CASH COLLATERAL AND DISBURSEMENT AGREEMENT
Dated November 8, 1996
Among
Fleet National Bank,
as Trustee,
Fleet National Bank,
as Disbursement Agent,
and
WATERFORD GAMING, L.L.C.
T A B L E O F C O N T E N T S
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ARTICLE I
DEFINITIONS
SECTION 1.1 Certain Defined Terms....................................... 2
ARTICLE II
ESTABLISHMENT OF ACCOUNT;
INITIAL DEPOSITS; PRIORITY RELEASES
SECTION 2.1 Establishment of Account.................................... 3
SECTION 2.2 Deposits to Account......................................... 3
SECTION 2.3 Priority Releases........................................... 3
SECTION 2.4 Security Interest........................................... 3
SECTION 2.5 Appointment of Disbursement Agent........................... 4
SECTION 2.6 Disbursement Agent Is Agent of Trustee...................... 4
SECTION 2.7 Instructions and Entitlement Orders
of Trustee................................................. 5
ARTICLE III
REQUESTING AND MAKING CASH
DISBURSEMENTS FROM THE ACCOUNT
SECTION 3.1 Requesting the Cash Disbursement............................ 5
SECTION 3.2 Making the Cash Disbursement................................. 5
ARTICLE IV
CONDITIONS OF CASH DISBURSEMENTS
FROM THE ACCOUNT
SECTION 4.1 Conditions Precedent to Cash
Disbursements............................................... 6
ARTICLE V
COVENANTS
SECTION 5.1 Covenants of the Company..................................... 7
SECTION 5.2 Covenants of the Disbursement Agent.......................... 9
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ARTICLE VI
EVENTS OF DEFAULT; REMEDIES; RIGHTS UPON DEFAULT
SECTION 6.1 Event of Default............................................ 10
SECTION 6.2 Rights and Remedies Generally............................... 11
SECTION 6.3 Assembly of Collateral...................................... 11
SECTION 6.4 Disposition of Collateral................................... 11
SECTION 6.5 Recourse.................................................... 11
SECTION 6.6 Expenses; Attorneys' Fees................................... 11
SECTION 6.7 Limitation on Duties Regarding
Preservation of Cash Collateral............................ 12
ARTICLE VII
DISBURSEMENT AGENT
SECTION 7.1 Rights, Duties, etc......................................... 13
SECTION 7.2 Resignation or Removal...................................... 14
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Amendments, Etc............................................. 15
SECTION 8.2 Notices, Etc................................................ 15
SECTION 8.3 No Waiver; Remedies......................................... 17
SECTION 8.4 Expenses; Indemnity......................................... 17
SECTION 8.5 Execution in Counterparts................................... 18
SECTION 8.6 Relationship of Trustee..................................... 18
SECTION 8.7 Governing Law............................................... 18
SECTION 8.8 Waiver of Jury Trial........................................ 18
SECTION 8.9 Termination................................................. 18
EXHIBIT A REQUEST FOR A CASH DISBURSEMENT.............................A-1
EXHIBIT B FORM OF TRUSTEE'S CERTIFICATE...............................B-1
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CASH COLLATERAL AND DISBURSEMENT AGREEMENT
CASH COLLATERAL AND DISBURSEMENT AGREEMENT, dated November 8, 1996, among
Fleet National Bank, as trustee for the Holders (in such capacity, together with
its successor in trust, if any, appointed pursuant to the Indenture referred to
below, the "Trustee"), under an Indenture dated the date hereof (such Indenture
as amended, supplemented or otherwise modified from time to time in accordance
with the terms thereof, the "Indenture"), Waterford Gaming, L.L.C. (the
"Company"), and Fleet National Bank, as Disbursement Agent for the Trustee (the
"Disbursement Agent").
PRELIMINARY STATEMENTS:
(1) The Company has entered into the Indenture pursuant to which it will
issue $65,000,000 of its 12 3/4% Senior Notes due 2003 (the "Notes").
(2) As security for the prompt and complete payment and performance in
full of the Obligations under the Indenture, the Company intends to grant to the
Trustee a security interest in, among other things, the Cash Collateral.
(3) The Disbursement Agent has agreed to take such action with respect to
the Account as specified herein.
