EXHIBIT 4.1
--------------------------------------------------------------------------------
HOLLYWOOD CASINO SHREVEPORT
SHREVEPORT CAPITAL CORPORATION
as Issuers,
SERIES A AND SERIES B
$39,000,000 13% SENIOR
SECURED NOTES DUE 2006 WITH CONTINGENT INTEREST
---------------
INDENTURE
Dated as of June 15, 2001
---------------
State Street Bank and Trust Company
as Trustee
---------------
--------------------------------------------------------------------------------
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310(a)(1)............................................................. 7.11
(a)(2)............................................................. 7.11
(a)(3)............................................................. N.A.
(a)(4)............................................................. N.A.
(a)(5)............................................................. 7.11
(b)................................................................ 7.11
(c)................................................................ N.A.
311(a)................................................................ 7.12
(b)................................................................ 7.12
(c)................................................................ N.A.
312(a)................................................................ 2.05
(b)................................................................ 14.03
(c)................................................................ 14.03
313(a)................................................................ 7.06
(b)(1)............................................................. 10.03
(b)(2)............................................................. 7.06;7.07;10.03
(c)................................................................ 7.06;14.02
(d)................................................................ 7.06
314(a)................................................................ 4.03;14.05
(b)................................................................ 10.02
(c)(1)............................................................. 11.04
(c)(2)............................................................. 11.04
(c)(3)............................................................. N.A.
(d)................................................................ 10.02;10.03, 10.04,
10.05;10.06
(e)................................................................ 10.02;14.05
(f)................................................................ N.A.
315(a)................................................................ 7.01
(b)................................................................ 7.05,11.02
(c)................................................................ 7.01
(d)................................................................ 7.01
(e)................................................................ 6.11
316(a) (last sentence)................................................ 2.09
(a)(1)(A).......................................................... 6.05
(a)(1)(B).......................................................... 6.04
(a)(2)............................................................. N.A.
(b)................................................................ 6.07
(c)................................................................ 14.13
317(a)(1)............................................................. 6.08
(a)(2)............................................................. 6.09
(b)................................................................ 2.04
318(a)................................................................ 11.01
(b)................................................................ N.A.
(c)................................................................ 14.01
N.A. means not applicable.
* This Cross Reference Table is not part of this Indenture.
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE............................................... 1
Section 1.01. Definitions................................................................ 1
Section 1.02. Other Definitions.......................................................... 27
Section 1.03. Incorporation By Reference of Trust Indenture Act.......................... 28
Section 1.04. Rules Of Construction...................................................... 29
ARTICLE 2 THE NOTES................................................................................ 29
Section 2.01. Form and Dating............................................................ 29
Section 2.02. Execution and Authentication............................................... 30
Section 2.03. Registrar and Paying Agent................................................. 30
Section 2.04. Paying Agent to Hold Money in Trust........................................ 31
Section 2.05. Holder Lists............................................................... 31
Section 2.06. Transfer and Exchange...................................................... 31
Section 2.07. Replacement Notes.......................................................... 43
Section 2.08. Outstanding Notes.......................................................... 43
Section 2.09. Treasury Notes............................................................. 44
Section 2.10. Temporary Notes............................................................ 44
Section 2.11. Cancellation............................................................... 44
Section 2.12. Defaulted Interest......................................................... 45
ARTICLE 3 REDEMPTION AND PREPAYMENT................................................................ 45
Section 3.01. Notices to Trustee......................................................... 45
Section 3.02. Selection of Notes to be Redeemed.......................................... 45
Section 3.03. Notice of Redemption....................................................... 46
Section 3.04. Effect of Notice of Redemption............................................. 46
Section 3.05. Deposit of Redemption Price................................................ 46
Section 3.06. Notes Redeemed in Part..................................................... 47
Section 3.07. Optional Redemption........................................................ 47
Section 3.08. Mandatory Disposition Pursuant to Gaming Laws.............................. 47
Section 3.09. Repurchase Offers.......................................................... 48
ARTICLE 4 COVENANTS................................................................................ 50
Section 4.01. Payment of Notes........................................................... 50
Section 4.02. Maintenance of Office or Agency............................................ 51
Section 4.03. Reports.................................................................... 51
Section 4.04. Compliance Certificate..................................................... 52
Section 4.05. Taxes...................................................................... 53
Section 4.06. Stay, Extension and Usury Laws............................................. 53
Section 4.07. Restricted Payments........................................................ 53
Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries............. 56
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Equity................ 57
Section 4.10. Asset Sales................................................................ 59
Section 4.11. Events of Loss............................................................. 61
Section 4.12. Transactions with Affiliates............................................... 63
Section 4.13. Liens...................................................................... 64
Section 4.14. Line of Business........................................................... 64
Section 4.15. Corporate Existence........................................................ 64
i
Section 4.16. Offer to Repurchase Upon Change of Control.......................................... 65
Section 4.17. Limitation on Status as Investment Company.......................................... 65
Section 4.18. Sale and Leaseback Transactions..................................................... 66
Section 4.19. Additional Subsidiary Guarantees.................................................... 66
Section 4.20. Designation of Restricted and Unrestricted Subsidiaries............................. 66
Section 4.21. Limitation on Issuances and Sales of Equity Interests in Subsidiaries............... 66
Section 4.22. Advances to Restricted Subsidiaries................................................. 67
Section 4.23. Compliance with Securities Laws..................................................... 67
Section 4.24. Payments for Consent................................................................ 67
Section 4.25. Further Assurances.................................................................. 67
Section 4.26. Insurance........................................................................... 68
Section 4.27. Amendments to Certain Agreements.................................................... 69
Section 4.28. Restriction on Payment of Management Fees........................................... 69
Section 4.29. Restrictions on Activities of Hwcc-louisiana, Hcs I, Hcs Ii and Shreveport Capital.. 69
Section 4.30. Mandatory Redemption................................................................ 70
ARTICLE 5 SUCCESSORS........................................................................................ 70
Section 5.01. Merger, Consolidation, or Sale of Assets............................................ 70
Section 5.02. Successor Corporation Substituted................................................... 72
ARTICLE 6 DEFAULTS AND REMEDIES............................................................................. 73
Section 6.01. Events of Default................................................................... 73
Section 6.02. Acceleration........................................................................ 74
Section 6.03. Other Remedies...................................................................... 75
Section 6.04. Waiver of Past Defaults............................................................. 76
Section 6.05. Control by Majority................................................................. 76
Section 6.06. Limitation on Suits................................................................. 76
Section 6.07. Rights of Holders of Notes to Receive Payment....................................... 77
Section 6.08. Collection Suit by Trustee.......................................................... 77
Section 6.09. Trustee May File Proofs of Claim.................................................... 77
Section 6.10. Priorities.......................................................................... 78
Section 6.11. Undertaking for Costs............................................................... 78
Section 6.12. Management of the Shreveport Resort................................................. 78
Section 6.13. Restoration of Rights and Remedies.................................................. 79
ARTICLE 7 TRUSTEE........................................................................................... 79
Section 7.01. Duties of Trustee................................................................... 79
Section 7.02. Rights of Trustee................................................................... 80
Section 7.03. Individual Rights of Trustee........................................................ 81
Section 7.04. Trustee's Disclaimer................................................................ 81
Section 7.05. Notice of Defaults.................................................................. 81
Section 7.06. Reports by Trustee to Holders of the Notes.......................................... 81
Section 7.07. Compensation and Indemnity.......................................................... 82
Section 7.08. Louisiana Gaming Control Board...................................................... 82
Section 7.09. Replacement of Trustee.............................................................. 83
Section 7.10. Successor Trustee by Merger, etc.................................................... 84
Section 7.11. Eligibility; Disqualification....................................................... 84
Section 7.12. Preferential Collection of Claims Against Issuers................................... 85
Section 7.13. Authorization of Trustee to Take Other Actions...................................... 85
ii
ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE.......................................................... 85
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance............................ 85
Section 8.02. Legal Defeasance and Discharge...................................................... 86
Section 8.03. Covenant Defeasance................................................................. 86
Section 8.04. Conditions to Legal or Covenant Defeasance.......................................... 87
Section 8.05. Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous
Provisions.......................................................................... 88
Section 8.06. Repayment to Partnership............................................................ 88
Section 8.07. Reinstatement....................................................................... 89
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER.................................................................. 89
Section 9.01. Without Consent of Holders of Notes................................................. 89
Section 9.02. With Consent of Holders of Notes.................................................... 90
Section 9.03. Compliance with Trust Indenture Act................................................. 91
Section 9.04. Revocation and Effect of Consents................................................... 92
Section 9.05. Notation on or Exchange of Notes.................................................... 92
Section 9.06. Trustee to Sign Amendments, etc..................................................... 92
ARTICLE 10 COLLATERAL AND SECURITY........................................................................... 92
Section 10.01. Security............................................................................ 92
Section 10.02. Recording and Opinions.............................................................. 93
Section 10.03. Release of Collateral............................................................... 94
Section 10.04. Protection of the Trust Estate...................................................... 95
Section 10.05. Certificates of the Issuers......................................................... 96
Section 10.06. Certificates of the Trustee......................................................... 96
Section 10.07. Authorization of Actions to be Taken By The Trustee Under The Collateral Documents.. 96
Section 10.08. Trustee's Duties.................................................................... 96
Section 10.09. Authorization Of Receipt Of Funds By The Trustee Under The Collateral Documents..... 97
Section 10.10. Termination Of Security Interest.................................................... 98
Section 10.11. Cooperation Of Trustee.............................................................. 98
Section 10.12. Collateral Agent.................................................................... 98
ARTICLE 11 NOTE GUARANTEES BY FUTURE RESTRICTED SECURITIES................................................... 99
Section 11.01. Note Guarantees..................................................................... 99
Section 11.02. Limitation on Guarantor Liability................................................... 99
Section 11.03. Execution and Delivery of Note Guarantee............................................ 100
Section 11.04. Guarantors May Consolidate, etc., on Certain Terms.................................. 100
Section 11.05. Releases Following Sale of Assets................................................... 101
ARTICLE 12 SATISFACTION AND DISCHARGE........................................................................ 101
Section 12.01 Satisfaction and Discharge.......................................................... 101
Section 12.02. Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous
Provisions.......................................................................... 102
Section 12.03. Repayment to Partnership............................................................ 102
iii
ARTICLE 13 JOINT AND SEVERAL LIABILITY...................................................................... 103
ARTICLE 14 MISCELLANEOUS.................................................................................... 105
Section 14.01. Trust Indenture Act Controls....................................................... 105
Section 14.02. Notices............................................................................ 105
Section 14.03. Communication by Holders of Notes with Other Holders of Notes...................... 106
Section 14.04. Certificate and Opinion as to Conditions Precedent................................. 106
Section 14.05. Statements Required in Certificate or Opinion...................................... 106
Section 14.06. Rules by Trustee and Agents........................................................ 107
Section 14.07. No Personal Liability of Directors, Officers, Employees and Stockholders........... 107
Section 14.08. Governing Law...................................................................... 107
Section 14.09. No Adverse Interpretation of Other Agreements...................................... 107
Section 14.10. Successors......................................................................... 108
Section 14.11. Severability....................................................................... 108
Section 14.12. Counterpart Originals.............................................................. 108
Section 14.13. Acts of Holders.................................................................... 108
Section 14.14. Benefit of Indenture............................................................... 109
Section 14.15. Louisiana Riverboat Economic Development and Gaming Control Act.................... 109
Section 14.16. Table of Contents, Headings, etc................................................... 110
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED
INVESTOR
Exhibit E FORM ON NOTATION ON NOTE RELATING TO GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL INDENTURE
Exhibit G1 FF&E COLLATERAL INTERCREDITOR AGREEMENT
Exhibit G2 PARI PASSU COLLATERAL INTERCREDITOR AGREEMENT
iv
INDENTURE dated as of June 15, 2001, among Hollywood Casino Shreveport, a
Louisiana general partnership (the "Partnership"), Shreveport Capital
Corporation, a Louisiana corporation ("Capital" and, together with the
Partnership, the "Issuers"), and State Street Bank and Trust Company, as trustee
(including any successor 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 of the 13% Series A Senior
Secured Notes due 2006 with Contingent Interest (the "Series A Notes") and the
13% Series B Senior Secured Notes due 2006 with Contingent Interest (the "Series
B Notes" and, together with the Series A Notes, the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.
"144A Global Note" means a Global Note substantially in the form of Exhibit
A hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold or resold in reliance on Rule 144A.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other
Person is merged with or into or became a Subsidiary of such specified
Person, whether or not such Indebtedness is incurred in connection with, or
in contemplation of, such other Person merging with or into, or becoming a
Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by
such specified Person.
"Adjusted Fixed Charge Coverage Ratio" means, with respect to any Person
for any period, the ratio of the Consolidated Cash Flow of such Person and its
Restricted Subsidiaries for such period to Adjusted Fixed Charges of such Person
and its Restricted Subsidiaries for such period (calculated in the same manner
as the Fixed Charge Coverage Ratio is calculated).
"Adjusted Fixed Charges" means, with respect to any Person for any period,
the Fixed Charges of such Person and its Restricted Subsidiaries for such
period, plus any Contingent Interest to the extent paid in such period.
"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; provided, however, that Paddlewheels shall
not be deemed an "Affiliate" of the Partnership. For purposes of this
definition, "control," as used with respect to any Person, shall
mean the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided, however,
that beneficial ownership of 10% or more of the voting securities of a Person
shall be deemed to be control. For purposes of this definition, the terms
"controlling," "controlled by" and "under common control with" shall have
correlative meanings.
"Agent" means any Registrar or Paying Agent.
"Applicable Procedures" means, with respect to any transfer or exchange of
or for beneficial interests in any Global Note, the rules and procedures of the
Depositary, Euroclear and Clearstream that apply to such transfer or exchange.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any assets or
rights; provided that the sale, conveyance or other disposition
of all or substantially all of the assets of the Partnership and
its Restricted Subsidiaries taken as a whole will be governed by
Section 4.16 and Section 5.01 and not by the provisions of
Section 4.10 hereof; and
(2) the issuance of Equity Interests by any of the Partnership's
Restricted Subsidiaries or the sale of Equity Interests by the
Partnership in any of its Subsidiaries.
Notwithstanding the preceding, the following items shall not be deemed to
be Asset Sales:
(1) any single transaction or series of related transactions that
involves assets having a fair market value of less than $1.0 million;
(2) a transfer of assets between or among the Partnership and its
Restricted Subsidiaries;
(3) an issuance of Equity Interests by a Restricted Subsidiary to the
Partnership or to another Restricted Subsidiary;
(4) the sale or lease of equipment, inventory, accounts receivable or
other assets in the ordinary course of business;
(5) the sale or other disposition of cash or Cash Equivalents; and
(6) a Restricted Payment or Permitted Investment that is permitted
under Section 4.07 hereof.
"Assignment Agreement" means the Amended and Restated Assignment of Joint
Venture Interest dated as of September 22, 1998, among Sodak Louisiana, L.L.C.,
a Louisiana
2
limited liability company, HWCC-Louisiana, Paddlewheels and New Orleans
Paddlewheels, Inc., a Louisiana corporation, as in effect on the date of the
Existing Notes Indenture or as amended or modified pursuant to Section 4.27.
"Attributable Debt" in respect of a sale and leaseback transaction means,
at the time of determination, the present value of the obligation of the lessee
for net rental payments during the remaining term of the lease included in such
sale and leaseback transaction, including any period for which such lease has
been extended or may, at the option of the lessor, be extended. Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state
law for the relief of debtors.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" shall be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" shall have a corresponding meaning.
"Board of Directors" means: (1) with respect to a corporation, the Board of
Directors of the corporation; (2) with respect to a partnership, the Board of
Directors of the managing general partner of the partnership; and (3) with
respect to any other Person, the board or committee of such Person serving a
similar function.
"Broker-Dealer" has the meaning set forth in the Registration Rights
Agreement.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at that time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means: (1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock; (3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and (4) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person.
"Cash Equivalents" means:
(1) United States dollars;
3
(2) securities issued or directly and fully guaranteed or insured by
the United States government or any agency or instrumentality thereof
(provided that the full faith and credit of the United States is pledged in
support thereof) having maturities of not more than six months from the
date of acquisition;
(3) certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case, with any domestic commercial bank having capital
and surplus in excess of $500.0 million and a Thomson Bank Watch Rating of
"B" or better;
(4) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses (2) and (3)
above entered into with any financial institution meeting the
qualifications specified in clause (3) above;
(5) commercial paper having the highest rating obtainable from
Moody's or S&P and in each case maturing within six months after the date
of acquisition; and
(6) money market funds at least 95% of the assets of which constitute
Cash Equivalents of the kinds described in clauses (1) through (5) of this
definition.
"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the assets
of Hollywood Casino and its Subsidiaries taken as a whole;
(2) the liquidation or dissolution of, or the adoption of a plan
relating to the liquidation or dissolution of, either of the Issuers or
Hollywood Casino or any successor thereto;
(3) Hollywood Casino becoming aware of (by way of a report or any
other filing pursuant to Section 13(d) of the Exchange Act, proxy vote,
written notice or otherwise) the acquisition by any Person or related group
(within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange
Act, or any successor provision to either of the foregoing, including any
"group" acting for the purpose of acquiring, holding or disposing of
securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act),
other than any of the Principals, in a single transaction or in a related
series of transactions, by way of merger, consolidation or other business
combination or purchase of beneficial ownership (within the meaning of Rule
l3d-3 under the Exchange Act, or any successor provision) of 30% or more of
the total voting power entitled to vote in the election of the Board of
Directors of Hollywood Casino or such other Person surviving the
transaction and, at such time, the Principals collectively shall fail to
beneficially own, directly or indirectly, securities representing greater
than
4
the combined voting power of Hollywood Casino's or such other Person's
Voting Stock as is beneficially owned by such Person or group;
(4) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Hollywood Casino's Board of
Directors (together with any new directors whose election or appointment by
such board or whose nomination for election by the stockholders of
Hollywood Casino was approved by a vote of a majority of the directors then
still in office who were either directors at the beginning of such period
or whose election or nomination for election was previously so approved)
ceasing for any reason to constitute a majority of the Hollywood Casino's
Board of Directors then in office;
(5) Hollywood Casino consolidates with, or merges with or into, any
Person, or any Person consolidates with, or merges with or into, Hollywood
Casino, in any such event pursuant to a transaction in which any of the
outstanding Voting Stock of Hollywood Casino is converted into or exchanged
for cash, securities or other property, other than any such transaction
where the Voting Stock of Hollywood Casino outstanding immediately prior to
such transaction is converted into or exchanged for Voting Stock (other
than Disqualified Stock) of the surviving or transferee Person constituting
a majority of the outstanding shares of such Voting Stock of such surviving
or transferee Person immediately after giving effect to such issuance;
(6) the first day on which Hollywood Casino ceases to Beneficially
Own 100% of the outstanding Equity Interests of the Partnership, other than
the Equity Interests of the Partnership owned by Paddlewheels on the date
of the Existing Notes Indenture; or
(7) the termination or repudiation by the Manager of the Management
Agreement.
"Clearstream" means Clearstream Banking Corporation.
"Collateral" means the FF&E Collateral and the Pari Passu Collateral.
"Collateral Agent" shall have the meaning set forth in the Collateral
Documents.
"Collateral Documents" means, collectively, all of the agreements,
instruments, documents, pledges or filings executed in connection with granting,
or that otherwise evidence, the Lien of the Trustee in the Collateral,
including, without limitation, the Intercreditor Agreements, each security
agreement executed by the Trustee and each of the Partnership, Capital and any
Guarantor, as the case may be, and each mortgage, ship mortgage and collateral
assignment of documents executed by the Partnership or any of its Restricted
Subsidiaries, as the case may be, creating a Lien that secures the Notes and any
Note Guarantees, and any other document, agreement, instrument, pledge or filing
executed in connection with the granting, or that otherwise evidence, the Lien
of the Trustee on the Collateral.
"Completion Capital Agreement" means the Completion Capital Agreement dated
as of the date of the Existing Notes Indenture, among Hollywood Casino, HWCC-
Louisiana, HCS I,
5
HCS II and the Partnership, as in effect on the date of the Existing Notes
Indenture or as amended or modified pursuant to Section 4.27 hereof.
"Consolidated Cash Flow" means, with respect to any specified Person for
any period, the Consolidated Net Income of such Person for such period plus:
(1) an amount equal to any extraordinary loss plus any net loss
realized by such Person or any of its Restricted Subsidiaries in connection
with an Asset Sale, to the extent such losses were deducted in computing
such Consolidated Net Income; plus
(2) provision for taxes based on income or profits or the Tax Amount
of such Person and its Restricted Subsidiaries for such period, to the
extent that such provision for taxes or Tax Amount was deducted in
computing such Consolidated Net Income; plus
(3) consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued and whether or not
capitalized (including, without limitation, amortization of debt issuance
costs and original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component of
all payments associated with Capital Lease Obligations, imputed interest
with respect to Attributable Debt, commissions, discounts and other fees
and charges incurred in respect of letter of credit or bankers' acceptance
financings, and net of the effect of all payments made or received pursuant
to Hedging Obligations), to the extent that any such expense was deducted
in computing such Consolidated Net Income; plus
(4) any pre-opening expenses to the extent that such pre-opening
expenses were deducted in computing Consolidated Net Income on a
consolidated basis and determined in accordance with GAAP; plus
(5) depreciation, amortization (including amortization of goodwill
and other intangibles but excluding amortization of prepaid cash expenses
that were paid in a prior period) and other non-cash expenses (excluding
any such non-cash expense to the extent that it represents an accrual of or
reserve for cash expenses in any future period or amortization of a prepaid
cash expense, other than pre-opening expenses, that was paid in a prior
period) of such Person and its Restricted Subsidiaries for such period to
the extent that such depreciation, amortization and other non-cash expenses
were deducted in computing such Consolidated Net Income; minus
(6) non-cash items increasing such Consolidated Net Income for such
period, other than the accrual of revenue in the ordinary course of
business, in each case, on a consolidated basis and determined in
accordance with GAAP.
Notwithstanding the preceding, the provision for taxes based on the income
or profits of, and the depreciation and amortization and other non-cash expenses
of, a Restricted Subsidiary of the Partnership shall be added to Consolidated
Net Income to compute Consolidated Cash
6
Flow of the Partnership only to the extent that a corresponding amount would be
permitted at the date of determination to be dividended to the Partnership by
such Restricted Subsidiary without prior governmental approval (that has not
been obtained), and without direct or indirect restriction pursuant to the terms
of its charter and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to that Restricted
Subsidiary or its equityholders.
"Consolidated Net Income" means, with respect to any specified Person for
any period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided, however, that:
(1) the Net Income of any Person that is not a Subsidiary or that is
accounted for by the equity method of accounting shall be included only to
the extent of the amount of dividends or distributions paid in cash to the
specified Person or a Restricted Subsidiary thereof;
(2) the Net Income of any Restricted Subsidiary shall be excluded to
the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at
the date of determination permitted without any prior governmental approval
(that has not been obtained) or, directly or indirectly, by operation of
the terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders;
(3) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition shall be
excluded;
(4) the cumulative effect of a change in accounting principles shall
be excluded;
(5) the Net Income of any Unrestricted Subsidiary shall be excluded,
whether or not distributed to the specified Person or one of its Restricted
Subsidiaries; and
(6) for purposes of calculating the Consolidated Net Income of the
Partnership and its Restricted Subsidiaries for any period, Net Income will
be reduced by the amount of any Paddlewheels Revenue Participation payable
with respect to such period.
"Contingent Interest" means:
(1) for the purpose of the First Accrual Period and any Semiannual
Period, the product of 1.3% multiplied by the Partnership's Consolidated
Cash Flow for such First Accrual Period or Semiannual Period, as
applicable;
(2) for the purpose of any Interim Period occurring after the date
that internal financial statements for the prior two fiscal quarters are
available, the product of (a) 1.3% multiplied by the Partnership's
Consolidated Cash Flow for those two fiscal quarters and (b) a fraction,
the numerator of which is the number of days from the end
7
of the most recent Semiannual Period to the date of payment and the
denominator of which is 180;
(3) for the purpose of an Accrual Period that ends prior to the
completion of the First Accrual Period or for any Interim Period occurring
prior to the date that internal financial statements for the immediately
preceding two fiscal quarters are available, the product of (1) 1.3%
multiplied by the Partnership's Consolidated Cash Flow for all completed
calendar months during such period for which financial statements are
available and (2) a fraction, the numerator of which is the number of days
from the first date of the First Accrual Period to the date of payment and
the denominator of which is the aggregate number of days for all completed
months included in such period;
(4) for purposes of any other Accrual Period, the maximum remaining
amount of Contingent Interest payable through the end of such Accrual
Period; and
in each case, multiplied by a fraction, the numerator of which is the principal
amount of Notes outstanding on the close of business on that Record Date and the
denominator of which is $39.0 million; provided, however, that Contingent
Interest that accrues in respect of any four consecutive fiscal quarters
(excluding any Contingent Interest deferred from prior periods) shall not exceed
the product of (a) 1.3% multiplied by $100.0 million and (b) a fraction, the
numerator of which is such principal amount of outstanding Notes and the
denominator of which is $39.0 million.
"Contribution and Assumption Agreement" means the Contribution and
Assumption Agreement dated as of July 21, 1999, among HWCC-Louisiana, HCS I, HCS
II and Paddlewheels, as in effect on the date of the Existing Notes Indenture or
as amended or modified pursuant to Section 4.27 hereof.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 14.02 hereof or such other address as to which the
Trustee may give notice to the Issuers.
"Custodian" means the Trustee, as custodian with respect to the Notes in
global form, or any successor entity thereto.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name of the
Holder thereof and issued in accordance with Section 2.06 hereof, substantially
in the form of Exhibit A hereto except that such Note shall not bear the Global
Note Legend and shall not have the "Schedule of Exchanges of Interests in the
Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.03 hereof as the
Depositary with respect to the
8
Notes, and any and all successors thereto appointed as Depositary hereunder and
having become such pursuant to the applicable provision of this Indenture.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date that is 91 days after the
date on which the Notes mature. Notwithstanding the preceding sentence, any
Capital Stock that would constitute Disqualified Stock solely because the
holders thereof have the right to require the Partnership to repurchase such
Capital Stock upon the occurrence of a change of control or an asset sale shall
not constitute Disqualified Stock if the terms of such Capital Stock provide
that the Partnership may not repurchase or redeem any such Capital Stock
pursuant to such provisions unless such repurchase or redemption complies with
Section 4.07 hereof.
