,
1998, by HOC and HET in favor of the Regulating Authority, as it may be amended
or supplemented from time to time, and (iv) the RDC/City Completion Guarantee,
dated as of _______, 1998, by HOC and HET in favor of the RDC and the City, as
it may be amended or supplemented from time to time.
"COMPLETION LOAN AGREEMENT" means the Amended and Restated Completion
Loan Agreement, dated as of ________, 1998, among the Company, HOC and HET, as
it may be amended or supplemented from time to time.
"CONSOLIDATED CAPITAL EXPENDITURES" means, with respect to any person
for any period, the capital expenditures of such person and its Consolidated
Subsidiaries (determined in accordance with GAAP) for such period.
"CONSOLIDATED COVERAGE RATIO" of any person on any date of
determination (the "Transaction Date") means, the ratio, on a PRO FORMA basis,
of (a) the aggregate amount of Consolidated EBITDA of such person attributable
to continuing operations and businesses
5
(exclusive of amounts attributable to operations and businesses permanently
discontinued or disposed of for the Reference Period) to (b) the aggregate
Consolidated Fixed Charges of such person (exclusive of amounts attributable to
operations and businesses permanently discontinued or disposed of, but only to
the extent that the obligations giving rise to such Consolidated Fixed Charges
would no longer be obligations contributing to such person's Consolidated Fixed
Charges subsequent to the Transaction Date) during the Reference Period;
provided, that for purposes of such calculation, (i) Acquisitions which occurred
during the Reference Period or subsequent to the Reference Period and on or
prior to the date of the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio shall be assumed to have occurred on the first day
of the Reference Period, (ii) transactions giving rise to the need to calculate
the Consolidated Coverage Ratio shall be assumed to have occurred on the first
day of the Reference Period, (iii) the incurrence of any Indebtedness or
issuance of any Disqualified Capital Stock during the Reference Period or
subsequent to the Reference Period and on or prior to the Transaction Date (and
the application of the proceeds therefrom to the extent used to refinance or
retire other Indebtedness) shall be assumed to have occurred on the first day of
such Reference Period, (iv) the Consolidated Fixed Charges of such person
attributable to interest on any Indebtedness or dividends on any Disqualified
Capital Stock bearing a floating interest (or dividend) rate shall be computed
on a PRO FORMA basis as if the average rate in effect from the beginning of the
Reference Period to the Transaction Date had been the applicable rate for the
entire period, unless such Person or any of its Subsidiaries is a party to an
Interest Rate Agreement (which shall remain in effect for the 12-month period
immediately following the Transaction Date) that has the effect of fixing the
interest rate on the date of computation, in which case such rate (whether
higher or lower) shall be used, (v) there shall be excluded from Consolidated
Fixed Charges any portion of such Consolidated Fixed Charges related to any
amount of Indebtedness that was outstanding during the Reference Period but is
not outstanding on the Transaction Date, except for Consolidated Fixed Charges
actually incurred with respect to Indebtedness borrowed (as adjusted pursuant to
clause (iv)) under a revolving credit or similar arrangement to the extent the
commitment thereunder remains in effect on the Transaction Date and (vi) the
Consolidated Fixed Charges of such person attributable to interest on any
Indebtedness under a revolving credit facility computed on a PRO FORMA basis
shall be computed based upon the average daily balance of such Indebtedness
during the Reference Period.
"CONSOLIDATED EBITDA" means, with respect to any person, for any
period, the Consolidated Net Income of such person for such period adjusted (A)
to add thereto (to the extent deducted from net revenues in determining
Consolidated Net Income), without duplication, the sum of (i) Permitted Tax
Distributions and, if such person is not treated as a pass through entity for
federal income tax purposes, or any similar provision of state or local law,
income tax expense (whether or not payable during such period) of such person
and its Consolidated Subsidiaries, (ii) consolidated depreciation and
amortization expense, (iii) Consolidated Fixed Charges, (iv) Aggregate
Contingent Payments, whether paid or accrued, (v) Incentive Management Fees,
whether paid or accrued, (vi) amortization expense with respect to deferred
financing fees, (vii) pre-opening expenses, (viii) any extraordinary loss
reflected in the calculation of Consolidated Net Income, (ix) other non-cash
charges, and (x) solely for the purpose of calculating Contingent Payments, if
any, and Incentive
6
Management Fees, if any, the proceeds, if any, from the exercise of the HET
Warrant, and (B) to subtract therefrom any extraordinary gain reflected in the
calculation of Consolidated Net Income.
"CONSOLIDATED FIXED CHARGES" of any person means, for any period, the
aggregate amount (without duplication) of (a) interest (excluding, solely for
purpose of this definition, Aggregate Contingent Payments and Incentive
Management Fees, whether paid or accrued) expensed or capitalized, paid,
accrued, or scheduled to be paid or accrued in accordance with GAAP (except as
set forth below and including, in accordance with the following sentence,
interest attributable to Capitalized Lease Obligations) during such period in
respect of all Indebtedness of such person and its Consolidated Subsidiaries
including the interest portion of all deferred payment obligations calculated in
accordance with GAAP, and excluding original issue discount and non-cash
interest payments or accruals on any Indebtedness, and all commissions,
discounts and other fees and charges owed with respect to bankers' acceptance
financings and currency and Interest Rate Agreements and (b) the amount of
dividends payable by such person or any of its Consolidated Subsidiaries in
respect of Disqualified Capital Stock (other than by Subsidiaries of such person
to such person or such person's wholly owned Subsidiaries). For purposes of
this definition, (x) interest on a Capitalized Lease Obligation shall be deemed
to accrue at an interest rate reasonably determined by the Company to be the
rate of interest implicit in such Capitalized Lease Obligation in accordance
with GAAP and (y) interest expense attributable to any Indebtedness represented
by the guaranty by such person or a Subsidiary of such person of an obligation
of another person shall be deemed to be the interest expense attributable to the
Indebtedness guaranteed.
"CONSOLIDATED NET INCOME" means, with respect to any person for any
period, the net income (or loss) of such person and its Consolidated
Subsidiaries (determined in accordance with GAAP) for such period, adjusted to
exclude (only to the extent included in computing such net income (or loss) and
without duplication): (a) all gains which are either extraordinary (as
determined in accordance with GAAP) or are either unusual or nonrecurring
(including from the sale of assets outside of the ordinary course of business or
from the issuance or sale of Capital Stock), (b) the net income, if positive, of
any person, other than a Consolidated Subsidiary, in which such person or any of
its Consolidated Subsidiaries has an interest, except to the extent of the
amount of any dividends or distributions actually paid in cash to such person or
a Consolidated Subsidiary of such person during such period, but not in excess
of such person's PRO RATA share of such person's net income for such period, (c)
the net income, if positive, of any person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition, and (d) the
net income, if positive, of any of such person's Consolidated Subsidiaries to
the extent that the declaration or payment of dividends or similar distributions
is not at the time permitted by operation of the terms of its charter or bylaws
or any other agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Consolidated Subsidiary.
"CONSOLIDATED SUBSIDIARY" means, for any person, each Subsidiary of
such person (whether now existing or hereafter created or acquired) the
financial statements of
7
which are or are required to be consolidated for financial statement reporting
purposes with the financial statements of such person in accordance with GAAP.
"CONSOLIDATED TANGIBLE NET WORTH" of any person at any date means, in
the case of a partnership, the partners capital and, in the case of a
corporation, the aggregate of capital, surplus and retained earnings of such
person (plus, in the case of a corporation, amounts of equity attributable to
preferred stock) and its Consolidated Subsidiaries, as would be shown on the
consolidated balance sheet of such person prepared in accordance with GAAP,
adjusted to exclude (to the extent included in calculating such equity), (a) the
amount of partners capital (or capital, surplus and accrued but unpaid
dividends, as the case may be), attributable to any Disqualified Capital Stock,
(b) all upward revaluations and other write-ups in the book value of any asset
of such person or a Consolidated Subsidiary of such person subsequent to the
Issue Date, (c) all investments in Subsidiaries that are not Consolidated
Subsidiaries and in persons that are not Subsidiaries, (d) all unamortized debt
discount and expense and unamortized deferred charges and (e) goodwill and other
intangible assets.
"CONTINGENT NOTES" means the Company's Senior Subordinated Contingent
Notes due 2009.
"CONTINGENT NOTES INDENTURE" means the Indenture, dated as of
________, 1998, among the Company, as obligor, JCC Holding, as guarantor, and
Norwest Bank Minnesota, National Association, as trustee, in connection with the
Contingent Notes.
"CONTINGENT PAYMENT PERIOD" means collectively a First Semiannual
Period together with the next succeeding Second Semiannual Period.
"CONTINGENT PAYMENTS" means collectively the First Period Contingent
Payments and the Second Period Contingent Payments.
"CONTINGENT PAYMENT ACCRUAL" means, at any time, the total amount of
Contingent Payments accrued and unpaid through and as of such time.
"CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES" means the 8% Convertible
Junior Subordinated Debentures due 2009 issued by the Company in connection with
the Plan of Reorganization.
"CREDIT ENHANCEMENT FEE AGREEMENT" means the Credit Enhancement Fee
Agreement, dated as of ________, 1998, between the Company and HOC.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"DEFAULT" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
8
"DEFAULTED INTEREST" shall have the meaning specified in Section 2.12.
"DESIGNATED SENIOR DEBT" means (i) so long as any Indebtedness is
outstanding in respect of the Tranche A Term Loans or the Revolving Loans, such
Indebtedness, and (ii) thereafter, any other Senior Debt permitted under this
Indenture the principal amount of which is $15,000,000 or more.
"DESIGNATED SENIOR DEBT OF THE GUARANTORS" means (i) so long as any
Indebtedness of the Guarantors is outstanding in respect of the Tranche A Term
Loans or the Revolving Loans, such Indebtedness, and (ii) thereafter, any other
Guarantor Senior Debt permitted under this Indenture the principal amount of
which is $15,000,000 or more.
"DEVELOPMENT AGREEMENT" means that certain Development Agreement,
dated as of _______, 1998, between the Company and a subsidiary of HOC.
"DISQUALIFIED CAPITAL STOCK" means (a) except as provided in (b), with
respect to any person, Capital Stock of such person that, by its terms or by the
terms of any security into which it is convertible, exercisable or exchangeable,
is, or upon the happening of an event or the passage of time would be, required
to be redeemed or repurchased (including at the option of the holder thereof) by
such person or any of its Subsidiaries, in whole or in part on or prior to the
Stated Maturity of the Notes, and (b) with respect to any Subsidiary of such
person (including any Subsidiary of the Company), any Capital Stock other than
any Capital Stock with no preference, privileges, or redemption or repayment
provisions.
"ENVIRONMENTAL LAW" means any applicable Federal, state, foreign or
local statute, law, rule, regulation, ordinance, code, guideline, written policy
and rule of common law now or hereafter in effect and in each case as amended,
and any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent decree or judgment, to the extent
binding on the Company or any of its subsidiaries, relating to the environment,
employee health and safety or Hazardous Materials, including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as the same may be amended from time to time, 42 U.S.C.
Section 9601 ET SEQ.; the Resource Conservation and Recovery Act, as the same
may be amended from time to time, 42 U.S.C. Section 6901 ET SEQ.; the Federal
Water Pollution Control Act, 33 U.S.C. Section 1251 ET SEQ.; the Toxic
Substances Control Act, 15 U.S.C. Section 2601 ET SEQ.; the Clean Air Act,
42 U.S.C. Section 7401 ET SEQ.; the Safe Drinking Water Act, 42 U.S.C. Section
3803 ET SEQ.; the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 ET SEQ.; the
Emergency Planning and the Community Right-to-Know Act of 1986, 42 U.S.C.
Section 11001 ET SEQ., the Hazardous Material Transportation Act, 49 U.S.C.
Section 1801 ET SEQ. and the Occupational Safety and Health Act, 29 U.S.C.
Section 651 ET SEQ. (to the extent it regulates occupational exposure to
Hazardous Materials); and any state and local or foreign counterparts or
equivalents, in each case as amended from time to time.
"EVENT OF DEFAULT" shall have the meaning specified in Section 7.1.
9
"EVENT OF LOSS" means, with respect to any property or asset, any (i)
loss, destruction or damage of such property or asset, or (ii) any condemnation,
seizure or taking, by exercise of the power of eminent domain or otherwise, of
such property or asset, or confiscation or requisition of the use of such
property or asset.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the SEC thereunder.
"FIRST PERIOD CONTINGENT PAYMENTS" means the amounts payable in the
aggregate to the Holders of the Securities on the Interest Payment Date next
following the six-month period ending on ____________ (the "First Semiannual
Period") in an amount equal to the product of (i) 75% of the Company's
Consolidated EBITDA for the First Semiannual Period in excess of $35,000,000 and
less than $45,769,000, and (ii) a fraction (A) the numerator of which is
the aggregate principal amount of Securities (including Secondary Securities)
outstanding on the close of business on the Record Date corresponding to such
Interest Payment Date and (B) the denominator of which is the sum of (x)
$187,500,000 and (y) the total aggregate principal amount of Secondary
Securities issued to Holders in lieu of cash interest payments as of such Record
Date.
"FIXED INTEREST" means interest, payable semi-annually on the Interest
Payment Dates in accordance with this Indenture, at a rate per annum for the
indicated periods:
__________, 1998 through __________, 1998 . . . 5.867%
__________, 1998 through __________, 1999 . . . 5.927%
__________, 1999 through __________, 1999 . . . 5.987%
__________, 1999 through __________, 2000 . . . 6.046%
__________, 2000 through __________, 2000 . . . 6.103%
__________, 2000 through __________, 2001 . . . 6.159%
__________, 2001 through __________, 2003 . . . 6.214%
__________, 2003 through __________, 2009 . . . 8.000%
"FORMULA RATE" means, with respect to any Note, one-half percent per
annum plus (a) the rate of interest per annum equal to the yield to maturity of
the United States Treasury Security having a maturity equal to the Weighted
Average Life to Maturity at such time of such Note, provided that if there shall
be more than one United States Treasury Security having a maturity equal to the
Weighted Average Life to Maturity of such Note, the Formula Rate shall be equal
to the average of the yields to maturity (expressed as a rate per annum) of such
United States Treasury Securities, or (b) if no United States Treasury Security
shall have a maturity equal to the Weighted Average Life to Maturity of such
Note, the rate of interest per annum to maturity (expressed as a rate per annum)
of the United States Treasury Security having a maturity as close as possible
to, but less than, the Weighted Average Life to Maturity of such Note. For
purposes of this definition, "United States Treasury Security" means, at any
time, each of the United States Treasury notes, bonds, three month bills, six
month bills and one year bills having the maturities and yields to maturity as
set forth in the then most recently published Federal Reserve Board Statistical
Release, provided (A) if, for any particular maturity set forth in such Federal
Reserve Board
10
Statistical Release, more than one date is associated therewith for which a
yield to maturity is set forth, then the yield to maturity for the most recent
date associated with such maturity shall be used for purposes of determining the
Formula Rate and (B) if, for any particular maturity and the most recent date
associated therewith that is set forth in such Federal Reserve Board Statistical
Release, more than one yield to maturity is set forth therein, then the average
yield associated with such maturity and such date shall be used for purposes of
determining the Formula Rate. For purposes of this definition, "Federal Reserve
Board Statistical Release" means the weekly Statistical Release H.15(519) of the
Federal Reserve Board of Governors or any successor or substitute publication.
"GAAP" means United States generally accepted accounting principles as
in effect on the date of this Indenture.
"GAMING AUTHORITY" means any Governmental Authority with the power to
regulate gaming in any Gaming Jurisdiction, and the corresponding Governmental
Authorities with responsibility to interpret and enforce the laws and
regulations applicable to gaming in any Gaming Jurisdiction.
"GAMING LICENSE" means every material license, material franchise or
other material authorization on the Issue Date or thereafter required to own,
lease, operate or otherwise conduct or manage a casino facility in any state,
local or other jurisdiction including, without limitation, any applicable
material liquor licenses, and with respect to the Company (and without
limitation), the Casino Operating Contract.
"GENERAL DEVELOPMENT AGREEMENT" means the Amended and Restated General
Development Agreement among the Company, the RDC and the City dated as of
________, 1998, as amended or supplemented from time to time.
"GOVERNMENTAL AUTHORITY" means any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
the United States or foreign government, any state, province or any city or
other political subdivision and whether now or hereafter in existence, or any
officer or official thereof, and any maritime authority.
"GROSS REVENUE" means all revenues and income of any nature derived
directly or indirectly from the Casino, or from the use or operation thereof,
including without limitation, win (gaming) (i.e., the difference between gaming
wins and losses before deducting cost and expenses determined according to
Casino Standard Accounting Principles (as the term is defined in the Management
Agreement, as in effect on the Issue Date)), food and beverage revenue,
telephone, telegraph, satellite or cable video and telex revenue, entertainment
revenue, parking revenue, rental payment from any lessees or concessionaires,
merchandise sales revenue, interest income, and the actual cash proceeds of
business interruption, increased cost of operation, use occupancy or similar
insurance.
11
"GROUND LEASE" means the Amended and Restated Ground Lease for the
site of the Casino among the Company, the RDC and the City, as Intervenor, dated
as of ________, 1998, as amended or supplemented from time to time.
"GUARANTOR SENIOR DEBT" means Indebtedness, including any obligation
for interest which would accrue but for any proceeding referred to in Section
14.2 at the relevant contractual rate, whether or not an allowed claim in any
such proceeding, of the Guarantors in respect of the Tranche A Term Loans or the
Revolving Loans, and any Refinancing (in whole or in part) of the Tranche A Term
Loans or the Revolving Loans (or any previous Refinancing thereof).
"GUARANTORS" means collectively the Parent Guarantor and the
Subsidiary Guarantors.
"GUARANTY" shall have the meaning specified in Section 12.1.
"XXXXXX'X INVESTOR" means Xxxxxx'x Crescent City Investment Company, a
Nevada corporation.
"XXXXXX'X MANAGEMENT COMPANY" means Xxxxxx'x New Orleans Management
Company, a Nevada corporation.
"HAZARDOUS MATERIALS" means (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
(b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous waste," "hazardous materials,"
"extremely hazardous substances," "restricted hazardous waste," "toxic
substances," "toxic pollutants," "contaminants," or "pollutants," or words of
similar import, under any applicable Environmental Law; and (c) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority under Environmental Laws.
"HET" means Xxxxxx'x Entertainment, Inc., a Delaware corporation.
"HET/JCC AGREEMENT" means the Agreement, dated as of ______________,
1998, among HET, HOC and the Company, as it may be amended, modified, renewed,
extended or replaced from time to time, pursuant to which HET and HOC shall
provide the Minimum Payment Guaranty for certain periods and subject to certain
terms and conditions set forth therein.
"HET LOAN GUARANTEE" means the guarantees of HET and HOC pursuant to
that certain Guaranty and Loan Purchase Agreement, dated as of ________ 1998,
among HET, HOC and Bankers Trust Company, as administrative agent.
12
"HET WARRANT" means the warrants granted to Xxxxxx'x Investor in
connection with the Plan of Reorganization pursuant to that certain Warrant
Agreement, dated as of ________, 1998, between JCC Holding and Xxxxxx'x
Investor, as it may be amended from time to time.
"HOC" means Xxxxxx'x Operating Company, Inc., a Delaware corporation.
"HOLDER" or "SECURITYHOLDER" means the person in whose name a Security
is registered on the Registrar's books.
"HOLDER OF CONTINGENT NOTES" means the person in whose name a
Contingent Note is registered on the books of the registrar with respect to the
Contingent Notes.
"INCUR" shall have the meaning specified in Section 5.11.
"INCURRENCE DATE" shall have the meaning specified in Section 5.11.
"INDEBTEDNESS" of any person means, without duplication, (a) all
liabilities and obligations, contingent or otherwise, of such person, (i) in
respect of borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such person or only to a portion thereof), including
accrued and unpaid Aggregate Contingent Payments, (ii) evidenced by bonds,
notes, debentures or similar instruments, (iii) representing the balance
deferred and unpaid of the purchase price of any property or services, except
such as would constitute trade payables to trade creditors in the ordinary
course of business, if and to the extent any of the foregoing described in
clauses (i), (ii) and (iii) would appear as a liability on the balance sheet of
such Person, (iv) evidenced by bankers' acceptances or similar instruments
issued or accepted by banks, (v) for the payment of money relating to a
Capitalized Lease Obligation, or (vi) evidenced by a letter of credit or a
reimbursement obligation of such person with respect to any letter of credit;
(b) all net obligations of such person under Interest Rate Agreements and
foreign currency xxxxxx; (c) all liabilities of others of the kind described in
the preceding clause (a) or (b) that such person has guaranteed or that is
otherwise its legal liability; (d) all obligations to purchase, redeem or
acquire any Capital Stock; and (e) all obligations secured by a Lien to which
the property or assets (including, without limitation, leasehold interests and
any other tangible or intangible property rights) of such person are subject,
whether or not the obligations secured thereby shall have been assumed by or
shall otherwise be such person's legal liability, provided, that the amount of
such obligations shall be limited to the lesser of the fair market value of the
assets or property to which such Lien attaches and the amount of the obligation
so secured. In addition, "Indebtedness" of any person shall include
Indebtedness described in the foregoing clauses (a) (i), (ii) and (iii) that
would not appear as a liability on the balance sheet of such person if (l) such
Indebtedness is the obligation of a partnership or joint venture that is not a
Subsidiary of such person (a "Joint Venture"), (2) such person or a Subsidiary
of such person is a general partner of the Joint Venture (a "General Partner"),
and (3) there is recourse, by contract or operation of law, with respect to
payment of such obligation to property or assets of such person or a Subsidiary
of such person; then such Indebtedness shall be included in an amount not to
exceed (x) the greater of (A) the net assets of the
13
General Partner, and (B) the amount of such obligations to the extent that there
is recourse, by contract or operation of law, to the property or assets of such
person or a Subsidiary of such person (other than the General Partner) or (y) if
less than the amounts determined pursuant to clause (x) above, the actual amount
of such Indebtedness that is recourse to such person, if the Indebtedness is
evidenced by a writing and is for a determinable amount.
"INDEMNITY AGREEMENT" means the Amended and Restated Construction Lien
Indemnity Obligation Agreement, dated as of ________, 1998, between the Company
and HOC.
"INDENTURE" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof.
"INDENTURE OBLIGATIONS" means the obligations of the Company and the
Guarantors pursuant to this Indenture and the Securities (and any other obligor
hereunder or under the Securities) now or hereafter existing, to pay principal
of and interest (including Contingent Payments) on the Securities when due and
payable, whether on the Maturity Date or an Interest Payment Date, by
acceleration, Required Regulatory Redemption, acceptance of any Asset Sale
Offer, Change of Control Offer, or otherwise, and interest on the overdue
principal of, and (to the extent lawful) interest, if any, on, the Securities
and all other amounts due or to become due in connection with this Indenture,
the Securities and the Collateral Documents, including any and all extensions,
renewals or other modifications thereof, in whole or in part, and the
performance of all other obligations of the Company (and any other obligor
hereunder or under the Securities) and the Guarantors, including all costs and
expenses incurred by the Trustee or the Holders in the collection or enforcement
of any such obligations or realization upon the Collateral or the security of
any Collateral Documents.
"INSURANCE PROCEEDS" means the Company's and the Guarantors' interest
in and to (a) all proceeds which now or hereafter may be paid under any
insurance policies now or hereafter obtained by or on behalf of the Company or
any of the Guarantors in connection with the conversion of the Property subject
to the Collateral Documents into Cash, Cash Equivalents or liquidated claims,
together with the interest payable thereon and the right to collect and receive
the same, including, but without limiting the generality of the foregoing,
proceeds of casualty insurance, title insurance, business interruption insurance
and any other insurance now or hereafter maintained with respect to such
Property and (b) all amounts attributable to Events of Loss.
"INTELLECTUAL PROPERTY SECURITY DOCUMENTS" means the Assignment of
Security Interests in United States Trademarks and Patents and the Assignment of
Security Interest in United States Copyrights, each substantially in the form
annexed to the Security Agreement and executed in favor of the Collateral Agent.
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement, dated as
of ________, 1998, among the Company, the Administrative Agent under the Bank
Credit
14
Facilities, the Trustee, the Collateral Agent and the other parties named
therein, as it may be amended or supplemented from time to time.
"INTEREST PAYMENT DATE" means the stated due date of an installment of
interest on the Securities. The "First Interest Payment Date" shall mean
_________, 1998. The "Second Interest Payment Date" shall mean _________, 1999.
The "Third Interest Payment Date" shall mean _________, 1999. The "Fourth
Interest Payment Date" shall mean _________, 2000. The "Fifth Interest Payment
Date" shall mean _________, 2000. The "Sixth Interest Payment Date" shall mean
_________, 2001.
"INTEREST RATE AGREEMENT" means the obligations of any person pursuant
to any interest rate swap agreement, interest rate collar agreement or other
similar agreement or arrangement, in each case designed to protect such person
or any of its Subsidiaries against fluctuations in interest rates.
"INVESTMENT" by any person in any other person means (without
duplication) (a) the acquisition by such person (whether for cash, property,
services, securities or otherwise) of capital stock, bonds, notes,
debentures, partnership or other ownership interests or other securities,
including any options or warrants, of such other person or any agreement to
make any such acquisition; (b) the making by such person of any deposit with,
or advance, loan or other extension of credit to or on behalf of, such other
person (including the purchase of property from another person subject to an
understanding or agreement, contingent or otherwise, to resell such property
to such other person) or any commitment to make any such advance, loan or
extension (but excluding accounts receivable arising in the ordinary course
of business); (c) other than (i) any guarantees of the Notes, (ii) any
guarantees of the Contingent Notes, (iii) any guarantees of the Bank Credit
Facilities, (iv) any guarantees of Interest Rate Agreements, and (v) any
guarantees of Indebtedness or other liabilities of the Company or its
Subsidiaries by the Guarantors, including, without limitation, the Parent
Guarantor, the Company or its Subsidiaries, the entering into by such person
of any guarantee of, or other credit support or contingent obligation with
respect to, Indebtedness or other liability of such other person; (d) the
making of any capital contribution by such person to such other person; or
(e) the designation by the Manager of the Company of a Subsidiary to be an
Unrestricted Subsidiary in accordance with the definition of "UNRESTRICTED
SUBSIDIARY." The Company shall be deemed to make an "Investment" in an
amount equal to the fair market value of the net assets of any Subsidiary, at
the time that such Subsidiary is designated an Unrestricted Subsidiary, and
any property transferred to an Unrestricted Subsidiary from the Company or
one of its Subsidiaries shall be deemed an Investment valued at its fair
market value at the time of such transfer, as determined by the Manager of
the Company in good faith. For purposes of such determination, the amount of
outstanding Investments shall be reduced by the fair market value (determined
by the Manager of the Company in good faith) of the net assets of any
Unrestricted Subsidiary upon its designation as a Subsidiary.
"ISSUE DATE" means the date of first issuance of the Notes under this
Indenture.
15
"LEASEHOLDS" of any person means all the right, title and interest of
such person as lessee or licensee in, to and under any lease.
"LEGAL HOLIDAY" shall have the meaning provided in Section 13.7.
"LICENSING AGREEMENT" means the Licensing Agreement, dated as of
________, 1998, between Xxxxxx'x Las Vegas, Inc. and JCC relating to JCC's use
of "Xxxxxx'x" in the name of the Casino and on its signage and advertising.
"LIEN" means any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind, whether or not filed, recorded or otherwise perfected
under applicable law (including, without limitation, any conditional sale or
other title retention agreement, any lease in the nature thereof, any option or
other agreement to sell or give any security interest in and any filing or other
agreement to give any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction).
"MAKE-WHOLE AMOUNT" with respect to the Notes shall consist of a
Primary Make-Whole Amount and a Secondary Make-Whole Amount.
"MANAGEMENT AGREEMENT" means the Second Amended and Restated
Management Agreement between the Company and Xxxxxx'x Management Company
relating to the management of the Casino dated as of ________, 1998, as it may
be amended or supplemented from time to time.
"MANAGEMENT FEE" means "Management Fee" as defined by the Management
Agreement.
"MANAGER" means (i) for so long as the Company is a limited liability
company, the Manager of the Company as set forth in the Company's Operating
Agreement or, if the Company's Operating Agreement does not provide for a
Manager, the member or members of the Company, and (ii) otherwise the Board of
Directors of the Company.
"MATURITY DATE," when used with respect to any Security, means the
date on which the principal of such Security becomes due and payable as therein
or herein provided, whether at Stated Maturity, a Change of Control Payment
Date, an Asset Sale Purchase Date or by declaration of acceleration, call for
redemption or otherwise.
"MAXIMUM CONTINGENT PAYMENTS" means, for any Contingent Payment
Period, an amount equal to the product of (i) $15,000,000 and (ii) a fraction
(x) the numerator of which is the aggregate principal amount of Securities
(including Secondary Securities) outstanding on the close of business on the
Record Date corresponding to the Interest Payment Date immediately following
such Contingent Payment Period, and (y) the denominator of which is the sum of
(I) $187,500,000 and (II) the total aggregate principal amount of Secondary
Securities issued to Holders in lieu of cash interest payments as of such Record
Date.
16
"MINIMUM ACCUMULATION DATE" shall have the meaning specified in
Section 5.14.
"MINIMUM PAYMENT GUARANTY" means the guaranty that the Casino
Operating Contract obligates the Company to cause to be provided to the
Regulating Authority guaranteeing the Company's $100,000,000 annual minimum
payment obligation to the Regulating Authority under the Casino Operating
Contract.
"MINIMUM PAYMENT GUARANTOR" means any person that provides the Minimum
Payment Guaranty to the State.
"MINIMUM PAYMENT GUARANTOR SECURITY INTEREST" means a first priority
Lien on the Collateral for the Benefit of the Minimum Payment Guarantor to
secure the Company's obligation to pay any amounts owing to the Minimum Payment
Guarantor including, without limitation, (i) any fees owing to the Minimum
Payment Guarantor in connection with providing the Minimum Payment Guaranty,
(ii) any termination payment owing by the Company to the Minimum Payment
Guarantor in connection with the Minimum Payment Guaranty, and (iii) payments of
principal and interest in respect of Indebtedness incurred by the Company to the
Minimum Payment Guarantor as a result of drawings (including interest thereon)
by the Regulating Authority under the Minimum Payment Guaranty.
"MORTGAGE" shall have the meaning set forth under the definition of
"Collateral Documents."
"NET CASH PROCEEDS" means the aggregate amount of U.S. Legal Tender or
Cash Equivalents received by the Company in the case of a sale of Qualified
Capital Stock and by the Company and its Subsidiaries in respect of an Asset
Sale, less, in each case, the sum of all fees, commissions and other expenses
incurred in connection with such sale of Qualified Capital Stock or Asset Sale,
and, in the case of an Asset Sale only, less (a) the amount (estimated
reasonably and in good faith by the Company) of income, franchise, sales and
other applicable taxes required to be paid by the Company or any of its
Subsidiaries in connection with such Asset Sale and (b) the aggregate amount of
U.S. Legal Tender or Cash Equivalents so received which is used to retire (in
whole or in part) any existing Indebtedness of the Company or its Subsidiaries
(owed to a person other than an Affiliate) which was secured by the assets that
were the subject of such Asset Sale and which was required to be repaid (which
repayment, in the case of a revolving credit arrangement or multiple advance
arrangement, reduces the commitment thereunder) in connection with such Asset
Sale.
"NET CASH PROCEEDS ACCOUNT" means the separate custodial account
established and maintained by the Company in the name of the Collateral Agent
for the benefit of the Holders and the Bank Lenders pursuant to Section 4.4 and
the terms of the Security Agreement into which the Net Cash Proceeds from Asset
Sales and Insurance Proceeds are to be deposited.
17
"NET PROCEEDS" means the aggregate Net Cash Proceeds and fair market
value of property and assets (valued at the fair market value thereof at the
time of receipt in good faith by the Manager of the Company), other than
securities of the Company or any of its Subsidiaries, received by the Company
after payment of expenses, commissions, discounts and the like incurred in
connection therewith.
"NON-RECOURSE INDEBTEDNESS" means Indebtedness of a person to the
extent that under the terms thereof or pursuant to applicable law (i) no
personal recourse shall be had against such person for the payment of the
principal of or interest or premium on such Indebtedness, and (ii) enforcement
of obligations on such Indebtedness is limited only to recourse against
interests in property and assets purchased with the proceeds of the incurrence
of such Indebtedness and as to which none of the Company, the Guarantors or any
of their Subsidiaries provides any credit support or is liable.
"NOTES." See "SECURITIES."
"OBLIGATIONS" means all obligations for principal, premium, interest,
penalties fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing, or otherwise relating to, any
Indebtedness.
"OFFER TO PURCHASE" means any Change of Control Offer or Asset Sale
Offer.
"OFFER TO PURCHASE PRICE" means any Change of Control Offer Price or
Asset Sale Offer Price.
"OFFICER" means, with respect to any person, the Chairman of the
Board, the President, any Vice President, the Chief Financial Officer, the
Treasurer, the Controller, or the Secretary or Assistant Secretary of such
person.
"OFFICERS' CERTIFICATE" means, with respect to the Company or any
Guarantor, a certificate signed by any Officer of the Company (or, if the
Company does not have any Officers, by an Officer of the Manager) or such
Guarantor and otherwise complying with the requirements of Sections 15.4 (1) and
15.5.
"OPEN ACCESS PROGRAM" means the program required under the General
Development Agreement and the Ground Lease pursuant to which the Company is to
facilitate the participation by minorities, women and disadvantaged persons and
business enterprises in developing, constructing and operating the Casino.
"OPINION OF COUNSEL" means a written opinion from legal counsel to the
Company reasonably acceptable to the Trustee and which complies with the
requirements of Sections 15.4 and 15.5. Unless otherwise required by this
Indenture, the counsel may be in-house counsel to the Company.
"PARENT GUARANTOR" means JCC Holding.
