Exhibit 4.2
PENINSULA GAMING COMPANY, LLC
PENINSULA GAMING CORP.
as Issuers
and the Subsidiary Guarantors referred to herein
12 1/4% Senior Secured Notes due 2006
------------------------------------------------
INDENTURE
Dated as of July 15, 1999
------------------------------------------------
FIRSTAR BANK OF MINNESOTA, N.A.
as Trustee
CROSS-REFERENCE TABLE*
Trust Indenture Indenture
Act Section Section
--------------- ---------
310(a)(1) ......................................................... 7.10
310(a)(2) ......................................................... 7.10
310(a)(3) ......................................................... N/A
310(a)(4) ......................................................... N/A
310(a)(5) ......................................................... 7.10
310(b) ............................................................ 7.8;7.10
310(c) ............................................................ N/A
311(a) ............................................................ 7.11
311(b) ............................................................ 7.11
311(c) ............................................................ N/A
312(a) ............................................................ 2.5
312(b) ............................................................ 12.3
312(c) ............................................................ 12.3
313(a) ............................................................ 7.6
313(b)(1) ......................................................... 7.6
313(b)(2) ......................................................... 7.6
313(c) ............................................................ 7.6
313(d) ............................................................ 7.6
314(a) ............................................................ 4.3;4.4
314(b) ............................................................ 11.1
314(c)(1) ......................................................... 12.4
314(c)(2) ......................................................... 12.4
314(c)(3) ......................................................... N/A
314(d) ............................................................ 11.4
314(e) ............................................................ 12.5
314(f) ............................................................ N/A
315(a) ............................................................ 7.1
315(b) ............................................................ 7.5
315(c) ............................................................ 7.1
315(d) ............................................................ 7.1
315(e) ............................................................ 6.11
316(a)(last sentence) ............................................. 2.9
316(a)(1)(A) ...................................................... 6.5
316(a)(1)(B) ...................................................... 6.4
316(a)(2) ......................................................... N/A
316(b) ............................................................ 6.7;9.2
316(c) ............................................................ 9.4
317(a)(1) ......................................................... 6.8
317(a)(2) ......................................................... 6.9
317(b) ............................................................ 2.4
Trust Indenture Indenture
Act Section Section
--------------- ---------
318(a) ............................................................ 12.1
318(b) ............................................................ N/A
318(c) ............................................................ 12.1
N/A means not applicable.
*This Cross-Reference Table is not part of the Indenture.
2
TABLE OF CONTENTS
Page
ARTICLE I - DEFINITIONS AND INCORPORATION BY REFERENCE .................... 1
Section 1.1 Definitions .......................................... 1
Section 1.2 Other Definitions .................................... 22
Section 1.3 Incorporation by Reference of Trust Indenture Act .... 23
Section 1.4 Rules of Construction ................................ 24
ARTICLE II - THE NOTES .................................................... 24
Section 2.1 Form and Dating ...................................... 24
Section 2.2 Execution and Authentication ......................... 25
Section 2.3 Registrar, Paying Agent and Depositary ............... 26
Section 2.4 Paying Agent to Hold Money in Trust .................. 26
Section 2.5 Holder Lists ......................................... 26
Section 2.6 Transfer and Exchange ................................ 27
Section 2.7 Replacement Notes .................................... 31
Section 2.8 Outstanding Notes .................................... 31
Section 2.9 Treasury Notes ....................................... 31
Section 2.10 Temporary Notes ...................................... 31
Section 2.11 Cancellation ......................................... 32
Section 2.12 Defaulted Interest ................................... 32
Section 2.13 Legends .............................................. 33
Section 2.14 Deposit of Moneys .................................... 33
Section 2.15 CUSIP Numbers ........................................ 34
ARTICLE III - REDEMPTION .................................................. 34
Section 3.1 Notices to Trustee ................................... 34
Section 3.2 Selection of Notes to Be Redeemed .................... 34
Section 3.3 Notice of Redemption ................................. 35
Section 3.4 Effect of Notice of Redemption ....................... 36
Section 3.5 Deposit of Redemption Price .......................... 36
Section 3.6 Notes Redeemed in Part ............................... 36
Section 3.7 Optional Redemption .................................. 36
Section 3.8 Required Regulatory Redemption ....................... 37
Section 3.9 No Mandatory Redemption .............................. 37
ARTICLE IV - COVENANTS .................................................... 38
Section 4.1 Payment of Notes ..................................... 38
Section 4.2 Maintenance of Office or Agency ...................... 38
Section 4.3 Reports .............................................. 39
Section 4.4 Compliance Certificate ............................... 40
Section 4.5 Taxes ................................................ 40
Section 4.6 Stay, Extension and Usury Laws ....................... 41
Section 4.7 Limitation on Restricted Payments .................... 41
Section 4.8 Limitation on Restrictions on Subsidiary Dividend .... 44
Section 4.9 Limitation on Incurrence of Indebtedness ............. 45
Section 4.10 Limitation on Asset Sales ............................ 47
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Section 4.11 Limitation on Transactions With Affiliates ........... 50
Section 4.12 Limitation on Liens .................................. 51
Section 4.13 Limited Liability Company and Corporate Existence .... 51
Section 4.14 Repurchase Upon a Change of Control .................. 52
Section 4.15 Maintenance of Properties ............................ 54
Section 4.16 Maintenance of Insurance ............................. 54
Section 4.17 Restriction on Sale and Issuance of Subsidiary Stock . 54
Section 4.18 Limitation on Lines of Business ...................... 54
Section 4.19 Restrictions on Activities of PGC .................... 54
Section 4.20 Excess Cash Flow Offer ............................... 55
ARTICLE V - SUCCESSORS .................................................... 57
Section 5.1 When the Issuers May Merge, etc. ..................... 57
Section 5.2 Successor Substituted ................................ 58
ARTICLE VI - DEFAULTS AND REMEDIES ........................................ 58
Section 6.1 Events of Default .................................... 58
Section 6.2 Acceleration ......................................... 60
Section 6.3 Other Remedies ....................................... 61
Section 6.4 Waiver of Past Defaults .............................. 61
Section 6.5 Control by Majority .................................. 62
Section 6.6 Limitation on Suits .................................. 62
Section 6.7 Rights of Holders to Receive Payment ................. 62
Section 6.8 Collection Suit by Trustee ........................... 62
Section 6.9 Trustee May File Proofs of Claim ..................... 63
Section 6.10 Priorities ........................................... 63
Section 6.11 Undertaking for Costs ................................ 64
ARTICLE VII - TRUSTEE ..................................................... 64
Section 7.1 Duties of Trustee .................................... 64
Section 7.2 Rights of Trustee .................................... 65
Section 7.3 Individual Rights of Trustee ......................... 66
Section 7.4 Trustee's Disclaimer ................................. 66
Section 7.5 Notice of Defaults ................................... 67
Section 7.6 Reports by Trustee to Holders ........................ 67
Section 7.7 Compensation and Indemnity ........................... 68
Section 7.8 Replacement of Trustee ............................... 69
Section 7.9 Successor Trustee by Merger, etc. .................... 70
Section 7.10 Eligibility; Disqualification ........................ 70
Section 7.11 Preferential Collection of Claims Against the Issuers 71
ARTICLE VIII- DISCHARGE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE 71
Section 8.1 Discharge: Option to Effect Legal or Covenant
Defeasance ........................................... 71
Section 8.2 Legal Defeasance and Discharge ....................... 71
Section 8.3 Covenant Defeasance .................................. 72
Section 8.4 Conditions to Legal or Covenant Defeasance ........... 72
Section 8.5 Deposits to be Held in Trust Other Miscellaneous
Provisions ........................................... 74
Section 8.6 Repayment to the Issuers ............................. 74
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Section 8.7 Reinstatement ........................................ 75
ARTICLE IX - AMENDMENTS ................................................... 75
Section 9.1 Without Consent of Holders ........................... 75
Section 9.2 With Consent of Holders .............................. 76
Section 9.3 Compliance with Trust Indenture Act .................. 77
Section 9.4 Revocation and Effect of Consents .................... 77
Section 9.5 Notation on or Exchange of Notes ..................... 78
Section 9.6 Trustee to Sign Amendments, etc. ..................... 78
ARTICLE X - SUBSIDIARY GUARANTEES ......................................... 78
Section 10.1 Subsidiary Guaranty .................................. 78
Section 10.2 Execution and Delivery of the Subsidiary Guarantees .. 80
Section 10.3 Limitation on Subsidiary Guarantor's Liability ....... 81
Section 10.4 Rights under the Subsidiary Guarantees ............... 81
Section 10.5 Primary Obligations .................................. 81
Section 10.6 Guaranty by Future Subsidiaries ...................... 82
Section 10.7 Release of Subsidiary Guarantors ..................... 83
ARTICLE XI - SECURITY INTEREST ............................................ 83
Section 11.1 Grant of Security Interest ........................... 83
Section 11.2 Suits to Protect the Collateral ...................... 84
Section 11.3 Further Assurances and Security ...................... 85
Section 11.4 Release of Collateral ................................ 85
Section 11.5 Certificate of the Issuers ........................... 86
Section 11.6 Reliance on Opinion of Counsel ....................... 86
Section 11.7 Purchaser May Rely ................................... 86
Section 11.8 Payment of Expenses .................................. 87
Section 11.9 Authorization of Receipt of Funds by the Trustee
Under the Security Documents ......................... 87
ARTICLE XII - MISCELLANEOUS ............................................... 87
Section 12.1 Trust Indenture Act Controls ......................... 87
Section 12.2 Notices .............................................. 87
Section 12.3 Communication by Holders with Other Holders .......... 89
Section 12.4 Certificate and Opinion as to Conditions Precedent ... 89
Section 12.5 Statements Required in Certificate or Opinion ........ 89
Section 12.6 Rules by Trustee and Agents .......................... 90
Section 12.7 Legal Holidays ....................................... 90
Section 12.8 No Recourse Against Others ........................... 90
Section 12.9 Governing Law ........................................ 90
Section 12.10 No Adverse Interpretation of Other Agreements ........ 91
Section 12.11 Successors ........................................... 91
Section 12.12 Severability ......................................... 91
Section 12.13 Counterpart Originals ................................ 91
Section 12.14 Table of Contents, Headings, etc. .................... 91
EXHIBIT A - Form of Note .................................................. A-1
-iv-
EXHIBIT B - Certificate to Be Delivered upon Exchange or Registration of
Transfer of Notes ............................................. X-0
XXXXXXX X - Xxxx xx Xxxxxxxxxx Xxxxxxxx ................................... C-1
EXHIBIT D - Form of Intercreditor Agreement ............................... D-1
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This Indenture, dated as of July 15, 1999, is entered into by and among
Peninsula Gaming Company, LLC, a Delaware limited liability company (the
"Company"), and Peninsula Gaming Corp., a Delaware corporation ("PGC," and
together with the Company, the "Issuers"), any future Subsidiary Guarantors (as
defined below) and Firstar Bank of Minnesota, N.A., a National Association, as
trustee (the "Trustee").
The Issuers and the Trustee agree as follows for the benefit of each other
and for the equal and ratable benefit of the Holders (as defined below) of the
Issuers' 12 1/4% Senior Secured Notes due 2006.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1 Definitions.
"Acquired Debt" means Indebtedness of a Person existing at the time such
Person is merged with or into the Company or a Restricted Subsidiary or becomes
a Restricted Subsidiary, other than Indebtedness incurred in connection with, or
in contemplation of, such Person merging with or into the Company or a
Restricted Subsidiary or becoming a Restricted Subsidiary.
"Acquisition" means the Company's acquisition on the Issue Date of the
Xxxxxxx Xx from Greater Dubuque Riverboat Entertainment Company, L.C. ("GDREC"),
pursuant to that certain Asset Purchase Agreement, dated as of January 15, 1999,
as amended, between PGP (formerly AB Capital, LLC) and GDREC (the "Asset
Acquisition Agreement"), and certain related real property from Harbor Community
Investment, L.C. ("HCI"), pursuant to that certain Real Property Purchase
Agreement, dated as of January 15, 1999, between PGP (formerly AR Capital, LLC)
and HCI.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
(a) the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise or (b) beneficial
ownership of 10% or more of the voting securities of such Person.
Notwithstanding the foregoing, the Initial Purchaser shall be deemed not to be
an Affiliate of PGP, the Company or any Restricted Subsidiary.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Capital Gain Tax Rate" means a rate equal to the sum of (a)
the highest marginal federal income tax rate applicable to net capital gain of
an individual who is a citizen of the United States plus (b) the greater of (i)
an amount equal to the sum of the highest marginal state and local income tax
rates applicable to net capital gain of an individual who is a resident of the
State of
1
California and (ii) an amount equal to the sum of the highest marginal state and
local income tax rates applicable to net capital gain of an individual who is a
resident of the State of Iowa, multiplied by a factor equal to 1 minus such
highest marginal federal income tax rate described in (a) above.
"Applicable Income Tax Rate" means a rate equal to the sum of (a) the
highest marginal Federal ordinary income tax rate applicable to an individual
who is a citizen of the United States plus (b) the greater of (i) an amount
equal to the sum of the highest marginal state and local ordinary income tax
rates applicable to an individual who is a resident of the State of California
and (ii) an amount equal to the sum of the highest marginal state and local
ordinary income tax rates applicable to an individual who is a resident of the
State of Iowa, multiplied by a factor equal to 1 minus such highest marginal
federal income tax rate described in (a) above.
"Asset Sale" means any (i) direct or indirect sale, assignment, transfer,
lease, conveyance, or other disposition (including, without limitation, by way
of merger or consolidation) (collectively, a "transfer"), other than in the
ordinary course of business, of any assets of the Company or any Restricted
Subsidiary; (ii) direct or indirect issuance or sale of any Capital Stock of any
Restricted Subsidiary (other than directors' qualifying shares), in each case to
any Person (other than the Company or a Restricted Subsidiary); or (iii) Event
of Loss. For purposes of this definition, (a) any series of transactions that
are part of a common plan shall be deemed a single Asset Sale and (b) the term
"Asset Sale" shall not include (1) any exchange of gaming equipment or
furniture, fixtures or other equipment for replacement items in the ordinary
course of business, (2) any series of transactions that have a fair market value
(or result in gross proceeds) of less than $1.0 million or (3) any disposition
of all or substantially all of the assets of the Company that is governed under
and complies with the terms of Article V.
"Bankruptcy Law" means title 11, U.S. Code or any similar Federal, state
or foreign law for the relief of debtors.
"beneficial owner" has the meaning attributed to it in Rules 13d-3 and
13d-5 under the Exchange Act (as in effect on the Issue Date), whether or not
applicable, except that a "person" shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time.
"Board of Directors" means the board of directors or any duly constituted
committee thereof of any corporation or of a corporate general partner of a
partnership and any similar body empowered to direct the affairs of any other
entity.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, as to any Person, the obligations of
such Person under a lease that are required to be classified and accounted for
as capital lease obligations under GAAP, and the amount of such obligations at
any date shall be the capitalized amount of such obligations at such date,
determined in accordance with GAAP.
2
"Capital Stock" means, (i) with respect to any Person that is a
corporation, any and all shares, interests, participations, rights or other
equivalents (however designated) of corporate stock, (ii) with respect to a
limited liability company, any and all membership interests, and (iii) with
respect to any other Person, any and all partnership or other equity interests
of such Person.
"Cash Equivalent" means (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof); (ii) time deposits and
certificates of deposit and commercial paper issued by the parent corporation of
any domestic commercial bank of recognized standing having capital and surplus
in excess of $250.0 million and commercial paper issued by others rated at least
A-2 or the equivalent thereof by Standard & Poor's Corporation or at least P-2
or the equivalent thereof by Xxxxx'x Investors Service, Inc. and in each case
maturing within one year after the date of acquisition; (iii) investments in
money market funds substantially all of whose assets comprise securities of the
type described in clauses (i) and (ii) above and (iv) repurchase obligations for
underlying securities of the types and with the maturities described above.
"Change of Control" means the occurrence of any of the following events:
(i) any merger or consolidation of the Company or PGP with or into
any Person or any sale, transfer or other conveyance, whether direct or
indirect, of all or substantially all of the assets of the Company or PGP,
on a consolidated basis, in one transaction or a series of related
transactions, if, immediately after giving effect to such transaction(s),
any "person" or "group" (as such terms are used for purposes of Sections
13(d) and 14(d) of the Exchange Act, whether or not applicable) (other
than an Excluded Person) is or becomes the "beneficial owner," directly or
indirectly, of more than 50% of the total voting power in the aggregate of
the Voting Stock of the transferee(s) or surviving entity or entities,
(ii) any "person" or "group" (as such terms are used for purposes of
Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable)
(other than an Excluded Person) is or becomes the "beneficial owner,"
directly or indirectly, of more than 50% of the total voting power in the
aggregate of the Voting Stock of the Company or PGP,
(iii) after any bona fide underwritten registered public offering of
Capital Stock of the Company, during any period of 24 consecutive months
after the Issue Date, individuals who at the beginning of any such
24-month period constituted the Managers of the Company (together with any
new Managers whose election by such Managers or whose nomination for
election by the Members was approved by a vote of a majority of the
Managers then still in office who were either Managers at the beginning of
such period or whose election or nomination for election was previously so
approved, including new Managers designated in or provided for in an
agreement regarding the merger, consolidation or sale, transfer or other
conveyance, of all or substantially all of the assets of the Company,
3
if such agreement was approved by a vote of such majority of Managers)
cease for any reason to constitute a majority of the Managers of the
Company then in office,
(iv) the Company adopts a plan of liquidation, or
(v) the first day on which the Company fails to own 99% of the
issued and outstanding Equity Interests of PGC.
A "Change of Control" shall not occur solely by reason of a Permitted
C-Corp Conversion.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means all assets (real or personnel, tangible or intangible)
of the Issuers or any Subsidiary (whether owned on the date hereof or hereafter
acquired) including, without limitation, all assets defined as "Collateral" in
any of the Security Documents, provided, that in no event shall Collateral
include Excluded Assets.
"Commission" means the United States Securities and Exchange Commission,
as from time to time constituted, created under the Exchange Act, or if at any
time after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Exchange Act, the Securities
Act or the TIA, as the case may be, then the body performing such duties at such
time.
"Company" means the party named as such above, until a successor replaces
such Person in accordance with the terms of this Indenture, and thereafter means
such successor.
"Consolidated EBITDA" means, with respect to any Person (the referent
Person) for any period, consolidated income (loss) from operations of such
Person and its subsidiaries for such period, determined in accordance with GAAP,
plus (to the extent such amounts are deducted in calculating such income (loss)
from operations of such Person for such period, and without duplication) (a)
amortization, depreciation and other non-cash charges (including, without
limitation, amortization of goodwill, deferred financing fees, and other
intangibles but excluding (i) non-cash charges incurred after the Issue Date
that require an accrual of or a reserve for cash charges for any future period
and (ii) normally recurring accruals such as reserves against accounts
receivables) and (b) non-capitalized transaction costs incurred in connection
with actual or proposed financings, acquisitions or divestitures, including the
offering of the Notes; provided, that (i) the income from operations of any
Person that is not a Wholly Owned Subsidiary of the referent Person or that is
accounted for by the equity method of accounting will be included only to the
extent of the amount of dividends or distributions paid during such period to
the referent Person or a Wholly Owned Subsidiary of the referent Person, (ii)
the income from operations of any Person acquired in a pooling of interests
transaction for any period ending prior to the date of such acquisition will be
excluded, and (iii) the income from operations of any Restricted Subsidiary will
not be included to the extent that declarations of dividends or similar
distributions by that Restricted Subsidiary are not
4
at the time permitted, directly or indirectly, by operation of the terms of its
organizational documents or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Restricted
Subsidiary or its owners.
"Consolidated Interest Expense" means, with respect to any Person for any
period, (a) the consolidated interest expense of such Person and its
subsidiaries for such period, whether paid or accrued (including amortization of
original issue discount, noncash interest payment, and the interest component of
Capital Lease Obligations), to the extent such expense was deducted in computing
Consolidated Net Income of such Person for such period less (b) amortization
expense, write-off of deferred financing costs and any charge related to any
premium or penalty paid, in each case accrued during such period in connection
with redeeming or retiring any Indebtedness before its stated maturity, as
determined in accordance with GAAP, to the extent such expense, cost or charge
was included in the calculation made pursuant to clause (a) above.
"Consolidated Net Income" means, with respect to any Person (the referent
Person) for any period, the aggregate of the Net Income of such Person and its
subsidiaries for such period, determined on a consolidated basis in accordance
with GAAP; provided, that (i) the Net Income of any Person relating to any
portion of such period that such Person (a) is not a Wholly Owned Subsidiary of
the referent Person or (b) is accounted for by the equity method of accounting
will be included only to the extent of the amount of dividends or distributions
paid to the referent Person or a Wholly Owned Subsidiary of the referent Person
during such portion of such period, (ii) the Net Income of any Person acquired
in a pooling of interests transaction for any period ending prior to the date of
such acquisition will be excluded, and (iii) the Net Income of any Restricted
Subsidiary will not be included to the extent that declarations of dividends or
similar distributions by that Restricted Subsidiary are not at the time
permitted, directly or indirectly, by operation of the terms of its
organizational documents or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Restricted
Subsidiary or its owners.
"Consolidated Net Worth" means, with respect to any Person, the total
stockholders' (or members') equity of such Person determined on a consolidated
basis in accordance with GAAP, adjusted to exclude (to the extent included in
calculating such stockholders' (or members') equity), (i) the amount of any such
stockholders' (or members') equity attributable to Disqualified Capital Stock or
treasury stock of such Person and its consolidated subsidiaries, and (ii) 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,
and (iii) all Investments in subsidiaries of such Person that are not
consolidated subsidiaries and in Persons that are not subsidiaries of such
Person.
"Corporate Trust Office" shall be at the address of the Trustee specified
in Section 12.1 or such other address as the Trustee may specify by notice to
the Issuers.
"Custodian" means any receiver, trustee, assignee, liquidator or similar
official under any Bankruptcy Law.
5
"Default" means any event that is, or after notice or the passage of time
or both would be, an Event of Default.
"Depositary" means the Person specified in Section 2.3 as the Depositary
with respect to the Notes issuable in global form, until a successor shall have
been appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
"Xxxxxxx Xx" means the riverboat casino and related facilities that will
be purchased, pursuant to the Asset Acquisition Agreement, by the Company on the
Issue Date, located in Dubuque, Iowa, as more fully described in the Security
Documents.
"Disqualified Capital Stock" means any Equity Interest that (i) either by
its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable) is or upon the happening of an event would be required
to be redeemed or repurchased prior to the final stated maturity of the Notes or
is redeemable at the option of the holder thereof at any time prior to such
final stated maturity, or (ii) is convertible into or exchangeable at the option
of the issuer thereof or any other Person for debt securities.
"DTC" means The Depository Trust Company.
"Equity Holder" means (a) with respect to a corporation, each holder of
stock of such corporation, (b) with respect to a limited liability company or
similar entity, each member of such limited liability company or similar entity,
(c) with respect to a partnership, each partner of such partnership, (d) with
respect to any entity described in clause (a)(iv) of the definition of "Flow
Through Entity", the owner of such entity, and (e) with respect to a trust
described in clause (a)(v) of the definition of "Flow Through Entity", the
persons treated for Federal income tax purposes as the owners thereof.
"Equity Interests" means Capital Stock or warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means (i) an underwritten offering of Qualified Capital
Stock of the Company pursuant to a registration statement filed with and
declared effective by the Commission in accordance with the Securities Act or
(ii) an offering of Qualified Capital Stock of the Company pursuant to an
exemption from the registration requirements of the Securities Act.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Event of Loss" means, with respect to any property or asset, any (a)
loss, destruction or damage of such property or asset or (b) 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.
6
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means the offer that may be made by the Issuers pursuant
to the Registration Rights Agreement to exchange Notes for Exchange Securities.
"Exchange Securities" has the meaning provided for such term in the
Registration Rights Agreement.
"Excess Cash Flow" means, with respect to any Hotel Operating Year, the
Consolidated EBITDA of the Company for such Hotel Operating Year, less the sum
of (i) Consolidated Interest Expense of the Company that is paid in cash during
such Hotel Operating Year, (ii) up to $4.0 million in capital expenditures of
the Company and its Subsidiaries that are actually paid during such Hotel
Operating Year, (iii) principal payments made during such Hotel Operating Year
on Indebtedness permitted to be incurred pursuant to Section 4.9 hereof and (iv)
Restricted Payments identified in Section 4.7(b) (iii), (v), (vi), (vii) or
(viii) hereof that are made during such Hotel Operating Year.
"Excluded Assets" means (i) cash, other than cash in bank and similar
accounts; (ii) assets securing Purchase Money Obligations or Capital Lease
Obligations permitted to be incurred under this Indenture; (iii) any agreements,
permits, licenses or the like that cannot be subject to a Lien under the
Security Documents without the consent of third parties, which consent is not
obtained by the Company; and (iv) all Gaming Licenses; provided, that Excluded
Assets does not include the proceeds of assets under clause (ii), (iii) or (iv)
or of any other Collateral to the extent such proceeds do not constitute
Excluded Assets.
"Excluded Person" means (i) M. Xxxxx Xxxxxxx, Xxxxxxx X. Xxxxxx and any
Affiliate or Manager of PGP on the Issue Date (collectively, the "Existing
Holders"), (ii) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners or owners of which consist solely of the
Existing Holders and members of the immediate family of the Existing Holders or
(iii) any partnership the sole general partners of which consist solely of the
Existing Holders and members of the immediate family of the Existing Holders.
"Flow Through Entity" means an entity that (a) for Federal income tax
purposes constitutes (i) an "S corporation" (as defined in Section 1361(a) of
the Code), (ii) a "qualified subchapter S subsidiary" (as defined in Section
1361(b)(3)(B) of the Code), (iii) a "partnership" (within the meaning of Section
7701 (a)(2) of the Code) other than a "publicly traded partnership" (as defined
in Section 7704 of the Code), (iv) an entity that is disregarded as an entity
separate from its owner under the Code, the Treasury regulations or any
published administrative guidance of the Internal Revenue Service, or (v) a
trust, the income of which is includible in the taxable income of the grantor or
another person under sections 671 through 679 of the Code (the entities
described in the immediately preceding clauses (i), (ii), (iii), (iv) and (v), a
"Federal Flow Through Entity") and (b) for state and local jurisdictions in
respect of which Permitted Tax Distributions are being made, is
7
subject to treatment on a basis under applicable state or local income tax law
substantially similar to a Federal Flow Through Entity.
"gaap" means generally accepted accounting principles, as in effect from
time to time, set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as approved by a significant segment
of the accounting profession, and in the rules and regulations of the
Commission.
"GAAP" means gaap as in effect on the Issue Date.
"Gaming Authorities" 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 city or other
political subdivision, whether now or hereafter existing, or any officer or
official thereof, including, without limitation, the Gaming Commission and any
other agency with authority to regulate any gaming operation (or proposed gaming
operation) owned, managed or operated by the Company or any of its Subsidiaries.
"Gaming Commission" means the Iowa Racing and Gaming Commission, or any
successor Gaming Authority.
"Gaming Licenses" means every material license, material franchise,
material registration, material qualification, findings of suitability or other
material approval or authorization required to own, lease, operate or otherwise
conduct or manage riverboat, dockside or land-based gaming activities in any
state or jurisdiction in which the Company or any of its Restricted Subsidiaries
conduct business (including, without limitation, all such licenses granted by
the Gaming Commission under Chapter 99F of the Iowa Code, and the rules and
regulations promulgated thereunder), and all applicable liquor licenses.
"Gaming Vessel" means a riverboat casino (i) which is substantially
similar in size and space to the Xxxxxxx Xx, (ii) with at least the same overall
qualities and amenities as the Xxxxxxx Xx, and (iii) that is developed,
constructed and equipped to be in compliance with all federal, state and local
laws, including, without limitation, the cruising requirements of Chapter 99F of
the Iowa Code. In the event the laws of the State of Iowa change to permit the
development and operation of additional land-based casinos, the term "Gaming
Vessel" shall be deemed to include a land-based casino meeting the requirements
of clauses (i), (ii) and (iii) above.
"Government Securities" means (i) direct obligations of the United States
of America for the timely payment of which its full faith and credit is pledged
or (ii) obligations of a Person controlled or supervised by and acting as an
agency or instrumentality of the United States of America the timely payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States of America, which, in either case, are not callable or redeemable
at the option of the issuer thereof, and shall also include a depository receipt
issued by a bank (as defined in Section
8
3(a)(2) of the Securities Act), as custodian with respect to any such Government
Security or a specific payment of principal of or interest on any such
Government Security held by such custodian for the account of the holder of such
depository receipt; provided, that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the Government Security or the specific payment of principal of or interest on
the Government Security evidenced by such depository receipt.
"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 or otherwise and whether now or hereafter in
existence, or any officer or official thereof, and any maritime authority.
"guaranty" or "guarantee," used as a noun, means any guaranty (other than
by endorsement of negotiable instruments for collection in the ordinary course
of business), direct or indirect, in any manner (including, without limitation,
letters of credit and reimbursement agreements in respect thereof), of all or
any part of any Indebtedness or other Obligation. "guarantee" or "guaranty" used
as a verb, has a correlative meaning.
"Hedging Obligations" means, with respect to any Person, the Obligations
of such Person under (i) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements and (ii) other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates.