"Eligible Institution" means a domestic commercial banking institution that
has combined capital and surplus of not less than $500 million or its equivalent
in foreign currency, whose debt is rated "A" or higher according to S&P or
Moody's at the time any investment or rollover therein is made.
"Equity Escrow Account" means the account into which $44.7 million in cash is
deposited on the date of the Existing Notes Indenture representing equity
contributions made to the Partnership by HCS I, HCS II and Paddlewheels.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Euroclear" means ▇▇▇▇▇▇ Guaranty Trust Company of New York, Brussels office,
as operator of the Euroclear system.
"Event of Loss" means, with respect to any asset, any (1) loss, destruction
or damage of such asset, (2) condemnation, seizure or taking by exercise of the
power of eminent domain or otherwise of such property or asset, or confiscation
of such asset or the requisition of the use of such asset or (3) settlement in
lieu of clause (2) above.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the SEC thereunder.
"Exchange Notes" means the Series B Notes issued in the Exchange Offer
pursuant to Section 2.06(f) hereof.
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
9
"Existing Notes" means the $150,000,000 13% First Mortgage Notes due 2006
with Contingent Interest.
"Existing Notes Indenture" means the Indenture, dated August 10, 1999,
among the Partnership, the Issuers, HWCC-Louisiana, HCS I, HCS II, and the
Existing Notes Trustee, relating to the Existing Notes.
"Existing Notes Trustee" means State Street Bank and Trust Company, or its
successor, in its capacity as trustee under the Existing Notes Indenture.
"FF&E" means furniture, fixtures or equipment used in the ordinary course
of the business of the Partnership and its Restricted Subsidiaries.
"FF&E Collateral" means the Partnership's FF&E and any substitutions and
replacements thereof, other than FF&E acquired with the proceeds of up to $6.0
million of permitted future FF&E Financings, as more particularly described in
the Security Agreement.
"FF&E Collateral Intercreditor Agreement" means that certain FF&E
Collateral Intercreditor Agreement, dated the date of this Indenture, among the
Partnership, the Trustee and the Existing Notes Trustee relating to the FF&E
Collateral, substantially in the form of Exhibit G1 hereto.
"FF&E Financing" means the incurrence of Indebtedness, the proceeds of
which are utilized solely to finance the acquisition of (or entry into a capital
lease by the Partnership or a Restricted Subsidiary with respect to) FF&E, other
than the FF&E comprising the FF&E Collateral.
"First Accrual Period" means the period beginning on July 1, 2001 through
and including December 31, 2001.
"Fixed Charge Coverage Ratio" means with respect to any specified Person
for any period, the ratio of the Consolidated Cash Flow of such Person and its
Restricted Subsidiaries for such period to the Fixed Charges of such Person for
such period. In the event that the specified Person or any of its Restricted
Subsidiaries incurs, assumes, Guarantees, repays, repurchases or redeems any
Indebtedness (other than ordinary working capital borrowings) or issues,
repurchases or redeems preferred equity subsequent to the commencement of the
period for which the Fixed Charge Coverage Ratio is being calculated and on or
prior to the date on which the event for which the calculation of the Fixed
Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge
Coverage Ratio shall be calculated giving pro forma effect to such incurrence,
assumption, Guarantee, repayment, repurchase or redemption of Indebtedness, or
such issuance, repurchase or redemption of preferred equity, and the use of the
proceeds therefrom as if the same had occurred at the beginning of the
applicable four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge Coverage Ratio:
10
(1) acquisitions that have been made by the specified Person or any of
its Restricted Subsidiaries, including through mergers or consolidations
and including any related financing transactions, during the four-quarter
reference period or subsequent to such reference period and on or prior
to the Calculation Date shall be given pro forma effect as if they had
occurred on the first day of the four-quarter reference period and
Consolidated Cash Flow for such reference period shall be calculated on a
pro forma basis in accordance with Regulation S-X under the Securities
Act, but without giving effect to clause (3) of the proviso set forth in
the definition of Consolidated Net Income;
(2) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses disposed of prior to the Calculation Date, shall be excluded;
and
(3) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed
of prior to the Calculation Date, shall be excluded, but only to the
extent that the obligations giving rise to such Fixed Charges will not be
obligations of the specified Person or any of its Restricted Subsidiaries
following the Calculation Date.
"Fixed Charges" means, with respect to any specified Person for any
period, the sum, without duplication, of:
(1) the consolidated interest expense (excluding Contingent Interest,
if any, paid or accrued) of such Person and its Restricted Subsidiaries
for such period, whether paid or accrued, including, without limitation,
amortization of debt issuance costs and original issue discount, non-cash
interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with
Capital Lease Obligations, imputed interest with respect to Attributable
Debt, commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers' acceptance financings, and net of
the effect of all payments made or received pursuant to Hedging
Obligations; plus
(2) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period; plus
(3) any interest expense on Indebtedness of another Person that is
Guaranteed by such Person or one of its Restricted Subsidiaries or
secured by a Lien on assets of such Person or one of its Restricted
Subsidiaries, whether or not such Guarantee or Lien is called upon; plus
(4) the product of (a) all dividends, whether paid or accrued and
whether or not in cash, on any series of preferred equity of such Person
or any of its Restricted Subsidiaries, other than dividends on Equity
Interests payable solely in Equity Interests of the Partnership (other
than Disqualified Stock) or to the Partnership or a Restricted Subsidiary
of the Partnership, times (b) a fraction, the numerator of which is one
and
11
the denominator of which is one minus the then current combined federal,
state and local statutory tax rate of such Person (or, in the case of a
Person that is a partnership or limited liability company, the combined
federal, state and local income tax rate that was or would have been used
to calculate the Tax Amount of such Person), expressed as a decimal, in
each case, on a consolidated basis and in accordance with GAAP.
"Fixed Interest" means the fixed interest payable on the Notes.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"Gaming Authority" means any agency, authority, board, bureau, commission,
department, office or instrumentality of any nature whatsoever of the United
States federal government, any foreign government, any state, province or city
or other political subdivision or otherwise, whether now or hereafter in
existence, or any officer or official thereof, including, without limitation,
the Louisiana Gaming Control Board, with authority to regulate any gaming
operation (or proposed gaming operation) owned, managed or operated by either of
the Issuers, Hollywood Casino, the Manager or any of their respective
Subsidiaries.
"Gaming Law" means the gaming laws of any jurisdiction or jurisdictions to
which either of the Issuers or any of the Partnership's Subsidiaries is, or may
at any time after the date of this Indenture, be subject.
"Gaming License" means any license, permit, franchise or other
authorization from any Gaming Authority necessary on the date of the Existing
Notes Indenture or at any time thereafter to own, lease, operate or otherwise
conduct the business of either of the Issuers, the Manager or any of the
Partnership's Restricted Subsidiaries.
"Global Note Legend" means the legend set forth in Section 2.06(g)(ii)
hereof, which is required to be placed on all Global Notes issued under this
Indenture.
"Global Notes" means, individually and collectively, each of the Restricted
Global Notes and the Unrestricted Global Notes, substantially in the form of
Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(ii) or 2.06(f) hereof.
"Government Securities" means securities that are: (1) direct obligations
of the United States of America for the timely payment of which its full faith
and credit is pledged; or (2) 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 also
includes a depository receipt issued by a bank (as defined in Section 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
12
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.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"Guarantor" means any Restricted Subsidiary of the Partnership that
executes a Guarantee in accordance with the provisions of this Indenture.
"HCS I" means HCS I, Inc., a Louisiana corporation.
"HCS II" means HCS II, Inc., a Louisiana corporation.
"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under: (1) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements; and (2) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.
"Holder" means a Person in whose name a Note is registered.
"Hollywood Casino" means Hollywood Casino Corporation, a Delaware
corporation.
"IAI Global Note" means the Global Note substantially in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of and registered in the name of the Depositary
or its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold to Institutional Accredited Investors.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent, in respect of.
(1) borrowed money;
(2) obligations evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in respect
thereof);
(3) banker's acceptances;
(4) Capital Lease Obligations;
(5) the balance deferred and unpaid of the purchase price of any
property, except any such balance that constitutes an accrued expense or
trade payable;
13
(6) any Hedging Obligations;
(7) all Indebtedness of others secured by a Lien on any asset of the
specified Person (whether or not such Indebtedness is assumed by the
specified Person); provided, however, that the amount of such Indebtedness
shall be limited to the lesser of the fair market value of the assets or
property to which such Lien attaches and the amount of the Indebtedness so
incurred; and
(8) to the extent not otherwise included, the Guarantee by the
specified Person of any indebtedness of any other Person;
and any and all deferrals, renewals, extensions, refinancings and
refundings (whether direct or indirect) thereof and any amendments,
modifications or supplements thereto, if and to the extent any of the
preceding items (other than letters of credit and Hedging Obligations)
would appear as a liability upon a balance sheet of the specified Person
prepared in accordance with GAAP.
The amount of any Indebtedness outstanding as of any date shall be:
(1) the accreted value thereof, in the case of any Indebtedness
issued with original issue discount; and
(2) the principal amount thereof, together with any interest thereon
that is more than 30 days past due, in the case of any other Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time to
time.
"Indirect Participant" means a Person who holds a beneficial interest in a
Global Note through a Participant.
"Intercompany Notes" means any intercompany notes issued by Restricted
Subsidiaries of the Partnership in favor of the Partnership or a Guarantor to
evidence advances by the Partnership or such Guarantor.
"Intercreditor Agreements" means the FF&E Collateral Intercreditor
Agreement and the Pari Passu Collateral Intercreditor Agreement set forth as
Exhibit G1 and G2 hereto, respectively.
"Interim Period" means any period, other than the First Accrual Period,
that begins on any January 1 and ends before the next June 30 and any period
that begins on any July 1 and ends before the next December 31.
"Interest" means Fixed Interest and Contingent Interest, if any.
"Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business), purchases or other
14
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the
Partnership or any Restricted Subsidiary of the Partnership sells or otherwise
disposes of any Equity Interests of any direct or indirect Restricted Subsidiary
of the Partnership such that, after giving effect to any such sale or
disposition, such Person is no longer a Restricted Subsidiary of the
Partnership, the Partnership shall be deemed to have made an Investment on the
date of any such sale or disposition equal to the fair market value of the
Equity Interests of such Restricted Subsidiary not sold or disposed of in an
amount determined as provided in Section 4.07. The acquisition by the
Partnership or any Restricted Subsidiary of the Partnership of a Person that
holds an Investment in a third Person shall be deemed to be an Investment by the
Partnership or such Restricted Subsidiary in such third Person in an amount
equal to the fair market value of the Investment held by the acquired Person in
such third Person in an amount determined as provided in Section 4.07 hereof.
"Joint Venture Agreement" means the Third Amended and Restated Joint
Venture Agreement of Hollywood Casino Shreveport dated as of July 21, 1999,
among Paddlewheels, HCS I and HCS II, as amended by the August 1999 Amendment to
the Third Amended and Restated Joint Venture Agreement of Hollywood Casino
Shreveport dated as of August 2, 1999, among Paddlewheels, HCS I and HCS II, as
in effect on the date of the Existing Notes Indenture, as amended by that
certain December 2000 Amendment to Third Amended and Restated Joint Venture
Agreement of Hollywood Casino Shreveport dated December 20, 2000, among the
parties thereto.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York, the Commonwealth of Massachusetts or at a
place of payment are authorized by law, regulation or executive order to remain
closed. If a payment date is a Legal Holiday at a place of payment, payment may
be made at that place on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue on such payment for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be prepared by
the Issuers and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"License Agreement" means the License Agreement dated as of the date of the
Existing Notes Indenture, between Hollywood Casino and the Partnership, as in
effect on the date of the Existing Notes Indenture or as amended or modified
pursuant to Section 4.27 hereof.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"Liquidated Damages" has the meaning ascribed thereto in the Registration
Rights Agreement.
15
"Management Agreement" means the Management Services Agreement dated
as of September 22, 1998, between the Partnership and the Manager relating to
the management of the Shreveport Resort, as amended by the Amendment to
Management Services Agreement dated as of August 2, 1999, among the Partnership
and the Manager, as in effect on the date of the Existing Notes Indenture or as
amended or modified pursuant to Section 4.27 hereof.
"Management Fees" means any fees payable to the Manager pursuant to
the Management Agreement.
"Manager" means HWCC-Shreveport, Inc., a Louisiana corporation.
"Manager Subordination Agreement" means the Manager Subordination
Agreement dated as of the date of this Indenture, among the Partnership, the
Manager and the Trustee.
"Marine Services Agreement" means the Marine Services Agreement dated
as of September 22, 1998, between the Partnership and Paddlewheels, as in effect
on the date of the Existing Notes Indenture or as amended or modified pursuant
to Section 4.27 hereof.
"Membership Interest Purchase Agreement" means the Purchase Agreement
dated as of March 31, 1999, among HWCC-Louisiana, Sodak Gaming and Sodak
Louisiana, L.L.C., as in effect on the date of the Existing Notes Indenture.
"Minimum Facilities" means, with respect to the Shreveport Resort, a
riverboat casino which has in operation at least 1,600 gaming positions, a hotel
which has at least 350 hotel rooms, two restaurants with seating for at least
500 people, two bars, an entertainment lounge and parking for at least 1,800
vehicles.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Net Income" means, with respect to any specified Person:
(1) the net income (loss) of such Person, determined in
accordance with GAAP and before any reduction in respect of
preferred equity dividends or distributions, excluding, however:
(a) any gain (but not loss), together with any related
provision for taxes or Tax Amount on such gain (but not loss),
realized in connection with: (I) any Asset Sale (including,
without limitation, dispositions pursuant to sale and
leaseback transactions); or (II) the disposition of any
securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such
Person or any of its Restricted Subsidiaries; and
(b) any extraordinary gain (but not loss), together with
any related provision for taxes or Tax Amount on such
extraordinary gain (but not loss); less
(2) in the case of any Person that is a partnership or
limited liability company, the Tax Amount of such Person for such
period.
16
"Net Loss Proceeds" means the aggregate cash proceeds received by the
Partnership or any of its Restricted Subsidiaries in respect of any Event of
Loss, including, without limitation, insurance proceeds from condemnation awards
or damages awarded by any judgment, net of the direct costs in recovery of such
Net Loss Proceeds (including, without limitation, legal, accounting, appraisal
and insurance adjuster fees and any relocation expenses incurred as a result
thereof), amounts required to be applied to the repayment of Indebtedness
secured by a Lien on the asset or assets that were the subject of such Event of
Loss, and any taxes or the portion of the Tax Amount attributable to such Event
of Loss paid or payable as a result thereof.
"Net Proceeds" means the aggregate cash proceeds received by the
Partnership or any of its Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale, including, without limitation, legal, accounting
and investment banking fees, sales commissions, relocation expenses incurred as
a result thereof and taxes or the portion of the Tax Amount attributable to such
Asset Sale paid or payable as a result thereof, in each case, after taking into
account any available tax credits or deductions and any tax sharing
arrangements, and amounts required to be applied to the repayment of
Indebtedness secured by a Lien on the asset or assets that were the subject of
such Asset Sale and any reserve for adjustment in respect of the sale price of
such asset or assets established in accordance with GAAP.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the Partnership nor any of its
Restricted Subsidiaries (a) provides credit support of any kind any
undertaking, agreement or instrument that would constitute
Indebtedness), (b) is directly or indirectly liable as a guarantor
or otherwise or (c) constitutes the lender;
(2) no default with respect to which (including any rights
that the holders thereof may have to take enforcement action against
an Unrestricted Subsidiary) would permit upon notice, lapse of time
or both any holder of any other Indebtedness (other than the Notes)
of the Partnership or any of its Restricted Subsidiaries to declare
a default on such other Indebtedness or cause the payment thereof to
be accelerated or payable prior to its stated maturity; and
(3) as to which the lenders have been notified in writing that
they will not have any recourse to the stock or assets of the
Partnership or any of its Restricted Subsidiaries.
"Non-U.S. Person" means a Person who is not a U.S. Person under
Regulation S.
"Note Guarantee" means the Guarantee by any Guarantor of the Issuers'
payment obligations under this Indenture and on the Notes, executed pursuant to
the provisions of this Indenture.
"Notes" has the meaning assigned to it in the preamble to this
Indenture.
17
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering" means the offering of the Notes by the Issuers.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of a
Person by two Officers of such Person, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of such Person, that meets the requirements of
Section 14.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
14.05 hereof. The counsel may be an employee of or counsel to the Issuers, any
Subsidiary of the Issuers or the Trustee.
"Paddlewheels" means Shreveport Paddlewheels, L.L.C., a Louisiana
limited liability company.
"Paddlewheels Revenue Participation" means the amount payable by the
Partnership to Paddlewheels equal to 1% of the Complex Net Revenues (as defined
in the Assignment Agreement) pursuant to the terms of the Assignment Agreement.
"Pari Passu Collateral" means substantially all of the Issuers'
assets other than the FF&E Collateral, whether now owned or hereafter acquired,
securing up to $10.0 million of the Issuers' principal obligations under the
Notes on a pari passu basis with the Existing Notes, including, without
limitation, and subject to the liens permitted by the Collateral Documents:
(1) all of the real property comprising the Shreveport Resort,
including all additions and improvements and component parts related
thereto and issues and profits therefrom;
(2) all FF&E which are part of the Shreveport Resort, other
than the FF&E Collateral otherwise pledged to secure the Notes and
up to $6.0 million of FF&E that may be acquired, leased or financed
in the future through permitted FF&E Financings;
(3) the riverboat which is part of the Shreveport Resort;
(4) the Partnership's accounts receivable, general
intangibles, inventory and other personal property not contemplated
by clause (2) above;
18
(5) the Partnership's interests in the License Agreement, the
Management Agreement and the principal agreements entered into in
connection with the ownership or operation of the Shreveport Resort;
and
(6) to the extent permitted by law, all licenses and permits
relating to the Shreveport Resort.
"Pari Passu Collateral Intercreditor Agreement" means that certain
Pari Passu Collateral Intercreditor Agreement, dated the date of this Indenture,
among the Partnership, the Trustee and the Existing Notes Trustee relating to
the Pari Passu Collateral, substantially in the form of Exhibit G2 hereto.
"Pari Passu Lien" means a Lien on the Pari Passu Collateral that
ranks pari passu with the Lien of the Trustee for the ratable benefit of the
Holders of Notes pursuant to the Pari Passu Collateral Intercreditor Agreement.
"Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).
"Permitted Business " means the gaming business and other businesses
necessary for, incident to, connected with, arising out of, or developed or
operated to permit or facilitate the conduct or pursuit of the gaming business
(including developing and operating lodging facilities, restaurants, sports or
entertainment facilities, transportation services or other related activities or
enterprises and any additions or improvements thereto) and potential
opportunities in the gaming business.
"Permitted Investments" means:
(1) any Investment in the Partnership or in any Restricted
Subsidiary of the Partnership;
(2) any Investment in Cash Equivalents or Government
Securities;
(3) any Investment by the Partnership or any Restricted
Subsidiary of the Partnership in a Person, if as a result of such
Investment:
(a) such Person becomes a Restricted Subsidiary of the
Partnership; or
(b) such Person is merged, consolidated or amalgamated
with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, the Partnership or any
Restricted Subsidiary of the Partnership;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with Section 4.10 hereof;
19
(5) any acquisition of assets solely in exchange for the
issuance of Equity Interests (other than Disqualified Stock) of the
Partnership;
(6) Hedging Obligations;
(7) one or more investments by the Partnership in any
entities the sole purpose of which is to develop, construct and/or
operate golf courses; provided that (a) the aggregate amount of all
such Investments does not exceed $3.0 million and (b) that the
development, construction and operation of such golf course would
satisfy the provisions of Section 4.14 hereof;
(8) any Investment by the Partnership or any of its
Restricted Subsidiaries in persons required in order to secure
liquor and/or other licenses or permits under applicable law
incident to the operation by the Partnership or any of its
Restricted Subsidiaries of a Permitted Business; provided that the
aggregate amount of such Investment shall at no time exceed
$100,000;
(9) any Investment made in settlement of gambling debts
incurred by patrons of any casino owned or operated by the
Partnership or any of its Restricted Subsidiaries which settlements
have been entered into in the ordinary course of business; and
(10) Investments not otherwise permitted by the foregoing
clauses (1) through (9) in an aggregate outstanding amount of not
more than $250,000.
"Permitted Liens" means:
(1) Liens on the assets of the Issuers and any Guarantors
created by the Existing Notes Indenture, this Indenture, the
Existing Notes, the Notes, the Collateral Documents, any Collateral
Documents securing future Guarantees of the Notes and the
collateral documents securing the Existing Notes and the Guarantees
of the Existing Notes;
(2) Liens on property of a Person existing at the time such
Person is merged into or consolidated with the Partnership or any
Restricted Subsidiary of the Partnership; provided, however, that
such Liens were in existence prior to the contemplation of such
merger or consolidation and do not extend to any assets other than
those of the Person merged into or consolidated with the
Partnership or any Restricted Subsidiary;
(3) Liens on property existing at the time of acquisition
thereof by the Partnership or any Restricted Subsidiary of the
Partnership; provided, however, that such Liens were in existence
prior to the contemplation of such acquisition;
(4) Liens existing on the date of the Existing Notes
Indenture;
(5) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a
like nature incurred in the ordinary course of business;
20
(6) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in
good faith by appropriate proceedings promptly instituted and
diligently concluded; provided, however, that any reserve or other
appropriate provision as shall be required in conformity with GAAP
shall have been made therefor;
(7) Liens on FF&E, other than the FF&E Collateral, to secure
Indebtedness permitted by clause (h) of the second paragraph of
Section 4.09 hereof;
(8) pledges or deposits in the ordinary course of business to
secure lease obligations or non-delinquent obligations under
workers' compensation, unemployment insurance or similar
legislation;
(9) easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances
not interfering in any material respect with the business or assets
of the Partnership or any Subsidiary incurred in the ordinary
course of business;
(10) ground leases in respect of real property on which
facilities owned or leased by the Partnership or any of its
Restricted Subsidiaries is located;
(11) Liens on assets of Unrestricted Subsidiaries that secure
Non-Recourse Debt of Unrestricted Subsidiaries;
(12) Liens arising from UCC financing statements regarding
property leased by the Partnership or any of its Restricted
Subsidiaries;
(13) Liens incurred and pledges made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and social security benefits; and
(14) without limiting the ability of the Partnership or any of
its Subsidiaries to create, incur, assume or suffer to exist any
Lien otherwise permitted under any of the foregoing clauses, any
extension, renewal or replacement, in whole or in part, of any Lien
described in the foregoing clauses; provided, however, that any
such extension, renewal or replacement Lien is limited to the
property or assets covered by the Lien extended, renewed or
replaced or substitute property or assets, the value of which is
(and, for property or assets having an aggregate fair market value
of more than $100,000, as determined by the Board of Directors to
be) not materially greater than the value of the property or assets
for which the substitute property or assets are substituted.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Partnership or any of its Restricted Subsidiaries issued in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Partnership or any of its Restricted
Subsidiaries (other than intercompany Indebtedness); provided, however, that:
21
(1) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the
principal amount (or accreted value, if applicable) of the
Indebtedness so extended, refinanced, renewed, replaced, defeased
or refunded (plus all accrued interest thereon and the amount of
all expenses and premiums incurred in connection therewith);
provided, however, if such Indebtedness is secured by a Lien
described in clause (7) of the definition of "Permitted Liens,"
then the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness will not exceed the then
current fair market value of the asset so encumbered;
(2) such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and has a
Weighted Average Life to Maturity equal to or greater than the
Weighted Average Life to Maturity of, the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded;
(3) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment
to the Notes, such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and is
subordinated in right of payment to, the Notes on terms at least as
favorable to the Holders of Notes as those contained in the
documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and
(4) such Indebtedness is incurred either by the Partnership or
by the Restricted Subsidiary who is the obligor on the Indebtedness
being extended, refinanced, renewed, replaced, defeased or
refunded.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company or government or other entity.
"Principals" means:
(1) ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III, their
respective estates and members of the immediate family (including
adopted children) of any of them who acquire Voting Stock of
Hollywood Casino from any such estates;
(2) C.A. ▇▇▇▇▇ Partners, Ltd., a Texas limited partnership;
provided, however, that, in each case, the majority of the voting
equity interest of the partnership is Beneficially Owned by a
Person named in clause (1); and
(3) The WDP, Jr. Family Trust; provided, however, that a
Person named in clause (1) is:
(a) the Beneficial Owner of a majority of the Voting
Stock of Hollywood Casino held by such trust, or
22
(b) if the trust is irrevocable, the trustee of the
irrevocable trust is a Person named in clause (1).
"Private Placement Legend" means the legend set forth in Section
2.06(g)(i) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"QNOV" means QNOV, a Louisiana general partnership.
"Qualified Equity Offering" means an offering of Hollywood Casino's
common stock which results in net proceeds to Hollywood Casino of at least $20.0
million, but only to the extent that the net proceeds of the offering are
contributed directly or indirectly as equity by Hollywood Casino to the
Partnership.
"Registration Rights Agreement" means the Registration Rights
Agreement dated the date of this Indenture, among the Issuers, Banc of America
Securities LLC and CIBC World Markets Corp.
"Regulation S" means Regulation S promulgated under the Securities
Act.
"Regulation S Global Note" means a global Note bearing the Private
Placement Legend and deposited with or on behalf of the Depositary and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Notes initially
sold in reliance on Rule 903 of Regulation S.
"Responsible Officer," when used with respect to the Trustee, means
any officer within Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Definitive Note" means a Definitive Note bearing the
Private Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private
Placement Legend, including the Rule 144A Global Note and the IAI Global Note.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act.
23
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"S&P" means Standard and Poor's Rating Services.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreement" means the Security Agreement (Partnership),
dated the date of this Indenture, as may be amended, supplemented or modified
from time to time by the Partnership in favor of the Trustee.
"Semiannual Period" means each period that begins on January 1 and
ends on the next June 30 or each period that begins on July 1 and ends on the
next December 31.
"Series A Notes" has the meaning assigned to it in the preamble of
this Indenture.
"Series B Notes" has the meaning assigned to it in the preamble of
this Indenture.
"Shelf Registration Statement" has the meaning given it in the
Registration Rights Agreement.
"Shreveport Resort" means the resort facility that includes a
riverboat casino, hotel and related amenities in Shreveport, Louisiana, as
described in the Offering Memorandum dated May 30, 2001, used in connection with
the Offering.