18
"PARTIAL PERIOD CONTINGENT PAYMENTS" means (A) with respect to a First
Semiannual Period, the product of (i) the fraction, the numerator of which is
the number of days from the end of the previous Second Semiannual Period to the
date giving rise to such calculation and the denominator of which is 180 (but in
no event shall such fraction be greater than 1.0), and (ii) the Contingent
Payments for the prior First Semiannual Period, and (B) with respect to a Second
Semiannual Period, the product of (i) the fraction, the numerator of which is
the number of days from the end of the previous First Semiannual Period to the
date giving rise to such calculation and the denominator of which is 180 (but in
no event shall such fraction be greater than 1.0), and (ii) the Contingent
Payments for the prior Second Semiannual Period.
"PAYING AGENT" shall have the meaning specified in Section 2.3.
"PERFORMANCE BOND INDEMNITY AGREEMENT" means the Performance Bond
Indemnity Agreement, dated as of ________, 1998, between the Company and HOC.
"PERMITTED FF&E FINANCING" means Indebtedness which is Non-recourse
Indebtedness to the Company or any of its Subsidiaries or any of their
properties (other than as provided in this definition) that is incurred to
finance the acquisition or lease after the Casino Completion Date of newly
acquired or leased furniture, fixtures or equipment ("FF&E") used directly in
the operation of the Casino or a Related Business and secured by a Lien on such
FF&E (which Lien, subject to certain limitations, shall be the only Permitted
Lien with respect to such FF&E and may be an exclusive Lien or senior, PARI
PASSU or junior to the rights of the Trustee and the Collateral Agent under the
Collateral Documents).
"PERMITTED INDEBTEDNESS" means any of the following:
(a) the Company and any Guarantor may incur Indebtedness solely in
respect of bankers' acceptances, letters of credit and payment and
performance bonds (to the extent that such incurrence does not result in
the incurrence of any obligation for the payment of borrowed money of any
person other than the Company or such Subsidiary), all in the ordinary
course of business, in amounts and for the purposes customary in the
Company's industry for gaming operations similar to those of the Company;
provided, that the aggregate principal amount outstanding of such
Indebtedness (including any Indebtedness issued to refinance, refund or
replace such Indebtedness) shall at no time exceed $5,000,000;
(b) the Company may incur Indebtedness to any Subsidiary, and any
Subsidiary may incur Indebtedness to any other Subsidiary or to the
Company; PROVIDED, however, that such obligations, in any case, shall be
subordinated to such entity's obligations pursuant to the Notes; PROVIDED
FURTHER that, in the case of Indebtedness of the Company to any of its
Subsidiaries, any disposition, pledge or transfer of any such Indebtedness
by the Subsidiary to a person (other than a Subsidiary) shall be deemed to
be an incurrence of such Indebtedness by the Company not permitted by this
clause (b);
19
(c) the Company and any of its Subsidiaries may incur Indebtedness
representing the balance deferred and unpaid of the purchase price of any
property or services used in the ordinary course of their business that
would constitute ordinarily a trade payable to trade creditors; and
(d) the Company and any of its Subsidiaries may post a bond or surety
obligation (or incur an indemnity or similar obligation) in order to
prevent the impairment or loss of or to obtain the Casino Operating
Contract, to the extent required by applicable law and consistent in
character and amount with customary industry practice.
"PERMITTED LIENS" means any of the following:
(a) Liens for taxes, assessments or other governmental charges not
yet due or which are being contested in good faith and by appropriate
proceedings by the Company or a Subsidiary thereof if adequate reserves
with respect thereto are maintained on the books of the Company or such
Subsidiary, as the case may be, in accordance with GAAP;
(b) statutory Liens of carriers, warehousemen, mechanics, landlords,
laborers, materialmen, repairmen or other like Liens arising by operation
of law in the ordinary course of business and consistent with industry
practices and Liens on deposits made to obtain the release of such Liens if
(i) the underlying obligations are not overdue for a period of more than 60
days or (ii) such Liens are being contested in good faith and by
appropriate proceedings by the Company or a Subsidiary thereof and adequate
reserves with respect thereto are maintained on the books of the Company or
such Subsidiary, as the case may be, in accordance with GAAP;
(c) easements, rights-of-way, zoning and similar restrictions and
other similar encumbrances or title defects incurred in the ordinary course
of business and consistent with industry practices which, in the aggregate,
are not substantial in amount, and which do not in any case materially
detract from the value of the property subject thereto (as such property is
used or proposed to be used by the Company or such Subsidiary) or interfere
with the ordinary conduct of the business of the Company or such
Subsidiary; provided, that any such Liens are not incurred in connection
with any borrowing of money or any commitment to loan any money or to
extend any credit;
(d) Liens existing on the Issue Date;
(e) pledges or deposits made in the ordinary course of business in
connection with worker's compensation, unemployment insurance and other
types of social legislation;
(f) Liens created by this Indenture, the Contingent Notes Indenture
and the Collateral Documents;
20
(g) Liens that secure Acquired Indebtedness or Liens on Acquired
Assets, provided, in each case, that such Liens do not secure any other
property or assets and were not put in place in connection with or in
anticipation of such acquisition, merger or consolidation;
(h) any judgment Lien unless it constitutes an Event of Default;
(i) Liens to secure payment or performance bonds to the extent
permitted under clause (a) under the definition of "Permitted
Indebtedness;"
(j) Liens incurred in the ordinary course of business securing
Indebtedness under Interest Rate Agreements;
(k) leases or subleases granted to other persons in the ordinary
course of business not materially interfering with the conduct of the
business of the Company or any of its Subsidiaries or materially detracting
from the value of the relative assets of the Company or such Subsidiary of
the Company; and
(l) Liens arising from precautionary Uniform Commercial Code
financing statement filings regarding operating leases entered into by the
Company or any of its Subsidiaries in the ordinary course of business.
"PERMITTED TAX DISTRIBUTION" means (A) for so long as the Company is
treated as a pass through entity for federal income tax purposes, distributions
to equity holders of the Company in an amount not to exceed the Tax Amount for
such period and (B) for so long as the Company is a corporation and for any
taxable year of the Company in which it joins in filing a consolidated federal
income tax return with JCC Holding, a payment (including any estimated tax
payment based on any estimated tax liability for such year) by the Company to
the Parent Guarantor in an amount not in excess of the lesser of (i) the
separate return federal income tax liability (if any) of the affiliated group
(within the meaning of Section 1504 of the Internal Revenue Code of 1986, as
amended) of which the Company would be the parent (the "JCC Group") if it were
not a member of another affiliated group for that or any other taxable year, and
(ii) the actual tax liability (if any) of the affiliated group of which the
Company is actually a member (the "Guarantor Group") for such year allocable to
the JCC Group; PROVIDED, that such payment can be made by the Company no earlier
than the date on which the Guarantor Group is required to make federal income
tax payments for such year to the Internal Revenue Service; and PROVIDED,
FURTHER, that for purposes of clause (ii) the actual tax liability of the
Guarantor Group shall be computed without regard to any income, gain, loss,
deduction or credit generated by a corporation other than the Parent Guarantor,
the Company or a Subsidiary of the Company. In the event that the Parent
Guarantor and any member of the JCC Group join in filing any combined or
consolidated (or similar) state or local income or franchise tax returns, then
Permitted Tax Distributions shall include payments with respect to such state or
local income or franchise taxes determined in a manner as similar as possible to
that provided in the preceding sentence for federal income taxes.
21
"PERSON" means any individual, limited liability company, corporation,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof.
"PLAN OF REORGANIZATION" means the plan of reorganization of Xxxxxx'x
Jazz Company, Xxxxxx'x Jazz Finance Corp., and Xxxxxx'x New Orleans Investment
Company (including all exhibits and schedules annexed thereto), as amended,
under chapter 11 of the United States Bankruptcy Code.
"PLANS" means all drawings, plans and specifications prepared by or on
behalf of the Company or one of its Subsidiaries, as the same may be amended or
supplemented from time to time in good faith, and, if required by applicable
law, submitted to and approved by the building or other relevant department,
which describe and show the Casino, or a Project Expansion, as the case may be,
and the labor and materials necessary for construction thereof.
"PLEDGE AGREEMENT" means the Pledge Agreement, dated ________, 1998,
executed by the Company in favor of the Collateral Agent, as it may be amended
or supplemented from time to time.
"PRIMARY MAKE-WHOLE AMOUNT" shall mean, as of any date, the greater of
(a) zero and (b) the remainder of the Present value (using a discount rate equal
to the Formula Rate at such time) of the remaining scheduled payments of
principal and interest (excluding Maximum Contingent Payments) payable in
respect of the Notes minus the principal amount of the Notes outstanding on such
date.
"PRINCIPAL" or "PRINCIPAL" of any Indebtedness (including the
Securities) means the principal of such Indebtedness plus any applicable
premium, if any, on such Indebtedness.
"PROJECT COSTS" means, with respect to a Project Expansion, the
aggregate costs required to complete such Project Expansion, through the Project
Expansion Termination of Construction Date with respect to such Project
Expansion in accordance with the Plans therefor and applicable legal
requirements, as set forth in a statement submitted to, and receipted for by,
the Trustee, setting forth in reasonable detail all amounts theretofore expended
and any anticipated costs and expenses estimated to be incurred and reserves to
be established in connection with the construction and development of such
Project Expansion, including direct costs related thereto such as construction
management, architectural engineering and interior design fees, site work,
utility installations and hook-up fees, construction permits, certificates and
bonds, land and lease acquisition costs and the cost of furniture, fixtures,
furnishings, machinery and equipment (including gaming equipment), but excluding
the following: principal or interest payments on any Indebtedness (other than
interest on Indebtedness in respect of such Project Expansion which is required
to be capitalized in accordance with GAAP, which shall be included in
determining Project Costs).
22
"PROJECT EXPANSION TERMINATION OF CONSTRUCTION DATE" means that date
by which (a) a temporary certificate of occupancy has been issued for the
Project Expansion by the building department and other relevant agencies;
(b) all required Approvals with respect to the Project Expansion have been
obtained by the Company and its Subsidiaries and their respective officers,
directors and equityholders; (c) a notice of completion has been duly recorded;
(d) all materialmen's claims, mechanics' liens or other liens or claims for
liens directly related to the Casino have been paid or satisfactory provisions
have been made for such payment, and the period of time for filing such claims
and liens has expired; (e) an Officers' Certificate has been delivered to the
Trustee certifying that the Project Expansion Termination of the Construction
Date has occurred; (f) a certificate has been delivered by the general
contractor and an architect engaged with respect to the Project Expansion to the
Trustee certifying that the Project Expansion has been substantially completed
in accordance with the Plans therefor and all applicable building laws,
ordinances and regulations; (g) the Project Expansion is in a condition
(including the installation of fixtures, furnishings and equipment) to receive
customers in the ordinary course of business; (h) the Project Expansion is open
for business to the general public. For purposes of the preceding sentence,
satisfactory provision for payment of claims, liens and claims for liens shall
be deemed to have been made if a bond, escrow or trust account for payment has
been established with an independent third party satisfactory to the Trustee in
an amount at least equal to the total of such outstanding claims, liens and
claims for liens.
"PROJECT EXPANSION" means any capital addition, improvement, extension
or repair to the Casino after the Casino Completion Date or to a Related
Business property.
"PROPERTY" or "PROPERTY" means any right or interest in or to property
or assets of any kind whatsoever, whether real, personal or mixed and whether
tangible, intangible, contingent, indirect or direct.
"PURCHASE PRICE" means any Change of Control Offer Price or Asset Sale
Offer Price.
"QUALIFIED CAPITAL STOCK" means any Capital Stock of the Company that
is not Disqualified Capital Stock.
"QUALIFIED EXCHANGE" means any defeasance, redemption, repurchase or
other acquisition of (a) Capital Stock or Indebtedness of the Company with the
Net Proceeds received by the Company from the substantially concurrent sale of
Qualified Capital Stock or in exchange for Qualified Capital Stock or (b)
subordinated Indebtedness of the Company through the issuance of new
subordinated Indebtedness of the Company, provided that any new subordinated
Indebtedness (l) shall be in a principal amount that does not exceed the
principal amount (after deduction of reasonable and customary fees and expenses
incurred in connection with the refinancing) so refinanced (or, if the
subordinated Indebtedness being refinanced provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration thereof, then such lesser amount as of the date of determination),
plus the lesser of (x) the stated amount of any premium required to be paid in
connection with such a refinancing pursuant to the terms of the Indebtedness
being refinanced
23
and (y) the amount of premium actually paid at such time to refinance the
Indebtedness; (2) has an Average Life greater than or equal to the Average Life
of the subordinated Indebtedness so refinanced; (3) has a stated maturity for
its final scheduled principal payment not sooner than the stated maturity of the
subordinated Indebtedness so refinanced; and (4) is expressly subordinated in
right of payment to the Notes pursuant to subordination provisions that are at
least as favorable to the holders of the Notes as those relating to the
subordinated Indebtedness so refinanced.
"RDC" means the Rivergate Development Corporation, a Louisiana public
benefit corporation established by the City.
"REAL PROPERTY" of any person shall mean all the right, title and
interest of such person in and to land, improvements and fixtures, including
Leaseholds.
"RECORD DATE" means a Record Date specified in the Securities whether
or not such Record Date is a Business Day.
"REDEMPTION DATE," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to Article III of
this Indenture and Paragraph 5 in the applicable form of Security.
"REDEMPTION PRICE," when used with respect to any Security to be
redeemed, means the principal amount thereof, plus accrued and unpaid interest
to the Redemption Date (or such lesser amount as may be required by applicable
law or by order of any Gaming Authority).
"REFERENCE PERIOD" with regard to any person means the four full
fiscal quarters (or such lesser period during which such person has been in
existence) ended immediately preceding any date upon which any determination is
to be made pursuant to the terms of the Notes or this Indenture; provided, that
the Consolidated Fixed Charges of such person, to the extent such person has
been in existence for a shorter period than four full fiscal quarters, shall be
computed on an annualized basis.
"REFINANCING" shall have the meaning set forth in the definition of
"Refinancing Indebtedness."
"REFINANCING INDEBTEDNESS" means Indebtedness or Disqualified Capital
Stock issued in exchange for, or the proceeds from the issuance and sale of
which are used substantially concurrently to repay, redeem, defease, refund,
refinance, discharge or otherwise retire for value, in whole or in part (a
"Refinancing"), any Indebtedness or Disqualified Capital Stock in a principal
amount or, in the case of Disqualified Capital Stock, liquidation preference,
not to exceed (after deduction of (a) any accrued and unpaid interest and/or
other amounts owing with respect to such Indebtedness which is included in the
Refinancing, and (b) reasonable and customary fees and expenses incurred in
connection with the Refinancing) the lesser of (i) the principal amount or, in
the case of Disqualified Capital Stock, liquidation preference, of the
Indebtedness or Disqualified Capital Stock so
24
Refinanced and (ii) if such Indebtedness being Refinanced was issued with an
original issue discount, the accreted value thereof (as determined in accordance
with GAAP) at the time of such Refinancing plus, in either case, the lesser of
the amount of premium actually paid at such time to refinance the Indebtedness
and the stated amount of any premium required to be paid in connection with such
a Refinancing pursuant to the terms of the Indebtedness being refinanced;
PROVIDED, HOWEVER, that (A) Refinancing Indebtedness of any Subsidiary of the
Company shall only be used to Refinance outstanding Indebtedness or Disqualified
Capital Stock of such Subsidiary, (B) Refinancing Indebtedness shall (x) not
have an Average Life shorter than the Indebtedness or Disqualified Capital Stock
to be so refinanced at the time of such refinancing and (y) in all respects, be
no less subordinated, if applicable, to the rights of holders pursuant to the
Notes than was the Indebtedness or Disqualified Capital Stock to be refinanced
and (C) such Refinancing Indebtedness shall have no installment of principal (or
redemption) scheduled to come due earlier than the scheduled maturity of any
installment of principal (or redemption payment) of the Indebtedness (or
Disqualified Capital Stock) to be so refinanced which was scheduled to come due
prior to the Stated Maturity of the Notes.
"REGISTRAR" shall have the meaning specified in Section 2.3.
"REGULATING AUTHORITY" means the Louisiana Gaming Control Board.
"RELATED BUSINESS" means any gaming business conducted by the Company
and its Subsidiaries within the State of Louisiana and any and all related
businesses in support of and ancillary to any such gaming business, including
the development and build-out of the non-gaming space on the second floor of the
Casino for non-gaming entertainment purposes and for leasing such space to
tenants with non-gaming businesses.
"REQUIRED REGULATORY REDEMPTION" means a redemption by the Company,
any Guarantor or any Subsidiary of the Company or any Guarantor of any of such
person's securities pursuant to, and in accordance with, any order of any
Governmental Authority with appropriate jurisdiction and authority relating to a
Gaming License held by the Company or an Affiliate of the Company (including HET
and any Affiliate of HET) or a wholly owned Subsidiary of the Company, or to the
extent necessary in the reasonable, good faith judgment of the Board of
Directors of HET, in the case of HET or one of its affiliates, or the Manager of
the Company, to prevent the loss, failure to obtain or material impairment or to
secure the reinstatement of, any such Gaming License, where such redemption or
acquisition is required because the holder or beneficial owner of such security
is required to be found suitable or to otherwise qualify under any gaming laws
and is not found suitable or so qualified within a reasonable period of time.
"RESTRICTED FUNDS ACCOUNT" means a segregated bank account under the
control of the Company or a Subsidiary, the proceeds of which are invested in
cash or Cash Equivalents pending any use pursuant to Section 5.14.
"RESTRICTED INVESTMENT" means, in one or a series of related
transactions, any Investment other than in Cash Equivalents; provided, that the
extension of credit to
25
customers of the Casino consistent with industry practice in the ordinary course
of business shall not be a Restricted Investment.
"RESTRICTED PAYMENT" means, with respect to any person, (a) the
declaration or payment of any dividend or other distribution in respect of
Capital Stock of such person, (b) any payment on account of the purchase,
redemption or other acquisition or retirement for value of Capital Stock of such
person or any Subsidiary of such person, (c) any purchase, redemption, or other
acquisition or retirement for value of, or any defeasance of, any subordinated
Indebtedness, directly or indirectly, by such person or a Subsidiary of such
person prior to the scheduled maturity, any scheduled repayment of principal, or
scheduled sinking fund payment, as the case may be, of such Indebtedness
(including any payment in respect of any amendment of the terms of any such
subordinated Indebtedness, which amendment is sought in connection with any such
acquisition of such Indebtedness or seeks to shorten any such due date), (d) any
Restricted Investment by such person, (e) any interest paid on Indebtedness
incurred in accordance with the provisions of clause (k) under Section 5.11, and
(f) any principal payments to HOC or HET (or any assignees thereof) pursuant to
the Subordinated Credit Facility, the Completion Loan Agreement, the Performance
Bond Indemnity Agreement, or the Indemnity Agreement; provided, however, that
the term "Restricted Payment" does not include (i) any dividend, distribution or
other payment on or with respect to Capital Stock of an issuer to the extent
payable solely in shares of Qualified Capital Stock of such issuer; (ii) any
dividend, distribution or other payment to the Company, or to any of its
directly or indirectly wholly owned Subsidiaries, by the Company or any of its
Subsidiaries; (iii) Investments in or loans to the Company or any of its wholly
owned Subsidiaries so long as all of the Capital Stock of such Subsidiary has
been pledged as collateral for the Notes in favor of the Holders; (iv)
Investments by the Company in a person, if as a result of such Investment (a)
such person becomes a wholly owned Subsidiary of the Company and all of the
Capital Stock of such person has been pledged as Collateral for the Notes in
favor of the Holders pursuant to the Pledge Agreement or (b) such person is
merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or a
wholly owned Subsidiary of the Company; (v) payments of interest in respect of
the Subordinated Credit Facility; (vi) payments of interest in respect of the
Completion Loan Agreement; (vii) payments of interest in respect of the
Performance Bond Indemnity Agreement; (viii) payments of interest in respect of
the Indemnity Agreement; (ix) Credit Enhancement Fees, as defined in, and paid
pursuant to, the Credit Enhancement Fee Agreement; and (x) any payments to the
Minimum Payment Guarantor in connection with providing the Minimum Payment
Guaranty, including without limitation, (I) payments of principal and interest
in respect of Indebtedness incurred by the Company to the Minimum Payment
Guarantor as a result of drawings by the Regulating Authority under the Minimum
Payment Guaranty, (II) payments of fees to the Minimum Payment Guarantor in
connection with providing the Minimum Payment Guaranty, and (III) any
termination payment owing by the Company to the Minimum Payment Guarantor in
connection with the Minimum Payment Guaranty.
.
"REVOLVING LOANS" means the Revolving Loans under the Bank Credit
Facilities.
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"SEC" means the Securities and Exchange Commission.
"SECOND PERIOD CONTINGENT PAYMENTS" means the amounts payable in the
aggregate to the Holders of the Securities on the Interest Payment Date next
following the six-month period ending on ________ (the "Second Semiannual
Period"), in an amount (which may not be less than zero) equal to (A) the
product of (i) 75% of the Company's aggregate Consolidated EBITDA for the First
Semiannual Period and the Second Semiannual Period in excess of $65,000,000 and
less than $85,000,000, and (ii) a fraction (x) the numerator of which is the
aggregate principal amount of Securities (including Secondary Securities)
outstanding on the close of business on the Record Date corresponding to such
Interest Payment Date and (y) the denominator of which is the sum of (I)
$187,500,000 and (II) the total aggregate principal amount of Secondary
Securities issued to Holders in lieu of cash interest payments as of such Record
Date, LESS (B) the aggregate amount, if any, of First Period Contingent
Payments, whether paid or accrued, in respect of the immediately preceding First
Semiannual Period.
"SECONDARY MAKE-WHOLE AMOUNT" shall mean, as of any date, the present
value (determined using a discount rate equal to the Formula Rate at such time)
of the Maximum Contingent Payments less any negative amount determined according
to clause (b) of the definition of "Primary Make-Whole Amount."
"SECONDARY SECURITIES" has the meaning set forth in Section 2.2.
"SECURITIES" or "NOTES" means the Senior Subordinated Notes due 2009,
including any Secondary Securities issued as interest thereon, in each case,
issued under this Indenture, as the same may be amended or modified from time to
time in accordance with the terms hereof.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"SECURITY AGREEMENT" means the Security Agreement, dated as of
________, 1998, by and among the Company, the Trustee and
______________________, as Collateral Agent (the "Collateral Agent"), as the
same may be amended from time to time in accordance with the terms thereof.
"SECURITYHOLDER." See "HOLDER."
"SECURITY INTERESTS" means the Liens on the Collateral created by the
Collateral Documents in favor of the Trustee for the benefit of the Holders.
"SENIOR DEBT" means Indebtedness, including any obligation for
interest which would accrue but for any proceeding referred to in Section 13.2
at the relevant contractual rate, whether or not an allowed claim in any such
proceeding, of the Company in respect of
27
the Tranche A Term Loans, the Revolving Loans, and any Refinancing (in whole or
in part) of the Tranche A Term Loans or the Revolving Loans (or any previous
Refinancing thereof).
"SENIOR SUBORDINATED DEBT" means Indebtedness, including any
obligation for interest which would accrue but for any proceeding referred to in
Section 13.2 at the relevant contractual rate, whether or not an allowed claim
in any such proceeding, of the Company in respect of the Tranche B Term Loans
and any Refinancing (in whole or in part) of such Indebtedness (or any previous
Refinancing thereof) which do not increase the principal amount of Indebtedness
outstanding and available thereunder (except to the extent (i) accrued and
unpaid interest and/or other amounts owing with respect to the refinanced
indebtedness is refinanced and/or (ii) of the fees and expenses incurred in
connection with the refinancing indebtedness) or decrease the weighted-average
maturity thereof.
"SIGNIFICANT SUBSIDIARY" of a person means a Subsidiary of such person
which, together with its Consolidated Subsidiaries, has assets or revenues equal
to or greater than 10% of the assets or revenues, respectively, of such person
and its Subsidiaries on a consolidated basis.
"SPECIFIED REAL ESTATE" means the parcels of real property owned by
the Company commonly known as 0 Xxxxx Xxxxx (designated Parcel VII in [insert
reference to description of this property]) and Xxxxxx Mall (designated Parcels
I, III, V and VI of [insert reference to description of this property]).
"STATED MATURITY" means _________, 2009.
"SUBORDINATED CREDIT FACILITY" means the credit agreement (the
"Subordinated Credit Agreement"), dated as of _________, 1998, among the
Company, the Parent Guarantor, HET and HOC, together with any related documents,
as such agreement may be amended, supplemented or modified from time to time.
"SUBORDINATED INDEBTEDNESS" means, with respect to any Notes,
Indebtedness of the Company that is subordinated in right of payment to such
Notes in any respect or has a stated maturity on or after the Stated Maturity of
such Notes.
"SUBORDINATED INDEBTEDNESS" means with respect to any Notes,
Indebtedness of the Company that is subordinated in right of payment to such
Notes in all respects and has no scheduled installment of principal due, by
redemption, sinking fund payment or otherwise, on or prior to the Stated
Maturity of such Notes.
"SUBORDINATION AGREEMENT" means that certain Manager Subordination
Agreement (Senior Subordinated Notes), dated as of ________, 1998, by and among
the Company, Xxxxxx'x Management and the Trustee.
"SUBSIDIARY," with respect to any person, means (i) a corporation a
majority of whose Capital Stock with voting power, under ordinary circumstances,
to elect directors is at
28
the time, directly or indirectly, owned by such person, by such person and one
or more Subsidiaries of such person or by one or more Subsidiaries of such
person or (ii) any other person (other than a corporation) in which such person,
one or more Subsidiaries of such person, or such person and one or more
Subsidiaries of such person, directly or indirectly, at the date of
determination thereof has at least majority ownership interest. Notwithstanding
the foregoing, an Unrestricted Subsidiary shall not be a Subsidiary of the
Company or any Guarantor.
"SUBSIDIARY GUARANTORS" means each existing or future Subsidiary of
the Company.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date of the execution of this Indenture.
"TAX AMOUNT" means, with respect to any period, without duplication,
the amount of taxable income in respect of the income of the Company of any
member multiplied by the highest marginal combined federal, state and local tax
rates applicable to corporations for such period.
"TRANCHE A TERM LOANS" means, collectively, the Tranche A-1 Term Loan,
the Tranche A-2 Term Loan and the Tranche A-3 Term Loan.
"TRANCHE A-1 TERM LOAN" means the Tranche A-1 Term Loan under the Bank
Credit Facilities.
"TRANCHE A-2 TERM LOAN" means the Tranche A-2 Term Loans under the
Bank Credit Facilities.
"TRANCHE A-3 TERM LOAN" means the Tranche A-3 Term Loans under the
Bank Credit Facilities.
"TRANCHE B TERM LOANS" means, collectively, the Tranche B-1 Term Loan
and the Tranche B-2 Term Loan.
"TRANCHE B-1 TERM LOAN" means the Tranche B-1 Term Loan under the Bank
Credit Facilities.
"TRANCHE B-2 TERM LOAN" means the Tranche B-2 Term Loan under the Bank
Credit Facilities.
"TRUSTEE" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
29
"TRUST OFFICER" means any officer within the corporate trust
department (or any successor group) of the Trustee including any vice president,
assistant vice president, secretary assistant secretary or any other officer or
assistant officer of the Trustee customarily performing functions similar to
those performed by the persons who at that time shall be such officers, and also
means, with respect to a particular corporate trust matter, any other officer of
the corporate trust department (or any successor group) of the Trustee to whom
such trust matter is referred because of his knowledge of and familiarity with
the particular subject.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Company that, at
the time of determination, shall be an Unrestricted Subsidiary (as designated by
the Manager of the Company, as provided below) provided that such Subsidiary
does not and shall not engage, to any substantial extent, in any line or lines
of business activity other than a Related Business. The Manager of the Company
may designate any person to be an Unrestricted Subsidiary if (a) no Default or
Event of Default is existing or will occur as a consequence thereof, (b)
immediately after giving effect to such designation, on a PRO FORMA basis, the
Company could incur at least $1.00 of additional Indebtedness pursuant to
paragraph (a) of Section 5.11 and (c) such Subsidiary does not own any Capital
Stock of, or own or hold any Lien on any property of, the Company or any other
Subsidiary. Any such designation also constitutes a Restricted Payment in an
amount equal to the net assets of such Subsidiary at the time of the designation
for purposes of Section 5.3. The Manager of the Company may designate any
Unrestricted Subsidiary to be a Subsidiary, provided, that (i) no Default or
Event of Default is existing or will occur as a consequence thereof and (ii)
immediately after giving effect to such designation, on a PRO FORMA basis, the
Company could incur at least $1.00 of Indebtedness pursuant to paragraph (a) of
Section 5.11. Each such designation shall be evidenced by filing with the
Trustee a certified copy of the resolution giving effect to such designation and
an Officers' Certificate certifying that such designation complied with the
foregoing conditions.
"U.S. GOVERNMENT OBLIGATIONS" means direct non-callable obligations
of, or noncallable obligations guaranteed by, the United States of America for
the payment of which obligation or guarantee the full faith and credit of the
United States of America is pledged.
"U.S. LEGAL TENDER" means such coin or currency of the United States
of America as at the time of payment is legal tender for the payment of public
and private debts.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, with respect to the Notes,
as of any date, the number of years obtained by dividing the then Remaining
Dollar-Years of the Notes by the aggregate outstanding principal amount of the
Notes. For purposes of this definition, "Remaining Dollar-Years" as of any
date, means the amount obtained by multiplying the aggregate outstanding
principal amount of the Notes as of such date by the number of years (calculated
at the nearest one-twelfth) which shall elapse between such date and Stated
Maturity.
30
"WHOLLY OWNED" with respect to a Subsidiary of any person means (i)
with respect to a Subsidiary that is a limited liability company or similar
entity, a Subsidiary whose capital stock is 99% or greater beneficially owned by
such person and (ii) with respect to a Subsidiary that is other than a limited
liability company or similar entity, a Subsidiary whose capital stock or other
equity interest is 100% (other than director's qualifying shares) beneficially
owned by such person.
SECTION 1.2 INCORPORATION BY REFERENCE OF TIA.
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"COMMISSION" means the SEC.
"INDENTURE SECURITIES" means the Securities.
"INDENTURE SECURITYHOLDER" means a Holder or a Securityholder.
"INDENTURE TO BE QUALIFIED" means this Indenture.
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee.
"OBLIGOR" on the indenture securities means the Company and any other
obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them thereby.
SECTION 1.3 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and words in the
plural include the singular;
(v) provisions apply to successive events and transactions;
31
(vi) "herein," "hereof" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section or
other subdivision; and
(vii) references to Sections or Articles means reference to
such Section or Article in this Indenture, unless stated otherwise.
ARTICLE II
THE SECURITIES
SECTION 2.1 FORM AND DATING.
The Securities and the Trustee's certificate of authentication, in
respect thereof, shall be substantially in the form of EXHIBIT A hereto, which
is incorporated into and made a part of this Indenture. The Securities may have
notations, legends or endorsements required by law, stock exchange rule or
usage. The Company shall approve the form of the Securities and any notation,
legend or endorsement on them. Any such notations, legends or endorsements not
contained in the form of Security attached as EXHIBIT A hereto shall be
delivered in writing to the Trustee. Each Security shall be dated the date of
its authentication.
The terms and provisions contained in the form of Securities shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company, the Parent Guarantor and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
Any reference in this Indenture to "accrued interest" includes the
amount of unpaid Contingent Payments due and payable.
SECTION 2.2 EXECUTION AND AUTHENTICATION.
The Securities shall be executed on behalf of the Company and the
Guaranty shall be executed on behalf of the Parent Guarantor by the Chairman of
the Board, the President or one of the Vice Presidents of each of them, under
the corporate seal of each respective company, reproduced thereon, and attested
by the Secretary or one of the Assistant Secretaries of each of them. The
signature of any of these officers on the Securities or Guarantees may be manual
or facsimile.
Securities or Guarantees bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company or the
Parent Guarantor shall bind the Company or the Guarantors, as the case may be,
notwithstanding that such individual or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities.
32
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security, but
such signature shall be conclusive evidence that the Security has been
authenticated pursuant to the terms of this Indenture.
The Trustee shall authenticate Securities, excluding Secondary
Securities, for original issue in the aggregate principal amount of up to
$187,500,000 upon a written order of the Company in the form of an Officers'
Certificate. The Officers' Certificate shall specify the amount of Securities
to be authenticated and the date on which the Securities are to be
authenticated. The aggregate principal amount of Securities outstanding at any
time may not exceed $187,500,000, except for any Securities that may be issued
pursuant to the immediately following paragraph and except as provided in
Sections 2.7 and 2.8. Upon the written order of the Company and the Parent
Guarantor in the form of an Officers' Certificate, the Trustee shall
authenticate Securities in substitution of Securities originally issued to
reflect any name change of the Company or the Parent Guarantor.
The Company shall pay Fixed Interest and Contingent Payments from
_________, 1998 or from the most recent Interest Payment Date to which
interest has been paid or provided for. The Company may, on any of the First
Interest Payment Date, the Second Interest Payment Date, the Third Interest
Payment Date, the Fourth Interest Payment Date, the Fifth Interest Payment
Date and the Sixth Interest Payment Date, at its option and in its sole
discretion, pay Fixed Interest in additional Securities ("Secondary
Securities") in lieu of the payment in whole or in part of Fixed Interest in
cash on the Securities as provided in paragraph 1 of the Securities;
provided, however, that if any Indebtedness is outstanding under the Tranche
A-1 Term Loan or the Tranche A-2 Term Loan on any of the First Interest
Payment Date, the Second Interest Payment Date, the Third Interest Payment
Date or the Fourth Interest Payment Date, the Company shall pay the Fixed
Interest due and payable on such Interest Payment Date in Secondary
Securities in lieu of the payment of such Fixed Interest in cash. In
addition, if the Company's Consolidated EBITDA is less than $28,500,000 for
any twelve-month period ending one month prior to an Interest Payment Date
occurring after the Sixth Interest Payment Date, the Company shall pay the
Fixed Interest due and payable on such Interest Payment Date in Secondary
Securities in lieu of the payment of such Fixed Interest in cash. The
Company shall give written notice to the Trustee of the amount of interest to
be paid in Secondary Securities not less than five Business Days prior to the
relevant Interest Payment Date, and the Trustee or an authenticating agent
(upon written order of the Company signed by an Officer of the Company given
not less than five nor more than 45 days prior to such Interest Payment Date)
shall authenticate for original issue (PRO RATA to each Holder of any
Securities on the applicable Record Date) Secondary Securities in an
aggregate principal amount equal to the amount of cash interest not paid on
such Interest payment Date. Except as set forth in the following paragraph,
each issuance of Secondary Securities in lieu of the payment of Fixed
Interest in cash on the Securities shall be made PRO RATA with respect to the
outstanding Securities, and the Company shall have the right to aggregate
amounts of interest payable in the form of Secondary Securities to a Holder
of outstanding Securities and issue to such holder a single Secondary
Security in payment thereof. Secondary Securities may be denominated a
separate series if the Company
33
deems it necessary to do so in order to comply with any law or other applicable
regulation or requirement, with appropriate distinguishing designations.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. Unless otherwise provided in the
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company, any Affiliate of the Company
or any of its Subsidiaries.