"Holder" means the Person in whose name a Note is registered in the
register of the Notes.
"Hotel" means a hotel to be constructed by the Company or a Subsidiary of
the Company in or around Dubuque, Iowa, which is expected to be contiguous to
the Xxxxxxx Xx.
"Hotel Operating Year" means (i) the four consecutive fiscal quarter
periods of the Company beginning on the first day of the fiscal quarter
commencing immediately after the date that the Hotel first becomes Operating,
and (ii) each succeeding four consecutive fiscal quarter period.
"Indebtedness" of any Person means (without duplication) (i) all
liabilities and obligations, contingent or otherwise, of such Person (a) in
respect of borrowed money (regardless of whether the recourse of the lender is
to the whole of the assets of such Person or only to a portion thereof), (b)
evidenced by bonds, debentures, notes or other similar instruments, (c)
representing the deferred purchase price of property or services (other than
trade payables on customary terms incurred in the ordinary course of business),
(d) created or arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person (even though the
rights and remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property), (e) representing
Capital Lease Obligations, (f) under bankers' acceptance and letter of credit
facilities, (g) to purchase, redeem, retire, defease or otherwise acquire for
value any
9
Disqualified Capital Stock, or (h) in respect of Hedging Obligations; (ii) all
Indebtedness of others that is guaranteed by such Person; and (iii) all
Indebtedness of others that is secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property (including, without limitation, accounts and contract
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness; provided, that the amount of such
Indebtedness shall (to the extent such Person has not assumed or become liable
for the payment of such Indebtedness) be the lesser of (1) the fair market value
of such property at the time of determination and (2) the amount of such
Indebtedness. The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such date. The
principal amount outstanding of any Indebtedness issued with original issue
discount is the accreted value of such Indebtedness.
"Indenture" means this Indenture as amended or supplemented from time to
time.
"Initial Purchaser" means Xxxxxxxxx & Company, Inc.
"Intercreditor Agreement" means that certain Intercreditor Agreement among
the Trustee and one or more Lenders, substantially in the form attached hereto
as Exhibit D, which may be entered into after the Issue Date in accordance with
Section 7.1(g) hereof, including any amended or supplemented agreement or any
replacement or substitute agreement, in each case substantially in the form of
Exhibit D attached hereto.
"Interest Coverage Ratio" means, for any period, the ratio of (i)
Consolidated EBITDA of the Company for such period, to (ii) Consolidated
Interest Expense of the Company for such period. In calculating Interest
Coverage Ratio for any period, pro forma effect shall be given to the
incurrence, assumption, guarantee, repayment, repurchase, redemption or
retirement by the Company or any of its Subsidiaries of any Indebtedness
subsequent to the commencement of the period for which the Interest Coverage
Ratio is being calculated, as if the same had occurred at the beginning of the
applicable period. For purposes of making the computation referred to above,
acquisitions that have been made by the Company or any of its Restricted
Subsidiaries, including all mergers and consolidations, subsequent to the
commencement of such period shall be calculated on a pro forma basis, assuming
that all such acquisitions, mergers and consolidations had occurred on the first
day of such period and Consolidated EBITDA for such period shall be calculated
without giving effect to clause (ii) of the proviso set forth in the definition
of Consolidated EBITDA. Without limiting the foregoing, the financial
information of the Company with respect to any portion of such period that falls
before the Issue Date shall be adjusted to give pro forma effect to the issuance
of the Notes and the application of the proceeds therefrom as if they had
occurred at the beginning of such period.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of loans,
guarantees, advances or capital contributions (excluding (i) payroll commission,
travel and similar advances to officers and employees of such
10
Person made in the ordinary course of business and (ii) bona fide accounts
receivable arising from the sale of goods or services in the ordinary course of
business consistent with past practice), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities, and any
other items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP.
"Iowa Code" means the Code of Iowa (1999), as amended from time to time.
"Issue Date" means the date upon which the Notes are first issued.
"Issuers" means the parties named as such above, until successors replace
such Persons in accordance with the terms of this Indenture, and thereafter
means such successors.
"Issuers Order" means a written request or order signed in the name of the
Company and PGC by each of their respective Managers, Chairmen of the Board,
Presidents, Chief Executive Officers or Senior or Executive Vice Presidents, and
by each of their respective Managers, Chairmans of the Board, Presidents, Chief
Executive Officers, Senior or Executive Vice Presidents, Treasurers, Secretaries
or Assistant Treasurers or Assistant Secretaries and delivered to the Trustee.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed.
"Lender" means a Person that is not an Affiliate of the Company and is a
lender under the Senior Credit Facility.
"Lien" means any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind, regardless of whether filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other title
retention agreement, any lease in the nature thereof, any option or other
agreement to sell or give a security interest in and any filing of or agreement
to give any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction).
"Liquidated Damages" has the meaning set out in the Registration Rights
Agreement.
"Managers" means, with respect to any Person (i) if such Person is a
limited liability company, the board member, board members, manager or managers
appointed pursuant to the operating agreement of such Person as then in effect
or (ii) otherwise, the members of the Board of Directors or other governing body
of such Person.
"Members" means the holders of all of the Voting Stock of the Company.
11
"Net Income" means, with respect to any Person for any period, (a) the net
income (loss) of such Person for such period, determined in accordance with
GAAP, excluding (to the extent included in calculating such net income) (i) any
gain or loss, together with any related taxes paid or accrued on such gain or
loss, realized in connection with any Asset Sales and dispositions pursuant to
sale-leaseback transactions, (ii) any extraordinary gain or loss, together with
any taxes paid or accrued on such gain or loss and (iii) amortization of
goodwill arising on the Issue Date from the Acquisition and related
transactions, reduced by (b) the maximum amount of Permitted Tax Distributions
for such period.
"Net Proceeds" means the aggregate proceeds received in the form of cash
or Cash Equivalents in respect of any Asset Sale (including issuance or other
payments in an Event of Loss and payments in respect of deferred payment
obligations and any cash or Cash Equivalents received upon the sale or
disposition of any non-cash consideration received in any Asset Sale, in each
case when received), net of: (i) the reasonable and customary direct
out-of-pocket costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees and sales commissions), other than
any such costs payable to an Affiliate of the Company, (ii) taxes required to be
paid by the Company, any of its Subsidiaries, or any Equity Holder of the
Company (or, in the case of any Company Equity Holder that is a Flow Through
Entity, the Upper Tier Equity Holder of such Flow Through Entity) in connection
with such Asset Sale in the taxable year that such sale is consummated or in the
immediately succeeding taxable year, the computation of which shall take into
account the reduction in tax liability resulting from any available operating
losses and net operating loss carryovers, tax credits and tax credit
carryforwards, and similar tax attributes, (iii) amounts required to be applied
to the permanent repayment of Indebtedness in connection with such Asset Sale,
and (iv) appropriate amounts provided as a reserve by the Company or any
Restricted Subsidiary, in accordance with GAAP, against any liabilities
associated with such Asset Sale and retained by the Company or such Restricted
Subsidiary, as the case may be, after such Asset Sale (including, without
limitation, as applicable, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations arising from such Asset Sale).
"Notes" means the 12 1/4% Senior Secured Notes due 2006 authenticated and
issued by the Issuers pursuant to this Indenture, including the Exchange
Securities.
"Obligation" means any principal, premium, interest, penalty, fee,
indemnification, reimbursement, damage and other obligation and liability
payable under the documentation governing any liability.
"Officers" means the Managers, Chairman of the Board, the President, the
Chief Financial Officer, the Chief Operating Officer, the Treasurer, any
Assistant Treasurer, the Controller, the Secretary, any Assistant Secretary or
Senior Vice President of either of the Issuers.
"Officers' Certificate" means a certificate signed on behalf of the
Company and PGC by two Officers of each of the Company and PGC, in each case,
one of whom must be the Manager,
12
Chairman of the Board, President, Chief Executive Officer, Chief Financial
Officer, Treasurer, Controller or a Senior or Executive Vice President of the
Company and PGC, respectively.
"Operating" means the Hotel is in a condition (including installation of
furnishings, fixtures and equipment) to receive customers in the ordinary course
of business, and is open to the general public and operating in accordance with
applicable law.
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee. Such counsel may be an employee of or counsel to
either of the Issuers, any Subsidiary of either of the Issuers or the Trustee.
"Permitted C-Corp Conversion" means a transaction resulting in the Company
becoming subject to tax under subchapter C of the Code (a "C Corporation")
provided, that:
(i) the C Corporation resulting from such transaction (a) is a
corporation organized and existing under the laws of any state of the United
States or the District of Columbia, (b) assumes all of the obligations of the
Company under the Notes, the Security Documents and the Indenture pursuant to a
supplemental indenture in form reasonably satisfactory to the Trustee and (c)
will have Consolidated Net Worth immediately after the transaction equal to or
greater than the Consolidated Net Worth of the Company immediately preceding the
transaction;
(ii) the Company shall have provided to the Trustee 30 days' advance
notice of such transaction and evidence reasonably satisfactory to the
Trustee regarding the maintenance of the perfection, priority and proof of
the security interest of the Trustee in the Collateral;
(iii) after giving effect to such transaction no Default or Event of
Default exists;
(iv) such transaction would not (a) result in the loss or suspension
or material impairment of any Gaming License unless a comparable
replacement Gaming License is effective prior to or simultaneously with
such loss, suspension or material impairment or (b) require any holder or
beneficial owner of Notes to obtain a Gaming License or be qualified or
found suitable under the laws of any applicable gaming jurisdiction; and
(v) prior to consummation of such transaction, the Company shall
have delivered to the Trustee (a) an Opinion of Counsel to the effect that
the holders of the outstanding Notes will not recognize income gain or
loss for Federal income tax purposes as a result of such Permitted C-Corp
Conversion 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 Permitted C-Corp Conversion had not occurred and (b) an Officers'
Certificate as to compliance with all of the above conditions.
"Permitted Investments" means:
13
(i) Investments in the Company or in any Wholly Owned Subsidiary;
(ii) Investments in Cash Equivalents;
(iii) Investments in a Person, if, as a result of such Investment,
such Person (a) becomes a Wholly Owned Subsidiary, or (b) 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;
(iv) Hedging Obligations;
(v) Investments as a result of consideration received in connection
with an Asset Sale made in compliance with Section 4.10;
(vi) Investments existing on the Issue Date;
(vii) Investments paid for solely with Capital Stock (other than
Disqualified Capital Stock) of the Company;
(viii) credit extensions to gaming customers in the ordinary course
of business, consistent with industry practice;
(ix) stock, obligations or securities received in settlement of
debts created in the ordinary course of business and owing to the Company
(a) in satisfaction of judgments or (b) pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of
trade creditors or customers; and
(x) loans or other advances to employees of the Company and its
Subsidiaries made in the ordinary course of business in an aggregate
amount not to exceed $0.5 million at any one time outstanding.
"Permitted Liens" means:
(i) Liens arising by reason of any judgment, decree or order of any
court for an amount and for a period not resulting in an Event of Default
with respect thereto, so long as such Lien is being contested in good
faith and is adequately bonded, and any appropriate legal proceedings that
may have been duly initiated for the review of such judgment, decree or
order shall not have been finally adversely terminated or the period
within which such proceedings may be initiated shall not have expired;
(ii) security for the performance of bids, tenders, trade, contracts
(other than contracts for the payment of money) or leases, surety and
appeal bonds, performance and
14
return-of-money bonds and other obligations of a like nature incurred in
the ordinary course of business, consistent with industry practice;
(iii) Liens (other than Liens arising under ERISA) for taxes,
assessments or other governmental charges not yet delinquent or that are
being contested in good faith and by appropriate proceedings if adequate
reserves with respect thereto are maintained on the books of the Company
in accordance with gaap;
(iv) Liens of carriers, warehousemen, mechanics, landlords, material
men, suppliers, repairmen or other like Liens arising by operation of law
in the ordinary course of business consistent with industry practices
(other than Liens arising under ERISA) and Liens on deposits made to
obtain the release of such Liens if (a) the underlying obligations are not
overdue for a period of more than 30 days or (b) such Liens are being
contested in good faith and by appropriate proceedings and adequate
reserves with respect thereto are maintained on the books of the Company
in accordance with gaap;
(v) easements, rights of way, zoning and similar restrictions and
other similar encumbrances or title defects incurred in the ordinary
course of business, consistent with industry practices that, in the
aggregate, are not substantial in amount, and that do not in any case
materially detract from the value of the property subject thereto (as such
property is used by the Company or a Subsidiary) or interfere with the
ordinary conduct of the business of the Company or any of its
Subsidiaries; provided, that such Liens are not incurred in connection
with borrowing money or any commitment to loan money or extend credit;
(vi) pledges or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
types of social security legislation or otherwise arising from statutory
or regulatory requirements of the Company or any of its Subsidiaries;
(vii) Liens securing Refinancing Indebtedness incurred in compliance
with this Indenture to refinance Indebtedness secured by Liens; provided,
(a) such Liens do not extend to any additional property or assets; (b) if
the Liens securing the Indebtedness being refinanced were subordinated to
or pari passu with the Liens securing the Notes, the Subsidiary Guarantees
or any intercompany loan, as applicable, such new Liens are subordinated
to or pari passu with such Liens to the same extent, and any related
subordination or intercreditor agreement is confirmed; and (c) such Liens
are no more adverse to the interests of Holders than the Liens replaced or
extended thereby;
(viii) Liens that secure Acquired Debt or Liens on property of a
Person existing at the time such Person is merged into or consolidated
with, or such property was acquired by, the Company or any Restricted
Subsidiary; provided, that such Liens do not extend to or cover any
Person, property or assets other than those of the Person or property
being acquired and were not put in place in anticipation of such
acquisition;
15
(ix) Liens that secure Purchase Money Obligations or Capital Lease
Obligations permitted to be incurred under this Indenture; provided that
such Liens do not extend to or cover any property or assets other than
those being acquired, leased or developed;
(x) whether or not existing on the Issue Date, Liens securing
Obligations under this Indenture, the Notes, the Subsidiary Guarantees or
the Security Documents;
(xi) Liens securing Indebtedness of the Company or any of its
Subsidiaries incurred pursuant to Section 4.9(b)(i);
(xii) with respect to any vessel included in the Collateral, certain
maritime Liens, including Liens for crew's wages and salvage;
(xiii) leases or subleases granted in the ordinary course of
business not materially interfering with the conduct of the business of
the Company or any of the Restricted Subsidiaries;
(xiv) 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;
(xv) Liens incurred in the ordinary course of business securing
Hedging Obligations, which Hedging Obligations relate to Indebtedness that
is otherwise permitted under this Indenture;
(xvi) Liens existing on the Issue Date to the extent and in the
manner such Liens are in effect on the Issue Date;
(xvii) Liens on a pledge of the Capital Stock of any Unrestricted
Subsidiary securing any Indebtedness of such Unrestricted Subsidiary; and
(xviii) Liens securing reimbursement obligations with respect to
commercial letters of credit that encumber documents and other property
relating to such letters of credit and the products and proceeds thereof.
"Permitted Tax Distributions" in respect of the Company and each
Subsidiary that qualifies as a Flow Through Entity means, with respect to any
taxable year, the sum of: (i) the product of (a) the excess of (1) all items of
taxable income or gain (other than capital gain) allocated by the Company to
Equity Holders for such year over (2) all items of taxable deduction or loss
(other than capital loss) allocated to such Equity Holders by the Company for
such year and (b) the Applicable Income Tax Rate, plus (ii) the product of (a)
the net capital gain (i.e., net long-term capital gain over net short-term
capital loss), if any, allocated by the Company to Equity Holders for such year
and (b) the Applicable Capital Gain Tax Rate, plus (iii) the product of (a) the
net short-term capital gain
16
(i.e., net short-term capital gain in excess of net long-term capital loss), if
any, allocated by the Company to Equity Holders for such year and (b) the
Applicable Income Tax Rate, minus (iv) the aggregate Tax Loss Benefit Amount for
the Company for such year; provided, that in no event shall the Applicable
Income Tax Rate or the Applicable Capital Gain Tax Rate exceed the greater of
(1) the highest aggregate applicable effective marginal rate of Federal, state,
and local income to which a corporation doing business in the State of
California would be subject in the relevant year of determination (as certified
to the Trustee by a nationally recognized tax accounting firm) plus 5% and (2)
60%. For purposes of calculating the amount of the Permitted Tax Distributions,
the proportionate part of the items of taxable income, gain, deduction or loss
(including capital gain or loss) of any Subsidiary that is a Flow Through Entity
shall be included in determining the taxable income, gain, deduction or loss
(including capital gain or loss) of the Company.
Estimated tax distributions shall be made within thirty days following
March 15, May 15, August 15, and December 15 based upon an estimate of the
excess of (x) the tax distributions that would be payable for the period
beginning on January 1 of such year and ending on March 31, May 31, August 31,
and December 31 if such period were a taxable year (computed as provided above)
over (y) distributions attributable to all prior periods during such taxable
year.
The amount of the Permitted Tax Distribution shall be re-computed promptly
after (i) the filing by the Company and each Subsidiary that is treated as a
Flow Through Entity of their respective annual income tax returns and (ii) an
appropriate Federal or state taxing authority finally determines that the amount
of the items of taxable income, gain, deduction, or loss of the Company or any
Subsidiary that is treated as a Flow Through Entity for any taxable year or the
aggregate Tax Loss Benefit Amounts carried forward to such taxable year should
be changed or adjusted (each of clauses (i) and (ii) a "Tax Calculation Event").
To the extent that the Permitted Tax Distributions previously paid to an Equity
Holder in respect of any taxable year are either greater than (a "Tax
Distribution Overage") or less than (a "Tax Distribution Shortfall") the
Permitted Tax Distributions with respect to such taxable year, as determined by
reference to the computation of the amount of the items of income, gain,
deduction, or loss of the Company and each Subsidiary in connection with a Tax
Calculation Event, the amount of the estimated Permitted Tax Distributions to be
made to such Equity Holder on the estimated tax distribution date immediately
following such Tax Calculation Event shall be reduced or increased as
appropriate to the extent of the Tax Distribution Overage or the Tax
Distribution Shortfall. To the extent that a Tax Distribution Overage remains
after the estimated tax distribution date immediately following such Tax
Calculation Event, the amount of the estimated Permitted Tax Distribution to be
made to such Equity Holder on the subsequent estimated tax distribution date
shall be reduced to the extent of such Tax Distribution Overage.
Prior to making any Permitted Tax Distributions, the Company shall require
each Equity Holder to agree that promptly after the second estimated tax
distribution date following a Tax Calculation Event, such Equity Holder shall
reimburse the Company to the extent of any remaining Tax Distribution Overage.
17
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof, or any other entity.
"PGC" means the party named as such above, until a successor replaces such
Person in accordance with the terms of this Indenture, and thereafter means such
successor.
"PGP" means Peninsula Gaming Partners, LLC, a Delaware limited liability
company, the direct parent and sole manager of the Company, and indirect parent
of PGC.
"Purchase Money Obligations" means Indebtedness representing, or incurred
to finance (or to Refinance Indebtedness incurred to finance), the cost (i) of
acquiring any assets (including furniture, fixtures or equipment) and (ii) of
construction or build-out of facilities (including Purchase Money Obligations of
any other Person at the time such other Person is merged with or into or is
otherwise acquired by the Issuers); provided, that (a) the principal amount of
such Indebtedness does not exceed 80% of such cost, including construction
charges, (b) any Lien securing such Indebtedness does not extend to or cover any
other asset or property other than the asset or property being so acquired,
constructed or built and (c) such Indebtedness is (or the Indebtedness being
Refinanced was) incurred, and any Liens with respect thereto are granted, within
180 days of the acquisition or commencement of construction or build-out of such
property or asset.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Qualified Capital Stock" means, with respect to any Person, Capital Stock
of such Person other than Disqualified Capital Stock.
"Refinancing Fee" means a payment in the aggregate amount of $1.5 million
to be received by certain member of the management of the Company and PGP,
including Xxxxxxx Xxxxxx, Xxxxx Xxx and M. Xxxxx Xxxxxxx, at the discretion of
Xx. Xxxxxxx, in the event that the Issuers repay, redeem or refinance 90% or
more of the Notes on or prior to July 1, 2003.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of the Issue Date, by and among the Issuers and the Initial Purchaser
as such agreement may be amended, modified or supplemented from time to time.
"Related Business" means the gaming, entertainment and hotel businesses
conducted (or proposed to be conducted) by the Company and its Subsidiaries as
of the Issue Date and any and all other businesses that in the good faith
judgment of the Managers of the Company are materially related or incidental
businesses (including, without limitation, food and beverage distribution
operations).
"Required Regulatory Redemption" means a redemption by the Issuers of any
Holder's Notes pursuant to, and in accordance with, any order of any
Governmental Authority with appropriate
18
jurisdiction and authority relating to a Gaming License, or to the extent
necessary in the reasonable, good faith judgment of the Managers of the Company
to prevent the loss, failure to obtain or material impairment or to secure the
reinstatement of, any Gaming License, where such redemption or acquisition is
required because the Holder or beneficial owner of Notes is required to be found
suitable or to otherwise qualify under any gaming or similar laws and is not
found suitable or so qualified within 30 days after being requested to do so (or
such lesser period that may be required by any Governmental Authority).
"Responsible Officer" when used with respect to the Trustee, means any
officer within the corporate trust department of the Trustee located at the
Corporate Trust Office (or any successor group of the Trustee) or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the designated officers, and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Securities" means Notes that bear or are required to bear the
legends relating to restrictions on transfer set forth on Exhibit A hereto.
"Restricted Subsidiary" means a Subsidiary other than an Unrestricted
Subsidiary.
"Return from Unrestricted Subsidiaries" means (a) 50% of any dividends or
distributions received by the Company or a Restricted Subsidiary from an
Unrestricted Subsidiary, to the extent that such dividends or distributions were
not otherwise included in Consolidated Net Income of the Company, plus (b) to
the extent not otherwise included in Consolidated Net Income of the Company, an
amount equal to the net reduction in Investments in Unrestricted Subsidiaries
resulting from (i) repayments of the principal of loans or advances or other
transfers of assets to the Company or any Restricted Subsidiary from
Unrestricted Subsidiaries or (ii) the sale or liquidation of any Unrestricted
Subsidiaries, plus (c) to the extent that any Unrestricted Subsidiary of the
Company is designated to be a Restricted Subsidiary, the fair market value of
the Company's Investment in such Subsidiary on the date of such designation.
"Rule 144" means Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the Commission.
"Rule 144A" means Rule 144A under the Securities Act, as such Rule may be
amended from time to time, or under any similar rule or regulation hereafter
adopted by the Commission.
"Security Agreement" means the Security Agreement dated the date hereof,
executed by the Company in favor of the Trustee for the Trustee's benefit and
the benefit of the Holders.
"Securities Act" means the Securities Act of 1933, as amended.
19
"Security Documents" means the Security Agreement, the Ship Mortgage, the
Shore Mortgage and any other mortgage, deed of trust, security agreement or
similar instrument securing the Issuers' Obligations under this Indenture or the
Notes.
"Seller Preferred" means $7.0 million face amount of the Company's
redeemable preferred membership interests to be issued to GDREC on the Issue
Date pursuant to the terms of the Asset Acquisition Agreement.
"Senior Credit Facility" means any revolving credit agreement or similar
instrument, including, without limitation, working capital, construction
financing or equipment purchase lines of credit, entered into by the Company
governing the terms of a bona fide borrowing from (i) a third party financial
institution that is primarily engaged in the business of commercial lending or
(ii) a vendor or other provider of financial accommodations in connection with
the purchase of equipment, in either case for valid business purposes, including
any related notes, guarantees, collateral documents, instruments and agreements
executed in connection therewith and, in each case, as amended, renewed,
refunded, replaced or refinanced from time to time; provided, that such
agreements or instruments (x) have terms and conditions (including with respect
to the applicable interest rates and fees) customary for similar facilities
extended to borrowers comparable to the Company, and (y) do not permit the
Company to incur Indebtedness in an aggregate principal amount at any time
outstanding in excess of $10.0 million.
"Ship Mortgage" means the First Preferred Ship Mortgage dated the date
hereof, executed by the Company in favor of the Trustee for the Trustee's
benefit and the benefit of the Holders.
"Shore Mortgage" means the Shore Mortgage dated the date hereof, executed
by the Company in favor of the Trustee for the Trustee's benefit and the benefit
of the Holders.
"subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity (including a limited liability company) of
which more than 50% of the total voting power of shares of Voting Stock thereof
is at the time owned or controlled, directly or indirectly, by such Person or
one or more of the other subsidiaries of that Person or a combination thereof
and (ii) any partnership in which such Person or any of its subsidiaries is a
general partner.
"Subsidiary" means any subsidiary of the Company.
"Subsidiary Guaranty" means an unconditional and irrevocable guaranty by a
Subsidiary Guarantor of the Obligations of the Issuers under the Notes and the
Indenture, on a senior secured basis, as set forth in this Indenture, as amended
from time to time in accordance with the terms thereof.
"Subsidiary Guarantor" means any Subsidiary that has executed and
delivered in accordance with this Indenture a Subsidiary Guaranty, and such
Person's successors and assigns.
20
"Tax Loss Benefit Amount" means with respect to any taxable year, the
amount by which the Permitted Tax Distributions would be reduced were a net
operating loss or net capital loss from a prior taxable year of the Company
ending subsequent to the Issue Date carried forward to the applicable taxable
year; provided, that for such purpose the amount of any such net operating loss
or net capital loss shall be used only once and in each case shall be carried
forward to the next succeeding taxable year until so used. For purposes of
calculating the Tax Loss Benefit Amount, the proportionate part of the items of
taxable income, gain, deduction, or loss (including capital gain or loss) of any
Subsidiary that is a Flow Through Entity for a taxable year of such Subsidiary
ending subsequent to the Issue Date shall be included in determining the amount
of net operating loss or net capital loss of the Company.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
ss.ss.77aaa-77bbbb), as amended, as in effect on the date hereof until such time
as this Indenture is qualified under the TIA, and thereafter as in effect on the
date on which this Indenture is qualified under the TIA, unless the context
requires reference thereto as in effect from time to time.
"transfer" has the meaning given to such term in the definition of the
term "Asset Sale."
"Trustee" means the party named as such above until a successor replaces
it in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.
"Unrestricted Subsidiary" means any Subsidiary that, at or prior to the
time of determination, shall have been designated by the Managers of the Company
as an Unrestricted Subsidiary; provided, that such Subsidiary does not hold any
Indebtedness or Capital Stock of, or any Lien on any assets of, the Company or
any Restricted Subsidiary. If, at any time, any Unrestricted Subsidiary would
fail to meet the foregoing requirements as an Unrestricted Subsidiary, it shall
thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture
and any Indebtedness of such Subsidiary shall be deemed to be incurred by a
Restricted Subsidiary as of such date. The Managers of the Company may at any
time designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided, that such designation shall be deemed to be an incurrence of
Indebtedness by a Restricted Subsidiary of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation shall only be permitted if (i) such
Indebtedness is permitted under the Interest Coverage Ratio test set forth in
Section 4.9 calculated on a pro forma basis as if such designation had occurred
at the beginning of the four-quarter reference period, and (ii) no Default or
Event of Default would be in existence following such designation. The Company
shall be deemed to make an Investment in each Subsidiary designated as an
Unrestricted Subsidiary immediately following such designation in an amount
equal to the Investment in such Subsidiary and its subsidiaries immediately
prior to such designation. Any such designation by the Managers of the Company
shall be evidenced to the Trustee by filing with the Trustee a certified copy of
the resolution of the Managers giving effect to such designation and an
Officers' Certificate certifying that such designation complies with the
foregoing conditions and is permitted by Section 4.9 hereof.
21
"Upper Tier Equity Holder" means, in the case of any Flow Through Entity
the Equity Holder of which is, in turn, a Flow Through Entity, the person that
is ultimately subject to tax on a net income basis on the items of taxable
income, gain, deduction, and loss of the Company and its Subsidiaries that are
Flow Through Entities.
"Voting Stock" means, with respect to any Person, (i) one or more classes
of the Capital Stock of such Person having general voting power to elect at
least a majority of the Board of Directors, managers or trustees of such Person
(regardless of whether at the time Capital Stock of any other class or classes
have or might have voting power by reason of the happening of any contingency)
and (ii) any Capital Stock of such Person convertible or exchangeable without
restriction at the option of the holder thereof into Capital Stock of such
Person described in clause (i) above.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years (rounded to the nearest
one-twelfth) obtained by dividing (i) the then outstanding principal amount of
such Indebtedness into (ii) the total of the product obtained by multiplying (a)
the amount of each then remaining installment, sinking fund, serial maturity or
other required payments of principal, including payment at final maturity, in
respect thereof, by (b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such payment.
"Wholly Owned Subsidiary" of any Person means a subsidiary of such Person
all the Capital Stock of which (other than directors' qualifying shares) is
owned directly or indirectly by such Person; provided, that with respect to the
Company, the term Wholly Owned Subsidiary shall exclude Unrestricted
Subsidiaries.
Section 1.2 Other Definitions.