"Side Agreement" means the Side Agreement dated as of January 16,
1998, among Queen of New Orleans at the Hilton Joint Venture, HWCC-Louisiana and
Sodak Louisiana, L.L.C., as in effect on the date of the Existing Notes
Indenture or as amended or modified pursuant to Section 4.27 hereof.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"Sodak Gaming" means Sodak Gaming, Inc., a South Dakota corporation.
"Software Agreement" means the License Agreement, Proposal and
Maintenance and Support Agreement, dated October 12, 2000, by and between the
Partnership and Advanced Casino Systems Corporation.
"Stated Maturity" means, with respect to any installment of interest
or principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any
24
contingent obligations to repay, redeem or repurchase any such interest or
principal prior to the date originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of
which more than 50% of the total voting power of shares of Capital
Stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries
of that Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the
managing general partner of which is such Person or a Subsidiary of
such Person or (b) the only general partners of which are such
Person or one or more Subsidiaries of such Person (or any
combination thereof).
"Tax Amount" means payments by the Partnership to HCS I and HCS II
in amounts sufficient to permit HCS I and HCS II to fulfill the obligations with
respect to all taxes of HWCC-Louisiana, HCS I and HCS II; provided, however,
that so long as HWCC-Louisiana, HCS I and HCS II file a consolidated, combined,
unitary or similar federal, state or local income or franchise tax return with
Hollywood Casino, the payment by the Partnership with respect to such taxes
shall be an amount sufficient to permit HWCC-Louisiana, HCS I and HCS II to
fulfill their respective obligations under the Tax Sharing Agreement solely with
respect to their respective obligations thereunder that are attributable to the
Partnership's income.
"Tax Sharing Agreement" means the Tax Sharing Agreement dated the
date of the Existing Notes Indenture, between Hollywood Casino and its domestic
corporate Subsidiaries, including HWCC-Louisiana, HCS I and HCS II as in effect
on the date of the Existing Notes Indenture or as amended or modified pursuant
to Section 4.27 hereof.
"Technical Services Agreement" means the Technical Services
Agreement dated as of September 22, 1998, between the Manager and the
Partnership, as in effect on the date of the Existing Notes Indenture or as
amended or modified pursuant to Section 4.27 hereof.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S) (S)
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"Total Assets" means, with respect to any Person, the aggregate of
all assets of such Person and its subsidiaries as would be shown on the balance
sheet of such Person prepared in accordance with GAAP.
"Trustee" means the party named as such in the preamble to this
Indenture until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.
25
"Unrestricted Definitive Note" means one or more Definitive Notes
that do not bear and are not required to bear the Private Placement Legend.
"Unrestricted Global Note" means a permanent Global Note
substantially in the form of Exhibit A attached hereto that bears the Global
Note Legend and that has the "Schedule of Exchanges of Interests in the Global
Note" attached thereto, and that is deposited with or on behalf of and
registered in the name of the Depositary, representing a series of Notes that do
not bear the Private Placement Legend.
"Unrestricted Subsidiary" means HCS-Golf Course LLC, Shreveport Golf
Company and any other Subsidiary of the Partnership other than Shreveport
Capital that is designated by the Board of Directors as an Unrestricted
Subsidiary pursuant to a resolution, but only to the extent that such
Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or
understanding with the Partnership or any Restricted Subsidiary of
the Partnership unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the Partnership
or such Restricted Subsidiary than those that might be obtained at
the time from Persons who are not Affiliates of the Partnership;
(3) is a Person with respect to which neither the Partnership
nor any of its Restricted Subsidiaries has any direct or indirect
obligation (a) to subscribe for additional Equity Interests or (b) to
maintain or preserve such Person's financial condition or to cause
such Person to achieve any specified levels of operating results; and
(4) has not guaranteed or otherwise directly or indirectly
provided credit support for any Indebtedness of the Partnership or
any of its Restricted Subsidiaries.
Any designation of a Subsidiary of the Partnership as an Unrestricted
Subsidiary shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
preceding conditions and was permitted by Section 4.07 hereof. If, at any time,
any Unrestricted Subsidiary would fail to meet the preceding 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 of the
Partnership as of such date and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09 hereof, the Partnership shall be in
default of such covenant. The Board of Directors of the Partnership 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 the Partnership of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall only be
permitted if (1) such Indebtedness is permitted under Section 4.09 hereof,
calculated on a pro
26
forma basis as if such designation had occurred at the beginning of the four-
quarter reference period and (2) no Default or Event of Default would be in
existence following such designation.
"U.S. Person" means a U.S. Person as defined in Rule 902(o) under the
Securities Act.
"Voting Stock" of any Person as of any date means the Capital Stock
of such Person that is at the time entitled to vote in the election of the Board
of Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the
amount of each then remaining installment, sinking fund, serial
maturity or other required payments of principal, including payment
at final maturity, in respect thereof, by (b) the number of years
(calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment; by
(2) the then outstanding principal amount of such
Indebtedness.
Section 1.02. Other Definitions.
Defined
in
Term Section
---- -------
"Act"...................................................... 14.13
"Affiliate Transaction".................................... 4.12
"Authentication Order"..................................... 2.02
"Beneficiary".............................................. 13(b)
"Change of Control Offer".................................. 4.16
"Change of Control Payment"................................ 4.16
"Change of Control Payment Date"........................... 4.16
"Covenant Defeasance"...................................... 8.03
"DTC"...................................................... 2.03
"Event of Default"......................................... 6.01
"Excess FF&E Loss Proceeds"................................ 4.11
"FF&E Asset Sale".......................................... 4.10
"FF&E Asset Sale Offer".................................... 4.10
"FF&E Event of Loss"....................................... 4.11
"FF&E Event of Loss Offer"................................. 4.11
27
"FF&E Excess Proceeds"................................... 4.10
"FF&E Loss Proceeds"..................................... 4.11
"FF&E Proceeds".......................................... 4.10
"incur".................................................. 4.09
"Legal Defeasance"....................................... 8.02
"Offer Amount"........................................... 3.09
"Note Obligations"....................................... 13(b)
"Offer Period"........................................... 3.09
"Pari Passu Asset Sale".................................. 4.10
"Pari Passu Asset Sale Offer"............................ 4.10
"Pari Passu Event of Loss"............................... 4.11
"Pari Passu Event of Loss Offer"......................... 4.11
"Pari Passu Excess Proceeds"............................. 4.10
"Pari Passu Loss Proceeds"............................... 4.11
"Pari Passu Proceeds".................................... 4.10
"Paying Agent"........................................... 2.03
"Payment Default"........................................ 6.01
"Permitted Debt"......................................... 4.09
"Purchase Date".......................................... 3.09
"Registrar".............................................. 2.03
"Repurchase Offer"....................................... 3.09
"Restricted Payments".................................... 4.07
Section 1.03. 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;
28
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes and the Note Guarantees means the Issuers and
the Guarantors, respectively, and any successor obligor upon the Notes and the
Note Guarantees, respectively.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
Section 1.04. 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) provisions apply to successive events and transactions; and
(f) references to sections of or rules under the Securities Act or
the Exchange Act shall be deemed to include substitute, replacement of successor
sections or rules adopted by the SEC from time to time.
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating.
(a) General. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The Notes
may have notations, legends or endorsements required by law, stock exchange rule
or usage. Each Note shall be dated the date of its authentication. The Notes
shall be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and the Issuers, any
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.
(b) Global Notes. Notes issued in global form shall be
substantially in the form of Exhibit A hereto (including the Global Note Legend
thereon and the "Schedule of Exchanges of
29
Interests in the Global Note" attached thereto). Notes issued in definitive form
shall be substantially in the form of Exhibit A attached hereto (but without the
Global Note Legend thereon and without the "Schedule of Exchanges of Interests
in the Global Note" attached thereto). Each Global Note shall represent such of
the outstanding Notes as shall be specified therein and each shall provide that
it shall represent the aggregate principal amount of outstanding Notes from time
to time endorsed thereon and that the aggregate principal 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 the Global
Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented thereby shall be made by the
Trustee or the Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof as required by Section 2.06 hereof.
(c) Euroclear and Clearstream Procedures Applicable. The provisions
of the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Clearstream
Bank" and "Customer Handbook" of Clearstream shall be applicable to transfers of
beneficial interests in Global Notes that are held by Participants through
Euroclear or Clearstream.
Section 2.02. Execution and Authentication.
One Officer shall sign the Notes for each of the Issuers by manual or
facsimile signature.
If an Officer whose signature is on a Note no longer holds that
office at the time a Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated under this Indenture.
The Trustee shall, upon a written order of the Issuers signed by two
Officers (an "Authentication Order"), authenticate Notes for original issue up
to the aggregate principal amount stated in paragraph 4 of the Notes. The
aggregate principal amount of Notes outstanding at any time may not exceed such
amount except as provided in Section 2.01 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Issuers to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Issuers.
Section 2.03. Registrar and Paying Agent.
The Issuers shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of
30
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 in writing 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
Issuers or any of their Subsidiaries may act as Agent.
The Issuers initially appoint The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.
The Issuers initially appoint the Trustee to act as the Registrar and
Paying Agent and to act as Custodian for the Depositary with respect to the
Global Notes.
Section 2.04. 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 will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or Interest on the Notes, and
will notify the Trustee of any default by 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 Issuers or a
Subsidiary) shall have no further liability for the money. If the Issuers or a
Subsidiary act as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to either of the Issuers,
the Trustee shall serve as Paying Agent for the Notes.
Section 2.05. 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 Section 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 and addresses of the Holders of
Notes and the Issuers shall otherwise comply with TIA Section 312(a).
Section 2.06. Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Issuers for Definitive Notes if (i) the Issuers deliver to the Trustee a
31
notice from the Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor Depositary is not appointed by the
Issuers within 120 days after the date of such notice from the Depositary or
(ii) the Issuers in their sole discretion determine that the Global Notes (in
whole but not in part) should be exchanged for Definitive Notes and deliver a
written notice to such effect to the Trustee. Upon the occurrence of either of
the preceding events in (i) or (ii) above, Definitive Notes shall be issued in
such names as the Depositary shall instruct the Trustee. Global Notes also may
be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and
2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu
of, a Global Note or any portion thereof, pursuant to this Section 2.06 or
Sections 2.07 or 2.10 hereof, shall be authenticated and delivered in the form
of, and shall be, a Global Note. A Global Note may not be exchanged for another
Note other than as provided in this Section 2.06(a), however, beneficial
interests in a Global Note may be transferred and exchanged as provided in
Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global
Notes. The transfer and exchange of beneficial interests in the Global Notes
shall be effected through the Depositary, in accordance with the provisions of
this Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Notes shall be subject to restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.
Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend; provided, however,
that prior to the expiration of the Restricted Period, transfers of
beneficial interests in the Regulation S Global Note may not be made to a
U.S. Person or for the account or benefit of a U.S. Person (other than an
Initial Purchaser). Beneficial interests in any Unrestricted Global Note
may be transferred to Persons who take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note. No written orders or
instructions shall be required to be delivered to the Registrar to effect
the transfers described in this Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests
in Global Notes. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 2.06(b)(i) above, the
transferor of such beneficial interest must deliver to the Registrar
either (A) (1) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the Applicable
Procedures directing the Depositary to credit or cause to be credited a
beneficial interest in another Global Note in an amount equal to the
beneficial interest to be transferred or exchanged and (2) instructions
given in accordance with the Applicable Procedures containing information
regarding the Participant account to be credited with such increase or (B)
(1) a written order from a Participant or an Indirect Participant given to
the Depositary in accordance with the Applicable Procedures directing the
Depositary to cause to be issued a Definitive Note in an amount equal to
the beneficial interest to be transferred or exchanged and (2)
instructions given by the
32
Depositary to the Registrar containing information regarding the Person in
whose name such Definitive Note shall be registered to effect the transfer
or exchange referred to in (1) above. Upon consummation of an Exchange
Offer by the Issuers in accordance with Section 2.06(f) hereof, the
requirements of this Section 2.06(b)(ii) shall be deemed to have been
satisfied upon receipt by the Registrar of the instructions contained in
the Letter of Transmittal delivered by the Holder of such beneficial
interests in the Restricted Global Notes. Upon satisfaction of all of the
requirements for transfer or exchange of beneficial interests in Global
Notes contained in this Indenture and the Notes or otherwise applicable
under the Securities Act, the Trustee shall adjust the principal amount of
the relevant Global Note(s) pursuant to Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted
Global Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(ii) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form of
a beneficial interest in a 144A Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of
a beneficial interest in the Regulation S Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of
a beneficial interest in the IAI Global Note, then the transferor
must deliver a certificate in the form of Exhibit B hereto, including
the certifications and certificates and Opinion of Counsel required
by item (3) thereof, if applicable.
(iv) Transfer and Exchange of Beneficial Interests in
Restricted Global Notes for Beneficial Interests in Unrestricted Global
Notes. A beneficial interest in any Restricted Global Note may be
exchanged by any holder thereof for a beneficial interest in an
Unrestricted Global Note or transferred to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note if the exchange or transfer complies with the requirements of Section
2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of the beneficial interest to be transferred, in the
case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (1)
a broker-dealer, (2) a Person participating in the distribution of
the Exchange Notes or (3) a Person who is an affiliate (as defined in
Rule 144) of the Issuers;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
33
(C) such transfer is effected by a Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a beneficial interest in an Unrestricted Global
Note, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(a) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Issuers so request or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Issuers and
the Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities
Act.
If any such transfer is effected pursuant to subparagraph (B)
or (D) above at a time when an Unrestricted Global Note has not yet been
issued, the Issuers shall issue and, upon receipt of an Authentication
Order in accordance with Section 2.02 hereof, the Trustee shall
authenticate one or more Unrestricted Global Notes in an aggregate
principal amount equal to the aggregate principal amount of beneficial
interests transferred pursuant to subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the
form of, a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive
Notes.
(i) Beneficial Interests in Restricted Global Notes to
Restricted Definitive Notes. If any holder of a beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note or to transfer such beneficial interest to a
Person who takes delivery thereof in the form of a Restricted Definitive
Note, then, upon receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest
for a Restricted Definitive Note, a certificate from such holder in
the form of Exhibit C hereto, including the certifications in item
(2)(a) thereof;
34
(B) if such beneficial interest is being transferred to a
QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule
903 or Rule 904 under Regulation S, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (2)
thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 under the Securities Act,
a certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption from
the registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a certificate to the
effect set forth in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if
applicable;
(F) if such beneficial interest is being transferred to
either of the Issuers or any of their Subsidiaries, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable
Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof,
and the Issuers shall execute and the Trustee shall authenticate and
deliver to the Person designated in the instructions a Definitive Note in
the appropriate principal amount. Any Definitive Note issued in exchange
for a beneficial interest in a Restricted Global Note pursuant to this
Section 2.06(c) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such beneficial
interest shall instruct the Registrar through instructions from the
Depositary and the Participant or Indirect Participant. The Trustee shall
deliver such Definitive Notes to the Persons in whose names such Notes are
so registered. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.06(c)(i)
shall bear the Private Placement Legend and shall be subject to all
restrictions on transfer contained therein.
(ii) Beneficial Interests in Restricted Global Notes to
Unrestricted Definitive Notes. A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest to a
Person who takes delivery thereof in the form of an Unrestricted
Definitive Note only if:
35
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of such beneficial interest, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in
Rule 144) of either of the Issuers;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in the form of
Exhibit C hereto, including the certifications in item (1)(b)
thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the
form of a Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in the form of
Exhibit B hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D), if the
Issuers so request or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Issuers and
the Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities
Act.
(iii) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any holder of a beneficial interest in
an Unrestricted Global Note proposes to exchange such beneficial interest
for a Definitive Note or to transfer such beneficial interest to a Person
who takes delivery thereof in the form of a Definitive Note, then, upon
satisfaction of the conditions set forth in Section 2.06(b)(ii) hereof,
the Trustee shall cause the aggregate principal amount of the applicable
Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof,
and the Issuers shall execute and the Trustee shall authenticate and
deliver to the Person designated in the instructions a Definitive Note in
the appropriate principal amount. Any Definitive Note issued in exchange
for a beneficial interest pursuant to this Section 2.06(c)(iii) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to
the Persons in whose
36
names such Notes are so registered. Any Definitive Note issued in exchange
for a beneficial interest pursuant to this Section 2.06(c)(iii) shall not
bear the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial
Interests.
(i) Restricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a Restricted
Global Note or to transfer such Restricted Definitive Notes to a Person
who takes delivery thereof in the form of a beneficial interest in a
Restricted Global Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in item (2)(b)
thereof;
(B) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule 144A under the
Securities Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904 under Regulation S, a
certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule 144 under
the Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being
transferred to an Institutional Accredited Investor in reliance on an
exemption from the registration requirements of the Securities Act
other than those listed in subparagraphs (B) through (D) above, a
certificate to the effect set forth in Exhibit B hereto, including
the certifications, certificates and Opinion of Counsel required by
item (3) thereof, if applicable;
(F) if such Restricted Definitive Note is being
transferred to either of the Issuers or any of their Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (3)(b) thereof; or
(G) if such Restricted Definitive Note is being
transferred pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(c) thereof,
the Trustee shall cancel the Restricted Definitive Note, increase or cause
to be increased the aggregate principal amount of, in the case of clause
(A) above, the appropriate Restricted
37
Global Note, in the case of clause (B) above, the 144A Global Note, in the
case of clause (C) above, the Regulation S Global Note, and in all other
cases, the IAI Global Note.
(ii) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Restricted Definitive Note to a Person who takes
delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an
affiliate (as defined in Rule 144) of the Issuers;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes
to exchange such Notes for a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item
(1)(c) thereof; or
(2) if the Holder of such Definitive Notes proposes
to transfer such Notes to a Person who shall take delivery
thereof in the form of a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in the
form of Exhibit B hereto, including the certifications in item
(4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Issuers so request or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Issuers and
the Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities
Act.
Upon satisfaction of the conditions of any of the subparagraphs
in this Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes
and increase or cause to be increased the aggregate principal amount of
the Unrestricted Global Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Note for a
38
beneficial interest in an Unrestricted Global Note or transfer such
Definitive Notes to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note at any time. Upon
receipt of a request for such an exchange or transfer, the Trustee shall
cancel the applicable Unrestricted Definitive Note and increase or cause
to be increased the aggregate principal amount of one of the Unrestricted
Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D)
or (iii) above at a time when an Unrestricted Global Note has not yet been
issued, the Issuers shall issue and, upon receipt of an Authentication
Order in accordance with Section 2.02 hereof, the Trustee shall
authenticate one or more Unrestricted Global Notes in an aggregate
principal amount equal to the principal amount of Definitive Notes so
transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(i) Restricted Definitive Notes to Restricted Definitive Notes.
Any Restricted Definitive Note may be transferred to and registered in the
name of Persons who take delivery thereof in the form of a Restricted
Definitive Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A
under the Securities Act, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or
Rule 904 under Regulation S, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof; and
(C) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities Act,
then the transferor must deliver a certificate in the form of Exhibit
B hereto, including the certifications, certificates and Opinion of
Counsel required by item (3) thereof, if applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive
Notes. Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person or
Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
39
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an
affiliate (as defined in Rule 144) of the Issuers;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive
Notes proposes to exchange such Notes for an Unrestricted
Definitive Note, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in item (1)(d)
thereof; or
(2) if the Holder of such Restricted Definitive
Notes proposes to transfer such Notes to a Person who shall
take delivery thereof in the form of an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests, an Opinion of Counsel in form reasonably
acceptable to the Issuers to the effect that such exchange or
transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive
Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note. Upon receipt of a request to register such a transfer,
the Registrar shall register the Unrestricted Definitive Notes pursuant to
the instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Issuers shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.02 hereof,
the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by Persons that
certify in the applicable Letters of Transmittal that (x) they are not broker-
dealers, (y) they are not participating in a distribution of the Exchange Notes
and (z) they are not affiliates (as defined in Rule 144) of the Issuers, and
(ii) Definitive Notes in an aggregate principal amount equal to the principal
amount of the Restricted Definitive Notes accepted for exchange in the Exchange
40
Offer. Concurrently with the issuance of such Notes, the Trustee shall cause the
aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Issuers shall execute and the Trustee shall
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Definitive Notes in the appropriate principal amount.
(g) Legends. The following legends shall appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each
Global Note and each Definitive Note (and all Notes issued in
exchange therefor or substitution thereof) shall bear the legend in
substantially the following form:
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES (A) TO OFFER, SELL,
PLEDGE OR OTHERWISE TRANSFER THIS NOTE ONLY (1) TO THE ISSUERS, (2) PURSUANT TO
A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (3) TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
AS DEFINED IN RULE 144A IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(4) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 904
UNDER THE SECURITIES ACT, (5) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN
THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, OR (6) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT (AND BASED ON AN OPINION OF
COUNSEL IF THE ISSUERS SO REQUEST), SUBJECT IN EACH OF THE FOREGOING CASES TO
APPLICABLE JURISDICTION, AND (B) THAT IT WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE NOTE EVIDENCED HEREBY OF THE
RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(iv), (c)(ii),
(c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this Section
2.06 (and all Notes issued in exchange therefor or substitution
thereof) shall not bear the Private Placement Legend.
41
(ii) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THIS INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.07 OF THIS INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THIS
INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THIS INDENTURE AND (IV) THIS GLOBAL
NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT
OF THE ISSUERS."
(h) Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note shall be increased accordingly
and an endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Issuers shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon the Issuers' order or at the Registrar's request, in
each case in accordance with the provisions of Section 2.02 hereof.
(ii) No service charge shall be made to a holder of a
beneficial interest in a Global Note or to a Holder of a Definitive Note
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 or
transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.11, 4.16 and 9.05
hereof).
42
(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid obligations of the Issuers, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Global
Notes or Definitive Notes surrendered upon such registration of transfer
or exchange.
(v) The Issuers shall not be required (A) to issue, to
register the transfer of or to exchange any Notes during a period
beginning at the opening of business 15 days before the day of any
selection of Notes for redemption under Section 3.02 hereof and ending at
the close of business on the day of selection, (B) to register the
transfer of or to exchange any Note so selected for redemption in whole or
in part, except the unredeemed portion of any Note being redeemed in part
or (C) to register the transfer of or to exchange a Note between a record
date and the next succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and either of the Issuers may
deem and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment of
principal of and Interest on such Notes and for all other purposes, and
none of the Trustee, any Agent or either of the Issuers shall be affected
by notice to the contrary.
(vii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06 to
effect a registration of transfer or exchange may be submitted by
facsimile.
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee or the Issuers and
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, the Issuers shall issue and the Trustee, upon receipt of an
Authentication Order, shall authenticate a replacement Note if the Holder or
Issuers satisfies the reasonable requirements of the Trustee. 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 and any authenticating agent from any loss that
any of them may suffer if a Note is replaced. The Issuers may charge for its
expenses in replacing a Note.
Every replacement Note is an additional 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 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation,
those reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions hereof, and those
43
described in this Section as not outstanding. Except as set forth in Section
2.09 hereof, a Note does not cease to be outstanding because either of the
Issuers or an Affiliate of either of the Issuers holds the Note; however, Notes
held by the Issuers or a Subsidiary of either of the Issuers shall not be deemed
to be outstanding for purposes of Section 3.07(b) hereof.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and Interest on it ceases to accrue.
If the Paying Agent (other than the Issuers, or a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
Interest.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount
of Notes have concurred in any direction, waiver or consent, Notes owned by the
Issuers, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Issuers, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that the Trustee knows are so owned shall be so disregarded.
SECTION 2.10. TEMPORARY NOTES.
Until certificates representing Notes are ready for delivery, the
Issuers may prepare and the Trustee, upon receipt of an Authentication Order,
shall authenticate temporary Notes. Temporary Notes shall be substantially in
the form of certificated Notes but may have variations that the Issuers consider
appropriate for temporary Notes and as shall be reasonably acceptable to the
Trustee. Without unreasonable delay, the Issuers shall prepare and the Trustee
shall authenticate Definitive Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits
of this Indenture.
SECTION 2.11. CANCELLATION.
The Issuers at any time may deliver Notes to the Trustee for
cancellation. The Agents shall forward to the Trustee any Notes surrendered to
them for registration of transfer, exchange or payment. The Trustee and no one
else shall cancel all Notes surrendered for registration of transfer, exchange,
payment, replacement or cancellation and shall destroy canceled Notes (subject
to the record retention requirement of the Exchange Act). Certification of the
destruction of all canceled Notes shall be delivered to the Issuers. The Issuers
may not issue new Notes to replace Notes that it has paid or that have been
delivered to the Trustee for cancellation.
44
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, in each case at the rate provided
in the Notes and in Section 4.01 hereof. The Issuers shall notify the Trustee in
writing of the amount of defaulted Interest proposed to be paid on each Note and
the date of the proposed payment. The Issuers shall fix or cause to be fixed
each such special record date and payment date, provided, however, that no such
special record date shall be less than 10 days prior to the related payment date
for such defaulted Interest. At least 15 days before the special record date,
the Issuers (or, upon the written request of the Issuers, the Trustee in the
name and at the expense of the Issuers) shall mail or cause to be mailed to
Holders a notice that states the special record date, the related payment date
and the amount of such Interest to be paid.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Issuers elect to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof or are required to redeem the Notes
pursuant to the mandatory redemption provisions of Section 4.30 hereof, they
shall furnish to the Trustee, at least 30 days or such shorter period as is
satisfactory to the Trustee but not more than 60 days before a redemption date,
an Officers' Certificate setting forth (a) the clause of this Indenture 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 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed or purchased in an
offer to purchase at any time, the Trustee shall select the Notes for redemption
or repurchase as follows: (i) if the Notes are listed, in compliance with the
requirements of the principal national securities exchange on which the Notes
are listed; or (ii) if the Notes are not so listed, on a pro rata basis, by lot
or by such method as the Trustee shall deem fair and appropriate.
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 or purchase, the principal amount thereof to be redeemed or
purchased. Notes and portions of Notes selected shall be in amounts of $1,000 or
whole multiples of $1,000, except that if all of the Notes of a Holder are to be
redeemed, the entire outstanding amount of Notes held by such Holder, even if
not a multiple of $1,000, shall be redeemed or purchased. Except as provided in
the preceding sentence, provisions of this Indenture that apply to Notes called
for redemption or purchase also apply to portions of Notes called for redemption
or purchase.