Securities shall be issuable only in registered form without coupons
in denominations of $1,000 and any integral multiple thereof, except that
Secondary Securities may be in denominations of other than $1,000 or any
integral multiple thereof; provided, however, that the Company may at its option
pay cash in lieu of issuing Secondary Securities in any denominations of less
than $1,000.
SECTION 2.3 REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency in the Borough of
Manhattan, The City of New York, where Securities may be presented for
registration of transfer or for exchange ("Registrar") and an office or agency
in the Borough of Manhattan, The City of New York where Securities may be
presented for payment ("Paying Agent") and an office or agency where notices and
demands to or upon the Company in respect of the Securities may be served. The
Company may act as its own Registrar or Paying Agent, except that, for the
purposes of Articles III, IX, XI and Section 5.14, neither the Company nor any
Affiliate of the Company shall act as Paying Agent. The Registrar shall keep a
register of the Securities and of their transfer and exchange. The Company may
have one or more co-Registrars and one or more additional Paying Agents. The
term "Paying Agent" includes any additional Paying Agent. The Company hereby
initially appoints the Trustee as Registrar and Paying Agent, and the Trustee
hereby initially agrees so to act until such time as the Trustee has resigned or
a successor has been appointed. The Company may change any Registrar, Paying
Agent or co-Registrar without notice to any Holder.
The Company shall enter into an appropriate written agency agreement
with any Agent not a party to this Indenture, which agreement shall implement
the provisions of this Indenture that relate to such Agent. The Company shall
promptly notify the Trustee in writing of the name and address of any such
Agent. If the Company fails to maintain a Registrar or Paying Agent, the
Trustee shall act as such.
SECTION 2.4 PAYING AGENT TO HOLD ASSETS IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that each Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all assets and/or Secondary Securities held by the Paying
Agent for the payment of principal of, or interest on, the Securities, and shall
notify the Trustee in writing of any Default by the Company in making any such
payment. If the Company or a Subsidiary of the Company
34
acts as Paying Agent, it shall segregate such assets and hold them as a separate
trust fund for the benefit of the Holders or the Trustee. The Company at any
time may require a Paying Agent to distribute all assets and/or Secondary
Securities held by it to the Trustee and account for any assets disbursed and
the Trustee may at any time during the continuance of any payment Default, upon
written request to a Paying Agent, require such Paying Agent to distribute all
assets and/or Secondary Securities held by it to the Trustee and to account for
any assets distributed. Upon distribution to the Trustee of all assets and/or
Secondary Securities that shall have been delivered by the Company to the Paying
Agent, the Paying Agent (if other than the Company) shall have no further
liability for such assets and/or Secondary Securities.
SECTION 2.5 SECURITYHOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee on or before the third Business Day preceding each Interest Payment Date
and at such other times as the Trustee may request in writing a list in such
form and as of such date as the Trustee reasonably may require of the names and
addresses of Holders. The Trustee, the Registrar and the Company shall provide
a current securityholder list to any Gaming Authority upon demand.
SECTION 2.6 TRANSFER AND EXCHANGE.
When Securities are presented to the Registrar or a co-Registrar with
a request to register the transfer of such Securities or to exchange such
Securities for an equal principal amount of Securities of other authorized
denominations, the Registrar or co-Registrar shall register the transfer or make
the exchange as requested if its reasonable requirements for such transaction
are met; PROVIDED, HOWEVER, that the Securities surrendered for transfer or
exchange shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the Registrar or
co-Registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing. To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Securities at the
Registrar's or co-Registrar's request. No service charge shall be made for any
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any transfer tax, assessments, or similar governmental
charge payable in connection therewith (other than any such transfer taxes,
assessments, or similar governmental charge payable upon exchanges or transfers
pursuant to Section 2.2, 2.10, 3.6, 5.14, 10.5, or 11.1).
SECTION 2.7 REPLACEMENT SECURITIES.
If a mutilated Security is surrendered to the Trustee or if the Holder
of a Security claims and submits an affidavit or other evidence, satisfactory to
the Trustee, to the Trustee to the effect that the Security has been lost,
destroyed or wrongfully taken, the Company and the Parent Guarantor shall issue
and the Trustee shall authenticate a replacement Security if the Trustee's
requirements are met. If required by the Trustee or the
35
Company, such Holder must provide an indemnity bond or other indemnity,
sufficient in the judgment of both the Company and the Trustee, to protect the
Company, the Trustee or any Agent from any loss which any of them may suffer if
a Security is replaced. The Company may charge such Holder for its reasonable,
out-of-pocket expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company
and the Guarantors.
SECTION 2.8 OUTSTANDING SECURITIES.
Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee, including Secondary Securities, except those
cancelled by it, those delivered to it for cancellation and those described in
this Section 2.8 as not outstanding. A Security does not cease to be
outstanding because the Company or an Affiliate of the Company holds the
Security, except as provided in Section 2.9.
If a Security is replaced pursuant to Section 2.7 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a BONA FIDE purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant to Section 2.7.
If on a Redemption Date or the Maturity Date the Paying Agent (other
than the Company or an Affiliate of the Company) holds U.S. Legal Tender or U.S.
Government Obligations sufficient to pay all of the principal and interest
(including Contingent Payments) due on the Securities payable on that date and
payment of the Securities called for redemption is not otherwise prohibited,
then on and after that date such Securities cease to be outstanding and interest
(including Contingent Payments) on them ceases to accrue unless the Company
defaults in its obligations with respect thereto.
SECTION 2.9 TREASURY SECURITIES.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, amendment, supplement, waiver or
consent, Securities owned by the Company, any Guarantor and Affiliates of the
Company, or of any Guarantor shall be disregarded, except that, for the purposes
of determining whether the Trustee shall be protected in relying on any such
direction, amendment, supplement, waiver or consent, only Securities that the
Trustee knows or has reason to know are so owned shall be disregarded.
SECTION 2.10 TEMPORARY SECURITIES.
Until definitive Securities are ready for delivery, the Company and
the Parent Guarantor may execute, and upon a written order of the Company in the
form of an Officer's Certificate, the Trustee shall authenticate temporary
Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company
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reasonably and in good faith considers appropriate for temporary Securities.
Without unreasonable delay, the Company and the Parent Guarantor shall execute,
and upon written order of the Company in the form of an Officer's Certificate,
the Trustee shall authenticate definitive Securities in exchange for temporary
Securities. Until so exchanged, the temporary Securities shall in all respects
be entitled to the same benefits under this Indenture as permanent Securities
authenticated and delivered hereunder.
SECTION 2.11 CANCELLATION.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent
(other than the Company or an Affiliate of the Company), and no one else, shall
cancel and, at the written direction of the Company, shall dispose of all
Securities surrendered for transfer, exchange, payment or cancellation. Subject
to Section 2.7, the Company may not issue new Securities to replace Securities
they have paid or delivered to the Trustee for cancellation. No Securities
shall be authenticated in lieu of or in exchange for any Securities cancelled as
provided in this Section 2.11, except as expressly permitted in the form of
Securities and as permitted by this Indenture. If the Company shall acquire any
of the Securities, such acquisition shall not operate as a redemption or
satisfaction of the obligations represented by such Securities unless and until
surrendered to the Trustee pursuant to this Section 2.11.
SECTION 2.12 DEFAULTED INTEREST.
Interest (including Contingent Payments) on any Security which is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the person in whose name that Security (or one or more
predecessor Securities) is registered at the close of business on Record Date
for such interest.
Any interest (including Contingent Payments) on any Security which is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date plus, to the extent lawful, any interest payable on the defaulted
interest (herein called "Defaulted Interest") shall forthwith cease to be
payable to the registered holder on the relevant Record Date, and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the persons in whose names the Securities (or their respective
predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall
be fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
Security and the date of the proposed payment, and at the same time the
Company shall deposit with the Trustee an amount of Cash equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest
or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the
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proposed payment, such Cash when deposited to be held in trust for the
benefit of the persons entitled to such Defaulted Interest as provided in
this clause (1). Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be mailed, first-class postage prepaid,
to each Holder at his address as it appears in the Security register not
less than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor having been mailed as aforesaid, such Defaulted Interest shall be
paid to the persons in whose names the Securities (or their respective
predecessor Securities) are registered on such Special Record Date and
shall no longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause,
such manner shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Security shall carry the rights to interest (including Contingent
Payments) accrued and unpaid, and to accrue, which were carried by such other
Security.
ARTICLE III
REDEMPTION
SECTION 3.1 RIGHT OF REDEMPTION.
Except as provided in Section 3.2 and paragraph 5 of the Notes, the
Notes may not be redeemed prior to maturity.
SECTION 3.2 REDEMPTION PURSUANT TO APPLICABLE LAWS.
Notwithstanding any other provision of this Indenture, the Notes shall
be redeemable in whole or in part, at any time pursuant to, and in accordance
with, a Required Regulatory Redemption. If the Company requires the redemption
of any Security pursuant to this Section 3.2, then the Redemption Price shall be
the principal amount thereof, plus accrued and unpaid interest to the date of
redemption (or such lesser amount as may be required by applicable law or by
order of any Gaming Authority). The Company shall tender the Redemption Price
(together with any accrued and unpaid interest) to the Trustee
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no less than 30 and no more than 60 days after the Company gives the
Securityholder or owner of a beneficial or voting interest written notice of
redemption or such earlier date as may be required by applicable law. The
Company shall notify the Trustee (a "Trustee Redemption Notice") of any
disposition or redemption required under this Section 3.2, and upon receipt of
such notice, the Trustee shall not accord any rights or privileges under this
Indenture or any Security to any Securityholder or owner of a beneficial or
voting interest who is required to dispose of any Security or tender it for
redemption, except to pay the Redemption Price upon tender of such Security.
SECTION 3.3 NOTICES TO TRUSTEE.
If the Company is required to redeem Securities pursuant to Section
3.2, the Company shall notify the Trustee in writing of the Securities to be
redeemed, the aggregate principal amount of the Securities to be redeemed, the
date on which the applicable Securities are to be redeemed (the "Redemption
Date") and whether the Company would like the Trustee to give notice of
redemption to the Holders.
SECTION 3.4 NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a Redemption Date,
the Company shall mail a notice of redemption by first class mail, postage
prepaid, to each Holder whose Securities are to be redeemed (unless a shorter
notice period shall be required by applicable law). At the Company's request,
the Trustee shall give the notice of redemption in the Company's name and at the
Company' expense. Each notice for redemption shall identify the Securities to
be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price, including the amount of accrued and
unpaid interest to be paid upon such redemption;
(3) the name, address and telephone number of the Paying Agent;
(4) that Securities called for redemption must be surrendered to
the Paying Agent at the address specified in such notice to collect the
Redemption Price;
(5) if any Security is being redeemed in part, the portion of
the principal amount, equal to $1,000 or any integral multiple thereof, of
such Security to be redeemed and that, after the Redemption Date, and upon
surrender of such Security, a new Security or Securities in aggregate
principal amount equal to the unredeemed portion thereof will be issued;
(6) if less than all the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be
redeemed, as well as the aggregate principal amount of such Securities to
be redeemed and the aggregate principal amount of Securities to be
outstanding after such partial redemption;
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(7) the CUSIP number of the Securities to be redeemed;
(8) the circumstances pursuant to which the Required Regulatory
Redemption is being effected; and
(9) that the notice is being sent pursuant to this Section 3.4
and Paragraph 5 of the Securities.
SECTION 3.5 EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.4,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price. Upon surrender to the Trustee or Paying Agent,
such Securities called for redemption shall be paid at the Redemption Price.
SECTION 3.6 DEPOSIT OF REDEMPTION PRICE.
On or before the Redemption Date, the Company shall deposit with the
Paying Agent U.S. Legal Tender sufficient to pay the Redemption Price of all
Securities to be redeemed on such Redemption Date. The Paying Agent shall
promptly return to the Company any U.S. Legal Tender so deposited which is not
required for that purpose upon the written request of the Company.
Interest (including Contingent Payments) on the Securities to be
redeemed will cease to accrue on the date on which the Trustee receives the
Trustee Redemption Notice, whether or not such Securities are presented for
payment.
SECTION 3.7 SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is to be redeemed in part, the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder, without service charge, a new Security or Securities equal in principal
amount to the unredeemed portion of the Security surrendered.
ARTICLE IV
SECURITY
SECTION 4.1 SECURITY INTEREST.
(a) In order to secure the prompt and complete payment and
performance in full of the Indenture Obligations, the Company, the Parent
Guarantor and, as applicable, the Trustee and the Collateral Agent have entered
into this Indenture and the Collateral Documents. Each Holder, by accepting a
Security, agrees to all of the terms and provisions of this Indenture, the
Intercreditor Agreement and the Collateral Documents, and the Trustee agrees to
all of the terms and provisions of this Indenture, the Intercreditor Agreement
and
40
the Collateral Documents, as this Indenture, the Intercreditor Agreement and the
Collateral Documents may be amended from time to time pursuant to the provisions
thereof and hereof.
(b) The Collateral as now or hereafter constituted shall be held for
the equal and ratable benefit of the Holders without preference, priority or
distinction of any thereof over any other by reason of difference in time of
issuance, sale or otherwise, as the only security for the Indenture Obligations.
The Collateral is to be held by the Collateral Agent for the benefit of the Bank
Lenders, the Holders and the Holders of Contingent Notes, subject to the terms
of the Intercreditor Agreement, the Collateral Documents and Section 4.6. The
Trustee and each Holder acknowledge that, as more fully set forth in the
Collateral Documents, the rights of the Holders (and of the Trustee on their
behalf) to receive proceeds from the disposition of the Collateral is
subordinated to the Bank Security Interests securing Senior Debt.
(c) The provisions of TIA Section 314(d), and the provisions of TIA
Section 314(c)(3) to the extent applicable by specific reference in this
Article IV, are hereby incorporated by reference herein as if set forth in their
entirety, except that, as set forth in Section 4.5, TIA Section 314(d) need not
be complied with in certain respects.
SECTION 4.2 RECORDING; OPINIONS OF COUNSEL.
(a) The Company represents that it has caused to be executed and
delivered, filed and recorded and covenants that it will promptly cause to be
executed and delivered, filed and recorded, all instruments and documents, and
has done and will do or will cause to be done all such acts and other things, at
the Company's expense, as are necessary to effect and maintain valid and
perfected security interests in the Collateral. The Company shall, as promptly
as practicable, cause to be executed and delivered, filed and recorded all
instruments and do all acts and other things as may be required by law to
perfect, maintain and protect the security interests under the Collateral
Documents and herein.
(b) The Company shall furnish to the Trustee, concurrently with the
execution and delivery of this Indenture and the Collateral Documents and
promptly after the execution and delivery of any amendment thereto or any other
instrument of further assurance, an Opinion(s) of Counsel stating that, in the
opinion of such counsel, subject to customary exclusions and exceptions
reasonably acceptable to the Trustee, either (i) this Indenture, the Collateral
Documents, any such amendment and all other instruments of further assurance
have been properly recorded, registered and filed and all such other action has
been taken to the extent necessary to make effective valid security interests
and to perfect the security interests intended to be created by this Indenture
and the Collateral Documents, and reciting the details of such action, or (ii)
no such action is necessary to effect and maintain in full force and effect the
validity and perfection of the security interests under the Collateral Documents
and hereunder.
(c) The Company shall furnish to the Trustee, on or prior to
_________, of each year commencing in 1999, an Opinion(s) of Counsel, dated as
of such date, stating
41
that, in the opinion of such counsel, subject to customary exclusions and
exceptions reasonably acceptable to the Trustee, either (A) all such action has
been taken with respect to the recording, registering, filing, rerecording and
refiling of this Indenture, all supplemental indentures, the Collateral
Documents, financing statements, continuation statements and all other
instruments of further assurance as is necessary to maintain the validity and
perfection of security interests under the Collateral Documents and hereunder in
full force and effect and reciting the details of such action, and stating that
all financing statements and continuation statements have been executed and
filed and such other actions taken that are necessary fully to preserve and
protect the rights of the Holders and the Trustee hereunder and under the
Collateral Documents, or (B) no such action is necessary to maintain in full
force and effect the validity and perfection of the security interests under the
Collateral Documents and hereunder.
SECTION 4.3 DISPOSITION OF CERTAIN COLLATERAL.
(a) The Company may, without requesting the release or consent of the
Trustee or the Collateral Agent, but otherwise subject to the requirements of
this Indenture:
(i) sell, assign, transfer, license or otherwise dispose of,
free from the security interests under the Collateral Documents and
hereunder, any machinery, equipment, or other personal Property
constituting Collateral that has become worn out, obsolete, or
unserviceable or is being upgraded, upon replacing the same with or
substituting for the same, machinery, equipment or other Property
constituting Collateral not necessarily of the same character but being of
at least equal fair value and at least equal utility to the Company as the
Property so disposed of, which Property shall without further action become
Collateral subject to the security interests under the Collateral Documents
and hereunder;
(ii) (A) in the ordinary course of the Company's business and
consistent with industry practices, sell, assign, transfer, license or
otherwise dispose of, free from the security interests under the Collateral
Documents and hereunder, inventory held for resale that is at any time part
of the Collateral, (B) in the ordinary course of the Company's business and
consistent with industry practices, collect, liquidate, sell, factor or
otherwise dispose of, free from the security interests under the Collateral
Documents and hereunder, accounts receivable or notes receivable that are
part of the Collateral or (C) make ordinary course of business Cash
payments (including scheduled repayments of Indebtedness permitted to be
incurred hereby) from Cash that is at any time part of the Collateral;
(iii) abandon, sell, assign, transfer, license or otherwise
dispose of, free from the security interests under the Collateral Documents
and hereunder, any personal property the use of which is no longer
necessary or desirable in the proper conduct of the business of the Company
and its Subsidiaries and the maintenance of its earnings and is not
material to the conduct of the business of the Company and its
Subsidiaries;
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(iv) subject to the provisions of the Collateral Documents
pertaining to disposal of real property, sell, assign, transfer, license or
otherwise dispose of, free from the security interests under the Collateral
Documents and hereunder, any assets or property in accordance with Section
5.14 (including, without limitation, pursuant to the penultimate paragraph
in Section 5.14(a)); provided that the Collateral Agent shall have a valid
and perfected security interest in all net proceeds that are not Net Cash
Proceeds from such disposition (except those fees, commissions and other
expenses and taxes deducted in the definition of "Net Cash Proceeds") and
in any assets or property acquired with the proceeds from such disposition
in the same priority as such assets or property so disposed of; and
(v) sell, assign, transfer, license or otherwise dispose of,
free from the security interests under the Collateral Documents and
hereunder, the Specified Real Estate; provided that the Collateral Agent
shall have a valid and perfected security interest in all net proceeds from
such disposition or any assets or property acquired with the proceeds of
such disposition in the same priority as the Specified Real Estate so
disposed of;
PROVIDED; HOWEVER, that the Company may either (x) release from the leasehold
estate of the Ground Lease the surface rights with respect to a triangular piece
of land approximately 5,400 square feet in area which area is adjacent to
Poydras Street and Convention Center Boulevard and can be measured from the
corner of Poydras Street and Convention Center Boulevard moving along Poydras
Street approximately sixty-five feet and Convention Center Boulevard
approximately one hundred fifty-five feet (so long as no portion of the Casino
is constructed on such triangular piece of land) for the purpose of
reconfiguring the intersection of Convention Center Boulevard and Poydras
Street, or (y) grant, or consent to the grant of, a right of way, servitude or
other right of use over the aforesaid triangular piece of land (so long as no
portion of the Casino is constructed on such triangular piece) to the extent
necessary to reconfigure the intersection of Convention Center Boulevard and
Poydras Street, provided that the first priority lien of the Mortgage is
maintained (less and except a lien on that portion of the real property
underlying the aforesaid triangular piece to be released in the event of a
release or less and except a first priority lien on said triangular piece of
real property in the event of a grant of or consent to a right of way, servitude
or other right of use over said triangular piece of land). The Trustee agrees,
upon the reasonable request and at the sole expense of the Company, to promptly
execute, or cause the Collateral Agent to promptly execute such documentation as
may be necessary to effect any release, grant or consent permitted by this
subsection.
(b) Notwithstanding the provisions of subsection (a) above, the
Company shall not dispose of or transfer (by lease, assignment, license, sale or
otherwise) or pledge, mortgage or otherwise encumber Collateral pursuant to the
provisions of Section 4.3(a)(ii) or (iii) with a fair value of 10% or more of
the aggregate fair value of all Collateral then existing in any transaction or
any series of related transactions.
(c) In the event that the Company has sold, exchanged, or otherwise
disposed of or proposes to sell, exchange or otherwise dispose of any portion of
the
43
Collateral which under the provisions of this Section 4.3 may be sold, exchanged
or otherwise disposed of by the Company without consent of the Trustee or the
Collateral Agent, and the Company requests the Trustee or the Collateral Agent
to furnish a written disclaimer, release or quitclaim of any interest in such
property under the Collateral Documents, the Trustee shall execute such an
instrument (or instruct the Collateral Agent to do so), prepared by the Company,
upon delivery to the Trustee of an Officers' Certificate by the Company reciting
the sale, exchange or other disposition made or proposed to be made and
describing in reasonable detail the property affected thereby, and certifying
that such property is property which by the provisions of this Section 4.3 may
be sold, exchanged or otherwise disposed of or dealt with by the Company without
any release or consent of the Trustee or the Holders. Each of the Trustee and
the Collateral Agent shall be authorized to conclusively rely on such
certification.
(d) Any disposition of Collateral made in compliance with the
provisions of this Section 4.3 shall be deemed not to impair the security
interests under the Collateral Documents and hereunder in contravention of the
provisions of this Indenture.
SECTION 4.4 NET CASH PROCEEDS ACCOUNT.
All Cash received by the Company or its subsidiaries as Net Cash
Proceeds from an Asset Sale or as Insurance Proceeds shall be deposited in the
Net Cash Proceeds Account, in which account there shall be, subject to the lien
subordination provisions set forth in the Intercreditor Agreement, the
Collateral Documents and Section 4.6, a perfected security interest in favor of
(i) the Collateral Agent for the benefit of the Bank Lenders as security for the
prompt and complete payment and performance in full of the obligations under the
Bank Credit Facilities, and (ii) the Holders, without preference, priority, or
distinction of any Holder over any other Holder by reason of difference in time
of issuance, sale or otherwise, as security for the prompt and complete payment
and performance in full of the Indenture Obligations. The funds from time to
time on deposit in the Net Cash Proceeds Account may be disbursed from such
account only for the purposes and in the manner provided for in the
Intercreditor Agreement, the Security Agreement, the Bank Credit Facilities and
this Indenture.
SECTION 4.5 CERTAIN RELEASES OF COLLATERAL.
Subject to applicable law, the release of any Collateral from Liens
created by the Collateral Documents or the release of, in whole or in part, the
Liens created by the Collateral Documents, will not be deemed to impair the
Collateral Documents in contravention of the provisions of this Indenture if and
to the extent the Collateral or Liens are released pursuant to, and in
accordance with, the applicable Collateral Documents or pursuant to, and in
accordance with, the terms hereof. To the extent applicable, without limitation
(except as provided in the last sentence of this paragraph), the Company, the
Parent Guarantor and each obligor on the Securities shall cause TIA Section
314(d), relating to the release of property or securities from the Liens of the
Collateral Documents, to be complied with. Any certificate or opinion required
by TIA Section 314(d) may be made by two Officers of the Company, except in
cases in which TIA Section 314(d) requires that such certificate or opinion
44
be made by an independent person. The Company shall not be required under this
Indenture to deliver to the Trustee any certificates or opinions required to be
delivered pursuant to Section 314(d) of the TIA in connection with releases of
Collateral in accordance with Section 4.3(a)(ii) hereunder, unless TIA Section
314(d) would require such certificate or opinion to be made by an independent
person.
SECTION 4.6 LIEN SUBORDINATION.
(a) Bank Security Interests in the Collateral securing Senior Debt
shall be senior and prior in right to the Security Interests. The Trustee and
each Holder acknowledge that the rights of the Bank Lenders in respect of Senior
Debt to receive proceeds from the disposition of the Collateral is senior to the
rights of the Holders to receive proceeds from the disposition of the
Collateral. Bank Security Interests in the Collateral securing Senior
Subordinated Debt are PARI PASSU with the Security Interests, and the rights of
Bank Lenders in respect of Senior Subordinated Debt to receive proceeds from the
disposition of the Collateral is PARI PASSU with the rights of the Holders to
receive proceeds from the disposition of the Collateral.
(b) The priorities set forth in this Section 4.6 are applicable
irrespective of the order of creation, attachment or perfection of any Liens or
security interests or any priority that might otherwise be available to the
Holders, the Trustee, or any Bank Lender under the applicable law.
(c) The priorities set forth in this Section 4.6 are premised upon
the assumption that the Bank Security Interests are duly and properly created
and perfected and are not avoidable for any reason. Accordingly, to the extent
that (but only for so long as) any Bank Security Interests are not duly and
properly created and perfected or are avoidable for any reason, then the
subordinations provided for in this Section 4.6 shall not be effective as to the
particular Collateral subject to such Bank Security Interests; provided,
however, that the Trustee and each Holder, by accepting a Security, agree not to
contest, or to bring (or voluntarily join in) any action or proceeding for the
purpose of contesting the validity, perfection or priority (as herein provided)
of, or seeking to avoid, any Bank Security Interests, and provided further, that
nothing herein shall be deemed or construed to prevent any Bank Lender from
commencing an action or proceeding to assert any right or claim it may have
arising under or in connection with any Collateral Documents.
SECTION 4.7 PAYMENT OF EXPENSES.
On demand of the Trustee, the Company forthwith shall pay or
satisfactorily provide for all reasonable expenditures incurred by the Trustee
and the Collateral Agent under this Article IV, including the reasonable fees
and expenses of counsel and all such sums shall be a Lien upon the Collateral
and shall be secured thereby.
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SECTION 4.8 SUITS TO PROTECT THE COLLATERAL.
Subject to Section 4.1 of this Indenture, the Intercreditor Agreement
and to the provisions of the Collateral Documents, the Trustee shall have power
to institute and to maintain such suits and proceedings as it may deem expedient
to prevent any impairment of the Collateral by any acts which may be unlawful or
in violation of the Collateral Documents or this Indenture, including the power
to institute and maintain suits or proceedings to restrain the enforcement of or
compliance with any legislative or other governmental enactment, rule or order
that may be unconstitutional or otherwise invalid or if the enforcement of, or
compliance with, such enactment, rule or order would impair the security
interests in contravention of this Indenture or be prejudicial to the interests
of the Holders or of the Trustee. The Trustee shall give notice to the Company
promptly following the institution of any such suit or proceeding.
SECTION 4.9 TRUSTEE'S DUTIES.
The powers and duties conferred upon the Trustee by this Article IV
are solely to protect the security interests and shall not impose any duty upon
the Trustee to exercise any such powers and duties, except as expressly provided
in this Indenture or the TIA. The Trustee shall be under no duty to the Company
or any Guarantor whatsoever to make or give any presentment, demand for
performance, notice of nonperformance, protest, notice of protest, notice of
dishonor, or other notice or demand in connection with any Collateral, or to
take any steps necessary to preserve any rights against prior parties except as
expressly provided in this Indenture. The Trustee shall not be liable to the
Company or the Guarantors for failure to collect or realize upon any or all of
the Collateral, or for any delay in so doing, nor shall the Trustee be under any
duty to the Company or the Guarantors to take any action whatsoever with regard
thereto. The Trustee shall have no duty to the Company or the Guarantors to
comply with any recording, filing, or other legal requirements necessary to
establish or maintain the validity, priority or enforceability of the security
interests in, or the Trustee's rights in or to, any of the Collateral.
SECTION 4.10 COLLATERAL DOCUMENTS.
Notwithstanding any provision of this Indenture or the Collateral
Documents to the contrary, (A) this Indenture and the Collateral Documents shall
grant no security or other interest or right in or to (i) the Casino Operating
Contract, (ii) the House Bank (as defined in the Management Agreement), or (iii)
the Louisiana Gaming Gross Revenue Share Payments (including the Gaming Board's
Interest in Daily Collections) (as such terms are defined in the Casino
Operating Contract), and (B) the Security Interests in favor of the Holders, and
the Trustee on their behalf, granted by this Indenture and the Collateral
Documents are subordinated to the Minimum Payment Guarantor Security Interest.
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ARTICLE V
COVENANTS
SECTION 5.1 PAYMENT OF SECURITIES.
The Company shall duly and punctually pay the principal of and
interest (including Contingent Payments) on the Securities at the places, on the
dates and in the manner provided in the Securities and this Indenture. An
installment of principal of or interest (including Contingent Payments) on the
Securities shall be considered paid on the date it is due if the Trustee or
Paying Agent (other than the Company or an Affiliate of the Company) holds for
the benefit of the Holders, on or before 10:00 a.m. New York City time on that
date, U.S. Legal Tender and/or, to the extent permitted or required by
Section 2.2, Secondary Securities, deposited and designated for and sufficient
to pay the installment, and has not received instructions from the Company not
to make such payment and is not otherwise prohibited from paying such principal,
interest or Secondary Securities to the Holders pursuant to this Indenture. If
and to the extent that, the Company's Consolidated EBITDA for any Contingent
Payment Period is less than the amount required to cause the Maximum Contingent
Payments for such Contingent Payment Period to become due, the difference
between the amount of the Contingent Payments actually made and the amount of
such Maximum Contingent Payments will never be accrued or paid.
The Company shall pay interest (including post-petition interest in
any proceeding under any applicable Bankruptcy Law) on overdue principal and on
overdue installments of interest (including Contingent Payments) at the rate
of 8% per annum compounded semi-annually, to the extent lawful.
SECTION 5.2 MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, The City of
New York, an office or agency where Securities may be presented or surrendered
for payment, where Securities may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Company shall give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the address of the Trustee set forth in Section 15.2.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or 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
47
agency. The Company hereby initially designates the Corporate Trust Office of
the Trustee as such office.
SECTION 5.3 LIMITATION ON RESTRICTED PAYMENTS.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, make any Restricted Payment if, after giving effect
thereto on a PRO FORMA basis, (l) a Default or an Event of Default shall have
occurred and be continuing, (2) immediately after giving effect to such
Restricted Payment on a PRO FORMA basis, the Consolidated Coverage Ratio of the
Company for the Reference Period immediately preceding the Restricted Payment
would be less than 2.0 to 1, (3) the aggregate amount of all Restricted Payments
made by the Company and its Subsidiaries, including after giving effect to such
proposed Restricted Payment, would exceed the sum of (a) 50% of the aggregate
Consolidated Net Income of the Company and its Consolidated Subsidiaries for the
period (taken as one accounting period) commencing on the first day of the first
full fiscal quarter commencing after the Casino Opening Date, to and including
the last day of the fiscal quarter ended immediately prior to the date of each
such calculation (or, in the event Consolidated Net Income for such period is a
deficit, then minus 100% of such deficit), minus 100% of the amount of any
writedowns, writeoffs, or negative extraordinary charges (other than any related
to the Casino prior to the Casino Completion Date) not otherwise reflected in
Consolidated Net Income during such period, plus (b) the aggregate Net Cash
Proceeds (including the fair market value of non-cash proceeds, as determined in
good faith by the Manager of the Company) received by the Company as a capital
contribution or from the sale of its Qualified Capital Stock (other than to a
Subsidiary of the Company and other than in connection with a Qualified
Exchange) after the Casino Completion Date, or (4) during each of the two full
consecutive Contingent Payment Periods preceding the proposed Restricted
Payment, the Company has not paid (a) the Maximum Contingent Payments with
respect to each such Contingent Payment Period and (b) the Maximum Contingent
Payments (in this instance only, as defined in the Contingent Notes Indenture)
with respect to the Contingent Notes with respect to each such Contingent
Payment Period.
The foregoing clauses (2), (3) and (4) of the immediately preceding
paragraph, however, will not prohibit (A) the payment of any dividend on or
redemption of Qualified Capital Stock within 60 days after the date of its
declaration or authorization, respectively, if such dividend or redemption could
have been made on the date of such declaration or authorization in compliance
with the foregoing provisions, (B) the redemption or distribution or other
Restricted Payment with respect to Capital Stock or Indebtedness pursuant to,
and in accordance with, any Required Regulatory Redemption effected in
accordance with this Indenture (including dividends and distributions to the
Parent Guarantor to permit the Parent Guarantor to effect a Required Regulatory
Redemption), (C) a Qualified Exchange, (D) dividends and distributions by the
Company to the Parent Guarantor in an amount equal to all Permitted Tax
Distributions, to the extent such are actually so applied by the Parent
Guarantor, and (E) dividends and distributions by the Company to the Parent
Guarantor to the extent necessary to permit the Parent Guarantor to pay the
Parent Guarantor's reasonable professional fees and expenses in connection with
complying with its reporting obligations (including its obligations set forth in
Section 5.8) and obligations to prepare and distribute
48
business records, financial statements or other documents to any lender or other
persons having business dealings with the Parent Guarantor or as may be required
by law, the Parent Guarantor's costs and related expenses in connection with the
computation of federal, state, local or foreign taxes and other governmental
charges other than Permitted Tax Distributions, indemnification agreements,
insurance premiums, surety bonds and insurance brokers' fees, and the Parent
Guarantor's expenses for directors', officers' and employees' compensation and
benefits, and any other administrative expenses incurred in the ordinary course
of business practices (all, in the case of this clause (E) to be limited in an
amount proportionate to the percentage of the book value of the Parent
Guarantor's assets which is fairly attributable, at the time of such Restricted
Payment, to the Company and its Subsidiaries). The full amount of any
Restricted Payment made pursuant to either of clauses (A) and (B) (but not those
made pursuant to clauses (C), (D) or (E)) will be deducted in the calculation of
the aggregate amount of Restricted Payments thereafter available to be made
pursuant to clause (3) of the immediately preceding paragraph.