Term Defined in Section
---- ------------------
"Affiliate Transaction" ................. 4.11
"Change of Control Offer" ............... 4.14
"Change of Control Payment" ............. 4.14
"Change of Control Payment Date" ........ 4.14
"Covenant Defeasance" ................... 8.3
"Definitive Notes" ...................... 2.1
"Events of Default" ..................... 6.1
"Excess Cash Flow Offer" ................ 4.20
"Excess Cash Flow Offer Amount" ......... 4.20
"Excess Cash Flow Offer Period" ......... 4.20
"Excess Proceeds" ....................... 4.10
22
Term Defined in Section
---- ------------------
"Excess Proceeds Offer" ................. 4.10
"Excess Proceeds Offer Period" .......... 4.10
"Excess Proceeds Payment Date" .......... 4.10
"Global Notes" .......................... 2.1
"incur" ................................. 4.9
"Legal Defeasance" ...................... 8.2
"Paying Agent" .......................... 2.3; 8.5 (solely for
purposes of Section
8.5)
"Purchase Amount" ....................... 4.10
"Refinance" ............................. 4.9
"Refinancing Indebtedness" .............. 4.9
"Registrar" ............................. 2.3
"Replacement Vessel" .................... 4.10
"Restricted Payments" ................... 4.7
"Security Interest" ..................... 11.1
Section 1.3 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means the Issuers, the Subsidiary Guarantors and
any successor obligor upon the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute, or defined by Commission rule under
the TIA have the meanings so assigned to them.
23
Section 1.4 Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the plural
include the singular;
(e) "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 the terms "Article," "Section," "Exhibit" and
"Schedule," unless otherwise specified or indicated by the context in
which used, mean the corresponding Article or Section of, or the
corresponding Exhibit or Schedule to, this Indenture;
(f) references to agreements and other instruments include
subsequent amendments, supplements and waivers to such agreements or
instruments but only to the extent not prohibited by this Indenture; and
(g) provisions apply to successive events and transactions.
ARTICLE II
THE NOTES
Section 2.1 Form and Dating.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A attached hereto, the terms of which are
incorporated in and made a part of this Indenture. Each Note shall include the
Subsidiary Guaranty in the form of Exhibit C attached hereto, executed by each
of the Subsidiary Guarantors existing on the date of issuance of such Note, the
terms of which are incorporated in and made a part of this Indenture. The Notes
may have notations, legends or endorsements required by law, stock exchange
rule, agreements to which either of the Issuers is subject or usage. Each Note
shall be dated the date of its authentication. The Notes shall be issued in
denominations of $1,000 and integral multiples thereof.
The Notes will be issued (a) in global form (the "Global Notes"),
substantially in the form of Exhibit A attached hereto (including the text
referred to in footnotes 1 and 5 thereto) and (b) upon the initial issuance
thereof and under certain other circumstances, in definitive form (the
"Definitive
24
Notes"), substantially in the form of Exhibit A attached hereto (excluding the
text referred to in footnotes 1 and 5 thereto). Each Global Note shall represent
the aggregate amount of outstanding Notes from time to time endorsed thereon;
provided, that the aggregate amount of outstanding Notes represented thereby may
from time to time be reduced or increased, as appropriate, to reflect exchanges
and redemptions. Any endorsement of a Global Note to reflect the amount of any
increase or decrease in the amount of outstanding Notes represented thereby
shall be made by the Trustee, in accordance with instructions given by the
Holder thereof, as required by Section 2.6.
Section 2.2 Execution and Authentication.
The Notes shall be executed on behalf of each of the Issuers, by manual or
facsimile signature, by its Manager, Chairman of the Board, its President or one
of its Vice Presidents and attested by another Officer by manual or facsimile
signature. If an Officer whose signature is on a Note no longer holds that
office at the time the Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid until authenticated by the manual signature of
the Trustee. The signature of the Trustee shall be conclusive evidence that the
Note has been authenticated under this Indenture. The form of Trustee's
certificate of authentication to be borne by the Notes shall be substantially as
set forth in Exhibit A attached hereto.
The Trustee shall, upon an Issuers Order, authenticate for original issue
Notes in any aggregate principal amount. Subject to Section 4.9, the aggregate
principal amount of Notes that may be authenticated and delivered under this
Indenture is unlimited; provided, that additional Notes issued after the Issue
Date may not be issued with original issue discount as determined under section
1271 et seq. of the Code.
The Trustee may appoint an authenticating agent acceptable to the Issuers
to authenticate Notes. Unless limited by the terms of such appointment, an
authenticating agent may authenticate Notes whenever the Trustee may do so. Each
reference in this Indenture to authenticating by the Trustee includes
authenticating by such agent. An authenticating agent has the same rights as an
Agent to deal with the Issuers or an Affiliate of either of the Issuers.
The Issuers, the Trustee and any agent of either of the Issuers or the
Trustee may treat the Person in whose name any Note is registered as the owner
of such Note for the purpose of receiving payment of principal of and (subject
to the provisions of this Indenture and the Notes with respect to record dates)
interest on such Note and for all other purposes whatsoever, regardless of
whether such Note is overdue, and none of the Issuers, the Trustee or any agent
of any of the Issuers or the Trustee shall be affected by notice to the
contrary.
25
Section 2.3 Registrar, Paying Agent and Depositary.
The Issuers shall maintain (a) an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and (b) an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Issuers initially appoint the Trustee as Registrar and Paying Agent. The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Issuers may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Issuers may change any
Paying Agent or Registrar without notice to any Holder. The Issuers shall notify
the Trustee of the name and address of any Agent not a party to this Indenture.
If the Issuers fail to appoint or maintain another entity as Registrar or Paying
Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may
act as Paying Agent or Registrar, except that for purposes of Articles III and
VIII and Sections 4.1, 4.10 and 4.14, neither the Company nor any of its
Subsidiaries shall act as Paying Agent.
The Issuers shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which shall incorporate the provisions of
the TIA. The agreement shall implement the provisions of this Indenture that
relate to such Agent.
The Issuers initially appoint DTC to act as Depositary with respect to the
Global Notes. The Trustee shall act as custodian for the Depositary with respect
to the Global Notes.
Section 2.4 Paying Agent to Hold Money in Trust.
The Issuers shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent shall hold in trust for the benefit of
the Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium, if any, or interest on the Notes and shall notify the
Trustee in writing of any default by either of the Issuers in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Issuers at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary
of the Company) shall have no further liability for the money delivered to the
Trustee. If the Company or a Subsidiary of the Company acts as Paying Agent
(subject to Section 2.3), it shall segregate and hold in a separate trust fund
for the benefit of the Holders all money held by it as Paying Agent.
Section 2.5 Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA ss.312(a). If the Trustee is
not the Registrar, the Issuers shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing a list in such form and as of such date as the
Trustee may reasonably require of the names
26
and addresses of the Holders, including the aggregate principal amount of Notes
held by each such Holder, and the Issuers shall otherwise comply with TIA
ss.312(a).
Section 2.6 Transfer and Exchange.
(a) Transfer and Exchange of Definitive Notes. When Definitive Notes
are presented by a Holder to the Registrar with a request (1) to register
the transfer of the Definitive Notes or (2) to exchange such Definitive
Notes for an equal principal amount of Definitive Notes of other
authorized denominations, the Registrar shall register the transfer or
make the exchange as requested if its requirements for such transactions
are met; provided, that the Definitive Notes so presented (A) have been
duly endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Registrar duly executed by such Holder or by his
attorney, duly authorized in writing; and (B) in the case of a Restricted
Security, such request shall be accompanied by the following additional
documents:
(i) if such Restricted Security is being delivered to the
Registrar by a Holder for registration in the name of such Holder,
without transfer, a certification to that effect (in substantially
the form of Exhibit B attached hereto); or
(ii) if such Restricted Security is being transferred to a QIB
in accordance with Rule 144A or pursuant to an effective
registration statement under the Securities Act, a certification to
that effect (in substantially the form of Exhibit B attached
hereto); or
(iii) if such Restricted Security is being transferred in
reliance on another exemption from the registration requirements of
the Securities Act, a certification to that effect (in substantially
the form of Exhibit B attached hereto) and an opinion of counsel
reasonably acceptable to the Issuers and the Registrar to the effect
that such transfer is in compliance with the Securities Act.
(b) Transfer of a Definitive Note for a Beneficial Interest in a
Global Note. A Definitive Note may be exchanged for a beneficial interest
in a Global Note only upon receipt by the Trustee of a Definitive Note,
duly endorsed or accompanied by appropriate instruments of transfer, in
form satisfactory to the Trustee, together with:
(i) written instructions directing the Trustee to make an
endorsement on the appropriate Global Note to reflect an increase in
the aggregate principal amount of the Notes represented by such
Global Note, and
(ii) if such Definitive Note is a Restricted Security, a
certification (in substantially the form of Exhibit B attached
hereto) and, if applicable, a legal
27
opinion, in each case similar to that required pursuant to clauses
(i), (ii) or (iii) of Section 2.6(a), as applicable;
in which case the Trustee shall cancel such Definitive Note and cause the
aggregate principal amount of Notes represented by the appropriate Global
Note to be increased accordingly. If no Global Note is then outstanding,
the Issuers shall issue and the Trustee shall authenticate a new Global
Note in the appropriate principal amount.
(c) Transfer and Exchange of Global Notes. The transfer and exchange
of Global Notes or beneficial interests therein shall be effected through
the Depositary in accordance with this Indenture and the procedures of the
Depositary therefor, which shall include restrictions on transfer
comparable to those set forth herein to the extent required by the
Securities Act.
(d) Transfer of a Beneficial Interest in a Global Note for a
Definitive Note. Upon receipt by the Trustee of 20 days prior written
transfer instructions (or such other form of instructions as is customary
for the Depositary) from the Depositary (or its nominee) on behalf of any
Person having a beneficial interest in a Global Note, the Trustee shall,
in accordance with the standing instructions and procedures existing
between the Depositary and the Trustee, cause the aggregate principal
amount of Global Notes to be reduced accordingly and, following such
reduction, the Issuers shall execute and the Trustee shall authenticate
and deliver to the transferee a Definitive Note in the appropriate
principal amount; provided, that in the case of a Restricted Security,
such instructions shall be accompanied by the following additional
documents:
(i) if such beneficial interest is being transferred to the
Person designated by the Depositary as being the beneficial owner, a
certification to that effect (in substantially the form of Exhibit B
attached hereto); or
(ii) if such beneficial interest is being transferred to a QIB
in accordance with Rule 144A or pursuant to an effective
registration statement under the Securities Act, a certification to
that effect (in substantially the form of Exhibit B attached
hereto); or
(iii) if such beneficial interest is being transferred in
reliance on another exemption from the registration requirements of
the Securities Act, a certification to that effect (in substantially
the form of Exhibit B attached hereto) and an opinion of counsel
reasonably acceptable to the Issuers and to the Registrar to the
effect that such transfer is in compliance with the Securities Act.
Definitive Notes issued in exchange for a beneficial interest in a Global
Note shall be registered in such names and in such authorized
denominations as the Depositary shall instruct the Trustee.
28
(e) Transfer and Exchange of Global Notes. Notwithstanding any other
provision of this Indenture, the Global Note may not be transferred as a
whole except by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor
Depositary or a nominee of such successor Depositary; provided, that if:
(i) the Depositary (a) notifies the Issuers that the
Depositary is unwilling or unable to continue as Depositary and a
successor Depositary is not appointed by the Company within 90 days
after delivery of such notice, or (b) has ceased to be a clearing
agency registered under the Exchange Act; or
(ii) the Issuers, at their sole discretion, notify the Trustee
in writing that they elect to cause the issuance of Definitive Notes
under this Indenture,
then the Issuers shall execute and the Trustee shall authenticate and
deliver, Definitive Notes in an aggregate principal amount equal to the
aggregate principal amount of the Global Note in exchange for such Global
Note.
(f) Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in the Global Note have either been exchanged for
Definitive Notes, redeemed, repurchased or cancelled, the Global Note
shall be returned to (or retained by) and cancelled by the Trustee. At any
time prior to such cancellation, if any beneficial interest in the Global
Note is exchanged for Definitive Notes, redeemed, repurchased or
cancelled, the aggregate principal amount of Notes represented by such
Global Note shall be reduced accordingly and an endorsement shall be made
on such Global Note by the Trustee to reflect such reduction.
(g) General Provisions Relating to Transfers and Exchanges. To
permit registrations of transfers and exchanges, the Issuers shall execute
and the Trustee shall authenticate Definitive Notes and Global Notes at
the Registrar's request. All Definitive Notes and Global Notes issued upon
any registration of transfer or exchange of Definitive Notes or Global
Notes shall be legal, valid and binding obligations of the Issuers,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Definitive Notes or Global Notes surrendered upon such
registration of transfer or exchange.
No service charge shall be made to a Holder for any registration of
transfer or exchange, but the Issuers may require payment of a sum
sufficient to cover any transfer tax or similar governmental charge
payable in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchange (without transfer to
another person) pursuant to Sections 2.10, 3.7, 3.8, 4.10, 4.14 and 9.5).
The Issuers shall not be required to (i) issue, register the
transfer of or exchange Notes during a period beginning at the opening of
business 15 days before the day of any
29
selection of Notes for redemption under Section 3.2 and ending at the
close of business on the day of selection; or (ii) register the transfer
of or exchange any Note so selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed in part; or (iii)
register the transfer of or exchange a Note between a record date and the
next succeeding interest payment date.
Prior to due presentment for the registration of a transfer of any
Note, the Trustee, any Agent and the Issuers may deem and treat the Person
in whose name any Note is registered as the absolute owner of such Note
for all purposes, and none of the Trustee, any Agent or the Issuers shall
be affected by notice to the contrary.
(h) Exchange of Notes for Exchange Securities. Notes may be
exchanged for Exchange Securities pursuant to the terms of the Exchange
Offer. The Trustee and Registrar shall make the exchange as follows:
The Issuers shall present the Trustee with an Officers' Certificate
certifying the following:
(i) upon issuance of the Exchange Securities, the transactions
contemplated by the Exchange Offer have been consummated; and
(ii) the principal amount of Notes properly tendered in the
Exchange Offer that are represented by a Global Note and the
principal amount of Notes properly tendered in the Exchange Offer
that are represented by Definitive Notes; the name of each Holder of
such Definitive Notes; the principal amount properly tendered in the
Exchange Offer by each such Holder; and the name and address to
which Definitive Notes for Exchange Securities shall be registered
and sent for each such Holder.
The Trustee, upon receipt of (i) such Officers' Certificate, (ii) an
Opinion of Counsel (1) to the effect that the Exchange Securities have
been registered under Section 5 of the Securities Act and this Indenture
has been qualified under the TIA and (2) with respect to the matters set
forth in Section 6(p) of the Registration Rights Agreement and (iii) an
Issuers Order, shall authenticate (1) a Global Note for Exchange
Securities in aggregate principal amount equal to the aggregate principal
amount of Notes represented by a Global Note indicated in such Officers'
Certificate as having been properly tendered and (2) Definitive Notes
representing Exchange Securities registered in the names of, and in the
principal amounts indicated in such Officers' Certificate.
The Trustee shall deliver such Definitive Notes for Exchange
Securities to the Holders thereof as indicated in such Officers'
Certificate.
30
Section 2.7 Replacement Notes.
If any mutilated Note is surrendered to the Trustee, or the Issuers and
the Trustee receive evidence to their satisfaction of the destruction, loss or
theft of any Note, the Issuers shall issue and the Trustee shall authenticate a
replacement Note if the Trustee's requirements for replacements of Notes are
met. If required by the Trustee or the Issuers, an indemnity bond must be
supplied by the Holder that is sufficient in the judgment of the Trustee and the
Issuers to protect the Issuers, the Trustee, any Agent or any authenticating
agent from any loss that any of them may suffer if a Note is replaced. The
Issuers or the Trustee may charge for their expenses in replacing a Note.
Every replacement Note is an obligation of the Issuers and shall be
entitled to all of the benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.
Section 2.8 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section 2.8 as not outstanding.
If a Note is replaced pursuant to Section 2.7, the replaced Note ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section 4.1,
it ceases to be outstanding and interest on it ceases to accrue.
Subject to Section 2.9, a Note does not cease to be outstanding because
either of the Issuers or an Affiliate of either of the Issuers holds the Note.
Section 2.9 Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by either
of the Issuers or any Affiliate of either of the Issuers shall be considered as
though not outstanding, except that for purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that a Responsible Officer of the Trustee knows to be so owned shall
be considered as not outstanding.
Section 2.10 Temporary Notes.
Pending the preparation of Definitive Notes, the Issuers (and the
Subsidiary Guarantors) may execute, and upon an Issuers Order, the Trustee shall
authenticate and deliver, temporary Notes that
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are printed, lithographed, typewritten, mimeographed or otherwise reproduced, in
any authorized denomination, substantially of the tenor of the Definitive Notes
in lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Notes may determine, as conclusively evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuers (and the Subsidiary Guarantors)
shall cause Definitive Notes to be prepared without unreasonable delay. The
Definitive Notes shall be printed, lithographed or engraved, or provided by any
combination thereof, or in any other manner permitted by the rules and
regulations of any principal national securities exchange, if any, on which the
Notes are listed, all as determined by the Officers executing such Definitive
Notes. After the preparation of Definitive Notes, the temporary Notes shall be
exchangeable for Definitive Notes upon surrender of the temporary Notes at the
office or agency maintained by the Issuers for such purpose pursuant to Section
4.2, without charge to the Holder. Upon surrender for cancellation of any one or
more temporary Notes, the Issuers (and the Subsidiary Guarantors) shall execute,
and the Trustee shall authenticate and make available for delivery, in exchange
therefor the same aggregate principal amount of Definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as Definitive Notes.
Section 2.11 Cancellation.
The Issuers at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment and not
previously received by the Trustee. The Trustee and no one else shall cancel all
Notes surrendered for registration of transfer, exchange, payment, replacement
or cancellation and shall retain or destroy cancelled Notes in accordance with
its normal practices (subject to the record retention requirement of the
Exchange Act) unless the Issuers direct the Notes to be returned to them. The
Issuers may not issue new Notes to replace Notes that have been redeemed or paid
or that have been delivered to the Trustee for cancellation. All such Notes
shall be cancelled by the Trustee and returned to the Issuers pursuant to a
written order signed by one Officer of each of the Issuers.
Section 2.12 Defaulted Interest.
If the Issuers default in a payment of interest on the Notes, they shall
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, which date shall be at the earliest practicable
date but in all events at least ten Business Days prior to the payment date, in
each case at the rate provided in the Notes and in Section 4.1. The Issuers
shall, with the consent of the Trustee, fix or cause to be fixed each such
special record date and payment date. At least 30 days before the special record
date, the Issuers (or the Trustee, in the name of and at the expense of the
Issuers, upon 15 days written notice to the Trustee) shall mail to the Holders a
notice that states the special record date, the related payment date and the
amount of such interest to be paid.
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Section 2.13 Legends.
(a) Except as permitted by subsections (b) or (c) of this Section
2.13, each Note shall bear legends relating to restrictions on transfer
pursuant to the securities laws in substantially the form set forth on
Exhibit A attached hereto.
(b) Upon any sale or transfer of a Restricted Security (including
any Restricted Security represented by a Global Note) pursuant to Rule 144
under the Securities Act or pursuant to an effective registration
statement under the Securities Act:
(i) in the case of any Restricted Security that is a
Definitive Note, the Registrar shall permit the Holder thereof to
exchange such Restricted Security for a Definitive Note that does
not bear the legends required by subsection (a) above; and
(ii) in the case of any Restricted Security represented by a
Global Note, such Restricted Security shall not be required to bear
the legends required by subsection (a) above, but shall continue to
be subject to the provisions of Section 2.6(c); provided, that with
respect to any request for an exchange of a Restricted Security that
is represented by a Global Note for a Definitive Note that does not
bear the legends required by subsection (a) above, which request is
made in reliance upon Rule 144, the Holder thereof shall certify in
writing to the Registrar that such request is being made pursuant to
Rule 144.
(c) The Issuers (and the Subsidiary Guarantors) shall issue and the
Trustee shall authenticate Exchange Securities in exchange for Notes
accepted for exchange in the Exchange Offer. The Exchange Securities shall
not bear the legends required by subsection (a) above unless the Holder of
such Notes is either:
(i) a broker-dealer who purchased such Notes directly from the
Issuers to resell pursuant to Rule 144A or any other available
exemption under the Securities Act,
(ii) a Person participating in the distribution of the Notes,
or
(iii) a Person who is an affiliate (as defined in Rule 144) of
either of the Issuers.
Section 2.14 Deposit of Moneys.
Subject to Section 3.5, prior to 10:00 a.m. on each date on which the
principal of, premium, if any, and interest on the Notes are due, the Issuers
shall deposit with the Trustee or Paying Agent in immediately available funds
money sufficient to make cash payments, if any, due on such date
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in a timely manner which permits the Trustee or such Paying Agent to remit
payment to the Holders on such date.
Section 2.15 CUSIP Numbers.
The Issuers in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed on
the Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Issuers will promptly notify the Trustee of any
change in the "CUSIP" numbers.
ARTICLE III
REDEMPTION
Section 3.1 Notices to Trustee.
If the Issuers elect or are required to redeem Notes pursuant to Section
3.7 or 3.8, they shall furnish to the Trustee, at least 35 days but not more
than 60 days before a redemption date (except in the case of a Required
Regulatory Redemption requiring less notice), an Officers' Certificate setting
forth (a) the clause of Section 3.7 or 3.8 pursuant to which the redemption
shall occur, (b) the redemption date, (c) the principal amount of Notes to be
redeemed and (d) the redemption price.
Section 3.2 Selection of Notes to Be Redeemed.
If less than all the Notes are to be redeemed pursuant to Section 3.7, the
Trustee shall select the Notes to be redeemed in compliance with the
requirements of the principal national securities exchange, if any, on which the
Notes are listed, or, if the Notes are not so listed, pro rata, by lot or by
such method as the Trustee deems to be fair and appropriate; provided, that
Notes in denominations of $1,000 or less may not be redeemed in part.
The Trustee shall promptly notify the Issuers in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected for redemption shall be in amounts of $1,000 or whole multiples
of $1,000. Provisions of this Indenture that apply to Notes called for
redemption also apply to portions of Notes called for redemption.
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Section 3.3 Notice of Redemption.
At least 30 days but not more than 60 days before a redemption date
(except in the case of a Required Regulatory Redemption requiring less notice),
the Issuers shall mail a notice of redemption by first class mail to each Holder
whose Notes are to be redeemed at such Holder's registered address.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part only, the portion of the
principal amount of such Note to be redeemed and that, after the
redemption date, upon cancellation of the original Note, a new Note or
Notes in principal amount equal to the unredeemed portion shall be issued;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(f) that, unless the Issuers default in making such redemption
payment, interest on Notes or portions of Notes called for redemption
shall cease to accrue on and after the redemption date;
(g) the paragraph of the Notes and/or the section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(h) the CUSIP number of the Notes to be redeemed.
At the Issuers' request, the Trustee shall give the notice of redemption
in the name of the Issuers and at the Issuers' expense; provided that the
Issuers shall deliver to the Trust at least 35 days (unless a shorter period is
acceptable to the Trustee) prior to the redemption date, an Officers'
Certificate requesting that the Trustee give such notice and setting forth the
information to be stated in such notice as provided in the preceding paragraph.
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Section 3.4 Effect of Notice of Redemption.
Once notice of redemption has been mailed to the Holders in accordance
with Section 3.3, Notes called for redemption become due and payable on the
redemption date at the redemption price. At any time prior to the mailing of a
notice of redemption to the Holders pursuant to Section 3.3, the Issuers may
withdraw, revoke or rescind any notice of redemption delivered to the Trustee
without any continuing obligation to redeem the Notes as contemplated by such
notice of redemption.
Section 3.5 Deposit of Redemption Price.
At or before 10:00 a.m. on the redemption date, the Issuers shall deposit
with the Trustee (to the extent not already held by the Trustee) or with the
Paying Agent money in immediately available funds sufficient to pay the
redemption price of and accrued interest on all Notes to be redeemed on that
date. The Trustee or the Paying Agent shall return to the Issuers any money
deposited with the Trustee or the Paying Agent by the Issuers in excess of the
amounts necessary to pay the redemption price of, and accrued interest on, all
Notes to be redeemed.
Interest on the Notes to be redeemed shall cease to accrue on the
applicable redemption date, regardless of whether such Notes are presented for
payment, if the Issuers make or deposit the redemption payment in accordance
with this Section 3.5. If any Note called for redemption shall not be paid upon
surrender for redemption because of the failure of the Issuers to comply with
the preceding paragraph, interest shall be paid on the unpaid principal, from
the redemption date until such principal is paid, and to the extent lawful on
any interest not paid on such unpaid principal, in each case at the rate
provided in the Notes.
Section 3.6 Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Issuers shall issue
and the Trustee shall authenticate for the Holder at the expense of the Issuers
a new Note equal in principal amount to the unredeemed portion of the Note
surrendered.
Section 3.7 Optional Redemption.
(a) Except as set forth in Section 3.7(b), the Notes are not
redeemable at the Issuers' option prior to July 1, 2003. Thereafter, the
Notes will be subject to redemption at the option of the Issuers, in whole
or in part, at the redemption prices (expressed as percentages of
principal amount) set forth below, plus accrued and unpaid interest
thereon, if any, to the applicable redemption date, if redeemed during the
12-month period beginning on July 1 of the years indicated below:
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Year Percentage
---- ----------
2003 108.00%
2004 105.33%
2005 and thereafter 102.67%
(b) Notwithstanding Section 3.7(a), at any time or from time to time
prior to July 1, 2002, the Issuers may redeem, at their option, up to 35%
of the aggregate principal amount of the Notes then outstanding, at a
redemption price of 112.25% of the principal amount thereof, plus accrued
and unpaid interest thereon, if any, through the applicable redemption
date, with the net cash proceeds of one or more Equity Offerings;
provided, that (i) such redemption shall occur within 60 days of the date
of closing of such Equity Offering and (ii) at least 65% of the aggregate
principal amount of Notes issued on or after the Issue Date remains
outstanding immediately after giving effect to each such redemption.
Section 3.8 Required Regulatory Redemption.
Notwithstanding any other provisions hereof, Notes to be redeemed pursuant
to a Required Regulatory Redemption will be redeemable by the Issuers, in whole
or in part, at any time upon not less than 20 Business Days nor more than 60
days notice (or such earlier date as may be ordered by any Governmental
Authority) at a price equal to the lesser of (a) the Holder's cost thereof and
(b) 100% of the principal amount thereof, plus in either case accrued and unpaid
interest thereon, if any, to the date of redemption (or such earlier period as
ordered by a Governmental Authority). The Issuers are not required to pay or
reimburse any Holder or beneficial owner of the Notes for the expenses of any
such Holder or beneficial owner related to the application for any Gaming
License, qualification or finding of suitability in connection with a Required
Regulatory Redemption. Such expenses of any such Holder or beneficial owner
will, therefore, be the obligation of such Holder or beneficial owner. Any
Required Regulatory Redemption shall be made in accordance with the provisions
of Sections 3.3, 3.4 and 3.5 unless other procedures are required by any
Governmental Authority.
Section 3.9 No Mandatory Redemption.
The Issuers shall not be required to make mandatory redemption payments
with respect to the Notes (except for a Required Regulatory Redemption). The
Notes shall not have the benefit of any sinking fund.
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ARTICLE IV
COVENANTS
Section 4.1 Payment of Notes.
The Issuers shall pay the principal and premium, if any, of, and interest
on, the Notes on the dates and in the manner provided in the Notes. Principal,
premium, if any, and interest shall be considered paid on the date due if the
Paying Agent, other than the Company or a Subsidiary of the Company, holds on or
before that date money deposited by the Issuers in immediately available funds
and designated for and sufficient to pay all principal, premium, if any, and
interest then due. Such Paying Agent shall return to the Issuers, no later than
three Business Days following the date of payment, any money that exceeds such
amount of principal, premium, if any, and interest then due and payable on the
Notes. The Issuers shall pay any and all amounts, including, without limitation,
Liquidated Damages, if any, on the dates and in the manner required under the
Registration Rights Agreement.
The Issuers shall pay interest (including post-petition interest) on
overdue principal at the rate equal to 1% per annum in excess of the then
applicable interest rate on the Notes to the extent lawful; it shall pay
interest (including post-petition interest) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.
Section 4.2 Maintenance of Office or Agency.
The Issuers shall maintain an office or agency (which may be an office of
the Trustee, Registrar or co-registrar) in the Borough of Manhattan, the City of
New York, where Notes may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Issuers in respect of the
Notes and this Indenture may be served. The Issuers 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 Issuers shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee.
The Issuers may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, that no
such designation or rescission shall in any manner relieve the Issuers of their
obligation to maintain an office or agency for such purposes. The Issuers shall
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
The Issuers hereby designate the Corporate Trust Office of the Trustee as
one such office or agency of the Issuers in accordance with Section 2.3.
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Section 4.3 Reports.