45
SECTION 3.03. NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.09 hereof, at least 30 days or
such shorter period as is satisfactory to the Trustee but not more than 60 days
before a redemption date, the Issuers shall mail or cause to be mailed, by first
class mail, a notice of redemption to each Holder whose Notes are to be redeemed
at its registered address; provided, however, that in the case of an optional
redemption in which the Issuers have called for redemption of all outstanding
Notes in connection with a refinancing of such Notes, the Issuers shall be
permitted to (a) specify a proposed redemption date, (b) change the proposed
redemption date not more than two times prior to a final redemption date by
notice mailed to Holders not later than five Business Days prior to the final
redemption date, (c) establish the final redemption date as a date not more than
90 days after the first notice from the Issuers calling the Notes for optional
redemption was mailed to the Holders and (d) rescind the redemption offer at any
time prior to the final redemption date, which recision shall not cause the
maturity of the Notes to have changed. If any Note is to be redeemed in part
only pursuant to Section 3.06 hereof, the notice of redemption that relates to
that note shall state the portion of principal amount thereof to be redeemed.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
On or prior to the redemption date, the Issuers shall deposit with
the Trustee or with the Paying Agent money sufficient to pay the redemption
price of and accrued Interest and Liquidated Damages, if any, on all Notes to be
redeemed on that date. The Trustee or the Paying Agent shall promptly 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 and Liquidated Damages, if any, on, all Notes to be redeemed.
If the Issuers comply with the provisions of the preceding paragraph,
on and after the redemption date, Interest shall cease to accrue on the Notes or
the portions of Notes called for redemption whether redeemed Notes are delivered
to the Paying Agent for payment. If a Note is redeemed on or after an interest
record date but on or prior to the related interest payment date, then any
accrued and unpaid Interest and Liquidated Damages, if any, shall be paid to the
Person in whose name such Note was registered at the close of business on such
record date. If any Note called for redemption shall not be so paid upon
surrender for redemption because of the failure of the 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 and in Section 4.01 hereof.
46
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, upon cancellation
of the old Note, the Issuers shall issue and, upon the Issuers' written request,
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. No Notes in denominations of $1,000 or less shall be redeemed in
part.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) At any time prior to August 1, 2002, the Issuers may on any one
or more occasions redeem up to 35% of the original aggregate principal amount of
Notes issued under this Indenture at a redemption price of 113% of the principal
amount thereof, plus accrued and unpaid Interest and Liquidated Damages, if any,
to the redemption date, with the net cash proceeds of a Qualified Equity
Offering; provided, however, that: (i) at least 65% of the aggregate principal
amount of the Notes originally issued under this Indenture remains outstanding
immediately after the occurrence of such redemption (excluding Notes held by the
Partnership and its Subsidiaries); and (ii) the redemption must occur within 60
days of the date of the closing of such Qualified Equity Offering. Except as
provided herein, the Notes will not be redeemable at the Issuers' option prior
to August 1, 2003. On or after August 1, 2003, the Issuers may redeem all or a
part of the Notes upon not less than 30 nor more than 60 days' notice, at the
following redemption prices (expressed as percentages of principal amount) plus
accrued and unpaid Interest and Liquidated Damages, if any, thereon, to the
applicable redemption date, if redeemed during the twelve-month period beginning
on August 1 of the years indicated below:
Year Percentage
---- ----------
2003................................. 106.50%
2004................................. 103.25%
2005 and thereafter.................. 100.00%
(b) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.
SECTION 3.08. MANDATORY DISPOSITION PURSUANT TO GAMING LAWS.
(a) Redemption Pursuant to Gaming Authority. Notwithstanding any
other provision of this Article 3, if any Gaming Authority requires that a
Person who is a Holder or the Beneficial Owner of a Note be licensed, qualified
or found suitable under any applicable Gaming Law, the Holder or Beneficial
Owner, as the case may be, shall apply for a license, qualification or a finding
of suitability within the time period required by the Gaming Authority. If the
Holder or Beneficial Owner fails to timely apply for such license, qualification
or finding of suitability within the required time period or is found
unsuitable, such Holder or Beneficial Owner, as the case may be, shall be
required to dispose of its Notes within the time specified by the Gaming
Authority and the Issuers shall have the right to redeem the Notes of such
Holder or Beneficial Owner, subject to approval of any applicable Gaming
Authority, at the least of (i) the principal
47
amount thereof, (ii) the amount that such Holder or Beneficial Owner paid for
the Notes or (iii) the fair market value of the Notes. Immediately upon the
imposition of a requirement to dispose of Notes by a Gaming Authority, such
Holder or Beneficial Owner of the Notes shall, to the extent required by
applicable law, have no further right (x) to exercise, directly or indirectly,
through any trustee or nominee or any other Person or entity, any right
conferred by the Notes or (y) to receive any Interest, dividends, economic
interests or any other distributions or payments with respect to the Notes or
any remuneration in any form with respect to the Notes from the Issuers or the
Trustee. Any Holder of Notes or Beneficial Owner that is required to apply for a
license, qualification or finding of suitability must pay all fees and costs of
any investigation by the applicable Gaming Authorities. The Issuers are not
required to pay or reimburse any Holder of the Notes or Beneficial Owner who is
required to apply for such license, qualification or finding of suitability for
the costs of the licensure or investigation for such qualification or finding of
suitability. The Issuers shall notify the Trustee in writing of any such
redemption as soon as practicable; provided, however, that until such time as
the Trustee receives notice from the Issuers of such redemption in accordance
with Section 14.02 hereof, the Trustee shall be entitled to treat the Holder or
Beneficial Owner as having all of its rights under the Indenture. The Trustee
shall report the names of the record Holders of the Notes to any Gaming
Authority when required by law.
(b) Except as described in this Section 3.08, the Issuers are not
required to make mandatory redemption or sinking fund payments with respect to
the Notes.
Section 3.09. Repurchase Offers.
In the event that, pursuant to Section 4.10, 4.11, 4.16 or 4.30
hereof, the Issuers shall be required to commence an offer to all Holders to
purchase Notes (a "Repurchase Offer"), they shall follow the procedures
specified below.
The Repurchase Offer shall remain open for a period of 20 Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law (the "Offer Period"). No later than
five Business Days after the termination of the Offer Period (the "Purchase
Date"), the Issuers shall purchase at the Purchase Price (as determined in
accordance with Section 4.10, 4.11, 4.16 or 4.30 hereof, as the case may be) the
principal amount of Notes required to be purchased pursuant to Section 4.10,
4.11, 4.16 or 4.30 hereof, as the case may be, (the "Offer Amount") or, if less
than the Offer Amount has been tendered, all Notes tendered in response to such
Repurchase Offer. Payment for any Notes so purchased shall be made in the same
manner as interest payments are made.
If the Purchase Date is on or after an Interest Record Date and on or
before the related Interest Payment Date, any accrued and unpaid Interest and
Liquidated Damages, if any, shall be paid to the Person in whose name a Note is
registered at the close of business on such Record Date, and no additional
Interest shall be payable to Holders who tender Notes pursuant to such
Repurchase Offer.
Upon the commencement of a Repurchase Offer, the Issuers shall send,
by first class mail, a notice to the Trustee and each of the Holders, with a
copy to the Trustee. The notice shall
48
contain all instructions and materials necessary to enable such Holders to
tender Notes pursuant to such Repurchase Offer. The Repurchase Offer shall be
made to all Holders. The notice, which shall govern the terms of such Repurchase
Offer, shall state:
(a) that the Repurchase Offer is being made pursuant to this Section
3.09 and Section 4.10, 4.11, 4.16 or 4.30 hereof, as the case may be, and the
length of time the Repurchase Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall continue
to accrue Interest and Liquidated Damages, if any;
(d) that, unless the Issuers default in making such payment, any Note
accepted for payment pursuant to the Repurchase Offer shall cease to accrue
Interest and Liquidated Damages, if any after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to any
Repurchase Offer may elect to have Notes purchased in integral multiples of
$1,000 only;
(f) that Holders electing to have a Note purchased pursuant to any
Repurchase Offer shall be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, or
transfer by book-entry transfer, to the Issuers, a Depositary, if appointed by
the Issuers, or a Paying Agent at the address specified in the notice on or
before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if the
Issuers, the Depositary or the Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Offer Amount, the Notes shall be selected for purchase
pursuant to the terms of Section 3.02 hereof, and that Holders whose Notes were
purchased only in part shall be issued new Notes equal in principal amount to
the unpurchased portion of the Notes surrendered; and
(i) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Issuers shall, to the extent
lawful, accept for payment, pursuant to the terms of Section 3.02 hereof, the
Offer Amount of Notes or portions thereof tendered pursuant to the Repurchase
Offer, or if less than the Offer Amount has been tendered, all Notes tendered,
and shall deliver to the Trustee an Officers' Certificate stating that such
Notes or portions thereof were accepted for payment by the Issuers in accordance
with the terms of this Section 3.09. The Issuers, the Depositary or the Paying
Agent, as the case may be,
49
shall promptly (but in any case not later than five Business days after the
Purchase Date) mail or deliver to each tendering Holder an amount equal to the
purchase price of the Notes tendered by such Holder and accepted by the Issuers
for purchase, and the Issuers shall promptly issue a new Note, and the Trustee,
upon written request from the Issuers, shall authenticate and mail or deliver
such new Note to such Holder, in a principal amount equal to any unpurchased
portion of the Note surrendered. Any Note not so accepted shall be promptly
mailed or delivered by the Issuers to the Holder thereof. The Issuers shall
publicly announce the results of the Repurchase Offer on the Purchase Date.
The Issuers shall comply with the requirements of Rule 14e-1 under
the Exchange Act, and any other securities laws and regulations thereunder to
the extent that such laws or regulations are applicable in connection with the
repurchase of the Notes pursuant to the Repurchase Offer. To the extent that the
provisions of Rule 14e-1 under the Exchange Act or any securities laws or
regulations conflict with the provisions of Sections 3.09, 4.10, 4.11, 4.16 or
4.30 of this Indenture, the Issuers will comply with the applicable securities
laws and regulations and will not be deemed to have breached its obligations
under those sections of this Indenture.
Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 shall be made pursuant to the provisions
of Sections 3.01 through 3.06 hereof.
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes.
The Issuers shall pay or cause to be paid the principal of, premium,
if any, and Interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and Interest shall be considered paid on the
date due if the Paying Agent, if other than the Issuers or a Subsidiary thereof,
holds as of 12:00 noon Eastern Time on the due 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. If Interest payable on
the Notes includes Contingent Interest, the Issuers shall provide a calculation
of such Contingent Interest in reasonable detail to the Trustee in the form of
an Officer's Certificate at the time of depositing the amount of such Contingent
Interest with the Trustee. If Interest payable on the Notes does not include
Contingent Interest, the Issuers shall provide notice to the Trustee to that
effect. The Issuers shall pay all Liquidated Damages, if any, in the same manner
on the dates and in the amounts set forth in the Registration Rights Agreement.
The Issuers shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate equal
to 1% per annum in excess of the then applicable Fixed Interest rate on the
Notes to the extent lawful; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
Interest and Liquidated Damages (without regard to any applicable grace period)
at the same rate to the extent lawful.
50
Section 4.02. Maintenance of Office or Agency.
The Issuers shall maintain in the Borough of Manhattan, the City of
New York, an office or agency (which may be an office of the Trustee or an
Affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the 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,
however, that no such designation or rescission shall in any manner relieve the
Issuers of their obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York 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
2.03 hereof.
Section 4.03. Reports.
Whether or not required by the SEC, so long as any Notes are
outstanding, the Issuers will furnish to the Holders of Notes, within 15 days
following the time periods specified in the SEC's rules and regulations: (a) all
consolidated quarterly and annual financial information that would be required
to be contained in a filing with the SEC on Forms 10-Q and 10-K if the Issuers
were required to file such Forms, including a "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and, with respect to
the annual information only, a report on the annual financial statements by the
Issuers' certified independent accountants; and (b) all current reports that
would be required to be filed with the SEC on Form 8-K if the Issuers were
required to file such reports. In addition, within 15 days after filing such
documents with the SEC, any Guarantors shall furnish to the Holders of the Notes
the items in (a) and (b) of this paragraph.
If the Partnership has designated any of its Subsidiaries as
Unrestricted Subsidiaries, then the consolidated quarterly and annual financial
information required by the preceding paragraph will include a reasonably
detailed presentation, either on the face of the financial statements or in the
footnotes thereto, and in Management's Discussion and Analysis of Financial
Condition and Results of Operations, of the financial condition and results of
operations of the Issuers and the Partnership's Restricted Subsidiaries separate
from the financial condition and results of operations of the Partnership's
Unrestricted Subsidiaries as required by the rules and regulations of the SEC.
51
In addition, following the consummation of the exchange offer
contemplated by the Registration Rights Agreement, whether or not required by
the SEC, the Issuers and any Guarantors will file a copy of all of the
information and reports referred to in clauses (a) and (b) of the first
paragraph of this Section 4.03 with the SEC for public availability within the
time periods specified in the SEC's rules and regulations (unless the SEC will
not accept such a filing) and make such information available to securities
analysts and prospective investors upon request. In addition, the Issuers have
agreed that, for so long as any Notes remain outstanding, they will furnish to
the Holders of the Notes and to securities analysts and prospective investors,
upon their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act. The Issuers shall at all times comply with
TIA (S).314(a).
Section 4.04. Compliance Certificate.
(a) The Issuers and any Guarantor (to the extent that such Guarantor
is so required under the TIA) shall deliver to the Trustee, within 120 days
after the end of each fiscal year of such Issuer or any Guarantor, as
applicable, an Officers' Certificate stating that a review of the activities of
the Issuers, any Guarantors and their Subsidiaries, as the case may be, during
the preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether each of the Issuers and any
Guarantors, as the case may be, has kept, observed, performed and fulfilled its
obligations under this Indenture and the Collateral Documents, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge each of the Issuers and any Guarantors, as the case may be,
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and the Collateral Documents and is not in default in the
performance or observance of any of the terms, provisions and conditions of this
Indenture or the Collateral Documents (or, if a Default or Event of Default
shall have occurred, describing all such Defaults or Events of Default of which
he or she may have knowledge and what action the applicable entity is taking or
proposes to take with respect thereto) and to the best of his or her knowledge,
no event has occurred and is continuing which is, or after notice or lapse of
time or both would become, an Event of Default (or, if such an event has
occurred and is continuing, specifying each such event known to such Officer and
the nature and status thereof) and that to the best of his or her knowledge no
event has occurred and remains in existence by reason of which payments on
account of the principal of or Interest, if any, on the Notes is prohibited or
if such event has occurred, a description of the event and what action the
applicable entity is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Issuers' and any Guarantors', as the case may be,
independent public accountants (each of which shall be a firm of established
national reputation) that in making the examination necessary for certification
of such financial statements, nothing has come to their attention that would
lead them to believe that either of the Issuers or any Guarantors, as the case
may be, has violated any provisions of Article 4 or Article 5 hereof or, if any
such violation has occurred, specifying the nature and period of existence
thereof, it being understood that such accountants shall not be liable directly
or indirectly to any Person for any failure to obtain knowledge of any such
violation.
52
(c) The Issuers shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Issuers are taking or proposes to take with
respect thereto.
Section 4.05. Taxes.
The Issuers shall pay, and shall cause each of its Subsidiaries to
pay, prior to delinquency, all material taxes, assessments, and governmental
levies except such as are contested in good faith and by appropriate proceedings
or where the failure to effect such payment is not adverse in any material
respect to the Holders of the Notes.
Section 4.06. Stay, Extension and Usury Laws.
Each Issuer and each of the Guarantors, if any, covenants (to the
extent that it may lawfully do so) that it shall not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension or usury law wherever enacted, now or at any time hereafter
in force, that may affect the covenants or the performance of this Indenture;
and each Issuer and each of the Guarantors, if any, 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 4.07. Restricted Payments.
The Partnership shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly: (a) declare or pay any dividend or make
any other payment or distribution on account of the Partnership's or any of its
Restricted Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving the Partnership
or any of its Restricted Subsidiaries) or to the direct or indirect holders of
the Partnership's or any of its Restricted Subsidiaries' Equity Interests in any
capacity (other than dividends or distributions payable in Equity Interests
(other than Disqualified Stock) of the Partnership or dividends or distributions
payable to the Partnership or a Restricted Subsidiary of the Partnership); (b)
purchase, redeem or otherwise acquire or retire for value (including, without
limitation, in connection with any merger or consolidation involving the
Partnership) any Equity Interests of the Partnership or any direct or indirect
parent of the Partnership; (c) make any payment on or with respect to, or
purchase, redeem, defease or otherwise acquire or retire for value, any
Indebtedness that is pari passu with or subordinated to the Notes, except (i) a
payment of Interest or principal at the Stated Maturity thereof, (ii) a payment
at any time of Interest or principal on Indebtedness permitted by clause (h) of
the second paragraph of Section 4.09 hereof and (iii) a purchase of up to $5.0
million principal amount of Existing Notes in open market transactions; or (d)
make any Restricted Investment (all such payments and other actions set forth in
clauses (a) through (d) above being collectively referred to as "Restricted
Payments"), unless, at the time of and after giving effect to such Restricted
Payment:
53
(i) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(ii) the Partnership would, at the time of such Restricted
Payment and after giving pro forma effect thereto as if such Restricted
Payment had been made at the beginning of the applicable four-quarter
period, have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in
the first paragraph of Section 4.09 hereof; and
(iii) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Partnership and its
Restricted Subsidiaries after the date of the Existing Notes Indenture
(excluding Restricted Payments permitted by clauses (ii) through (v) and
(vii) and (viii) of the next succeeding paragraph), is less than the sum,
without duplication, of:
(A) 50% of the Consolidated Net Income of the Partnership
for the period (taken as one accounting period) from the date of the
Existing Notes Indenture to the end of the Partnership's most
recently ended fiscal quarter for which internal financial statements
are available at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit, less 100% of
such deficit), plus
(B) 100% of the aggregate net cash proceeds received by
the Partnership since the date of the Existing Notes Indenture as a
contribution to its common equity capital (other than amounts
contributed directly or indirectly by Hollywood Casino to the
Partnership (1) which have been or will be deposited into the Equity
Escrow Account and (2) pursuant to the Completion Capital Agreement),
plus
(C) 50% of any cash dividends received by the Partnership
or any of its Restricted Subsidiaries after the date of the Existing
Notes Indenture from an Unrestricted Subsidiary of the Partnership,
to the extent such dividends were not otherwise included in
Consolidated Net Income of the Partnership for such period, plus
(D) to the extent that any Restricted Investment that was
made after the date of the Existing Notes Indenture is sold for cash
or otherwise liquidated or repaid for cash, the sum of (1) 50% of the
cash proceeds with respect to such Restricted Investment in excess of
the aggregate amount invested in such Restricted Investment (less the
cost of disposition, if any) and (2) the aggregate amount invested in
such Restricted Investment; plus
(E) to the extent that any Subsidiary that was designated
as an Unrestricted Subsidiary after the date of the Existing Notes
Indenture is redesignated as a Restricted Subsidiary, the lesser of
(1) the amount of the Investment in the Subsidiary treated as a
Restricted Payment at and since the time that the Subsidiary was
designated as an Unrestricted Subsidiary, as determined by the last
paragraph of this covenant, and (2) the fair market value of the
Investment in the Subsidiary as of the date that it is redesignated
as a Restricted Subsidiary.
54
With respect to any payments made pursuant to (a) clauses (i) through
(iv), and (vii) below, so long as no Default has occurred and is continuing or
would be caused thereby, (b) clause (v) below, regardless of whether any Default
or Event of Default has occurred and is continuing or would be caused thereby
and (c) clauses (vi) and (viii) below, so long as no Default or Event of Default
in the payment when due of any principal, Interest, premium or Liquidated
Damages, if any, on the Notes shall have occurred or be continuing or would be
caused thereby, the preceding provisions will not prohibit:
(i) the payment of any dividend within 60 days after the date
of declaration thereof, if at such date of declaration such payment would
have complied with the provisions of this Indenture;
(ii) the redemption, repurchase, retirement, defeasance or
other acquisition of any pari passu or subordinated Indebtedness of the
Partnership or any of its Restricted Subsidiaries that is a Guarantor or
of any Equity Interests of the Partnership in exchange for, or out of the
net cash proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Partnership) of, Equity Interests of the Partnership
(other than Disqualified Stock); provided, however, that the amount of any
such net cash proceeds that are utilized for any such redemption,
repurchase, retirement, defeasance or other acquisition shall be excluded
from clause (iii)(B) of the preceding paragraph;
(iii) the defeasance, redemption, repurchase or other
acquisition of pari passu or subordinated Indebtedness of the Partnership
or any of its Restricted Subsidiaries, as the case may be, that is a
Guarantor with the net cash proceeds from an incurrence of Permitted
Refinancing Indebtedness;
(iv) the payment to the Manager of (a) cost reimbursements in
the amounts permitted by the Technical Services Agreement and the
Management Agreement and (b) management fees in the amounts permitted by
the Management Agreement, subject in the case of clause (b) above to (1)
the terms of the Manager Subordination Agreement and (2) the requirement
that all such payments are made in compliance with Section 4.28 hereof;
(v) the payment to: (a) HCS I or HCS II of any amounts that
they may be required to pay to Paddlewheels pursuant to the Assignment
Agreement; and (b) Paddlewheels of amounts required to be paid to it by
the Partnership pursuant to the terms of the Assignment Agreement and the
Marine Services Agreement;
(vi) any redemption required pursuant to Section 3.08 hereof;
(vii) payments by the Partnership to any of its Affiliates with
respect to reimbursements for costs incurred by such Affiliates in
connection with the provision or procurement of goods or services by such
Affiliates to the Partnership in the ordinary course of business; and
(viii) payments by the Partnership to HWCC-Louisiana, HCS I and
HCS II in amounts equal to the Tax Amount.
55
The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of the Restricted Payment of the assets or
securities proposed to be transferred or issued to or by the Partnership or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any assets or securities that are required to be valued
by this Section 4.07 shall be determined by the Partnership's Board of Directors
whose resolution with respect thereto shall be delivered to the Trustee. The
Partnership's Board of Directors' determination must be based upon an opinion or
appraisal issued by an accounting, appraisal or investment banking firm of
national standing if the fair market value exceeds $5.0 million. Not later than
the date of making any Restricted Payment, the Partnership 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 4.07 were computed, together with a copy of any fairness opinion or
appraisal required by this Indenture.
Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries.
The Partnership shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to: (a) pay dividends or make any other distributions on
its Capital Stock to the Partnership or any of its Restricted Subsidiaries, or
with respect to any other interest or participation in, or measured by, its
profits, or pay any Indebtedness owed to the Partnership or any of its
Restricted Subsidiaries; (b) make loans or advances to the Partnership or any of
its Restricted Subsidiaries; or (c) transfer any of its properties or assets to
the Partnership or any of its Restricted Subsidiaries.
The preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of: (a) the Notes, this Indenture, the
Existing Notes, the Existing Notes Indenture, the Guarantees of the Existing
Notes, any Guarantees of the Notes, the Collateral Documents and the collateral
documents with respect to the Existing Notes; (b) applicable law; (c) customary
non-assignment provisions in leases entered into in the ordinary course of
business and consistent with past practices; (d) Permitted Refinancing
Indebtedness; provided, however, that the restrictions contained in the
agreements governing such Permitted Refinancing Indebtedness are no more
restrictive, taken as a whole, than those contained in the agreements governing
the Indebtedness being refinanced; (e) the acquisition of the Capital Stock of
any Person, or property or assets of any Person by the Partnership or any
Restricted Subsidiary, if the encumbrances or restrictions (i) existed at the
time of the acquisition and were not incurred in contemplation thereof and (ii)
are not applicable to any Person or the property or assets of any Person other
than the Person acquired or the property or assets of the Person acquired; (f)
purchase money obligations or capital lease obligations for FF&E acquired with
FF&E Financing that impose restrictions of the type described in clause (c) of
the first paragraph of this Section 4.08 on the FF&E so acquired; (g) any
agreement for the sale or other disposition of a Restricted Subsidiary that
restricts distributions by that Restricted Subsidiary pending its sale or other
disposition; (h) Liens securing Indebtedness that limit the right of the debtor
to dispose of the assets subject to such Lien; (i) provisions with respect to
the disposition or distribution of assets or property in joint venture
agreements, asset sale agreements, stock sale agreements and other similar
agreements entered into in the ordinary course of business; and (j) restrictions
on cash or other
56
deposits or net worth imposed by customers under contracts entered into in the
ordinary course of business.
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Equity.
The Partnership shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt), and the Partnership shall not issue any Disqualified Stock and shall not
permit any of its Subsidiaries to issue any shares of preferred equity;
provided, however, that, the Issuers may incur Indebtedness (including Acquired
Debt) or issue Disqualified Stock, if the Fixed Charge Coverage Ratio for the
Partnership's most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which such
additional Indebtedness is incurred or such Disqualified Stock is issued would
have been at least 2.0 to 1, determined on a pro forma basis (including a pro
forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred or the preferred equity or Disqualified Stock had
been issued, as the case may be, at the beginning of such four-quarter period.