(4) This Cash Collateral and Disbursement Agreement is a condition to the
issuance of the Notes under the terms of the Purchase Agreement, dated November
5, 1996, by and among the Company, Waterford Gaming Finance Corp. and the
initial purchasers named therein.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants hereinafter set forth, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Certain Defined Terms. Capitalized terms used but not defined
herein and in any schedules and exhibits hereto shall have the meanings set
forth in the Indenture. In addition, the following terms shall have the
following meanings (such meanings to be equally applicable to both the singular
and plural forms of the terms defined):
"Account" has the meaning specified in Section 2.1.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banks in Connecticut are authorized or
obligated by law to close.
"Cash Collateral" has the meaning specified in Section 2.4.
"Cash Disbursement" means a disbursement to the Trustee or as
directed by the Company.
"Cash Disbursement Date" has the meaning specified in Section 3.1.
"Closing Date" means November 8, 1996.
"Company" means Waterford Gaming, L.L.C.
"Disbursement Agent" has the meaning specified in the recital of
parties.
"Indenture" has the meaning specified in the recital of parties.
"Notes" has the meaning specified in the Preliminary Statements
hereto.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association,
joint venture or other entity, or a government or any political
subdivision or agency thereof.
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"Request for a Cash Disbursement" has the meaning specified in
Section 3.1.
"Trustee" shall have the meaning set forth in the recitals of the
parties.
ARTICLE II
ESTABLISHMENT OF ACCOUNT;
INITIAL DEPOSITS; PRIORITY RELEASES
SECTION 2.1 Establishment of Account. There is hereby established with
Fleet National Bank a custodial account under the sole dominion and control of
the Trustee (the "Account"). The Account shall clearly indicate on the title
thereof that it is the account of Fleet National Bank, as trustee for the
holders of 12 3/4% Senior Notes due 2003 of Waterford Gaming, L.L.C. and
Waterford Gaming Finance Corp.
SECTION 2.2 Deposits to Account. The initial deposit to the Account shall
be $62,725,000. The Company at any time shall make contributions to the Account
consistent with the terms of the Indenture.
SECTION 2.3 Priority Releases. Funds in the Account shall be released by
the Disbursement Agent to any account specified by the Trustee, upon receipt of
a Trustee's Certificate substantially in the form of Exhibit B hereto,
certifying that such amounts will promptly be used for the purpose of making any
required payment of principal or interest or Liquidated Damages to Noteholders,
provided that the applicable notice shall have been given and the applicable
cure periods shall have expired, in each case as provided for in the Indenture.
SECTION 2.4 Security Interest. As security for the prompt and complete
payment and performance in full of all the Obligations, the Company hereby
pledges and assigns to the Trustee for the equal and ratable benefit of the
Holders, and grants to the Trustee for the equal and ratable benefit of the
Holders an exclusive first priority security interest in all of its right, title
and interest in the following collateral (the "Cash Collateral"):
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(a) the Account, all funds, investments and securities held therein
or credited thereto, whether by book-entry or other form, and all certificates
and instruments, if any, from time to time representing or evidencing the
Account;
(b) all investments from time to time credited to the Account, and
all certificates and instruments, if any, held therein from time to time
representing or evidencing Cash Equivalents;
(c) all notes, certificates of deposits, deposit amounts, checks and
other instruments from time to time hereafter delivered to or otherwise
possessed by the Disbursement Agent for or on behalf of the Trustee for the
benefit of the Holders;
(d) all interest, dividends, cash and instruments from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the foregoing; and
(e) all proceeds of any and all of the foregoing.
SECTION 2.5 Appointment of Disbursement Agent. The Trustee hereby appoints
Fleet National Bank to act as the Disbursement Agent in connection with this
Agreement, and to take all actions necessary or appropriate on behalf of the
Trustee in order to comply with the terms of this Agreement.
SECTION 2.6 Disbursement Agent Is Agent of Trustee. Subject to the
limitations as to the duties and liabilities of the Disbursement Agent set forth
below, (a) the Trustee hereby appoints the Disbursement Agent as the Trustee's
agent and pledgee-in-possession for the Cash Collateral; and (b) the
Disbursement Agent by its execution and delivery of this Agreement hereby
accepts such appointment and agrees to be bound by the terms of this Agreement.
The Company hereby agrees to such appointment of the Disbursement Agent and
further agrees that the Disbursement Agent, on behalf of the Trustee, shall be
entitled to act upon the instructions of the Trustee pursuant to Sections 2.3
and 2.7 herein. The Disbursement Agent agrees to take such action as shall from
time to time be specified in writing from the Trust-
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ee to enable the Trustee to exercise its rights and remedies with respect to the
lien and security interest described in Section 2.4 above.