(a) The Company shall file with the Trustee, within 15 days after
the date of filing with the Commission, copies of the reports, information
and other documents (or copies of such portions of any of the foregoing as
the Commission may by rules and regulations prescribe) that the Company is
required to file with the Commission pursuant to Section 13 or 15(d) of
the Exchange Act. If the Company is not subject to the requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall file with the
Trustee all such reports, information and other documents as it would be
required to file if it were subject to the requirements of Section 13 or
15(d) of the Exchange Act, with the period applicable to such report,
information or other document pursuant to the Exchange Act. From and after
the time the Company files a registration statement with the Commission
with respect to the Notes, the Company shall file such information with
the Commission; provided, that the Company shall not be in default of the
provisions of this Section 4.3 for any failure to file reports with the
Commission solely by refusal by the Commission to accept the same for
filing. The Company shall deliver (or cause the Trustee to deliver) copies
of all reports, information and documents required to be filed with the
Trustee pursuant to this Section 4.3 to the Holders at their addresses
appearing in the register of Notes maintained by the Registrar. The
Company shall also comply with the provisions of TIA ss.314(a).
(b) If the Company is required to furnish annual, quarterly or
current reports to its members pursuant to the Exchange Act, the Company
shall cause any annual, quarterly, current or other financial report
furnished by it generally to its members to be filed with the Trustee and
mailed to the Holders by the Company at their addresses appearing in the
register of Notes maintained by the Registrar. If the Company is not
required to furnish annual, quarterly or current reports to its
stockholders pursuant to the Exchange Act, the Company shall cause the
financial statements of the Company and its consolidated Subsidiaries,
including any notes thereto (and, with respect to annual reports, an
auditors' report by an accounting firm of established national
reputation), and a "Management's Discussion and Analysis of Financial
Condition and Results of Operations," comparable to that which would have
been required to appear in annual or quarterly reports filed under Section
13 or 15(d) of the Exchange Act to be so filed with the Trustee and mailed
to the Holders by the Company promptly, but in any event, within 90 days
after the end of each of the fiscal years of the Company and within 45
days after the end of each of the first three quarters of each such fiscal
year.
(c) So long as is required for an offer or sale of the Notes to
qualify for an exemption under Rule 144A, the Issuers (and the Subsidiary
Guarantors) shall, upon written request, provide the information required
by clause (d)(4) thereunder to each Holder and to each beneficial owner
and prospective purchaser of Notes identified by any Holder of Restricted
Securities.
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Section 4.4 Compliance Certificate.
(a) The Issuers shall deliver to the Trustee, within 120 days after
the end of each fiscal year, an Officers' Certificate (provided that one
of the signatories to such Officers' Certificate shall be the Company's
principal executive officer, principal financial officer or principal
accounting officer and another of the signatories to such Officers'
Certificate shall be PGC's principal executive officer, principal
financial officer or principal accounting officer) stating that a review
of the activities of the Issuers and their Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determine whether each has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that each of
the Issuers and their Subsidiaries has kept, observed, performed and
fulfilled each and every covenant contained in this Indenture and is not
in default in the performance or observance of any of the terms,
provisions and conditions hereof or thereof (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of
Default of which he may have knowledge and what action each is taking or
proposes to take with respect thereto).
(b) The year-end financial statements delivered pursuant to Section
4.3 shall be accompanied by a written statement of the independent public
accountants of the Issuers (which shall be a firm of established national
reputation reasonably satisfactory to the Trustee) which states that in
making the examination necessary for certification of such financial
statements nothing has come to their attention which would lead them to
believe that either of the Issuers or any of their Subsidiaries has
violated any provisions of this Indenture or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or
indirectly to any Person for any failure to obtain knowledge of any such
violation.
(c) So long as any of the Notes are outstanding, the Issuers shall
deliver to the Trustee forthwith upon any Officer becoming aware of (i)
any Default or Event of Default or (ii) any event of default under any
mortgage, indenture or instrument referred to in Section 6.1 (a)(v), an
Officers' Certificate specifying such Default, Event of Default or other
event of default and what action the Issuers are taking or propose to take
with respect thereto.
Section 4.5 Taxes.
(a) The Issuers shall, and shall cause their Subsidiaries to, file
all tax returns required to be filed and to pay prior to delinquency all
material taxes, assessments and governmental levies except as contested in
good faith and by appropriate proceedings and for which reserves have been
established in accordance with GAAP.
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(b) The Company shall not recognize any transfers of its Equity
Interests, except pursuant to, and in accordance with the provisions of,
the Amended and Restated Operating Agreement of the Company, as in effect
on the date hereof.
Section 4.6 Stay, Extension and Usury Laws.
Each Issuer (and each Subsidiary Guarantor) covenants (to the extent that
it may lawfully do so) that it shall not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay,
extension, usury or other law, wherever enacted, now or at any time hereafter in
force, that would prohibit or forgive the payment of all or any portion of the
principal of or interest on the Notes, or that may affect the covenants or the
performance of this Indenture, and each Issuer (and each Subsidiary Guarantor)
(to the extent that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law and covenants that it shall not, by resort to any
such law, hinder, delay or impede the execution of any power herein granted to
the Trustee but shall suffer and permit the execution of every such power as
though no such law has been enacted.
Section 4.7 Limitation on Restricted Payments.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly
(i) declare or pay any dividend or make any distribution on
account of any Equity Interests of the Company or any of its
Subsidiaries or make any other payment to any Excluded Person or
Affiliate thereof (other than (1) dividends or distributions payable
in Equity Interests (other than Disqualified Capital Stock) of the
Company or (2) amounts payable to the Company or any Restricted
Subsidiary);
(ii) purchase, redeem or otherwise acquire or retire for value
any Equity Interest of the Company, any Subsidiary or any other
Affiliate of the Company (other than any such Equity Interest owned
by the Company or any Restricted Subsidiary);
(iii) make any principal payment on, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness of
the Company or any Subsidiary Guarantor that is subordinated in
right of payment to the Notes or such Subsidiary Guarantor's
Subsidiary Guaranty thereof, as the case may be, prior to any
scheduled principal payment, sinking fund payment or other payment
at the stated maturity thereof; or
(iv) make any Restricted Investment
41
(all such payments and other actions set forth in clauses (i) through (iv)
above being collectively referred to as "Restricted Payments"), unless, at
the time of such Restricted Payment:
(i) no Default or Event of Default has occurred and is
continuing or would occur as a consequence thereof, and
(ii) immediately after giving effect to such Restricted
Payment on a pro forma basis, the Company could incur at least
$1.00 of additional Indebtedness under the Interest Coverage
Ratio test set forth in Section 4.9 and
(iii) such Restricted Payment (the value of any such payment,
if other than cash, being determined in good faith by
the Managers of the Company and evidenced by a
resolution set forth in an Officers' Certificate
delivered to the Trustee), together with the aggregate
of all other Restricted Payments made after the Issue
Date (including Restricted Payments permitted by clauses
(i) and (ii) of Section 4.7(b) and excluding Restricted
Payments permitted by the other clauses of Section
4.7(b)), is less than the sum of:
(1) 50% of the Consolidated Net Income of the Company
for the period (taken as one accounting period) from the
beginning of the first fiscal quarter commencing immediately
after the Issue Date to the end of the Company's most recently
ended fiscal quarter for which internal financial statements
are available at the time of such Restricted Payment (or, if
such Consolidated Net Income for such period is a deficit,
100% of such deficit), plus
(2) 100% of the aggregate net cash proceeds (or of the
net cash proceeds received upon the conversion of non-cash
proceeds into cash) received by the Company from the issuance
or sale, other than to a Subsidiary, of Equity Interests of
the Company (other than Disqualified Capital Stock) after the
Issue Date and on or prior to the time of such Restricted
Payment, plus
(3) 100% of the aggregate net cash proceeds (or of the
net cash proceeds received upon the conversion of non-cash
proceeds into cash) received by the Company from the issuance
or sale, other than to a Subsidiary, of any convertible or
exchangeable debt security of the Company that has been
converted or exchanged into Equity Interests of the Company
(other than Disqualified Capital Stock) pursuant to the terms
thereof after the Issue Date and on or prior to
42
the time of such Restricted Payment (including any additional
net proceeds received by the Company upon such conversion or
exchange), plus
(4) the aggregate Return from Unrestricted Subsidiaries
after the Issue Date and on or prior to the time of such
Restricted Payment.
(b) The foregoing provisions shall not prohibit:
(i) the payment of any dividend within 60 days after the date
of declaration thereof, if at said date of declaration such payment
would not have been prohibited by the provisions of this Indenture;
(ii) the redemption, purchase, retirement or other acquisition
of any Equity Interests of the Company or Indebtedness of the
Company or any Restricted Subsidiary in exchange for, or out of the
proceeds of, the substantially concurrent sale (other than to a
Subsidiary) of, other Equity Interests of the Company (other than
Disqualified Capital Stock);
(iii) with respect to each tax year that the Company qualifies
as a Flow Through Entity, and for so long as no Event of Default
exists or would occur as a consequence thereof, the payment of
Permitted Tax Distributions; provided, that (1) prior to the first
payment of Permitted Tax Distributions during the calendar year, the
Company provides an Officers' Certificate and Opinion of Counsel to
the effect that the Company and each Subsidiary in respect of which
such distributions are being made qualify as Flow Through Entities
for Federal income tax purposes and for the states in respect of
which such distributions are being made and (2) at the time of such
distribution, the most recent audited financial statements of the
Company provided to the Trustee pursuant to the covenant described
in Section 4.3, provide that the Company and each such Subsidiary
were treated as Flow Through Entities for the period of such
financial statements;
(iv) the redemption, repurchase or payoff of any Indebtedness
of the Company or a Restricted Subsidiary with proceeds of any
Refinancing Indebtedness permitted to be incurred pursuant to
Section 4.9;
(v) distributions to PGP for (1) reasonable tax preparation,
accounting, legal and administrative fees and expenses incurred on
behalf of the Issuers or in connection with PGP's ownership of the
Issuers, consistent with industry practice and (2) compensation to
PGP executive officers pursuant to, and in accordance with,
consulting agreements in effect on the Issue Date;
43
(vi) payments on or with respect to the redemption of Seller
Preferred in an aggregate amount not to exceed $3.0 million;
(vii) reasonable and customary directors fees to, and
indemnity provided on behalf of, the Managers of PGP and the
Company, and customary reimbursement of travel and similar expenses
incurred in the ordinary course of business;
(viii) payment of the Refinancing Fee; and
(ix) Restricted Payments in an aggregate amount not to exceed
$1.0 million.
Not later than the date of making any Restricted Payment, the
Company shall deliver to the Trustee an Officers' Certificate stating that
such Restricted Payment is permitted and setting forth the basis upon
which the calculations required by this Section 4.7 were computed, which
calculations may be based upon the Company's latest available financial
statements.
Section 4.8 Limitation on Restrictions on Subsidiary Dividends.
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Restricted
Subsidiary to:
(a) pay dividends or make any other distributions to the Company or
any of its Restricted Subsidiaries (i) on such Restricted Subsidiary's
Capital Stock or (ii) with respect to any other interest or participation
in, or measured by, such Restricted Subsidiary's profits, or
(b) pay any Indebtedness owed to the Company or any of its
Restricted Subsidiaries, or
(c) make loans or advances to the Company or any of its Restricted
Subsidiaries, or
(d) transfer any of its assets to the Company or any of its
Restricted Subsidiaries,
except, with respect to clauses (a) through (d) above, for such encumbrances or
restrictions existing under or by reason of:
(1) a Senior Credit Facility containing dividend or
other payment restrictions that are not more restrictive in
any material respect than those contained in this Indenture on
the Issue Date;
44
(2) this Indenture, the Security Documents and the
Notes;
(3) applicable law or any applicable rule or order of
any Governmental Authority;
(4) Acquired Debt; provided, that such encumbrances and
restrictions are not applicable to any Person, or the
properties or assets of any Person, other than the Person, or
the property or assets of the Person, so acquired;
(5) customary non-assignment and net worth provisions of
any contract, lease or license entered into in the ordinary
course of business;
(6) customary restrictions on the transfer of assets
subject to a Permitted Lien imposed by the holder of such
Lien;
(7) the agreements governing permitted Refinancing
Indebtedness; provided, that such restrictions contained in
any agreement governing such Refinancing Indebtedness are no
more restrictive in any material respect than those contained
in any agreements governing the Indebtedness being refinanced;
and
(8) any restrictions with respect to a Restricted
Subsidiary imposed pursuant to a binding agreement that has
been entered into for the sale or disposition of all or
substantially all of the Equity Interests or assets of such
Restricted Subsidiary; provided, that such restrictions only
apply to the Equity Interests or assets of such Restricted
Subsidiary being sold.
Section 4.9 Limitation on Incurrence of Indebtedness.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, (i) create, incur,
issue, assume, guaranty or otherwise become directly or indirectly liable
with respect to, contingently or otherwise (collectively, "incur"), any
Indebtedness (including, without limitation, Acquired Debt) or (ii) issue
any Disqualified Capital Stock; provided, that the Company may incur
Indebtedness (including, without limitation, Acquired Debt) and issue
shares of Disqualified Capital Stock (and a Restricted Subsidiary may
incur Acquired Debt) if (1) 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 or issuance, and (2) the
Interest Coverage Ratio for the Company's most recently ended four full
fiscal quarters for which internal financial statements are
45
available immediately preceding the date on which such additional
Indebtedness is incurred or such Disqualified Capital Stock is issued
would have been not less than 2.0 to 1.0 for the period from the Issue
Date through, but not including, January 1, 2003, and 2.25 to 1.0
thereafter, in each case, determined on a pro forma basis (including a pro
forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred, or the Disqualified Capital Stock had been
issued, as the case may be, at the beginning of such four-quarter period;
provided, that in the case of Indebtedness (other than Indebtedness
outstanding under the Senior Credit Facility, Purchase Money Obligations,
Capital Lease Obligations or Acquired Debt), the Weighted Average Life to
Maturity and final stated maturity of such Indebtedness is equal to or
greater than the Weighted Average Life to Maturity and final stated
maturity of the Notes.
(b) Notwithstanding the foregoing, the limitations of Section 4.9(a)
shall not prohibit the incurrence of:
(i) Indebtedness under the Senior Credit Facility; provided,
that the aggregate principal amount of Indebtedness so incurred on
any date, together with all other Indebtedness incurred pursuant to
this clause (i) and outstanding on such date, shall not exceed (a)
$10.0 million if such date is on or prior to the 90th day following
the date on which the hotel is first Operating, or $5 million if
such date is after such 90th day, less (b) the aggregate amount of
commitment reductions contemplated by clause (iii) under Section
4.10(a);
(ii) Capital Lease Obligations or Purchase Money Obligations;
provided, that the aggregate principal amount of Indebtedness so
incurred on any date, together with all other Indebtedness incurred
pursuant to this clause (ii) and outstanding on such date, shall not
exceed $2.5 million, at any time;
(iii) performance bonds, appeal bonds, surety bonds, insurance
obligations or bonds and other similar bonds or obligations
(including Obligations under bankers acceptances and letters of
credit) incurred in the ordinary course of business (including,
without limitation, to maintain any licenses or permits);
(iv) Hedging Obligations incurred to fix the interest rate on
any variable rate Indebtedness otherwise permitted by this
Indenture; provided, that the notional principal amount of each such
Hedging Obligation does not exceed the principal amount of the
Indebtedness to which such Hedging Obligation relates;
(v) Indebtedness of the Company or any Subsidiary Guarantor
owed to and held by a Subsidiary Guarantor or the Company, as the
case may be, that is unsecured and subordinated in right of payment
to the Notes or the Subsidiary Guaranty, as the case may be;
provided, that any subsequent issuance or transfer of any Capital
Stock that results in any such Subsidiary Guarantor ceasing to be a
46
Subsidiary Guarantor or any transfer of such Indebtedness (other
than to the Company or a Subsidiary Guarantor) shall be deemed, in
each case, to constitute the incurrence of such Indebtedness by the
Company or such Subsidiary Guarantor;
(vi) Indebtedness outstanding on the Issue Date, including the
Notes outstanding on the Issue Date;
(vii) Indebtedness arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn
against insufficient funds in the ordinary course of business;
(viii) any Subsidiary Guaranty of the Notes; and
(ix) Indebtedness issued in exchange for, or the proceeds of
which are substantially contemporaneously used to extend, refinance,
renew, replace, or refund (collectively, "Refinance"), Indebtedness
incurred pursuant to the Interest Coverage Ratio test set forth in
Section 4.9(a), Section 4.9(b)(vi) or this clause (ix) (the
"Refinancing Indebtedness") provided, that (1) the principal amount
of such Refinancing Indebtedness does not exceed the principal
amount of Indebtedness so Refinanced (plus any required premiums and
out-of-pocket expenses reasonably incurred in connection therewith),
(2) the Refinancing Indebtedness has a final scheduled maturity that
equals or exceeds the final stated maturity, and a Weighted Average
Life to Maturity that is equal to or greater than the Weighted
Average Life to Maturity, of the Indebtedness being Refinanced and
(3) the Refinancing Indebtedness ranks, in right of payment, no more
favorable to the Notes or applicable Subsidiary Guaranty, as the
case may be, than the Indebtedness being Refinanced.
Section 4.10 Limitation on Asset Sales.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, make any Asset Sale unless:
(i) the Company or such Restricted Subsidiary receives
consideration at the time of such Asset Sale not less than the fair
market value of the assets subject to such Asset Sale;
(ii) at least 75% of the consideration for such Asset Sale is
in the form of cash or Cash Equivalents or liabilities of the
Company or any Restricted Subsidiary (other than liabilities that
are by their terms subordinated to the Notes or any Subsidiary
Guaranty) that are assumed by the transferee of such assets
(provided, that following such Asset Sale there is no further
recourse to the Company or its Restricted Subsidiaries with respect
to such liabilities); and (iii) within 270 days of
47
such Asset Sale, the Net Proceeds thereof are (1) invested in assets
related to the business of the Company or its Restricted
Subsidiaries (which, in the case of an Asset Sale of the Xxxxxxx Xx
or any replacement Gaming Vessel (a "Replacement Vessel"), must be a
Gaming Vessel having a fair market value, as determined by an
independent appraisal, at least equal to the fair market value of
the Xxxxxxx Xx or such Replacement Vessel immediately preceding such
Asset Sale); (2) applied to repay Indebtedness under Purchase Money
Obligations incurred in connection with the assets so sold; (3)
applied to repay Indebtedness under the Senior Credit Facility and
permanently reduce the commitment thereunder in the amount of the
Indebtedness so repaid; or (4) to the extent not used as provided in
clauses (1), (2), or (3) or any combination thereof, applied to make
an offer to purchase Notes as described below (an "Excess Proceeds
Offer") provided, that the Company shall not be required to make an
Excess Proceeds Offer until the amount of Excess Proceeds is greater
than $5.0 million.
The provisions in clauses (i) and (ii) above shall not apply to an
Event of Loss. Pending the final application of any Net Proceeds, the
Company may temporarily reduce Indebtedness under the Senior Credit
Facility or temporarily invest such Net Proceeds in Cash Equivalents.
Net Proceeds not invested or applied as set forth in the preceding
clauses (1), (2) or (3) constitute "Excess Proceeds." If the Company
elects, or becomes obligated to make an Excess Proceeds Offer, the Issuers
shall offer to purchase Notes having an aggregate principal amount equal
to the Excess Proceeds (the "Purchase Amount"), at a purchase price equal
to 100% of the aggregate principal amount thereof, plus accrued and unpaid
interest thereon, if any, to the purchase date. The Issuers must commence
such Excess Proceeds Offer not later than 30 days after the expiration of
the 270 day period following the Asset Sale that produced such Excess
Proceeds. If the aggregate purchase price for the Notes tendered pursuant
to the Excess Proceeds Offer is less than the Excess Proceeds, the Company
and its Restricted Subsidiaries may use the portion of the Excess Proceeds
remaining after payment of such purchase price for general corporate
purposes.
Each Excess Proceeds Offer shall remain open for a period of 20
Business Days and no longer, unless a longer period is required by law
(the "Excess Proceeds Offer Period"). Promptly after the termination of
the Excess Proceeds Offer Period (the "Excess Proceeds Payment Date"), the
Issuers shall purchase and mail or deliver payment for the Purchase Amount
for the Notes or portions thereof tendered, pro rata or by such other
method as may be required by law, or, if less than the Purchase Amount has
been tendered, all Notes tendered pursuant to the Excess Proceeds Offer.
The principal amount of Notes to be purchased pursuant to an Excess
Proceeds Offer may be reduced by the principal amount of Notes acquired by
the Issuers through purchase or redemption (other than pursuant to a
Change of Control Offer or an Excess Cash Flow Offer) subsequent to the
date of the Asset Sale and surrendered to the Trustee for cancellation.
48
Each Excess Proceeds Offer shall be conducted in compliance with all
applicable laws, including, without limitation, Regulation 14E under the
Exchange Act and the rules thereunder and all other applicable federal and
state securities laws. To the extent that the provisions of any securities
laws or regulations conflict with the provisions of this Section 4.10, the
Issuers shall comply with the applicable securities laws and regulations
and shall not be deemed to have breached their obligations under this
Section 4.10 by virtue thereof. The Company shall not, and shall not
permit any of its Restricted Subsidiaries to, create or suffer to exist or
become effective any restriction that would impair the ability of the
Issuers to make an Excess Proceeds Offer upon an Asset Sale or, if such
Excess Proceeds Offer is made, to pay for the Notes tendered for purchase.
(b) The Issuers shall, no later than 30 days following the
expiration of the 270-day period following the Asset Sale that produced
Excess Proceeds, commence the Excess Proceeds Offer by mailing to the
Trustee and each Holder, at such Holder's last registered address, a
notice, which shall govern the terms of the Excess Proceeds Offer, and
shall state:
(i) that the Excess Proceeds Offer is being made pursuant to
this Section 4.10, the principal amount of Notes which shall be
accepted for payment and that all Notes validly tendered shall be
accepted for payment on a pro rata basis;
(ii) the purchase price and the date of purchase;
(iii) that any Notes not tendered or accepted for payment
pursuant to the Excess Proceeds Offer shall continue to accrue
interest in accordance with the terms thereof;
(iv) that, unless the Issuers default in the payment of the
purchase price with respect to any Notes tendered, Notes accepted
for payment pursuant to the Excess Proceeds Offer shall cease to
accrue interest after the Excess Proceeds Payment Date;
(v) that Holders electing to have Notes purchased pursuant to
an Excess Proceeds Offer shall be required to surrender their Notes,
with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Note completed, to the Company prior to the close of
business on the third Business Day immediately preceding the Excess
Proceeds Payment Date;
(vi) that Holders shall be entitled to withdraw their election
if the Issuers receive, not later than the close of business on the
second Business Day preceding the Excess Proceeds Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of Notes the Holder
delivered for purchase and a statement that such Holder is
withdrawing his election to have such Notes purchased;
49
(vii) that Holders whose Notes are purchased only in part
shall be issued Notes representing the unpurchased portion of the
Notes surrendered; provided that each Note purchased and each new
Note issued shall be in a principal amount of $1,000 or whole
multiples thereof; and
(viii) the instructions that Holders must follow in order to
tender their Notes.
On or before the Excess Proceeds Payment Date, the Issuers shall (i)
accept for payment the Notes or portions thereof (or an allocable amount
thereof) tendered pursuant to the Excess Proceeds Offer, (ii) deposit with
the Paying Agent money sufficient to pay the purchase price of all Notes
or portions thereof so accepted and (iii) deliver to the Trustee the Notes
so accepted, together with an Officers' Certificate stating that the Notes
or portions thereof (or an allocable amount thereof) tendered to the
Issuers are accepted for payment. The Paying Agent shall promptly mail to
each Holder of Notes so accepted payment in an amount equal to the
purchase price of such Notes, and the Trustee shall promptly authenticate
and mail to such Holders new Notes equal in principal amount to any
unpurchased portion of the Notes surrendered. After payment to the Holders
of the purchase price of all Notes or portions thereof so accepted, the
Paying Agent shall deliver promptly to the Issuers the balance, if any, of
any money so deposited by the Issuers with the Paying Agent remaining
after such payment to the Holders
The Issuers shall make a public announcement of the results of the
Excess Proceeds Offer as soon as practicable after the Excess Proceeds
Payment Date. For the purposes of this Section 4.10, the Trustee shall act
as the Paying Agent.
Section 4.11 Limitation on Transactions With Affiliates.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, sell, lease, transfer
or otherwise dispose of any of its properties or assets to, or purchase
any property or assets from, or enter into any contract, agreement,
understanding, loan, advance or guaranty with, or for the benefit of, any
Affiliate (each of the foregoing, an "Affiliate Transaction"), except for:
(i) Affiliate Transactions that, together with all related
Affiliate Transactions, have an aggregate value of not more than
$1.0 million; provided, that such transactions are conducted in good
faith and on terms that are no less favorable to the Company or the
relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction at such time by the Company or
such Restricted Subsidiary on an arm's-length basis from a Person
that is not an Affiliate of the Company or such Restricted
Subsidiary;
50
(ii) Affiliate Transactions that, together with all related
Affiliate Transactions, have an aggregate value of not more than
$5.0 million; provided, that (1) a majority of the disinterested
Managers of the Company or, if none, a disinterested committee
appointed by the Managers of the Company for such purpose, determine
that such transactions are conducted in good faith and on terms that
are no less favorable to the Company or the relevant Restricted
Subsidiary than those that would have been obtained in a comparable
transaction at such time by the Company or such Restricted
Subsidiary on an arm's-length basis from a Person that is not an
Affiliate of the Company or such Restricted Subsidiary and (2) prior
to entering into such transaction the Company shall have delivered
to the Trustee an Officers' Certificate certifying to such effect;
or
(iii) Affiliate Transactions for which the Company delivers to
the Trustee an opinion as to the fairness to the Company or such
Restricted Subsidiary from a financial point of view issued by an
accounting, appraisal or investment banking firm of national
standing.
(b) Notwithstanding the foregoing, the following will be deemed not
to be Affiliate Transactions: (i) transactions between or among the
Issuers and/or any or all of the Subsidiary Guarantors; (ii) Restricted
Payments permitted by Section 4.7; and (iii) reasonable and customary
compensation paid to officers, employees or consultants of PGP, the
Company or any Restricted Subsidiary, in each case for services provided
to the Company or any Restricted Subsidiary, as determined in good faith
by the Managers or senior executives of the Company.
Section 4.12 Limitation on Liens.
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, create, incur, assume or suffer to exist any Lien on any
asset (including, without limitation, all real, tangible or intangible property)
of the Company or any Restricted Subsidiary, whether now owned or hereafter
acquired, or on any income or profits therefrom, or assign or convey any right
to receive income therefrom, except Permitted Liens.
Section 4.13 Limited Liability Company and Corporate Existence.
Subject to Article V, the Issuers shall do or cause to be done all things
necessary to preserve and keep in full force and effect (a) their limited
liability company and corporate existence, as applicable, and the corporate,
partnership or other existence of each of the Subsidiaries, in accordance with
their respective organizational documents (as the same may be amended from time
to time) and (b) their (and the Subsidiaries') rights (charter and statutory),
licenses (including gaming and related licenses) and franchises; provided, that
the Issuers shall not be required to preserve any such right, license or
franchise, or the corporate, partnership or other existence of any Subsidiary,
if the Managers or Board of Directors, on behalf of both Issuers, shall
determine in good faith that
51
the preservation thereof is no longer desirable in the conduct of the business
of the Company and its Subsidiaries taken as a whole and that the loss thereof
is not adverse in any material respect to the Holders.
Section 4.14 Repurchase Upon a Change of Control.
(a) Upon the occurrence of a Change of Control, the Issuers shall
offer to purchase all of the Notes then outstanding as described below
(the "Change of Control Offer") at a purchase price equal to 101% of the
principal amount thereof, plus accrued and unpaid interest thereon, if
any, to the date of repurchase (the "Change of Control Payment").
(b) The Change of Control Offer shall be made in compliance with all
applicable laws, including, without limitation, Regulation 14E under the
Exchange Act and the rules thereunder and all other applicable Federal and
state securities laws. To the extent that the provisions of any securities
laws or regulations conflict with the provisions of this Section 4.14, the
Issuers shall comply with the applicable securities laws and regulations
and shall not be deemed to have breached its obligations under this
Section 4.14 by virtue thereof.
(c) Within 30 days following any Change of Control, the Issuers
shall commence the Change of Control Offer by mailing to each Holder a
notice, which 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 4.14 and that all Notes tendered will be accepted for
payment;
(ii) the purchase price and the purchase date, which shall be
a Business Day no earlier than 30 days nor later than 45 days from
the date such notice is mailed (the "Change of Control Payment
Date");
(iii) that any Note not tendered for payment pursuant to the
Change of Control Offer shall continue to accrue interest in
accordance with the terms thereof;
(iv) that, unless the Issuers default in the payment of the
Change of Control Payment, all Notes accepted for payment pursuant
to the Change of Control Offer shall cease to accrue interest on the
Change of Control Payment Date;
(v) that any Holder electing to have Notes purchased pursuant
to a Change of Control Offer shall be required to surrender such
Notes, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Notes completed, to the Paying Agent at the
address specified in the notice prior to the close of business on
the third Business Day preceding the Change of Control Payment Date;
52
(vi) that any Holder shall be entitled to withdraw such
election if the Paying Agent receives, not later than the close of
business on the second Business Day preceding the Change of Control
Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of Notes
such Holder delivered for purchase, and a statement that such Holder
is withdrawing his election to have such Notes purchased;
(vii) that a Holder whose Notes are being purchased only in
part shall be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered, which unpurchased
portion must be equal to $1,000 in principal amount or an integral
multiple thereof;
(viii) the instructions that Holders must follow in order to
tender their Notes; and
(ix) the circumstances and relevant facts regarding such
Change of Control.