The first paragraph of this Section 4.09 shall not prohibit the
incurrence of any of the following items of Indebtedness so long as no Default
or Event of Default has occurred and is continuing (collectively, "Permitted
Debt"):
(a) the incurrence by the Partnership and its Restricted Subsidiaries
of (i) Indebtedness represented by the Notes to be issued on the date of this
Indenture and the Exchange Notes to be issued pursuant to the Registration
Rights Agreement and (ii) their respective obligations arising under the
Collateral Documents to the extent such obligations would represent
Indebtedness;
(b) the incurrence by the Partnership or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net
proceeds of which are used to refund, refinance or replace Indebtedness (other
than intercompany Indebtedness) that was permitted by this Indenture to be
incurred under the first paragraph of this Section 4.09 or clauses (a), (b) and
(h) of this paragraph;
(c) the incurrence by the Partnership or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Partnership and
any of its Restricted Subsidiaries as provided in Section 4.22 hereof; provided,
however, that (i) such Indebtedness must be expressly subordinated to the prior
payment in full in cash of all Obligations with respect to the Notes and (ii)
(A) any subsequent issuance or transfer of Equity Interests that results in any
such Indebtedness being held by a Person other than the Partnership or a
Restricted Subsidiary thereof; or (B) any sale or other transfer of any such
Indebtedness to a Person that is not either the Partnership or a Restricted
Subsidiary thereof shall be deemed, in each case, to constitute an incurrence of
such Indebtedness by the Partnership or such Restricted Subsidiary, as the case
may be, that was not permitted by this clause (c);
57
(d) the incurrence by the Partnership or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing
or hedging interest rate risk with respect to any floating rate Indebtedness
that is permitted by the terms of this Indenture to be outstanding;
(e) the Guarantee by the Partnership or any of its Restricted
Subsidiaries of Indebtedness permitted to be incurred by another provision of
this Section 4.09;
(f) the incurrence by the Partnership or any of its Restricted
Subsidiaries of Indebtedness in respect of performance, surety or appeal bonds
in the ordinary course of business;
(g) the accrual of interest, the accretion or amortization of
original issue discount, the payment of interest on any Indebtedness in the form
of additional Indebtedness with the same terms and the payment of dividends on
Disqualified Stock in the form of additional shares of the same class of
Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an
issuance of Disqualified Stock for the purposes of this covenant; provided,
however, in each such case, that the amount thereof is included in Fixed Charges
of the Partnership or the applicable Restricted Subsidiary, as the case may be,
as accrued;
(h) the incurrence by the Partnership of FF&E Financing; provided,
however, that (i) the principal amount of such Indebtedness does not exceed the
cost (including sales and excise taxes, installation and delivery charges and
other direct costs of, and other direct expenses paid or charged in connection
with, such purchase) of the FF&E purchased or leased with the proceeds thereof,
(ii) no Indebtedness incurred under the Notes is utilized for the purchase or
lease of such FF&E and (iii) the aggregate principal amount of such
Indebtedness, including all Permitted Refinancing Indebtedness incurred to
refund, refinance or replace any Indebtedness incurred pursuant to this clause,
does not exceed $6.0 million outstanding at any time;
(i) the Guarantee by the Partnership of Indebtedness incurred by any
minority or woman owned business enterprise that provides goods or services to
the Partnership; provided, however, that (i) such Indebtedness is directly
related to the construction, development or operation of the Shreveport Resort
and (ii) the total amount of Guarantees for which the Partnership has become and
may become obligated pursuant to this clause may not exceed an aggregate of
$200,000;
(j) Indebtedness existing on the date the Notes are issued, including
Indebtedness represented by the Existing Notes; and
(k) the incurrence by any of the Partnership's Unrestricted
Subsidiaries of Non-Recourse Debt; provided, however, that if any such
Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such
event shall be deemed to constitute an incurrence of Indebtedness by the
applicable Restricted Subsidiary that was not permitted by this clause (k);
The Partnership will not incur any Indebtedness (including Permitted
Debt) that is contractually subordinated in right of payment to any other
Indebtedness of the Partnership unless such Indebtedness is also contractually
subordinated in right of payment to the Notes on substantially identical terms;
provided, however, that no Indebtedness of the Partnership shall be
58
deemed to be contractually subordinated in right of payment to any other
Indebtedness of the Partnership solely by virtue of being unsecured.
For purposes of determining compliance with this Section 4.09, in the
event that an item of proposed Indebtedness meets the criteria of more than one
of the categories of Permitted Debt described in clauses (a) through (k) above,
or is entitled to be incurred pursuant to the first paragraph of this Section
4.09, the Partnership will be permitted to classify such item of Indebtedness on
the date of its incurrence in any manner that complies with this Section 4.09.
Section 4.10. Asset Sales.
(a) FF&E Asset Sale. The Partnership shall not, and shall not permit
any of its Restricted Subsidiaries to, consummate an Asset Sale relating to FF&E
Collateral (an "FF&E Asset Sale") unless: (i) the Partnership (or the Restricted
Subsidiary, as the case may be) receives consideration at the time of such FF&E
Asset Sale in an amount at least equal to the fair market value of the FF&E sold
or otherwise disposed of; (ii) such fair market value is determined by the
Partnership's Board of Directors and evidenced by a resolution of such Board of
Directors set forth in an Officers' Certificate delivered to the Trustee; and
(iii) at least 75% of the consideration therefor received by the Partnership or
the Restricted Subsidiary is in the form of cash.
Within 270 days after the receipt of any Net Proceeds from an FF&E
Asset Sale ("FF&E Proceeds"), the Partnership or the Restricted Subsidiary, as
the case may be, may apply such FF&E Proceeds to acquire FF&E that is used or
useful in a line of business permitted under Section 4.14 hereof; provided,
however, that the Partnership or the Restricted Subsidiary, as the case may be,
grants to the Trustee, on behalf of the Holders of the Notes, a first priority
security interest in any such FF&E acquired with the FF&E Proceeds of any such
FF&E Asset Sale on the terms set forth in this Indenture, the FF&E Collateral
Intercreditor Agreement and the Collateral Documents. Pending the final
application of any such FF&E Proceeds, the Partnership or the Restricted
Subsidiary, as the case may be, may invest such FF&E Proceeds in Cash
Equivalents which shall be held in an account in which the Trustee shall have a
first priority perfected security interest for the benefit of the holders of
Notes.
Any FF&E Proceeds from FF&E Asset Sales that are not applied or
invested as provided in the preceding paragraph shall constitute "FF&E Excess
Proceeds." Within ten days following the date that the aggregate amount of FF&E
Excess Proceeds exceeds $5.0 million, the Partnership shall make an offer (an
"FF&E Asset Sale Offer") to all Holders of Notes to purchase the maximum
principal amount of Notes that may be purchased out of the FF&E Excess Proceeds.
The offer price in any FF&E Asset Sale Offer shall be equal to 100% of principal
amount plus accrued and unpaid Interest and Liquidated Damages, if any, to the
date of purchase, and shall be payable in cash. If any FF&E Excess Proceeds
remain after consummation of an FF&E Asset Sale Offer, the Partnership may use
such FF&E Excess Proceeds for any purpose not otherwise prohibited by this
Indenture and the Collateral Documents. If the aggregate principal amount of
Notes tendered pursuant to such FF&E Asset Sale Offer exceeds the amount of FF&E
Excess Proceeds, the Trustee shall select the Notes to be purchased on a pro
rata basis.
59
Upon completion of each FF&E Asset Sale Offer, the amount of FF&E Excess
Proceeds shall be reset at zero.
(b) Pari Passu Asset Sale. The Partnership shall not, and shall not
permit any of its Restricted Subsidiaries to, consummate any other Asset Sale (a
"Pari Passu Asset Sale") unless: (i) the Partnership (or the Restricted
Subsidiary, as the case may be) receives consideration at the time of such Pari
Passu Asset Sale at least equal to the fair market value of the assets or Equity
Interests issued or sold or otherwise disposed of; (ii) such fair market value
is determined by the Partnership's Board of Directors and evidenced by a
resolution of the Board of Directors as set forth in an Officers' Certificate
delivered to the Trustee; and (iii) at least 75% of the consideration therefor
received by the Partnership or such Restricted Subsidiary is in the form of
cash. For purposes of this Section 4.10(b) and not for purposes of the
definition of "Net Proceeds" (except to the extent set forth in such definition
with respect to the conversion of non-cash proceeds to cash), each of the
following shall be deemed to be cash: (x) any liabilities (as shown on the
Partnership's or such Restricted Subsidiary's most recent balance sheet) of the
Partnership or any Restricted Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Notes or any Restricted
Subsidiary's Guarantee) that are assumed by the transferee of any such assets
pursuant to a customary novation agreement that releases the Partnership or such
Restricted Subsidiary from further liability; and (y) any securities, notes or
other obligations received by the Partnership or any such Restricted Subsidiary
from such transferee that are contemporaneously (subject to ordinary settlement
periods) converted by the Partnership or such Restricted Subsidiary into cash
(to the extent of the cash received in that conversion).
Within 270 days after the receipt of any Net Proceeds from a Pari
Passu Asset Sale (the "Pari Passu Proceeds"), the Partnership or the Restricted
Subsidiary, as the case may be, may apply such Pari Passu Proceeds to make a
capital expenditure, improve real property or acquire long-term assets that are
used or useful in a line of business permitted under Section 4.14 of this
Indenture; provided, however, that the Partnership or the Restricted Subsidiary,
as the case may be, grants to the Trustee, on behalf of the Holders of the
Notes, and the Existing Notes Trustee, on behalf of the holders of the Existing
Notes, a first priority security interest, subject to Permitted Liens, in any
such property or assets acquired or constructed with the Pari Passu Proceeds of
any Pari Passu Asset Sale on the terms set forth in this Indenture, the Pari
Passu Collateral Intercreditor Agreement, the Existing Notes Indenture and the
Collateral Documents. Pending the final application of any such Pari Passu
Proceeds, the Partnership or the applicable Restricted Subsidiary, as the case
may be, may invest such Pari Passu Proceeds in Cash Equivalents held in an
account in which the Trustee and the Existing Notes Trustee shall have a first
priority perfected security interest, subject to Permitted Liens, for the
benefit of the Holders of the Notes and the holders of the Existing Notes,
respectively.
Any Pari Passu Proceeds that are not applied or invested as provided
in the preceding paragraph shall constitute "Pari Passu Excess Proceeds." Within
ten days following the date that the aggregate amount of Pari Passu Excess
Proceeds exceeds $5.0 million, the Partnership shall make an offer (a "Pari
Passu Asset Sale Offer") to all Holders of the Notes and all holders of the
Existing Notes to purchase the maximum principal amount of the Notes and the
Existing Notes that may be purchased out of the Pari Passu Excess Proceeds, pro
rata in proportion to the
60
respective principal amounts of the Notes and the Existing Notes. The offer
price in any Pari Passu Asset Sale Offer shall be equal to 100% of principal
amount plus accrued and unpaid Interest and Liquidated Damages, if any, to the
date of purchase, and shall be payable in cash. If any Pari Passu Excess
Proceeds remain after consummation of a Pari Passu Asset Sale Offer, the
Partnership may use such Pari Passu Excess Proceeds for any purpose not
otherwise prohibited by this Indenture and the Collateral Documents. If the
aggregate principal amount of Notes and Existing Notes tendered pursuant to such
Pari Passu Asset Sale Offer exceeds the amount of Pari Passu Excess Proceeds,
the Trustee and the Existing Notes Trustee shall select the Notes and the
Existing Notes to be purchased on a pro rata basis based on the principal amount
of the Notes and the Existing Notes tendered and shall select the Notes and the
Existing Notes to be purchased in the manner described under Section 3.02 of
this Indenture. Upon completion of each Pari Passu Asset Sale Offer, the amount
of Pari Passu Excess Proceeds shall be reset at zero.
Section 4.11. Events of Loss.
(a) FF&E Event of Loss. Within 360 days after any Event of Loss with
respect to any FF&E Collateral with a fair market value (or replacement cost, if
greater) in excess of $1.0 million (an "FF&E Event of Loss") the Partnership or
its affected Restricted Subsidiary, as the case may be, shall apply the Net Loss
Proceeds from such FF&E Event of Loss ("FF&E Loss Proceeds") to the rebuilding,
repair, replacement or construction of FF&E, with no concurrent obligation to
make any purchase of any Notes; provided, however, that the Partnership or the
Restricted Subsidiary, as the case may be, delivers to the Trustee an Officers'
Certificate certifying that the Partnership or the Restricted Subsidiary, as the
case may be, has available from FF&E Loss Proceeds or other sources sufficient
funds to repair or rebuild such damaged or lost FF&E or replace such damaged or
lost FF&E with suitable substitute FF&E.
Any FF&E Loss Proceeds that are not reinvested or not permitted to
be reinvested as provided in the immediately preceding paragraph of this Section
4.11(a) shall be deemed "Excess FF&E Loss Proceeds." Within ten days following
the date that the aggregate amount of Excess FF&E Loss Proceeds exceeds $5.0
million, the Partnership shall make an offer (an "FF&E Event of Loss Offer") to
all Holders of the Notes to purchase the maximum principal amount of Notes that
may be purchased out of the Excess FF&E Loss Proceeds. The offer price in any
FF&E Event of Loss Offer shall be equal to 100% of principal amount plus accrued
and unpaid Interest and Liquidated Damages, if any, to the date of purchase, and
shall be payable in cash. If any Excess FF&E Loss Proceeds remain after
consummation of an FF&E Event of Loss Offer, the Partnership or the Restricted
Subsidiary, as the case may be, may use such Excess FF&E Loss Proceeds for any
purpose not otherwise prohibited by this Indenture and the Collateral Documents.
If the aggregate principal amount of Notes tendered pursuant to an FF&E Event of
Loss Offer exceeds the amount of Excess FF&E Loss Proceeds, the Trustee shall
select the Notes to be purchased on a pro rata basis based on the principal
amount of Notes tendered. Upon completion of any such FF&E Event of Loss Offer,
the amount of Excess FF&E Loss Proceeds shall be reset at zero.
Pending their final application, all FF&E Loss Proceeds shall be
invested in Cash Equivalents held in an account in which the Trustee has a first
priority perfected security interest for the benefit of the Holders of the
Notes. These pledged funds and securities shall be released
61
to the Partnership or the Restricted Subsidiary, as the case may be, to pay for
or reimburse for the actual cost of a permitted use of FF&E Loss Proceeds as
provided above, or the FF&E Event of Loss Offer, pursuant to the terms of the
Collateral Documents. The Partnership or the Restricted Subsidiary, as the case
may be, shall grant to the Trustee, on behalf of the Holders of Notes, a first
priority security interest, subject to Permitted Liens, in any FF&E rebuilt,
repaired, replaced or constructed with such FF&E Loss Proceeds on the terms set
forth in this Section 4.11(a), the FF&E Collateral Intercreditor Agreement and
the Collateral Documents.
(b) Pari Passu Event of Loss. Within 360 days after any Event of
Loss with respect to any Pari Passu Collateral with a fair market value (or
replacement cost, if greater) in excess of $1.0 million, (a "Pari Passu Event of
Loss") the Partnership or the affected Restricted Subsidiary of the Partnership,
as the case may be, may apply the Net Loss Proceeds from such Pari Passu Event
of Loss ("Pari Passu Loss Proceeds") to the rebuilding, repair, replacement or
construction of improvements to the Shreveport Resort, with no concurrent
obligation to make any purchase of any Notes; provided, however, that:
(i) the Partnership delivers to the Trustee within 60 days of
such Pari Passu Event of Loss a written opinion from a reputable
contractor that the Shreveport Resort with at least the Minimum
Facilities can be rebuilt, repaired, replaced or constructed and
operating within 360 days of the Pari Passu Event of Loss;
(ii) an Officers' Certificate certifying that the Partnership
has available from Pari Passu Loss Proceeds or other sources sufficient
funds to complete the rebuilding, repair, replacement or construction
described in clause (i) above; and
(iii) the Pari Passu Loss Proceeds are less than $75.0 million.
Any Pari Passu Loss Proceeds that are not reinvested or not permitted
to be reinvested as provided in the immediately preceding paragraph of this
Section 4.11(b) shall be deemed "Excess Pari Passu Loss Proceeds." Within ten
days following the date that the aggregate amount of Excess Pari Passu Loss
Proceeds exceeds $5.0 million, the Partnership shall make an offer (a "Pari
Passu Event of Loss Offer") to all Holders of the Notes and all holders of the
Existing Notes to purchase the maximum principal amount of the Notes and the
Existing Notes that may be purchased out of the Excess Pari Passu Loss Proceeds,
pro rata in proportion to the respective principal amounts of the Notes and the
Existing Notes. The offer price in any Pari Passu Event of Loss Offer will be
equal to 100% of principal amount plus accrued and unpaid Interest and
Liquidated Damages, if any, to the date of purchase, and shall be payable in
cash. If any Excess Pari Passu Loss Proceeds remain after consummation of a Pari
Passu Event of Loss Offer, the Partnership or the Restricted Subsidiary, as the
case may be, may use such Excess Pari Passu Loss Proceeds for any purpose not
otherwise prohibited by this Indenture and the Collateral Documents. If the
aggregate principal amount of the Notes and the Existing Notes tendered pursuant
to a Pari Passu Event of Loss Offer exceeds the amount of Excess Pari Passu Loss
Proceeds, the Trustee and the Existing Notes Trustee shall select the Notes and
the Existing Notes to be purchased on a pro rata basis based on the principal
amount of the Notes and the Existing Notes tendered and shall select the Notes
and the Existing Notes to be purchased in the
62
manner described under Section 3.02 hereof. Upon completion of each such Pari
Passu Event of Loss Offer, the amount of Excess Pari Passu Loss Proceeds shall
be reset at zero.
Pending their final application, all Pari Passu Loss Proceeds shall
be invested in Cash Equivalents held in an account in which each of the Trustee
and the Existing Notes Trustee has a first priority perfected security interest,
subject to Permitted Liens, for the benefit of the Holders of the Notes and the
holders of the Existing Notes, respectively, on a pari passu basis. These
pledged funds and securities shall be released to the Partnership to pay for or
reimburse the Partnership for the actual cost of a permitted use of Pari Passu
Loss Proceeds as provided above, or the Pari Passu Event of Loss Offer, pursuant
to the terms of the Collateral Documents. The Partnership or the Restricted
Subsidiary, as the case may be, shall grant to each of the Trustee and the
Existing Notes Trustee, on behalf of the Holders of the Notes and the holders of
the Existing Notes, respectively, a first priority security interest, subject to
Permitted Liens, on any property or asset rebuilt, repaired, replaced or
constructed with such Pari Passu Net Loss Proceeds pursuant to the terms set
forth in this Section 4.11(b), the Pari Passu Collateral Intercreditor Agreement
and the Collateral Documents.
In the event of an Event of Loss pursuant to clause (3) of the
definition of "Event of Loss" with respect to any property or assets that have a
fair market value (or replacement cost, if greater) in excess of $5.0 million,
the Partnership or the affected Restricted Subsidiary, as the case may be, shall
be required to receive consideration (a) at least equal to the fair market value
(evidenced by a resolution of the Partnership's Board of Directors set forth in
an Officers' Certificate delivered to the Trustee) of the property or assets
subject to the Event of Loss and (b) with respect to any "Event of Loss" of any
portion of the hotel, riverboat casino or parking structure and restaurant and
entertainment promenade that are a part of the Shreveport Resort, at least 90%
of which is in the form of Cash Equivalents.
Section 4.12. Transactions with Affiliates.
The Partnership shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each, an "Affiliate Transaction"), unless: (a) such Affiliate
Transaction is on terms that are no less favorable to the Partnership or the
relevant Restricted Subsidiary than those that would have been obtained in a
comparable transaction by the Partnership or such Restricted Subsidiary with an
unrelated Person; and (b) the Partnership delivers to the Trustee:
(i) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $1.0 million, a resolution of the Board of Directors set
forth in an Officers' Certificate certifying that such Affiliate
Transaction complies with this Section 4.12 and that such Affiliate
Transaction has been approved unanimously by the Board of Directors;
and
(ii) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $5.0 million, other than in
63
connection with the Software Agreement, an opinion as to the fairness
to the Holders of the Notes of such Affiliate Transaction from a
financial point of view issued by an accounting, appraisal or
investment banking firm of national standing.
The foregoing paragraph shall not apply to the following: (a) payments
made pursuant to the Management Agreement, License Agreement, Tax Sharing
Agreement, Technical Services Agreement, Assignment Agreement and Marine
Services Agreement; (b) purchases of goods and services in the ordinary course
of business; (c) transactions between or among the Partnership and/or its
Restricted Subsidiaries; (d) Restricted Payments that are permitted by Section
4.07 hereof; (e) reasonable fees and compensation (including, without
limitation, bonuses, retirement plans and securities, stock options and stock
ownership plans) paid or issued to and indemnities provided on behalf of,
officers, directors, employees or consultants of the Partnership or any
Restricted Subsidiary in the ordinary course of business; and (f) any other
transactions that do not involve, in the aggregate for all such transactions,
the payment of more than $250,000 in consideration in any one calendar year.
SECTION 4.13. LIENS.
The Partnership shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create, incur, assume or suffer to exist any Lien of
any kind on any asset now owned or hereafter acquired, or any proceeds, income
or profits therefrom or assign or convey any right to receive income therefrom,
except Permitted Liens.
SECTION 4.14. LINE OF BUSINESS.
The Partnership shall not, and shall not permit any Subsidiary to,
engage in any business or investment activities other than a Permitted Business.
Neither the Partnership nor any of its Subsidiaries may conduct a Permitted
Business in any gaming jurisdiction in which the Partnership or such Subsidiary
is not licensed as of the date of this Indenture if the Holders of the Notes
shall be required to be licensed as a result thereof; provided, however, that
the provisions described in this sentence shall not prohibit the Partnership or
any of its Subsidiaries from conducting a Permitted Business in any jurisdiction
that does not require the licensing or qualification of all the Holders, but
reserves the discretionary right to require the licensing or qualification of
any Holders.
SECTION 4.15. CORPORATE EXISTENCE.
Subject to Article 5 and Section 11.04 hereof, each of the Issuers and
any Guarantors shall do or cause to be done all things necessary to preserve and
keep in full force and effect (a) its corporate or organizational existence, as
the case may be, and the corporate, partnership or other existence of each of
its Subsidiaries, in accordance with the respective organizational documents (as
the same may be amended from time to time) of each of the Issuers or any such
Subsidiary and (b) the rights (charter and statutory), licenses and franchises
of each of the Issuers and their Subsidiaries; provided, however, that the
Issuers shall not be required to preserve any such right, license or franchise,
or the corporate, partnership or other existence of any of its Subsidiaries, if
the Partnership's Board of Directors shall determine that the preservation
thereof
64
is no longer desirable in the conduct of the business of the Issuers and their
Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any
material respect to the Holders of the Notes.
SECTION 4.16. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
If a Change of Control occurs, each Holder of the Notes shall have the
right to require the Issuers to repurchase all or any part (equal to $1,000 or
an integral multiple thereof) of that Holder's Notes pursuant to an offer
described below (a "Change of Control Offer"). In the Change of Control Offer,
the Issuers shall offer a payment (the "Change of Control Payment") in cash
equal to 101% of the aggregate principal amount of Notes repurchased plus
accrued and unpaid Interest and Liquidated Damages, if any, thereon, to the date
of purchase. Within ten days following any Change of Control, the Issuers shall
mail a notice to each Holder describing the transaction or transactions that
constitute the Change of Control and offering to repurchase Notes on the date
(the "Change of Control Payment Date") specified in such notice, which date
shall be no earlier than 30 days and no later than 60 days from the date such
notice is mailed, pursuant to the procedures set forth in Section 3.09 hereof,
and described in such notice.
The Issuers will 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 Indenture applicable to a Change of Control Offer made by the Issuers
and purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.
On the Change of Control Payment Date, the Issuers will, to the extent
lawful: (a) accept for payment all Notes or portions thereof properly tendered
pursuant to the Change of Control Offer; (b) 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 (c) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof being purchased by the
Issuers. The Paying Agent shall promptly mail to each Holder of the Notes so
tendered the Change of Control Payment for such Notes, and the Trustee shall
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided, however, that each such new Note shall
be in a principal amount of $1,000 or an integral multiple thereof.
SECTION 4.17. LIMITATION ON STATUS AS INVESTMENT COMPANY.
The Issuers and the Partnership's Subsidiaries are prohibited from
being required to register as an "investment company" (as that term is defined
in the Investment Company Act of 1940, as amended), or from otherwise becoming
subject to regulation under the Investment Company Act of 1940.
65
SECTION 4.18. SALE AND LEASEBACK TRANSACTIONS.
The Partnership will not, and will not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction; provided,
however, that the Partnership may enter into a sale and leaseback transaction
if:
(a) the Partnership could have (i) incurred Indebtedness in an amount
equal to the Attributable Debt relating to such sale and leaseback transaction
under the first paragraph of Section 4.09 hereof and (ii) incurred a Lien to
secure such Indebtedness pursuant to Section 4.13 hereof;
(b) the gross cash proceeds of the sale and leaseback transaction are
at least equal to the fair market value, as determined in good faith by the
Board of Directors of the Partnership and set forth in an Officers' Certificate
delivered to the Trustee, of the property that is the subject of such sale and
leaseback transaction; and
(c) the transfer of assets in such sale and leaseback transaction is
permitted by, and the Partnership applies the proceeds of such transaction in
compliance with, Section 4.10 hereof.
SECTION 4.19. ADDITIONAL SUBSIDIARY GUARANTEES.
The Issuers shall, and shall cause each of their Restricted
Subsidiaries to, comply with Section 11.02 hereof.
SECTION 4.20. DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES.
The Board of Directors of the Partnership may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if that designation would not cause
a Default. If a Restricted Subsidiary is designated as an Unrestricted
Subsidiary, the aggregate fair market value of all outstanding Investments owned
by the Partnership and its Restricted Subsidiaries in the Restricted Subsidiary
so designated will be deemed to be an Investment made as of the time of such
designation and will reduce the amount available for Restricted Payments under
clause (c) of the first paragraph of Section 4.07 hereof or reduce the amount
available for future Investments under one or more clauses of the definition of
"Permitted Investments," as the Partnership shall determine. The designation of
any such Restricted Subsidiary as an Unrestricted Subsidiary shall only be
permitted if such Restricted Payment would be permitted at that time and if such
Restricted Subsidiary otherwise meets the definition of an "Unrestricted
Subsidiary" set forth in Section 1.01 hereof. The Board of Directors may
redesignate any Unrestricted Subsidiary to be a Restricted Subsidiary if the
redesignation would not cause a Default.
SECTION 4.21. LIMITATION ON ISSUANCES AND SALES OF EQUITY INTERESTS IN
SUBSIDIARIES.
All of the Partnership's Restricted Subsidiaries, other than Shreveport
Capital, shall be wholly owned by the Partnership, by one or more of its
Restricted Subsidiaries or by the Partnership and one or more of its Restricted
Subsidiaries. The Partnership will not, and will not permit any of its
Restricted Subsidiaries to, transfer, convey, sell, lease or otherwise dispose
of
66
any Equity Interests in any Restricted Subsidiary of the Partnership to any
Person (other than the Partnership or a Restricted Subsidiary of the
Partnership), unless (a) such transfer, conveyance, sale, lease or other
disposition is of all the Equity Interests in such Restricted Subsidiary and (b)
the cash Net Proceeds from such transfer, conveyance, sale, lease or other
disposition are applied in accordance with Section 4.10 hereof. In addition, the
Partnership shall not permit any of its Restricted Subsidiaries to issue any of
its Equity Interests to any Person other than to the Partnership or one or more
of its Restricted Subsidiaries.
SECTION 4.22. ADVANCES TO RESTRICTED SUBSIDIARIES.
All advances, other than equity contributions, to Restricted
Subsidiaries made by the Partnership after the date of this Indenture shall be
evidenced by an Intercompany Note in favor of the Partnership. Any such
Intercompany Notes shall be pledged pursuant to the Collateral Documents to the
Trustee as Collateral to secure up to $10.0 million of the Partnership's
principal obligations under the Notes on a pari passu basis with the Existing
Notes. Each Intercompany Note shall be payable upon demand and shall bear
interest at a rate equal to the then current fair market interest rate.
SECTION 4.23. COMPLIANCE WITH SECURITIES LAWS.