SECTION 2.7 Instructions and Entitlement Orders of Trustee. The
Disbursement Agent hereby agrees, and the Company hereby acknowledges, that the
Disbursement Agent shall comply with instructions and entitlement orders
(including without limitation, instructions as to the investment, transfer,
redemption or other disposition of the Cash Collateral) originated by the
Trustee without further consent of the Company. Notwithstanding the foregoing,
the Trustee agrees with the Company that any such instruction or entitlement
order shall be consistent with any and all rights that the Trustee may have
under the Indenture and all other agreements and instruments executed pursuant
thereto, or under applicable law, with respect to the Cash Collateral.
ARTICLE III
REQUESTING AND MAKING CASH
DISBURSEMENTS FROM THE ACCOUNT
SECTION 3.1 Requesting the Cash Disbursement. The Company may request that
a Cash Disbursement be made from the Account by delivering notice to the
Disbursement Agent, not later than 11:00 A.M. (New York time) on the second
Business Day prior to the date of the proposed Cash Disbursement, except with
respect to Cash Disbursements made on the Closing Date, which request may be
made on such date. Each such request shall be substantially in the form of
Exhibit A (a "Request for a Cash Disbursement") shall be executed by a duly
authorized officer of the Company and shall specify therein (i) the requested
date of such Cash Disbursement (the "Cash Disbursement Date") and (ii) the
aggregate amount of such Cash Disbursement.
SECTION 3.2 Making the Cash Disbursement. Upon fulfillment of the terms
and conditions set forth herein including, without limitation, the applicable
conditions set forth in Article IV hereof, the Disbursement Agent shall make
payment of each Cash Disbursement, no later than 3:00 P.M. (New York time) on
each Cash Disbursement Date, by deducting the amount of each Cash Dis-
5
bursement from the Account and depositing such amount in the trust account
maintained with the Trustee for such purpose or as otherwise directed by the
Company with respect to Cash Disbursement not involving payments to the holders
of the Notes, provided that Cash Disbursements on the Closing Date may be made
by checks on the Account of up to $687,211. At least two Business Days prior to
any Cash Disbursement Date, the Company shall instruct the Disbursement Agent to
sell such portion of the Cash Equivalents, if any, held in the Account as shall
be necessary to fund the requested Cash Disbursement.
ARTICLE IV
CONDITIONS OF CASH DISBURSEMENTS
FROM THE ACCOUNT
SECTION 4.1 Conditions Precedent to Cash Disbursements. The Disbursement
Agent shall make Cash Disbursements from the Account upon satisfaction in
connection with each Cash Disbursement of the following conditions:
(a) Documents. The Disbursement Agent shall have received the
following, in form and substance reasonably satisfactory to the Disbursement
Agent:
(i) a Request for a Cash Disbursement in substantially the
form of Exhibit A (including the representations and warranties referred
to in Section 4.1(b) herein); and
(ii) such other instruments, documents, opinions, and
information pertaining to the Cash Disbursement or evidencing compliance
by the Company with the provisions of this Agreement and the Indenture as
the Disbursement Agent may reasonably request.
(b) Representations and Warranties. The giving of each Request for a
Cash Disbursement shall constitute a representation and warranty by the Company
to the Disbursement Agent, the Trustee and the Holders that:
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(i) no event has occurred and is continuing, or would result
from such Cash Disbursement or from the application of the proceeds
thereof, that constitutes an Event of Default under the Indenture or would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both; and
(ii) the Company has satisfied all of the conditions herein to
the release of such funds.
(c) Cessation of Disbursements. In the event of an Event of Default,
the Disbursement Agent shall not disburse any additional funds other than to the
Trustee until such event is waived or cured. The Company covenants to promptly
notify the Disbursement Agent of such event, and the Disbursement Agent may rely
on such notification without independent verification.
ARTICLE V
COVENANTS
SECTION 5.1 Covenants of the Company. For so long as this Agreement shall
remain in effect, the Company shall:
(a) Certain Rights. Not claim any rights with respect to the Cash
Collateral except as specifically set forth herein or in accordance with
applicable law.