(d) On the Change of Control Payment Date, the Issuers shall, to the
extent lawful, (i) accept for payment the Notes or portions thereof
tendered pursuant to the Change of Control Offer, (ii) deposit with the
Paying Agent an amount equal to the Change of Control Payment in respect
of all Notes or portions thereof so tendered and not withdrawn, and (iii)
deliver or cause to be delivered to the Trustee the Notes so accepted,
together with an Officers' Certificate stating that the Notes or portions
thereof tendered to the Issuers are accepted for payment. The Paying Agent
shall promptly mail to each Holder of Notes so accepted payment in an
amount equal to the purchase price for such Notes, and the Trustee shall
authenticate and mail (or cause to be transferred by book entry) to each
Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any, provided, that each such new Note will be
in the principal amount of $1,000 or an integral multiple thereof.
(e) The Issuers shall make a public announcement of the results of
the Change of Control Offer on or as soon as practicable after the Change
of Control Payment Date. For the purposes of this Section 4.14, the
Trustee shall act as the Paying Agent.
(f) The Issuers shall not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of
Control Offer in the manner, at the times and otherwise in compliance with
the requirements set forth in this Section 4.14 and purchases all Notes
validly tendered and not withdrawn under such Change of Control Offer.
53
Section 4.15 Maintenance of Properties.
The Company shall, and shall cause each of its Subsidiaries to, maintain
their properties and assets in normal working order and condition as on the date
of this Indenture (reasonable wear and tear excepted) and make all necessary
repairs, renewals, replacements, additions, betterments and improvements
thereto, as shall be reasonably necessary for the proper conduct of the business
of the Issuers and the Subsidiaries taken as a whole; provided, that nothing
herein shall prevent the Issuers or any of the Subsidiaries from discontinuing
any maintenance of any such properties if the Company determines that such
discontinuance is desirable in the conduct of the business of the Issuers and
the Subsidiaries taken as a whole.
Section 4.16 Maintenance of Insurance.
The Company shall, and shall cause each of its Subsidiaries to, maintain
liability, casualty and other insurance (including self-insurance consistent
with prior practice) with responsible insurance companies in such amounts and
against such risks as is in accordance with customary industry practice in the
general areas in which the Issuers and the Subsidiaries operate.
Section 4.17 Restriction on Sale and Issuance of Subsidiary Stock.
The Company shall not, and shall not permit any Restricted Subsidiary to,
issue or sell any Equity Interests (other than directors' qualifying shares) of
any Restricted Subsidiary to any Person other than the Company or a Wholly Owned
Subsidiary of the Company; provided, that the Company and its Restricted
Subsidiaries may sell all (but not less than all) of the Capital Stock of a
Restricted Subsidiary owned by the Company and its Restricted Subsidiaries if
the Net Proceeds from such Asset Sale are used in accordance with the terms of
Section 4.10.
Section 4.18 Limitation on Lines of Business.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly engage to any material extent in any
line or lines of business activity other than that which, in the reasonable good
faith judgment of the Managers of the Company, is a Related Business.
Section 4.19 Restrictions on Activities of PGC.
PGC may not hold any assets, become liable for any obligations or engage
in any business activities; provided, that PGC may be a co-obligor of the Notes
pursuant to the terms of this Indenture and any activities directly related or
necessary in connection therewith.
54
Section 4.20 Excess Cash Flow Offer.
(a) Within 120 days after the end of each Hotel Operating Year, the
Issuers shall make an offer to all Holders (the "Excess Cash Flow Offer")
to purchase the maximum principal amount of Notes that is an integral
multiple of $1,000 that may be purchased with 50% of Excess Cash Flow for
such Operating Year (the "Excess Cash Flow Offer Amount"), at a purchase
price in cash equal to 101% of the principal amount of the Notes to be
purchased, plus accrued and unpaid interest to the date fixed for the
closing of the Excess Cash Flow Offer.
Each Excess Cash Flow Offer shall remain open for a period of 20
Business Days and no longer, unless a longer period is required by law
(the "Excess Cash Flow Offer Period"). Promptly after the termination of
the Excess Cash Flow Offer Period, the Issuers shall purchase and mail or
deliver payment for the Excess Cash Flow Offer Amount for the Notes or
portions thereof tendered, pro rata or by such other method as may be
required by law, or, if less than the Excess Cash Flow Offer Amount has
been tendered, all Notes tendered pursuant to the Excess Cash Flow Offer.
The principal amount of Notes to be purchased pursuant to an Excess Cash
Flow Offer may be reduced by the principal amount of Notes acquired by the
Issuers through purchase or redemption (other than pursuant to a Change of
Control Offer or an Excess Proceeds Offer) surrendered to the Trustee for
cancellation.
Each Excess Cash Flow Offer shall be conducted in compliance with
all applicable laws, including, without limitation, Regulation 14E under
the Exchange Act and the rules thereunder and all other applicable federal
and state securities laws. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this
Section 4.20. the Issuers shall comply with the applicable securities laws
and regulations and shall not be deemed to have breached their obligations
under this Section 4.20 by virtue thereof. The Company shall not, and
shall not permit any of its Restricted Subsidiaries to, create or suffer
to exist or become effective any restriction that would impair the ability
of the Issuers to make an Excess Cash Flow Offer or, if such Excess Cash
Flow Offer is made, to pay for the Notes tendered for purchase.
(b) Within 120 days after the end of each Hotel Operating Year, the
Issuers shall commence the Excess Cash Flow Offer by mailing to the
Trustee and each Holder, at such Holder's last registered address, a
notice, which shall govern the terms of the Excess Cash Flow Offer, and
shall state:
(i) that the Excess Cash Flow Offer is being made pursuant to
this Section 4.20, the principal amount of Notes which shall be
accepted for payment and that all Notes validly tendered shall be
accepted for payment on a pro rata basis;
(ii) the purchase price and the date of purchase;
55
(iii) that any Notes not tendered or accepted for payment
pursuant to the Excess Cash Flow Offer shall continue to accrue
interest in accordance with the terms thereof;
(iv) that, unless the Issuers default in the payment of the
purchase price with respect to any Notes tendered, Notes accepted
for payment pursuant to the Excess Cash Flow Offer shall cease to
accrue interest after the Excess Cash Flow Payment Date;
(v) that Holders electing to have Notes purchased pursuant to
an Excess Cash Flow Offer shall be required to surrender their
Notes, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Note completed, to the Company prior to the
close of business on the third Business Day immediately preceding
the Excess Cash Flow Payment Date;
(vi) that Holders shall be entitled to withdraw their election
if the Issuers receive, not later than the close of business on the
second Business Day preceding the Excess Cash Flow Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of Notes the Holder
delivered for purchase and a statement that such Holder is
withdrawing his election to have such Notes purchased;
(vii) that Holders whose Notes are purchased only in part
shall be issued Notes representing the unpurchased portion of the
Notes surrendered; provided that each Note purchased and each new
Note issued shall be in a principal amount of $1,000 or whole
multiples thereof; and
(viii) the instructions that Holders must follow in order to
tender their Notes.
On or before the Excess Cash Flow Payment Date, the Issuers shall
(i) accept for payment the Notes or portions thereof (or an allocable
amount thereof) tendered pursuant to the Excess Cash Flow Offer, (ii)
deposit with the Paying Agent money sufficient to pay the purchase price
of all Notes or portions thereof so accepted and (iii) deliver to the
Trustee the Notes so accepted, together with an Officers' Certificate
stating that the Notes or portions thereof (or an allocable amount
thereof) tendered to the Issuers are accepted for payment. The Paying
Agent shall promptly mail to each Holder of Notes so accepted payment in
an amount equal to the purchase price of such Notes, and the Trustee shall
promptly authenticate and mail to such Holders new Notes equal in
principal amount to any unpurchased portion of the Notes surrendered.
After payment to the Holders of the purchase price of all Notes or
portions thereof so accepted, the Paying Agent shall deliver promptly to
the Issuers the balance, if any, of any money so deposited by the Issuers
with the Paying Agent remaining after such payment to the Holders
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The Issuers shall make a public announcement of the results of the
Excess Cash Flow Offer as soon as practicable after the Excess Cash Flow
Payment Date. For the purposes of this Section 4.20, the Trustee shall act
as the Paying Agent.
ARTICLE V
SUCCESSORS
Section 5.1 When the Issuers May Merge, etc.
Neither Issuer shall consolidate or merge with or into (regardless of
whether such Issuer is the surviving corporation), or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its properties
or assets (determined on a consolidated basis for the Company and its Restricted
Subsidiaries) in one or more related transactions to, any other Person, unless:
(a) such Issuer is the surviving Person or the Person formed by or
surviving any such consolidation or merger (if other than such Issuer) or
to which such sale, assignment, transfer, lease, conveyance or other
disposition has been made is a corporation organized and existing under
the laws of the United States of America, any state thereof or the
District of Columbia;
(b) the Person formed by or surviving any such consolidation or
merger (if other than such Issuer) or the Person to which such sale,
assignment, transfer, lease, conveyance or other disposition has been made
assumes all the Obligations of such Issuer, pursuant to a supplemental
indenture in a form reasonably satisfactory to the Trustee, under the
Notes, this Indenture, the Security Documents and the Registration Rights
Agreement;
(c) immediately after giving effect to such transaction on a pro
forma basis, no Default or Event of Default exists;
(d) such transaction would not result in the loss or suspension or
material impairment of any Gaming License unless a comparable replacement
Gaming License is effective prior to or simultaneously with such loss,
suspension or material impairment; and
(e) such Issuer, or any Person formed by or surviving any such
consolidation or merger, or to which such sale, assignment, transfer,
lease, conveyance or other disposition has been made, (i) has Consolidated
Net Worth (immediately after the transaction but prior to any purchase
accounting adjustments resulting from the transaction) equal to or greater
than the Consolidated Net Worth of such Issuer immediately preceding the
transaction and (ii) will be permitted, at the time of such transaction
and after giving pro forma effect thereto as if such transaction had
occurred at the beginning of the applicable four-quarter period, to incur
at least $1.00 of additional Indebtedness pursuant to the Interest
Coverage Ratio test set forth in Section 4.9(a).
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The Issuers shall deliver to the Trustee prior to the consummation of any
proposed transaction an Officers' Certificate to the foregoing effect, an
Opinion of Counsel, stating that all conditions precedent to the proposed
transaction provided for in this Indenture have been complied with, and a
written statement from a firm of independent public accountants of established
national reputation reasonably satisfactory to the Trustee stating that the
proposed transaction complies with clause (e) of this Section 5.1.
For purposes of this Section 5.1, the sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the properties
and assets of one or more Subsidiaries of either of the Issuers, which
properties and assets, if held by such Issuer instead of such Subsidiaries,
would constitute all or substantially all of the properties and assets of such
Issuer on a consolidated basis, shall be deemed to be the sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially all of
the properties and assets of such Issuer.
Section 5.2 Successor Substituted.
In the event of any transaction (other than a lease) contemplated by
Section 5.1 in which such Issuer is not the surviving Person, the successor
formed by such consolidation or into or with which such Issuer is merged or to
which such sale, assignment, transfer, conveyance or other disposition is made,
or formed by such reorganization, as the case may be, shall succeed to, and be
substituted for, and may exercise every right and power of, such Issuer under,
and such Issuer shall be discharged from its Obligations under, this Indenture,
the Notes, the Security Documents and the Registration Rights Agreement, with
the same effect as if such successor Person had been named as such Issuer herein
or therein.
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.1 Events of Default.
(a) Each of the following shall constitute an "Event of Default"
under this Indenture:
(i) the Issuers default in the payment of interest on any Note
when the same becomes due and payable and the Default continues for
a period of 30 days;
(ii) the Issuers default in the payment of the principal (or
premium, if any) on any Note when the same becomes due and payable
at maturity, upon redemption, by acceleration, in connection with an
Excess Proceeds Offer or a Change of Control Offer or otherwise;
(iii) either of the Issuers default in the performance of or
breaches the provisions of Sections 4.7, 4.10 or 4.14, or 5.1;
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(iv) either of the Issuers or any Subsidiary Guarantor fails
to comply with any of its other agreements or covenants in, or
provisions of, the Notes or this Indenture and the Default continues
for 60 days after written notice thereof has been given to the
Issuers by the Trustee or to the Issuers and the Trustee by the
Holders of at least 25% in aggregate principal amount of the then
outstanding Notes, such notice to state that it is a "Notice of
Default";
(v) a default occurs under (after giving effect to any
waivers, amendments, applicable grace periods or any extension of
any maturity date) any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by the Issuers or any Restricted
Subsidiary (or the payment of which is guaranteed by the Issuers or
any Restricted Subsidiary), whether such Indebtedness or guaranty
now exists or is created after the Issue Date, if (1) either (A)
such default results from the failure to pay principal of or
interest on such Indebtedness or (B) as a result of such default the
maturity of such Indebtedness has been accelerated, and (2) the
principal amount of such Indebtedness, together with the principal
amount of any other such Indebtedness with respect to which such a
payment default (after the expiration of any applicable grace period
or any extension of the maturity date) has occurred, or the maturity
of which has been so accelerated, exceeds $5.0 million in the
aggregate;
(vi) a final non-appealable judgment or judgments for the
payment of money (other than to the extent of any judgment as to
which a reputable insurance company has accepted liability) is or
are entered by a court or courts of competent jurisdiction against
either of the Issuers or any Subsidiary and such judgment or
judgments remain undischarged, unbonded or unstayed for a period of
60 days after entry, provided that the aggregate of all such
judgments exceeds $5.0 million;
(vii) the cessation of substantially all gaming operations of
the Company for more than 60 days, except as a result of an Event of
Loss;
(viii) any revocation, suspension, expiration (without
previous or concurrent renewal) or loss of any Gaming License for
more than 90 days;
(ix) any event of default under a Security Document;
(x) either of the Issuers or any Subsidiary Guarantor pursuant
to or within the meaning of any Bankruptcy Law:
(1) commences a voluntary case,
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(2) consents to the entry of an order for relief against
it in an involuntary case,
(3) consents to the appointment of a Custodian of it or
for all or substantially all of its property,
(4) makes a general assignment for the benefit of its
creditors,
(5) admits in writing its inability to pay debts as the
same become due; and
(xi) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(1) is for relief against either of the Issuers or any
Subsidiary Guarantor in an involuntary case,
(2) appoints a Custodian of either of the Issuers or any
Subsidiary Guarantor or for all or substantially all of their
property,
(3) orders the liquidation of either of the Issuers, or
any Subsidiary Guarantor,
and the order or decree remains unstayed and in effect for 60 days.
(b) The Issuers shall, upon becoming aware that a Default or Event
of Default has occurred, deliver to the Trustee a statement specifying
such Default or Event of Default and what action the Issuers are taking or
propose to take with respect thereto.
Section 6.2 Acceleration.
Subject to the terms of the Intercreditor Agreement, if an Event of
Default (other than an Event of Default specified in clause (x) or (xi) of
Section 6.1(a)) occurs and is continuing, the Trustee by written notice to the
Issuers, or the Holders of at least 25% in principal amount of the then
outstanding Notes by written notice to the Issuers and the Trustee, may declare
the unpaid principal of and any accrued interest on all the Notes to be due and
payable. Upon such declaration the principal and interest shall be due and
payable immediately. If an Event of Default specified in clause (x) or (xi) of
Section 6.1(a) occurs, all outstanding Notes shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder. At any time after a declaration of acceleration, but
before a judgment or decree for payment of the money due has been obtained by
the Trustee, the Holders of a majority in aggregate principal amount of the
Notes outstanding, by written notice to the Issuers and the Trustee, may rescind
and
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annul such declaration and its consequences if (a) the Issuers have paid or
deposited with the Trustee a sum sufficient to pay (i) all sums paid or advanced
by the Trustee and the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, (ii) all overdue interest
(including any interest accrued subsequent to an Event of Default specified in
clause (x) or (xi) of Section 6.1(a)) on all Notes, (iii) the principal of and
premium, if any, on any Notes that have become due otherwise than by such
declaration or occurrence of acceleration and interest thereon at the rate borne
by the Notes, and (iv) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Notes; (b) all Events of
Default, other than the non-payment of principal of and interest on the Notes
that have become due solely by such declaration or occurrence of acceleration,
have been cured or waived; and (c) the rescission would not conflict with any
judgment, order or decree of any court of competent jurisdiction.
Section 6.3 Other Remedies.
If an Event of Default occurs and is continuing, subject to the terms of
the Intercreditor Agreement, the Trustee may pursue any available remedy (under
this Indenture or otherwise) to collect the payment of principal or interest on
the Notes or to enforce the performance of any provision of the Notes, this
Indenture or the Security Documents.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder in exercising any right or remedy accruing upon an
Event of Default shall not impair the right or remedy or constitute a waiver of
or acquiescence in the Event of Default. All remedies are cumulative to the
extent permitted by law.
Section 6.4 Waiver of Past Defaults.
Holders of a majority of the aggregate principal amount of the then
outstanding Notes by written notice to the Trustee may on behalf of the Holders
of all of the Notes (a) waive any existing Default or Event of Default and its
consequences under this Indenture except a continuing Default or Event of
Default in the payment of the principal of, or interest on, any Note or a
Default or 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 Note affected, and/or (b) rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default (except nonpayment of principal or
interest that has become due solely because of the acceleration) have been cured
or waived. Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
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Section 6.5 Control by Majority.
The Holders of a majority in principal amount of the then outstanding
Notes may direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
it. However, the Trustee may refuse to follow any direction that conflicts with
law or this Indenture, that the Trustee determines may be unduly prejudicial to
the rights of other Holders, or that may involve the Trustee in personal
liability.
Section 6.6 Limitation on Suits.
A Holder may pursue a remedy with respect to this Indenture or the Notes
only if:
(a) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any loss, liability
or expense;
(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.
Section 6.7 Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal and interest on the Note, on or
after the respective due dates expressed in the Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of the Holder.
Section 6.8 Collection Suit by Trustee.
If an Event of Default specified in Section 6.1(a)(i) or 6.1(a)(ii) occurs
and is continuing, the Trustee is authorized to recover judgment in its own name
and as trustee of an express trust against the Issuers for the whole amount of
principal and interest remaining unpaid on the Notes and interest
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on overdue principal (and premium, if any) and, to the extent lawful, interest
on overdue interest and such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee and its agents and counsel.
Section 6.9 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Issuers (or any
other obligor under the Notes), their creditors or their property and shall be
entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee and its agents and counsel, and any other amounts due the Trustee under
Section?. To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Trustee and its agents and counsel, and any
other amounts due the Trustee under Section ? out of the estate in any such
proceeding, shall be denied for any reason, payment of the same shall be secured
by a Lien on, and shall be paid out of, any and all distributions, dividends,
money, securities and other properties that the Holders may be entitled to
receive in such proceeding whether in liquidation or under any plan of
reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
Section 6.10 Priorities.
Subject to the terms of the Intercreditor Agreement, if the Trustee
collects any money pursuant to this Article VI, it shall pay out the money in
the following order:
First: to the Trustee and its agents and attorneys for amounts due
under Section?, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs
and expenses of collection;
Second: to Holders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for principal
and interest, respectively;
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Third: without duplication, to Holders for any other Obligations
owing to the Holders under the Notes, this Indenture, the Security
Documents or the Registration Rights Agreement; and
Fourth: to the Issuers or to such party as a court of competent
jurisdiction shall direct.
The Trustee, upon written notice to the Issuers, may fix a record date and
payment date for any payment to Holders.
Section 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.6, or a suit by Holders of more than 10% in principal
amount of the then outstanding Notes.
ARTICLE VII
TRUSTEE
Section 7.1 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture and 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 or her own affairs.
(b) Except during the continuance of an Event of Default:
(i) The duties of the Trustee shall be determined solely by
the express provisions of this Indenture, and the Trustee need
perform only those duties that are specifically set forth in this
Indenture and the Security Documents, and no others, and no implied
covenants or obligations shall be read into this Indenture against
the Trustee.
(ii) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture and the Security Documents. However, the Trustee
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shall examine the certificates and opinions to determine whether
they conform to the requirements of this Indenture and the Security
Documents.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) This paragraph does not limit the effect of paragraph (b)
of this Section 7.1.
(ii) The Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts.
(iii) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.5.
(d) Regardless of whether therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is
subject to paragraphs (a), (b), (c) and (e) of this Section 7.1.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee may
refuse to perform any duty or exercise any right or power unless it
receives security and indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the
Issuers. Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) The Trustee is hereby authorized and directed to enter into the
Intercreditor Agreement upon execution thereof by the other parties
thereto.
Section 7.2 Rights of Trustee.
(a) The Trustee may conclusively rely and shall be protected in
acting or refraining from acting upon any document believed by it to be
genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith
in reliance on such Officers' Certificate or Opinion of
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Counsel. The Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through 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.
(e) Unless otherwise specifically provided in this Indenture and the
Security Documents, any demand, request, direction or notice from the
Issuers shall be sufficient if signed by an Officer of each of the
Issuers, on behalf of the respective Issuer.
(f) Except with respect to Section 4.1, the Trustee shall have no
duty to inquire as to the performance of the Issuers' covenants in Article
IV. 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 6.1(a)(i), 6.1(a)(ii) and 4.1, or (ii) any Default or
Event of Default of which the Trustee shall have received written
notification or a Responsible Officer of the Trustee shall have obtained
actual knowledge.
Section 7.3 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with either Issuer or an Affiliate of
either Issuer with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights. However, the Trustee is subject to
Sections 7.10 and 7.11.
Section 7.4 Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Issuers' use of the proceeds from the Notes or any money
paid to the Issuers or upon the Issuers' direction under any provision hereof,
it shall not be responsible for the use or application of any money received by
any Paying Agent other than the Trustee and it shall not be responsible for any
statement or recital herein or any statement in the Notes or any other document
in connection with the sale of the Notes or pursuant to this Indenture other
than its certificate of authentication.
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Section 7.5 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if the
Trustee has actual knowledge thereof (within the meaning of Section 7.2(f), the
Trustee shall mail to the Holders a notice of the Default or Event of Default
within 90 days after it occurs. Except in the case of a Default or Event of
Default in the payment of principal of, premium, if any, or interest on any
Note, the Trustee may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interest of the Holders.
Section 7.6 Reports by Trustee to Holders.
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, the Trustee shall mail to the Holders a brief report
dated as of such reporting date that complies with TIA ss.313(a) (but if no
event described in TIA ss.313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA ss.313(b). The Trustee shall also transmit by mail all
reports as required by TIA ss.313(c).
Commencing at the time this Indenture is qualified under the TIA, a copy
of each report at the time of its mailing to the Holders shall be filed with the
Commission and each stock exchange on which the Notes are listed. The Issuers
shall promptly notify the Trustee when the Notes are listed on any stock
exchange.
At the express direction of the Company and at the Company's expense, the
Trustee will provide any Gaming Authority with:
(a) copies of all notices, reports and other written communications
that the Trustee gives to Holders;
(b) a list of all of the Holders promptly after the original
issuance of the Notes and periodically thereafter if the Company so
directs;
(c) notice of any Default or Event of Default under this Indenture,
any acceleration of the Indebtedness evidenced hereby, the institution of
any legal actions or proceedings before any court or governmental
authority in respect of a Default or Event of Default hereunder;
(d) notice of the removal or resignation of the Trustee within five
Business Days of the effectiveness thereof;
(e) notice of any transfer or assignment of rights under this
Indenture known to the Trustee within five Business Days thereof; and
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(f) a copy of any amendment to the Notes or this Indenture within
five Business Days of the effectiveness thereof.
To the extent requested by the Company and at the Company's expense,
the Trustee shall cooperate with any Gaming Authority in order to provide such
Gaming Authority with the information and documentation requested and as
otherwise required by applicable law.
Section 7.7 Compensation and Indemnity.
The Issuers shall pay to the Trustee from time to time such compensation
as shall be agreed to in writing by the Issuers and the Trustee for its
acceptance of this Indenture and services hereunder. The Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Issuers shall reimburse the Trustee promptly upon request for all
reasonable disbursements, advances and expenses incurred or made by it in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee's agents and
counsel, except such disbursements, advances and expenses as may be attributable
to its negligence or bad faith.
Except as set forth below, the Issuers, jointly and severally, shall
indemnify the Trustee, any predecessor and their respective officers, directors,
agents and employees against any and all losses, liabilities, damages, claims or
expenses incurred by it without negligence or bad faith on its part arising out
of or in connection with the acceptance or administration of its duties under
this Indenture and the Security Documents (including the costs and expenses of
enforcing this Indenture or the Security Documents against either of the Issuers
and defending itself against any claim (regardless of whether asserted by either
of the Issuers or any Holder or any other person) or liability in connection
with the exercise or performance of any of its powers or duties hereunder),
except as set forth below. The Trustee shall notify each of the Issuers promptly
of any claim for which it may seek indemnity. Failure by the Trustee to so
notify the Issuers shall not relieve the Issuers of their obligations hereunder.
Each of the Issuers shall defend the claim and the Trustee shall cooperate in
the defense. In the event that a conflict of interest or conflicting defenses
would arise in connection with the representation of the Issuers and the Trustee
by the same counsel, the Trustee may have separate counsel and the Issuers shall
pay the reasonable fees and expenses of such counsel. The Issuers need not pay
for any settlement made without their consent, which consent shall not be
unreasonably withheld.
The obligations of the Issuers under this Section ? shall survive the
satisfaction and discharge of this Indenture.
The Issuers need not reimburse any expense or indemnify against any loss
or liability incurred by the Trustee through its own negligence or bad faith.
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To secure the Issuers' payment obligations in this Section ?, the Trustee
shall have a Lien prior to the Notes on all money or property held or collected
by the Trustee, except that held in trust to pay principal of (and premium, if
any) and interest on particular Notes. Such Lien shall survive the satisfaction
and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(a)(x) or (xi) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The provisions of this Section ? shall survive the termination of this
Indenture.
Section 7.8 Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.8 and upon the Issuers' receipt of
notice from the successor Trustee of such appointment.
The Trustee may resign at any time and be discharged from the trust hereby
created by so notifying the Issuers. The Holders of a majority in principal
amount of the then outstanding Notes may remove the Trustee by so notifying the
Trustee and the Issuers. The Issuers may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property;
(d) the Trustee becomes incapable of acting; or
(e) the Trustee is found unsuitable or unqualified by any Gaming
Authority.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Issuers shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Issuers.
If any Gaming Authority requires the Trustee to be approved, licensed or
qualified and the Trustee fails or declines to do so, such approval, license or
qualification shall be obtained upon the request of, and at the expense of, the
Company, unless the Trustee declines to do so, in which case the Trustee shall
be replaced in accordance with this Section 7.8, or, if the Trustee's
relationship with the Company may, in the Company's discretion, jeopardize any
material Gaming License or
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franchise or right or approval granted thereto, the Trustee shall resign, and,
in addition, the Trustee may, at its option, resign if the Trustee in its sole
discretion determines not to be so approved, licensed or qualified.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuers or the
Holders of at least 10% in principal amount of the then outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee after written request by any Holder who has been a Holder
for at least six months fails to comply with Section 7.10, such Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Issuers. Thereupon, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to the
Holders. The retiring Trustee shall promptly transfer all property held by it as
Trustee to the successor Trustee, provided that all sums owing to the Trustee
hereunder have been paid and subject to the Lien provided for in Section?.
Notwithstanding replacement of the Trustee pursuant to this Section 7.8, the
Issuers' obligations under Section ? shall continue for the benefit of the
retiring Trustee, and the Issuers shall pay to any such replaced or removed
Trustee all amounts owed under Section ? upon such replacement or removal.
Section 7.9 Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation or
banking association, the successor corporation without any further act shall be
the successor Trustee.
Section 7.10 Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that shall (a) be a
corporation organized and doing business under the laws of the United States of
America or of any state thereof or of the District of Columbia authorized under
such laws to exercise corporate trustee power, (b) be subject to supervision or
examination by Federal or state or the District of Columbia authority, and (c)
have a combined capital and surplus of at least $100.0 million as set forth in
its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA ss.ss.310(a)(1), 310(a)(2) and 310(a)(5). The Trustee is subject to TIA
ss.310(b); provided, however, that there shall be excluded from the operations
of TIA ss.310(b)(l) any indenture or indentures under
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which other securities, or certificates of interest or participation in other
securities, of the Company are outstanding, if the requirements for such
exclusion set forth in TIA ss.310(b)(1) are met.
Section 7.11 Preferential Collection of Claims Against the Issuers.
The Trustee is subject to TIA ss.311(a), excluding any creditor
relationship listed in TIA ss.311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss.311(a) to the extent indicated therein. The
provisions of TIA ss.311 shall apply to the Issuers, as obligors on the Notes.
ARTICLE VIII
DISCHARGE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.1 Discharge; Option to Effect Legal or Covenant Defeasance.
This Indenture shall cease to be of further effect (except that the
Issuers' and the Subsidiary Guarantors' obligations under Section ? and the
Trustee's and the Paying Agent's obligations under Sections 8.6 and 8.7 shall
survive) when all outstanding Notes theretofore authenticated and issued have
been delivered (other than destroyed, lost or stolen Notes that have been
replaced or paid) to the Trustee for cancellation and the Issuers or the
Subsidiary Guarantors have paid all sums payable hereunder. In addition, the
Issuers may elect at any time to have Section 8.2 or Section 8.3, at the
Issuers' option, of this Indenture applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article VIII.