In addition to, and notwithstanding anything to the contrary in, the
foregoing, the Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, make any Restricted Payment (other than pursuant to
clauses (B), (C), (D) and (E) of the immediately preceding paragraph) prior to
the last day of the Company's first full fiscal quarter during or prior to which
the Casino Completion Date shall have occurred.
SECTION 5.4 EXISTENCE.
Subject to Article VI, the Company and its Subsidiaries shall do or
cause to be done all things necessary to preserve and keep in full force and
effect their existence, rights (charter and statutory) and franchises and the
corporate or other existence of each of their Subsidiaries in accordance with
the respective organizational documents of each of them; provided, however, that
neither the Company nor any Guarantor shall be required to preserve, with
respect to itself or any of its Subsidiaries, any right or franchise if (a) the
Manager shall determine reasonably and in good faith that the preservation
thereof is no longer desirable in the conduct of the business of the Company or
Guarantors and (b) the loss thereof is not disadvantageous in any material
respect to the Holders.
SECTION 5.5 PAYMENT OF TAXES AND OTHER CLAIMS.
The Company and each of the Guarantors shall, and shall cause each of
its Subsidiaries to, pay or discharge or cause to be paid or discharged, before
the same shall become delinquent, (i) all material taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon the Company, any Guarantor or any
of their Subsidiaries or upon any of their material properties and assets and
(ii) all material lawful claims, whether for labor, materials, supplies,
services or anything else, which have become due and payable and which by law
have or may become a Lien upon the property and assets of the Company, any
Guarantor or any of their Subsidiaries; provided, however, that neither the
Company nor any Guarantor shall be required to pay or discharge or cause to be
paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in
49
good faith by appropriate proceedings and for which adequate reserves have been
established in accordance with GAAP.
SECTION 5.6 MAINTENANCE OF INSURANCE.
On the Issue Date, and at all times thereafter, the Company and its
Subsidiaries shall have in effect customary comprehensive general liability,
property and casualty and business interruption insurance, shall have
completion, payment or performance or similar bonds in place for the Casino and
shall cause the builders of the Casino to maintain builder's risk coverage
insurance, in each case on terms and in an amount reasonably believed by the
Company to be sufficient (taking into account, among other factors, the
creditworthiness of the insurer) to avoid a material adverse change in the
financial condition or results of operation of the Company and its Subsidiaries,
taken as a whole.
SECTION 5.7 COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT.
(a) The Company shall deliver to the Trustee, within 120 days after
the end of each of its fiscal year, an Officers' Certificate complying (whether
or not required) with Section 314(a)(4) of the TIA and stating that a review of
its activities and the activities of its Subsidiaries during the preceding
fiscal year has been made under the supervision of the signing Officers with a
view to determining whether the Company has kept, observed, performed and
fulfilled its obligations under this Indenture and the Collateral Documents and
further stating, as to each such Officer signing such certificate, whether or
not the signer knows of any failure by the Company, any Guarantor or any
Subsidiary of the Company or any Guarantor to comply with any conditions or
covenants in this Indenture and, if such signer does know of such a failure to
comply, the certificate shall describe such failure with particularity. The
Officers' Certificate shall also notify the Trustee should the relevant fiscal
year end on any date other than the current fiscal year end date.
(b) So long as not contrary to the then current recommendation of the
American Institute of Certified Public Accountants, the Company shall deliver to
the Trustee within 120 days after the end of its fiscal year a written report of
a firm of independent certified public accountants with an established national
reputation stating that in conducting their audit for such fiscal year, nothing
has come to their attention that caused them to believe that of Company or any
Subsidiary of the Company was not in compliance with the provisions set forth in
Section 5.3, 5.11, 5.14, or 5.19 of this Indenture.
(c) The Company shall, so long as any of the Securities are
outstanding, deliver to the Trustee, immediately upon becoming aware of any
Default or Event of Default under this Indenture, an Officers' Certificate
specifying such Default or Event of Default and what action the Company is
taking or proposes to take with respect thereto. The Trustee shall not be
deemed to have knowledge of a Default or an Event of Default unless one of its
trust officers receives notice of the Default or Event of Default giving rise
thereto from the Company or any of the Holders.
50
SECTION 5.8 REPORTS.
Whether or not the Company or any Guarantor is subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company
and JCC Holding shall file (which filing may be on a consolidated basis) with
the SEC (to the extent permitted under the Exchange Act) on or prior to the date
they are or would have been required to file such with the SEC (the "Required
Filing Date"), annual and quarterly consolidated financial statements
substantially equivalent to financial statements that would have been included
in reports filed with the SEC if the Company or JCC Holding, as applicable, were
subject to the requirements of Section 13 or 15(d) of the Exchange Act,
including, with respect to annual information only, a report thereon by such
reporting entity's certified independent public accountants as such would be
required in such reports to the SEC and, in each case, together with a
management's discussion and analysis of financial condition and results of
operations which would be so required. The Company and JCC Holding shall also
include in such reports the anticipated completion date of the Casino and, in
the case of quarterly reports, the Contingent Payments made, the Contingent
Payment Accrual amount and Consolidated EBITDA with respect to the most recently
ended fiscal quarter of the Company, and in the case of annual reports, the
audited Contingent Payments made, the audited Contingent Payment Accrual amount
and audited Consolidated EBITDA for the most recently ended fiscal year and for
each of the Semiannual Periods ending in such fiscal year. The Company and JCC
Holding shall also file all other reports and information that they are or would
have been required with the SEC prior to the Required Filing Date. The Company
and JCC Holding will also provide copies of such annual and quarterly reports to
the Trustee within 30 days after the Required Filing Date; provided, that the
Company and JCC Holding shall not be in default of the provisions of this
Section 5.8 for any failure to file reports with the SEC solely by refusal by
the SEC to accept the same for filing, it being understood that in such event,
such reports shall be delivered to the Trustee as described herein as if they
had been filed with the SEC.
SECTION 5.9 WAIVER OF STAY, EXTENSION OR USURY LAWS.
The Company and each Guarantor covenant (to the extent that they may
lawfully do so) that they will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law wherever enacted which would
prohibit or forgive the Company or each Guarantor from paying all or any portion
of the principal of or interest (including Contingent Payments) on the
Securities as contemplated herein, wherever enacted, now or at any time
hereafter in force, or which may affect the covenants or the performance of this
Indenture; and (to the extent that they may lawfully do so) the Company and each
Guarantor hereby expressly waive all benefit or advantage of any such law
insofar as such law applies to the Securities, and covenant that they shall not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
51
SECTION 5.10 LIMITATION ON TRANSACTIONS WITH AFFILIATES.
Neither the Company nor any of its Subsidiaries will enter into any
contract, arrangement, understanding or transaction with an Affiliate (an
"Affiliate Transaction") except for (i) transactions evidenced by an Officers'
Certificate addressed and delivered to the Trustee stating that such Affiliate
Transaction is made in good faith and that the terms of such Affiliate
Transaction are fair and reasonable to the Company or such Subsidiary, as the
case may be, and at least as favorable as the terms which could be obtained by
the Company or such Subsidiary, as the case may be, in a comparable transaction
made on an arm's length basis with persons who are not Affiliates; PROVIDED,
HOWEVER, that any such transaction shall be deemed to be on terms which are fair
and reasonable to the Company or such Subsidiary, as applicable, and on terms
which are at least as favorable as the terms which could be obtained on an arm's
length basis with persons who are not so affiliated, if such transaction is
approved by a majority of the members of the Manager's Board of Directors (or,
if the Company is a corporation, by the members of the Company's Board of
Directors) who are disinterested in the terms thereof; and, PROVIDED, FURTHER,
(a) that Affiliate Transactions during a single fiscal year involving HET or any
Subsidiary of HET shall not in the aggregate involve consideration to either
party in excess of a threshold to be determined by the Manager's Board of
Directors (or, if the Company is a corporation, by the Company's Board of
Directors) (including, without limitation, any decisions regarding the exercise,
waiver or modification of rights or obligations, or the determination of fees
with respect to project development services, under the Management Agreement),
unless such Affiliate Transactions (y) have been approved by the Board of
Directors of the Manager (or, if the Company is a corporation, of the Company)
or such Subsidiary, as applicable, in accordance with the applicable governance
documents of such entity, or (z) are pursuant to or in connection with
agreements or plans (including, without limitation, any business plans,
operating plans, financing plans or marketing plans) (I) approved by the Board
of Directors of the Manager (or, if the Company is a corporation, of the
Company) or such Subsidiary, as applicable, in accordance with the governance
documents of such entity, (II) approved by the Bankruptcy Court for the Eastern
District of Louisiana in connection with the Plan of Reorganization, or (III)
entered into by the Company prior to, on, or substantially concurrently with,
the Issue Date, and (b) that with respect to any Affiliate Transaction
(including any series of related transactions) involving consideration to either
party in excess of $2.5 million, the Company must, prior to the consummation
thereof, obtain a written favorable opinion as to the fairness of such
transaction to the Company or Subsidiary, as the case may be, from a financial
point of view from an independent investment banking firm of national
reputation, or (in the case of a real estate transaction) an independent
investment banking firm or a real estate appraisal firm of national reputation,
(ii) transactions solely between the Company and any wholly owned Subsidiaries
or solely among wholly owned Subsidiaries, (iii) transactions effected pursuant
to, and in accordance with the terms of, the Management Agreement, the
Completion Guarantees, the Administrative Services Agreement, the Licensing
Agreement, the Development Agreement, the Completion Loan Agreement, the
Indemnity Agreement, the Performance Bond Indemnity Agreement, the HET Loan
Guarantee, the Credit Enhancement Fee Agreement, the Minimum Payment Guaranty,
the HET/JCC Agreement, the HET Warrant, and any payments under the Bank Credit
Facilities, as such terms in such agreements exist on the Issue Date or, in the
case of
52
the Bank Credit Facilities, as they may be subsequently amended, modified,
supplemented or replaced in a manner that is not disadvantageous to the Holders
in any material respect, and (iv) Restricted Payments to the extent permitted by
Section 5.3. Notwithstanding the foregoing, this covenant shall not restrict
the disposition of the Specified Real Estate to an Affiliate at a purchase price
no less than the lesser of the cost to the Company of such real estate or its
then current fair market value determined by the members of the Manager's Board
of Directors (or, if the Company is a corporation, the members of the Company's
Board of Directors) who are disinterested in the transaction.
SECTION 5.11 LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS AND
DISQUALIFIED CAPITAL STOCK.
Except as set forth below, the Company will not, and the Company will
not permit any of its Subsidiaries to, directly or indirectly, issue, assume,
guaranty, incur, become directly or indirectly liable with respect to (including
as a result of an acquisition, merger or consolidation), or otherwise become
responsible for, contingently or otherwise (individually and collectively, to
"incur," or, as appropriate, an "incurrence"), any Indebtedness or any
Disqualified Capital Stock from and after the Issue Date. Notwithstanding the
foregoing:
(a) the Company and its Subsidiaries may incur Subordinated
Indebtedness and Disqualified Capital Stock (i) if no Default or Event of
Default shall have occurred and be continuing at the time of, or would
occur after giving effect on a PRO FORMA basis to, such incurrence of
Subordinated Indebtedness or Disqualified Capital Stock, (ii) in an
aggregate principal amount of up to $30 million if, on the date of such
incurrence (the "Incurrence Date"), the Consolidated Coverage Ratio of the
Company for the Reference Period immediately preceding the Incurrence Date,
after giving effect on a PRO FORMA basis to such incurrence of such
Subordinated Indebtedness or Disqualified Capital Stock, would be at least
2.5 to 1, and (iii) in an aggregate principal amount of up to $50 million
if, on the Incurrence Date, the Consolidated Coverage Ratio of the Company
for the Reference Period immediately preceding such Incurrence Date, after
giving effect on a PRO FORMA basis to such incurrence of such Subordinated
Indebtedness or Disqualified Capital Stock, would be at least 3.0 to 1;
(b) the Company and the Guarantors may incur (i) Indebtedness
evidenced by the Notes (including the issuance of Secondary Securities in
lieu of cash interest payments pursuant to the terms of this Indenture) and
represented by this Indenture up to the amounts specified herein and
therein as of the date hereof and thereof and (ii) Indebtedness evidenced
by the Contingent Notes and represented by the Contingent Notes Indenture
up to the amounts specified therein as of the dates thereof;
(c) the Company and any Subsidiary may incur Permitted FF&E Financing
in an aggregate principal amount of up to $25 million, provided, that in
each case the aggregate amount of Indebtedness incurred pursuant to this
paragraph (c) (including
53
any Indebtedness issued to refinance, replace or refund such Indebtedness)
with respect to each item of FF&E shall not constitute more than 100% of
the cost to the Company and such Subsidiary of such item of FF&E so
purchased or leased;
(d) the Company and any Guarantor may incur Indebtedness the proceeds
of which are used for working capital pursuant to, or in respect of, the
Revolving Loans in an aggregate amount outstanding at any time (including
any Indebtedness issued to refinance, replace or refund such Indebtedness)
not to exceed $25 million;
(e) the Company and any Subsidiary may incur (i) Non-recourse
Indebtedness and (ii) up to $50 million in aggregate principal amount of
Subordinated Indebtedness, in each case in respect of the Project Cost of a
Project Expansion;
(f) the Company and any Guarantor may incur Refinancing Indebtedness
with respect to any Indebtedness or Disqualified Capital Stock, as
applicable, described in clauses (a) through (e) and (h) and (i) of this
covenant so long as, in the case of Indebtedness used to refinance, refund,
or replace Indebtedness in clauses (c), (d) and (e), such Refinancing
Indebtedness satisfies the applicable requirements of such clauses;
(g) the Company and any Subsidiary may incur Permitted Indebtedness;
(h) the Company or any Guarantor may incur Indebtedness pursuant to,
or in respect of, (i) the Tranche A-1 Term Loan in an aggregate principal
amount outstanding at any time not to exceed $10,000,000, (ii) the Tranche
A-2 Term Loan in an aggregate principal amount outstanding at any time not
to exceed $20,000,000, (iii) the Tranche A-3 Term Loan in an aggregate
principal amount outstanding at any time not to exceed $30,000,000,
(iv) the Tranche B-1 Term Loan in an aggregate principal amount outstanding
at any time not to exceed $30,000,000, and (v) the Tranche B-2 Term Loan in
an aggregate principal amount outstanding at any time not to exceed
$105,000,000 (in each case, less the amount of any permanent reductions in
amounts available to be borrowed thereunder pursuant to Section 5.14);
(i) the Company or any of its Subsidiaries may incur Indebtedness
incurred pursuant to the Completion Guarantees (including without
limitation under the Completion Loan Agreement), the HET Loan Guarantee,
the Indemnity Agreement and the Performance Bond Indemnity Agreement or
arising as a result of any payment made thereunder;
(j) the Company and any Subsidiary may accrue Management Fees and all
other amounts owing under the Management Agreement;
(k) the Company and any Subsidiary may incur Subordinated
Indebtedness to any of the stockholders of JCC Holding;
54
(l) the Company and its Subsidiaries may incur Indebtedness under the
Interest Rate Agreements in the ordinary course of business;
(m) the Company and its Subsidiaries may incur Subordinated
Indebtedness pursuant to, or in respect of, the Subordinated Credit
Facility in an aggregate principal amount outstanding at any time not to
exceed $10,000,000;
(n) the Company and its Subsidiaries may incur Subordinated
Indebtedness evidenced by (i) the Convertible Junior Subordinated
Debentures in an aggregate principal amount outstanding at any time not to
exceed $27,000,000; and (ii) additional Junior Convertible Subordinated
Debentures in lieu of cash interest payments in accordance with the terms
of the Convertible Junior Subordinated Debentures Indenture;
(o) the Company and any Guarantor may incur Indebtedness pursuant to,
or in connection with, any Minimum Payment Guaranty including, without
limitation, the HET/JCC Agreement.
Notwithstanding the other provisions of this covenant, neither the
Company nor any of its Subsidiaries may incur any Indebtedness or issue any
Disqualified Capital Stock pursuant to clause (a), (c) or (e) until the Casino
Completion Date shall have occurred in accordance with the terms of this
Indenture.
SECTION 5.12 LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create, assume or suffer to exist any consensual
encumbrance or restriction on the ability of any of its Subsidiaries to pay
dividends or make other distributions to, or to pay any obligation to, or to
otherwise transfer assets or make or pay loans or advances to, the Company
except (a) restrictions imposed by the Bank Credit Facilities, the Notes, the
Contingent Notes, this Indenture, the Contingent Notes Indenture, the
Performance Bond Indemnity Agreement, the Subordinated Credit Facility, the
Convertible Junior Subordinated Debentures (or the indenture in respect of the
Convertible Junior Subordinated Debentures), the Ground Lease, the General
Development Agreement, the Casino Operating Contract, the Completion Loan
Agreement, the Indemnity Agreement, the Minimum Payment Guaranty or the HET/JCC
Agreement, (b) reasonable and customary provisions restricting subletting or
assignment of any agreement entered into in the ordinary course of business,
consistent with industry practices, (c) restrictions imposed by applicable law
or as a result of regulatory action, (d) restrictions under any Acquired
Indebtedness or any agreement relating to any property, asset, or business
acquired by the Company or any of its Subsidiaries, which restrictions existed
at the time of acquisition, were not put in place in connection with or in
anticipation of such acquisition and are not applicable to any person, other
than the person acquired or to any property, asset or business other than the
property, assets and business so acquired in each case, (e) any such encumbrance
or restriction in existence on the Issue Date and any such other encumbrance or
restriction no more restrictive than those in existence as
55
of the Issue Date, including, without limitation, those contained in the
agreements (as of the Issue Date) referred to in clause (a) of this Section
5.12, (f) any restrictions with respect solely to a Subsidiary of the Company
imposed pursuant to a binding agreement (subject only to reasonable and
customary closing conditions and termination provisions) which has been entered
into for the sale or disposition of all or substantially all of the Capital
Stock or assets of such Subsidiary, provided such restrictions apply solely to
the Capital Stock or assets of such Subsidiary to be sold, (g) restrictions on
the transfer of collateral (1) used to secure Indebtedness permitted to be
incurred by this Indenture or (2) encumbered by Liens permitted by this
Indenture and (h) restrictions incurred in connection with any asset sale for
the benefit of the purchaser of such assets.
SECTION 5.13 LIMITATION ON LIENS.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or suffer to exist any Lien in or
on any right, title or interest to any of their respective properties or assets,
except (a) Permitted Liens, (b) Liens on the Casino which secure the Notes and
the Contingent Notes, or Indebtedness other than the Notes and the Contingent
Notes, which Liens may secure such other Indebtedness junior, but not senior, to
the Notes and the Contingent Notes, provided that substantially concurrently
with the granting of such Lien all of the Net Proceeds from such Indebtedness
are used to finance at least 75% of the Project Costs of a Project Expansion,
(c) Liens incurred pursuant to Permitted FF&E Financing incurred in accordance
with the provisions of clause (c) under Section 5.11, which Liens may be
exclusive Liens on such Permitted FF&E Financing, (d) Liens incurred in respect
of the Minimum Payment Guaranty including, without limitation, the HET/JCC
Agreement, which Liens may secure Indebtedness incurred in connection with the
Minimum Payment Guaranty including, without limitation, the HET/JCC Agreement,
senior to the Liens in respect of the Notes, (e) Liens incurred in respect of
the Revolving Loans entered into in accordance with the provisions of clause (d)
under Section 5.11, which Liens may secure Indebtedness incurred pursuant to the
Revolving Loans senior to the Liens in respect of the Notes, (f) Liens securing
Subordinated Indebtedness that is incurred in accordance with the provisions of
clause (a) under Section 5.11, which Liens may secure such Subordinated
Indebtedness junior to the Liens in respect of the Notes, (g) Liens incurred in
connection with the incurrence of Refinancing Indebtedness in accordance with
the provisions of clause (f) under Section 5.11, provided, that such Liens are
not more adverse to the interests of the Holders of the Notes than the Liens
replaced or extended thereby, provided that such Liens replaced or extended were
permitted by the terms of this Indenture, (h) Liens securing Senior Debt which
Indebtedness is incurred in accordance with the provisions of clause (h) under
Section 5.11, which Liens may secure such Indebtedness senior to the Liens in
respect of the Notes; and (i) Liens securing Senior Subordinated Debt which
Indebtedness is incurred in accordance with the provisions of clause (h) under
Section 5.11, which Liens may secure such Indebtedness on an equal and ratable
basis with the Liens in respect of the Notes.
56
SECTION 5.14 LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK;
EVENT OF LOSS.
(a) The Company and each of its Subsidiaries will not, in one or a
series of related transactions, convey, sell, transfer, assign or otherwise
suffer to dispose of, directly or indirectly, any of their property, business or
assets (other than the Capital Stock or other interests of an Unrestricted
Subsidiary), including without limitation upon any sale or other transfer or
issuance of any Capital Stock of any Subsidiary of the Company or any sale and
leaseback transaction, whether by the Company or a Subsidiary of the Company or
through the issuance, sale or transfer of Capital Stock by a Subsidiary of the
Company (an "Asset Sale"), unless (l) the Net Cash Proceeds from an Asset Sale
(the "Aggregate Amount") are (i) within 210 days after the date of such Asset
Sale applied (A) first, to amounts outstanding (and/or permanent reductions in
commitments) under, or in respect of, Senior Debt with a permanent reduction of
the amounts available under, or in respect of, Senior Debt, and (B) second, to
the extent that no amounts are outstanding, and there are no amounts available
under, or in respect of, Senior Debt, (I) to the repurchase of the Notes
pursuant to an irrevocable, unconditional offer (the "Asset Sale Offer") to
repurchase the Notes at the Asset Sale Offer Price made within 180 days of such
Asset Sale, and (II) to amounts outstanding (and/or permanent reductions in
commitments) under, or in respect of, Senior Subordinated Debt with a permanent
reduction of the amounts available under, or in respect of, Senior Subordinated
Debt (with the portion of the Aggregate Amount to be applied to the repurchase
of the Notes pursuant to the Asset Sale Offer (the "Asset Sale Offer Amount")
being equal to the Aggregate Amount (less that portion of the Aggregate Amount
applied as provided in clause (ii) below) multiplied by a fraction, the
numerator of which is the principal amount of the Notes then outstanding (less
an amount equal to the Accumulated Amount at such time, determined prior to any
increase thereto as a result of the respective Asset Sale) and the denominator
of which is the principal of Notes then outstanding (less an amount equal to the
Accumulated Amount at such time, determined prior to any increase thereto as a
result of the respective Asset Sale) plus the principal amount of Indebtedness
then outstanding and amounts available under, or in respect of, Senior
Subordinated Debt and/or (ii) the Aggregate Amount (less that portion of the
Aggregate Amount applied as provided in clause (i) above) is reinvested by the
Company to make replacements, improvements or additions to existing properties
or new properties directly related to a Related Business and such reinvestment
is made or committed to be made (such commitment to be established by (A) the
purchase of a new property, the ground-breaking or the commencement of
construction, in each case within 180 days of such Asset Sale or (B) promptly
placing the Net Cash Proceeds in a Restricted Funds Account, provided that such
Net Cash Proceeds are invested as aforesaid in existing properties or new
properties within three years of being placed in such Restricted Funds Account)
within 180 days of such Asset Sale, (2) at least 75% of the consideration for
such conveyance, sale, transfer or other disposition or issuance (treating for
this purpose as U.S. Legal Tender or Cash Equivalents (A) property that promptly
after such Asset Sale is converted into U.S. Legal Tender or Cash Equivalents
and (B) any liabilities that are assumed by the transferee in such Asset Sale)
consists of U.S. Legal Tender or Cash Equivalents, (3) no Default or Event of
Default shall have occurred and be continuing at the time of, or would occur
after giving effect, on a PRO FORMA basis, to, such Asset Sale and (4) the
Manager of the Company determines in good
57
faith that the Company or such Subsidiary, as applicable, receives fair market
value for such Asset Sale. For purposes of this covenant and subject to the
provisions hereof as to the amount so received and the application of the
proceeds thereof, the receipt by the Company of proceeds due to an Event of Loss
shall constitute an Asset Sale.
Notwithstanding the foregoing provisions of the prior paragraph:
(i) the Company and its Subsidiaries may in the ordinary course
of business for the casino industry, convey, sell, lease, transfer, assign,
or otherwise dispose of assets acquired and held for resale in the ordinary
course of business;
(ii) the Company and its Subsidiaries may convey, sell or dispose
of, lease, transfer or otherwise dispose of assets pursuant to and in
accordance with the limitation on mergers, sales or consolidations
provisions in the Indenture;
(iii) the Company and its Subsidiaries may sell or dispose of
damaged, worn out or other obsolete property in the ordinary course of
business so long as such property is no longer necessary for the proper
conduct of the business of the Company or such Subsidiary as applicable;
and
(iv) the Company and its Subsidiaries may convey, sell, transfer,
assign or otherwise dispose of assets to the Company or any of its wholly
owned Subsidiaries.
The term "Asset Sale" shall not include (and this covenant shall not
apply to) any single sale of assets or series of related sales of assets, or
Event of Loss, at any time while the Notes are outstanding to the extent the Net
Proceeds therefrom do not exceed $15,000,000, and any dispositions as described
in the immediately preceding paragraph.
The Company shall accumulate all Net Cash Proceeds from Asset Sales
(to be maintained in the Net Cash Proceeds Account in which, subject to the lien
subordination provisions set forth in the Intercreditor Agreement, the
Collateral Documents and Section 4.6, the Collateral Agent shall have a
perfected security interest on behalf of the Bank Lenders and the Holders), and
the aggregate amount of such accumulated Net Cash Proceeds not used for the
purposes permitted by this Section 5.14(a) and within the time provided by this
Section 5.14(a) shall be referred to as the "Accumulated Amount."
(b) For the purposes of this Section 5.14, "Minimum Accumulation
Date" means each date on which the Accumulated Amount exceeds $15,000,000. Not
later than 10 Business Days after each Minimum Accumulation Date, the Company
shall apply such Accumulated Amount to amounts outstanding (and/or permanent
reductions in commitments) under, or in respect of, Senior Debt with a permanent
reduction of the amounts available under or in respect of, Senior Debt. To the
extent that there are no amounts outstanding, and there are no amounts available
under, or in respect of, Senior Debt, at such time, the Company shall commence
an Asset Sale Offer to the Holders to purchase, on a PRO RATA basis, for U.S.
Legal Tender Securities having a principal amount equal to the Asset Sale
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Offer Amount, at a purchase price (the "Asset Sale Offer Price") equal to 100%
of principal amount, plus accrued but unpaid interest (including Contingent
Payments) to, and including, the date (the "Asset Sale Purchase Date") the
Securities tendered are purchased and paid for in accordance with this Section
5.14. Notice of an Asset Sale Offer shall be sent, not later than 20 Business
Days prior to the close of business on the Asset Sale Put Date (as defined
below), by first-class mail, by the Company to each Holder at its registered
address, with a copy to the Trustee. The notice to the Holders shall contain
all information, instructions and materials required by applicable law or
otherwise material to such Holders' decision to tender Securities pursuant to
the Asset Sale Offer. The notice, which (to the extent consistent with this
Indenture) shall govern the terms of the Asset Sale Offer, shall state:
(1) that the Asset Sale Offer is being made pursuant to such
notice and this Section 5.14;
(2) the Asset Sale Offer Amount, the Accumulated Amount, the
Asset Sale Offer Price (including the amount of accrued and unpaid
interest), the Asset Sale Put Date, and the "Asset Sale Purchase Date,"
which Asset Sale Purchase Date shall be on or prior to 30 Business Days (or
later, if required by law) following the date the Accumulated Amount was
greater than $15,000,000;
(3) that any Security or portion thereof not tendered or
accepted for payment will continue to accrue interest (including Contingent
Payments) if interest is then accruing;
(4) that, unless the Company defaults in depositing U.S. Legal
Tender with the Paying Agent (which may not for purposes of this Section
5.14, notwithstanding anything in this Indenture to the contrary, be the
Company or any Affiliate of the Company) in accordance with the last
paragraph of this clause (b), any Security, or portion thereof accepted for
payment pursuant to the Asset Sale Offer shall cease to accrue interest
(including Contingent Payments) after the Asset Sale Purchase Date;
(5) that Holders electing to have a Security, or portion
thereof, purchased pursuant to an Asset Sale Offer will be required to
surrender their Security, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Security completed, to the Paying Agent
(which may not for purposes of this Section 5.14, notwithstanding any other
provision of this Indenture, be the Company or any Affiliate of the
Company) at the address specified in the notice prior to the close of
business on the third Business Day prior to the Asset Sale Purchase Date
(the "Asset Sale Put Date");
(6) that Holders will be entitled to withdraw their elections,
in whole or in part, if the Paying Agent (which may not for purposes of
this Section 5.14, notwithstanding any other provision of this Indenture,
be the Company or any Affiliate of the Company) receives, up to the close
of business on the Asset Sale Put Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the
59
Holder, the principal amount of the Securities the Holder is withdrawing
and a statement that such Holder is withdrawing his election to have such
principal amount of Securities purchased;
(7) that if Securities in a principal amount in excess of the
principal amount of Securities to be acquired pursuant to the Asset Sale
Offer are tendered and not withdrawn, the Company shall purchase Securities
on a PRO RATA basis (with such adjustments as may be deemed appropriate by
the Company so that only Securities in denominations of $1,000 or integral
multiples of $1,000 shall be acquired, except for Secondary Securities that
were issued in denominations other than $1,000 or an integral multiple
thereof);
(8) that Holders whose Securities were purchased only in part
will be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered; and
(9) the circumstances and relevant facts regarding such Asset
Sales.
Any such Asset Sale Offer shall comply with all applicable provisions
of Federal and state laws, including those regulating tender offers, if
applicable, and any provisions of this Indenture that conflict with such laws
shall be deemed to be superseded by the provisions of such laws.
No later than 12:00 noon New York City time on an Asset Sale Purchase
Date, the Company shall (i) accept for payment Securities or portions thereof
properly tendered pursuant to the Asset Sale Offer (on a PRO RATA basis if
required pursuant to paragraph (7) above), (ii) deposit with the Paying Agent
U.S. Legal Tender sufficient to pay the Asset Sale Offer Price for all
Securities or portions thereof so accepted and (iii) deliver to the Trustee
Securities so accepted together with an Officers' Certificate setting forth the
Securities or portions thereof being purchased by the Company. The Paying Agent
shall promptly mail or deliver to Holders of Securities so accepted payment in
an amount equal to the Asset Sale Offer Price for such Securities, and the
Trustee shall promptly authenticate and mail or deliver to such Holders a new
Security equal in principal amount to any unpurchased portion of the Security
surrendered. Any Securities not so accepted shall be promptly mailed or
delivered by the Company to the Holder thereof.
(c) Notwithstanding the foregoing, if the amount required to acquire
all Securities tendered by Holders pursuant to the Asset Sale Offer (the
"Acceptance Amount") shall be less than the Asset Sale Offer Amount, the excess
of the Asset Sale Offer Amount over the Acceptance Amount may be used by the
Company for general corporate purposes without regard to the restrictions set
forth in this Section 5.14, unless otherwise restricted by the other provisions
of this Indenture. Upon consummation of any Asset Sale Offer made in accordance
with the terms of Section 5.14(b), the Accumulated Amount as of the Minimum
Accumulation Date shall be reduced to zero and accumulations thereof shall be
deemed to recommence from the day next following such Minimum Accumulation Date,
and all Liens in such Accumulated Amount created pursuant to Section 5.14(a)
shall be released.
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SECTION 5.15 CONSTRUCTION.
The Company shall cause construction of the Casino to be prosecuted
with diligence and continuity in a good and workmanlike manner in accordance
with the Plans, subject to Force Majeure (as defined in the General Development
Agreement).
SECTION 5.16 LIMITATION ON USE OF CERTAIN FUNDS.
The Company will use (i) borrowings under the Tranche A Term Loans,
the Tranche B Term Loans and the Subordinated Credit Facility (ii) proceeds from
the Convertible Junior Subordinated Debentures, and (iii) any equity
contributions it received in connection with the consummation of the Plan of
Reorganization, (a) to pay all regularly scheduled payments of, interest on,
fees and other amounts (other than principal payments until the regularly
scheduled date of repayment occurs with respect thereto as provided in the Bank
Credit Facilities) due and payable pursuant to the Bank Credit Facilities, (b)
to pay all regularly scheduled payments of Fixed Interest and Contingent
Payments due and payable on the Notes and Contingent Payments (in this instance
only, as defined in the Contingent Notes Indenture due and payable on the
Contingent Notes, (c) to pay all amounts, including without limitation, all fees
and payments of principal and interest, due and payable in connection with the
Minimum Payment Guaranty including, without limitation, the HET/JCC Agreement,
(d) to pay all amounts, including without limitation, all fees and payments of
interest due and payable on the Subordinated Credit Facility, the Completion
Loan Agreement, the Convertible Junior Subordinated Debentures, the Indemnity
Agreement and the Performance Bond Indemnity Agreement, (e) to pay all costs of
construction and development of the Casino (including, without limitation, the
costs set forth in the Pre-Opening Budget attached to the Management Agreement
as Exhibit H, including, without limitation, costs related to construction
management, architectural engineering and interior design, site work, utility
installations and hook-up fees, construction permits, certificates and bonds,
furniture, fixtures, furnishings, machinery and equipment (including gaming
equipment)), (f) to pay all amounts owing under the Ground Lease, the General
Development Agreement, the Casino Operating Contract and any other agreement
entered into in connection with the construction or development of the Casino,
as well as all amounts owing to the City, the State of Louisiana, the Regulating
Authority, the RDC or any other governmental authority, agency, board,
subdivision or special purpose corporation thereof, (g) to pay amounts due and
owing under the Management Agreement, (h) to pay Credit Enhancement Fees (as
defined in the Credit Enhancement Fee Agreement), (i) for the repurchase of any
securities of the Company, any Guarantor or any Subsidiary thereof, including
the Notes, pursuant to a Required Regulatory Redemption, (j) for repurchases of
Notes pursuant to an Offer to Purchase, and (k) after the Casino Opening Date,
for general corporate purposes.