(b) Further Assurances. From time to time at the expense of the
Company, promptly execute, deliver, file and record all further instruments,
indorsement and other documents, and take such further action as the Trustee may
deem reasonably desirable in obtaining the full benefits of this Agreement and
of the rights, remedies and powers herein granted, including, without
limitation, the following:
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(i) the filing of any financing statements, in form sufficient
under the Uniform Commercial Code in effect in any jurisdiction with
respect to the liens and security interests granted hereby. The Company
also hereby authorizes the Trustee to file any such financing statement
without the signature of the Company to the extent permitted by applicable
law. A photocopy or other reproduction of this Agreement shall be
sufficient as a financing statement and may be filed in lieu of the
original to the extent permitted by applicable law. The Company will pay
or reimburse the Trustee for all filing fees and related expenses; and
(ii) furnish to the Trustee from time to time statements and
schedules further identifying and describing the Cash Collateral and such
other reports in connection with the Cash Collateral as the Trustee may
reasonably request, all in reasonable detail and in form satisfactory to
the Trustee.
(c) Change of Name; Identity; Corporate Structure; or Chief
Executive Office. Not change its name, identity, corporate structure or the
location of its chief executive office without (i) giving the Trustee and the
Disbursement Agent at least thirty (30) days' prior written notice clearly
describing such new name, identity, corporate structure or new location and
providing such other information in connection therewith as the Trustee may
reasonably request, and (ii) taking all action satisfactory to the Trustee as
the Trustee may reasonably request to maintain the security interest of the
Trustee in the Cash Collateral intended to be granted hereby at all times fully
perfected with the same or better priority and in full force and effect.
(d) Prompt Notice. Upon discovering that it requires funding and is
unable to make the representations and warranties contained herein in connection
with a Request for a Cash Disbursement, promptly notify the Trustee and the
Holders of such event.
(e) Change in Law. In the event that the 1994 Official Text of
Article 8 of the Uniform Commercial
8
Code or an amended version thereof ("Revised Article 8") becomes law in the
State of Connecticut, within 30 days after the effective date of the adoption of
Revised Article 8 in Connecticut, the Company shall deliver to the Trustee an
opinion of counsel that either (i) the enactment of Revised Article 8 does not
adversely effect the validity, perfection or priority of the security interest
of the Trustee for the benefit of the Holders in the Cash Collateral, and after
giving effect to Revised Article 8, the security interest of the Trustee for the
benefit of the Holders in the Cash Collateral will be entitled to the same
status as a valid and perfected security interest and entitled to the same
priority to which it would otherwise have been entitled immediately prior to
giving effect to Revised Article 8 or (ii) the provisions of the Cash Collateral
and Disbursement Agreement are effective to give the Trustee "control" (as
defined in Revised Article 8) over any "securities entitlements" (as defined in
Revised Article 8). If the opinion contained in clause (ii) is given, the
opinion shall further state that pursuant to Revised Article 8, the provisions
of the Cash Collateral and Disbursement Agreement together with such control are
sufficient to create a valid and perfected security interest in favor of the
Trustee in any such "securities entitlements" and that no other security
interest of any other creditor of the Company will be equal or prior to the
security interest of the Trustee in such securities entitlements.
SECTION 5.2 Covenants of the Disbursement Agent. For so long as this
Agreement shall remain in effect, in addition to its other undertakings, the
Disbursement Agent:
(a) The Account. Shall maintain the Account as follows:
(i) Notwithstanding anything to the contrary in this or any
other agreement relating to the Account, the Account is and will be held
in trust on behalf of the Trustee for the benefit of the Holders and not
commingled with any ordinary deposit or commercial bank account, will be
maintained with the trust department of the Disbursement Agent solely for
the Trustee for the benefit of the Holders and
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will be subject to the written instructions of the Trustee.
(ii) Unless otherwise instructed in writing by the Trustee
for the benefit of the Holders, the Disbursement Agent shall invest
amounts on deposit in the Account in Cash Equivalents in accordance with
the written instructions of the Company.
(iii) All disbursements and releases pursuant to this
Agreement shall be made by the Disbursement Agent irrespective of, and
without deduction for, any counterclaim, defense, recoupment or set-off
and shall be final.
(iv) All service charges and fees with respect to this
Agreement or the Account shall be paid by the Company.
(v) The Disbursement Agent irrevocably waives and renounces
any pledge, security interest (whether consensual, statutory or otherwise)
or right of offset or compensation that it has or may ever have for its
own benefit with respect to the Account.