Section 8.2 Legal Defeasance and Discharge.
Upon the Issuers' exercise under Section 8.1 of the option applicable to
this Section 8.2, except as set forth below, the Issuers and the Subsidiary
Guarantors shall be deemed to have been discharged from their respective
obligations with respect to all outstanding Notes on the date the conditions set
forth below are satisfied (hereinafter, "Legal Defeasance"). Following such
Legal Defeasance, (a) the Issuers shall be deemed to have paid and discharged
the entire indebtedness outstanding hereunder, and this Indenture shall cease to
be of further effect as to all outstanding Notes and Subsidiary Guarantees, and
(b) the Issuers and the Subsidiary Guarantors shall be deemed to have satisfied
all other of their respective obligations under the Notes, the Subsidiary
Guarantees and this Indenture (and the Trustee, on demand of and at the expense
of the Issuers, shall execute proper instruments acknowledging the same), except
for the following which shall survive until otherwise terminated or discharged
hereunder:
(i) the rights of Holders to receive payments in respect of the
principal of, premium, if any, and interest (and Liquidated Damages, if
any) on such Notes when such payments are due from the trust described in
Section 8.5;
(ii) the Issuers' obligations under Sections 2.4, 2.6, 2.7, 2.l0,
4.2, 8.5, 8.6 and 8.7; and
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(iii) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Issuers' and the Subsidiary Guarantors'
obligations in connection therewith.
Subject to compliance with the provisions of this Article VIII, the Company may
exercise its option under this Section 8.2 notwithstanding the prior exercise of
its option under Section 8.3.
Section 8.3 Covenant Defeasance.
Upon the Issuers' exercise under Section 8.1 of the option applicable to
this Section 8.3, the Company and the Subsidiary Guarantors shall be released
from their respective obligations under the covenants contained in Sections 4.3,
4.4, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19 and
4.20 and Article V on and after the date the conditions set forth below are
satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall thereafter
be deemed not "outstanding" for the purposes of any direction, waiver, consent
or declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder. Following such Covenant Defeasance, (a) none
of the Issuers or any Subsidiary Guarantor need comply with, and none of them
shall have any 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, the Notes and the
Subsidiary Guarantees shall be unaffected thereby, and (b) Sections 6.1(a)(iii)
through 6.1(a)(ix) shall not constitute Events of Default with respect to the
Notes.
Section 8.4 Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either Section
8.2 or 8.3 to the outstanding Notes:
(a) the Issuers shall irrevocably have deposited or caused to be
deposited with the Trustee (or other trustee satisfying the requirements
of Section 7.10 who shall agree to comply with the provisions of this
Article VIII applicable to it), in trust, for the benefit of the Holders,
cash in U.S. dollars, non-callable Government Securities, or a combination
thereof, in such amounts as will be sufficient, in the opinion of a
nationally recognized firm of independent public accountants, to pay the
principal of, premium, if any, and interest (and Liquidated Damages, if
any) on such outstanding Notes on the stated maturity or on the applicable
redemption date, as the case may be, and the Issuers must specify whether
the Notes are being defeased to maturity or to a particular redemption
date;
(b) in the case of Legal Defeasance, the Issuers shall have
delivered to the Trustee an Opinion of Counsel confirming that (i) the
Issuers have received from, or there has been published by, the Internal
Revenue Service a ruling or (ii) since the Issue Date, there has
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been a change in the applicable Federal income tax law, in either case to
the effect that, and based thereon such Opinion of Counsel shall confirm
that, the Holders 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 had
not occurred;
(c) in the case of Covenant Defeasance, the Issuers shall have
delivered to the Trustee an Opinion of Counsel confirming that the Holders
of the outstanding Notes 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;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the borrowing of funds to be applied to such
deposit);
(e) such Legal Defeasance or Covenant Defeasance will not result in
a breach or violation of, or constitute a default under any material
agreement or instrument (other than this Indenture) to which the Issuers
or any of the Subsidiaries is a party or by which the Issuers or any of
the Subsidiaries is bound;
(f) the Issuers shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Issuers with the
intent of preferring the Holders over the other creditors of the Issuers
with the intent of defeating, hindering, delaying or defrauding other
creditors of the Issuers or others;
(g) each of the Issuers shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating, subject to
certain factual assumptions and bankruptcy and insolvency exceptions, that
all conditions precedent provided for in, in the case of the Officers'
Certificate, clauses (a) through (f) of this paragraph and, in the case of
the Opinion of Counsel, clauses (b), (c) and (e) of this paragraph, have
been complied with; and
(h) in the event all or any portion of the Notes are to be redeemed
through such irrevocable trust, the Issuers must make arrangements
satisfactory to the Trustee, at the time of such deposit, for the giving
of notice of such redemption or redemptions by the Trustee in the name and
at the expense of the Issuers.
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Section 8.5 Deposits to be Held in Trust: Other Miscellaneous Provisions.
Subject to Section 8.6, all cash in U.S. dollars and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.5, the "Paying Agent") pursuant to Section 8.4 in respect of the outstanding
Notes shall be held in trust and applied by the Paying Agent, in accordance with
the provisions of such Notes and this Indenture, to the payment, either directly
or through any other Paying Agent as the Trustee may determine, to the Holders
of such Notes of all sums due and to become due thereon in respect of principal,
premium, if any, and interest (and Liquidated Damages, if any).
The Issuers shall pay and, jointly and severally, indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against the
Government Securities deposited pursuant to Section 8.4 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 outstanding Notes.
Section 8.6 Repayment to the Issuers.
(a) The Trustee or the Paying Agent shall deliver or pay to the
Issuers from time to time upon the request of the Issuers any cash in U.S.
dollars or non-callable Government Securities held by it as provided in
Section 8.4 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 8.4(a)), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or
Covenant Defeasance.
(b) Any cash in U.S. dollars and non-callable Government Securities
(including the proceeds thereof) deposited with the Trustee or any Paying
Agent, or then held by the Issuers, in trust for the payment of the
principal of, premium, if any, or interest (and Liquidated Damages, if
any) on any Note and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable
shall be paid to the Issuers on their request; and the Holder of such Note
shall thereafter look only to the Issuers 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, shall at
the expense of the Issuers 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 Issuers.
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Section 8.7 Reinstatement.
If the Trustee or Paying Agent is unable to apply any cash in U.S. dollars
or non-callable Government Securities in accordance with Section 8.2 or 8.3, as
the case may be, of this Indenture by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, or if any event occurs at any time in the period ending on the
91st day after the date of deposit pursuant to Section 8.2 or 8.3 which event
would constitute an Event of Default under Section 6.1(a)(x) or (xi) had Legal
Defeasance or Covenant Defeasance, as the case may be, not occurred, then the
Issuers' and the Subsidiary Guarantors' obligations under this Indenture and the
Notes shall be revived and reinstated as though no deposit had occurred pursuant
to Section 8.2 or 8.3 until such time as the Trustee or Paying Agent is
permitted to apply such money in accordance with Section 8.2 or 8.3, as the case
may be; provided, however, that, if the Issuers make any payment of principal
of, premium, if any, or interest (and Liquidated Damages, if any) on any Note
following the reinstatement of their obligations, the Issuers shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the cash in U.S. dollars or non-callable Government Securities held by the
Trustee or Paying Agent.
ARTICLE IX
AMENDMENTS
Section 9.1 Without Consent of Holders.
(a) The Issuers, the Subsidiary Guarantors and the Trustee may amend
or supplement this Indenture and the Notes without the consent of any
Holder:
(i) to cure any ambiguity, defect or inconsistency;
(ii) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(iii) to comply with Article V and Section 10.6;
(iv) to make any change that would provide any additional
rights or benefits to the Holders or that does not adversely affect
the legal rights hereunder or thereunder of any Holder;
(v) to comply with requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the
TIA; or
(vi) to release any Subsidiary Guaranty of the Notes permitted
to be released under Section 10.7.
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Upon the request of the Issuers, accompanied by a resolution of the Board
of Directors or Managers, as the case may be, of each of the Issuers authorizing
the execution of any such supplemental indenture or amendment, and upon receipt
by the Trustee of the documents described in Section 9.6 required or requested
by the Trustee, the Trustee shall join with the Issuers in the execution of any
supplemental indenture or amendment authorized or permitted by the terms of this
Indenture and shall make any further appropriate agreements and stipulations
which may be therein contained, but the Trustee shall not be obligated to enter
into such supplemental indenture or amendment that affects its own rights,
duties or immunities under this Indenture or otherwise.
Section 9.2 With Consent of Holders.
(a) Subject to Sections 6.4, 6.7 and 9.2(e), the Issuers and the
Trustee, as applicable, may amend, or waive any provision of, this
Indenture or the Notes, with the written consent of the Holders of at
least a majority in aggregate principal amount of the then outstanding
Notes (including consents obtained in connection with a tender offer or
exchange offer for Notes).
(b) Upon the request of the Issuers, accompanied by a resolution of
the Board of Directors or Managers, as the case may be, of each of the
Issuers authorizing the execution of any such supplemental indenture or
amendment, and upon filing with the Trustee of evidence satisfactory to
the Trustee of the consent of the Holders as aforesaid, and upon receipt
by the Trustee of the documents described in Section 9.6, the Trustee
shall join with the Issuers in the execution of such supplemental
indenture or amendment unless such supplemental indenture or amendment
affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion,
but shall not be obligated to, enter into such supplemental indenture.
(c) It shall not be necessary for the consent of the Holders under
this Section 9.2 to approve the particular form of any proposed
supplemental indenture or amendment, but it shall be sufficient if such
consent approves the substance thereof.
(d) After a supplemental indenture or amendment under this Section
9.2 becomes effective, the Issuers shall mail to the Holders of each Note
affected thereby a notice briefly describing the amendment or waiver. Any
failure of the Issuers to mail such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such
supplemental indenture, amendment or waiver.
(e) Notwithstanding any other provision hereof, without the consent
of each Holder affected, an amendment or waiver under this Section 9.2 may
not (with respect to any Notes held by a non-consenting Holder):
(i) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
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(ii) reduce the principal of, or the premium (including,
without limitation, redemption premium) on, or change the fixed
maturity of, any Note; alter the provisions with respect to the
payment on redemption of the Notes; or alter the price at which the
Issuers shall offer to purchase such Notes pursuant to Section 4.10,
4.14 or 4.20;
(iii) reduce the rate of or change the time for payment of
interest, including default interest, on any Note;
(iv) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on, or redemption
payment with respect to, any Note (other than a Default in the
payment of an amount due as a result of an acceleration if the
Holders rescind such acceleration pursuant to Section 6.2);
(v) make any Note payable in money other than that stated in
the Notes;
(vi) make any change in Section 6.4 or 6.7 or in this Section
9.2 with respect to the requirement for the consent of any affected
Holder;
(vii) waive a redemption payment with respect to any Note; or
(viii) make any change adversely affecting the contractual
ranking of the Obligations of the Company under the Notes, this
Indenture or of the Subsidiary Guarantors under their respective
Subsidiary Guarantees.
Section 9.3 Compliance with Trust Indenture Act.
If, at the time of an amendment to this Indenture or the Notes, this
Indenture shall be qualified under the TIA, every amendment to this Indenture or
the Notes shall be set forth in a supplemental indenture that complies with the
TIA as then in effect.
Section 9.4 Revocation and Effect of Consents.
Until a supplemental indenture, an amendment or waiver becomes effective,
a consent to it by a Holder of a Note is a continuing consent by the Holder and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. A supplemental indenture, amendment or waiver becomes
effective in accordance with its terms and thereafter binds every Holder.
The Issuers may fix a record date for determining which Holders must
consent to such supplemental indenture, amendment or waiver. If the Issuers fix
a record date, the record date shall be fixed at (a) the later of 30 days prior
to the first solicitation of such consent or the date of the most
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recent list of Holders furnished to the Trustee prior to such solicitation
pursuant to Section 2.5, or (b) such other date as the Issuers shall designate.
Section 9.5 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about a supplemental
indenture, amendment or waiver on any Note thereafter authenticated. The Issuers
in exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment or waiver.
Section 9.6 Trustee to Sign Amendments, etc.
The Trustee shall sign any amendment or supplemental indenture authorized
pursuant to this Article IX if the amendment does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, sign it. In signing or refusing to sign such
amendment or supplemental indenture, the Trustee shall be entitled to receive,
if requested, an indemnity reasonably satisfactory to it and to receive and,
subject to Section 7.1, shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that such amendment
or supplemental indenture is authorized or permitted by this Indenture, that it
is not inconsistent herewith, and that it shall be valid and binding upon the
Issuers in accordance with its terms. The Issuers may not sign an amendment or
supplemental indenture until the Managers of the Company and the Board of
Directors of PGC approves it.
ARTICLE X
SUBSIDIARY GUARANTEES
Section 10.1 Subsidiary Guaranty.
(a) For good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, subject to Section 10.3, each Subsidiary
Guarantor, jointly and severally, hereby unconditionally guarantees to
each Holder and the Trustee, irrespective of the validity or
enforceability of this Indenture, the Notes, the Security Documents, the
Registration Rights Agreement or the Obligations of the Issuers hereunder
or thereunder:
(i) the due and punctual payment of the principal and premium,
if any, of, and interest on, the Notes (including, without
limitation, interest after the filing of a petition initiating any
proceedings referred to in clause (x) or (xi) of Section 6.1(a)),
whether at maturity or on an interest payment date, by acceleration,
call for redemption or otherwise;
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(ii) the due and punctual payment of interest on the overdue
principal and premium, if any, of, and interest on, the Notes, if
lawful;
(iii) the due and punctual payment and performance of all
other Obligations of the Issuers under the Notes, this Indenture,
the Security Documents and the Registration Rights Agreement, all in
accordance with the terms set forth herein and in the Notes, the
Security Documents and the Registration Rights Agreement; and
(iv) in case of any extension of time of payment or renewal of
any Notes or any of such other Obligations hereunder or under the
Notes, the Security Documents or the Registration Rights Agreement,
the due and punctual payment or performance thereof in accordance
with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise.
(b) Failing payment when due by the Issuers of any amount so
guaranteed for whatever reason, the Subsidiary Guarantors shall be jointly
and severally obligated to pay the same immediately.
(c) Each Subsidiary Guarantor hereby agrees that (i) its obligations
hereunder shall be unconditional, irrespective of the validity, regularity
or enforceability of the Notes, this Indenture, the Security Documents,
the Registration Rights Agreement or the Obligations of the Issuers
hereunder or thereunder, the absence of any action to enforce the same,
any waiver or consent by any Holder with respect to any provisions hereof
or thereof, any releases of Collateral, any amendment of this Indenture,
the Notes or the Security Documents, any delays in obtaining or realizing
upon or failure to obtain or realize upon the Collateral, the recovery of
any judgment against either of the Issuers or any of their Subsidiaries,
any action to enforce the same, or any other circumstance that might
otherwise constitute a legal or equitable discharge or defense of a
guarantor and (ii) each Subsidiary Guaranty will not be discharged except
by complete performance of the Obligations of the Issuers under the Notes,
this Indenture, the Security Documents and the Registration Rights
Agreement.
(d) Each Subsidiary Guarantor hereby agrees that it shall not be
entitled to and irrevocably waives diligence, presentment, demand of
payment, filing of claim with a court in the event of insolvency or
bankruptcy of either of the Issuers, any Subsidiary Guarantor, any other
Subsidiary of the Issuers or any other obligor under the Notes, any right
to require a proceeding first against either of the Issuers, any
Subsidiary Guarantor, any other Subsidiary of the Issuers or any other
obligor under this Indenture, the Notes or the Security Documents,
protest, notice and all demands whatsoever.
(e) If any Holder or the Trustee is required by any court or
otherwise to return to the Issuers, any Subsidiary Guarantor, any other
Subsidiary of the Issuers or any other
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obligor under this Indenture, the Notes or the Security Documents, or any
trustee, liquidator or other similar official, any amount paid by the
Issuers, any Subsidiary Guarantor, any other Subsidiary of the Issuers or
any other obligor under this Indenture, the Notes or the Security
Documents to the Trustee or such Holder, the Subsidiary Guarantees, to the
extent theretofore discharged, shall be reinstated in full force and
effect.
(f) Each Subsidiary Guarantor agrees that, as between the Subsidiary
Guarantors, on the one hand, and the Holders and the Trustee, on the other
hand, (i) the maturity of the Obligations of the Issuers guaranteed hereby
may be accelerated as provided in Section 6.2 for the purposes of the
Subsidiary Guarantees, notwithstanding any stay, injunction or other
prohibition preventing such acceleration as to the Issuers of the
Obligations guaranteed hereby, and (ii) in the event of any declaration of
acceleration of those Obligations as provided in Section 6.2, those
Obligations (regardless of whether due and payable) will forthwith become
due and payable by each of the Subsidiary Guarantors for the purpose of
the Subsidiary Guarantees.
Section 10.2 Execution and Delivery of the Subsidiary Guarantees.
(a) To evidence the Subsidiary Guarantees set forth in Section 10.1,
the Issuers and each Subsidiary Guarantor hereby agrees that
(i) a notation of the Subsidiary Guarantees substantially as
set forth on Exhibit C hereto shall be endorsed on each Note
authenticated and delivered by the Trustee,
(ii) such endorsement shall be executed on behalf of each
Subsidiary Guarantor by its Manager, Chairman of the Board,
President, Chief Financial Officer, Chief Operating Officer,
Treasurer, Secretary or any Vice President and
(iii) a counterpart signature page to this Indenture shall be
executed on behalf of each Subsidiary Guarantor by its Manager,
Chairman of the Board, President or one of its Vice Presidents and
attested to by another officer acknowledging such Subsidiary
Guarantor's agreement to be bound by the provisions hereof and
thereof.
(b) Each Subsidiary Guarantor hereby agrees that its Subsidiary
Guaranty set forth in Section 10.1 shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such
Subsidiary Guaranty.
(c) If an officer whose signature is on this Indenture no longer
holds that office at the time the Trustee authenticates the Notes on which
a Subsidiary Guaranty is endorsed, the Subsidiary Guaranty shall
nevertheless be valid.
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(d) The delivery of any Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the
Subsidiary Guarantees set forth in this Indenture on behalf of the
Subsidiary Guarantors.
Section 10.3 Limitation on Subsidiary Guarantor's Liability.
Each Subsidiary Guarantor and by its acceptance hereof each Holder hereby
confirms that it is the intention of all such parties that the guaranty by such
Subsidiary Guarantor pursuant to its Subsidiary Guaranty not constitute a
fraudulent transfer or conveyance for purposes of any federal or state law. To
effectuate the foregoing intention, the Holders and the Subsidiary Guarantors
hereby irrevocably agree that the Obligations of each Subsidiary Guarantor under
its Subsidiary Guaranty shall be limited to the maximum amount as will, after
giving effect to all other contingent and fixed liabilities of such Subsidiary
Guarantor and to any collections from or payments made by or on behalf of any
other Subsidiary Guarantor in respect of the Obligations of such other
Subsidiary Guarantor under its Subsidiary Guaranty, result in the Obligations of
such Subsidiary Guarantor under its Subsidiary Guaranty not constituting a
fraudulent conveyance or fraudulent transfer under federal or state law and not
rendering a Subsidiary Guarantor insolvent.
Section 10.4 Rights under the Subsidiary Guarantees.
(a) No payment by any Subsidiary Guarantor pursuant to the
provisions hereof shall entitle such Subsidiary Guarantor to any payment
out of any Collateral or give rise to any claim of the Subsidiary
Guarantors against the Trustee or any Holder.
(b) Each Subsidiary Guarantor waives notice of the issuance, sale
and purchase of the Notes and notice from the Trustee or the Holders from
time to time of any of the Notes of their acceptance and reliance on its
Subsidiary Guaranty.
(c) No set-off, counterclaim, reduction or diminution of any
obligation or any defense of any kind or nature (other than performance by
the Subsidiary Guarantors of their obligations hereunder) that any
Subsidiary Guarantor may have or assert against the Trustee or any Holder
shall be available hereunder to such Subsidiary Guarantor.
(d) Each Subsidiary Guarantor shall pay all costs, expenses and
fees, including all reasonable attorneys' fees, that may be incurred by
the Trustee in enforcing or attempting to enforce the Subsidiary
Guarantees or protecting the rights of the Trustee or the Holder, if any,
in accordance with this Indenture.
Section 10.5 Primary Obligations.
The Obligations of each Subsidiary Guarantor hereunder shall constitute a
guaranty of payment and not of collection. Each Subsidiary Guarantor agrees that
it is directly liable to each Holder hereunder, that the Obligations of each
Subsidiary Guarantor hereunder are independent of
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the Obligations of the Issuers or any other Subsidiary Guarantor, and that a
separate action may be brought against each Subsidiary Guarantor, whether such
action is brought against either of the Issuers or any other Subsidiary
Guarantor or whether either of the Issuers or any other Subsidiary Guarantor is
joined in such action. Each Subsidiary Guarantor agrees that its liability
hereunder shall be immediate and shall not be contingent upon the exercise or
enforcement by the Trustee or the Holders of whatever remedies they may have
against either of the Issuers or any other Subsidiary Guarantor or the
enforcement of any lien or realization upon any security the Trustee may at any
time possess. Each Subsidiary Guarantor agrees that any release that may be
given by the Trustee or the Holders to either of the Issuers or any other
Subsidiary Guarantor shall not release such Subsidiary Guarantor.
Section 10.6 Guaranty by Future Subsidiaries.
The Issuers shall cause each Person that becomes a Restricted Subsidiary
after the Issue Date (regardless of whether through formation, acquisition,
merger or otherwise) to, concurrently with so becoming a Restricted Subsidiary
to
(a) become a Subsidiary Guarantor hereunder and execute and deliver
to the Trustee an endorsement of its Subsidiary Guaranty in the form of
Exhibit C attached hereto and a supplemental indenture in form reasonably
satisfactory to the Trustee, pursuant to which such Restricted Subsidiary
shall unconditionally guarantee all of the Issuers' Obligations under the
Notes, this Indenture, the Security Documents and the Registration Rights
Agreement as set forth in Section 10.1,
(b) execute Security Documents (substantially in the form of the
Security Documents entered into on the Closing Date) necessary to grant to
the Trustee a valid, enforceable, perfected Lien on the Collateral
described therein, and
(c) deliver to the Trustee an Opinion of Counsel, in form reasonably
satisfactory to the Trustee, to the effect that (i) such supplemental
indenture, Subsidiary Guaranty and Security Documents have been duly
authorized, executed and delivered by such Restricted Subsidiary and (ii)
such supplemental indenture, Subsidiary Guaranty and Security Documents
constitute legal, valid, binding and enforceable obligations of such
Restricted Subsidiary, subject to customary exceptions for bankruptcy,
fraudulent transfer and equitable principles.
Each Note issued after the date of execution by any Subsidiary Guarantor
of a Subsidiary Guaranty shall be endorsed with a form of Subsidiary Guaranty
that has been executed by such Subsidiary Guarantor. However, the failure of any
Note to have endorsed thereon a Subsidiary Guaranty executed by such Subsidiary
Guarantor shall not affect the validity or enforceability of such Subsidiary
Guaranty against such Subsidiary Guarantor.
82
Section 10.7 Release of Subsidiary Guarantors.
If all of the Capital Stock of any Subsidiary Guarantor is sold by the
Company or any of the Subsidiaries to a Person (other than the Company or any of
its Subsidiaries) and the Net Proceeds from such Asset Sale are used in
accordance with Section 4.10, then such Subsidiary Guarantor shall be released
and discharged from all of its obligations under its Subsidiary Guaranty of the
Notes and this Indenture.
ARTICLE XI
SECURITY INTEREST
Section 11.1 Grant of Security Interest.
(a) In order to secure the performance of the Issuers' obligation to
pay the principal amount of, premium, if any, and interest on the Notes
when and as the same shall be due and payable, whether at maturity or on
an interest payment date, by acceleration, call for redemption, repurchase
or otherwise, and interest on the overdue principal of and premium, if
any, and interest, if lawful, on the Notes and performance of all other
Obligations of the Issuers to the Holders and the Trustee under this
Indenture and the Notes, according to their terms hereunder or thereunder,
the Company pursuant to the Security Documents has unconditionally and
absolutely granted to the Trustee for the benefit of itself and all
Holders, a security interest in the Collateral, whether owned on the Issue
Date or thereafter acquired, subject to the limitations set forth in
Section 4.12 (the "Security Interest"). The Trustee's security interest in
the Collateral will be subordinated to a lien securing Indebtedness
outstanding under the Senior Credit Facility. Prior to the effectiveness
of such Senior Credit Facility, with incurring any such Indebtedness, the
Trustee will be permitted to enter into an Intercreditor Agreement with
the Lenders under such Senior Credit Facility substantially in the form of
Exhibit D attached hereto.
(b) The Security Interest as now or hereafter in effect shall be
held for the Trustee and for the equal and ratable benefit and security of
the Notes without preference, priority or distinction of any thereof over
any other by reason, or difference in time, of issuance, sale or
otherwise, and for the enforcement of the payment of principal of,
premium, if any, and interest on the Notes in accordance with their terms.
(c) The Company represents and warrants that it has executed and
delivered, filed and recorded and/or shall, and shall cause each
Restricted Subsidiary to, execute and deliver, file and record, all
instruments and documents, and has done or will do or cause to be done all
such acts and other things as are necessary or proper, or as may be
required by the Security Documents, to subject the Collateral to the Lien
of the Security Documents. The Company shall, and shall cause each
Restricted Subsidiary to, execute and deliver, file and record all
instruments and do all acts and other things as may be reasonably
necessary or
83
advisable to perfect, maintain and protect the Security Interest and shall
pay all filing, recording, mortgage or other taxes or fees incidental
thereto.
(d) The Company shall, and shall cause each Restricted Subsidiary
to, furnish to the Trustee (i) promptly after the recording or filing, or
re-recording or re-filing of the Security Documents and other security
filings, an Opinion of Counsel (who may be counsel for the Company)
stating that in the opinion of such counsel the Security Documents and
other security filings have been properly recorded, filed, re-recorded or
re-filed so as to make effective and perfect the Security Interest
intended to be created thereby and reciting the details of such action;
and (ii) at least annually on the anniversary date of the execution and
delivery of this Indenture, an Opinion of Counsel (who may be counsel for
the Company), dated as of such date, either stating that in the opinion of
such counsel such action with respect to the recording, registering,
filing, re-recording or re-filing of the Security Documents and other
security filings, financing statements, continuation statements or other
instruments of further assurance has been taken as is necessary to
maintain the Lien and Security Interest of the Security Documents and
other security filings, financing statements, continuation statements or
other instruments of further assurance and reciting the details of such
action, or stating that in the opinion of such counsel no such action is
necessary to maintain such Lien and Security Interest, and stating what
actions it then believes are necessary to maintain the effectiveness of
such Lien and Security Interest during the next year, subject to customary
assumptions and exclusions. In giving the opinions required by this
Section 11.1(d), such counsel may rely, to the extent recited in such
opinions, on (i) certificates of relevant public officials; (ii)
certificates of an officer or officers of the Company; (iii) photocopies
of filed and recorded documents certified by public officials as being
accurate copies of such documents; (iv) the opinions of other counsel
reasonably acceptable to the Trustee with respect to matters governed by
law of any jurisdiction other than the state in which such counsel is
licensed to practice law; and (v) title insurance policies and
commitments. In addition, such opinions may contain such qualifications,
exceptions and limitations as are appropriate for similar opinions
relating to the nature of the Collateral.
Section 11.2 Suits to Protect the Collateral.
Subject to the terms of the Intercreditor Agreement, the Trustee may, in
its sole discretion and without the consent of the Holders, on behalf of the
Holders, take all actions it deems necessary or appropriate in order to (a)
enforce any of the terms of the Security Documents and (b) collect and receive
any and all amounts payable in respect of the Obligations of the Issuers and the
Guarantors hereunder and under the Notes, the Security Documents and the
Registration Rights Agreement. To the extent permitted under the Security
Documents and this Indenture, the Trustee shall have power to institute and
maintain such suits and proceedings as it may deem expedient to prevent any
impairment of the Collateral by any acts which may be unlawful or in violation
of this Indenture or the Security Documents and such suits and proceedings as
the Trustee may deem expedient to preserve or protect its interests and the
interest of the Holders in the Collateral and in the proceeds,
84
profits, rents, revenues and other income arising therefrom (including power to
institute and maintain suits or proceedings to restrain the enforcement of or
compliance with any legislative or other governmental enactment, rule or order
that may be unconstitutional or otherwise invalid if the enforcement of, or
compliance with, such enactment, rule or order would impair the Security
Interest thereunder or be prejudicial to the interest of the Holders or of the
Trustee).
Section 11.3 Further Assurances and Security.
(a) The Company represents and warrants that at the time the
Security Documents and this Indenture are executed, the Company and its
Restricted Subsidiaries will have full right, power and lawful authority
to grant, bargain, sell, release, convey, hypothecate, assign, mortgage,
pledge, transfer and confirm, absolutely, the Collateral, in the manner
and form done, or intended to be done, in the Security Documents, free and
clear of all Liens, except for Permitted Liens.