SECTION 5.17 LIMITATION ON LINES OF BUSINESS.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly engage to any substantial extent in any line or lines of
business activity other than in a Related Business.
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SECTION 5.18 LIMITATION ON STATUS AS INVESTMENT COMPANY.
The Company will not, and will not permit any of its Subsidiaries to,
be required to register as an "investment company" (as that term is defined in
the Investment Company Act of 1940, as amended), or otherwise be subject to
regulation under the Investment Company Act.
SECTION 5.19 RESTRICTIONS ON SALE AND ISSUANCE OF SUBSIDIARY STOCK.
The Company will not sell, and will not permit any of its Subsidiaries
to issue or sell, any shares of Disqualified Capital Stock of any Subsidiary to
any person other than the Company or a wholly owned Subsidiary of the Company.
SECTION 5.20 LIMITATION ON PAYMENT OF MANAGEMENT FEES.
(a) The Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly, pay to any stockholder of the Company or any of such
stockholder's Affiliates, Management Fees in the aggregate (for all such
stockholders and Affiliates) in excess of 3% of Gross Revenues of the Casino
("Base Management Fees"); PROVIDED, HOWEVER, that if Consolidated EBITDA of the
Company exceeds $40,000,000 in any First Semiannual Period, additional
Management Fees ("Incentive Management Fees") may be paid for such First
Semiannual Period year up to an amount equal to 7% of Consolidated EBITDA for
such First Semiannual Period in excess of $40,000,000; and if Consolidated
EBITDA of the Company exceeds an aggregate of $75,000,000 for a Second
Semiannual Period and the immediately preceding First Semiannual Period,
Incentive Management Fees may be paid for such Second Semiannual Period up to an
amount equal to (a) 7% of the aggregated Consolidated EBITDA for such First
Semiannual Period and Second Semiannual Period in excess of $75,000,000, less
(b) an amount equal to the Incentive Management Fees, if any, paid with respect
to the immediately preceding First Semiannual Period. Incentive Management Fees
with respect to a Semiannual Period may be made no earlier than the next
Business Day following the date on which all accrued interest (including
Contingent Payments) has been paid for all periods through such Semiannual
Period; PROVIDED FURTHER, HOWEVER, that the Management Agreement shall provide
that Xxxxxx'x Management Company shall refund to the Company any Incentive
Management Fees paid by the Company to Xxxxxx'x Management Company in respect of
such First Semiannual Period if Consolidated EBITDA of the Company does not
exceed an aggregate of $75,000,000 for such First Semiannual Period and
immediately succeeding Second Semiannual Period. No Base Management Fees may be
paid, and no Incentive Management Fees may be accrued or paid, during or with
respect to any period in which the Company is in default with respect to
interest (including Contingent Payments) or principal payments on the Notes;
Base Management Fees accrued during such period may be paid in the event that
such default is cured.
(b) Notwithstanding subsection (a) above:
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(i) if the Company pays Fixed Interest in Secondary Securities in
lieu of paying Fixed Interest in cash on any of the First Interest Payment Date,
the Second Interest Payment Date, the Third Interest Payment Date and the Fourth
Interest Payment Date, Base Management Fees shall be deferred for the six month
period beginning on such Interest Payment Date if the Manager determines that
the cash that would otherwise have been required to pay Fixed Interest on such
Interest Payment Date is required by the Company to fund cash flow deficiencies
(other than cash flow deficiencies resulting from payments of principal or
interest in respect of the Tranche A-1 Term Loan or the Tranche A-2 Term Loan);
PROVIDED, HOWEVER, that such deferred Base Management Fees may be paid to
Xxxxxx'x Management Company at such time and to the extent that Consolidated
EBITDA exceeds $65,000,000 for the twelve-month period ending on the next
Interest Payment Date;
(ii) if the Company pays Fixed Interest in Secondary Securities
in lieu of paying Fixed Interest in cash on any of the Third Interest Payment
Date, the Fourth Interest Payment Date, the Fifth Interest Payment Date and the
Sixth Interest Payment Date, Incentive Management Fees shall be deferred for the
six month period beginning on such Interest Payment Date; PROVIDED, HOWEVER,
that such deferred Incentive Management Fees may be paid to Xxxxxx'x Management
Company at such time and to the extent that Consolidate EBITDA exceeds
$75,000,000 for the twelve-month period ending on the next Interest Payment
Date; and
(iii) if Consolidate EBITDA is less than $28,500,000 for any
twelve-month period ending one month prior to any Interest Payment Date
occurring after the Sixth Interest Payment Date, Base Management Fees shall be
deferred for the six-month period ending on such Interest Payment Date.
SECTION 5.21 LISTING OF SECURITIES.
The Company covenants and agrees that it will, as promptly as
practicable, use its best efforts to list the Notes on such securities exchanges
or quotation systems as may be required from time to time, by written order,
regulation or otherwise, in order for the Holders to maintain their suitability
under Louisiana gaming laws or regulations.
SECTION 5.22 COMPLIANCE WITH ENVIRONMENTAL LAWS.
(a) The Company will comply, and will cause each of its subsidiaries
to comply, in all material respects with all Environmental Laws applicable to
the ownership or use of its Real Property now or hereafter owned or operated by
the Company or any of its subsidiaries, will within a reasonable time-period pay
or cause to be paid all costs and expenses incurred in connection with such
compliance and will keep or cause to be kept all such Real Property free and
clear of any Liens imposed pursuant to such Environmental Laws, except as could
not reasonably be expected to have a material adverse effect, singly or in the
aggregate, on the properties, business, results of operations, financial
condition, business affairs or prospects of the Company (a "Material Adverse
Effect"). Except as could not reasonably be expected to have a Material Adverse
Effect, neither the Company nor any of its subsidiaries will generate, use,
treat, store, release or dispose of, or permit the
63
generation, use, treatment, storage, release or disposal of Hazardous Materials
on any Real Property now or hereafter owned or operated by the Company or any of
its subsidiaries, or transport or permit the transportation of Hazardous
Materials to or from any such Real Property except for Hazardous Materials used
or stored at any such Real Properties in material compliance with all applicable
Environmental Laws and reasonably required in connection with the operation, use
and maintenance of any such Real Property.
(b) At the written request of the Trustee or the Holders of a
majority in aggregate principal amount of the Securities at the time
outstanding, which request shall specify in reasonable detail the basis
therefor, at any time and from time to time, the Company will provide, at its
expense, an environmental site assessment report concerning any Real Property
now or hereafter owned or operated by the Company or any of its subsidiaries,
prepared by an environmental consulting firm approved by the Trustee, indicating
the presence or absence of Hazardous Materials and the potential cost of any
removal or remedial action in connection with any Hazardous Materials on such
Real Property; provided that such request may be made only if (i) there has
occurred and is continuing an Event of Default, (ii) the Trustee or the Holders
of a majority in aggregate principal amount of the Securities at the time
outstanding reasonably believe that the Company or any such subsidiary or any
such Real Property is not in material compliance with any Environmental Law, or
(iii) circumstances exist that reasonably could be expected to form the basis of
a material Environmental Claim against the Company or any such subsidiary or any
such Real Property. If the Company fails to provide the same within 90 days
after such request was made, the Trustee may order the same, and the Company
shall grant and hereby grants to the Trustee and the Holders and their agents
access to such Real Property and specifically grants the Trustee and the Holders
an irrevocable non-exclusive license, subject to the rights of tenants, to
undertake such an assessment, all at the Company's expense.
SECTION 5.23 LIMITATION ON LAYERING DEBT.
Neither the Company nor the Parent Guarantor may create, incur, assume
or suffer to exist any Indebtedness, except for Senior Subordinated Debt, that
is subordinate in right of payment to any other Indebtedness of the Company or
the Parent Guarantor, as applicable, unless, by its terms or the terms of the
instrument creating or evidencing it, such Indebtedness is subordinate in right
of payment to the Securities or, in the case of the Parent Guarantor, the
Guaranty.
ARTICLE VI
SUCCESSORS
SECTION 6.1 LIMITATION ON MERGER, SALE OR CONSOLIDATION.
The Company shall not consolidate with or merge with or into another
person or, directly or indirectly, sell, lease or convey all or substantially
all of its assets (computed on a consolidated basis, including, without
limitation, as set forth in the last paragraph of this
64
Section 6.1), whether in a single transaction or a series of related
transactions, to another person or group of affiliated persons, unless:
(i) either (a) the Company is the continuing entity or (b) the
resulting, surviving or transferee entity is a corporation or partnership
organized under the laws of the United States, any state thereof or the
District of Columbia (provided that at all times at least one obligor with
respect to the Securities is such a corporation) and expressly assumes by
supplemental indenture all of the obligations of the Company in connection
with the Securities, this Indenture and the Collateral Documents;
(ii) no Default or Event of Default shall exist or shall occur
immediately after giving effect on a PRO FORMA basis to such transaction;
(iii) immediately after giving effect to such transaction on
a PRO FORMA basis, the Consolidated Tangible Net Worth of the consolidated
surviving or transferee entity is at least equal to the Consolidated
Tangible Net Worth of the Company immediately prior to such transaction;
(iv) other than in the case of a transaction solely between the
Company and any wholly owned Subsidiary of the Company or solely between
wholly owned Subsidiaries of the Company, immediately after giving effect
to such transaction on a PRO FORMA basis, the consolidated surviving or
transferee entity would immediately thereafter be permitted to incur at
least $1.00 of additional Indebtedness pursuant to clause (a) under Section
5.11; and
(v) such transaction will not result in the loss of any Gaming
License relating to the Company.
For purposes of this Section 6.1, the Consolidated Coverage Ratio
shall be determined on a PRO FORMA consolidated basis (giving PRO FORMA effect
to the transaction and any related incurrence of Indebtedness or Disqualified
Capital Stock).
For purposes of the first sentence of this Section 6.1, the sale,
lease, conveyance or transfer of all or substantially all of the properties and
assets of one or more Subsidiaries of the Company, which properties and assets,
if held by the Company instead of such Subsidiaries, would constitute all or
substantially all of the properties and assets of the Company on a consolidated
basis, shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Company.
Notwithstanding the foregoing, the Company is permitted to reorganize
as a corporation in accordance with the procedures established in the Indenture,
PROVIDED that the Company shall have delivered to the Trustee an opinion of
counsel reasonably acceptable to the Trustee confirming that such reorganization
is not adverse to Holders of the Notes (it being recognized that such
reorganization shall not be deemed adverse to the Holders of the Notes solely
because (i) of the accrual of deferred tax liabilities resulting from such
65
reorganization or (ii) the successor or surviving corporation (a) is subject to
income tax as a corporate entity or (b) is considered to be an "includible
corporation" of an affiliated group of corporations within the meaning of the
Internal Revenue Code of 1986, as amended, or any similar state or local law).
SECTION 6.2 SUCCESSOR SUBSTITUTED.
Upon any consolidation or merger or any sale, lease, conveyance or
transfer of all or substantially all of the assets of the Company in accordance
with Section 6.1, the successor entity formed by such consolidation or into
which the Company is merged or to which such sale, lease, conveyance or transfer
is made, shall succeed to, and be substituted for, and may exercise every right
and power of, the Company under the Notes, this Indenture and the Collateral
Documents with the same effect as if such successor corporation had been named
therein as the Company, and the Company will be released from its obligations
under this Indenture, the Collateral Documents and the Notes, except as to any
obligations that arise from or as a result of such transaction.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
SECTION 7.1 EVENTS OF DEFAULT.
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be caused voluntarily or involuntarily or effected, without limitation, by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) the failure by the Company to pay any installment of
interest on the Notes or the Contingent Notes as and when due and payable
and the continuance of any such failure for 30 days;
(2) the failure by the Company to pay all or any part of the
principal, or premium, if any, on the Notes when and as the same become due
and payable at maturity, redemption, by acceleration or otherwise,
including, without limitation, failure to pay any Offer to Purchase Price,
or otherwise;
(3) except as provided in clauses (1) or (2) of this Section
7.1, failure of the Company or any Guarantor to comply with any provision
of Section 5.10, 5.15, 5.16, 5.19, 5.20 or 6.1 or Article XI, which failure
continues for 30 days;
(4) except as otherwise provided herein, the failure by the
Company or any Guarantor to observe or perform any other covenant or
agreement contained in the Notes or the Indenture and the continuance of
such failure for a period of 30 days
66
after written notice is given to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Notes then outstanding;
(5) the filing by the Company or any Significant Subsidiary of
the Company (in either case, a "Debtor") of a petition commencing a
voluntary case under section 301 of title 11 of the United States Code, or
the commencement by a Debtor of a case or proceeding under any other
Bankruptcy Law seeking the adjustment, restructuring, or discharge of the
debts of such Debtor, or the liquidation of such Debtor, including without
limitation the making by a Debtor of an assignment for the benefit of
creditors; or the taking of any corporate action by a Debtor in furtherance
of or to facilitate, conditionally or otherwise, any of the foregoing;
(6) the filing against a Debtor of a petition commencing an
involuntary case under section 303 of title 11 of the United States Code,
with respect to which case (a) such Debtor consents or fails to timely
object to the entry of, or fails to seeks the stay and dismissal of, an
order of relief, (b) an order for relief is entered and is pending and
unstayed on the 60th day after the filing of the petition commencing such
case, or if stayed, such stay is subsequently lifted so that such order for
relief is given full force and effect, or (c) no order for relief is
entered, but the court in which such petition was filed has not entered an
order dismissing such petition by the 60th day after the filing thereof; or
the commencement under any other Bankruptcy Law of a case or proceeding
against a Debtor seeking the adjustment, restructuring, or discharge of the
debts of such Debtor, or the liquidation of such Debtor, which case or
proceeding is pending without having been dismissed on the 60th day after
the commencement thereof;
(7) the entry by a court of competent jurisdiction or by the
Regulating Authority of a judgment, decree or order appointing a receiver,
liquidator, trustee, custodian or assignee of a Debtor or of the property
of a Debtor, or directing the winding up or liquidation of the affairs or
property of a Debtor, and (a) such Debtor consents or fails to timely
object to the entry of, or fails to seek the stay and dismissal of, such
judgment, decree, or order, or (b) such judgment, decree or order is in
full force and effect and is not stayed on the 60th day after the entry
thereof, or, if stayed, such stay is thereafter lifted so that such
judgment, decree or order is given full force and effect;
(8) a default in the payment of principal, premium or interest
when due at final maturity or an acceleration for any other reason of the
maturity of any Indebtedness (other than Non-recourse Indebtedness) of the
Company or any Significant Subsidiary with an aggregate principal amount in
excess of $15,000,000, including, without limitation, the Bank Credit
Facilities at such times as the aggregate principal amount of Indebtedness
thereunder exceeds $15,000,000; provided that an Event of Default shall not
be deemed to occur with respect to the failure to make such payment at
final maturity or the acceleration of the maturity of Indebtedness of the
Company or any Significant Subsidiary if the event that caused such
acceleration shall
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be cured, or such acceleration shall be rescinded, or the Indebtedness
shall be repaid in full, in each such case within 10 days;
(9) final unsatisfied judgments not covered by insurance (other
than with respect to Non-recourse Indebtedness) aggregating in excess of
$15,000,000, at any one time rendered against the Company or any
Significant Subsidiary of the Company and not stayed, bonded or discharged
within 60 days;
(10) the loss of the legal right of the Company to operate slot
machines at the Casino for gaming activities and such loss continuing for
more than 90 days;
(11) an event of default under, or if none is specified therein,
a failure to comply with the provisions of, the Collateral Documents (other
than the Security Agreement) and the continuance of such event of default
or failure to comply, as the case may be, for a period of 30 days after
written notice is given to the Company by the Trustee or to the Company and
the Trustee by the Holders of at least 25% in aggregate principal amount of
the Notes outstanding, provided that if such event of default or failure to
comply, as the case may be, materially and adversely affects (1) the
Collateral, (2) the priority or perfection of the security interests
purported to be created with respect to any material portion of the
Collateral or (3) the rights and remedies of the Collateral Agent, the
Trustee or the respective secured creditors in respect of any material
portion of the Collateral, then the event of default or failure to comply,
as the case may be, need only continue after the applicable cure period
specified in the applicable Collateral Document;
(12) the occurrence of an event of default under the Security
Agreement and the continuance of such failure or event of default for a
period of 30 days after written notice is given to the Company by the
Collateral Agent or the Trustee or to the Company and the Trustee by the
Holders of at least 25% in aggregate principal amount of the Notes
outstanding, provided, that if such failure or event of default materially
and adversely effects (a) the Collateral (as defined in the Security
Agreement), (b) the priority of perfection of the security interests
purported to be created with respect to any material portion of such
Collateral or (c) the rights and remedies of the Collateral Agent, the
Trustee or Holders of Notes in respect of any material portion of such
Collateral, then the failure or event of default need only continue after
the cure period specified in the Security Agreement;
(13) any Collateral Document fails to become or ceases to be in
full force and effect (other than in accordance with its terms or the terms
hereof) or ceases (once effective) to create in favor of the Trustee, with
respect to any material amount of Collateral, a valid and perfected Lien on
the Collateral to be covered thereby (unless a prior or exclusive Lien is
specifically permitted by this Indenture);
(14) the failure of the Casino Completion Date to have occurred
by 30 days following the date on which an event of default entitling the
City to terminate
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the Ground Lease has occurred under the Ground Lease as a result of the
failure to complete the Casino;
(15) an "Event of Default" (as defined in the Ground Lease) has
occurred; and
(16) an "Event of Default" (as defined in the Contingent Notes
Indenture) has occurred.
SECTION 7.2 ACCELERATION OF MATURITY DATE; RESCISSION AND ANNULMENT.
If (x) an Event of Default (other than an Event of Default specified
in Section 7.1(5), (6) or (7)), or (y) the acceleration of the maturity of
amounts owing under the Bank Credit Facilities occurs and is continuing, then,
and in every such case, unless the principal of all of the Securities shall have
already become due and payable, either the Trustee or the Holders of not less
then 25% in aggregate principal amount of then outstanding Securities, by a
notice in writing to the Company and the Guarantors (and to the Trustee if given
by Holders) (an "Acceleration Notice"), may declare all of the principal of the
Securities, determined as set forth below, together with accrued interest
thereon, to be due and payable immediately. If an Event of Default specified in
Section 7.1(5), (6) or (7) occurs, (i) all principal of, premium applicable to,
and accrued interest on, the Securities, and (ii) the Make-Whole Amount, shall
be immediately due and payable on all outstanding Securities without any
declaration or other act on the part of the Trustee or the Holders; PROVIDED,
HOWEVER, that (A) the Primary Make-Whole Amount shall rank PARI PASSU with any
Senior Subordinated Debt including, without limitation, any Senior Subordinated
Debt to which HET has succeeded to the rights of the lenders thereunder and (B)
the Secondary Make-Whole Amount shall be subordinate to any Senior Subordinated
Debt including, w ithout limitation, any Senior Subordinated Debt to which HET
has succeeded to the rights of the lenders thereunder.
At any time after such a declaration of acceleration being made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article VII, the Holders of a
majority in aggregate principal amount of then outstanding Securities, by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences and may waive, on behalf of all Holders, an
Event of Default or an event which with notice or lapse of time or both would
become an Event of Default if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest (including Contingent Payments) on
all Securities,
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(B) principal of (and premium, if any, applicable to) any
Securities which would become due otherwise than by such declaration
of acceleration, and interest thereon at the rate borne by the
Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest (including Contingent Payments) at the
rate borne by the Securities,
(D) all sums paid or advanced by the Trustee hereunder and
the compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and
(2) all Events of Default, other than the nonpayment of amounts
which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 7.12.
Notwithstanding the previous sentence of this Section 7.2, no rescission,
amendment or waiver shall be effective for any Event of Default or event which
with notice or lapse of time or both would be an Event of Default with respect
to any covenant or provision which cannot be modified or amended without the
consent of the Holder of each outstanding Security, unless all such affected
Holders agree, in writing, to rescind such acceleration or waive such Event of
Default or event. No such waiver shall cure or waive any subsequent default or
impair any right consequent thereon.
SECTION 7.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
The Company covenants that if an Event of Default in payment of
principal, premium, or interest (including Contingent Payments) specified in
Section 7.1(1) and (2) occurs and is continuing, the Company shall, upon demand
of the Trustee, pay to it, for the benefit of the Holders of such Securities,
the whole amount then due and payable on such Securities for principal and
interest (including Contingent Payments), and, to the extent that payment of
such interest shall be legally enforceable, interest on any overdue principal
and on any overdue interest (including Contingent Payments), at the rate borne
by the Securities, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including compensation
to, and expenses, disbursements and advances of the Trustee, its agents and
counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust in favor of the
Holders, may institute a judicial proceeding for the collection of the sums so
due and unpaid, may prosecute such proceeding to judgment or final decree and
may enforce the same against the Company or any other obligor upon the
Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any other obligor
upon the Securities, wherever situated.
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If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 7.4 TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest (including
Contingent Payments)) shall be entitled and empowered, by intervention in such
proceeding or otherwise to take any and all actions under the TIA, including
(i) to file and prove a claim for the whole amount of principal
and interest (including Contingent Payments) owing and unpaid in respect of
the Securities and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agent and counsel) and of
the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 8.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment, or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
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SECTION 7.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust in favor of the Holders, and any recovery of
judgment shall, after provision for the payment of compensation to, and
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities in respect of which
such judgment has been recovered.
SECTION 7.6 PRIORITIES.
Subject to the Intercreditor Agreement, Section 4.6, Article XIII and
Article XIV, any money collected by the Trustee pursuant to this Article VII
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
or interest (including Contingent Payments), upon presentation of the Securities
and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
FIRST: To the Trustee in payment of all amounts due pursuant to
Section 8.7:
SECOND: To the Holders in payment of the amounts then due and unpaid
for principal of and interest (including Contingent Payments) on, the Securities
in respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts
due and payable on such Securities for principal and interest (including
Contingent Payments), respectively; and
THIRD: To whomsoever may be lawfully entitled thereto, the remainder,
if any.
SECTION 7.7 LIMITATION ON SUITS.
No Holder of any Security shall have any right to order or direct the
Trustee to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(A) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(B) the Holders of not less than 25% in principal amount of then
outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
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(C) such Holder or Holders have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities to be incurred or reasonably probable to be incurred in
compliance with such request;
(D) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding;
and
(E) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 7.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND
INTEREST.
Notwithstanding any other provision of this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of, and interest (including Contingent
Payments) on, such Security on the Maturity Dates of such payments as expressed
in such Security (in the case of Required Regulatory Redemption, the Redemption
Price on the applicable Redemption Date, in the case of the Change of Control
Offer Price, on the applicable Change of Control Purchase Date, and in the case
of the Offer Price on the Asset Sale Purchase Date) and to institute suit for
the enforcement of any such payment, and such rights shall not be impaired
without the consent of such Holder.
SECTION 7.9 RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in Section 2.7, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 7.10 DELAY OR OMISSION NOT WAIVER.
No delay or omission by the Trustee or by any Holder of any Security
to exercise any right or remedy arising upon any Event of Default shall impair
the exercise of any such right or remedy or constitute a waiver of any such
Event of Default. Every right
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and remedy given by this Article VII or by law to the Trustee or to the Holders
may be exercised from time to time, and as often as may be deemed expedient, by
the Trustee or by the Holders, as the case may be.
SECTION 7.11 CONTROL BY HOLDERS.
Subject to the terms of the Intercreditor Agreement with respect to
actions taken under the Collateral Documents, the Holder or Holders of a
majority in aggregate principal amount of then outstanding Securities shall have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee or exercising any trust or power conferred
upon the Trustee, provided, that
(1) such direction shall not be in conflict with any rule of law
or with this Indenture,
(2) the Trustee shall not determine that the action so directed
would be unjustly prejudicial to the Holders not taking part in such
direction, and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 7.12 WAIVER OF PAST DEFAULT.
Subject to Section 7.8, the Holder or Holders of not less than a
majority in aggregate principal amount of the outstanding Securities may, by
written notice to the Trustee on behalf of all Holders, prior to the declaration
of acceleration of the maturity of the Securities, waive any past default
hereunder and its consequences, except a default
(A) in the payment of the principal of, premium, if any, or
interest (including Contingent Payments) on, any Security as specified in
clauses (1) and (2) of Section 7.1, or
(B) in respect of a covenant or provision hereof which, under
Article X, cannot be modified or amended without the consent of the Holder
of each outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair the exercise of any right arising therefrom.
SECTION 7.13 UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Security
by its acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in
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any suit against the Trustee for any action taken, suffered or omitted to be
taken by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 7.13 shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in aggregate
principal amount of the outstanding Securities, or to any suit instituted by any
Holder for enforcement of the payment of principal of, or premium (if any) or
interest (including Contingent Payments) on, any Security on or after the
Maturity Date of such Security.
SECTION 7.14 RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every case, subject to any
determination in such proceeding, the Company, the Guarantors, the Trustee and
the Holders shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee and
the Holders shall continue as though no such proceeding had been instituted.
ARTICLE VIII
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this Indenture
and covenants and agrees to perform the same, as herein expressed.
SECTION 8.1 DUTIES OF TRUSTEE.
(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the conduct
of his own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
(1) The Trustee need perform only those duties as are
specifically set forth in this Indenture and no others, and no covenants or
obligations shall be implied in or read into this Indenture which are
adverse to the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall
75
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section 8.1.
(2) The Trustee shall comply with any order or directive of a
Gaming Authority that the Trustee submit an application for any license,
finding of suitability or other approval pursuant to any Gaming Law and
will cooperate fully and completely in any proceeding related to such
application, provided, however, that in the event the Trustee in its
reasonable judgment determines that complying with such order or directive
would subject it or its officers or directors to unreasonable or onerous
requirements, the Trustee may, at its option, resign as Trustee in lieu of
complying with such order or directive; and provided, FURTHER, that no
resignation shall become effective until a successor Trustee is appointed
and delivers a written acceptance in accordance with Section 8.8 hereof.
(3) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts.
(4) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 7.11.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or to take or omit to take any action
under this Indenture or at the request, order or direction of the Holders or in
the exercise of any of its rights or powers if it shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c), (d) and (f) of this Section 8.1.
(f) The Trustee shall not be liable for interest on any assets
received by it except as the Trustee may agree in writing with the Company.
Assets held in trust by the Trustee need not be segregated from other assets
except to the extent required by law.
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SECTION 8.2 RIGHTS OF TRUSTEE.
Subject to Section 8.1:
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may consult
with counsel and may require an Officers' Certificate or an Opinion of Counsel,
which shall conform to Sections 13.4 and 13.5. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
certificate or opinion.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers conferred upon it by this Indenture or the TIA.
(e) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, notice, request, direction, consent, order, bond, debenture, or other
paper or document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders, pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby.
(g) Except with respect to Section 5.1, the Trustee shall have no
duty to inquire as to the performance of the Company's covenants in Article V.
In addition, the Trustee shall not be deemed to have knowledge of any Default or
Event of Default except (i) any Event of Default occurring pursuant to Sections
7.1(1), 7.1(2) and 5.1, or (ii) any Default or Event of Default of which the
Trustee shall have received written notification or obtained actual knowledge.
(h) Unless otherwise specifically provided for in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
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SECTION 8.3 INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of any of the Securities, may make loans to, accept deposits
from, and perform services for the Company or its Affiliates, and may otherwise
deal with the Company, any Guarantor, any of their respective Subsidiaries, or
their respective Affiliates with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. However, the Trustee must
comply with Sections 8.10 and 8.11.
SECTION 8.4 TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities and it shall not be responsible for any
statement in the Securities, other than the Trustee's certificate of
authentication, or the use or application of any funds received by a Paying
Agent other than the Trustee.
SECTION 8.5 NOTICE OF DEFAULT.
If a Default or an Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to each Securityholder notice of
the uncured Default or Event of Default within 90 days after such Default or
Event of Default occurs. Except in the case of a Default or an Event of Default
in payment of principal of, or interest (including Contingent Payments) on, any
Security (including the payment of the Change of Control Offer Price on the
Change of Control Purchase Date, the Redemption Price on the Redemption Date and
the Asset Sale Offer Amount on the Asset Sale Purchase Date, as the case may
be), the Trustee may withhold the notice if and so long as a Trust Officer in
good faith determines that withholding the notice is in the interest of the
Securityholders.
SECTION 8.6 REPORTS BY TRUSTEE TO HOLDERS.
If required by law, within 60 days after each May 15 beginning with
the May 15 following the date of this Indenture, the Trustee shall mail to each
Securityholder a brief report dated as of such May 15 that complies with TIA
Section 313(a). If required by law, the Trustee also shall comply with TIA
Sections 313(b) and 313(c).
The Company shall promptly notify the Trustee in writing if the
Securities become listed on any stock exchange or automatic quotation system.
A copy of each report at the time of its mailing to Securityholders
shall be mailed to the Company and filed with the SEC and each stock exchange,
if any, on which the Securities are listed.
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SECTION 8.7 COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable disbursements, expenses
and advances incurred or made by it. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents, accountants,
experts and counsel.
The Company shall indemnify the Trustee (in its capacity as Trustee)
and each of its officers, directors, attorneys-in-fact and agents for, and hold
it harmless against, any claim, demand, expense (including but not limited to
reasonable compensation, disbursements and expenses of the Trustee's agents and
counsel), loss or liability incurred by them without negligence, bad faith or
willful misconduct on its part, arising out of or in connection with (a) the
administration of this trust and their rights or duties hereunder including the
reasonable costs and expenses of defending themselves against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder and (b) the actual or alleged presence of Hazardous Materials
in the air, surface water or groundwater or on the surface or subsurface of any
real property owned, leased or at any time operated by the Company or any of its
Subsidiaries, the release, generation, storage, transportation, handling or
disposal of Hazardous Materials at any location, whether or not owned or
operated by the Company or any of its Subsidiaries, the non-compliance of any
real property with foreign, federal, state and local laws, regulations, and
ordinances (including applicable permits thereunder) applicable to any real
property, or any environmental claim relating in any way to the Company or any
of its Subsidiaries, their operations, or any real property owned, leased or at
any time operated by the Company or any of its Subsidiaries, including, in each
case, without limitation, the reasonable fees and disbursements of counsel and
other consultants incurred in connection with any such investigation,
litigation, or other proceeding (but excluding any losses, liabilities, claims,
damages or expenses to the extent incurred by reason of the gross negligence or
willful misconduct of the person to be indemnified). The Trustee shall notify
the Company promptly of any claim asserted against the Trustee for which it may
seek indemnity. The Company shall defend the claim and the Trustee shall
provide reasonable cooperation at the Company's expense in the defense. The
Trustee may have separate counsel and the Company shall pay the reasonable fees
and expenses of such counsel; provided, that the Company will not be required to
pay such fees and expenses if it assumes the Trustee's defense and there is no
conflict of interest between the Company and the Trustee in connection with such
defense. The Company need not pay for any settlement made without its written
consent. The Company need not reimburse any expense or indemnify against any
loss or liability to the extent incurred by the Trustee through its negligence,
bad faith or willful misconduct.
To secure the Company's payment obligations in this Section 8.7, the
Trustee shall have a lien prior to the Securities on all assets held or
collected by the Trustee, in its capacity as Trustee, except assets held in
trust to pay principal of or interest (including Contingent Payments) on
particular Securities.
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When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 7.1(5), (6) or (7) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The Company's obligations under this Section 8.7 and any lien arising
hereunder shall survive the resignation or removal of the Trustee, the discharge
of the Company's obligations pursuant to Article IX and any rejection or
termination of this Indenture under any Bankruptcy Law.
SECTION 8.8 REPLACEMENT OF TRUSTEE.
The Trustee may resign by so notifying the Company in writing. The
Holder or Holders of a majority in principal amount of the outstanding
Securities may remove the Trustee by so notifying the Company and the Trustee in
writing and may appoint a successor trustee with the Company's consent. The
Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 8.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver, Custodian, or other public officer takes charge
of the Trustee or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holder
or Holders of a majority in principal amount of the Securities may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that
and provided that all sums owing to the Trustee provided for in Section 8.7 have
been paid, the retiring Trustee shall transfer all property held by it as
Trustee to the successor Trustee, subject to the lien provided in Section 8.7,
the resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. A successor Trustee shall mail notice of its
succession to each Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holder or Holders of at least 10% in principal amount of the outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
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If the Trustee fails to comply with Section 8.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
8.8, the Company's obligations under Section 8.7 shall continue for the benefit
of the retiring Trustee.
SECTION 8.9 SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee.
SECTION 8.10 ELIGIBILITY; DISQUALIFICATION.
The Trustee shall at all times satisfy the requirements of TIA Section
310(a)(1) and TIA Section 310(a)(5). The Trustee shall have a combined capital
and surplus of at least $100,000,000 as set forth in its most recent published
annual report of condition. The Trustee shall comply with TIA Section 310(b).
SECTION 8.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE IX
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 9.1 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may elect to have either Section 9.2 or 9.3 be applied to
all outstanding Securities upon compliance with the conditions set forth below
in this Article IX.