(b) Books and Records. Shall maintain appropriate books and records
with respect to the Account in which shall be recorded all transactions related
thereto including, without limitation, all disbursements hereunder and any Cash
Equivalents acquired by the Disbursement Agent and shall permit the Trustee or
any of its agents or representatives to inspect and to make copies of such books
and records at the Company's sole cost and expense.
ARTICLE VI
EVENTS OF DEFAULT; REMEDIES; RIGHTS UPON DEFAULT
SECTION 6.1 Event of Default. For purposes of this Agreement, the term
"Event of Default" shall have the meaning provided in the Indenture and shall
also include any default in the performance, or breach, of any
10
covenant of the Company set forth in Section 5.1 hereof that continues for 30
days after written notice has been given from the Trustee or from holders of at
least 25% of the aggregate principal amount of the Notes then outstanding,
specifying such default and requiring that it be remedied.
SECTION 6.2 Rights and Remedies Generally. If an Event of Default shall
occur and be continuing, then and in every such case, the Trustee shall have all
the rights of a secured party under the Uniform Commercial Code, shall have all
rights now or hereafter existing under all other applicable laws, and, subject
to any mandatory requirements of applicable law then in effect, shall have all
the rights set forth in this Agreement and all the rights set forth with respect
to the Cash Collateral or this Agreement in any other security agreement
between the parties.
SECTION 6.3 Assembly of Collateral. If an Event of Default shall occur and
be continuing, upon five (5) days' notice to the Company, the Company shall, at
its own expense, assemble the Cash Collateral (or from time to time any portion
thereof) and make it available to the Trustee at any place or places designated
by the Trustee which is reasonably convenient to both parties.
SECTION 6.4 Disposition of Collateral. The Trustee will give the Company
reasonable notice as required by the Uniform Commercial Code, if any of the time
and place of any public sale of the Cash Collateral or any part thereof or of
the time after which any private sale or any other intended disposition thereof
is to be made. The Company agrees that the requirements of reasonable notice to
it shall be met if such notice is mailed, registered or certified mail, to its
address specified in Section 7.2 of this Agreement at least ten (10) days before
the time of any public sale (notwithstanding the time periods contained in
Section 7.2) or after which any private sale may be made.
SECTION 6.5 Recourse. The Company shall remain liable for any deficiency
if the proceeds of any sale or other disposition of the Cash Collateral are
insufficient to satisfy the Obligations in accordance with the terms of the
Indenture. The Company shall also be liable for all expenses of the Trustee
incurred in
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connection with collecting such deficiency, including, without limitation, the
fees and disbursements of any attorneys employed by the Trustee to collect such
deficiency.
SECTION 6.6 Expenses; Attorneys' Fees. The Company shall reimburse the
Trustee for all its expenses in connection with the exercise of its rights
hereunder, including, without limitation, all reasonable attorneys' fees and
legal expenses incurred by the Trustee. Expenses of retaking, holding, preparing
for sale, selling or the like shall include the reasonable attorneys' fees and
legal expenses of the Trustee. All such expenses shall be secured hereby.
SECTION 6.7 Limitation on Duties Regarding Preservation of Cash
Collateral. (a) The Trustee's sole duty with respect to the custody, safekeeping
and physical preservation of the Cash Collateral in its possession, under
Section 9-207 of the Uniform Commercial Code or otherwise, shall be to deal with
it in the same manner as the Trustee deals with similar property for its own
account.
(b) The Trustee shall have no obligation to take any steps to
preserve rights against prior parties to any Cash Collateral.
(c) Neither the Trustee nor any of its directors, officers,
employees or agents shall be liable for failure to demand, collect or realize
upon all or any part of the Cash Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Cash
Collateral upon the request of the Company or otherwise.
(d) Neither the Trustee nor the Disbursement Agent nor any of their
directors, officers, employees or agents shall be liable for disbursements made
in good faith reliance on any certificate provided to either of them pursuant to
the terms of this Agreement; provided, however, that the Trustee, the
Disbursement Agent and their respective directors, officers, employees and
agents shall remain liable for damages caused by disbursements made through
their gross negligence, bad faith or willful misconduct.