(b) The Company will, and will cause each Subsidiary Guarantor to
(i) grant to the Trustee a security interest in all Collateral, whether
owned on the Issue Date or thereafter acquired, (ii) execute, acknowledge
and deliver to the Trustee, at the Company's expense, at any time and from
time to time such further assignments, transfer, assurances or other
instruments as may, in the opinion of the Trustee, be required to
effectuate the terms of this Indenture or the Security Documents; and
(iii) do or cause to be done all such acts and things as may be necessary
or proper, or as may be required by the Trustee, to assure and confirm to
the Trustee that the Security Interest in the Collateral contemplated
hereby and by the Security Documents shall be perfected and superior to
and prior to the rights of all third persons, and subject to no other
Liens, other than as provided herein and therein.
Section 11.4 Release of Collateral.
(a) Collateral shall be released from the Liens created by the
Security Documents from time to time at the sole cost and expense of the
Issuers:
(i) upon payment in full of the Notes and all other
Obligations under this Indenture, the Notes, the Security Documents
and the Registration Rights Agreement then due and owing,
(ii) unless an Event of Default shall have occurred and be
continuing, upon the (A) sale or other disposition of such
Collateral pursuant to an Asset Sale made in accordance with Section
4.10 hereof, (B) sale or other disposition of such Collateral
meeting the conditions of (b)(1) of the definition of Asset Sale, or
(C) transfer or exchange of such Collateral in the ordinary course
of business,
85
(iii) upon the written consent of the Holders of at least a
majority of the aggregate principal amount of the then outstanding
Notes (including consents obtained in connection with a tender offer
or exchange offer for Notes),
(iv) as required pursuant to the terms of the Intercreditor
Agreement, or
(v) upon a Legal Defeasance or Covenant Defeasance;
provided, that the Trustee shall not release any Lien on any Collateral
unless and until it shall have received an Officers' Certificate
certifying that all conditions precedent hereunder have been met and such
other documents required by Section 11.5 hereof. Upon compliance with the
above provisions, the Trustee shall execute, deliver or acknowledge any
necessary or proper instruments of termination, satisfaction or release to
evidence the release of any Collateral permitted to be released pursuant
to this Indenture or the Security Documents.
(b) The release of any Collateral from the terms of the Security
Documents shall not be deemed to impair the security under this Indenture
in contravention of the provisions hereof and of the Security Documents if
and to the extent the Collateral is released pursuant to the terms of this
Indenture and the Security Documents.
Section 11.5 Certificates of the Issuers.
The Issuers shall furnish to the Trustee, prior to each proposed release
of Collateral, all documents required by TIA ss.314(d). The Trustee may, to the
extent permitted by Sections 7.1 and 7.2 hereof, accept as conclusive evidence
of compliance with the foregoing provisions the appropriate statements contained
in such instruments. Any certificate or opinion required by TIA ss.314(d) may be
made by an Officer of each of the Issuers, except in cases where TIA ss.314(d)
requires that such certificate or opinion be made by an independent engineer,
appraiser or other expert within the meaning of TIA ss.314(d).
Section 11.6 Reliance on Opinion of Counsel.
The Trustee shall, before taking any action under this Article XI, be
entitled to receive an Opinion of Counsel, stating the legal effect of such
action, the steps necessary to consummate the same and to perfect the Trustee's
priority with respect to any Lien in connection therewith and that such action
will not be in contravention of the provisions thereof or this Indenture and
such opinion shall be full protection to the Trustee for any action taken or
omitted to be taken in reliance thereon.
Section 11.7 Purchaser May Rely.
A purchaser in good faith of the Collateral or any part thereof or
interest therein which is purported to be transferred, granted or released by
the Trustee as provided in this Article XI shall not be bound to ascertain, and
may rely on the authority of the Trustee to execute, transfer, grant or
86
release, or to inquire as to the satisfaction of any conditions precedent to the
exercise of such authority, or to see to the application of the purchase price
therefor.
Section 11.8 Payment of Expenses.
On demand of the Trustee, the Issuers forthwith shall jointly and
severally pay or satisfactorily provide for the payment of all reasonable
expenditures incurred by the Trustee under this Article XI, including, without
limitation, the costs of title insurance, surveys, attorneys' fees and expenses,
recording fees and taxes, transfer taxes, taxes on indebtedness and other
expenses incidental thereto and all such sums shall be a Lien upon the
Collateral prior to the Notes and shall be secured thereby.
Section 11.9 Authorization of Receipt of Funds by the Trustee Under the
Security Documents.
The Trustee is authorized to receive any funds for the benefit of the
Holders distributed under the Security Documents, and to make further
distributions of such funds to the Holders according to the provisions of this
Indenture and the Security Documents.
ARTICLE XII
MISCELLANEOUS
Section 12.1 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA ss.318(c), the imposed duties shall control.
Section 12.2 Notices.
Any notice or communication by the Issuers or the Trustee to others is
duly given if in writing and delivered in person or mailed by first-class mail
(registered or certified, return receipt requested), telecopier or overnight air
courier guaranteeing next day delivery, to the others' addresses:
87
If to the Issuers:
Peninsula Gaming Company, LLC
Peninsula Gaming Corp.
c/o Peninsula Gaming Company, LLC
0xx Xxxxxx Ice Harbor
X.X. Xxx 0000
Xxxxxxx, Xxxx, 00000-0000
Attention: Chief Financial Officer
Telecopier No.: (000) 000-0000
If to the Trustee:
Firstar Bank of Minnesota, N.A.
000 Xxxx 0xx Xxxxxx
Xx. Xxxx, XX 00000
Attention: Corporate Trust Department
Telecopier No.: (000) 000-0000
The Issuers or the Trustee by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; upon receipt, if deposited in the mail, postage prepaid; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
All notices and communications to the Trustee shall be deemed to have been duly
given only if actually received by the Trustee.
Any notice or communication to a Holder shall be mailed by first-class
mail, to his address shown on the register kept by the Registrar. Failure to
mail a notice or communication to a Holder or any defect in it shall not affect
its sufficiency with respect to other Holders.
If a notice communication is mailed in the manner provided above within
the time prescribed, it is duly given, regardless of whether the addressee
receives it.
If the Issuers mail a notice or communication to Holders, they shall mail
a copy to the Trustee and each Agent at the same time.
88
Section 12.3 Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA ss.312(b) with other Holders with
respect to their rights under this Indenture or the Notes. The Issuers, the
Trustee, the Registrar and any other person shall have the protection of TIA
ss.312(c).
Section 12.4 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Issuers to the Trustee to take any
action under this Indenture, the Issuers shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 12.5) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 12.5) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been complied with.
Section 12.5 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA ss.314(a)(4)) shall include:
(a) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of such Person, such
condition or covenant has been complied with,
provided that with respect to matters of fact, an Opinion of Counsel may rely
upon an Officers' Certificate or a certificate of a public official.
89
Section 12.6 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 12.7 Legal Holidays.
If a payment date is a Legal Holiday at a place of payment, payment may be
made at that place on the next succeeding day that is not a Legal Holiday, and
no interest shall accrue for the intervening period.
Section 12.8 No Recourse Against Others.
No director, officer, employee, incorporator, stockholder, member or
controlling person of either of the Issuers or any Subsidiary Guarantor, as
such, shall have any liability for any obligations of either of the Issuers or
any Subsidiary Guarantor under the Notes, this Indenture, the Security Documents
or the Registration Rights Agreement or for any claim based on, in respect of,
or by reason of such obligations or their creation. Each Holder by accepting a
Note waives and releases all such liability. The waiver and release shall be
part of the consideration for the issuance of the Notes and the Subsidiary
Guarantees. Notwithstanding the foregoing, nothing in this provision shall be
construed as a waiver or release of any claims under the Federal securities
laws.
Section 12.9 Governing Law.
This Agreement shall be construed and interpreted and the rights of the
parties shall be determined in accordance with the laws of the State of New
York, as applied to contracts made and performed within the State of New York,
including, without limitation, Sections 5-1401 and 5-1402 of the New York
General Obligations Laws and New York Civil Practice Laws and Rules 327(b). Each
of the Issuers hereby irrevocably submits 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 irrevocably accepts for itself and in respect of its property,
generally and unconditionally, jurisdiction of the aforesaid courts. Each of the
Issuers irrevocably waives, to the fullest extent it may effectively do so under
applicable law, trial by jury and any objection that it 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 such court has been brought in an inconvenient forum. Each of the Issuers
irrevocably consents, to the fullest extent it may effectively do so under
applicable law, to the service of process of any of the aforementioned courts in
any such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to the Issuers at the address set forth herein,
such service to become effective 30 days after such mailing. Nothing herein
shall affect the right of any holder
90
to serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against either of the Issuers in any other
jurisdiction.
Section 12.10 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of any of the Issuers or their Subsidiaries. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
Section 12.11 Successors.
All agreements of either of the Issuers and any Subsidiary Guarantors in
this Indenture and the Notes shall bind their respective successors. All
agreements of the Trustee in this Indenture shall bind its successor.
Section 12.12 Severability.
In case any provision in this Indenture or in the Notes shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
Section 12.13 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
Section 12.14 Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof and shall in no way modify or
restrict any of the terms or provisions hereof.
(Signature pages follow.)
91
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Indenture as of the date first written above.
Company:
PENINSULA GAMING COMPANY, LLC
By:
-------------------------------
Name:
Title:
Attest:
-------------------------------
Name:
PENINSULA GAMING CORP.
By:
-------------------------------
Name:
Title:
Attest:
-------------------------------
Name:
FIRSTAR BANK OF MINNESOTA, N.A.,
as Trustee
By:
-------------------------------
Name:
Title: Vice President
EXHIBIT A
(Face of Security)
Unless and until it is exchanged in whole or in part for notes in definitive
form, this Note may not be transferred except as a whole by The Depository Trust
Company (the "Depositary") to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor depositary or a nominee of such
successor depositary. Unless this certificate is presented by an authorized
representative of the Depositary to the Issuers or their agent for registration
of transfer, exchange or payment, and any certificate issued is registered in
the name of Cede & Co. or such other name as may be requested by an authorized
representative of the Depositary (and any payment hereon is made to Cede & Co.
or such other entity as may be requested by an authorized representative of the
Depositary), any transfer, pledge or other use hereof for value or otherwise by
or to any person is wrongful inasmuch as the registered owner hereof, Cede &
Co., has an interest herein.(1)
This security has not been registered under the Securities Act of 1933, as
amended (the "Securities Act"), or any state securities laws. Neither this
security nor any interest or participation herein may be reoffered, sold,
assigned, transferred, pledged, encumbered or otherwise disposed of in the
absence of such registration or unless such transaction is exempt from, or not
subject to, registration.(2)
The holder of this security by its acceptance hereof agrees to offer, sell or
otherwise transfer such security, prior to the date which is two years (or such
other period that may hereafter be provided under Rule 144(k) as permitting
resales of restricted securities by nonaffiliates without restriction) after the
later of the original issue date of this security and the last date on which the
Issuers or any affiliate of the Issuers was the owner of this security (or any
predecessor of such security) only (a) to the Issuers, (b) pursuant to a
registration statement which has been declared effective under the Securities
Act, (c) for so long as the notes are eligible for resale pursuant to Rule 144A
under the Securities Act, to a person it reasonably believes is a "qualified
institutional buyer" as defined in Rule 144A under the Securities Act that
purchases for its own account or for the account of a qualified institutional
buyer to whom notice is given that the transfer is being made in reliance on
Rule 144A, (d) to an institutional "accredited investor" within the meaning of
subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the Securities Act that
is acquiring the security for its own account, or for the account of such an
institutional "accredited investor," for investment purposes and not with a view
to, or for offer or sale in connection with, any distribution in violation of
the Securities Act or (e) pursuant to another available exemption from the
registration requirements of the Securities Act, subject to the Issuers' and the
Trustee's right prior to any such offer, sale or transfer pursuant to clauses
(d) or (e) to require the delivery of an opinion of counsel, certification
and/or other information satisfactory to each of them, and in each of the
foregoing cases, a certificate of transfer in the form appearing on the other
side of this security is completed and delivered by the transferor to the
Trustee.(3)
----------
(1) This paragraph should be included only if the Now is issued in global
form.
(2) This paragraph should be included only if the Note is a Restricted
Security.
(3) This paragraph should be included only if the Note is a Restricted
Security.
A-l
PENINSULA GAMING COMPANY, LLC
PENINSULA GAMING CORP.
12 1/4% Senior Secured Note due 2006
No.
$ _____
CUSIP NO.
Peninsula Gaming Company, LLC, a Delaware limited liability company (the
"Company"), and Peninsula Gaming Corp., a Delaware corporation ("PGC," and
together with the Company, the "Issuers"), as obligors, for value received
promise to pay to _________________________ or registered assigns, the principal
sum of__________________ Dollars on July 1, 2006.
Interest Payment Dates: July 1 and January 1 and on the maturity date.
Record Dates: June 15 and December 15 (regardless of whether a Business
Day).
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
A-2
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Indenture as of the date first written above.
Company:
PENINSULA GAMING COMPANY, LLC
By: /s/ Xxxxx Xxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxx
Title:
Attest:
/s/ Xxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxx
PENINSULA GAMING CORP.
By: /s/ Xxxxx Xxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxx
Title:
Attest:
/s/ Xxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxx
FIRSTAR BANK OF MINNESOTA, N.A.,
as Trustee
By: /s/ Xxxxx Xxxxxx
-------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
[Indenture]
(Back of Security)
PENINSULA GAMING COMPANY, LLC
PENINSULA GAMING CORP.
12 1/4% Senior Secured Note due 2006
1. Interest. Peninsula Gaming Company, LLC, a Delaware limited liability
company (the "Company"), and Peninsula Gaming Corp., a Delaware corporation
("PGC," and together with the Company, the "Issuers"), as obligors, promise to
pay interest on the principal amount of this Note at the rate and in the manner
specified below.
The Issuers shall pay, in cash, interest on the principal amount of this
Note, at the rate of 12 1/4% per annum. The Issuers shall pay interest
semiannually on July 1 and January 1 of each year, and on the maturity date,
commencing on January 1, 2000, or if any such day is not a Business Day, on the
next succeeding Business Day (each an "Interest Payment Date").
Interest shall be computed on the basis of a 360-day year consisting of
twelve 30-day months. Interest shall accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from July 15, 1999. To
the extent lawful, the Issuers shall pay interest on overdue principal at the
rate of 1% per annum in excess of the then applicable interest rate on the
Notes; the Issuers shall pay interest on overdue installments of interest
(without regard to any applicable grace periods) at the same rate to the extent
lawful.
2. Method of Payment. The Issuers shall pay interest on the Notes (except
defaulted interest) to the Persons who are registered Holders of Notes at the
close of business on the record date next preceding the Interest Payment Date,
even if such Notes are cancelled after such record date and on or before such
Interest Payment Date. The Holder must surrender this Note to a Paying Agent to
collect principal payments. The Issuers shall pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts. The Issuers may pay principal and interest
by check to a Holder's registered address.
3. Paying Agent and Registrar. Initially, the Trustee shall act as Paying
Agent and Registrar. The Issuers may change any Paying Agent, Registrar or
co-registrar without notice to any Holder. Subject to certain exceptions, the
Issuers or any of their Subsidiaries may act in any such capacity.
4. Indenture. The Issuers have issued the Notes under an Indenture dated
as of July 15, 1999 (the "Indenture") among the Issuers, the Subsidiary
Guarantors referred to therein and the Trustee. The terms of the Notes include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939 (the "TIA") (15 U.S. Code ss.ss.77aaa-77bbbb)
as in effect on the date of the Indenture until such time as the Indenture is
qualified under the TIA and thereafter as in effect on the date the Indenture is
so qualified. The Notes are subject to all such terms, and Holders are referred
to the Indenture and the TIA for a statement of such terms. The terms of the
Indenture shall govern any inconsistencies between the Indenture and the Notes.
Terms
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not otherwise defined herein shall have the meanings assigned in the Indenture.
The aggregate principal amount of Notes that may be authenticated and delivered
under the Indenture is unlimited.
5. Optional Redemption. Except as set forth below, the Notes are not
redeemable at the Issuers' option prior to July 1, 2003. Thereafter, the Notes
will be subject to redemption at the option of the Issuers, in whole or in part,
at the redemption prices (expressed as percentages of principal amount) set
forth below, plus accrued and unpaid interest thereon, if any, to the applicable
redemption date, if redeemed during the 12-month period beginning on July 1 of
the years indicated below:
Year Percentage
---- ----------
2003 ...................... 108.00%
2004 ...................... 105.33%
2005 and thereafter ....... 102.67%
Notwithstanding the foregoing, at any time or from time to time prior to
July 1,2002, the Issuers may redeem, at their option, up to 35% of the aggregate
principal amount of the Notes then outstanding, at a redemption price of 112.25%
of the principal amount thereof, plus accrued and unpaid interest thereon, if
any, through the applicable redemption date, with the net cash proceeds of one
or more Equity Offerings; provided, that (a) such redemption shall occur within
60 days of the date of closing of such Equity Offering and (b) at least 65% of
the aggregate principal amount of Notes issued on or after the Issue Date
remains outstanding immediately after giving effect to each such redemption.
6. Mandatory Redemption. The Issuers shall not be required to make
mandatory redemption payments with respect to the Notes (except for a Required
Regulatory Redemption). The Notes shall not have the benefit of any sinking
fund.
7. Denominations. Transfer. Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Issuers may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Registrar and the Issuers need not exchange or
register the transfer (a) of any Note or portion of a Note selected for
redemption or (b) of any Notes for a period of 15 days before a selection of
Notes to be redeemed or during the period between a record date and the
corresponding Interest Payment Date.
8. Persons Deemed Owners. The registered Holder of a Note may be treated
as its owner for all purposes, subject to the provisions of the Indenture with
respect to the record dates for the payment of interest.
9. Amendments and Waivers. Subject to certain exceptions, the Indenture or
the Notes may be amended with the written consent of the Holders of at least a
majority in principal aggregate amount of the then outstanding Notes (including
consents obtained in connection with a tender offer or
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exchange offer for Notes) and any existing Default or Event of Default (except
certain payment defaults) or compliance with any provision of the Indenture or
this Note may be waived with the consent of the Holders of a majority in
aggregate principal amount of the then outstanding Notes (including consents
obtained in connection with a tender offer or exchange offer for Notes). Without
the consent of any Holders, the Indenture and the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
assumption of any of the Issuers' or the Subsidiary Guarantors' obligations to
the Holders in the case of a merger or consolidation, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to make
any change that would provide any additional rights or benefits to the Holders
or that does not adversely affect the legal rights under the Indenture or this
Note of any Holder, to release any Subsidiary Guaranty of the Notes permitted to
be released under the terms of the Indenture or to comply with requirements of
the Commission in order to effect or maintain the qualification of the Indenture
under the TIA.
10. Defaults and Remedies. If an Event of Default occurs and is
continuing, the Trustee may declare by written notice to the Issuers or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare by written notice to the Issuers and the Trustee all the Notes to be due
and payable immediately, except that in the case of an Event of Default arising
from certain events of bankruptcy or insolvency, all outstanding Notes shall
become due and payable immediately without further action or notice. Holders may
not enforce the Indenture or the Notes except as provided in the Indenture. The
Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Notes. Subject to certain limitations, Holders of a majority in
principal amount of the then outstanding Notes may direct the Trustee in its
exercise of any trust or power. The Issuers must furnish an annual compliance
certificate to the Trustee.
11. Trustee Dealings with the Issuers. The Trustee under the Indenture, in
its individual or any other capacity, may make loans to, accept deposits from,
and perform services for either of the Issuers or their respective Affiliates,
and may otherwise deal with either of the Issuers or their respective
Affiliates, as if it were not Trustee.
12. No Recourse Against Others. No director, officer, employee,
incorporator, stockholder, member or controlling person of either of the Issuers
or any Subsidiary Guarantor, as such, shall have any liability for any
obligations of either of the Issuers or any Subsidiary Guarantor under the
Notes, the Indenture, the Security Documents or the Registration Rights
Agreement or for any claim based on, in respect of, or by reason of such
obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes and the Subsidiary Guarantees.
Notwithstanding the foregoing, nothing in this provision shall be construed as a
waiver or release of any claims under the Federal securities laws.
13. Authentication. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
14. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint
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tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
15. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuers have caused
CUSIP numbers to be printed on the Notes and have directed the Trustee to use
CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
16. Governing Law. This Note and the Indenture shall be construed,
interpreted and the rights of the parties determined in accordance with the laws
of the State of New York, including without limitation, Section 5-1401 and
5-1402 of the New York General Obligations Law and New York Civil Practice Laws
and Rule 327(b).
17. Holders' Compliance with Registration Rights Agreement. Each Holder of
a Note, by his acceptance thereof, acknowledges and agrees to the provisions of
the Registration Rights Agreement, dated as of July 15, 1999, by and among the
Issuers and the Purchaser (as defined therein) (the "Registration Rights
Agreement"), including but not limited to the obligations of the Holders with
respect to a registration and the indemnification of the Issuers and the
Purchasers (as defined therein) to the extent provided therein.(4)
The Issuers shall furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to: Peninsula Gaming Company, LLC, 3rd Street Ice Harbor,
X.X. Xxx 0000, Xxxxxxx, Xxxx, 00000-0000, Attention: ____________________.
----------
(4) This paragraph should not be included in the Exchange Securities.
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ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to:
_______________________________________________________________________________
(Insert assignee's soc. sec. or tax ID. no.)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _______________________________ as agent to transfer
this Note on the books of the Issuers. The agent may substitute another to act
for him.
_______________________________________________________________________________
Date: _____________
Your Signature: _______________________________________
(Sign exactly as your name appears on
the face of this Note)
Tax Identification Number: ______________________
Signature Guaranty*
___________________________
* NOTICE: The signature must be guaranteed by an institution which is
a member of one of the following recognized signature
guarantee programs:
(1) The Securities Transfer Agent Medallian Program (STAMP);
(2) The New York Stock Exchange Medallian Program (MSP);
(3) The Stock Exchange Medallian Program (SEMP).
A-8
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Note purchased by the
Issuers pursuant to Section 4.10, Section 4.14 or Section 4.20 of the Indenture,
as the case may be, state the amount you elect to have purchased (if all, write
"ALL"):
$ _________________
Date: _______________________
Your Signature: _______________________________________
(Sign exactly as your name appears on
the face of this Note)
Signature Guaranty*
________________________
* NOTICE: The signature must be guaranteed by an institution which is
a member of one of the following recognized signature
guarantee programs:
(1) The Securities Transfer Agent Medallian Program (STAMP);
(2) The New York Stock Exchange Medallian Program (MSP);
(3) The Stock Exchange Medallian Program (SEMP).
A-9
SCHEDULE OF EXCHANGES OF DEFINITIVE NOTES(5)
The following exchanges of a part of this Global Note for Definitive Notes
have been made:
Amount of decrease Amount of increase Principal Amount of this Signature of
in Principal Amount in Principal Amount Global Note following authorized
Date of Exchange of this Global Note of this Global Note such decrease (or increase) officer of Trustee
--------------------------------------------------------------------------------------------------------------
----------
(5) This should only be included if the Note is issued in global form.
A-10
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF NOTES
Re: 12 1/4% Senior Secured Notes due 2006 (the "Notes") of Peninsula Gaming
Company, LLC and Peninsula Gaming Corp.
This Certificate relates to $____________________________ principal amount
of Notes held in *|_| book-entry or *|_| definitive form by
_______________________ (the "Transferor").
The Transferor, by written order, has requested the Trustee:
|_| to deliver in exchange for its beneficial interest in the Global Note held
by the depository, a Note or Notes in definitive, registered form of
authorized denominations and an aggregate principal amount equal to its
beneficial interest in such Global Note (or the portion thereof indicated
above); or
|_| to exchange or register the transfer of a Note or Notes. In connection
with such request and in respect of each such Note, the Transferor does
hereby certify that Transferor is familiar with the Indenture relating to
the above captioned Notes and, the transfer of this Note does not require
registration under the Securities Act of 1933, as amended (the "Securities
Act") because such Note:
|_| is being acquired for the Transferor's own account, without
transfer;
|_| is being transferred pursuant to an effective registration
statement;
|_| is being transferred to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act), in reliance on such
Rule 144A;
|_| is being transferred pursuant to an exemption from registration in
accordance with Rule 904 under the Securities Act;**
|_| is being transferred pursuant to Rule 144 under the Securities
Act;** or
|_| is being transferred pursuant to another exemption from the
registration requirements of the Securities Act (explain:
__________________________________________________________
________________________________________________________).**
______________________________
[INSERT NAME OF TRANSFEROR]
B-1
By: __________________________
Date: _______________________
* Check applicable box.
** If this box is checked, this certificate must be accompanied by an
opinion of counsel to the effect that such transfer is in compliance
with the Securities Act.
B-2
EXHIBIT C
[Form of Subsidiary Guaranty]
GUARANTY
For good and valuable consideration received from the Issuers by the
undersigned (hereinafter referred to as the "Subsidiary Guarantors," which term
includes any successor or additional Subsidiary Guarantors), the receipt and
sufficiency of which is hereby acknowledged, subject to Section 10.3 of the
Indenture, each Subsidiary Guarantor, jointly and severally, hereby
unconditionally guarantees, irrespective of the validity or enforceability of
the Indenture, the Notes, the Security Documents, the Registration Rights
Agreement or the Obligations of any party under the Notes, the Indenture, the
Security Documents or the Registration Rights Agreement, (a) the due and
punctual payment of the principal and premium, if any, of and interest on the
Notes (including, without limitation, interest after the filing of a petition
initiating any proceedings referred to in Sections 6.l(a)(x) or (xi) of the
Indenture), whether at maturity or on an Interest Payment Date, by acceleration,
call for redemption or otherwise, (b) the due and punctual payment of interest
on the overdue principal and premium, if any, of and interest, if any, on the
Notes, if lawful, (c) the due and punctual payment and performance of all other
Obligations of the Company under such documents, all in accordance with the
terms set forth in the Indenture, the Notes, the Security Documents and the
Registration Rights Agreement and (d) in case of any extension of time of
payment or renewal of any Notes or any of such other Obligations under the
Indenture, the Notes, the Security Documents or the Registration Rights
Agreement, the due and punctual payment or performance thereof in accordance
with the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise.
No director, officer, employee, incorporator, stockholder, members or
controlling person of the Subsidiary Guarantor, as such, shall have any
liability under this Subsidiary Guaranty for any obligations of the Subsidiary
Guarantor under the Notes, the Indenture, the Security Documents or the
Registration Rights Agreement or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of the Notes by
accepting a Note waives and releases all such liability.
__________________________________
By: ____________________________
Name: __________________________
Title: _________________________
C-1
EXHIBIT D
[Form of Intercreditor Agreement]
INTERCREDITOR AGREEMENT
between
[NAME OF SENIOR LENDER]
and
FIRSTAR BANK OF MINNESOTA, N.A.
Dated as of _______, ____
--------------------------------------------------------------------------------
D-1
FORM OF
INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT dated as of ______, ____ (this
"Agreement") is made by and among Firstar Bank of Minnesota, N.A., solely in its
capacity as trustee under the Indenture (as defined below) and under the
Security Documents (as defined in the Indenture) (the "Trustee") and [Name of
Credit Facility Lender] (the "Credit Facility Lender"), as lender under the
Credit Facility (as defined in the Indenture).
RECITAL
A. Peninsula Gaming, LLC, a Delaware limited liability company
("Borrower"), Peninsula Gaming Corp., a Delaware corporation ("PGC" and,
together with Borrower, the "Issuers"), the guarantors named therein (the
"Guarantors") and the Trustee entered into an Indenture, dated as of July ___,
1999 (the "Indenture"), pursuant to which indebtedness was incurred by the
Issuers, the repayment of which is guaranteed by the Guarantors and secured by
security interests in and liens on certain now owned and hereafter acquired
assets and properties described in the Security Documents (the "Indenture
Collateral").
B. As of_________________, Borrower and the Credit Facility Lender entered
into a Credit Agreement (as such may be amended, restated, supplemented or
otherwise modified from time to time after the date hereof, the "Credit Facility
Agreement"), pursuant to which the Credit Facility Lender agreed, upon the terms
and conditions stated therein, to make loans and advances to, or to issue
letters of credit (or guaranties in respect thereof) for the account of,
Borrower, in an aggregate principal and undrawn amount not to exceed the Maximum
Amount (as defined below), the repayment of which is secured by security
interests in and liens on the Indenture Collateral pursuant to the Credit
Facility Agreement and the collateral security documents, vessel mortgage,
instruments and guaranties executed and delivered in connection therewith by one
or more of Borrower and any Guarantor, together with such other agreements,
instruments and certificates entered into in connection with the Credit Facility
Agreement (as such may be amended, restated, supplemented or otherwise modified
from time to time after the date hereof, together with the Credit Facility
Agreement, the "Credit Facility Loan Documents").
C. One of the conditions of the Credit Facility Agreement is that the
priority of the security interests and liens on the Collateral under the Credit
Facility Loan Documents be senior to the security interests in and liens on the
Indenture Collateral in the manner and to the extent provided for in this
Agreement.
D. The Trustee and the Credit Facility Lender desire to enter into this
Agreement concerning their respective rights with respect to the priority of
their respective security interests in and liens on the Collateral.