The Issuers shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with each
repurchase of Notes pursuant to Sections 4.10, 4.11, 4.16 or 4.30 hereof. To the
extent that the provisions of any securities laws or regulations conflict with
Sections 3.09, 4.10, 4.11, 4.16 or 4.30 hereof, the Issuers will comply with the
applicable securities laws and regulations and will not be deemed to have
breached their obligations under this Indenture by virtue of such conflict.
SECTION 4.24. PAYMENTS FOR CONSENT.
The Issuers shall not, and shall not permit any of the Partnership's
Restricted Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder of the Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Notes unless such consideration is offered to be paid
and is paid to all Holders of the Notes that consent, waive or agree to amend in
the time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
SECTION 4.25. FURTHER ASSURANCES.
The Issuers shall, and shall cause each of their Restricted
Subsidiaries to do, execute, acknowledge, deliver, record, re-record, file, re-
file, register and re-register, as applicable, any and all such further acts,
deeds, conveyances, security agreements, mortgages, assignments, estoppel
certificates, financing statements and continuations thereof, termination
statements, notices of assignment, transfers, certificates assurances and other
instruments as may be required from time to time in order to (a) carry out more
effectively the purposes of the Collateral Documents, (b) subject to the Liens
created by any of the Collateral
67
Documents any of the properties, rights or interests required to be encumbered
thereby, (c) perfect and maintain the validity, effectiveness and priority of
any of the Collateral Documents and the Liens intended to be created thereby and
(d) better assure, convey, grant, assign, transfer, preserve, protect and
confirm to the Trustee any of the rights granted now or hereafter intended by
the parties thereto to be granted to the Trustee under any other instrument
executed in connection therewith or granted to the Partnership under the
Collateral Documents or under any other instrument executed in connection
therewith.
SECTION 4.26. INSURANCE
Until the Notes have been paid in full, the Partnership shall, and
shall cause its Restricted Subsidiaries to, maintain insurance with carriers
against such risks and in such amounts as is customarily carried by similar
businesses with such deductibles, retentions, self insured amounts and
coinsurance provisions as are customarily carried by similar businesses of
similar size, including, without limitation, property and casualty. Customary
insurance coverage shall be deemed to include, without limitation, the
following: (a) workers' compensation insurance to the extent required to comply
with all applicable state, territorial or United States laws and regulations, or
the laws and regulations of any other applicable jurisdiction; (b) comprehensive
general liability insurance with minimum limits of $1.0 million; (c) umbrella or
excess liability insurance providing excess liability coverages over and above
the foregoing underlying insurance policies up to a minimum limit of $25.0
million; (d) business interruption insurance; and (e) property insurance
protecting the property against losses or damages as is customarily covered by
an "all-risk" policy or a property policy covering "special" causes of loss for
a business of similar type and size; provided, however, that such insurance
shall provide coverage of not less than the lesser of (i) 120% of the
outstanding principal amount of the Notes and the Existing Notes plus accrued
and unpaid Fixed Interest and (ii) 100% of actual replacement value (as
determined at each policy renewal based on the ▇.▇. ▇▇▇▇▇ Building Index or some
other recognized means) of any improvements customarily insured consistent with
industry standards and, in each case, with a deductible no greater than 2% of
the insured value of the Shreveport Resort or such greater amount as is
available on commercially reasonable terms (other than earthquake or flood
insurance, for which the deductible may be up to 10% of such replacement value).
All insurance required by this Section 4.26 (except worker's
compensation) shall name the Partnership and the Trustee as additional insureds
or loss payees, as the case may be, with losses in excess of $1.0 million
payable jointly to the Partnership and the Trustee (unless a Default or Event of
Default has occurred and is then continuing, in which case all losses are
payable solely to the Trustee), with no recourse against the Trustee for the
payment of premiums, deductibles, commissions or club calls, and for at least 30
days notice of cancellation. All such insurance policies will be issued by
carriers having an A.M. Best & Company, Inc. rating of A or higher and a
financial size category of not less than X, or if such carrier is not rated by
A.M. Best & Company, Inc., having the financial stability and size deemed
appropriate by an opinion from a reputable insurance broker. The Partnership
will deliver to the Trustee on the date of this Indenture and each anniversary
thereafter a certificate of an insurance agent describing the insurance policies
obtained by the Partnership and its Restricted Subsidiaries, together with an
68
Officer's Certificate stating that such policies comply with this Section 4.26
and the related applicable provisions of the Collateral Documents.
SECTION 4.27. AMENDMENTS TO CERTAIN AGREEMENTS
Neither of the Issuers nor any of the Partnership's Restricted
Subsidiaries will amend, waive or modify, or take or refrain from taking any
action that has the effect of amending, waiving or modifying any provision of
any of the Collateral Documents, Management Agreement, License Agreement, Tax
Sharing Agreement, Technical Services Agreement, Assignment Agreement, Marine
Services Agreement, Side Agreement and Contribution and Assumption Agreement;
provided, however, that (a) any such agreement may be amended or modified so
long as the terms of such agreement as so amended or modified are no less
favorable to the Holders of the Notes than the terms of such agreement as of the
date of the Existing Notes Indenture and (b) any of the Collateral Documents may
be amended, waived or modified as set forth in Article 9 hereof.
SECTION 4.28. RESTRICTION ON PAYMENT OF MANAGEMENT FEES
The Partnership shall not, directly or indirectly, pay to the Manager
or any of its Affiliates any Management Fees, except pursuant to the Management
Agreement in accordance with this Indenture. Amounts payable pursuant to the
Management Agreement may not be prepaid, and no payment of Management Fees,
either current or accrued, will be made:
(a) if at the time of payment of such Management Fee, a Default or an
Event of Default shall have occurred and be continuing or shall occur as a
result thereof; or
(b) to the extent such payment would cause the Partnership's Fixed
Charge Coverage Ratio for its most recently ended four full fiscal quarters for
which internal financial statements are available immediately preceding the date
on which such Management Fee is proposed to be paid to be less than 1.5 to 1
(calculated on a pro forma basis after adding back Management Fees that were
deducted in connection with the calculation of Consolidated Cash Flow during
that period and deducting from Consolidated Cash Flow Management Fees to be paid
pursuant to this provision); provided, however, that, with respect to periods
prior to the time when internal financial statements are available for four full
fiscal quarters of 2001, such Fixed Charge Coverage Ratio will be calculated
with respect to the number of full fiscal quarters (but in no event less than
one full fiscal quarter) for which internal financial statements are available
for 2001.
Any Management Fees not permitted to be paid pursuant to this Section
4.28 will be deferred and will accrue and may be paid only at such time that
they would otherwise be permitted to be paid hereunder.
SECTION 4.29. RESTRICTIONS ON ACTIVITIES OF HWCC-LOUISIANA, HCS I, HCS II AND
SHREVEPORT CAPITAL
None of HWCC-Louisiana, HCS I, HCS II or Shreveport Capital may:
69
(a) hold any material assets; provided, however, that (i) HWCC-
Louisiana may hold shares of HCS I and HCS II, the $2.5 million in cash that it
will use to fund its obligations under the Membership Interest Purchase
Agreement until such obligations are paid pursuant to the Membership Interest
Purchase Agreement and a promissory note from Paddlewheels in the aggregate
amount of $1.0 million and (ii) HCS I and HCS II may each hold interests in the
Partnership;
(b) consolidate or merge with or into any other Person, other than as
permitted under Section 5.01 hereof;
(c) become liable or pay for any obligations; provided, however, that
each of them may become liable for or pay for (i) (A) its obligations under the
Existing Notes Indenture, the Existing Notes, the Guarantees of the Existing
Notes, the Registration Rights Agreement with respect to the Existing Notes, the
collateral documents with respect to the Existing Notes and any performance,
surety or appeal bonds incurred in the ordinary course of business, (B) any
judgments and (C) its obligations under agreements in existence on the date the
Existing Notes were issued and (ii) Shreveport Capital may be a co-obligor with
respect to Indebtedness if the Partnership is also an obligor of such
Indebtedness and the net proceeds thereof are received by the Partnership or one
or more of its Restricted Subsidiaries other than Shreveport Capital; or
(d) engage in any significant business activities, other than those
that are reasonably necessary for HCS I to take in its capacity as the managing
general partner of the Partnership.
SECTION 4.30. MANDATORY REDEMPTION AND OFFERS TO PURCHASE.
If the Issuers elect to either redeem the Existing Notes, in whole or
in part, or make an offer to purchase (other than pursuant to a concurrent Pari
Passu Asset Sale Offer, Pari Passu Event of Loss Offer or Change of Control
Offer) the Existing Notes, in whole or in part, the Issuers shall make a like
redemption or offer to purchase with respect to the Notes on a pro rata basis in
proportion to the respective principal amounts of the Notes and the Existing
Notes on the same terms and at the same price as offered with respect to the
Existing Notes. Any redemptions made pursuant to this Section 4.30 shall be
conducted in accordance with the provisions of Article 3 hereof.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
Neither the Partnership nor any Guarantor may, directly or indirectly
(a) consolidate or merge with or into another Person (whether or not the
Partnership or the Guarantor is the surviving entity) or (b) sell, assign,
transfer, convey or otherwise dispose of all or substantially all of its and its
Restricted Subsidiaries', properties or assets, taken as a whole, in one or more
related transactions, to another Person; unless:
70
(i) either (A) the Partnership or the Guarantor, as applicable, is
the surviving entity or (B) the Person formed by or surviving any such
consolidation or merger (if other than the Partnership or the
Guarantor) or to which such sale, assignment, transfer, conveyance or
other disposition shall have been made is a corporation organized or
existing under the laws of the United States, any state thereof or the
District of Columbia;
(ii) the Person formed by or surviving any such consolidation or merger
(if other than the Partnership or the Guarantor) or the Person to which
such sale, assignment, transfer, conveyance or other disposition shall
have been made assumes all the obligations of the Partnership or the
Guarantor, as applicable, under the Notes, this Indenture, the
Registration Rights Agreement, any Guarantee of the Notes and the
Collateral Documents pursuant to agreements reasonably satisfactory to
the Trustee;
(iii) immediately after such transaction no Default or Event of
Default exists;
(iv) such transaction would not result in the loss or suspension or
material impairment of any of the Partnership's or any of its
Restricted Subsidiaries' Gaming Licenses unless a comparable
replacement Gaming License is effective prior to or simultaneously with
such loss, suspension or material impairment;
(v) in the case of a consolidation or merger of the Partnership, the
Partnership or the Person formed by or surviving any such consolidation
or merger (if other than the Partnership) or to which such sale,
assignment, transfer, conveyance or other disposition shall have been
made will, or, in the case of a consolidation or merger of a Guarantor
or the sale, assignment, transfer, conveyance or other disposition of
the property or assets of the Guarantor, the Partnership shall, on the
date of such transaction after giving pro forma effect thereto and any
related financing transactions as if the same had occurred at the
beginning of the applicable four-quarter period, be permitted to incur
at least $1.00 of additional Indebtedness pursuant to the first
paragraph of Section 4.09 hereof; and
(vi) such transaction would not require any Holder or Beneficial
Owner of the Notes to obtain a Gaming License or be qualified or
found suitable under the law of any applicable gaming jurisdiction;
provided, however, that such Holder or Beneficial Owner would not
have been required to obtain a Gaming License or be qualified or
found suitable under the laws of any applicable gaming jurisdiction
in the absence of such transaction.
In addition, neither the Partnership nor any Guarantor may, directly or
indirectly, lease all or substantially all of its properties or assets, in one
or more related transactions, to any other Person. The restrictions of this
Section 5.01 shall not apply to a sale, assignment, transfer, conveyance or
other disposition of assets between or among the Partnership and any of its
Restricted Subsidiaries.
71
Notwithstanding the foregoing, the Partnership may reorganize as a
corporation or other business entity in accordance with the procedures
established in this Indenture, provided that the Partnership has delivered to
the Trustee an opinion of counsel in the United States reasonably acceptable to
the Trustee confirming that the reorganization is not adverse to the Holders of
the Notes (it being recognized that the reorganization will not be deemed
adverse to the Holders of the Notes solely because (a) of the accrual of
deferred tax liabilities resulting from the reorganization or (b) the successor
or surviving corporation (i) is subject to income tax as a corporate entity or
(ii) is considered to be an "includible corporation" of an affiliated group of
corporations within the meaning of the Internal Revenue Code of 1986, as
amended, or any similar state or local law).
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Partnership or any Guarantor in accordance with Section 5.01 hereof, the
successor corporation formed by such consolidation or into or with which the
Partnership or Guarantor is merged or to which such sale, assignment, transfer,
lease, conveyance or other disposition is made shall succeed to, and be
substituted for (so that from and after the date of such consolidation, merger,
sale, lease, conveyance or other disposition, the provisions of this Indenture
referring to the "Partnership" or the "Guarantor," as applicable, shall refer
instead to the successor corporation and not to the Partnership or the
Guarantor, as applicable, and may exercise every right and power of the
Partnership or the Guarantor, as applicable, under this Indenture with the same
effect as if such successor Person had been named as the Partnership or the
Guarantor, as applicable, herein; provided, however, that (a) the surviving
entity or acquiring corporation shall (i) assume all of the Obligations of the
acquired Person incurred under this Indenture, the Notes, the Note Guarantees
and the Collateral Documents, as applicable, (ii) acquire and own and operate,
directly or through Subsidiaries, all or substantially all of the properties and
assets then constituting the assets of the Partnership, the applicable Guarantor
or any of their Restricted Subsidiaries, as the case may be, (iii) have been
issued, or have a consolidated Subsidiary which has been issued, Gaming Licenses
to operate the acquired casino operations and entities substantially in the
manner and scope operated prior to such transaction, which Gaming Licenses are
in full force and effect and (iv) be in compliance fully with Section 5.01
hereof and (b) the Partnership or the applicable Guarantor shall deliver to the
Trustee an Officers' Certificate and Opinion of Counsel, subject to customary
assumptions and exclusions, stating that the proposed transaction complies with
this Article 5; provided, further, however, that the predecessor Person shall
not be relieved from the obligation to pay the principal of, premium and
Liquidated Damages, if any, and Interest on, the Notes except in the case of a
sale of all of one or the Partnership's assets that meets the requirements of
Section 5.01 hereof.
72
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
Each of the following is an Event of Default:
(a) default for 30 days in the payment when due of Interest on, or
Liquidated Damages, if any, with respect to, the Notes; provided that payments
of Contingent Interest that are permitted to be deferred as provided in this
Indenture will not become due for this purpose until such payment is required to
be made pursuant to the terms of this Indenture;
(b) default in payment when due of the principal of, or premium, if
any, on the Notes;
(c) (i) default in the payment of principal of, premium, if any,
Interest and Liquidated Damages, if any, on Notes required to be purchased
pursuant to Sections 4.10, 4.11, 4.16 or 4.30 hereof, when due and payable; and
(ii) failure to perform or comply with the provisions described under (A)
Section 5.01, or (B) Section 4.07 but only if the failure under this clause (B)
is caused by a Restricted Payment described in the first set of clauses (a)
through (c) of the first paragraph of Section 4.07 hereof;
(d) failure by either of the Issuers or any of the Partnership's
Restricted Subsidiaries for 60 days after notice thereof to comply with any of
the other agreements in this Indenture not set forth in clause (c) above;
(e) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Partnership or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Partnership or any of
its Restricted Subsidiaries) whether such Indebtedness or guarantee now exists,
or is created after the date of this Indenture, if that default:
(i) is caused by a failure to pay principal of, or Interest or
premium, if any, on such Indebtedness prior to the expiration of the grace
period provided in such Indebtedness on the date of such default (a
"Payment Default"); or
(ii) results in the acceleration of such Indebtedness prior to its
express maturity, and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the maturity
of which has been so accelerated, aggregates $5.0 million or more;
(f) failure by either of the Issuers or any of the Partnership's
Restricted Subsidiaries to pay final judgments aggregating in excess of $5.0
million, which judgments are not paid, discharged or stayed for a period of 60
days;
(g) (i) breach by either of the Issuers or any Guarantor in any
material respect of any representation or warranty or agreement in any of the
Collateral Documents or in any certificates delivered in connection therewith,
(ii) the repudiation by any of them of any of its obligations
73
under any of the Collateral Documents, (iii) the unenforceability of the
Collateral Documents against any of them for any reason which continues for 30
days after written notice from the Trustee or Holders of at least 25% in
outstanding principal amount of Notes or (iv) the loss of the perfection or
priority of the Liens granted by any of them pursuant to the Collateral
Documents for any reason;
(h) except as permitted by this Indenture, any Note Guarantee by a
Guarantor with Total Assets of $5.0 million or more shall be held in any
judicial proceeding to be unenforceable or invalid or shall cease for any reason
to be in full force and effect or any Guarantor with Total Assets of $5.0
million or more, or any Person acting on behalf of any such Guarantor, shall
deny or disaffirm its obligations under its Note Guarantee;
(i) the Partnership or any of the Partnership's Restricted
Subsidiaries: (i) commences a voluntary case; (ii) consents to the entry of an
order for relief against it in an involuntary case; (iii) consents to the
appointment of a custodian of it or for all or substantially all of its
property; (iv) makes a general assignment for the benefit of its creditors; or
(v) generally is not paying its debts as they become due; or
(j) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that: (i) is for relief against the Partnership or any of the
Partnership's Restricted Subsidiaries in an involuntary case; (ii) appoints a
custodian of the Partnership or any of the Partnership's Restricted Subsidiaries
for all or substantially all of the property of the Partnership or any of the
Partnership's Restricted Subsidiaries; or (iii) orders the liquidation of the
Partnership or any of the Partnership's Restricted Subsidiaries; and the order
or decree remains unstayed and in effect for 60 consecutive days;
(k) if HWCC-Louisiana, HCS I, HCS II and the Partnership ever fail to
own collectively 100% of the issued and outstanding Equity Interests of
Shreveport Capital;
(l) any revocation, suspension or loss of any Gaming License which
results in the cessation or suspension of business at the Shreveport Resort for
a period of more than 90 consecutive days; provided, however, that, in any
event, there shall not be an Event of Default under this clause if the
suspension of business results from a Pari Passu Event of Loss or an FF&E Event
of Loss and the Partnership is complying with Section 4.11 hereof; or
(m) if at any time the Existing Notes Trustee or the Holders of the
Existing Notes take any action to enforce their rights under or to realize upon
the Guarantees of the Existing Notes from HWCC-Louisiana, HCS I or HCS II or
there occurs a sale, conveyance or other disposition of any Capital Stock
pledged to secure the Guarantees of the Existing Notes in connection with the
exercise of any right or remedies under those Guarantees by the Existing Notes
Trustee or the Holders of the Existing Notes.
SECTION 6.02. ACCELERATION.
If any Event of Default (other than an Event of Default specified in
clause (i) or (j) of Section 6.01 hereof with respect to the Issuers, any
Restricted Subsidiary that is a Significant
74
Subsidiary or any group of Restricted Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary) occurs and is continuing, the Trustee or
the Holders of at least 25% in principal amount of the then outstanding Notes
may declare all the Notes to be due and payable immediately. Upon any such
declaration, the Notes shall become due and payable immediately. Notwithstanding
the foregoing, if an Event of Default specified in clause (i) or (j) of Section
6.01 hereof occurs with respect to either of the Issuers, any Restricted
Subsidiary that is a Significant Subsidiary or any group of Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary, all outstanding
Notes shall be due and payable immediately without further action or notice. The
Holders of a majority in aggregate principal amount of the Notes then
outstanding by written notice to the Trustee may on behalf of all of the Holders
of the Notes rescind an acceleration and its consequences if the rescission
would not conflict with any judgment or decree and if all existing Events of
Default (except nonpayment of principal, Interest, premium or Liquidated
Damages, if any, that has become due solely because of the acceleration) have
been cured or waived.
Notwithstanding the foregoing, the Trustee shall have no obligation to
accelerate the Notes if in the best judgment of the Trustee acceleration is not
in the best interest of the Holders of the Notes.
If an Event of Default occurs by reason of any willful action (or
inaction) taken (or not taken) by or on behalf of the Issuers with the intention
of avoiding payment of the premium that the Issuers would have had to pay if the
Issuers then had elected to redeem the Notes pursuant to Section 3.07(a) hereof,
then upon acceleration of the Notes, an equivalent premium to the premium that
the Issuers would have had to pay pursuant to Section 3.07(a) hereof, shall also
become and be immediately due and payable, to the extent permitted by law,
anything in this Indenture or in the Notes to the contrary notwithstanding. If
an Event of Default occurs prior to August 1, 2003, by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Issuers with
the intention of avoiding the prohibition on redemption of the Notes prior to
August 1, 2003, then the premium specified in this Indenture shall also become
immediately due and payable to the extent permitted by law upon the acceleration
of the Notes.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal, premium and Liquidated
Damages, if any, and Interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
75
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount of
the Notes then outstanding by notice to the Trustee may on behalf of the Holders
of all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of Interest or Liquidated Damages, if any, on, or the principal of, the
Notes (including in connection with an offer to purchase); provided, however,
that the Holders of a majority in aggregate principal amount of the then
outstanding Notes may rescind an acceleration and its consequences, including
any related Payment Default that resulted from such acceleration. Upon any such
waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in aggregate principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on it, including the exercise of any remedy under any
of the Collateral Documents. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture that the Trustee reasonably
determines may be unduly prejudicial to the rights of other Holders of Notes or
that may involve the Trustee in personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes only if:
(a) the Holder of a Note 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 of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity reasonably 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 written direction
inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
76
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and Interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder;
provided, however, that a Holder shall not have the right to institute any such
suit for the enforcement of payment if and to the extent that the institution or
prosecution thereof or the entry of judgment therein would, under applicable
law, result in the surrender, impairment, waiver or loss of the Lien of this
Indenture upon any property subject to such Lien.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b) hereof
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against either of the Issuers for
the whole amount of principal of, premium and Liquidated Damages, if any, and
Interest remaining unpaid on the Notes and Interest on overdue principal and, to
the extent lawful, Interest and such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Issuers
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
77
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.07 hereof, including payment of all compensation, expense
and liabilities incurred, and all advances made, by the Trustee and the
costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium and Liquidated Damages, if any, and Interest,
ratably, without preference or priority of any kind, according to the
amounts due and payable on the Notes for principal, premium and Liquidated
Damages, if any and Interest, respectively; and
Third: to the Issuers or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
SECTION 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 of
a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
SECTION 6.12. MANAGEMENT OF THE SHREVEPORT RESORT.
Notwithstanding any provision of this Article 6 to the contrary,
following an Event of Default which permits the taking of possession of the
Shreveport Resort, the appointment of a receiver of either the Collateral or any
part there of pursuant to any of the Collateral Documents, or after such taking
of possession of such appointment, the Trustee or any such receiver may, but
shall not be obligated to, in addition to the rights and powers of the Trustee
and such receiver set forth in this Indenture and the Collateral Documents, to
retain one or more experienced operators or developers or construction
contractors or agents of casinos to manage the operations and/or construction of
the Shreveport Resort on behalf of the Holders of the Notes, provided, however,
that any such operator shall have all necessary legal qualifications, including
all applicable Gaming Licenses to manage the Shreveport Resort.
78
SECTION 6.13. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture or any Collateral Document and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case the Issuers, the Trustee and the Holders shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding has been
instituted.
ARTICLE 7
TRUSTEE
SECTION 7.01. 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 its exercise, as a
prudent Person would exercise or use under the circumstances in the conduct of
such Person's 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 no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee in writing and conforming to the requirements of this
Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture.
(c) The Trustee may not be relieved from 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;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(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 6.05 hereof.
79
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section.
(e) No provision of this Indenture or the Collateral Documents shall
require the Trustee to expend or risk its own funds or incur any liability. The
Trustee shall be under no obligation to exercise any of its rights and powers
under this Indenture or the Collateral Documents at the request of any Holder of
Notes, unless such Holder shall have offered to the Trustee security and
indemnity reasonably 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 shall execute and deliver such non-disburbance and
attornment agreements relating to sub-leases of space in the Shreveport Resort
from the Partnership, as lessor, as requested by the Partnership.
Section 7.02. Rights of Trustee.
Subject to the provisions of Section 7.01:
(a) The Trustee may conclusively rely upon any document believed by
it to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from an Issuer shall be sufficient if
signed by an Officer of such Issuer.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
80
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Issuers or any
Affiliate of the Issuers with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as trustee or resign. Any Agent may do the same with like
rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
Section 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture, the Collateral Documents 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 of this Indenture or the Collateral Documents, 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, the Collateral Documents or any
other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
Section 7.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it
is known to a Responsible Officer of the Trustee, the Trustee shall mail to
Holders of Notes a notice of the Default or Event of Default within 90 days
after it occurs. Except in the case of a Default or Event of Default in payment
of principal of, premium and Liquidated Damages, if any, or Interest on any
Note, the Trustee may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interests of the Holders of the Notes.
Section 7.06. Reports by Trustee to Holders of the Notes.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA (S) 313(a) (but if no event described in
TIA (S) 313(a) has occurred within the twelve months preceding the reporting
date, no report need be transmitted). The Trustee also shall comply with TIA (S)
313(b)(2). The Trustee shall also transmit by mail all reports as required by
TIA (S) 313(c).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Issuers. The Issuers shall file a copy of each
report with the SEC and each stock exchange on which the Notes are listed in
accordance with TIA (S) 313(d). The Issuers shall promptly notify the Trustee
when the Notes are listed on any stock exchange.
81
Section 7.07. Compensation and Indemnity.
The Issuers shall pay to the Trustee from time to time reasonable
compensation 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 for such disbursements, advances and expenses as are
attributable to the Trustee's negligence, willful misconduct or bad faith.
The Issuers shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture and the
Collateral Documents, including the costs and expenses of enforcing this
Indenture and the Collateral Documents against the Issuers (including this
Section 7.07) and defending itself against any claim (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 or
thereunder, except to the extent any such loss, liability or expense may be
attributable to its negligence, willful misconduct or bad faith. The Trustee
shall notify 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. The Issuers shall defend the claim and the Trustee
shall cooperate in the defense. 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 7.07 shall survive
the satisfaction and discharge of this Indenture.
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 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 6.01(i) or (j) hereof occurs, the expenses and
the compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA (S) 313(b)(2) to
the extent applicable.
Section 7.08. Louisiana Gaming Control Board.
(a) The Trustee shall notify the Louisiana Gaming Control Board,
simultaneously with any notice given to the Holders, of any Default or
acceleration under the Notes, this Indenture, the Collateral Documents, or any
other documents, instrument, agreement, covenant, or condition
82
related to the issuance of the Notes, whether declared or effectuated by the
Trustee or the Holders. The Trustee shall notify the Louisiana Gaming Control
Board on a continuing basis and in writing, of any actions taken by the Trustee
or the Holders with regard to such default, acceleration or similar matters
related thereto.