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ARTICLE VII
DISBURSEMENT AGENT
SECTION 7.1 Rights, Duties, etc. The acceptance by the Disbursement Agent
of its duties hereunder is subject to the following terms and conditions which
the parties to this Agreement hereby agree shall govern and control with respect
to its rights, duties, liabilities and immunities:
(a) it shall act hereunder as a disbursement agent only and shall
not be responsible or liable in any manner whatsoever for the sufficiency,
correctness, genuineness or validity of any funds or securities deposited with
or held by it, except as provided in this Agreement;
(b) it shall be protected in acting upon any written notice,
certificate, instruction, request or other paper or document, as to the due
execution thereof and the validity and effectiveness of the provisions thereof
and as to the truth of any information therein contained, which Disbursement
Agent in good faith believes to be genuine;
(c) it shall not be liable for any error of judgment or for any act
done or step taken or omitted except in the case of its negligence, wilful
misconduct or bad faith;
(d) it may consult with and obtain advice from counsel in the event
of any dispute or question as to the construction of any provision hereof;
(e) it shall have no duties as Disbursement Agent except those which
are expressly set forth herein and in any modification or amendment hereof;
provided, however, that no such modification or amendment hereof shall affect
its duties unless it shall have given its prior written consent thereto;
(f) it may execute or perform any duties hereunder either directly
or through agents or attorneys;
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(g) it may engage or be interested in any financial or other
transactions with any party hereto and may act on, or as depository, trustee or
agent for, any committee or body of holders of obligations of such person as
freely as if it were not the Disbursement Agent hereunder; and
(h) it shall not be obligated to take any action which in its
reasonable judgment would involve it in expense or liability unless it has been
furnished with reasonable indemnity.
Notwithstanding anything contained herein to the contrary, the standard of good
faith imposed on the Disbursement Agent under this Agreement shall not impose a
duty upon the Disbursement Agent to undertake any investigation with respect to
any Trustee's Certificate or Request for a Cash Disbursement delivered to the
Disbursement Agent hereunder other than to determine that it is completed in
accordance with the requirements hereof and contains the required attachments
thereto. Any allegation that the Disbursement Agent did not act in good faith,
or that the Disbursement Agent acted in bad faith, shall not result in any
liability to the Disbursement Agent until such allegation is upheld by a court
of competent jurisdiction.
SECTION 7.2 Resignation or Removal. (a) The Disbursement Agent may at any
time resign by giving notice to each other party to this Agreement, such
resignation to be effective upon the appointment of a successor Disbursement
Agent and the delivery of a written instrument accepting such appointment as
hereinafter provided.
(b) The Trustee may remove the Disbursement Agent at any time by
giving notice to each other party to this Agreement, such removal to be
effective upon the appointment of a successor Disbursement Agent and the
delivery of a written instrument accepting such appointment as hereinafter
provided.
(c) In the event of any resignation or removal of the Disbursement
Agent, a successor Disbursement Agent, which shall be a bank or trust company
organized under the laws of the United States of America or any state thereof
and having a capital and surplus of not
14
less than $100,000,000, shall be appointed by the Company. Any such successor
Disbursement Agent shall deliver to each party to this Agreement, a written
instrument accepting such appointment hereunder, and thereupon such successor
Disbursement Agent shall succeed to all the rights and duties of the
Disbursement Agent hereunder and shall be entitled to receive the Account from
the predecessor Disbursement Agent.
(d) If a successor Disbursement Agent shall not have been appointed
within 30 days after the giving of written notice of such resignation or the
delivery of the written instrument with respect to such removal, the
Disbursement Agent or Trustee may apply to any court of competent jurisdiction
to appoint a successor Disbursement Agent to act until such time, if any, as a
successor shall have been appointed as above provided. Any successor
Disbursement Agent so appointed by such court shall immediately and without
further act be superseded by any successor Disbursement Agent appointed as above
provided within one year from the date of the appointment by such court.
(e) Any person into which the Disbursement Agent may be merged or
converted or within which it may be consolidated, or any person resulting from
any merger, conversion or consolidation to which the Disbursement Agent shall be
a party, or any person to which substantially all the corporate trust business
of the Disbursement Agent may be transferred, shall, subject to the terms of
paragraph (c) above, be the Disbursement Agent under this Agreement without
further act.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Amendments, Etc. No amendment, modification or waiver of any
provision of this Agreement may be made except in accordance with Section 8.1
and 8.2(9) of the Indenture; provided, that any such amendment, modification or
waiver which adversely affects the Disbursement Agent shall require the prior
written consent of the Disbursement Agent.