SECTION 9.2 LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 9.1 of the option applicable
to this Section 9.2, the Company shall be deemed to have been discharged from
their obligations with respect to all outstanding Securities on the date the
conditions set forth below are satisfied (hereinafter, "Legal Defeasance"). For
this purpose, such Legal Defeasance means that the Company shall be deemed to
have paid and discharged the entire Indebtedness represented by the outstanding
Securities, which shall thereafter be deemed to be "outstanding" only for the
purposes of Section 9.5 and the other Sections of this Indenture
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referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Securities and this Indenture (and the Trustee, on demand
of and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following which shall survive until
otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Securities to receive solely from the trust fund described in
Section 9.4, and as more fully set forth in such section, payments in respect of
the principal of, premium, if any, and interest (including Contingent Payments)
on such Securities when such payments are due, (b) the Company's obligations
with respect to such Securities under Sections 2.4, 2.6, 2.7, 2.10, 5.2 and 5.4,
(c) the rights, powers, trusts, duties and immunities of the Trustee hereunder
and the Company's obligations in connection therewith, and (d) this Article IX.
Subject to compliance with this Article IX, the Company may exercise its option
under this Section 9.2 notwithstanding the prior exercise of its option under
Section 9.3 with respect to the Securities.
SECTION 9.3 COVENANT DEFEASANCE.
Upon the Company's exercise under Section 9.1 of the option applicable
to this Section 9.3, the Company shall be released from its obligations under
the covenants contained in Sections 5.3, 5.6, 5.7, 5.8, 5.10, 5.11, 5.12, 5.13,
5.14, 5.15, 5.16, 5.17, 5.19, 5.20. 5.21, 5.22 and 5.23 and Article VI with
respect to the outstanding Securities on and after the date the conditions set
forth below are satisfied (hereinafter, "Covenant Defeasance"), and the
Securities shall thereafter be deemed not "outstanding" for the purposes of any
direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder. For this
purpose, such Covenant Defeasance means that, with respect to the outstanding
Securities, the Company need not comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document, but, except as specified above,
the remainder of this Indenture and such Securities shall be unaffected thereby.
In addition, upon the Company's exercise under Section 9.1 of the option
applicable to this Section 9.3, Sections 7.1(3), 7.1(4) and 7.1(8), 7.1(9),
7.1(10), 7.1(11), 7.1(12), 7.1(13), 7.1(14), 7.1(15) and 7.1(16) shall not
constitute Events of Default.
SECTION 9.4 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 9.2 or Section 9.3 to the outstanding Securities:
(a) (1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements of
Section 8.10 who shall agree to comply with the provisions of this Article IX
applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such Securities, (i) U.S. Legal Tender in an
amount, or (ii) U.S. Government Obligations which through the
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scheduled payment of principal and interest in respect thereof in accordance
with their terms will provide, not later than one day before the due date of any
payment, U.S. Legal Tender in an amount, or (iii) a combination thereof, in such
amounts, as will be sufficient, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge and which shall be applied by the
Trustee (or other qualifying trustee) to pay and discharge the principal of and
interest (including Maximum Contingent Payments for the current and all future
Contingent Payment Periods) on the outstanding Securities on the stated maturity
or on the applicable redemption date, as the case may be, of such principal or
installment of principal or interest (including Contingent Payments); provided
that the Trustee shall have been irrevocably instructed to apply such U.S. Legal
Tender or the proceeds of such U.S. Government Obligations to said payments with
respect to the Securities and (2) the Holders must have a valid and perfected
exclusive security interest in such trust;
(b) In the case of an election under Section 9.2, the Company shall
have delivered to the Trustee an Opinion of Counsel in the United States
reasonably satisfactory to the Trustee confirming that (i) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (ii) since the Issue Date, there has been a change in the applicable
Federal income tax law, in either case to the effect that, and based thereon
such opinion shall confirm that, the Holders of the outstanding Securities will
not recognize income, gain or loss for Federal income tax purposes as a result
of such Legal Defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such Legal Defeasance has not occurred (assuming that the Maximum Contingent
Payments had been made for the current and all future Contingent Payment
Periods);
(c) In the case of an election under Section 9.3, the Company shall
have delivered to the Trustee an Opinion of Counsel in the United States to the
effect that the Holders of the outstanding Securities will not recognize income,
gain or loss for Federal income tax purposes as a result of such Covenant
Defeasance and will be subject to Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred (assuming that the Maximum Contingent Payments had
been made for the current and all future Contingent Payment Periods);
(d) No Default or Event of Default with respect to the Securities
shall have occurred and be continuing on the date of such deposit or, in so far
as Section 7.1(5), 7.1(6) or 7.1(7) is concerned, at any time in the period
ending on the 91st day after the date of such deposit (it being understood that
this condition shall not be deemed satisfied until the expiration of such
period);
(e) Such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under, this Indenture or any
other material agreement or instrument 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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(f) In the case of an election under either Section 9.2 or 9.3, the
Company shall have delivered to the Trustee an Officers' Certificate stating
that the deposit made by the Company pursuant to its election under Section 9.2
or 9.3, as applicable, was not made by the Company with the intent of preferring
the Holders over other creditors of the Company or with the intent of defeating,
hindering, delaying or defrauding creditors of the Company or others; and
(g) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel in the United States, each stating that
all conditions precedent provided for relating to either the Legal Defeasance
under Section 9.2 or the Covenant Defeasance under Section 9.3 (as the case may
be) have been complied with as contemplated by this Section 9.4.
SECTION 9.5 DEPOSITED U.S. LEGAL TENDER AND U.S. GOVERNMENT
OBLIGATIONS TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 9.6, all money and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee (or other qualifying
trustee, collectively for purposes of this Section 9.5, the "Trustee") pursuant
to Section 9.4 in respect of the outstanding Securities shall be held in trust
and applied by the Trustee, in accordance with the provisions of such Securities
and this Indenture, to the payment, either directly or through any Paying Agent
as the Trustee may determine, to the Holders of such Securities of all sums due
and to become due thereon in respect of principal, premium, if any, and interest
(including Contingent Payments), but such money need not be segregated from
other funds except to the extent required by law.
The Company agrees to pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the U.S. Legal Tender or U.S.
Government Obligations deposited pursuant to Section 9.4 or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding
Securities.
Anything in this Article IX to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any U.S. Legal Tender or U.S. Government Obligations held by it
as provided in Section 9.4 which, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
9.4(a)), are in excess of the amount thereof which would then be required to be
deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
SECTION 9.6 REPAYMENT TO COMPANY.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of or interest
(including Contingent Payments) on any Security and remaining unclaimed for two
years after such principal or interest has become due and payable shall be paid
to the Company on its request; and the
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Holder of such Security shall thereafter look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the NEW YORK TIMES and THE
WALL STREET JOURNAL (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining will be repaid to the Company.
SECTION 9.7 REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any U.S. Legal
Tender or U.S. Government Obligations in accordance with Section 9.2 or 9.3, as
the case may be, by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
the Company's obligations under this Indenture and the Securities shall be
revived and reinstated as though no deposit had occurred pursuant to Section 9.2
or 9.3 until such time as the Trustee or Paying Agent is permitted to apply such
money in accordance with Section 9.2 and 9.3, as the case may be; provided,
however, that, if the Company makes any payment of principal of or interest
(including Contingent Payments) on any Security following the reinstatement of
its obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money held by the Trustee or
Paying Agent.
ARTICLE X
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holder, the Company and any Guarantor, when
authorized by Board Resolutions, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, or may amend,
modify or supplement the Securities, this Indenture, or any of the Collateral
Documents, in form satisfactory to the Trustee and the Company, for any of the
following purposes:
(1) to cure any ambiguity, defect, or inconsistency, or to make
any other provisions with respect to matters or questions arising under
this Indenture which shall not be inconsistent with the provisions of this
Indenture, provided such action pursuant to this clause (1) shall not
adversely affect the interests of any Holder in any respect;
(2) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon the
Company or to make any other change that does not adversely affect the
rights of any Holder; provided, that the Company has delivered to the
Trustee an Opinion of Counsel stating that such change does not adversely
affect the rights of any Holder;
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(3) to provide for additional collateral for or additional
Guarantors of the Securities;
(4) to provide for uncertificated Securities in addition to or
in place of certificated Securities;
(5) to evidence the succession of another person to the Company,
and the assumption by any such successor of the obligations of the Company,
herein and in the Securities in accordance with Article VI; or
(6) to comply with the TIA.
SECTION 10.2 AMENDMENTS, SUPPLEMENTAL INDENTURES AND WAIVERS WITH
CONSENT OF HOLDERS.
Subject to Section 7.8 and the last sentence of this paragraph, with
the consent of the Holders of not less than a majority in aggregate principal
amount of then outstanding Securities, by written act of said Holders delivered
to the Company and the Trustee, the Company and any Guarantor, when authorized
by Board Resolutions, and the Trustee may amend or supplement any of the
Collateral Documents, this Indenture or the Securities or enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
any of the Collateral Documents, this Indenture or the Securities or of
modifying in any manner the rights of the Holders under any of the Collateral
Documents, this Indenture or the Securities. Subject to Section 7.8 and the
last sentence of this paragraph, the Holder or Holders of a majority in
aggregate principal amount of then outstanding Securities may waive compliance
by the Company or any Guarantor with any provision of any of the Collateral
Documents, this Indenture or the Securities. Notwithstanding the foregoing
provisions of this Section 10.2, no such amendment, supplemental indenture or
waiver shall, without the consent of the Holder of each outstanding Security
affected thereby:
(1) change the Stated Maturity of, or the Change of Control
Offer Period or the Asset Sale Offer Period on, any Security;
(2) reduce the principal amount of any Security;
(3) reduce the rate or extend the time for payment of interest
(including Contingent Payments) on any Security;
(4) make the principal of, or the interest on, any Security
payable with anything or in any manner other than as provided for in this
Indenture and the Securities as in effect on the Issue Date;
(5) make any changes in Section 7.8 or this third sentence of
this Section 10.2 (except, in the case of this third sentence, to add any
additional provision of this Indenture to this sentence);
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(6) reduce any Purchase Price;
(7) alter the redemption provisions of Article III or the
Securities in a manner adverse to any Holder;
(8) make any changes in the provisions concerning waivers of
Defaults or Events of Default by Holders of the Securities or change the
percentage of principal amount of Securities whose Holders must consent to
an amendment, supplement or waiver of any provision of this Indenture or
the Securities (except to increase any required percentage) or make any
changes in the provisions concerning the rights of Holders to recover the
principal of, interest (including Contingent Payments) on, or redemption
payment with respect to, any Security; or
(9) make the Securities subordinated in right of payment to any
extent or under any circumstances (except as permitted by this Indenture)
to any other indebtedness.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture or waiver.
After an amendment, supplement or waiver under this Section 10.2 or
10.4 becomes effective, it shall bind each Holder, subject to the limitations
set forth above.
In connection with any amendment, supplement or waiver under this
Article X, the Company may, but shall not be obligated to, offer to any Holder
who consents to such amendment, supplement or waiver, or to all Holders,
consideration for such Holder's consent to such amendment, supplement or waiver.
SECTION 10.3 COMPLIANCE WITH TIA.
Every amendment, waiver or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
SECTION 10.4 REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, waiver or supplement becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made on
any Security. However, any such Holder or
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subsequent Holder may revoke the consent as to his Security or portion of his
Security by written notice to the Company or the person designated by the
Company as the person to whom consents should be sent if such revocation is
received by the Company or such person before the date on which the Trustee
receives an Officers' Certificate certifying that the Holders of the requisite
principal amount of Securities have consented (and not theretofore revoked such
consent) to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be the date so fixed by the
Company notwithstanding the provisions of the TIA. If a record date is fixed,
then notwithstanding the last sentence of the immediately preceding paragraph,
those persons who were Holders at such record date, and only those persons (or
their duly designated proxies), shall be entitled to revoke any consent
previously given, whether or not such persons continue to be Holders after such
record date. No such consent shall be valid or effective for more than 90 days
after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder, unless it makes a change described in any of clauses
(1) through (9) of Section 10.2, in which case, the amendment, supplement or
waiver shall bind only each Holder of a Security who has consented to it and
every subsequent Holder of a Security or portion of a Security that evidences
the same (or a portion of the same) debt as the consenting Holder's Security
with respect to which a consent was given; provided, that any such waiver shall
not impair or affect the right of any Holder to receive payment of principal and
premium of and interest (including Contingent Payments) on a Security, on or
after the respective dates set for such amounts to become due and payable
expressed in such Security, or to bring suit for the enforcement of any such
payment on or after such respective dates.
SECTION 10.5 NOTATION ON OR EXCHANGE OF SECURITIES.
If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may require the Holder of the Security to deliver it to the Trustee
or require the Holder to put an appropriate notation on the Security. The
Trustee may place an appropriate notation on the Security about the changed
terms and return it to the Holder. Alternatively, if the Company or the Trustee
so determine, the Company in exchange for the Security shall issue, the
Guarantors shall endorse and the Trustee shall authenticate a new Security that
reflects the changed terms. Any failure to make the appropriate notation or to
issue a new Security shall not affect the validity of such amendment, supplement
or waiver.
SECTION 10.6 TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article X, provided, that the Trustee may, but shall
not be obligated to, execute any such amendment, supplement or waiver which
affects the Trustee's own rights, duties or immunities under this Indenture.
The Trustee shall be entitled to receive, and shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of any
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amendment, supplement or waiver authorized pursuant to this Article X is
authorized or permitted by this Indenture.
SECTION 10.7 CONSENT TO CERTAIN AMENDMENTS OF THE GROUND LEASE;
TRUSTEE'S ACTIONS.
To the extent required under the Ground Lease, the Collateral Agent
and the Trustee, on behalf of the Holders, hereby waive their right to consent
or shall be authorized to waive its consent, as the case may be, to any future
amendment, modification or change of such lease, and any and all other leases
now or hereafter subject to the Collateral Mortgage, provided that:
(a) such amendment, modification or change would not (i) have a
material adverse effect on the Collateral, (ii) have a material adverse
effect on the rights of the Holders or the Collateral Agent under the
Ground Lease or such other lease, as the case may be; or (iii) materially
increase the payment obligations under the Ground Lease, or such other
lease, as the case may be; and
(b) contemporaneously with the execution of such amendment,
modification or change, the Collateral Agent shall receive, at no cost to
the Holders or the Collateral Agent, an endorsement to the mortgagee's
title insurance policy insuring the Collateral Mortgage, assuring (i) that
such amendment does not impair or invalidate the lien of the Collateral
Mortgage and (ii) that such amendment does not affect the coverage afforded
by the above-referenced title insurance policy.
Except as set forth above, the Trustee may request the consent and
approval of the Holders as a condition to giving any consent or approval under
the Ground Lease, or any other lease or the Casino Operating Contract and shall
have no responsibility or liability for failing to give any such consent or
approval absent direction from the Holders.
ARTICLE XI
RIGHT TO REQUIRE REPURCHASE
SECTION 11.1 REPURCHASE OF SECURITIES AT OPTION OF THE HOLDER UPON
CHANGE OF CONTROL.
(a) In the event that a Change of Control (the date on which such
event occur being referred to as the "Change of Control Date") occurs, each
Holder of Securities shall have the right, at such Holder's option, subject to
the terms and conditions hereof, to require the Company to repurchase all or any
part of such Holder's Notes (provided, that the principal amount of such Notes
at maturity must be $1,000 or an integral multiple thereof, except for Secondary
Securities that were issued in denominations other than $1,000 or an integral
multiple thereof) on the date that is no later than 30 Business Days after the
occurrence of such Change of Control (the "Change of Control Payment Date"), at
a cash
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price (the "Change of Control Offer Price") equal to 101% of the principal
amount thereof, plus accrued and unpaid interest, if any, to the Change of
Control Payment Date.
(b) In the event that, pursuant to this Section 11.1, the Company
shall be required to commence an offer to purchase Notes (a "Change of Control
Offer"), the Company shall follow the procedures set forth in this Section 11.1
as follows:
(1) the Change of Control Offer shall commence within 10
Business Days following the Change of Control Date;
(2) the Change of Control Offer shall remain open for 20
Business Days and no longer, except to the extent that a longer period is
required by applicable law (the "Change of Control Offer Period");
(3) within 5 Business Days following the expiration of a Change
of Control Offer (and in any event not later than 35 Business Days
following the Change of Control Date), the Company shall purchase all of
the tendered Securities at the Change of Control Offer Price together with
accrued interest to the Change of Control Payment Date;
(4) if the Change of Control Payment Date is on or after an
interest payment record date and on or before the related interest payment
date, any accrued interest will be paid to the Person in whose name a
Security is registered at the close of business on such record date, and no
additional interest (including Contingent Payments) will be payable to
Securityholders who tender Securities pursuant to the Change of Control
Offer and who are paid on the Change of Control Payment Date;
(5) the Company shall provide the Trustee with notice of the
Change of Control Offer at least 5 Business Days before the commencement of
any Change of Control Offer; and
(6) on or before the commencement of any Change of Control
Offer, the Company or the Trustee (upon the request and at the expense of
the Company) shall send, by first-class mail, a notice to each of the
Securityholders, which (to the extent consistent with this Indenture) shall
govern the terms of the Change of Control Offer and shall state:
(i) that the Change of Control Offer is being made pursuant to
this Section 11.1;
(ii) the Change of Control Offer Price (including the amount of
accrued and unpaid interest), the Change of Control Payment Date and
the Change of Control Put Date (as defined below);
(iii) that any Security or portion thereof not tendered or
accepted for payment will continue to accrue interest (including
Contingent Payments);
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(iv) that, unless (a) the Company defaults in depositing U.S.
Legal Tender with the Paying Agent (which may not for purposes of this
Section 11.1, notwithstanding anything in this Indenture to the
contrary, be the Company or any Affiliate of the Company in accordance
with the last paragraph of this clause (b) or (b) such Change of
Control payment is prevented for any reason, any Security or portion
thereof accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest (including Contingent Payments) after
the Change of Control Payment Date;
(v) that Holders electing to have a Security, or portion
thereof, purchased pursuant to a Change of Control Offer will be
required to surrender the Security, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Security completed, to
the Paying Agent (which may not for purposes of this Section 11.1,
notwithstanding anything in this Indenture to the contrary, be the
Company or any Affiliate of the Company) at the address specified in
the notice prior to the close of business on the fifth Business Day
prior to the Change of Control Payment Date (the "Change of Control
Put Date");
(vi) that Holders will be entitled to withdraw their elections,
in whole or in part, if the Paying Agent (which, for purposes of this
Section 11.1, notwithstanding any other provision of this Indenture,
may not be the Company or an Affiliate of the Company) receives, up to
the close of business on the Change of Control Put Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Securities the Holder is
withdrawing and a statement that such Holder is withdrawing his
election to have such principal amount of Securities purchased; and
(vii) a brief description of the events resulting in such
Change of Control.
No later than 12:00 noon, New York City Time, on a Change of Control
Payment Date, the Company shall (i) accept for payment Securities or portions
thereof properly tendered pursuant to the Change of Control Offer prior to the
close of business on the Final Change of Control Put Date, (ii) irrevocably
deposit with the Paying Agent U.S. Legal Tender sufficient to pay the Change of
Control Offer Price (including accrued and unpaid interest) of all Securities so
tendered and (iii) deliver to the Trustee Securities so accepted together with
an Officers' Certificate listing the Securities or portions thereof being
purchased by the Company. The Paying Agent shall on the Change of Control
Payment Date pay to the Holders of Securities so accepted an amount equal to the
Change of Control Offer Price (including accrued and unpaid interest), and the
Trustee shall promptly authenticate and mail or deliver to such Holders a new
Security equal in principal amount to any unpurchased portion of the Security
surrendered. Any Securities not so accepted shall be promptly mailed or
delivered by the Company to the Holder thereof.
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ARTICLE XII
GUARANTY
SECTION 12.1 GUARANTY.
(a) In consideration of good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, and subject to Article III and
subsection (d) below, each of the Guarantors hereby irrevocably and
unconditionally guarantees (the "Guaranty") to each Holder of a Security
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, irrespective of the validity and enforceability of this Indenture,
the Securities or the obligations of the Company under this Indenture or the
Securities, that: (w) the principal and premium (if any) of and interest
(including Contingent Payments to the extent due and payable hereunder) on the
Securities will be paid in full when due, whether at the maturity or Interest
Payment Date, by acceleration, Required Regulatory Redemption, upon a Change of
Control, Offer to Purchase, or otherwise; (x) all other obligations of the
Company to the Holders or the Trustee under this Indenture or the Securities
will be promptly paid in full or performed, all in accordance with the terms of
this Indenture and the Securities; and (y) in case of any extension of time of
payment or renewal of any Securities or any of such other obligations, they will
be paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at maturity, by acceleration, Required Regulatory
Redemption, upon an Offer to Purchase or otherwise. Failing payment when due of
any amount so guaranteed for whatever reason, each Guarantor shall be obligated
to pay the same before failure so to pay becomes an Event of Default.
(b) Each Guarantor hereby agrees that its obligations with regard to
this Guaranty shall be unconditional, irrespective of the validity, regularity
or enforceability of the Securities or this Indenture, the absence of any action
to enforce the same, any delays in obtaining or realizing upon or failures to
obtain or realize upon collateral, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstances that might
otherwise constitute a legal or equitable discharge or defense of a guarantor.
Each Guarantor hereby waives diligence, presentment, demand of payment, filing
of claims with a court in the event of insolvency or bankruptcy of the Company,
any right to require a proceeding first against the Company or right to require
the prior disposition of the assets of the Company to meet its obligations,
protest, notice and all demands whatsoever and covenants that this Guaranty will
not be discharged except by complete performance of the obligations contained in
the Securities and this Indenture.
(c) If any Holder or the Trustee is required by any court or
otherwise to return to either the Company or any Guarantor, or any Custodian,
Trustee, or similar official acting in relation to the Company or such
Guarantor, any amount paid by the Company or such Guarantor to the Trustee or
such Holder, this Guaranty, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each Guarantor agrees that it will not be
entitled to any right of subrogation in relation to the Holders in respect of
any obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby. Each Guarantor further agrees that, as between such
Guarantor, on the one hand, and the Holders and the
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Trustee, on the other hand, (i) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Section 7.2 for the purposes of this
Guaranty, notwithstanding any stay, injunction or other prohibition preventing
such acceleration as to the Company of the obligations guaranteed hereby, and
(ii) in the event of any declaration of acceleration of those obligations as
provided in Section 7.2, those obligations (whether or not due and payable) will
forthwith become due and payable by each of the Guarantors for the purpose of
this Guaranty.
(d) It is the intention of each Guarantor and the Company that the
obligations of each Guarantor hereunder shall be, but not in excess of, the
maximum amount permitted by applicable law. Accordingly, if the obligations in
respect of the Guaranty would be annulled, avoided or subordinated to the
creditors of the Guarantor by a court of competent jurisdiction in a proceeding
actually pending before such court as a result of a determination both that such
Guaranty was made without fair consideration and, immediately after giving
effect thereto, or at the time that any demand is made thereupon, such Guarantor
was insolvent or unable to pay its debts as they mature or left with an
unreasonably small capital, then the obligations of such Guarantor under such
Guaranty shall be reduced by such an amount, if any, that would result in the
avoidance of such annulment, avoidance or subordination; PROVIDED, HOWEVER, that
any reduction pursuant to this paragraph shall be made in the smallest amount as
is necessary to reach such result. For purposes of this paragraph, "fair
consideration," "insolvency," "unable to pay its debts as they mature,"
"unreasonably small capital" and the effective times of reductions, if any,
required by this paragraph shall be determined in accordance with applicable
law.
(e) Each Guarantor shall be subrogated to all rights of the Holders
against the Company under the Securities, this Indenture or the Collateral
Documents in respect of any amounts paid by such Guarantor pursuant to the
provisions of such Guaranty or this Indenture; PROVIDED, HOWEVER, that the
Guarantor shall not be entitled to enforce or to receive any payments arising
out of, or based upon, such right of subrogation until the principal of,
premium, if any, and interest (including Contingent Payments to the extent due
and payable hereunder) on all Securities issued hereunder shall have been paid
in full.
SECTION 12.2 EXECUTION AND DELIVERY OF GUARANTY.
To evidence its Guaranty set forth in Section 12.1, each Guarantor
agrees that a notation of such Guaranty substantially in the form annexed hereto
as EXHIBIT B shall be endorsed on each Security authenticated and delivered by
the Trustee and that this Indenture shall be executed on behalf of such
Guarantor by its Chairman of the Board, its President or one of its Vice
Presidents, by manual or facsimile signature, under a facsimile of its seal
reproduced thereon and attested to by another Officer other than the Officer
executing the Indenture.
Each Guarantor agrees that its Guaranty set forth in Section 12.1
shall remain in full force and effect and apply to all the Securities
notwithstanding any failure to endorse on each Security a notation of such
Guaranty.
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If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security on which a Guaranty is
endorsed, the Guaranty shall be valid nevertheless.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guaranty set forth in
this Indenture on behalf of each Guarantor.
SECTION 12.3 FUTURE SUBSIDIARY GUARANTORS.
The Company shall cause each person that is or becomes a Subsidiary of
the Company after the Issue Date to execute a Guaranty in the form of Exhibit B
hereto and cause such Subsidiary to execute an Indenture supplemental hereto for
the purpose of adding such Subsidiary as a Guarantor hereunder.
SECTION 12.4 RELEASE OF GUARANTOR.
The Parent Guarantor shall be released from all of its obligations
under the Guaranty and under this Indenture if:
(a) (i) the Company or the Parent Guarantor has transferred all or
substantially all of its properties and assets to any Person (whether by
sale, merger or consolidation or otherwise), or has merged into or
consolidated with another Person, pursuant to a transaction in compliance
with this Indenture;
(ii) the corporation to whom all or substantially all of the
properties and assets of the Company or the Parent Guarantor are
transferred, or whom the Company or the Parent Guarantor has merged
into or consolidated with, has expressly assumed, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of the Parent
Guarantor under the Guaranty and this Indenture;
(iii) immediately before and immediately after giving effect
to such transaction, no Event of Default, and no event or condition
which, after notice or lapse of time or both, would become an Event of
Default, shall have occurred and be continuing; and
(iv) the Parent Guarantor has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger or transfer and such supplemental indenture
comply with this Section 12.3 and that all conditions precedent herein
provided for relating to such transaction have been complied with; or
(b) the Parent Guarantor liquidates (other than pursuant to any
Bankruptcy Law) and complies, if applicable, with the provisions of this
Indenture; PROVIDED that if a Person and its Affiliates, if any, shall
acquire all or substantially all of the assets
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of the Parent Guarantor upon such liquidation the Parent Guarantor shall
liquidate only if:
(i) the Person and each such Affiliate (or the common corporate
parent of such Person and its Affiliates, if such Person and its
Affiliates are wholly owned by such parent) which acquire or will
acquire all or a portion of the assets of the Parent Guarantor shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, all the
obligations of the Parent Guarantor, under the Guaranty and this
Indenture and such Person or any of such Affiliates (or such parent)
shall be a corporation organized and existing under the laws of the
United States or any State thereof or the District of Columbia;
(ii) immediately after giving effect to such transaction, no
Event of Default, and no event or condition which, after notice or
lapse of time or both, would become an Event of Default, shall have
occurred and be continuing; and
(iii) the Parent Guarantor has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that
such liquidation and such supplemental indenture comply with this
Section 12.3 and that all conditions precedent herein provided for
relating to such transaction have been complied with; or
(c) the Company ceases for any reason to be a "wholly owned
subsidiary" (as such term is defined in Rule 1-02(aa) of the Regulation S-X
promulgated by the Commission) of the Parent Guarantor.
Upon any assumption of the Guaranty by any Person pursuant to this
Section, such Person may exercise every right and power of the Parent Guarantor
under this Indenture with the same effect as if such successor corporation had
been named as the Parent Guarantor herein, and all the obligations of the Parent
Guarantor, hereunder and under such Parent Guaranty and the Indenture shall
terminate.
SECTION 12.5 WHEN THE GUARANTOR MAY MERGE, ETC.
The Parent Guarantor shall not consolidate with or merge with or into
any other Person or, directly or indirectly, sell, lease or convey all or
substantially all of its assets (computed on a consolidated basis), whether in a
single transaction or a series of related transactions, to another Person,
unless:
(a) either the Parent Guarantor shall be the continuing person, or
the Person (if other than the Parent Guarantor) formed by such
consolidation or into which the Parent Guarantor is merged or to which the
assets of the Parent Guarantor are transferred shall be a corporation
organized and validly existing under the laws of the United States or any
State thereof or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee,
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in form satisfactory to the Trustee, all the obligations of the Parent
Guarantor under the Guaranty and this Indenture;
(b) immediately after giving effect to such transaction, no Event of
Default, and no event or condition which, after notice or lapse of time or
both, would become an Event of Default, shall have occurred and be
continuing; and
(c) the Parent Guarantor has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, sale, conveyance or lease and such supplemental
indenture comply with this Section and that all conditions precedent herein
provided for relating to such transaction have been complied with.
Upon any consolidation or merger, or any sale, conveyance or lease of
all or substantially all of the assets of the Parent Guarantor, in accordance
with this Section, the successor corporation formed by such consolidation or
into which the Parent Guarantor is merged or to which such transfer is made
shall succeed to, and be substituted for, and may exercise every right and power
of, the Parent Guarantor under this Indenture with the same effect as if such
successor corporation had been named as the Parent Guarantor herein, and all the
obligations of the predecessor Parent Guarantor hereunder and under the Guaranty
and the Indenture shall terminate.
SECTION 12.6 CERTAIN BANKRUPTCY EVENTS.
The Parent Guarantor hereby covenants and agrees that in the event of
the insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Company, the Parent Guarantor shall not file (or join in any filing of), or
otherwise seek to participate in the filing of, any motion or request seeking to
stay or to prohibit (even temporarily) execution on the Guaranty and hereby
waives and agrees not to take the benefit of any such stay of execution, whether
under Section 362 or 105 of the United States Bankruptcy Code or otherwise.
ARTICLE XIII
SUBORDINATION OF SECURITIES
SECTION 13.1 SECURITIES SUBORDINATED TO SENIOR DEBT.
The Company, for itself, its successors and assigns, covenants and
agrees, and each Holder of any Securities, by his or its acceptance thereof,
likewise covenants and agrees, that the indebtedness evidenced by the Securities
(and any renewals or extensions thereof), including the principal of, premium,
if any, and interest (including Contingent Payments) thereon and any interest
payable on such interest (including Contingent Payments), and requirements that
the Company make repurchases or redemptions shall be subordinate and subject in
right of payment, to the extent and in the manner hereinafter set forth, to the
prior payment in full in cash or Cash Equivalents of all Obligations in respect
of Senior Debt, and that each holder of Senior Debt whether now outstanding or
hereafter created,
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incurred, assumed or guaranteed shall be deemed to have acquired Senior Debt in
reliance upon the covenants and provisions contained in this Indenture and the
Securities.
SECTION 13.2 SECURITIES SUBORDINATED TO PRIOR PAYMENT OF ALL SENIOR
DEBT ON DISSOLUTION, LIQUIDATION, REORGANIZATION, ETC. OF THE COMPANY.
Upon any payment or distribution of the assets of the Company of any
kind or character, whether in cash, property or securities (including any
Collateral at any time securing the Securities) to creditors upon any
dissolution, winding-up, total or partial liquidation, reorganization, or
recapitalization or readjustment of the Company or its property or securities
(whether voluntary or involuntary, or in bankruptcy, insolvency, reorganization,
liquidation, or receivership proceedings, or upon an assignment for the benefit
of creditors, or any other marshalling of the assets and liabilities of the
Company or otherwise), then in such event,
(i) all holders of Senior Debt shall first be entitled to
receive payment in full, in cash or Cash Equivalents, of all Obligations in
respect of Senior Debt before any payment is made on account of
Obligations, including, without limitation, the principal, premium, if any,
or interest (including Contingent Payments), in respect of the Securities
or in respect of the Change of Control Offer Price;
(ii) any payment or distribution of assets of the Company, of any
kind or character, whether in cash, property or securities (other than, to
the extent issued in exchange for the Securities, Qualified Capital Stock
of the Company and debt securities of the Company that are subordinated to
the Senior Debt (and any securities issued in exchange for Senior Debt) to
the same extent the Securities are subordinated to Senior Debt (and any
securities issued in exchange for Senior Debt)), to which the Holders, or
the Trustee on behalf of the Holders, would be entitled except for the
provisions of this Article XIII, shall be paid or delivered by any debtor
or other person making such payment or distribution, directly to the
holders of the Senior Debt or their representative or representatives, or
to the trustee or trustees under any indenture pursuant to which any
instruments evidencing any of such Senior Debt may have been issued,
ratably according to the aggregate amounts remaining unpaid on account of
the Senior Debt held or represented by each, for application to payment of
all Obligations in respect of Senior Debt remaining unpaid, to the extent
necessary to pay all Obligations in respect of Senior Debt in full, in cash
or Cash Equivalents, after giving effect to any concurrent payment or
distribution to the holders of such Senior Debt; and
(iii) in the event that, notwithstanding the foregoing
provisions of this Section 13.2, any payment or distribution of assets of
the Company, whether in cash, property or securities (other than, to the
extent issued in exchange for the Securities, Qualified Capital Stock of
the Company and debt securities of the Company that are subordinated to the
Senior Debt (and any securities issued in exchange for Senior Debt) to the
same extent the Securities are subordinated to Senior
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Debt (and any securities issued in exchange for Senior Debt)), shall be
received by the Trustee or the Holders before all Obligations in respect of
Senior Debt are paid in full, such payment or distribution (subject to the
provisions of Sections 13.6 and 13.7) shall be held in trust for the
benefit of, and shall be immediately paid or delivered by the Trustee or
such Holders, as the case may be, to the holders of Senior Debt remaining
unpaid or unprovided for, or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any
instruments evidencing any of such Senior Debt may have been issued,
ratably according to the aggregate amounts remaining unpaid on account of
the Obligations in respect of Senior Debt held or represented by each, for
application to the payment of all Obligations in respect of Senior Debt
remaining unpaid, to the extent necessary to pay all Obligations in respect
of Senior Debt in full after giving effect to any concurrent payment or
distribution to the holders of such Senior Debt.