D-2
E. The terms of the Indenture permit Borrower to enter into the Credit
Facility Agreement and, in connection therewith, authorize and direct the
Trustee to enter into an intercreditor agreement substantially in the form of
this Agreement.
NOW, THEREFORE, the Parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Terms Defined Above and in the Recitals. As used in this
Agreement, the following terms shall have the respective meanings indicated in
the initial paragraph of this Agreement and in the above Recitals:
"Agreement"
"Borrower"
"Credit Facility Lender"
"Credit Facility Agreement"
"Credit Facility Loan Documents"
"Guarantors"
"Indenture"
"Indenture Collateral"
"Trustee"
Section 1.2 Other Definitions. As used in this Agreement, the following
terms shall have the meanings set forth below:
"Collateral" shall mean all of the Indenture Collateral in which the
Credit Facility Lender is granted a security interest or lien to secure the
Credit Facility Indebtedness.
"Credit Facility Indebtedness" shall mean all present and future
Obligations, contingent or otherwise, of Borrower and the Guarantors to the
Credit Facility Lender arising under or pursuant to the Credit Facility Loan
Documents, including, in each case, interest, fees, and expenses accruing after
the initiation of any Insolvency Proceeding (irrespective of whether allowed as
a claim in such proceeding), and including the secured claims of the Credit
Facility Lender and the Lenders under the Credit Facility Agreement in respect
of the Collateral in any Insolvency Proceeding.
"Enforcement Action" shall mean, with respect to any Party, (a)
commencement of any action, whether judicial or otherwise, for the enforcement
of such Party's rights and remedies as a secured creditor with respect to the
Collateral, including, without limitation, commencement of any receivership or
foreclosure proceedings against, or any other sale of, collection on, or
disposition of, any Collateral; or (b) notifying any third party account debtors
D-3
of Borrower or any of its subsidiaries to make payment directly to such Party or
to any of its agents or other Persons acting on its behalf.
"Enforcement Event" shall mean the occurrence and continuance of an
"Event of Default" as defined under Section 6.1 of the Indenture.
"Enforcement Event Notice" shall have the meaning ascribed thereto
in Section 3.2.
"Entitled Party" shall have the meaning ascribed thereto in Section
4.1(a).
"Event of Default" shall have the meaning ascribed thereto in the
Credit Facility Agreement.
"Financing Documents" shall mean the Indenture Documents and the
Credit Facility Loan Documents.
"Foreclosure Action" shall mean any action to foreclose upon or
enforce a Lien against any of the Collateral, including (a) commencing judicial
or non-judicial foreclosure proceedings, (b) exercising any rights afforded to
secured creditors in a case under the Bankruptcy Law with respect to the
Collateral, or (c) taking any action under the Bankruptcy Law that directly
relates to or directly affects any such Collateral, other than any such action
that relates to or affects all or substantially all of the property of the
bankruptcy estate.
"Fully Paid" shall mean the payment in cash or cash equivalents in
full of all Obligations (other than indemnity obligations that survive payment
in full) under the Financing Documents, as the case may be, and in the case of
the Credit Facility Loan Documents, at such time when there shall no longer be
any obligation to make loans or advances or issue letters of credit (or
guaranties in respect thereof) thereunder and there shall no longer be any
letter of credit (or guaranty in respect thereof) outstanding thereunder or such
letter of credit (or guaranty in respect thereof) shall have been fully cash
collateralized (in accordance with the provisions of the Credit Facility Loan
Documents).
"Indenture Documents" shall mean the Indenture, the Notes, the
Security Documents and the Registration Rights Agreement, and such other
agreements, instruments and certificates executed and delivered (or issued) by
the Issuers or the Guarantors pursuant to the Indenture, as any or all of the
same may be amended, restated, supplemented or otherwise modified from time to
time.
"Insolvency Proceeding" shall mean any proceeding for the purposes
of dissolution, winding up, liquidation, arrangement or reorganization of
Borrower, any Guarantor, or any other subsidiary of Borrower, or their
respective successors or assigns, whether in bankruptcy, insolvency,
arrangement, reorganization or receivership proceedings, or upon an assignment
for the benefit of creditors or any other marshaling of the assets and
liabilities of
D-4
Borrower, any Guarantor, or any other subsidiary of Borrower, or their
respective successors or assigns.
"Lien Priority" shall mean, with respect to any Lien in and to the
Collateral, the order of priority of such Lien as specified in Sections 2.1 and
2.2.
"Maximum Amount" shall mean Indebtedness under the Credit Facility
Loan Documents that the Credit Facility Lender in good faith believes, at the
time such Indebtedness is incurred, Borrower is permitted to incur pursuant to
Section 4.9(a) of the Indenture (together with all interest, fees, and expenses
payable thereon or with respect thereto). In no event may the Maximum Amount
exceed $___________(1) principal amount plus interest, fees and expenses payable
thereon or with respect thereto.
"Party" shall mean any signatory to this Agreement.
"Secured Liabilities" shall mean the Subordinated Lien Indebtedness
and the Credit Facility Indebtedness.
"Subordinated Lien Indebtedness" shall mean all present and future
Obligations, contingent or otherwise, of Borrower and the Guarantors to the
Trustee or Holders arising under or pursuant to the Indenture Documents,
including, in each case, interest, fees and expenses accruing after the
initiation of any Insolvency Proceeding (irrespective of whether allowed as a
claim in such proceeding), and including the secured claims of the Trustee or
the Holders in respect of the Collateral in any Insolvency Proceeding.
"Trigger Date" means the earlier of (i) the date on which an event
contemplated by clause (b) or (c) (i), (ii) or (iii) or (iv) of the definition
of Trigger Event occurs, (ii) the date on which an Enforcement Event Notice is
delivered and (iii) the final maturity date of the Credit Facility Indebtedness
(after giving effect to any extensions granted thereunder).
"Trigger Event" shall mean any of:
(a) the occurrence of an Event of Default,
(b) the acceleration of the maturity of or demand for payment
with respect to the Credit Facility Indebtedness by the Credit Facility Lender
pursuant to the Credit Facility Agreement, or
(c) the commencement of any action or proceeding by the Credit
Facility Lender, whether judicial or otherwise (but excluding demands for
payment or notices of
----------
(1) $10 million if the intercreditor agreement is entered into on or prior to
the 90th day following the date on which the Hotel is first Operating; $5
million if entered into after such 90th day.
D-5
default), for the enforcement of the Credit Facility Lender's rights and
remedies under any of the Credit Facility Loan Documents, including (i)
commencement of any receivership or Foreclosure Action against or any other sale
of, collection on or disposition of any Collateral, including any notification
to third parties to make payment directly to the Credit Facility Lender, (ii)
exercise of any right of set-off, (iii) commencement of any Insolvency
Proceeding, and (iv) commencement of any judicial action or proceeding against
the Borrower or any Guarantor to recover all or any part of the Credit Facility
Indebtedness.
Section 1.3 Indenture Definitions. All other capitalized terms that are
used but not defined herein shall have the respective meaning indicated in the
Indenture.
Section 1.4 Miscellaneous. All definitions herein (whether set forth
herein directly or by reference to definitions in other documents) shall be
equally applicable to both the singular and the plural forms of the terms
defined. The words "hereof," "herein" or "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement. Article and section references are
to articles and sections of this Agreement unless otherwise specified. The term
"including" shall mean "including without limitation."
ARTICLE II
LIEN PRIORITY
Section 2.1 Agreement to Subordinate Liens. The Trustee hereby agrees that
the Liens of the Trustee for the benefit of itself and the Holders in and to the
Collateral are and shall be junior to and subordinate in priority to the Liens
of the Credit Facility Lender in and to the Collateral securing the Credit
Facility Indebtedness up to, but not in excess of, the Maximum Amount; provided,
that the rights of the Credit Facility Lender under this Agreement shall be void
and of no further force and effect if, and only to the extent, that the Liens of
the Credit Facility Lender in and to the Collateral are avoided, disallowed, set
aside or otherwise invalidated in any action or proceeding by a court, tribunal
or administrative agency of competent jurisdiction and such avoidance,
disallowance, set aside or other invalidation is permanent and is not later
reversed. The subordination of the Liens of the Trustee for the benefit of
itself and the Holders in and to the Collateral in favor of the Credit Facility
Lender provided for herein shall not be deemed to (a) subordinate the Liens of
the Trustee to the Liens of any other Person or (b) subordinate the Subordinated
Lien Indebtedness to any other Indebtedness of the Borrower or any of the
Guarantors, including, the Credit Facility Indebtedness, or (c) subordinate the
Liens of the Trustee for the benefit of itself and the Holders in and to any
Indenture Collateral other than the Collateral.
Section 2.2 Non-Contest; Excluded Assets. Each Party agrees that it will
not attack or contest the validity, perfection, priority or enforceability of
the Liens of the other Party or finance or urge any other Person to do so,
provided that either Party may enforce its rights and
D-6
privileges hereunder without being deemed to have violated this provision. Any
provision contained in this Agreement to the contrary notwithstanding, the terms
and conditions of this Agreement shall not apply to any property or assets
(including property or assets that do not constitute Collateral) as to which one
Party has a Lien and as to which the other Party does not have a Lien.
Section 2.3 Exercise of Rights.
(a) The Trustee may exercise, and nothing herein shall constitute a
waiver of, any right it may have at law or equity to receive notice of, or
to commence or join with any creditor in commencing any Insolvency
Proceeding; provided, that the exercise of any such right by the Trustee
shall be (i) subject to the Lien Priority and application of proceeds of
Collateral as provided in Section 3.4 and (ii) subject to the provisions
of Sections 3.1 and 3.2.
(b) Notwithstanding any other provision hereof, the Trustee may make
such demands or file such claims as may be necessary to prevent the waiver
or bar of such claims under applicable statutes of limitations or other
statutes, court orders or rules of procedure.
Section 2.4 Priority of Liens. Irrespective of the order of recording of
mortgages, financing statements, security agreements or other instruments, and
irrespective of the descriptions of Collateral contained in the Financing
Documents, including any financing statements, the Parties agree among
themselves that their respective Liens in the Collateral shall be governed by
the Lien Priority, which shall be controlling in the event of any conflict
between this Agreement and any of the Financing Documents.
ARTICLE III
ACTIONS OF THE PARTIES
Section 3.1 Limitation on Certain Actions. Subject to Section 3.2, until
the earlier of (a) the date on which all Credit Facility Indebtedness is Fully
Paid and (b) the first date following the Trigger Date on which the Maximum
Amount of Credit Facility Indebtedness is Fully Paid, the Trustee will not,
without the prior written consent of the Credit Facility Lender, take any
Enforcement Action.
Section 3.2 Standstill Period. If an Enforcement Event has occurred and is
continuing, the Trustee, on behalf of the holders of the Notes, may give the
Credit Facility Lender written notice thereof (an "Enforcement Event Notice").
If (a) such Enforcement Event is continuing for more than 180 consecutive days
after the delivery of such Enforcement Event Notice (the "Expiry Date"), (b) the
Credit Facility Lender has not, on or before the Expiry Date, commenced (and
notified the Trustee that the Credit Facility Lender has commenced) one or
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more Enforcement Actions, and (c) Borrower or the Guarantor against which the
Trustee's proposed Enforcement Action is to be taken is not the subject of an
Insolvency Proceeding, then the Trustee may, subject to the Lien Priority and
the application of all proceeds of the Collateral in accordance with Section
3.4, take one or more Enforcement Actions. If (i) the Credit Facility Lender has
commenced any Enforcement Action on or prior to the Expiry Date and, at any time
after the Expiry Date, is no longer pursuing one or more Enforcement Actions,
(ii) no Insolvency Proceeding is pending against Borrower or the Guarantor
against which the Trustee's proposed Enforcement Action is to be taken, and
(iii) the Enforcement Event that was the subject of, or existing on the date of,
the Enforcement Event Notice is then continuing, then the Trustee may, subject
to the Lien Priority and the prior application of all proceeds of the Collateral
in accordance with Section 3.4, take one or more Enforcement Actions. Except as
expressly provided for in this Agreement, nothing in this Agreement shall
prevent the Parties hereto from exercising any other remedy, or taking any other
action, under any of the Financing Documents.
Section 3.3 Foreclosure. Any Party taking a permitted Foreclosure Action
may enforce its Financing Documents independently as to Borrower and each
Guarantor and independently of any other remedy or security such Party at any
time may have or hold in connection with its Secured Liabilities, and, except as
provided herein, it shall not be necessary for such Party to marshal assets in
favor of any other Party hereto or any other Person or to proceed upon or
against or exhaust any other security or remedy before proceeding to enforce the
Financing Documents. Each of the Trustee (for so long as the Credit Facility
Indebtedness is not Fully Paid) and the Credit Facility Lender (for so long as
the Trustee and the holders of the Notes are owed any Subordinated Lien
Indebtedness) expressly waives any right to require the other Party to marshal
assets in favor of any Party or to proceed against any Collateral provided by
Borrower or any Guarantor, or any other property, assets, or collateral provided
by Borrower, any Guarantor, or any other Person, and agrees that the Party
taking such permitted Foreclosure Action may proceed against Borrower, any
Guarantor, any Collateral or other property, assets, or other collateral
provided by any of them or by any other Person, in such order as it shall
determine in its sole and absolute discretion. The foregoing notwithstanding:
(a) with respect to the sale or other disposition of any Collateral governed by
Article 9 of the Uniform Commercial Code, the Party conducting such sale or
other disposition agrees in favor of the other Party that every aspect of such
sale or other disposition, including the method, manner, time, place, and terms,
must be commercially reasonable, (b) with respect to the sale or other
disposition of any other Collateral, the Party conducting such sale or other
disposition agrees in favor of the other Party that such sale or other
disposition shall be conducted according to the normal practices of commercial
real property secured lenders generally, (c) with respect to the sale or other
disposition of any Collateral by either Party, such Party agrees to provide the
other Party with such written notice as it is required by applicable law
(including, if applicable, the Uniform Commercial Code) to provide to Borrower
or the Guarantors (without regard to whether Borrower or the Guarantors have
waived their entitlement to receive such notice), and (d) the Credit Facility
Lender agrees that, at such time as all Credit Facility Indebtedness is Fully
Paid, the Credit Facility Lender thereupon promptly shall cease all further
Foreclosure Actions.
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Section 3.4 Distribution. Each Party agrees that, upon any distribution as
a result of a Foreclosure Action, or the receipt of any other payment or
distribution with respect to the Collateral, the proceeds thereof shall be
distributed in the order of, and in accordance with, the following priorities:
(a) FIRST:
(i) if the Foreclosure Action is taken by the Credit Facility
Lender, to the payment of all reasonable costs and expenses, commissions
and taxes of the Credit Facility Lender incurred in connection with taking
any such Foreclosure Action or other realization, including all reasonable
expenses (including attorneys fees and expenses), liabilities and advances
made or incurred by the Credit Facility Lender in connection therewith;
(ii) if the Foreclosure Action is taken and entitled to be taken
hereunder by the Trustee, to the payment of all reasonable costs and
expenses, commissions and taxes of the Trustee incurred in connection with
taking any such Foreclosure Action or other realization, including all
reasonable expenses (including attorneys fees and expenses), liabilities
and advances made or incurred by the Trustee in connection therewith;
(b) SECOND, to the Credit Facility Lender, until the earlier of (i)
the Credit Facility Indebtedness being Fully Paid and (ii) the first time
following the Trigger Date at which the Maximum Amount of Credit Facility
Indebtedness is Fully Paid;
(c) THIRD, to the Trustee, until all Subordinated Lien Indebtedness
is Fully Paid;
(d) FOURTH, to the Credit Facility Lender until all outstanding
Credit Facility Indebtedness in excess of the Maximum Amount is Fully
Paid.
Section 3.5 Notice of Certain Events. Each Party agrees that it will
notify the other, in writing, (a) if it receives actual notice of the occurrence
of a Trigger Event or Enforcement Event, not later than 30 days after the date
of any such occurrence, and (b) at least 15 days prior to exercising any
remedies with respect to any portion of the Collateral. Notwithstanding the
foregoing, (a) the Credit Facility Lender shall not be obligated to provide such
prior written notice if exigent circumstances require that the Credit Facility
Lender act immediately in order to preserve, protect, or obtain possession or
control over the Collateral or any portion thereof; provided, that, if such
exigent circumstances require the Credit Facility Lender to so act immediately,
the Credit Facility Lender agrees to provide the Trustee with written notice as
soon as practicable following the Credit Facility Lender first exercising any of
its secured creditor remedies with respect to the Collateral, and (b) no Party
shall incur any liability to the other under this Section 3.5 as a result of the
failure of such Party to provide any such notice so
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long as the failure to so provide such notice was not the result of wilful
misconduct, bad faith or gross negligence.
ARTICLE IV
ENFORCEMENT OF PRIORITIES
Section 4.1 In Furtherance of Lien Priorities. Each Party agrees as
follows:
(a) All payments or distributions of or with respect to the
Collateral that are received by any Party contrary to the provisions of
this Agreement (including, without limitation, payments or distributions
in connection with any Insolvency Proceeding) shall be segregated from
other funds and property held by such Party and shall be held in trust for
the Party entitled thereto in accordance with the provisions of Section
3.4 hereof (the "Entitled Party") and such Party shall forthwith pay over
such remaining proceeds to the Entitled Party in the same form as so
received (with any necessary endorsement) to be applied (in the case of
cash) or held as Collateral (in the case of non-cash property or
securities) in accordance with the provisions hereof and the provisions of
the applicable Financing Documents.
(b) After the earlier of (i) the date on which all Credit Facility
Indebtedness is Fully Paid and (ii) the first date following the Trigger
Date on which the Maximum Amount of Credit Facility Indebtedness is Fully
Paid, the Credit Facility Lender will promptly execute and deliver all
further instruments and documents, and take all further acts that may be
necessary, or that the Trustee may reasonably request, to permit the
Trustee to evidence the termination of the Lien Priority hereunder, or in
furtherance thereof; provided, that the Credit Facility Lender shall not
be required to pay over any payment or distribution, execute any
instruments or documents, or take any other action referred to in this
clause (b) to the extent that such action would contravene any law, order
or other legal requirement, and in the event of a controversy or dispute,
the Credit Facility Lender may interplead any payment or distribution in
any court of competent jurisdiction.
(c) Each Party is hereby authorized to demand specific performance
of this Agreement, whether or not Borrower or any Guarantor shall have
complied with any of the provisions hereof applicable to it, at any time
when any other Party shall have failed to comply with the provisions of
this Agreement applicable to it, provided that the remedy of specific
performance shall not be available, and the asserting Party shall be free
to assert any and all legal defenses it may possess, if such remedy would
result in, or otherwise constitute, a violation of the Employee Retirement
Income Security Act of 1974, as amended. Each Party hereto hereby
irrevocably waives any defense based on the adequacy of a remedy at law,
which might be asserted as a bar to such remedy of specific performance.
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(d) This Agreement shall continue to be effective or be reinstated,
as the case may be, if at any time any payment of any of the Secured
Liabilities is, other than as a result of any intentional fraud or gross
negligence of the applicable Party, rescinded or must otherwise be
returned by the applicable Party upon the insolvency, bankruptcy or
reorganization of Borrower or any Guarantor or otherwise, all as though
such payment had not been made.
Section 4.2 Perfection of Possessory Security Interests. For the limited
purpose of perfecting the security interests of the Parties in those types or
items of Collateral in which a security interest only may be perfected by
possession or control, each Party hereby appoints the other as its
representative for the limited purpose of possessing on its behalf any such
Collateral that may come into the possession or control of such other Party from
time to time, and each Party agrees to act as the other's representative for
such limited purpose of perfecting the other's security interest by possession
or control through a representative, provided that neither Party shall incur any
liability to the other by virtue of acting as the other's representative
hereunder. In this regard, any Party that is in possession or control of any
such item of Collateral agrees that if it elects to relinquish possession or
control of such item of Collateral it shall deliver possession or control
thereof to the other Party; provided, that no Party shall be required to deliver
any such item of Collateral or take any other action referred to in this section
to the extent that such action would contravene any law, order or other legal
requirements, and in the event of a controversy or dispute, such Party may
interplead any item of Collateral in any court of competent jurisdiction.
Section 4.3 Control of Dispositions of Collateral and Effect thereof on
Junior Liens.
(a) Each Party hereby agrees that any Uniform Commercial Code
collection, sale, or other disposition of Collateral by the Credit
Facility Lender shall be free and clear of any Lien of the Trustee in such
Collateral; provided that the Trustee shall retain a Lien (having the same
priority as the Lien it previously had on the item of Collateral that was
collected, sold or otherwise disposed of) on the proceeds of such
collection, sale, or other disposition (except to the extent such proceeds
are applied to the Credit Facility Indebtedness in accordance with Section
3.4).
(b) To the extent reasonably requested by either Party, the other
Party will cooperate in providing any necessary or appropriate releases to
permit a collection, sale, or other disposition of Collateral, as provided
in subsection (a) of this Section 4.3, by the Party holding the senior
Lien therein free and clear of the other Party's junior Lien.
ARTICLE V
MISCELLANEOUS
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Section 5.1 Rights of Subrogation. The Trustee agrees that no payment or
distribution to the Credit Facility Lender pursuant to the provisions of this
Agreement shall entitle the Trustee to exercise any rights of subrogation in
respect thereof until the first date following the Trigger Date on which the
Maximum Amount of Credit Facility Indebtedness shall have been Fully Paid.
Section 5.2 Further Assurances. The Parties will, at their own expense and
at any time and from time to time, promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable, or that any Party may reasonably request, in order to protect any
right or interest granted or purported to be granted hereby or to enable any
Party to exercise and enforce its rights and remedies hereunder; provided, that
no Party shall be required to pay over any payment or distribution, execute any
instruments or documents, or take any other action referred to in this Section
5.2 to the extent that such action would contravene any law, order or other
legal requirement binding upon such Party, and in the event of a controversy or
dispute, any Party may interplead any payment or distribution in any court of
competent jurisdiction, without further responsibility in respect of such
payment or distribution under this Section 5.2.
Section 5.3 Defenses Similar to Suretyship Defenses. All rights,
interests, agreements and obligations of each of the Parties under this
Agreement, shall remain in full force and effect irrespective of:
(a) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Liabilities, or any other
amendment or waiver of or any consent to departure from the Financing
Documents, provided that this clause (a) shall not apply to, and the
Trustee's Liens in the Collateral shall not be subordinated in priority by
virtue of this Agreement to, the Credit Facility Lender's Liens therein if
and to the extent that the Credit Facility Indebtedness is increased,
without the express written consent of the Trustee, to an amount in excess
of the Maximum Amount: or
(b) any exchange, release, non-enforcement or non-perfection of any
Party's Liens with respect to any Collateral, or any release, amendment or
waiver of or consent to departure from any guaranty, for all or any of the
Secured Liabilities; or
(c) any failure by any Party to marshal assets in favor of any other
Party or any other Person or to proceed upon or against or exhaust any
security or remedy before proceeding to enforce the Financing Documents.
Section 5.4 Waiver. Except as otherwise provided in Section 2.1 and the
other provisions hereof, to the maximum extent permitted by applicable law, the
Trustee hereby waives, solely with respect to the Collateral to which the Lien
Priority relates, any failure, omission, delay or lack on the part of the Credit
Facility Lender to enforce, assert or exercise any right, power or remedy
conferred on the Credit Facility Lender in any of the Credit Facility
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Loan Documents or the inability of the Credit Facility Lender to enforce any
provision of the Credit Facility Loan Documents or this Agreement.
Section 5.5 Amendments, Etc. No amendment or waiver of any provision of
this Agreement nor consent to any departure by any Party shall in any event be
effective unless the same shall be in writing and signed by each Party, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
Section 5.6 Addresses for Notices. All demands, notices and other
communications provided for hereunder shall be in writing and, if to the
Trustee, mailed or sent by telecopy or delivered to it, addressed to it as
follows:
Firstar Bank of Minnesota, N.A.
000 Xxxx 0xx Xxxxxx
Xx. Xxxx, XX 00000
Attention: Corporate Trust Department
Telephone:
Facsimile: (000) 000-0000
and if to the Credit Facility Lender, mailed or sent by telecopy or delivered to
it, addressed to it as follows:
[Name of Senior Lender]
[address]
[address]
Attention:
Telephone:
Facsimile:
or as to any Party at such other address as shall be designated by such Party in
a written notice to the other parties complying as to delivery with the terms of
this Section. All such demands, notices and other communications shall be
effective: when mailed, two business days after deposit in the mails, postage
prepaid; when sent by telecopy, when receipt is acknowledged by the receiving
telecopy equipment (or at the opening of the next business day if receipt is
after normal business hours); or when delivered, as the case may be, addressed
as aforesaid.
Section 5.7 No Waiver of Remedies. No failure on the part of any Party to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
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Section 5.8 Continuing Agreement. This Agreement is a continuing agreement
and shall (a) be binding upon the Parties and their successors and assigns
(including, without limitation, all parties that become lenders or participants
under the Credit Facility), and (b) inure to the benefit of and be enforceable
by the Parties and their respective successors, transferees and assigns.
Section 5.9 Governing Law; Entire Agreement. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New York
including, without limitation, Section 5-1401 of the New York General
Obligations Law, except as otherwise preempted by applicable federal law. This
Agreement constitutes the entire agreement and understanding among the Parties
with respect to the subject matter hereof and supersedes any prior agreements,
written or oral, with respect thereto.
Section 5.10 Counterparts. This Agreement may be executed in any number of
counterparts, and it is not necessary that the signatures of all Parties be
contained on any one counterpart hereof, each counterpart will be deemed to be
an original, and all together shall constitute one and the same document.
Section 5.11 No Third Party Beneficiary. This Agreement is solely for the
benefit of the Parties (and their successors and assigns) and the holders of the
Secured Liabilities (including the Credit Facility Lender and the Holders). No
other Person (including Borrower, any Guarantor or any subsidiary or affiliate
of Borrower) shall be deemed to be a third party beneficiary of this Agreement
or shall have any rights to enforce any provisions hereof.
Section 5.12 Headings. The headings of the articles and sections of this
Agreement are inserted for purposes of convenience only and shall not be
construed to affect the meaning or construction of any of the provisions hereof.
Section 5.13 Severability. If any of the provisions in this Agreement
shall, for any reason, be held invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement and shall not invalidate the Lien Priority or any
other priority set forth in this Agreement.
Section 5.14 Trustee Status. Notwithstanding any term herein to the
contrary, it is hereby expressly agreed and acknowledged that the subordination
and related agreements set forth herein by the Trustee are made solely in its
capacity as trustee and collateral agent under the Indenture Documents and with
respect to the Notes issued under the Indenture (and not in its individual
commercial capacity, except to the extent that it is or becomes the holder of
any such Note). The Trustee shall not have any duties, obligations, or
responsibilities to the Credit Facility Lender under this Agreement except as
expressly set forth herein. Nothing in this Agreement shall be construed to
operate as a waiver by the Trustee, with respect to Borrower or any holder of
any Subordinated Lien Indebtedness, of the benefit of any exculpatory
provisions, presumptions, indemnities, protections, benefits, immunities or
reliance rights contained in the Indenture, and, by its acknowledgment hereof,
Borrower expressly agrees that as between itself
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and the Trustee, the Trustee shall have such benefit with respect to all actions
or omissions by the Trustee pursuant to this Agreement. For all purposes of this
Agreement, Trustee may (a) rely in good faith, as to matters of fact, on any
representation of fact believed by Trustee to be true (without any duty of
investigation) and that is contained in a written certificate of any authorized
representative of Borrower or of the Credit Facility Lender, (b) rely in good
faith, as to matters of law, on any advice received from its legal counsel or an
opinion of its counsel, counsel to Borrower or counsel to the Credit Facility
Lender, and shall have no liability for any action or omission taken in reliance
thereon, and (c) assume in good faith (without any duty of investigation), and
rely upon, the genuineness, due authority, validity, and accuracy of any
certificate, instrument, notice, or other document believed by it in good faith
to be genuine and presented by the proper person.
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IN WITNESS WHEREOF each Party has caused this Agreement to be duty
executed and delivered as of the date first above written.
CREDIT
FACILITY LENDER: [NAME OF SENIOR LENDER]
By:
---------------------------
TRUSTEE: FIRSTAR BANK OF MINNESOTA, N.A.,
solely in its capacity as Trustee (and not individually)
By:
---------------------------
Name:
Title:
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ACKNOWLEDGMENT
The undersigned hereby acknowledges that (a) it has received a copy
of the foregoing Intercreditor Agreement and consents thereto, and agrees to
recognize all rights granted hereby to the parties thereto, and will not do any
act or perform any obligation which is not in accordance with the agreements set
forth in such Intercreditor Agreement and (b) it is not an intended beneficiary
or third party beneficiary under the Intercreditor Agreement.
Dated as of _________________, ____.
PENINSULA GAMING, LLC
a Delaware limited liability company
By:
---------------------------
Name:
Title:
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Indenture as of the date first written above.
Company:
PENINSULA GAMING COMPANY, LLC
By: /s/ Xxxxx Xxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxx
Title:
Attest:
/s/ Xxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxx
PENINSULA GAMING CORP.
By: /s/ Xxxxx Xxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxx
Title:
Attest:
/s/ Xxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxx
FIRSTAR BANK OF MINNESOTA, N.A.,
as Trustee
By: /s/ Xxxxx Xxxxxx
-------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
[Indenture]