SECTION 8.2 Notices, Etc. All notices and other communications required or
permitted hereunder
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shall be in writing and shall be sufficiently given if made by hand delivery, by
telex, by facsimile or registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
To Disbursement Agent:
Fleet National Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
To Trustee:
Fleet National Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
To the Company:
Waterford Gaming, L.L.C.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇
Any party hereto may by notice to each other party designate such
additional or different addresses as shall be furnished in writing by such
party. Any notice or communication to any party shall be deemed to have been
given or made as of the date so delivered, if personally delivered or by
courier; when answered back, if telexed; when receipt is acknowledged, if faxed;
and five calendar days after mailing, if sent by registered or certified mail
(except that a notice of change of address
16
shall not be deemed to have been given until actually received by the
addressee). A copy of any notice given under this agreement to any party shall
also be given to each other party hereto. Any party hereto may give notice to
the Holders at the addresses set forth for them in the register kept by the
Registrar under the Indenture or may request that the Trustee notify them at
such address.
SECTION 8.3 No Waiver; Remedies. No failure on the part of the
Disbursement Agent, the Trustee, or any Holder to exercise, and no delay in
exercising, any right under this Agreement shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right.
SECTION 8.4 Expenses; Indemnity. The Company will upon demand pay to the
Disbursement Agent or the Trustee the amount of any and all reasonable expenses,
including the reasonable fees and expenses of its counsel and of any experts and
agents, that the Disbursement Agent or the Trustee may incur in connection with
(i) the administration of this Agreement, (ii) the exercise or enforcement of
any of the rights of the Disbursement Agent, the Trustee, or the Holders
hereunder or (iii) the failure by the Company to perform or observe any of the
provisions hereof. In addition, the Company hereby assumes liability for and
agrees to indemnify, protect, save and keep harmless the Disbursement Agent and
its respective successors, assigns, agents and servants, from and against any
claim, demand, expense (including but not limited to reasonable compensation,
disbursements and expenses of the Disbursement Agent's agents and counsel), loss
or liability that may be imposed on, incurred by, or asserted against, at any
time, the Disbursement Agent (whether or not also indemnified against by any
other person under any contract or instrument) and in any way relating to or
arising out of the execution, delivery and performance of this Agreement, the
establishment of the Account, the acceptance of deposits, the purchase or sale
of investments, the retention of cash and investments or the proceeds thereof
and any payment, transfer or other application of cash or investments by the
Disbursement Agent in accordance with the provisions of this Agreement, or as
may arise by reason of any act, omission or error of the Disbursement Agent made
in good faith in the
17
conduct of its duties; except that the Company shall not be required to
indemnify, protect, save and keep harmless the Disbursement Agent against the
Disbursement Agent's own negligence, active or passive, or wilful misconduct.
The indemnities contained in this Section 8.4 shall survive the termination of
this Agreement.
SECTION 8.5 Execution in Counterparts. This Agreement may be executed in
any number of separate counterparts and by different parties hereto in separate
counterparts, each of which, when so executed, shall be deemed to be an original
and all of which, taken together, shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 8.6 Relationship of Trustee. The Trustee shall not be under any
responsibility in respect of the validity or sufficiency of this Agreement or
the execution and delivery hereof or in respect of the validity or sufficiency
of any document or agreement delivered in connection herewith, including, but
not limited to, the Request for a Cash Disbursement as provided by Exhibit A.
SECTION 8.7 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Connecticut.
SECTION 8.8 Waiver of Jury Trial. Each of the Company, the Trustee and the
Disbursement Agent hereby irrevocably waives all right to trial by jury in any
action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to this Agreement, or the actions of any
party hereto in the negotiation, administration, performance or enforcement
thereof.
SECTION 8.9 Termination. The rights, duties and obligations of each of the
parties hereto as provided for hereunder shall cease and this Agreement shall
terminate upon the discharge in full of all of the Obligations.
18
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
WATERFORD GAMING, L.L.C.
By:/s/ ▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: Chief Executive Officer
Fleet National Bank,
as Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
Title: Vice President
Fleet National Bank,
as Disbursement Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
Title: Vice President
19
EXHIBIT A
REQUEST FOR A CASH DISBURSEMENT
[Letterhead of the Company]
November 8, 1996
Fleet National Bank,
as Disbursement Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
Attention: ______________________________
Gentlemen:
The undersigned refers to the Cash Collateral and Disbursement
Agreement, dated November 8, 1996 (the "Cash Collateral and Disbursement
Agreement"; the defined terms used herein are as therein defined or as defined
in the Indenture referred to therein), among the Trustee, the undersigned and
you and requests, pursuant to Section 3.1 of the Cash Collateral and
Disbursement Agreement, that a Cash Disbursement from the Account in the amount
of $__________ (the "Cash Disbursement") be made available to
____________________ on ____________, 199__, which is a Business Day.
The undersigned hereby certifies that the representations and
warranties contained in the Cash Collateral and Disbursement Agreement are true
on the date hereof and will be true on the date of the Cash Disbursement.