Without limiting the foregoing, the Company shall give prompt written
notice to the Trustee and any Paying Agent of any action or plan of dissolution,
winding-up, liquidation or reorganization of the Company or any other facts
known to it which would cause a payment to violate this Article XIII.
Upon any payment or distribution of assets of the Company referred to
in this Article XIII, the Trustee, subject to the provisions of Section 8.1 and
Section 8.2, and the Holders shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which such dissolution,
winding-up, liquidation or reorganization proceeding is pending, or a
certificate of the liquidating trustee or agent or other person making any
distribution to the Trustee or to the Holders, for the purpose of ascertaining
the persons entitled to participate in such distribution, the holders of the
Senior Debt and other Debt of the Company, the amount thereof payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XIII.
SECTION 13.3 HOLDERS OF SECURITIES TO BE SUBROGATED TO RIGHT OF
HOLDERS OF SENIOR DEBT.
Subject to the payment in full of all Obligations in respect of Senior
Debt in cash or Cash Equivalents, the Holders of the Securities shall be
subrogated (equally and ratably with the holders of all Senior Subordinated
Debt) to the rights of the holders of Senior Debt to receive payments or
distributions of assets of the Company applicable to the Senior Debt until the
principal of, premium, if any, and interest (including Contingent Payments) on,
the Securities, including the Change of Control Offer Price, if applicable,
shall be paid in full, and for purposes of such subrogation, no payments or
distributions to the holders of Senior Debt of assets, whether in cash, property
or securities, distributable to the holders of Senior Debt under the provisions
hereof to which the Holders would be entitled except for the provisions of this
Article XIII, and no payment over pursuant to the provisions of this Article
XIII to the holders of Senior Debt by the Holders shall, as between the Company,
its creditors (other than the holders of Senior Debt) and the Holders, be deemed
to be a payment by the Company to or on account of Senior Debt, it being
understood that the provisions of this Article XIII are, and are intended,
solely for the
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purpose of defining the relative rights of the Holders, on the one hand, and the
holders of Senior Debt, on the other hand.
SECTION 13.4 OBLIGATIONS OF THE COMPANY UNCONDITIONAL.
Nothing contained in this Article XIII or elsewhere in this Indenture
or in any Security (but subject to the provisions of Section 3.2) is intended to
or shall impair or affect, as between the Company, its creditors (other than the
holders of Senior Debt) and the Holders, the obligation of the Company, which is
absolute and unconditional, to pay to the Holders the principal of, premium, if
any, and interest (including Contingent Payments) on, the Securities, and the
Change of Control Offer Price, if applicable, as and when the same shall become
due and payable in accordance with their terms, or to affect the relative rights
of the Holders and creditors of the Company other than the holders of Senior
Debt, nor shall anything herein or therein prevent or limit the Trustee or any
Holder from exercising all remedies otherwise permitted by applicable law upon
the happening of an Event of Default hereunder, subject to the provisions of
Article VII hereof and to the rights, if any, under this Article XIII of the
holders of Senior Debt in respect of assets, whether in cash, property or
securities, of the Company received upon the exercise of any such remedy.
Nothing contained in this Article XIII or elsewhere in this Indenture or in the
Securities, shall, except during the pendency of any dissolution, winding-up,
total or partial liquidation, reorganization, recapitalization or readjustment
of the Company or its securities (whether voluntary or involuntary, or in
bankruptcy, insolvency, reorganization, liquidation or receivership proceedings,
or upon an assignment for the benefit of creditors, or any other marshalling of
assets and liabilities of the Company or otherwise), affect the obligation of
the Company to make, or prevent the Company from making, at any time (except
under the circumstances described in Section 13.5 hereof), payment of principal
of, premium, if any, or interest (including Contingent Payments) on, the
Securities, or the Change of Control Offer Price, if applicable, in respect of
any Securities.
SECTION 13.5 COMPANY NOT TO MAKE PAYMENTS WITH RESPECT TO SECURITIES
IN CERTAIN CIRCUMSTANCES.
(a) Upon the maturity of any Senior Debt by lapse of time,
acceleration or otherwise, but subject to the provisions of Section 3.2, all
principal thereof and interest thereon and all other Obligations in respect
thereof shall first be paid in full in cash or Cash Equivalents, or such payment
duly provided for, and, in the case of Senior Debt in respect of letters of
credit to the extent they have not been drawn upon, be fully secured by cash
collateral, before any payment is made on account of Obligations, including,
without limitation, principal of, premium, if any, or interest (including
Contingent Payments), in respect of the Securities in cash or property or to
acquire or repurchase any of the Securities.
(b) Upon the happening of a default or an event of default (as such
term is used in the documentation governing Senior Debt) in respect of the
payment of any Obligations in respect of Senior Debt ("Payment Default"), but
subject to the provisions of Section 3.2, then, unless and until such default or
event of default shall have been cured or waived by the holders of such Senior
Debt or shall have ceased to exist, no payment shall be
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made by or on behalf of the Company with respect to Obligations, including,
without limitation, the principal of, premium, if any, or interest (including
Contingent Payments), in respect of the Securities in cash or property or to
acquire or repurchase any of the Securities.
(c) Upon the happening of a default or an event of default with
respect to any Senior Debt as such terms are used in the documentation governing
Senior Debt), other than a default in payment of the principal of, premium, if
any, or interest on the Senior Debt, or if an event of default would result upon
any payment with respect to the Securities, but subject to the provisions of
Section 3.2, upon written notice, which notice shall specify that such notice
constitutes a payment blockage notice pursuant to and for purposes of, this
Section 13.5(c), of the default given to the Company and the Trustee by holders
of Designated Senior Debt representing a majority of the principal amount
thereof or their representative, then, unless and until such default or event of
default has been cured or waived or otherwise has ceased to exist, no payment
may be made by or no behalf of the Company with respect to Obligations,
including, without limitation, the principal of, premium, if any, or interest
(including Contingent Payments), in respect of the Securities in cash or
property, or to acquire or repurchase any of the Securities for cash or
property. Notwithstanding the foregoing, unless the Designated Senior Debt in
respect of which such default or event of default exists has been declared due
and payable in its entirety, in the case of a default, within 30 days and, in
the case of an event of default, within 180 days after the date written notice
of such default or event of default is delivered as set forth above (the
"Payment Blockage Period"), and such declaration has not been rescinded, the
Company is required (subject to the provisions of Section 13.2 and Sections
13.5(a) and (b), to the extent then applicable) then to pay all sums not paid to
the Holders of the Securities during the Payment Blockage Period due to the
foregoing prohibitions and to resume all other payments as and when due on the
Securities. Any number of such notices may be given; PROVIDED, HOWEVER, that
(i) during any 360 consecutive days, the aggregate of all Payment Blockage
Periods shall not exceed 180 days, (ii) there shall be a period of at least 180
consecutive days during each continuous 360-day period when no Payment Blockage
Period is in effect, and (iii) any default or event of default that resulted in
the commencement of a 180-day period may not be the basis for the commencement
of any other 180-day period.
In the event that, notwithstanding the foregoing provisions of this
Section 13.5, any payment or distribution of assets of the Company, whether in
cash, property or securities (other than, to the extent issued in exchange for
the Securities, Qualified Capital Stock of the Company and debt securities of
the Company that are subordinated to the Senior Debt (and any securities issued
in exchange for Senior Debt) to the same extent the Securities are subordinated
to Senior Debt (and any securities issued in exchange for Senior Debt)), shall
be received by the Trustee or the Holders at a time when such payment or
distribution should not have been made because of this Section 13.5, such
payment or distribution (subject to the provisions of Sections 13.6 and 13.7)
shall be held in trust for the benefit of the holders of, and shall be paid or
delivered by the Trustee or such Holders, as the case may be, to the holders of
the Senior Debt remaining unpaid or unprovided for or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any of such Senior Debt may have been issued,
ratably according to the aggregate amounts remaining unpaid on account of
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the Senior Debt held or represented by each, for application to the payment of
all Obligations in respect of Senior Debt remaining unpaid, to the extent
necessary to pay all Obligations in respect of Senior Debt in full, in cash or
Cash Equivalents, after giving effect to any concurrent payment or distribution
to the holders of such Obligations in respect of Senior Debt.
SECTION 13.6 TRUSTEE ENTITLED TO ASSUME PAYMENTS NOT PROHIBITED IN
ABSENCE OF NOTICE.
The Trustee shall not at any time be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or by
the Trustee, unless and until the Trustee shall have received written notice
thereof at its Corporate Trust Office from the Company or any Guarantor or from
one or more holders of Senior Debt or from any representative thereof or trustee
therefor, and, prior to the receipt of any such written notice, the Trustee,
subject to the provisions of Sections 8.1 and 8.2 hereof, shall be entitled to
assume conclusively that no such facts exist, and shall be fully protected in
making any such payment in any such event.
The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself or itself to be a holder of
Senior Debt (or a trustee on behalf of such holder) to establish that such
notice has been given by a holder of Senior Debt or a trustee on behalf of any
such holder. In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any Person as a holder
of Senior Debt to participate in any payment or distribution pursuant to this
Article XIII, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Debt held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article XIII, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
SECTION 13.7 APPLICATION BY TRUSTEE OF MONIES DEPOSITED WITH IT.
Any deposit of monies by the Company with the Trustee or any Paying
Agent (whether or not in trust) for the payment of the principal of, premium, if
any, or interest (including Contingent Payments) on, any Securities or Change of
Control Offer Price in respect of any Securities shall be subject to the
provisions of Sections 13.1, 13.2, 13.3 and 13.5 hereof, except that, if prior
to the opening of business on the second Business Day next prior to the date on
which, by the terms of this Indenture, any such monies may become payable for
any purpose (including, without limitation, the payment of principal of,
premium, if any, or interest (including Contingent Payments) on, or Change of
Control Offer Price in respect of, any Security) the Trustee shall not have
received with respect to such monies the notice provided for in Section 13.6,
then the Trustee shall have the full power and authority to receive such monies
and to apply such monies to the purpose for which they were received, and shall
not be affected by any notice to the contrary which may be received by it on or
after such date; without, however, limiting any rights that holders of Senior
Debt
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may have to recover any such payments from the Holders in accordance with the
provisions of this Article XIII.
SECTION 13.8 SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS
OF COMPANY OR HOLDERS OF SENIOR DEBT.
No right of any present or future holder of any Senior Debt to enforce
subordination, as herein provided, shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any non-compliance
by the Company with the terms, provisions and covenants of this Indenture, the
Securities, or any other agreement or instrument regardless of any knowledge
thereof any such holder may have or be otherwise charged with.
Each Holder of any Securities, by his acceptance thereof, undertakes
and agrees for the benefit of each holder of Senior Debt to execute, verify,
deliver and file any proofs of claim, consents, assignments or other instruments
that any holder of Senior Debt may at any time require in order to prove and
realize upon any rights or claims pertaining to the Securities and to effectuate
the full benefit of the subordination contained in this Article XIII, and upon
failure of any Holder of any Security so to do, any such holder of Senior Debt
(or a trustee or representative on its behalf) shall be deemed to be irrevocably
appointed the agent and attorney-in-fact of the Holder of such Security to
execute, verify, deliver and file any such proofs of claim, consents,
assignments or other instrument.
Without limiting the effect of the first paragraph of this Section
13.8, any holder of Senior Debt may at any time and from time to time without
the consent of or notice to any Holder, without impairing or releasing any of
the rights of any such holder of Senior Debt hereunder, upon or without any
terms or conditions and in whole or in part:
(1) change the manner, place or terms of payment, or change or
extend the time of payment of or increase the amount of, renew or alter,
any Senior Debt or any other liability of the Company to such holder, any
security therefor, or any liability incurred directly or indirectly in
respect thereof, and the provisions hereof shall apply to the Senior Debt
of such holder as so changed, extended, renewed or altered;
(2) sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or however securing,
any Senior Debt or any other liability of the Company to such holder or any
other liabilities incurred directly or indirectly in respect thereof or
hereof, or any offset against it;
(3) exercise or refrain from exercising any rights or remedies
against the Company or others or otherwise act or refrain from acting or
for any reason fail to file, record or otherwise perfect any security
interest in or lien on any property of the Company or any other Person;
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(4) settle or compromise any Senior Debt or any other liability
of the Company to such holder or any security therefor, or any liability
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Company to creditors of the Company
other than such holder; and
(5) apply any sums by whomsoever paid and however realized to
any liability or liabilities of the Company to such holder (other than in
respect of the Securities or any liability or liabilities which rank PARI
PASSU or junior in right of payment to the Securities) regardless of what
liability or liabilities of the Company to such holder remain unpaid.
SECTION 13.9 HOLDERS OF SECURITIES AUTHORIZE TRUSTEE TO EFFECTUATE
SUBORDINATION OF SECURITIES.
Without purporting to limit the authority of the Trustee as may be
appropriate in other circumstances, each Holder by his or its acceptance thereof
irrevocably authorizes and expressly directs the Trustee on his behalf to take
such action as may be necessary or appropriate to effectuate the subordination
provided in this Article XIII and appoints the Trustee his attorney-in-fact for
such purpose, including, in the event of any dissolution, winding-up or
liquidation or reorganization under Bankruptcy Law of the Company (whether in
bankruptcy, insolvency or receivership proceedings or otherwise), the timely
filing of a claim for the unpaid balance of its or his Securities in the form
required in such proceedings and the causing of such claim to be approved. If
the Trustee does not file a claim or proof of debt substantially in the form
required in such proceeding at least one day before the expiration of the time
to file such claims or proofs, then any of the holders of Senior Debt have the
right to file such proof of claim or debt on behalf of the Holders, and to take
any action with respect to such proof of claim or debt permitted to be taken by
the holders of Senior Debt pursuant to this Indenture, the Securities or by law;
PROVIDED, HOWEVER, that no such action by holders of Senior Debt shall in any
way limit or affect the rights of the Holders or the Trustee hereunder or under
the Securities or applicable law.
SECTION 13.10 RIGHT OF TRUSTEE TO HOLD SENIOR DEBT; PRESERVATION OF
TRUSTEE'S RIGHTS.
The Trustee, in its individual capacity, shall be entitled to all of
the rights set forth in this Article Thirteen in respect of any Senior Debt at
any time held by it to the same extent as any other holder of Senior Debt, and
nothing in this Indenture shall be construed to deprive the Trustee of any of
its rights as such holder. Nothing in this Article XIII shall apply to claims
of, or payment to, the Trustee under or pursuant to Section 8.7.
SECTION 13.11 ARTICLE XIII NOT TO PREVENT EVENTS OF DEFAULT.
The failure to make a payment on account of principal of, premium, if
any, or interest (including Contingent Payments) on, the Securities, the Change
of Control Offer
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Price in respect of the Securities, by reason by any provision in this Article
XIII shall not be construed as preventing the occurrence of an Event of Default
under Section 7.1 hereof.
SECTION 13.12 TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR DEBT.
The provisions of this Indenture are not intended to create, nor shall
they create, any trust or fiduciary relationship between the Trustee and the
holders of Senior Debt, nor shall any implied covenants or obligations with
respect to holders of Senior Debt (other than those expressly set forth herein)
be read into this Indenture against the Trustee. Accordingly, notwithstanding
any provision of this Article XIII to the contrary, the Trustee shall not be
liable to any such holders if it shall, in good faith, inadvertently pay over or
distribute to Holders or the Company or any other person monies or assets to
which any holders of Senior Debt shall be entitled by virtue of this Article
XIII or otherwise.
SECTION 13.13 TRUST MONIES NOT SUBORDINATED.
Notwithstanding anything contained herein to the contrary and subject
to the prior satisfaction of all of the conditions set forth in Article IX,
payments from money held in trust under Article IX by the Trustee for the
payment of principal of, premium, if any, or interest (including Contingent
Payments) on, the Securities, or Change of Control Purchase Price in respect of
the Securities shall not be subordinated to the prior payment of any Senior Debt
of the Company or subject to the restrictions set forth in this Article Thirteen
and none of the Holders shall be obligated to pay over any such amount to the
Company or any holder of Senior Debt of the Company or any other creditor of the
Company, in each case so long as (and only so long as) at the time the
respective amounts were deposited pursuant to Article IX, such amounts would
have been permitted to be paid directly in respect of Obligations, including
without limitation, principal of, premium, if any, and interest (including
Contingent Payments), in respect of the Securities in accordance with the
provisions (other than this Section 13.13) of this Article XIII.
ARTICLE XIV
SUBORDINATION OF GUARANTEE
SECTION 14.1 GUARANTEE SUBORDINATED TO GUARANTOR SENIOR DEBT.
Each Guarantor, for itself, its successors and assigns, covenants and
agrees, and each Holder of any Securities, by his or its acceptance thereof,
likewise covenants and agrees, that payments by such Guarantor in respect of the
Guaranty shall be subordinate and subject in right of payment, to the extent and
in the manner hereinafter set forth, to the prior payment in full, in cash or
Cash Equivalents, of all Obligations in respect of Guarantor Senior Debt, and
that each holder of Guarantor Senior Debt whether now outstanding or hereafter
created, incurred, assumed or guaranteed shall be deemed to have acquired
Guarantor Senior Debt in reliance upon the covenants and provisions contained in
this Indenture and the Securities. For purposes of this Article XIV, "payment
in respect of the Guaranty" means any payment made by or on behalf of a
Guarantor in respect of the
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Guaranty, including, but not limited to, any payment on account of the principal
of, premium, if any, or interest (including Contingent Payments) on the
Securities in cash or property or to acquire or repurchase any of the
Securities.
SECTION 14.2 GUARANTEE SUBORDINATED TO PRIOR PAYMENT OF ALL GUARANTOR
SENIOR DEBT ON DISSOLUTION, LIQUIDATION, REORGANIZATION, ETC. OF THE GUARANTOR.
Upon any payment or distribution of the assets of any Guarantor of any
kind or character, whether in cash, property or securities (including any
Collateral at any time securing the Securities) to creditors upon any
dissolution, or winding-up, or total or partial liquidation, or reorganization,
or recapitalization or readjustment of such Guarantor or its property or
securities (whether voluntary or involuntary, or in bankruptcy, insolvency,
reorganization, liquidation, or receivership proceedings, or upon an assignment
for the benefit of creditors, or any other marshalling of the assets and
liabilities of such Guarantor or otherwise), then in such event,
(i) the holders of all Guarantor Senior Debt shall first be
entitled to receive payment in full, in cash or Cash Equivalents, before
any payment of Obligations in respect of the Guaranty are made;
(ii) any payment or distribution of assets of any Guarantor of
any kind or character, whether in cash, property or securities (other than,
to the extent issued in exchange for the Securities, Qualified Capital
Stock of such Guarantor and debt securities that are subordinated to the
Guarantor Senior Debt (and any Securities issued in exchange for Guarantor
Senior Debt) to the same extent the Securities are subordinated to the
Guarantor Senior Debt (and any securities issued in exchange for Guarantor
Senior Debt)), to which the Holders, or the Trustee on behalf of the
Holders, would be entitled except for the provisions of this Article XIV,
shall be paid or delivered by any debtor or other person making such
payment or distribution, directly to the holders of the Guarantor Senior
Debt or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing
any of such Guarantor Senior Debt may have been issued, ratably according
to the aggregate amounts remaining unpaid on account of the Guarantor
Senior Debt held or represented by each, for application to payment of all
Obligations in respect of Guarantor Senior Debt remaining unpaid, to the
extent necessary to pay all Obligations in respect of Guarantor Senior Debt
in full, in cash or Cash Equivalents, after giving effect to any concurrent
payment or distribution to the holders of such Guarantor Senior Debt; and
(iii) in the event that, notwithstanding the foregoing
provisions of this Section 14.2, any payment or distribution of assets of
any Guarantor of any kind or character, whether in cash, property or
securities (other than, to the extent issued in exchange for the
Securities, Qualified Capital Stock of such Guarantor and debt securities
that are subordinated to the Guarantor Senior Debt (and any Securities
issued in exchange for Guarantor Senior Debt) to the same extent the
Securities are subordinated to the Guarantor Senior Debt (and any
securities issued in exchange for
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Guarantor Senior Debt)), shall be received by the Trustee or the Holders
before all Obligations in respect of Guarantor Senior Debt are paid in
full, in cash or Cash Equivalents, such payment or distribution (subject to
the provisions of Sections 14.6 and 14.7) shall be held in trust for the
benefit of, and shall be immediately paid or delivered by the Trustee or
such Holders, as the case may be, to the holders of Guarantor Senior Debt
remaining unpaid or unprovided for, or their representative or
representatives, or to the trustee or trustees under any indenture pursuant
to which any instruments evidencing any of such Guarantor Senior Debt may
have been issued, ratably according to the aggregate amounts remaining
unpaid on account of the Obligations in respect of Guarantor Senior Debt
held or represented by each, for application to the payment of all
Obligations in respect of Guarantor Senior Debt remaining unpaid, to the
extent necessary to pay all Obligations in respect of Guarantor Senior Debt
in full after giving effect to any concurrent payment or distribution to
the holders of such Guarantor Senior Debt.
Without limiting the foregoing, each Guarantor shall give prompt
notice to the Trustee and any Paying Agent of any dissolution, winding-up,
liquidation or reorganization of such Guarantor or any other facts known to it
which would cause a payment to violate this Article XIV.
Upon any payment or distribution of assets of any Guarantor referred
to in this Article XIV, the Trustee, subject to the provisions of Section 8.1
and Section 8.2, and the Holders shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which such dissolution,
winding-up, liquidation or reorganization proceeding is pending, or a
certificate of the liquidating trustee or agent or other person making any
distribution to the Trustee or to the Holders, for the purpose of ascertaining
the persons entitled to participate in such distribution, the holders of the
Guarantor Senior Debt and other Debt of such Guarantor, the amount thereof
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article XIV.
SECTION 14.3 HOLDERS OF SECURITIES TO BE SUBROGATED TO RIGHT OF
HOLDERS OF GUARANTOR SENIOR DEBT.
Subject to the payment in full of all Obligations in respect of
Guarantor Senior Debt in cash or Cash Equivalents, the Holders of the Securities
shall be subrogated (equally and ratably with the holders of all Debt of the
Guarantor that, by its terms, ranks PARI PASSU with the Guaranty) to the rights
of the holders of Guarantor Senior Debt to receive payments or distributions of
assets of each Guarantor applicable to the Guarantor Senior Debt until the
principal of, premium, if any, and interest (including Contingent Payments) on,
the Securities, including the Change of Control Offer Price, if any, shall be
paid in full, and for purposes of such subrogation, no payments or distributions
to the holders of Guarantor Senior Debt of assets, whether in cash, property or
securities, distributable to the holders of Guarantor Senior Debt under the
provisions hereof to which the Holders would be entitled except for the
provisions of this Article XIV, and no payment over pursuant to the provisions
of this Article XIV to the holders of Guarantor Senior Debt by the Holders
shall, as between such Guarantor, its creditors (other than the holders of
Guarantor Senior Debt) and the
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Holders, be deemed to be a payment by such Guarantor to or on account of
Guarantor Senior Debt, it being understood that the provisions of this Article
XIV are, and are intended, solely for the purpose of defining the relative
rights of the Holders, on the one hand, and the holders of Guarantor Senior
Debt, on the other hand.
SECTION 14.4 OBLIGATIONS OF THE GUARANTOR UNCONDITIONAL.
Nothing contained in this Article XIV or elsewhere in this Indenture
or in any Security (but subject to the provisions of Section 3.2) is intended to
or shall impair or affect, as between each Guarantor, its creditors (other than
the holders of Guarantor Senior Debt) and the Holders, the obligation of such
Guarantor under the Guaranty, or to affect the relative rights of the Holders
and creditors of such Guarantor, other than the holders of Guarantor Senior
Debt, nor shall anything herein or therein prevent or limit the Trustee or any
Holder from exercising all remedies otherwise permitted by applicable law upon
the happening of an Event of Default hereunder, subject to the provisions of
Article VII hereof and to the rights, if any, under this Article XIV of the
holders of Guarantor Senior Debt in respect of assets, whether in cash, property
or securities, of the Guarantor, received upon the exercise of any such remedy.
Nothing contained in this Article XIV or elsewhere in this Indenture or in the
Securities, shall, except during the pendency of any dissolution, winding-up,
total or partial liquidation, reorganization, recapitalization or readjustment
of such Guarantor or its securities (whether voluntary or involuntary, or in
bankruptcy, insolvency, reorganization, liquidation or receivership proceedings,
or upon an assignment for the benefit of creditors, or any other marshalling of
assets and liabilities of the Guarantor or otherwise), affect the obligation of
such Guarantor to make, or prevent such Guarantor from making, at any time
(except under the circumstances described in Section 14.5 hereof), any payment
in respect of the Guaranty.
SECTION 14.5 GUARANTOR NOT TO MAKE PAYMENTS IN RESPECT OF THE
GUARANTY IN CERTAIN CIRCUMSTANCES.
(a) Upon the maturity of any Guarantor Senior Debt by lapse of time,
acceleration or otherwise, but subject to the provisions of Section 3.2, all
principal thereof and interest thereon and all other Obligations in respect
thereof shall first be paid in full in cash or Cash Equivalents, or such payment
duly provided for, and, in the case of Guarantor Senior Debt in respect of
letters of credit to the extent they have not been drawn upon, be fully secured
by cash collateral, before any payment on account of Obligations in respect of
the Guaranty are made.
(b) Upon the happening of a default or an event of default (as such
term is used in such instrument) in respect of the payment of any Guarantor
Senior Debt ("Payment Default"), but subject to the provisions of Section 3.2,
then, unless and until such default shall have been cured or waived by the
holders of such Guarantor Senior Debt or shall have ceased to exist, no payment
in respect of the Guaranty shall be made.
(c) No payment in respect of the Guaranty may be made during any
Payment Blockage period. Notwithstanding the foregoing, unless the Designated
Senior Debt
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or Guarantor Senior Debt in respect of which such default or event of default
exists has been declared due and payable in its entirety during the Payment
Blockage Period, and such declaration has not been rescinded, the Guarantors are
required (subject to the provisions of Section 14.2 and Sections 14.5(a) and
(b), to the extent then applicable) then to pay all sums not paid to the Holders
of the Securities during the Payment Blockage Period due to the foregoing
prohibitions and to resume all other payments as and when due on the Securities.
SECTION 14.6 TRUSTEE ENTITLED TO ASSUME PAYMENTS NOT PROHIBITED IN
ABSENCE OF NOTICE.
The Trustee shall not at any time be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or by
the Trustee, unless and until the Trustee shall have received written notice
thereof at its Corporate Trust Office from the Company or any Guarantor or from
one or more holders of Guarantor Senior Debt or from any representative thereof
or trustee therefor, and, prior to the receipt of any such written notice, the
Trustee, subject to the provisions of Sections 8.1 and 8.2 hereof, shall be
entitled to assume conclusively that no such facts exist, and shall be fully
protected in making any such payment in any such event.
The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself or itself to be a holder of
Guarantor Senior Debt (or a trustee on behalf of such holder) to establish that
such notice has been given by a holder of Guarantor Senior Debt or a trustee on
behalf of any such holder. In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any Person
as a holder of Guarantor Senior Debt to participate in any payment or
distribution pursuant to this Article XIV, the Trustee may request such Person
to furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of Guarantor Senior Debt held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article XIV, and, if
such evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 14.7 APPLICATION BY TRUSTEE OF MONIES DEPOSITED WITH IT.
Any deposit of monies by any Guarantor with the Trustee or any Paying
Agent (whether or not in trust) for any payment in respect of the Guaranty shall
be subject to the provisions of Sections 14.1, 14.2, 14.3 and 14.5 hereof except
that, if prior to the opening of business on the second Business Day next prior
to the date on which, by the terms of this Indenture, any such monies may become
payable for any purpose (including, without limitation, the payment of principal
of, or premium (if any) or interest (including Contingent Payments) on, or the
Change of Control Offer Price in respect of, any Security) the Trustee shall not
have received with respect to such monies the notice provided for in Section
14.6, then the Trustee shall have the full power and authority to receive such
monies and to apply such monies to the purpose for which they were received, and
shall not be affected by any notice to the contrary which may be received by it
on or after such date; without, however,
108
limiting any rights that holders of Guarantor Senior Debt may have to recover
any such payments from the Holders in accordance with the provisions of this
Article XIV.
SECTION 14.8 SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS
OF A GUARANTOR OR HOLDERS OF GUARANTOR SENIOR DEBT.
No right of any present or future holder of any Guarantor Senior Debt
to enforce subordination, as herein provided, shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of any Guarantor
or by any act or failure to act, in good faith, by any such holder, or by any
non-compliance by such Guarantor with the terms, provisions and covenants of
this Indenture, the Securities, or any other agreement or instrument regardless
of any knowledge thereof any such holder may have or be otherwise charged with.
Each Holder of any Securities, by his acceptance thereof, undertakes
and agrees for the benefit of each holder of Guarantor Senior Debt to execute,
verify, deliver and file any proofs of claim, consents, assignments or other
instruments that any holder of Guarantor Senior Debt may at any time require in
order to prove and realize upon any rights or claims pertaining to the Guaranty
and to effectuate the full benefit of the subordination contained in this
Article XIV; and upon failure of any Holder of any Security so to do, any such
holder of Guarantor Senior Debt (or a trustee or representative on its behalf)
shall be deemed to be irrevocably appointed the agent and attorney-in-fact of
the Holder of such Security to execute, verify, deliver and file any such proofs
of claim, consents, assignments or other instrument.
Without limiting the effect of the first paragraph of this Section
14.8, any holder of Guarantor Senior Debt may at any time and from time to time
without the consent of or notice to any Holder, without impairing or releasing
any of the rights of any such holder of Guarantor Senior Debt hereunder, upon or
without any terms or conditions and in whole or in part:
(1) change the manner, place or terms of payment, or change or
extend the time of payment of or increase the amount of, renew or alter,
any Guarantor Senior Debt or any other liability of the Guarantors to such
holder, any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the provisions hereof shall apply to the
Guarantor Senior Debt of such holder as so changed, extended, renewed or
altered;
(2) sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or however securing,
any Guarantor Senior Debt or any other liability of the Guarantors to such
holder or any other liabilities incurred directly or indirectly in respect
thereof or hereof, or any offset against it;
(3) exercise or refrain from exercising any rights or remedies
against the Guarantors or others or otherwise act or refrain from acting or
for any
109
reason fail to file, record or otherwise perfect any security interest in
or lien on any property of the Guarantors or any other Person;
(4) settle or compromise any Guarantor Senior Debt or any other
liability of the Company to such holder or any security therefor, or any
liability incurred directly or indirectly in respect thereof or hereof, and
may subordinate the payment of all or any part thereof to the payment of
any liability (whether due or not) of the Guarantors to creditors of the
Guarantors other than such holder; and
(5) apply any sums by whomsoever paid and however realized to
any liability or liabilities of the Guarantors to such holder (other than
in respect of the Guaranty or any liability or liabilities which rank PARI
PASSU or junior in right of payment to the Guaranty) regardless of what
liability or liabilities of the Guarantors to such holder remain unpaid.
SECTION 14.9 HOLDERS OF SECURITIES AUTHORIZE TRUSTEE TO EFFECTUATE
SUBORDINATION OF GUARANTY.
Without purporting to limit the authority of the Trustee as may be
appropriate in other circumstances, each Holder by his or its acceptance thereof
irrevocably authorizes and expressly directs the Trustee on his behalf to take
such action as may be necessary or appropriate to effectuate the subordination
provided in this Article XIV and appoints the Trustee his attorney-in-fact for
such purpose, including, in the event of any dissolution, winding-up or
liquidation or reorganization under Bankruptcy Law of any Guarantor (whether in
bankruptcy, insolvency or receivership proceedings or otherwise), the timely
filing of a claim for the unpaid balance of its or his Securities in the form
required in such proceedings and the causing of such claim to be approved. If
the Trustee does not file a claim or proof of debt substantially in the form
required in such proceeding at least one day before the expiration of the time
to file such claims or proofs, then any of the holders of Guarantor Senior Debt
have the right to file such proof of claim or debt on behalf of the Holders, and
to take any action with respect to such proof of claim or debt permitted to be
taken by the holders of Guarantor Senior Debt pursuant to this Indenture, the
Securities or by law; PROVIDED, HOWEVER, that no such action by holders of
Guarantor Senior Debt shall in any way limit or affect the rights of the Holders
or the Trustee hereunder or under the Guaranty or applicable law.
SECTION 14.10 RIGHT OF TRUSTEE TO HOLD GUARANTOR SENIOR DEBT;
PRESERVATION OF TRUSTEE'S RIGHTS.
The Trustee, in its individual capacity, shall be entitled to all of
the rights set forth in this Article XIV in respect of any Guarantor Senior Debt
at any time held by it to the same extent as any other holder of Guarantor
Senior Debt, and nothing in this Indenture shall be construed to deprive the
Trustee of any of its rights as such holder. Nothing in this Article XIV shall
apply to claims of, or payment to, the Trustee under or pursuant to Section 8.7.
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SECTION 14.11 ARTICLE XIV NOT TO PREVENT EVENTS OF DEFAULT.
The failure to make a payment in respect of the Guaranty, by reason by
any provision in this Article XIV shall not be construed as preventing the
occurrence of an Event of Default under Section 7.1 hereof.
SECTION 14.12 TRUSTEE NOT FIDUCIARY FOR HOLDERS OF GUARANTOR SENIOR
DEBT.
The provisions of this Indenture are not intended to create, nor shall
they create, any trust or fiduciary relationship between the Trustee and the
holders of Guarantor Senior Debt, nor shall any implied covenants or obligations
with respect to holders of Guarantor Senior Debt (other than those expressly set
forth herein) be read into this Indenture against the Trustee. Accordingly,
notwithstanding any provision of this Article XIV to the contrary, the Trustee
shall not be liable to any such holders if it shall, in good faith,
inadvertently pay over or distribute to Holders or the Guarantor or any other
person monies or assets to which any holders of Guarantor Senior Debt shall be
entitled by virtue of this Article or otherwise.