(b) The Trustee shall notify the Louisiana Gaming Control Board of
the removal or resignation of the Trustee promptly after such removal or
resignation.
(c) The Trustee shall notify the Louisiana Gaming Control Board of
any transfer or assignment of any rights under this Indenture, the Collateral
Documents, or any other documents, instrument, agreement, covenant or condition
related to the issuance of the Notes by the Issuers promptly after such transfer
or agreement.
(d) The Trustee shall provide to the Louisiana Gaming Control Board
promptly after its execution of the same, copies of any and all amendments or
modifications to this Indenture, the Notes, the Collateral Documents, or any
other documents, instrument, agreement, covenant or condition related to the
issuance of the Notes.
(e) The Issuers agree to provide such information as the Trustee
shall request, including the mailing address of the Louisiana Gaming Control
Board, in order to permit the Trustee to mail the reports described herein. The
Issuers shall promptly provide written notice to the Trustee of the occurrence
of any the events described in this Section 7.08. Any failure by the Trustee to
fulfill the reporting obligations in this Section 7.08 shall not be deemed to be
negligence on the part of the Trustee, and the Trustee shall have no liability
to the Issuers, any Guarantor or the Holders for any failure to comply with the
reporting obligations in this Section 7.08.
Section 7.09. 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.
Subject to applicable Gaming Laws, the Trustee may resign in writing
at any time and be discharged from the trust hereby created by so notifying the
Issuers and applicable Gaming Authorities. Subject to applicable Gaming Laws,
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 in writing. The
Issuers may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.11 hereof;
(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; or
(d) the Trustee becomes incapable of acting.
83
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 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 take all steps necessary or advisable to
be approved by applicable Gaming Authorities, if required, and 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 Holders. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, provided
all sums owing to the Trustee hereunder have been paid and subject to the Lien
provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee
pursuant to this Section 7.09, the Issuers' obligations under Section 7.07
hereof shall continue for the benefit of the retiring Trustee.
Section 7.10. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee; provided, however, such corporation shall be otherwise
eligible and qualified under this Article and in accordance with any applicable
rules or regulations of Gaming Authorities.
Section 7.11. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100 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. 310(a)(1), (2) and (5). The Trustee is subject to TIA
(S) 310(b).
84
Section 7.12. Preferential Collection of Claims Against Issuers.
The Trustee is subject to TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein.
Section 7.13. Authorization of Trustee to Take Other Actions.
(a) The Trustee is hereby authorized to enter into and take any
actions or deliver such consents required by or requested under each of the
Collateral Documents (including, without limitation, the FF&E Collateral
Intercreditor Agreement and the Pari Passu Collateral Intercreditor Agreement)
and such other documents as directed by the Holders of a majority of outstanding
aggregate principal amount of the Notes. If at any time any action by or the
consent of the Trustee is required under any of the Collateral Documents
(including, without limitation, the FF&E Collateral Intercreditor Agreement and
the Pari Passu Collateral Intercreditor Agreement) or any other document entered
into by the Trustee at the direction of a majority of the Holders of outstanding
aggregate principal amount of the Notes, such action or consent shall be taken
or given by the Trustee upon the consent to such action by the Holders of a
majority of outstanding aggregate principal amount of the Notes.
(b) Upon the request of the Partnership, the Trustee shall enter
into an intercreditor agreement with respect to any new FF&E Financing in
substantially the same form as the FF&E Collateral Intercreditor Agreement, with
such differences as are reasonable, necessary or desirable under such
circumstances; provided, however, that the Issuers deliver an Officers'
Certificate certifying that (i) such financing will not violate this Indenture,
(ii) the terms of such intercreditor agreement will not violate this Indenture
or any of the Collateral Documents and (iii) any Liens incurred in connection
with such FF&E Financing extend only to the assets financed pursuant to such
FF&E Financing as permitted by clause (7) of the definition of Permitted Liens
included herein.
(c) The Trustee and its directors, officers, employees and
Affiliates shall cooperate with all Gaming Authorities and provide such
information and documentation as may from time to time be requested thereby.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.
The Issuers may, at the option of its Board of Directors evidenced by
a resolution set forth in an Officers' Certificate delivered to the Trustee, at
any time, elect to have either Section 8.02 or 8.03 hereof be applied to all
outstanding Notes upon compliance with the conditions set forth below in this
Article 8.
85
Section 8.02. Legal Defeasance and Discharge.
Upon the Issuers' exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Issuers and the Guarantors shall, subject
to the satisfaction of the conditions set forth in Section 8.04 hereof, be
deemed to have been discharged from their obligations with respect to all
outstanding Notes and any Note Guarantees, as applicable on the date the
conditions set forth below are satisfied (hereinafter, "Legal Defeasance"). For
this purpose, Legal Defeasance means that the Issuers shall be deemed to have
paid and discharged the entire Indebtedness represented by the outstanding
Notes, which shall thereafter be deemed to be "outstanding" only for the
purposes of Section 8.05 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all their other
obligations under such Notes 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 provisions which shall survive
until otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in Section
8.04 hereof, and as more fully set forth in such Section, payments in respect of
the principal of, or Interest or premium and Liquidated Damages, if any, on such
Notes when such payments are due, (b) the Issuers' obligations with respect to
such Notes under Article 2 and Section 4.02 hereof, (c) the rights, powers,
trusts, duties and immunities of the Trustee hereunder, and the Issuers' and the
Guarantor's obligations in connection therewith and (d) this Article 8. Subject
to compliance with this Article 8, the Issuers may exercise their option under
this Section 8.02 notwithstanding the prior exercise of its option under Section
8.03 hereof.
Section 8.03. Covenant Defeasance.
Upon the Issuers' exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Issuers shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10,
4.11, 4.12, 4.13, 4.14, 4.16, 4.17, 4.18. 4.19, 4.20, 4.21, 4.22, 4.23, 4.24,
4.26, and 4.27 hereof and clause (iv) of Section 5.01 hereof with respect to the
outstanding Notes on and after the date the conditions set forth in Section 8.04
hereof 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 (it being understood that such
Notes shall not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding Notes,
the Issuers may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 6.01 hereof, but,
except as specified above, the remainder of this Indenture and such Notes shall
be unaffected thereby. In addition, upon the Issuers' exercise under Section
8.01 hereof of the option applicable to this Section 8.03, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(c) through 6.01(f) and Section 6.01(l) hereof shall not constitute Events
of Default.
86
Section 8.04. Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Issuers must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders of the Notes, cash in United States dollars,
non-callable Government Securities, or a combination thereof, in such amounts as
will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, and Fixed Interest, the
maximum remaining amount payable as Contingent Interest, and premium and
Liquidated Damages, if any, on the 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 an election under Section 8.02 hereof, the
Issuers shall have delivered to the Trustee an Opinion of Counsel reasonably
acceptable to the Trustee confirming that (a) the Issuers have received from, or
there has been published by, the Internal Revenue Service a ruling or (b) since
the date of this Indenture, there has 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 of the outstanding Notes 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 an election under Section 8.03 hereof, the
Issuers shall have delivered to the Trustee an Opinion of Counsel reasonably
acceptable to the Trustee 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 either: (i) 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) or (ii) insofar as Events of Default from bankruptcy or insolvency
events are concerned, at any time in the period ending on the 91st day after the
date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under any material agreement
or instrument (other than this Indenture) to which either of the Issuers any of
the Partnership's Restricted Subsidiaries is a party or by which either of the
Issuers or any of the Partnership's Restricted Subsidiaries is bound;
(f) the Issuers must have delivered to the Trustee an Opinion of
Counsel to the effect that, assuming no intervening bankruptcy of either of the
Issuers or any Guarantor between the
87
date of the deposit and the 91st day following the deposit and assuming that no
Holder is an "insider" of either of the Issuers under applicable bankruptcy law,
after the 91st day following the deposit, the trust funds will not be subject to
the effect of any applicable bankruptcy, insolvency, reorganization or similar
laws affecting creditors' rights generally;
(g) the Issuers must deliver to the Trustee an Officers' Certificate
stating that the deposit was not made by the Issuers with the intent of
preferring the Holders of the Notes over the other creditors of either of the
Issuers with the intent of defeating, hindering, delaying or defrauding
creditors of either of the Issuers or others; and
(h) the Issuers must deliver to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent relating
to the Legal Defeasance or the Covenant Defeasance have been complied with.
Section 8.05. Deposited Money And Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Issuers acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium and Liquidated Damages, if
any, and Interest, but such money need not be segregated from other funds except
to the extent required by law.
The Issuers shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.04 hereof or the principal
and Interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Partnership from time to time upon the
request of the Partnership any money or non-callable Government Securities held
by it as provided in Section 8.04 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
Section 8.06. Repayment to Partnership.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Issuers, in trust for the payment of the principal of, premium and
Liquidated Damages, if any, or Interest on any Note and remaining unclaimed for
two years after such principal, and premium, if any, or
88
Interest has become due and payable shall be paid to the Partnership on its
request or (if then held by either of the Issuers) shall be discharged from such
trust; 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, and all liability of the Issuers as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the 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 Partnership.
Section 8.07. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Issuers' obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.02 or 8.03
hereof, as the case may be; provided, however, that, if the Issuers make any
payment of principal of, premium, if any, or Interest on any Note following the
reinstatement of its obligations, the Issuer, as applicable, shall be subrogated
to the rights of the Holders of such Notes to receive such payment from the
money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Issuers, any
Guarantors and the Trustee may amend or supplement this Indenture, the Notes,
any Guarantees of the Notes or the Collateral Documents without the consent of
any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place
of certificated Notes;
(c) to provide for the assumption of the either of the Issuers'
obligations to Holders of the Notes in the case of a merger or consolidation or
sale of all or substantially all of that Issuers' assets;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal
rights under this Indenture of any such Holder;
89
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA; or
(f) to enter into additional or supplemental Collateral Documents
pursuant to Sections 4.10, 4.11 and 10.11 hereof and to amend or supplement
Schedule A to the Security Agreement to reflect substitutions and replacements
of the FF&E Collateral.
Upon the request of the Issuers accompanied by a resolution of their
Boards of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 7.02 hereof, the Trustee shall join with the Issuers and
any Guarantor in the execution of any amended or supplemental Indenture
authorized or permitted by the terms of this Indenture and to make any further
appropriate agreements and stipulations that may be therein contained, but the
Trustee shall not be obligated to enter into such amended or supplemental
Indenture that affects its own rights, duties or immunities under this Indenture
or otherwise.
Section 9.02. With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Issuers, any
Guarantors and the Trustee may amend or supplement this Indenture (including
Sections 3.09, 4.10, 4.11, 4.16 and 4.30 hereof), the Notes, any Guarantee of
the Notes and the Collateral Documents with the consent of the Holders of at
least a majority in principal amount of the Notes then outstanding (including,
without limitation, consents obtained in connection with a purchase of, or
tender offer or exchange offer for, the Notes), and, subject to Sections 6.04
and 6.07 hereof, any existing Default or compliance with any provision of this
Indenture, the Notes, any Guarantee of the Notes or the Collateral Documents may
be waived with the consent of the Holders of a majority in principal amount of
the Notes then outstanding (including, without limitation, consents obtained in
connection with a tender offer or exchange offer for, or purchase of, the
Notes).
Upon the request of the Issuers accompanied by a resolution of each
of their respective Boards of Directors authorizing the execution of any such
amended or supplemental Indenture, and upon the filing with the Trustee of
evidence satisfactory to the Trustee of the consent of the Holders of Notes as
aforesaid, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee shall join with the Issuers and any Guarantor in the
execution of such amended or supplemental Indenture unless such amended or
supplemental Indenture directly 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 amended or
supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes
under this Section 9.02 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Issuers shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Issuers to mail such notice, or any defect
90
therein, shall not, however, in any way impair or affect the validity of any
such amended or supplemental Indenture or waiver. Subject to Sections 6.04 and
6.07 hereof, the Holders of a majority in aggregate principal amount of the
Notes then outstanding voting as a single class may waive compliance in a
particular instance by the Issuers with any provision of this Indenture or the
Notes. However, without the consent of each Holder affected, an amendment or
waiver under this Section 9.02 may not (with respect to any Notes held by a non-
consenting Holder):
(a) reduce the principal amount of Notes whose Holders must consent
to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note
or alter the provisions with respect to the redemption of the Notes except as
provided above with respect to Sections 3.09, 4.10, 4.11, 4.16 and 4.30 hereof;
(c) reduce the rate of or change the time for payment of Interest or
default interest on any Note;
(d) waive a Default or Event of Default in the payment of principal
of, or Interest or premium, or Liquidated Damages, if any, on the Notes (except
a rescission of acceleration of the Notes by the Holders of at least a majority
in aggregate principal amount of the Notes and a waiver of the payment default
that resulted from such acceleration);
(e) make any Note payable in money other than that stated in the
Notes;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive payments
of principal of, or Interest or premium or Liquidated Damages, if any, on the
Notes;
(g) waive a redemption payment with respect to any Note except as
provided above with respect to Sections 3.09, 4.10, 4.11 and 4.16 hereof;
(h) release any Guarantor from any of its obligations under its Note
Guarantee or this Indenture, except in accordance with the terms of this
Indenture;
(i) release all or substantially all of the Collateral from the Lien
of this Indenture or the Collateral Documents (except in accordance with the
provisions thereof); or
(j) make any change in the preceding amendment and waiver
provisions.
Any amendment to, or waiver of the provisions of any of the
Collateral Documents relating to Section 4.13 or Article 10 hereof shall require
the consent of the Holders of at least 85% in aggregate principal amount of
Notes then outstanding.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in a amended or supplemental Indenture that complies with the TIA as
then in effect.
91
Section 9.04. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section 9.05. Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Issuers in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall
not affect the validity and effect of such amendment, supplement or waiver.
Section 9.06. Trustee to Sign Amendments, etc.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Issuers and any Guarantor may not sign an amendment or supplemental
Indenture until their respective Boards of Directors approve such amendment or
supplemental indenture. In executing any amended or supplemental indenture, the
Trustee shall be entitled to receive and (subject to Section 7.01 hereof) shall
be fully protected in relying upon, in addition to the documents required by
Section 14.04 hereof, an Officer's Certificate and an Opinion of Counsel stating
that the execution of such amended or supplemental indenture is authorized or
permitted by this Indenture.
ARTICLE 10
COLLATERAL AND SECURITY
Section 10.01. Security.
The due and punctual payment of the principal of, premium and
Liquidated Damages, if any, and Interest on the Notes when and as the same shall
be due and payable, whether on an interest payment date, at maturity, by
acceleration, repurchase, redemption or otherwise, and Interest on the overdue
principal of, premium and Liquidated Damages, if any, and interest on the Notes
and performance of all other obligations of the Issuers and the Guarantors to
the Holders of Notes or the Trustee under this Indenture, the Notes and the Note
Guarantees, according to the terms hereunder or thereunder, shall be secured by
the Collateral, as provided in the Collateral Documents which the Issuers have
entered into simultaneously with the execution of this
92
Indenture for the benefit of the Holders of Notes. Each Holder of Notes, by its
acceptance thereof, consents and agrees to the terms of the Collateral Documents
and the Intercreditor Agreements, as the same may be in effect or may be amended
from time to time in accordance with its terms, and authorizes and directs the
Trustee to enter into the Collateral Documents and the Intercreditor Agreements
and to perform its obligations and exercise its rights thereunder in accordance
therewith. The Issuers shall deliver to the Trustee copies of all documents
executed pursuant to this Indenture, the Collateral Documents, and the
Intercreditor Agreements and shall do or cause to be done all such acts and
things as may be necessary or proper, or as may be required by the provisions of
the Collateral Documents to assure and confirm to the Trustee the security
interest in the Collateral contemplated hereby, by the Collateral Documents, or
any part thereof, as from time to time constituted, so as to render the same
available for the security and benefit of this Indenture and of the Notes and
any Note Guarantees secured thereby, according to the intent and purposes herein
and therein expressed. The Issuers and any Guarantors shall take, or shall cause
their respective Restricted Subsidiaries to take, upon request of the Trustee,
any and all actions reasonably required to cause the Collateral Documents to
create and maintain, as security for the obligations of the Issuers and the
Guarantors hereunder, a valid and enforceable perfected Lien on the Collateral,
subject to liens permitted by the Collateral Documents.
Section 10.02. Recording and Opinions.
The Issuers and the Guarantors will cause the applicable Collateral
Documents and any financing statements, and all amendments or supplements to
each of the foregoing and any other similar security documents as necessary, to
be registered, recorded and filed and/or re-recorded, re-filed and renewed in
such manner and in such place or places, if any, as may be required by law or
reasonably requested by the Trustee in order fully to preserve and protect the
Liens securing the obligations under the Notes and any Note Guarantees pursuant
to the Collateral Documents, except as otherwise provided herein and therein.
The Issuers, the Guarantors and any other obligor shall furnish to
the Trustee:
(a) promptly after the execution and delivery of this Indenture, and
promptly after the execution and delivery of any other instrument of further
assurance or amendment, an Opinion of Counsel in the United States either (i)
stating that, subject to customary assumptions and exclusions, in the opinion of
such counsel, this Indenture, the applicable Collateral Documents and all other
instruments of further assurance or amendment have been properly recorded,
registered and filed to the extent necessary to make effective the Liens
intended to be created by the Collateral Documents and reciting the details of
such action or referring to prior Opinions of Counsel in which such details are
given or (ii) stating that, subject to customary assumptions and exclusions, in
the opinion of such counsel, no such action is necessary to make any other Lien
created under any of the Collateral Documents effective as intended by such
Collateral Documents; and
(b) within 30 days after January 1, in each year beginning with the
year 2002, an Opinion of Counsel, dated as of such date, either (i) stating
that, subject to customary assumptions and exclusions, in the opinion of such
counsel, such action has been taken with respect to the recording, registering,
filing, re-recording, re-registering and re-filing of this
93
Indenture and all supplemental indentures, financing statements, continuation
statements or other instruments of further assurance as is necessary to maintain
the Lien of this Indenture and the Collateral Documents until the next Opinion
of Counsel is required to be rendered pursuant to this paragraph and reciting
the details of such action or referring to prior Opinions of Counsel in which
such details are given or (ii) stating that, subject to customary assumptions
and exclusions, in the opinion of such counsel, no such action is necessary to
maintain such Lien, until the next Opinion of Counsel is required to be rendered
pursuant to this paragraph.
(c) The Issuers shall furnish to the Trustee the certificates or
opinions, as the case may be, required by TIA Section 314(d). Such certificates
or opinions will be subject to the terms of TIA Section 314(e).
Section 10.03. Release of Collateral.
(a) Subject to subsections (b), (c) and (d) of this Section 10.03,
Collateral may be released from the Lien created by this Indenture and the
Collateral Documents at any time or from time to time upon the request of the
Issuers pursuant to an Officers' Certificate certifying that all terms for
release and conditions precedent hereunder and under any applicable Collateral
Document have been met and specifying (x) the identity of the Collateral to be
released and (y) the provision of this Indenture and the applicable Collateral
Document which authorizes such release. The Trustee shall release (at the sole
cost and expense of the Issuers) (i) all Collateral that is contributed, sold,
leased, conveyed, transferred or otherwise disposed of (including, without
limitation, any Collateral that is contributed, sold, leased, conveyed,
transferred or otherwise disposed of to an Unrestricted Subsidiary, but
excluding any such contribution, sale, lease, conveyance, transfer or other
distribution to the either of the Issuers or a Restricted Subsidiary); provided,
such contribution, sale, lease, conveyance, transfer or other distribution is or
will be made in accordance with the provisions of this Indenture and any
applicable Collateral Document, including, without limitation, the requirement
that the net proceeds from such contribution, sale, lease, conveyance, transfer
or other distribution are or will be applied in accordance with this Indenture
and that no Default or Event of Default has occurred and is continuing or would
occur immediately following such release; (ii) Collateral that is condemned,
seized or taken by the power of eminent domain or otherwise confiscated pursuant
to an Event of Loss; provided that the FF&E Loss Proceeds and the Pari Passu
Loss Proceeds, if any, from such FF&E Event of Loss or Pari Passu Event of Loss,
as the case may be, are or will be applied in accordance with Section 4.11
hereof and that no Default or Event of Default has occurred and is continuing or
would occur immediately following such release; (iii) Collateral which may be
released with the consent of Holders pursuant to Article 9 hereof; (iv) all
Collateral (except as provided in Article 8 hereof and, in particular, the funds
in the trust fund described in Section 8.04 hereof) upon discharge or defeasance
of this Indenture in accordance with Article 8 hereof; (v) all Collateral upon
the payment in full of all obligations of the Issuers with respect to the Notes;
(vi) Collateral of a Guarantor whose Note Guarantee is released pursuant to
Section 11.06 hereof; and (vii) Collateral that is expressly required or
permitted to be released by any Collateral Document. Upon receipt of such
Officers' Certificate the Trustee shall execute, deliver or acknowledge any
necessary or proper instruments of termination, satisfaction or release to
evidence the release of any Collateral permitted to be released pursuant to this
Indenture or the Collateral Documents. The Trustee is hereby authorized and
shall, from time to
94
time upon request of the Issuers, execute and deliver UCC-3 partial release or
termination statements and such other documents evidencing release of Collateral
available for release pursuant to clauses (i) through (vii) above.
(b) Except pursuant to Section 10.03(a) above, no Collateral shall
be released from the Lien and security interest created by the Collateral
Documents pursuant to the provisions of the Collateral Documents unless there
shall have been delivered to the Trustee the Officers' Certificate required by
this Section 10.03.
(c) The Trustee may release Collateral from the Lien and security
interest created by this Indenture and the Collateral Documents upon the sale or
disposition of Collateral pursuant to the Trustee's powers, rights and duties
with respect to remedies provided under any of the Collateral Documents.
(d) The release of any Collateral from the terms of this Indenture
and the Collateral Documents shall not be deemed to impair the security under
this Indenture in contravention of the provisions hereof if and to the extent
the Collateral is released pursuant to the terms hereof. To the extent
applicable, the Issuers shall cause TIA (S) 313(b), relating to reports, and TIA
(S) 314(d), relating to the release of property or securities from the Lien and
security interest of the Collateral Documents and relating to the substitution
therefor of any property or securities to be subjected to the Lien and security
interest of the Collateral Documents to be complied with. Any certificate or
opinion required by TIA (S) 314(d) may be made by an Officer of the Issuers
except in cases where TIA (S) 314(d) requires that such certificate or opinion
be made by an independent Person, which Person shall be an independent engineer,
appraiser or other expert selected or approved by the Trustee in the exercise of
reasonable care.
Section 10.04. Protection of the Trust Estate.
Subject to the terms of the FF&E Collateral Intercreditor Agreement,
the Pari Passu Collateral Intercreditor Agreement and the Collateral Documents,
upon prior written notice to the Issuers and any Guarantor, the Trustee shall
have the power (i) to institute and maintain such suits and proceedings as it
may deem expedient, to prevent any impairment of the Collateral under any of the
Collateral Documents and in the profits, rents, revenues and other income
arising therefrom, including the power to institute and maintain suits or
proceedings to restrain the enforcement of or compliance with any legislative or
other governmental enactment, rule or order that may be unconstitutional or
otherwise invalid if the enforcement of, or compliance with, such enactment,
rule or order would impair any Collateral or be prejudicial to the interests of
the Holders of Notes or the Trustee, to the extent permitted thereunder; and
(ii) to enforce the obligations of the Issuers, any Guarantor or any Restricted
Subsidiary under this Indenture, the FF&E Collateral Intercreditor Agreement,
the Pari Passu Collateral Intercreditor Agreement or the Collateral Documents.
Upon receipt of notice that a Restricted Subsidiary or any Guarantor is not in
compliance with any of the requirements of the Preferred Ship Mortgage,
Leasehold Mortgage and Assignment of Leases and Rents, the Trustee may, but
shall have no obligation to, purchase, at the Issuers' expense, such insurance
coverage necessary to comply with the appropriate section of the mortgage.
95
Section 10.05. Certificates of the Issuers.
The Issuers shall furnish to the Trustee, prior to each proposed
release of Collateral pursuant to the Collateral Documents (i) all documents
required by TIA ss.314(d) and (ii) an Opinion of Counsel in the United States,
which may be rendered by internal counsel to the Issuers, to the effect that,
subject to customary assumptions and exclusions, such accompanying documents
constitute all documents required by TIA ss.314(d). The Trustee may, to the
extent permitted by Sections 7.01 and 7.02 hereof, accept as conclusive evidence
of compliance with the foregoing provisions the appropriate statements contained
in such documents and such Opinion of Counsel.
Section 10.06. Certificates of the Trustee.
In the event that the Issuers wish to release Collateral in
accordance with the Collateral Documents and has delivered the certificates and
documents required by the Collateral Documents and Sections 10.03 and 10.04
hereof, the Trustee shall determine whether it has received all documentation
required by TIA ss.314(d) in connection with such release and, based on such
determination and the Opinion of Counsel delivered pursuant to Section
10.05(ii), shall deliver a certificate to the Issuers setting forth such
determination.
Section 10.07. Authorization of Actions to be Taken by the Trustee Under the
Collateral Documents.
Subject to the provisions of Section 7.01, 7.02 and 7.13 hereof, the
Trustee may, in its sole discretion and without the consent of the Holders of
Notes, on behalf of the Holders of Notes, take all actions it deems necessary or
appropriate in order to (a) enforce any of the terms of the Collateral
Documents, the FF&E Collateral Intercreditor Agreement or the Pari Passu
Collateral Intercreditor Agreement and (b) collect and receive any and all
amounts payable in respect of the Obligations of the Issuers hereunder,
including but not limited to the appointment and approval of collateral agents
and the appointment and approval of an insurance trustee. The Trustee shall have
power to institute and maintain such suits and proceedings as it may deem
expedient to prevent any impairment of the Collateral by any acts that may be
unlawful or in violation of the Collateral Documents, the FF&E Collateral
Intercreditor Agreement, the Pari Passu Collateral Intercreditor Agreement or
this Indenture, and such suits and proceedings as the Trustee may deem expedient
to preserve or protect its interests and the interests of the Holders of Notes
in the Collateral (including power to institute and maintain suits or
proceedings to restrain the enforcement of or compliance with any legislative or
other governmental enactment, rule or order that may be unconstitutional or
otherwise invalid if the enforcement of, or compliance with, such enactment,
rule or order would impair the security interest hereunder or be prejudicial to
the interests of the Holders of Notes or of the Trustee).