A-1
The undersigned hereby certifies that the Cash Disbursement will be
applied to the uses indicated below in the amounts indicated below:
o for the payment of interest on the Notes on the regular Interest
Payment Date falling on _____- _______, ____, in the amount of
$_________
o for the payment of Liquidated Damages on the Notes on the regular
Interest Payment Date falling on ____________, ____ in the amount of
$______________
o for the payment of Defaulted Interest on the Notes on __________,
____ in the amount of $-----------
o for the mandatory redemption of Notes out of Excess Cash in the
amount of $__________ on __________, ____ (the date fixed for
redemption) as provided in the first paragraph of Section 3.1 of
the Indenture, including accrued and unpaid interest and Liquidated
Damages and scheduled premium thereon. A copy of the notice of
redemption as mailed is attached.
o for the mandatory redemption of Notes out of Excess Cash in the
amount of $__________ on __________, ____ (the date fixed for
redemption) as provided in the second paragraph of Section 3.1 of
the Indenture, including accrued and unpaid interest and Liquidated
Damages and scheduled premium thereon. A copy of the notice of
redemption as mailed is attached.
o for the optional redemption of Notes out of Excess Cash in the
amount of $__________ on __________, ____ (the date fixed for
redemption) as provided in the third paragraph of Section 3.1 of
the Indenture, including accrued and unpaid interest and Liquidated
Damages and scheduled premium thereon. A copy of the notice of
redemption as mailed is attached.
o for the repurchase of Notes pursuant to a Change of Control Offer in
the amount of $___________ as provided in Article IX of the
A-2
Indenture, including accrued and unpaid interest and Liquidated
Damages and scheduled premium thereon. A copy of the offer to
purchase is attached.
o for the payment of the purchase price of First Tranche Completion
Guarantee Subordinated Notes or Original Subordinated Notes in the
amount of $___________ as permitted by Section 4.3 of the Indenture.
o for the making of a capital contribution or loan in the amount of
$_________ to Trading Cove Associates, a Connecticut general
partnership ("TCA"), for the development and/or improvement of the
Mohegan Sun as permitted by Section 4.3 of the Indenture. A copy of
the notice from TCA is attached.
o for the making of an Investment in the amount of $_________ in
connection with development and/or improvement of a hotel adjacent
to the Mohegan Sun.
o for the payment of a dividend of $_______ (not to exceed $10
million) on the Issue Date for purchase or redemption of certain
equity interests in the members of the Company.
o for the payment of $10.6 million for the acquisition of RJH
Development Corp.'s interest in TCA.
o for the payment of Permitted Quarterly Tax Distributions in the
amount of $_________. The statement of the Tax Amounts CPA is
attached.
o for the payment of expenses of $______ consistent with Section
4.14 of the Indenture for o trustee fees o printing expenses o legal
expenses o audit expenses o filing fees o initial purchaser offering
expenses
A-3
o other _____ (not to include overhead, salaries, rent, lease payments
or any other operating expenses of the Manager)
Wire instructions (for payments other than to the Trustee) are
attached.
Very truly yours,
WATERFORD GAMING, L.L.C.
By:_________________________________
Name:
Title:
A-4
EXHIBIT B
FORM OF TRUSTEE'S CERTIFICATE
[Date]
Fleet National Bank,
as Disbursement Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
Attention: _____________________
Re: Request of $_______
Gentlemen:
Fleet National Bank (the "Trustee") requests that a disbursement of
$________ be made from the Account to Account No. ______________. Capitalized
terms used herein shall have the meaning afforded them under that certain Cash
Collateral and Disbursement Agreement dated November 8, 1996, to which you are a
party. In connection with the requested release of funds, the Trustee hereby
represents, warrants and certifies that the Trustee is entitled to the
possession of such funds.
The foregoing representations, warranties and certifications are
true and correct and Disbursement Agent is entitled to rely on the foregoing and
is authorized in making the release of funds.
FLEET NATIONAL BANK
By:_____________________________________
Name:
Title:
B-1