SECTION 14.13 TRUST MONIES NOT SUBORDINATED.
Notwithstanding anything contained herein to the contrary and subject
to the prior satisfaction of all of the conditions set forth in Article IX,
payments from money held in trust under Article IX by the Trustee for any
payment in respect of the Guaranty shall not be subordinated to the prior
payment of any Guarantor Senior Debt or subject to the restrictions set forth in
this Article XIV and none of the Holders shall be obligated to pay over any such
amount to the Guarantors or any holder of Guarantor Senior Debt or any other
creditor of the Company, in each case so long as (and only so long as) at the
time the respective amounts were deposited pursuant to Article IX, such amounts
would have been permitted to be paid directly in respect of the Guaranty in
accordance with the provisions (other than this Section 14.13) of this Article
XIV.
ARTICLE XV
MISCELLANEOUS
SECTION 15.1 TIA CONTROLS.
If any provision of this Indenture limits, qualifies, or conflicts
with the duties imposed by operation of the TIA, the imposed duties, upon
qualification of this Indenture under the TIA, shall control.
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SECTION 15.2 NOTICES.
Any notices or other communications to the Company, the Parent
Guarantor or the Trustee required or permitted hereunder shall be in writing,
and shall be sufficiently given if made by hand delivery, by telex, by
telecopier or registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
if to the Company:
Jazz Casino Company, L.L.C.
000 Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Corporate Secretary
if to the Parent Guarantor:
[Insert JCC Holding's address]
if to the Trustee:
Norwest Bank Minnesota, National Association
Norwest Center
6th and Marquette
Xxxxxxxxxxx, Xxxxxxxxx 00000
The Company, JCC Holding or the Trustee by notice to each other party
may designate additional or different addresses as shall be furnished in writing
by such party. Any notice or communication to the Company, JCC Holding or the
Trustee shall be deemed to have been given or made as of the date so delivered,
if personally delivered; when answered back, if telexed; when receipt is
acknowledged, if telecopied; and five Business Days after mailing if sent by
registered or certified mail, postage prepaid (except that a notice of change of
address shall not be deemed to have been given until actually received by the
addressee).
Any notice or communication mailed to a Securityholder shall be mailed
to him by first class mail or other equivalent means at his address as it
appears on the registration books of the Registrar and shall be sufficiently
given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
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SECTION 15.3 COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Guarantors, the Trustee, the Registrar and any
other person shall have the protection of TIA Section 312(c).
SECTION 15.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate (in form and substance reasonably
satisfactory to the Trustee) stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel (in form and substance reasonably
satisfactory to the Trustee) stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 15.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of each
such person, such condition or covenant has been complied with; PROVIDED,
HOWEVER, that with respect to matters of fact an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
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SECTION 15.6 RULES BY TRUSTEE, PAYING AGENT, REGISTRAR.
The Trustee may make reasonable rules for action by or at a meeting of
Securityholders. The Paying Agent or Registrar may make reasonable rules for
its functions.
SECTION 15.7 LEGAL HOLIDAYS.
A "Legal Holiday" used with respect to a particular place of payment
is a Saturday, a Sunday or a day on which banking institutions in New York, New
York are not required to be open. If a payment date is a Legal Holiday in New
York, New York, payment may be made at such place on the next succeeding day
that is not a Legal Holiday, and no interest (including Contingent Payments)
shall accrue for the intervening period.
SECTION 15.8 GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS
MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. THE COMPANY AND THE GUARANTORS HEREBY IRREVOCABLY SUBMIT TO
THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN
IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN
IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS INDENTURE AND THE SECURITIES, AND IRREVOCABLY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY,
JURISDICTION OF THE AFORESAID COURTS. THE COMPANY AND THE GUARANTORS
IRREVOCABLY WAIVE, TO THE FULLEST EXTENT THEY MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE TRUSTEE OR ANY SECURITYHOLDER TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
THE COMPANY IN ANY OTHER JURISDICTION.
SECTION 15.9 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company, the Guarantors or any of their Subsidiaries. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
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SECTION 15.10 NO RECOURSE AGAINST OTHERS.
A direct or indirect stockholder, member, director, officer, partner,
employee, as such, of the Company or the Guarantors or any affiliate of either
(including, without limitation, Xxxxxx'x Investor, Xxxxxx'x Management Company,
HET and HOC, but excluding the Company and the Guarantors themselves) shall not
have any liability for any obligations of the Company or the Guarantors under
the Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations PROVIDED, HOWEVER, that nothing contained in this
Section 15.10 shall (i) impair the validity of the Indebtedness evidenced by
this Indenture or the Securities, (ii) prevent the taking of any action
permitted by law against the Company or the assets of the Company or the
proceeds of such assets, (iii) in any way affect or impair the right of the
Collateral Agent, the Trustee or any Holder to take any action permitted by law
to realize upon any of the Collateral or any other security which may secure the
Company's or the Guarantors' obligations, or (iv) be construed to limit in any
respect the validity and enforceability of (x) the Notes Completion Guarantee or
the obligations of HET or HOC thereunder or (y) the Subordination Agreement or
the obligations thereunder of the parties thereto. Notwithstanding the
foregoing, nothing in this Section 15.10 shall be deemed to release the Company
or any officer of the Company from liability under this Indenture, the Notes or
any of the Collateral Documents for its fraudulent actions, intentional material
misrepresentations, gross negligence or willful misconduct or for any of its
obligations or liabilities under any agreement, document, instrument or
certificate executed by such person in its individual capacity in connection
with the transactions contemplated by this Indenture, the Notes and the
Collateral Documents. Each Securityholder by accepting a Security waives and
releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Securities.
SECTION 15.11 SUCCESSORS.
All agreements of the Company and the Guarantors in this Indenture and
the Securities shall bind their successors. All agreements of the Trustee in
this Indenture shall bind its successor.
SECTION 15.12 DUPLICATE ORIGINALS.
All parties may sign any number of copies or counterparts of this
Indenture. Each signed copy or counterpart shall be an original, but all of
them together shall represent the same agreement.
SECTION 15.13 SEVERABILITY.
In case any one or more of the provisions in this Indenture or in the
Securities shall be held invalid, illegal or unenforceable, in any respect for
any reason, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions shall not in any way be
affected or impaired thereby, it being intended that all of the provisions
hereof shall be enforceable to the full extent permitted by law.
115
SECTION 15.14 TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and headings of the
Articles and the Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 15.15 GAMING LAWS.
This Indenture, the Collateral Documents, the Securities and the
security interests thereunder are subject to the Louisiana Economic Development
and Gaming Corporation Act, La. R.S. 27:1 ET SEQ., La.R.S. 27:201 ET SEQ. and
the rules and regulations thereunder (the "Gaming Regulations") (and the Company
represents and warrants that all requisite approvals thereunder have been
obtained), and the exercise of remedies under the Collateral Documents with
respect to the Collateral will be subject to the Gaming Regulations.
SECTION 15.16 TAX TREATMENT.
The Company, each Guarantor, and each Holder of a Security by
acceptance of a Security, agree to (i) treat a Security as evidence of
indebtedness for federal, state and local income tax purposes; (ii) treat all
Contingent Payments with respect to the Security as "contingent" and not as
either "remote or incidental" for purposes of Treasury Regulation Sections
1.1275-4(a)(1) and (5); (iii) use a discount rate with respect to the
non-contingent component of a Security for purposes of Treasury Regulation
Section 1.1275-4(c) and 1.1274-2(c) & (g) such that the issue price of such
component will be equal to 100% of the original principal amount of such
component; and (iv) treat all Contingent Payments as consisting of principal
and interest such that each payment of principal is accompanied by a payment
of interest at 12% per annum (compounded semi-annually) such that the test
rate for the Securities for purposes of Treasury Regulation Section
1.1275-4(c)(4)(ii)(A) will be 12% per annum (compounded semi-annually).
SECTION 15.17 WAIVERS AND RELEASES.
(a) NO ASSURANCES
(i) As a condition to the effectiveness of the confirmation of
the Plan of Reorganization, HET and HOC (the "Initial Guarantors") have entered
into the HET/JCC Agreement in favor of the Regulating Authority. The HET/JCC
Agreement provides that the Initial Guarantors will provide the Minimum Payment
Guaranty required under the Casino Operating Contract for the Fiscal Years (as
defined in the Casino Operating Contract) ending March 31, 1999 and
March 31, 2000, renewable for the four Fiscal Years thereafter through March 31,
2004, subject to termination or non-renewal in accordance with the terms of the
HET/JCC Agreement. As a prerequisite to maintaining the effectiveness of the
Casino Operating Contract, the Casino Operating Contract requires that the
Company annually provide the Minimum Payment Guaranty to the Regulating
Authority. In entering
116
into the HET/JCC Agreement, the Initial Guarantors have no obligation to provide
a Minimum Payment Guaranty for the entire term of the Casino Operating Contract,
but rather have agreed only to provide a Minimum Payment Guaranty for the period
and on terms and conditions specified therein. The Initial Guarantors have
expressly informed the Trustee on behalf of the Holders that the Initial
Guarantors have not agreed to renew the HET/JCC Agreement beyond March 31, 2004,
or in any prior year where the Initial Guarantors' obligation to furnish a
Minimum Payment Guaranty does not renew by the express terms of Section 1(b) of
the HET/JCC Agreement. The Initial Guarantors have informed the Trustee on
behalf of the Holders that any decision the Initial Guarantors make concerning
whether to renew any Minimum Payment Guaranty or the HET/JCC Agreement will be
made in the Initial Guarantors' sole discretion, acting only in their best
interests. The Trustee on behalf of the Holders hereby acknowledges that (A)
the Initial Guarantors are not obligated to, and have not given any assurances
to the Trustee that the Initial Holders will, renew the HET/JCC Agreement beyond
March 31, 2004, or renew any Minimum Payment Guaranty for any earlier Fiscal
Year in which the Initial Guarantors' obligation to furnish a Minimum Payment
Guaranty does not renew under the express terms of Section 1(b) thereof, (B) the
Initial Guarantors have the right to make any such renewal decision by
considering only their best interests, and (C) the Initial Guarantors need not
consider the interests of any other parties in making any such renewal decision,
notwithstanding that the Initial Guarantors are involved in a number of
capacities in respect of the Company.
(ii) The Trustee and the Holders hereby agree that the Initial
Guarantors, by entering into the HET/JCC Agreement or providing a Minimum
Payment Guaranty or otherwise, are not now, and in the past have not, made any
assurances or guarantees concerning the financial results of the Casino, nor are
or have the Initial Guarantors made any assurances or guarantees that the Casino
will be financially successful or will perform as projected in the projections
and/or feasibility studies included in the Disclosure Statement distributed in
connection with the Plan of Reorganization confirmation process.
(iii) The Trustee and the Holders hereby agree and acknowledge
that any future representation, warranty, assurance or other guaranty by the
Initial Guarantors or any of their subsidiaries or other affiliates to the
Trustee or the Holders concerning the renewal of any Minimum Payment Guaranty
or the HET/JCC Agreement, the operation of the Casino, the financial results
of the Casino, or any other matter concerning the Casino or the Plan of
Reorganization shall only be effective if set forth in writing and properly
executed by the party to be charged.
(b) RELEASES
(i) The Trustee and the Holders hereby release and waive and
agree not to bring any Claims against the Initial Guarantors, whether a known
Claim or an Unknown Claim, that may arise in any way, in whole or in part, out
of (A) the Initial Guarantors' decision either to renew or not renew any Minimum
Payment Guaranty or the HET/JCC Agreement, (B) the Initial Guarantors acting in
their own best interests in connection with the execution, renewal or failure to
renew any Minimum Payment Guaranty
117
or the HET/JCC Agreement, and/or (C) any alleged assurance or guarantee by the
Initial Guarantors concerning the operation of the Casino, the financial results
of the Casino or any other matter concerning the Casino or the Plan of
Reorganization, unless such Claim is based on a writing (but in any event cannot
be based on the HET/JCC Agreement or any Minimum Payment Guaranty) properly
executed by the party against whom such a claim is being made.
(ii) The Trustee and the Holders also hereby specifically waive
any rights each might have under Louisiana Civil Code Article 3083 and all other
applicable or similar laws to this same or similar effect as the matters
described in Section 15.17(b)(i) hereof, including but not limited to, any
purported right to challenge the validity or seek rescission of, or to vitiate,
the releases set forth above in Section 15.17(b)(i) hereof on the ground that
any information was kept concealed from it and agrees that no remedy shall be
available for any such alleged non-disclosure, and that the right to rescind the
above release on any such ground is hereby expressly waived.
(c) DEFINITIONS. For the purposes of Sections 15.17(b)(i) and (ii)
hereof:
(i) "Claim" or "Claims" shall mean any action or actions, cause
or causes of action, in law or equity, suits, debts, liens, liabilities, claims,
demands, damages, punitive damages, losses, costs or expenses, and/or reasonable
attorneys' fees of any nature whatsoever.
(ii) "Initial Guarantors" shall include HET, HOC, Xxxxxx'x New
Orleans Investment Company, Xxxxxx'x Crescent City Investment Company, Xxxxxx'x
New Orleans Management Company, their successors and assigns, and all direct or
indirect subsidiaries, and each of their parents, subsidiaries, officers,
directors, corporate representatives, employees, agents, lawyers and accountants
and all persons acting or claiming through, under or in concert with any of
them.
(iii) "Unknown Claim" or "Unknown Claims" means any and all
Claims, including without limitation, any Claim which any of the parties
hereto does not know or even suspect to exist in his, her, or its favor at
the time of the giving of the releases and waivers set forth in Section 15.17
hereof which, if known by him, her or it might have affected his, her or its
decision regarding the releases and waivers. Each of the parties
acknowledges that he, she or it might hereafter discover facts in addition to
or different from those which he, she, or its now knows or believes to be
true with respect to the matters herein released and waived, but each shall
be deemed to have fully, finally and forever released any and all Claims.
(d) NO THIRD PARTY BENEFICIARIES. The Trustee and the Holders hereby
acknowledge that each Minimum Payment Guaranty and the HET/JCC Agreement provide
that there shall be no third party beneficiaries thereof. The Trustee and the
Holders also hereby agree that each shall not claim or assert it is a third
party beneficiary or possesses any derivative claims under any Minimum Payment
Guaranty or the HET/JCC Agreement.
118
(e) DISCLOSURE. The Trustee on behalf of the Holders hereby
acknowledges that the Initial Guarantors have informed it (i) not to infer or
assume that the Initial Guarantors will renew any Minimum Payment Guaranty or
the HET/JCC Agreement; (ii) that the Initial Guarantors will consider only their
own best interests in determining whether to renew any Minimum Payment Guaranty
or the HET/JCC Agreement; (iii) that the Initial Guarantors are involved in a
number of different capacities in connection with the reorganization of Xxxxxx'x
Jazz Company, the governance of the Company and JCC Holding, and the operation
of the Casino; and (iv) that there can be no assurance that the Casino will
perform as set forth in the projections and/or feasibility study set forth in
the Disclosure Statement circulated in connection with the Plan of
Reorganization.
(f) AMENDMENT OF OBLIGATIONS. Each Minimum Payment Guaranty provided
under the HET/JCC Agreement is provided on the express condition that the
Company shall not amend or modify the Casino Operating Contract in any way to
increase the obligations under any Minimum Payment Guaranty or adversely affect
the Initial Guarantors without the prior written agreement of the Initial
Guarantors, and any such amendment or modification shall have no force or effect
in respect of the Initial Guarantors or any Minimum Payment Guaranty provided
thereby.
119
SIGNATURE
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first written above.
JAZZ CASINO COMPANY, L.L.C.
a Louisiana limited liability company
By:
--------------------------------
Name:
Title:
JCC HOLDING COMPANY,
a Delaware corporation
By:
--------------------------------
Name:
Title:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By:
--------------------------------
Name:
Title:
120
Exhibit A
[FORM OF NOTE]
JAZZ CASINO COMPANY, L.L.C.
SENIOR SUBORDINATED NOTES
DUE 2009
No. $
Jazz Casino Company, L.L.C., a Louisiana limited liability company
(hereinafter called the "Company," which term includes any successor entity
under the Indenture hereinafter referred to), for value received, hereby
promises to pay to ____________________________, or registered assigns, the
principal sum of $____________________ Dollars, on _________, 2009.
Interest Payment Dates: _________ and _________. The first Interest
Payment Date is _________, 1998.
Record Dates: _________ and _________. The first Record Date is
_________, 1998.
Reference is made to the further provisions of this Security on the
reverse side, which will, for all purposes, have the same effect as if set forth
at this place.
A-1
IN WITNESS WHEREOF, the Company has caused this Instrument to be duly
executed.
Dated:
JAZZ CASINO COMPANY, L.L.C.
By:
--------------------------------
Name:
Title:
A-2
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the within-mentioned
Indenture.
-----------------------------------
Norwest Bank Minnesota,
National Association
By:
--------------------------------
Authorized Signatory
Dated:
A-3
JAZZ CASINO COMPANY, L.L.C.
SENIOR SUBORDINATED NOTES
DUE 2009 WITH CONTINGENT PAYMENTS
THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN THE INTERCREDITOR
AGREEMENT (AS DEFINED IN THE INDENTURE), WHICH INTERCREDITOR AGREEMENT, AMONG
OTHER THINGS, ESTABLISHES CERTAIN RIGHTS WITH RESPECT TO THE SECURITY FOR THIS
NOTE AND THE SHARING OF PROCEEDS THEREOF WITH CERTAIN OTHER SECURED CREDITORS.
COPIES OF SUCH INTERCREDITOR AGREEMENT WILL BE FURNISHED TO ANY HOLDER OF THIS
NOTE UPON REQUEST TO THE COMPANY.
1. INTEREST.
Jazz Casino Company, L.L.C., a Louisiana limited liability company
(the "Company"), promises to pay Fixed Interest on the principal amount of this
Security, plus the Contingent Payments described below, from February 28, 1998
or from the most recent Interest Payment Date to which interest has been paid or
provided for. "Fixed Interest" means interest, payable semi-annually on the
Interest Payment Dates in accordance with this Indenture, at a rate per annum
of, for the indicated periods:
_________, 1998 through _________, 1998. . . . . . . . . . 5.867%
_________, 1998 through _________, 1999. . . . . . . . . . 5.927%
_________, 1999 through _________, 1999. . . . . . . . . . 5.987%
_________, 1999 through _________, 2000. . . . . . . . . . 6.046%
_________, 2000 through _________, 2000. . . . . . . . . . 6.103%
_________, 2000 through _________, 2001. . . . . . . . . . 6.159%
_________, 2001 through _________, 2003. . . . . . . . . . 6.214%
_________, 2003 through _________, 2009. . . . . . . . . . 8.000%
The Company may, on any of the First Interest Payment Date, the Second Interest
Payment Date, the Third Interest Payment Date, the Fourth Interest Payment Date,
the Fifth Interest Payment Date and the Sixth Interest Payment Date, at its
option and in its sole discretion, pay Fixed Interest in additional Securities
("Secondary Securities") in lieu of the payment in whole or in part of Fixed
Interest in cash on the Securities; provided, however, that if any Indebtedness
is outstanding under the Tranche A-1 Term Loan or the Tranche A-2 Term Loan on
any of the First Interest Payment Date, the Second Interest Payment Date, the
Third Interest Payment Date or the Fourth Interest Payment Date, the Company
shall pay the Fixed Interest due and payable on such Interest Payment Date in
Secondary Securities in lieu of the payment of such Fixed Interest in cash. In
addition, if the Company's Consolidated EBITDA is
A-4
less than $28,500,000 for any twelve-month period ending one month prior to
an Interest Payment Date occurring after the Sixth Interest Payment Date, the
Company shall pay the Fixed Interest due and payable on such Interest Payment
Date in Secondary Securities in lieu of the payment of such Fixed Interest in
cash. If, pursuant to this paragraph, the Company issues Secondary Securities
in lieu of cash payment, in whole or in part, of Fixed Interest, it shall
give notice to the Trustee not less than 5 Business Days prior to the
relevant Interest Payment Date, and shall instruct the Trustee (upon written
order of the Company signed by an Officer of the Company given not less than
5 nor more than 45 days prior to such Interest Payment Date) to authenticate
a Secondary Security, dated such Interest Payment Date, in a principal amount
equal to the amount of Fixed Interest not paid in cash in respect of this
Security on such Interest Payment Date. Each issuance of Secondary
Securities in lieu of cash payments of Fixed Interest on the Securities shall
be made PRO RATA with respect to the outstanding Securities. Any such
Secondary Securities shall be governed by the Indenture and shall be subject
to the same terms (including the maturity date and the rate of interest from
time to time payable thereon) as this Security (except, as the case may be,
with respect to the title, issuance date and aggregate principal amount).
The term Securities shall include the Secondary Securities that may be issued
under the Indenture.
Interest on this Security will be payable semiannually on _________
and _________, commencing _________, 1998, to the person in whose name this
Security is registered at the close of business on _________ or _________,
preceding such Interest Payment Date (each, a "Record Date"). Interest on this
Security will be computed on the basis of a 360-day year, consisting of twelve
30-day months.
In addition to regular semiannual payments of Fixed Interest, the
Company will pay on each Interest Payment Date to the Holder of this Security at
the close of business on the immediately preceding Record Date such Holder's PRO
RATA amount of Contingent Payments.
Any reference in this Security to "accrued interest" includes the
amount of unpaid Contingent Payments due and payable. For purposes of
determining accrued Contingent Payments due and payable per $1,000 principal
amount of Notes with respect to a First Semiannual Period or a Second Semiannual
Period prior to the completion of such period, such Contingent Payments due and
payable per $1,000 principal amount of Notes shall be equal to the Partial
Period Contingent Payments. To the extent it is lawful, the Company promises to
pay interest on any interest payment due but unpaid on such principal amount at
a rate of 8% per annum compounded semi-annually.
2. METHOD OF PAYMENT.
The Company shall pay interest (including Contingent Payments) on the
Securities (except defaulted interest) to the persons who are the registered
Holders at the close of business on the Record Date immediately preceding the
Interest Payment Date. Holders must surrender Securities to a Paying Agent to
collect principal payments. Except as provided below, the Company shall pay
principal and interest in such coin or currency of the United States of America
as at the time of payment shall be legal tender for payment of
A-5
public and private debts ("U.S. Legal Tender") (or, pursuant to Paragraph 1
hereof, in Secondary Securities). However, the Company may pay principal and
interest by wire transfer of Federal funds, or interest by its check payable in
such U.S. Legal Tender (or, pursuant to Paragraph 1 hereof, in Secondary
Securities). The Company may deliver any such interest payment to the Paying
Agent or the Company may mail any such interest payment to a Holder at the
Holder's registered address. Notwithstanding the preceding two sentences, in
the case of Securities of which The Depository Trust Company or its nominee is
the Holder, such payments must be made by wire transfer of Federal funds (or,
pursuant to Paragraph 1 hereof, in Secondary Securities).
3. PAYING AGENT AND REGISTRAR.
Initially, Norwest Bank Minnesota, National Association (the
"Trustee") will act as Paying Agent and Registrar. The Company may change any
Paying Agent, Registrar or Co-registrar without notice to the Holders. The
Company or any of its Subsidiaries may, subject to certain exceptions, act as
Paying Agent, Registrar or Co-registrar.
4. INDENTURE.
The Company issued the Securities under an Indenture, dated as of
________, 1998 (the "Indenture"), between the Company, the JCC Holding and the
Trustee. Capitalized terms herein are used as defined in the Indenture unless
otherwise defined herein. The terms of the Securities include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act, as in effect on the date of the Indenture. The Securities are
subject to all such terms, and Holders of Securities are referred to the
Indenture and said Act for a statement of them. The Securities are secured
obligations of the Company limited in aggregate principal amount to
$187,500,000, except for Secondary Securities and except as otherwise provided
in the Indenture.
5. REDEMPTION.
The Securities may not be redeemed, except that the Securities may be
redeemed at any time pursuant to, and in accordance with, any order of any
Governmental Authority with appropriate jurisdiction and authority relating to a
Gaming License held by the Company or an Affiliate or wholly owned Subsidiary of
the Company, or to the extent necessary in the reasonable, good faith judgment
of the Board of Directors of Xxxxxx'x Entertainment, Inc. ("HET"), in the case
of HET or one of its affiliates, or the Board of Directors of the Company, to
prevent the loss, failure to obtain or material impairment or to secure the
reinstatement of, any such Gaming License, where such redemption or acquisition
is required because the Holder or beneficial owner of such Security is required
to be found suitable or to otherwise qualify under any gaming laws and is not
found suitable or so qualified within a reasonable period of time. In such
event, the Redemption Price shall be the principal amount thereof, plus accrued
and unpaid interest to the date of redemption (or such lesser amount as may be
required by applicable law or by order of any Gaming Authority).
A-6
Any redemption of the Notes shall comply with Article III of the
Indenture.
6. NOTICE OF REDEMPTION.
Notice of redemption will be mailed by first class mail at least 30
days but not more than 60 days before the Redemption Date (unless a shorter
notice period shall be required by applicable laws or by order of any Gaming
Authority) to each Holder of Securities to be redeemed at his registered
address. Securities in denominations larger than $1,000 may be redeemed in
part.
Except as set forth in the Indenture, from and after any Redemption
Date, if monies for the redemption of the Securities called for redemption shall
have been deposited with the Paying Agent (other than the Company or an
Affiliate thereof) on such Redemption Date, the Securities called for redemption
will cease to bear interest (including Contingent Payments) and the only right
of the Holders of such Securities will be to receive payment of the Redemption
Price, including any accrued and unpaid interest to the Redemption Date.
7. DENOMINATIONS; TRANSFER; EXCHANGE.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000 (other than Secondary
Securities which may be issued in denominations other than $1,000 or an integral
multiple thereof). A Holder may register the transfer of, or exchange
Securities in accordance with, the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer of or exchange any
Securities selected for redemption.
8. PERSONS DEEMED OWNERS.
The registered Holder of a Security may be treated as the owner of it
for all purposes.
9. UNCLAIMED MONEY.
If money for the payment of principal or interest (including
Contingent Payments) remains unclaimed for two years, the Trustee and the Paying
Agent(s) will pay the money back to the Company at its written request. After
that, all liability of the Trustee and such Paying Agent(s) with respect to such
money shall cease.
10. LEGAL DEFEASANCE OR COVENANT DEFEASANCE PRIOR TO REDEMPTION OR MATURITY.
If the Company at any time deposits with the Trustee, in trust, for
the benefit of the Holders, U.S. Legal Tender, U.S. Government Obligations or a
combination thereof in such amounts as will be sufficient in the opinion of a
nationally recognized firm of independent public accountants selected by the
Trustee, to pay and discharge the principal of
A-7
and interest (including Maximum Contingent Payments) on the Securities to
redemption or maturity and comply with the other provisions of the Indenture
relating thereto, the Company may elect to have the obligations of the Company
and the Guarantors discharged (in which case the Indenture would cease to be of
further effect, except as to certain limited obligations and to the rights of
Holders to receive payments when due) or to be discharged from certain
provisions of the Indenture and the Securities (including the financial
covenants, but excluding the obligation to pay the principal of and interest
(including Contingent Payments) on the Securities).
11. AMENDMENT; SUPPLEMENT; WAIVER.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the written consent of the Holders of a majority in
aggregate principal amount of the Securities then outstanding, and any existing
Default or Event of Default or compliance with any provision may be waived with
the consent of the Holders of a majority in aggregate principal amount of the
Securities then outstanding. Without notice to or consent of any Holder, the
parties thereto may amend or supplement the Indenture, the Collateral Documents
or the Securities to, among other things, cure any ambiguity, defect or
inconsistency, provide for uncertificated Securities in addition to or in place
of certificated Securities, or make any other change that does not adversely
affect the rights of any Holder of a Security.
12. RESTRICTIVE COVENANTS.
The Indenture imposes certain limitations on the ability of the
Company and its Subsidiaries to, among other things, incur additional
Indebtedness and Disqualified Capital Stock, make payments in respect of its
Capital Stock, enter into transactions with Affiliates, incur Liens, sell
assets, merge or consolidate with any other person and sell, lease, transfer or
otherwise dispose of substantially all of its properties or assets. The
limitations are subject to a number of important qualifications and exceptions.
The Company must annually report to the Trustee on compliance with such
limitations.
13. CHANGE OF CONTROL.
In the event there shall occur any Change of Control, each Holder of
Securities shall have the right, at such Holder's option but subject to the
limitations and conditions set forth in the Indenture, to require the Company to
purchase on the Change of Control Payment Date in the manner specified in the
Indenture, all or any part (in integral multiples of $1,000) of such Holder's
Securities at a Change of Control Offer Price equal to 101% of the principal
amount thereof, together with accrued and unpaid interest, if any, to the Change
of Control Payment Date.
14. SECURITY.
In order to secure the obligations under the Indenture, the Company,
the Parent Guarantor and the Trustee or the Collateral Agent have entered into a
security
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agreement in order to create security interests in certain assets and properties
of the Company. As more fully set forth in the security agreement and Section
4.6 of the Indenture, the rights of the Holders (and the Trustee on their
behalf) to receive proceeds from the disposition such assets and properties are
subordinated to security interests in such assets and properties in favor of
other secured creditors, and rank pari passu with security interests in such
assets and properties in favor of other secured creditors.
15. SALE OF ASSETS.
The Indenture imposes certain limitations on the ability of the
Company and its Subsidiaries to sell assets. In the event the proceeds from a
permitted Asset Sale exceed certain amounts, as specified in the Indenture, the
Company will be required either to reinvest the proceeds of such Asset Sale in
its business or to repay certain senior indebtedness and, to the extent that no
amounts of such senior indebtedness are outstanding, and no amounts of such
indebtedness are available, to repay certain other indebtedness and to make an
offer to purchase each Holder's Securities at 100% of the principal amount
thereof, together with accrued and unpaid interest, if any, to the purchase
date.
16. GAMING LAWS.
The rights of the Holder of this Security and any owner of any
beneficial interest in this Security are subject to the gaming laws, regulations
and the jurisdiction and requirements of the Gaming Authorities and the further
limitations and requirements set forth in the Indenture.
17. SUCCESSORS.
When a successor assumes all the obligations of its predecessor under
the Securities and the Indenture, the predecessor will be released from those
obligations.
18. DEFAULTS AND REMEDIES.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Securities. Subject to certain limitations,
Holders of a majority in aggregate principal amount of the Securities then
outstanding may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders of Securities notice of any continuing Default
or Event of Default (except a Default in payment of principal or interest
(including Contingent Payments)), if it determines that withholding notice is in
their interest.
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19. TRUSTEE DEALINGS WITH THE COMPANY.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of any of the Securities, make loans
to, accept deposits from, and perform services for the Company or its
Affiliates, and may otherwise deal with the Company, the Guarantors or their
respective Affiliates with the same rights it would have if it were not the
Trustee.
20. NO RECOURSE AGAINST OTHERS.
An incorporator, director, officer, employee, stockholder or member,
as such, of the Company or any Guarantor or any affiliate thereof (including,
without limitation, Xxxxxx'x Investor, Xxxxxx'x Management Company, HET and HOC,
but excluding the Company and Guarantors themselves) shall not have any
liability for any obligation of the Company or the Guarantors under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations, subject to certain exceptions set forth in the
Indenture. Each Holder of a Security by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Securities.
21. AUTHENTICATION.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on the other side of this
Security.
22. ABBREVIATIONS AND DEFINED TERMS.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
23. CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will cause CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
24. TAX TREATMENT
The Company, each Guarantor, and each Holder of a Security by
acceptance of a Security, agree to (i) treat a Security as evidence of
indebtedness for federal, state and local income tax purposes; (ii) treat all
Contingent Payments with respect to the Security as "contingent" and not as
either "remote or incidental" for purposes of Treasury Regulation
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Sections 1.1275-4(a)(1) and (5); (iii) use a discount rate with respect to
the non-contingent component of a Security for purposes of Treasury
Regulation Section 1.1275-4(c) and 1.1274-2(c) & (g) such that the issue
price of such component will be equal to 100% of the original principal
amount of such component; and (iv) treat all Contingent Payments as
consisting of principal and interest such that each payment of principal is
accompanied by a payment of interest at 12% per annum (compounded
semi-annually) such that the test rate for the Securities for purposes of
Treasury Regulation Section 1.1275-4(c)(4)(ii)(A) will be 12% per annum
(compounded semi-annually).
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[FORM OF ASSIGNMENT]
I or we assign this Security to
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--------------------------------------------------------------------------------
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(Print or type name, address and zip code of assignee)
Please insert Social Security or other identifying number of assignee
_______________________________ and irrevocably appoint ______________________
_____________________________________ agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.
Dated: Signed:
---------------------------- ----------------------------
(Sign exactly as your name appears on the other side of this Security)
-----------------------------------------------------
Signature guarantee should be made by a guarantor institution participating in
the Securities Transfer Agents Medallion Program or in such other guarantee
program acceptable to the Trustee.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to any of the following provisions of the Indenture, check the
appropriate box:
[ ] Section 5.14; [ ] Article XI.
If you want to elect to have only part of this Security purchased by the Company
pursuant to the Indenture, state the principal amount you want to be purchased:
$________________________
Date: Signature:
------------------------------ -------------------------
(Sign exactly as your name appears on the other side of this Security)
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Exhibit B
FORM OF GUARANTY
For value received, JCC Holding Company, a Delaware corporation,
hereby unconditionally guarantees (on a subordinated basis as provided in
Article XIV of the Indenture) to the Holder of the Security upon which this
Guaranty is endorsed the due and punctual payment, as set forth in the Indenture
pursuant to which such Security and this Guaranty were issued, of the principal
of, premium (if any) and interest (including Contingent Payments) on such
Security when and as the same shall become due and payable for any reason
according to the terms of such Security and Article XII of the Indenture. The
Guaranty of the Security upon which this Guaranty is endorsed will not become
effective until the Trustee signs the certificate of authentication on such
Security.
JCC HOLDING COMPANY
By:
-------------------------------------
Attest:
---------------------------------
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