Section 10.08. Trustee's Duties.
The powers and duties conferred upon the Trustee by this Article 10
are solely to protect the Collateral and shall not impose any duty upon the
Trustee to exercise any such powers and duties, except as expressly provided in
this Indenture. The Trustee shall be under no duty to
96
the Issuers or any Guarantor whatsoever to make or give any presentment, demand
for performance, notice or nonperformance, protest, notice of protest, notice of
dishonor, or other notice or demand in connection with any Collateral, or to
take any steps necessary to preserve this Indenture. The Trustee shall not be
liable to the Issuers or any Guarantor for failure to collect or realize upon
any or all of the Collateral, or for any delay in doing so, nor shall the
Trustee be under any duty to the Issuers or any Guarantor to take any action
whatsoever with regard thereto. The Trustee shall have no duty to the Issuers,
the any Guarantor or any Holder to comply with any recording, filing or other
legal requirements necessary to establish or maintain the validity, priority or
enforceability of the Liens in, or the Trustee's rights in or to, any of the
Collateral or to perform on behalf of the Issuers under any Collateral
Documents.
Section 10.09. Authorization of Receipt of Funds by the Trustee Under the
Collateral Documents.
Upon an Event of Default and so long as such Event of Default
continues, the Trustee may, subject to the terms of the FF&E Collateral
Intercreditor Agreement and the Pari Passu Collateral Intercreditor Agreement,
exercise in respect of the Collateral, in addition to the other rights and
remedies provided for herein, in the Collateral Documents or otherwise available
to it, all of the rights and remedies of a secured party under the Uniform
Commercial Code or other applicable law, and the Trustee may also upon obtaining
possession of the Collateral as set forth herein, without notice to the Issuers
or any Guarantor, except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any exchange,
broker's board or at any of the Trustee's offices or elsewhere, for cash, on
credit or for future delivery, and upon such other terms as the Trustee may deem
commercially reasonable. The Issuers and each Guarantor, if any, acknowledge and
agree that any such private sale may result in prices and other terms less
favorable to the seller than if such a sale were a public sale. The Issuers and
each Guarantor, if any, agree that, to the extent notice of sale shall be
required by law, at least 10 days' notice to the Issuers or the Guarantor, as
applicable, of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification. The Trustee
shall not be obligated to make any sale regardless of notice of sale having been
given. The Trustee may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
Any cash that is Collateral held by the Trustee and all cash proceeds
received by the Trustee in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral shall be applied (unless
otherwise provided for in the Collateral Documents and after payment of any and
all amounts payable to the Trustee pursuant to this Indenture), as the Trustee
shall determine or as the Holders of the Notes shall direct pursuant to Section
6.05 hereof, (a) against the obligations for the ratable benefit of the Holders
of the Notes, (b) to maintain, repair or otherwise protect the Collateral or (c)
to take such other action to protect the other rights of the Holders of the
Notes or to take any other appropriate action or remedy for the benefit of the
Holders of the Notes. Any surplus of such cash or cash proceeds held by the
Trustee and remaining after payment in full of all the obligations shall be paid
over to the applicable Issuer or Guarantor or to whomsoever may be lawfully
entitled to receive such surplus or as a court of competent jurisdiction may
direct.
97
Section 10.10. Termination of Security Interest.
Upon the payment in full of all Obligations of the Issuers under this
Indenture and the Notes, the Trustee shall (at the request of the Issuers
accompanied by (a) an Officers' Certificate of the Issuers to the Trustee
stating that such Obligations have been paid in full, and (b) instructions from
the Issuers to the Trustee to release the Liens pursuant to this Indenture and
the Collateral Documents) release the Liens securing the Collateral.
Section 10.11. Cooperation of Trustee.
In the event the Issuers or any Guarantor pledge or grant a security
interest in additional Collateral, the Trustee shall cooperate with the Issuers
or such Guarantor in reasonably and promptly agreeing to the form of, and
executing as required, any instruments or documents necessary to make effective
the security interest in the Collateral to be so substituted or pledged. To the
extent practicable, the terms of any security agreement or other instrument or
document necessitated by any such substitution or pledge shall be comparable to
the provisions of the existing Collateral Documents. Subject to, and in
accordance with the requirements of this Article 10 and the terms of the
Collateral Documents, in the event that the Issuer or any Guarantor engages in
any transaction pursuant to Section 10.03 hereof, the Trustee shall cooperate
with the Issuer or such Guarantor in order to facilitate such transaction in
accordance with any reasonable time schedule proposed by the Issuer, including
by delivering and releasing the Collateral in a prompt and reasonable manner.
Section 10.12. Collateral Agent.
The Trustee may, from time to time, appoint one or more Collateral
Agents hereunder. Each of such Collateral Agents may be delegated any one or
more of the duties or rights of the Trustee hereunder or under the Collateral
Documents, the FF&E Collateral Intercreditor Agreement, the Pari Passu
Collateral Intercreditor Agreement or any other intercreditor agreement or which
are specified in any Collateral Documents, the FF&E Collateral Intercreditor
Agreement, the Pari Passu Collateral Intercreditor Agreement or any other
intercreditor agreement, including without limitation, the right to hold any
Collateral in the name of, registered to, or in the physical possession of, such
Collateral Agent, for the ratable benefit of the Holders of the Notes. Each such
Collateral Agent shall have such rights and duties as may be specified in an
agreement between the Trustee and such Collateral Agent. The Trustee and any
Collateral Agent shall be authorized hereunder to give any acknowledgment
reasonably requested by any party under the FF&E Collateral Intercreditor
Agreement, the Pari Passu Collateral Intercreditor Agreement or any other
intercreditor agreement to confirm the rights and obligations of the parties
under the FF&E Collateral Intercreditor Agreement, the Pari Passu Collateral
Intercreditor Agreement or any other intercreditor agreement.
98
ARTICLE 11
NOTE GUARANTEES BY FUTURE RESTRICTED SECURITIES
Section 11.01. Note Guarantees.
If any Restricted Subsidiary attains, or if the Issuers or any of its
Restricted Subsidiaries acquires or creates a Restricted Subsidiary that has,
after the date hereof, Total Assets in excess of $2.5 million, then the Issuers
shall cause any such Restricted Subsidiary to, within 20 Business Days of the
date on which any such Restricted Subsidiary attained Total Assets of at least
$2.5 million or was acquired or created, (a) execute and deliver to the Trustee
a supplemental indenture and supplemental Collateral Documents in form
reasonably satisfactory to the Trustee pursuant to which such Restricted
Subsidiary shall unconditionally and jointly and severally guarantee, on a pari
passu basis with the Existing Notes, all of the Issuers' obligations under the
Notes, this Indenture and the Collateral Documents on the terms set forth in
this Indenture on a pari passu basis with Guarantees of the Existing Notes
pursuant to the Existing Notes Indenture, and (b) deliver to the Trustee an
Opinion of Counsel that, subject to customary assumptions and exclusions, such
supplemental indenture and supplemental Collateral Documents have been duly
executed and delivered by such Restricted Subsidiary. Any Restricted Subsidiary
that becomes a Guarantor shall remain a Guarantor unless designated an
Unrestricted Subsidiary by the Issuers in accordance with this Indenture or is
otherwise released from its obligations as a Guarantor pursuant to Section 11.05
hereof. Any Note Guarantee executed and delivered in accordance with this
Section 11.01 up to an amount equal to $10.0 million of each Guarantor's
obligations under the Guarantees of the Notes shall be secured by a Lien or
charge on all assets of such Guarantor. Any such Note Guarantee shall be
released if the Issuers or their Restricted Subsidiaries cease to own any Equity
Interests in such Restricted Subsidiary or if such Restricted Subsidiary becomes
an Unrestricted Subsidiary in accordance with the terms of this Indenture or is
otherwise released from its obligations as a Guarantor pursuant to Section 11.05
hereof.
Section 11.02. Limitation on Guarantor Liability.
Each Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Note Guarantee of
such Guarantor not constitute a fraudulent transfer or conveyance for purposes
of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar federal or state law to the extent applicable to any
Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders
and the Guarantors hereby irrevocably agree that the obligations of such
Guarantor under this Article 11 shall be limited to the maximum amount as will,
after giving effect to such maximum amount and all other contingent and fixed
liabilities of such Guarantor that are relevant under such laws, and after
giving effect to any collections from, rights to receive contribution from or
payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under this Article 11, result in the
obligations of such Guarantor under its Note Guarantee not constituting a
fraudulent transfer or conveyance.
99
Section 11.03. Execution and Delivery of Note Guarantee.
To evidence its Note Guarantee set forth in Section 11.01 hereof,
each Guarantor hereby agrees that a notation of such Note Guarantee
substantially in the form included in Exhibit D shall be endorsed by an Officer
of such Guarantor on each Note authenticated and delivered by the Trustee and
that this Indenture shall be executed on behalf of such Guarantor by its
President or one of its Vice Presidents.
Each Guarantor hereby agrees that its Note Guarantee set forth in
Section 11.01 hereof shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Note Guarantee.
If an Officer whose signature is on this Indenture or on the Note
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Note Guarantee is endorsed, the Note Guarantee shall be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Note Guarantee set forth
in this Indenture on behalf of the Guarantors.
Section 11.04. Guarantors May Consolidate, etc., on Certain Terms.
Except as otherwise provided in Section 11.05 hereof, no Guarantor
may consolidate with or merge with or into (whether or not such Guarantor is the
surviving Person) another Person whether or not affiliated with such Guarantor
unless:
(a) subject to Section 11.05 hereof, the Person formed by or
surviving any such consolidation or merger (if other than a Guarantor or the
Issuers) unconditionally assumes all the obligations of such Guarantor under the
Notes, this Indenture, the Collateral Documents and the Note Guarantee on the
terms set forth herein or therein, pursuant to a supplemental indenture and
supplemental Collateral Documents in form and substance reasonably satisfactory
to the Trustee; and
(b) the Guarantor complies with the requirements of Article 5 hereof.
In case of any such consolidation, merger, sale or conveyance and
upon the assumption by the successor Person by supplemental indenture, executed
and delivered to the Trustee and satisfactory in form to the Trustee, of the
Note Guarantee endorsed upon the Notes and the due and punctual performance of
all of the covenants and conditions of this Indenture to be performed by the
Guarantor, such successor Person shall succeed to and be substituted for the
Guarantor with the same effect as if it had been named herein as a Guarantor.
Such successor Person thereupon may cause to be signed any or all of the Note
Guarantees to be endorsed upon all of the Notes issuable hereunder which
theretofore shall not have been signed by the Issuers and delivered to the
Trustee. All the Note Guarantees so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Note Guarantees theretofore
and thereafter issued in accordance with the terms of this Indenture as though
all of such Note Guarantees had been issued at the date of the execution hereof.
100
Except as set forth in Articles 4 and 5 hereof, and notwithstanding
clauses (a) and (b) above, nothing contained in this Indenture or in any of the
Notes shall prevent any consolidation or merger of a Guarantor with or into
either of the Issuers or another Guarantor, or shall prevent any sale or
conveyance of the property of a Guarantor as an entirety or substantially as an
entirety to either of the Issuers or another Guarantor.
Section 11.05. Releases Following Sale of Assets.
In the event of a sale or other disposition of all of the assets of
any Guarantor, by way of merger, consolidation or otherwise, or a sale or other
disposition of all to the capital stock of any Guarantor, in each case to a
Person that is not (either before or after giving effect to such transactions) a
Restricted Subsidiary of either of the Issuers, then such Guarantor (in the
event of a sale or other disposition, by way of merger, consolidation or
otherwise, of all of the capital stock of such Guarantor) or the corporation
acquiring the property (in the event of a sale or other disposition of all or
substantially all of the assets of such Guarantor) will be released and relieved
of any obligations under its Note Guarantee; provided, however, that the Net
Proceeds of such sale or other disposition are applied in accordance with the
applicable provisions of this Indenture, including without limitation Section
4.10 hereof. Upon delivery by the Issuers to the Trustee of an Officers'
Certificate and an Opinion of Counsel to the effect that such sale or other
disposition was made by the applicable Issuer in accordance with the provisions
of this Indenture, including without limitation Section 4.10 hereof, the Trustee
shall execute any documents reasonably required in order to evidence the release
of any Guarantor from its obligations under its Note Guarantee.
Any Guarantor not released from its obligations under its Note
Guarantee shall remain liable for the full amount of principal of and Interest
on the Notes and for the other obligations of such Guarantor under this
Indenture and the Collateral Documents as provided in this Article 11.
ARTICLE 12
SATISFACTION AND DISCHARGE
Section 12.01 Satisfaction and Discharge.
This Indenture will be discharged and will cease to be of further
effect as to all Notes issued thereunder, when:
(a) either:
(i) all Notes that have been authenticated (except lost,
stolen or destroyed Notes that have been replaced or paid and Notes
for whose payment money has theretofore been deposited in trust and
thereafter repaid to the Issuers) have been delivered to the Trustee
for cancellation; or
(ii) all Notes that have not been delivered to the
Trustee for cancellation have become due and payable by reason of the
making of a notice of redemption or otherwise or will become due and
payable within one year and the Issuers or any Guarantor have
101
irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust solely for the benefit of the Holders of the
Notes, cash in U.S. dollars, non-callable Government Securities, or a
combination thereof, in such amounts as will be sufficient without
consideration of any reinvestment of interest, to pay and discharge
the entire indebtedness on the Notes not delivered to the Trustee for
cancellation for principal, Fixed Interest, the maximum amount
payable as Contingent Interest and premium and Liquidated Damages, if
any, to the date of maturity or redemption;
(b) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or shall occur as a result of such
deposit and such deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which either of the Issuers
or any Guarantor is a party or by which either of the Issuers or any Guarantor
is bound;
(c) each of the Issuers and any Guarantor has paid or caused to be
paid all sums payable by it under this Indenture; and
(d) the Issuers have delivered irrevocable instructions to the
Trustee under this Indenture to apply the deposited money toward the payment of
the Notes at maturity or the redemption date, as the case may be.
The Issuers shall deliver an Officers' Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.
Notwithstanding the above, the Trustee shall pay to the Partnership
from time to time upon the request of the Partnership any cash or Government
Securities held by it as provided in this Section 12.01 which, in the opinion of
a nationally recognized firm of independent public accountants expressed in a
written certification delivered to the Trustee, are in excess of the amount
thereof that would then be required to be deposited to effect a satisfaction and
discharge under this Article 12.
Section 12.02. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 12.03 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
12.02, the "Trustee") pursuant to Section 12.01 hereof in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Issuers acting as
Paying Agent) as the Trustee may determine, to the Holders of such Notes of all
sums due and to become due thereon in respect of principal, premium and
Liquidated Damages, if any, and Interest, but such money need not be segregated
from other funds except to the extent required by law.
Section 12.03. Repayment to Partnership.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Issuers, in trust for the payment of the principal of, premium and
Liquidated Damages, if any, or Interest
102
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
Partnership on its request or (if then held by the Issuers) shall be discharged
from such trust; 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, and all liability of the Issuers as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Issuers cause to be published once, in the New York Times or 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 Partnership.
ARTICLE 13
JOINT AND SEVERAL LIABILITY
(a) Notwithstanding any contrary provision contained in the
Indenture, the Notes and the Collateral Documents to which both of the Issuers
are a party, the representations, warranties, covenants, agreements and
obligations of the Issuers, and either of them, shall be deemed joint and
several. Any waiver including, without limitation, any suretyship waiver, made
by either Issuer in the Indenture, the Notes or any Collateral Document to which
both of the Issuers are a party shall be deemed to be made also by the other
Issuer and references in any such waiver to either Issuer shall be deemed to
include the other Issuer and each of them.
(b) Notwithstanding any contrary provision contained in the
Indenture, the Notes or any Collateral Document to which both of the Issuers are
a party, each such document to which both Issuers are party shall be deemed to
include, without limitation, the following waivers:
Each of the Issuers hereby waives and relinquishes all rights and
remedies accorded by applicable law to sureties or guarantors and agrees not to
assert or take advantage of any such rights or remedies, including, without
limitation, (a) any right to require the Trustee or any of the Holders (each a
"Beneficiary") to proceed against either of the Issuers or any other Person or
to proceed against or exhaust any security held by a Beneficiary at any time or
to pursue any other remedy in the power of a Beneficiary before proceeding
against such Issuer or other Person, (b) the defense of the statute of
limitations in any action hereunder or in any action for the collection or
performance of the Obligations under the Indenture, the Notes and any of the
Collateral Documents (collectively, the "Note Obligations"), (c) any defense
that may arise by reason of the incapacity, lack of authority, death or
disability of any Person or the failure of a Beneficiary to file or enforce a
claim against the estate (in administration, bankruptcy or any other proceeding)
of any Person, (d) appraisal, valuation, stay, extension, marshaling of assets,
redemption, exemption, demand, presentment, protest and notice of any kind,
including, without limitation, notice of the existence, creation or incurring of
any new or additional indebtedness or obligation or of any action or non-action
on the part of a Beneficiary, any Issuer, any endorser, guarantor or creditor of
either Issuer or on the part of any other Person under this or any other
instrument or document in connection with any Obligation or evidence of
Indebtedness held by a Beneficiary as collateral or in connection with the Note
Obligations, (e) any defense based upon
103
an election of remedies by a Beneficiary, including, without limitation, an
election to proceed by non-judicial rather than judicial foreclosure, which
destroys or otherwise impairs the subrogation rights of either Issuer, the right
of either Issuer to proceed against the other Issuer or any other Person for
reimbursement, or both, (f) any defense based upon any statute or rule of law
which provides that the obligation of a surety must be neither larger in amount
nor in other respects more burdensome than that of the principal, (g) any duty
on the part of a Beneficiary to disclose to either Issuer any facts a
Beneficiary may now or hereafter know about either of the Issuers or any other
Person, regardless of whether a Beneficiary has reason to believe that any such
facts materially increase the risk beyond that which such Issuer intends to
assume, or has reason to believe that such facts are unknown to such Issuer, or
has a reasonable opportunity to communicate such facts to the either Issuer,
because each Issuer acknowledges that each Issuer is fully responsible for being
and keeping informed of the financial condition of each of the Issuers or any
other Person and of all circumstances bearing on the risk of non-payment of any
Note Obligations, (h) any defense arising because of the election of a
Beneficiary, in any proceeding instituted under the Federal Bankruptcy Code, of
the application of Section 1111(b)(2) of the Federal Bankruptcy Code, (i) any
defense based upon any borrowing or grant of a security interest under Section
364 of the Federal Bankruptcy Code, (j) any claim or other rights which it may
now or hereafter acquire against the other Issuer or any other Person that
arises from the existence of performance of each Issuer of its obligations under
this Indenture, the Notes or any Collateral Document, including, without
limitation, any right of subrogation, reimbursement, exoneration, contribution,
indemnification, any right to participate in any claim or remedy by a
Beneficiary against the other Issuer or any collateral which a Beneficiary now
has or hereafter acquires, whether or not such claim, remedy or right arises in
equity or under contract, statute or common law, by any payment made hereunder
or otherwise, including, without limitation, the right to take or receive from
either of the Issuers or any other Person, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security on
account of such claim or other rights, (k) any rights which it may acquire by
way of contribution under this Indenture, the Notes or any Collateral Document,
by any payment made hereunder or otherwise, including, without limitation, the
right to take or receive from any other Person, directly or indirectly, in cash
or other property or by set-off or in any other manner, payment or security on
account of such contribution rights, and (1) any defense based on one-action
laws and any other anti-deficiency protections granted to guarantors by
applicable law. No failure or delay on the Trustee's part in exercising any
power, right or privilege under this Indenture shall impair or waive one such
power, right or privilege. Each of the Issuers acknowledges and agrees that any
nonrecourse or exculpation provided for in this Indenture, the Notes or any
Collateral Document, or any other provision of this Indenture, the Notes or any
Collateral Document, limiting the Benefited Parties' recourse to specific
collateral, or limiting the Benefited Parties' right to enforce a deficiency
judgment against the Issuers, shall have absolutely no application to the
Issuers' liability under this Indenture, the Notes or any Collateral Documents.
(c) In the event of any inconsistency between the provisions of this
Article 13 and the corresponding provisions of the Indenture, the Notes or any
Collateral Document to which both of the Issuers are a party, the provisions of
the Indenture shall govern.
104
ARTICLE 14
MISCELLANEOUS
Section 14.01. 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 14.02. Notices.
Any notice or communication by the Issuers, any Guarantor or the
Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telex, telecopier or overnight air courier guaranteeing next day delivery, to
the others' address:
If to either of the Issuers and/or any Guarantor:
c/o Hollywood Casino Corporation
Two ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ 48
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Trustee (By mail):
State Street Bank and Trust Company
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
Re: Hollywood Casino Shreveport/2001
(By hand or Overnight Delivery)
State Street Bank and Trust Company
▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
Re: Hollywood Casino Shreveport/2001
Telecopier No: (▇▇▇) ▇▇▇-▇▇▇▇
105
The Issuers, any Guarantor 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; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first
class mail, certified or registered, return receipt requested, or by overnight
air courier guaranteeing next day delivery to its address shown on the register
kept by the Registrar. Any notice or communication shall also be so mailed to
any Person described in TIA (S) 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If any of the Issuers or any Guarantor mail a notice or communication
to Holders, it shall mail a copy to the Trustee and each Agent at the same time.
Section 14.03. Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA (S) 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Issuers, the
Guarantors, the Trustee, the Registrar and anyone else shall have the protection
of TIA (S) 312(c).
Section 14.04. 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 or the Guarantors 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 14.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 14.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
Section 14.05. 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 (S) 314(a)(4)) shall comply with the provisions of TIA
(S). 314(e) and shall include:
106
(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 or she has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied; provided, however, that with
respect to matters of fact, an Opinion of Counsel may rely on certificates from
relevant corporate officers or public officials.
Section 14.06. 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 14.07. No Personal Liability of Directors, Officers, Employees,
Partners and Stockholders.
No director, officer, employee, partner, incorporator or stockholder
of either of the Issuers or any Guarantor, as such, or Paddlewheels shall have
any liability for any obligations of either of the Issuers or any of the
Guarantors under the Notes, this Indenture, any Guarantees of the Notes, the
Collateral Documents 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. The waiver and release are part of the
consideration for issuance of the Notes. The waiver may not be effective to
waive liabilities under the federal securities laws.
Section 14.08. Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT
TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION
OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Section 14.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Issuers, the Guarantors or any of their Subsidiaries or
of any other Person. Any such indenture, loan or debt agreement may not be used
to interpret this Indenture.
107
Section 14.10. Successors.
All agreements of the Issuers in this Indenture, each of the
Collateral Documents to which they are a party and the Notes shall bind their
successors. All agreements of the Trustee in this Indenture shall bind its
successors. All agreements of each Guarantor in this Indenture, each of the
Collateral Documents to which it is a party and its Note Guarantee shall bind
its successors, except as otherwise provided in Section 11.05.
Section 14.11. Severability.
In case any provision in this Indenture, the Notes or in the Note
Guarantees shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 14.12. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
Section 14.13. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by the
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Issuers and
any Guarantor. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and conclusive in favor of the Trustee, the Issuers
and any Guarantor, if made in the manner provided in this Section 14.13.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to such witness, notary or officer the
execution thereof. Where such execution is by a signer acting in a capacity
other than his individual capacity, such certificate or affidavit shall also
constitute sufficient proof of authority. The fact and date of the execution of
any such instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner which the Trustee deems sufficient.
(c) Notwithstanding anything to the contrary contained in this
Section 14.13, the principal amount and serial numbers of Notes held by any
Holder, and the date of holding the same, shall be proved by the register of the
Notes maintained by the Registrar as provided in Section 2.03 hereof.
108
(d) If the Issuers shall solicit from the Holders of the Notes any
request, demand, authorization, direction, notice, consent, waiver or other Act,
the Issuers may, at their option, by or pursuant to a resolution of their
respective Boards of Directors, fix in advance a record date for the
determination of Holders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other Act, but the Issuers shall have no
obligation to do so. Notwithstanding TIA ss. 316(c), such record date shall be
the record date specified in or pursuant to such resolution, which shall be a
date not earlier than the date 30 days prior to the first solicitation of
Holders generally in connection therewith or the date of the most recent list of
Holders forwarded to the Trustee prior to such solicitation pursuant to Section
2.05 hereof and not later than the date such solicitation is completed. If such
a record date is fixed, such request, demand, authorization, direction, notice,
consent, waiver or other Act may be given before or after such record date, but
only the Holders of record at the close of business on such record date shall be
deemed to be Holders for the purposes of determining whether Holders of the
requisite proportion of the then outstanding Notes have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the then outstanding Notes shall be
computed as of such record date; provided, that no such authorization, agreement
or consent by the Holders on such record date shall be deemed effective unless
it shall become effective pursuant to the provisions of this Indenture not later
than eleven months after the record date.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Note shall bind every future Holder of
the same Note and the Holder of every Note issued upon the registration or
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Issuers in
reliance thereon, whether or not notation of such action is made upon such Note.
(f) Without limiting the foregoing, a Holder entitled hereunder to
take any action hereunder with regard to any particular Note may do so itself
with regard to all or any part of the principal amount of such Note or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.
Section 14.14. Benefit of Indenture.
Nothing, in this Indenture or in the Notes, express or implied, shall
give to any Person, other than the parties hereto, any Paying Agent, any
Registrar and their successors hereunder, and the Holders, any benefit or any
legal or equitable right, remedy or claim under this Indenture.
Section 14.15. Louisiana Riverboat Economic Development and Gaming Control Act.
Notwithstanding the provisions of Section 14.08 hereof, each of the
provisions of this Indenture is subject to and shall be enforced in compliance
with the provisions of the Louisiana Riverboat Economic Development and Gaming
Control Act, to the extent applicable, and the regulations promulgated
thereunder, unless such provisions are in conflict with the TIA, in which case
the TIA shall control. Each Holder by accepting a Note agrees that all Holders,
whether
109
initial Holders or subsequent transferees, shall be subject to the
qualifications or suitability provisions of the Louisiana Riverboat Economic
Development and Gaming Control Act.
Section 14.16. Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
(Signatures on following page)
110
SIGNATURES
Dated as of June 15, 2001 HOLLYWOOD CASINO SHREVEPORT
By: HCS I, Inc., its managing general partner
By:_______________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
Title: President
Dated as of June 15, 2001 SHREVEPORT CAPITAL CORPORATION
By:_______________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
Title: President
Dated as of June 15, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ BANK AND TRUST COMPANY,
as Trustee
By:_______________________________________
Name:
Title:
F-1